Aircraft Industry (Hansard, 22 February 1960)

§ 4. Mrs. Castle
asked the Minister of Aviation whether he will issue a White Paper setting out the sums contributed by Her Majesty's Government to each civil aviation development project since the war, together with the sums repaid to Her Majesty's Government in respect of each project.

§ The Minister of Aviation (Mr. Duncan Sandys)
The figures, in the form asked for, over this long period are not readily available. I propose, therefore, to discuss with the hon. Lady how best I can give her the information she requires without imposing an undue amount of work on my staff.

§ Mrs. Castle
I thank the Minister for that reply, but is he aware that this is not just a question of satisfying the hon. Lady; it is a question of the principle of public accountability? Over £60 million has been spent on research and development of civil aircraft since the 3 end of the war in connection with which no matter of security arises. Surely the House has a right to know where the money has gone and what return we have had for it. There is a constitutional problem involved here of putting them in some form over which Parliament can have control over public funds.

§ Mr. Sandys
I have no illusions that I shall be able to satisfy the hon. Lady. What I said was that I would discuss with her in what form the figures she is asking for could be presented to Parliament without causing an altogether disproportionate amount of work in my Department. She has asked for figures going right the way back to 1945, and this is my difficulty. It is extremely difficult to separate the amount of assistance being given to military and civil projects, particularly with regard to aero-engines where they are developed for both purposes.

§ Mr. Strauss
One appreciate that difficulty. There are no doubt some figures available. Indeed, the right hon. Gentleman indicated that there were. He says that he will make the figures available to Parliament, but in what form does he propose to do that? Will there be some statement in HANSARD or something like that, because these figures are all-important?

§ Mr. Sandys
I will try to do it in a form which is convenient to the House.

§ 5. Mrs. Castle
asked the Minister of Aviation if he will now state in detail the steps which he intends to take to ensure that Her Majesty's Government receives a share of the profits arising from the development of civil aircraft in return for the public money he is investing in these projects.

§ 13. Mr. Strauss
asked the Minister of Aviation whether he has now considered the desirability of issuing as soon as possible a White Paper setting out in full the Government's plans for strengthening the aircraft industry.

§ 14. Mr. Rankin
asked the Minister of Aviation what total sums he intends providing towards the initial costs of developing new types of aircraft, of producing a limited number of aircraft over and above firm orders, and of proving and introducing new types of civil aircraft into regular airline service.

§ Mr. Sandys
I have nothing at present to add to the statement on this subject which I made last week.

§ Mrs. Castle
Is the Minister aware that the Press has widely described that statement as seriously unsatisfactory in just these particular respects? Is it not time that a thorough review was made of the basis on which this public money is put into the hands of private firms? Is it not also desirable that the Government and the public taxpayers should not only get recoupment of a certain percentage of the cost, but should be given a share in the profits by the acquisition of equities in these companies, carrying with them the right to appoint directors to the boards so that proper control can be introduced?

§ Mr. Sandys
I have already made it clear in my statement last week that the Government propose to make arrangements in the contract with each firm governing the assistance to be granted and for recouping a share of the proceeds.

§ Mrs. Castle
Not proceeds, profits.

§ Mr. Sandys
I also explained that profits and proceeds are closely related. There is quite an advantage in having a contract which provides for recouping a share of the proceeds, even though there may not be a profit.

§ Mr. Strauss
On the question of the White Paper, if the right hon. Gentleman is not able to do so at the moment because he wants to discuss the matter with the aircraft industry—and that is understandable—will he shortly issue a White Paper which will set out in greater detail the very broad indications of policy which he sketched to the House last week? Does he not realise that the House is entitled to know the manner and extent to which he proposes to apply that policy? In particular, if there is to be closer partnership with the aircraft industry, as he implied, why should that partnership not be made a reality by some participation in the equity shares of the company, or otherwise by some Government representation on the boards of the companies?

§ Mr. Sandys
I have already said that it was not our policy to take equity shares in the companies. There is another Question down on the Order 5 Paper about Government participation on the boards of the companies. As regards the issue of a White Paper, as I explained—the right hon. Member for Vauxhall (Mr. Strauss) referred to this himself—I am at the moment discussing these matters with the manufacturers, and this would not be an appropriate moment to give more information. When the time comes, I shall consider giving more information, but I doubt very much that it will justify the publication of a White Paper. I will consider in what form it will be most convenient to give the House that information.

