HC Deb 19 March 1964 vol 691 cc1801-21

1.41 a.m.

Mr. Stratton Mills (Belfast, North)

I am obliged to my right hon. Friend the Minister of Aviation for his courtesy in being here at this very late hour to discuss the position of Short Bros & Harland. The matter I wish to raise has become of extreme importance as a result of the decision which was announced in the House yesterday by my right hon. Friend; the decision to order the Bell Agusta helicopter.

From the point of view of Short Bros & Harland, this was a very small fish; nevertheless, the disappointment over this matter has been intense, because it was felt that this order would have helped further to diversify the working of the firm. As I understand the position, the Minister of Defence and the Secretary of State for War have said that both the Bell Agusta and the Hiller would have been suitable for the Army's requirements. That point is further strengthened by the fact that the Royal Navy already has a number of Hillers in use.

I wish tonight to probe the reasons why my right hon. Friend made his decision. In a few sentences yesterday he gave to the House the reasons why the Bell Agusta was picked. The first reason was that Westland's have more experience of helicopter work. I have no doubt that that is true, but it does not essentially get away from the fact that, initially, the firm of Hiller was sent by the Ministry of Aviation to Short Bros & Harland. One assumed at the time that it was felt that it was not unreasonable to expect that Shorts could adapt themselves to the work.

The second point to remember is that it is surely unsatisfactory that one firm, Westland's, should have the complete monopoly on helicopter construction in this country. Although this is my own opinion, I understand that that firm decided to take a loss on the construction of the Bell Agusta. It may be said, I think, that the Bell Agusta may become the "loss-leader" of the aircraft industry. Is this not unsatisfactory and unfair to the other firms?

Another reason given yesterday by my right hon. Friend concerned the price. He said that the price of the Bell Agusta was substantially lower. My information is that the price differential between the two planes was very small. I know that detailed prices are never given in this House, but it would be helpful if my right hon. Friend could say what the price differential between the final tenders of the two firms was on a percentage basis.

I want also to refer to the general situation at Short & Harland. It would be ungenerous not to say how much I and my hon. Friends from Northern Ireland divisions appreciate my right hon. Friend's efforts as Minister of Aviation. Speaking for myself, I think that from the point of view of Short & Harland he has been the best Minister of Aviation since I came to the House.

I want particularly to refer to a somewhat alarming statement made on Monday by Mr. R. E. Harvey, joint managing director of Short & Harland. I do not want to speculate on the motives of the management in saying this, but would merely as an aside say that there is a very great danger of crying "Wolf, wolf" too often. I feel that this statement has been widely misunderstood, and in my view it was, perhaps, clumsily phrased and has created considerable unnecessary alarm. I hope that this debate will give my right hon. Friend the Minister of Aviation an opportunity to put the situation into perspective.

All of us in the House will note that Mr. Wrangham, the chairman, was at pains to dilute the impression of the earlier statement which had been misunderstood by many sections of the Press, and given headlines that its careful qualifications could scarcely justify. It was noticeable that Mr. Wrangham quickly put out yesterday a much more balanced and considered view of the position, because he realised the unnecessary alarm which the firm's earlier statement had created amongst the very best of its employees.

It is also relevant to remind the House how much we welcomed the statement of the Prime Minister when he visited Belfast on 6th March that it was the intention of the Government to maintain Short & Harland as a design and production unit, from which statement we all took great reassurance of the Government's long-standing position.

I should like now to read from the statement that was made by the present Minister of Aviation on 5th March, 1963. Hon. Members will recall that that was when the HS681 was announced to replace the Beverley and the Hastings planes. After announcing "a substantial share" of the production work for Short & Harland, my right hon. Friend said—and this was in his main, considered statement, and not in a supplementary answer: … this should provide employment for a production labour force not far below the present level of 6,000 or so until about 1970. In reply to a question put by my hon. Friend the Member for Belfast, West (Mrs. McLaughlin), he reiterated: …as far as the production force is concerned, they can be kept in full employment, or at least up to about the 6,000 level, until the end of the decade. Those were encouraging and welcome words.

Then the right hon. Member for Battersea, North (Mr. Jay) queried these figures and said Is he aware that … it will not be possible to maintain the labour force? In fact it means a reduction by 1965 or 1966 to about 2,400. … My right hon. Friend hit that on the head by saying We are in the closest touch with Short Bros. & Harland and I should think we are in the best position to evaluate how the load is likely to lie. I apologise for reading these four quotations at slightly greater length than I would wish, but I would ask my right hon. Friend, and this is the main burden of my argument to which I attach great importance. Is he in a position today to repeat that assurance which he gave to the House. If he can, it will go a long way towards casting on one side the unfortunate impression created by the management statement on Monday.

If my right hon. Friend is still able to adhere to that statement, as I hope he is, will he explain to the House how it is hoped to maintain that labour force over that period? In my own view the Minister can give this assurance only through the sub-contracting work on the HS681, and I notice with interest that he hinted at its importance yesterday in the House. The present position about this contract is complicated and technical but I would wish to describe it to hon. Members.

At present Hawker Siddeley are in the early stages of making a prototype under a development contract. No production contract has yet been completed but I think that it is expected that one will be signed very soon. My right hon. Friend the Minister of Aviation in that statement on 5th March, 1963, said We have therefore decided to arrange for a substantial share of the production work on this new aircraft to be sub-contracted to Shorts by the Hawker Siddeley Group."—[OFFICIAL REPORT, 5th March, 1963; Vol. 673, c. 210–13.] Considerable emphasis has been placed on that. I underline the words that my right hon. Friend would arrange "for a substantial share". How much is a substantial share? I would ask my right hon. Friend to confirm that before signing the production contract with Hawker Siddeley the Ministry of Aviation will ensure that the actual percentage share to go to Short Bros. & Harland is written into the contract, as I believe is usually done in this kind of transaction. I ask him to make certain that the largest possible share of this work goes to Short Bros. & Harland and perhaps to give us some indication today in very broad terms of what he is thinking of in this connection.

My view is that there will be great difficulty indeed in redeeming the assurance given by my right hon. Friend to the House to maintain the labour force at 6,000 to the year 1970 unless approximately one-half of this work is given to Short Bros. & Harland. I have outlined the main problems facing the firm. The essential work is for the HS681, but more Belfasts are also needed, and my hon. Friend the Member for Belfast, East (Mr. McMaster) has drawn the attention of the House on many occasions to this. I have left that subject today to concentrate on my main point and I look forward to my right hon. Friend's reply.

1.55 a.m.

Mr. A. Fenner Brockway (Eton and Slough)

I propose to intervene very briefly, for two reasons. First, I support the case made by the hon. Member for Belfast, North (Mr. Stratton Mills) on two grounds. In Northern Ireland there is the greatest percentage of unemployment in all Great Britain. It is 8 per cent. It seems to me that, when contracts are being let, the situation of hundreds or, perhaps, thousands of workers in Belfast should be very much in the mind of Ministers. I accept at once that, if the firm of Short Brothers & Harland were not capable of fulfilling the contract, the Minister would have a reason for putting it elsewhere; but all the history and all the record of the firm indicate that it is capable of fulfilling it.

The second ground on which I support the hon. Gentleman is that the principal contract has been given to a great monopoly. The Government have often declared that they are opposed to the retention of monopolies in this country. It is very desirable, when contracts of this kind are let, that the work should be distributed in such a way that the production of weapons is not the monopoly of one firm but is dispersed and diversified among other firms which are equal to the task.

My second purpose in intervening is to make something almost in the nature of a personal statement. When this matter was raised in the House of Commons on 17th March, I asked the Prime Minister whether, when this firm was being considered, he would inquire whether an applicant for employment there was asked about his religion. I concluded my supplementary question by asking, Will the right hon. Gentleman see that religious discrimination in Northern Ireland in relation to employment is ended?".—[OFFICIAL REPORT. 17th March, 1964 Vol. 691, c. 1185.] When I asked that supplementary question, I had already received a copy of the form of application for employment at Messrs. Short Brothers & Harland, and I sent a photographed copy of that form to the Prime Minister that afternoon. I shall now read to the House the relevant parts of the form. It is headed, Short Brothers & Harland Limited, Belfast. Application for Employment—Staff". Certain particulars, including the religion of the applicant, are requested.