§ Mr. Rankin
Does the Minister recall that since he made the statement to which he has just referred, he has indicated to the Chancellor that he will require in the Estimates for next year £7 million odd for the development of civil aviation for the many purposes set out in Question No. 14, and for the development of military aviation he will require £198 million? Does he tell the House that, in asking for that money, he has no idea what he will do with it?

§ Mr. Sandys
I shall not discuss the Estimates before they are published.

§ Mr. Rankin
On a point of order, Mr. Speaker. Surely, when one asks a simple question like this, without seeking to discuss—

§ Mr. Speaker
That is not a point of order.

§ Mr. Grimond
Does the Minister's use of the word "proceeds" as opposed to "profits" mean that he expects some of these projects which he will support with public money to be unprofitable? If he says "No", that he expects them all to be profitable, will he tell us what steps he intends to take to make sure that this money cannot be raised in the market?

§ Mr. Sandys
I shall not say in advance whether some of these projects will be profitable or unprofitable. In the past, we have had some of each.

§ 8 and 9. Mr. Small
asked the Minister of Aviation, (1) what are the numbers employed in the aircraft industry in Scotland: and how they will be affected by the mergers proposed for the aircraft industry;
6 (2) what development contracts are being placed in Scotland as a result of the present mergers between aircraft firms.

§ 17. Mr. Rankin
asked the Minister of Aviation what support he intends giving to the aircraft industry in Scotland.

§ Mr. Sandys
The Government's support of the aircraft industry, of which I gave particulars last week, is designed to strengthen the industry as a whole and should, therefore, increase the prospects of employment generally.
It is estimated that, at the end of 1959, the aircraft industry in Scotland employed about 12,500 people. Rolls-Royce, which employs over 10,000 in Scotland, is one of the two major aeroengine manufacturers on which the Government proposes, as far as possible, to concentrate orders.

§ Mr. Small
I thank the Minister for that Answer. He has referred to aeroengines at Rolls-Royce, and the figure given of 12,500 is the total employment of trained personnel in Scotland. Does he appreciate that my Question refers to the aircraft industry, and it is our share of the aircraft industry as such in Scotland about which I am particularly concerned?

§ Mr. Rankin
Will the right hon. Gentleman particularise a little? We accept, of course, the position he has indicated with regard to aeroengines in Scotland, but does he realise that the aircraft production side of the industry is steadily disappearing and the industry at Prestwick has almost gone out'? Does he realise that maintenance work at Renfrew will, by June, have disappeared completely? What does he propose to do to help Scotland, which did have some of this industry but which now, under the present Government, is rapidly losing it?

§ Mr. Sandys
I stand to be corrected, but I do not believe it is right that maintenance work at Renfrew will be running out in June—

§ Mr. Rankin
Oh.

§ Mr. Sandys
I stand to be corrected on that, but I do not believe that it is so. As regards Scottish Aviation Ltd, which is the firm. I think, which the hon. Member has in mind, I should, of 7 course, be very happy to see that firm included in one or other of the major groups. I am still hoping, though not necessarily confident.

§ Mr. Rankin
What encouragement is being offered to Scottish Aviation, Limited, to take part in any of the mergers?

§ Mr. Sandys
I do not believe that it needs much encouragement.

§ Mr. Emrys Hughes
Does the Minister appreciate that he is causing a great deal of dissatisfaction in the west of Scotland by his superficial references to Prestwick? Is he aware that there is an industry which has grown up round the civil airport, one of the biggest in the world, yet now it seems that he has no clear practical proposals—only hopes? Can he give some indication that he is really thinking of doing something for this very important sector of our economy?

§ Mr. Sandys
All the three Questions which I answered were related to the aircraft industry.

§ 19. Mr. Skeffington
asked the Minister of Aviation what estimate he has made of the effect of the amalgamation of the firm producing the Rotodyne with another company on employment in Hayes, Middlesex.

§ Mr. Rippon
It is premature to attempt to estimate the effect of the recent merger on employment at Hayes.

§ Mr. Skeffington
Will the Minister bear in mind that, in this and other cases, it would be highly desirable if some intimation of changes could be given to trade union officers and shop stewards in order to prevent a great deal of unnecessary personal concern and anxiety?

§ Mr. Rippon
These are, of course, matters for the management. We cannot forecast what may be the position with regard to particular factories. But if there are any developments, we will get in touch with the hon. Member.

§ 15. Mr. Albu
asked the Minister of Aviation whether he will arrange for a senior official of his Department to be appointed to the board of any aircraft manufacturing company which receives substantial financial support from Government sources.