I have today received a letter from Mr. Dennis Wrangham, the chairman of Messrs. Short Brothers & Harland. I think it fair to the firm to read this letter, and I have informed Mr. Wrangham that I would do so tonight at the first opportunity. The letter reads as follows: Dear Mr. Brockway, After reading your questions in the House of Commons yesterday. I would like to assure you that no sort of discrimination—religious or racial—is ever practised by this Company. If your time permits, do please suggest to me one or two dates when we could fetch you over to Belfast to spend a night with us and see round the whole undertaking. Yours sincerely, Dennis Wrangham. I have today written to Mr. Wrangham expressing appreciation of that letter. I welcome his statement that no discrimination on religious or racial grounds is practised at the works of Messrs. Short Brothers & Harland Ltd. of Belfast. I have told him, which is true, that I had been informed by quite responsible and representative persons in Northern Ireland that it is very difficult for a Roman Catholic to obtain a post upon the staff of this company, and I hoped that he would be able to inform me of the number of persons employed on the staff and the number of Roman Catholics among them.

I thought it desirable, at the first possible opportunity, to read to the House this letter from the chairman of this company so that if there has been any misrepresentation on my part it may now be corrected.

Mr. Stanley R. McMaster (Belfast, East)

I was present when the hon. Member asked that question of the Prime Minister and I attempted to rise to express my concern. In view of what he has said, and the way in which he has withdrawn his remarks, I should like also to withdraw what I said, because I know that these comments have had prominence in my constituency.

Mr. Brockway

It was not in my mind.

2.0 a.m.

Mr. John Farr (Harborough)

I should like briefly to express my regret that it has been found necessary to order helicopters from sources abroad. In thumbing through a copy of the Report of the Select Committee on Estimates, published in 1956ߝ57, one of the items which caught the Committee's eye was that of the 26 military aircraft research projects undertaken between 1945 and 1955, no fewer than ten related to helicopters. It is that, in particular, which has prompted me to intervene, because I want to express my regret that it has been thought necessary, not only to order these helicopters from abroad, but that both the designs which should have been considered were, in fact, American.

2.3 a.m.

Mr. John Cronin (Loughborough)

I should first like to express my appreciation, on behalf of my hon. Friends, to the hon. Member for Belfast, North (Mr. Stratton Mills) for having raised this subject. It is an awkward subject, but I think that all of us, like my hon. Friend the Member for Eton and Slough (Mr. Brockway), feel concerned about the high rate of unemployment in Northern Ireland and the very real family tragedies which that represents.

Yet, the troubles of Short Brothers & Harland are, to some extent, a localized form of the rather general dissatisfaction present in the aircraft industry. Things are going far from satisfactorily at present. We often hear of scientists migrating to the United States, but there is not much publicity about the engineers—and especially aircraft engineers—who migrate from this country as an expression of the frustration which they feel over Government policy.

I appreciate that I must confine myself to Short Brothers & Harland; I could say a lot on this matter, but I would join with the hon. Member for Belfast, North in seeking an assurance about what is likely to happen with the sub-contract for work on the Hawker Siddeley 681. It is quite obvious that there is scope for giving a lot of the work to this firm, and I should appreciate anything which we can be told which is more specific on this matter. The Minister should tell us something more about plans for the future for the supply of a strategic freighter for the Royal Air Force. We all know that the Air Ministry, through the Ministry of Aviation, ordered ten Belfast aircraft in February 1959 from Short Bros & Harland, but there have been no further orders of that nature and there appears to be no promise or suggestion of them.

Having formerly been Secretary of State for Air, the Minister has a thorough knowledge of the problem. He will remember that, as long as three years ago, we used to ask him when the Royal Air Force would be provided with a strategic freighter. It did not have a strategic freighter then, and it still does not have one. We would like to know from the Minister whether the ten strategic freighters which have been ordered from Short Bros & Harland are the limit of the aspirations of the Royal Air Force in equipping itself with strategic freighters.