§ Mr. Sandys
No, Sir.

§ Mr. Albu
Does not the Minister agree that when finance is provided on a large scale in connection with private industry it is the usual practice for the financier to have the right to appoint a director to safeguard his interests? Is not the Government now getting into that position with regard to the aircraft industry?

§ Mr. Sandys
I would not accept the last suggestion of the hon. Gentleman. The Government do not wish to get involved in the day-to-day management of private firms. Our position as the placer of large contracts will, I am sure, give us quite as much say as we ought properly to have.

§ Mr. Albu
But surely the Minister would agree that a director is concerned with safeguarding policy and not with day-to-day management—[HON. MEMBERS: "Oh."]—a director is not concerned with day-to-day management unless he happens to be a managing director or an executive director; the main object of a director is to safeguard activities. The organisation putting up the finance ought to have some say in the general policy which is being carried out. Should not the Government, therefore, be in a position to do this with regard to the aircraft industry?

§ Mr. Sandys
The contracts we shall place for the development of projects will lay down the amount of assistance we are proposing to give and will contain all the safeguards we consider necessary.

§ Mr. Strauss
Does not the right hon. Gentleman realise that in this matter we are going far beyond anything which has happened in the past? Does he not realise that there must be tens of millions of pounds which will be put into aircraft manufactured by some firms for development purposes? Surely it is proper and responds to public requirements that under such conditions there should be a Government representative—a director or somebody—on the board of such companies which the Government are keeping alive with public money? Will the right hon. Gentleman reconsider his decision? When he issues a White Paper or makes such statement as he has in mind, will he tell us that this obviously 9 desirable proposal should be initiated by the Government?

§ Mr. Sandys
I think that the right hon. Gentleman, who was himself at one time Minister of Supply, is quite wrong. When he says that what we are doing now goes far beyond anything done before, he must have forgotten the facts. We are proposing to take a share in the cost of developing new aircraft. I think I am right in saying that in a number of cases when the right hon. Gentleman was in office the Government paid 100 per cent. of the cost of the development of aircraft but did not put anyone on the board.

§ Mr. Dudley Williams
Will my right hon. Friend bear in mind that this subject was discussed during the last General Election and rejected by the electorate? Does not my right hon. Friend think it would be much better if the party opposite spent some time trying to revise its own constitution instead of putting down frivolous Questions of this nature?

§ Mr. Sandys
That is just what I thought it was doing.

§ Mr. Strauss
Is not the essence of the statement made last week by the Minister—that he proposed in various ways to assist the aircraft industry by more financial help than it has had in the past—that now something additional is proposed? Is it not these new circumstances which make such a strong case for taking action which has not been taken before to safeguard the public purse?

Mr. H. Wilson
Will the right hon. Gentleman explain to his hon. Friend the Member for Exeter (Mr. Dudley Williams) that what we were told about at the General Election was the great success of competitive private enterprise? In view of the fact that the Government are now going to face the facts in this connection—

§ Mr. Dudley Williams
On a point of order, Mr. Speaker. May I draw your attention to the fact that I am not the Minister responsible for answering Questions? I understood that the question of the right hon. Member for Huyton (Mr. H. Wilson) was addressed to me—I have no responsibility.

§ Mr. Speaker
I am well aware that the hon. Gentleman is not the Minister. I think that we should get on with Questions.

Mr. Wilson
My question was put to the Minister. I was asking him to take a little time off to explain a few facts to his hon. Friend. Will the right hon. Gentleman answer this question? Is not the Government completely schizophrenic in this matter? Is it not the fact that under D.A.T.A.C. procedure the Treasury has been in the habit of appointing Government directors to almost every firm in a Development Area which has been in receipt of Government finance or help, and that Treasury-appointed directors have been involved in the management of a large number of companies manufacturing commodities ranging from vacuum cleaners to detergents? If that can be done with factories in those areas, what is wrong with doing the same thing in the case of the aircraft industry?

§ Mr. Sandys
I think the arrangements we propose should work quite satisfactorily.

§ Mr. Dugdale
I can understand that the Minister may be willing to give large sums of money to the aircraft industry, but is the Chancellor of the Exchequer equally willing? Is this a precedent for giving equally large sums of money to other firms without any control over it?

§ Mr. Sandys
The right hon. Gentleman has been a member of a Government. I consider that he need not waste the time of the House in asking a Minister whether he has consulted the Chancellor of the Exchequer before making a major announcement involving considerable Government expenditure.