I hope that the right hon. Gentleman will not say that the Britannia, with which the Royal Air Force transport force is now equipped, is a strategic freighter in any real sense of the word. As he knows, its cargo cross-section is small and it can be loaded only from the side and from ramps. It is unsatisfactory from that point of view although excellent as a passenger-carrying aircraft. Short Bros & Harland have been producing further designs for a strategic freighter. Their latest, the SC541, is of an advanced design which would be equipped with Rolls-Royce Conway by-pass turbo-jet engines. In many ways, it would be comparable with the best strategic freighters available. Can the Minister give us an idea of the Government's intentions for this aircraft? Has it been given serious consideration?

One thing that is certain is that the need for a strategic freighter for the Royal Air Force will become much more acute, particularly when the transport force is unable to fly over the Middle East, as will soon be likely. We will lose the base at El Adem and if we are unable to fly across Libya and the Sudan we shall be in serious difficulties unless we have an adequate supply of strategic freighters. I hope, therefore, that the Minister can give us an idea about the future.

Are the Government asking Short Bros & Harland at least to have a design study to produce more freighters, or will we ask some other firm? As far as I know, no other firm has a design for a strategic freighter. Are the Government thinking, perhaps, in terms of ordering an American machine, such as the Lockheed C141? We have already had the shock of hearing that the Navy is to be completely re-equipped in its fighter squadrons with the Phantom. Do the Government have ideas of ordering American aircraft for strategic freighters? We would like reassurance about this.

Mr. McMaster

Will the hon. Member also bear in mind that many high-ranking staff officers who have visited Short's consider that an order for ten Belfasts is hopelessly inadequate and that irrespective of the jet version to which he has referred, they would like to see an extended version of the Belfast with, perhaps, a larger propeller and greater range and ceiling, and that this would provide more work for the firm?

Mr. Cronin

Yes. I am obliged to the hon. Gentleman for his intervention. It is entirely consistent with my information. It is very important to emphasise that this is not only a matter of dealing with unemployment in Belfast. Short Brothers & Harland is in a position to provide something which the Royal Air Force desperately needs, and no other British firm is in a position to do it.

I leave the subject of strategic freighters and turn to the question of the Skyvan, a small aircraft designed and produced by Short Brothers & Harland. It is very economical and can carry substantial loads over appreciable distances. It is particularly useful in countries where there is a serious transport problem which cannot be met by rail and road.

When I visited Short Brothers & Harland about two years ago I saw the Skyvan and was, naturally impressed by it. So I have made a point of inquiring from Short Brothers & Harland from time to time what has been happening about the project. I understand that earlier last year Short Brothers & Harland was receiving inquiries from potential customers in Alaska, Australia and South America and was on the point of receiv- ing export orders, but before it could put the Skyvan into production it had to obtain sanction from the Treasury.

The Minister comes out of this in rather a good light, certainly in a less unfavourable light than the Treasury. I am not always in a position to say this about the right hon. Gentleman, and so I welcome this opportunity. Short Brothers & Harland made an application to the Treasury through the Ministry of Aviation in July last year. The situation is that the firm had been asked by potential customers to produce the Skyvan for export. So it applied to the Treasury. There was dead silence from the Treasury. The Minister, although he will not confess it, probably felt some irritation at the long delay.

In January I heard of this delay and wrote to the Chief Secretary to the Treasury. I received in replyߞhe had been sitting on the project for six months—a somewhat machiavellian letter saying that it was really the responsibility of the Minister of Aviation. I feel that this is one way in which we cannot afford to lose export orders. I know that at last Short Brothers & Harland has received permission to produce the Skyvan, but these potential customers had been obliged to wait eight months before permission to produce the aircraft could be obtained. This is a very unsatisfactory way of trying to get export orders for our aircraft industry.

I turn now to the order for the light helicopter. I think that all of us have understood that the Army has been equally agreeable about having either the Bell or the Hiller helicopter. There was practically nothing to choose between the two in performance. So I think the House has a duty to examine closely the Minister's decision to order the Bell rather than the Hiller. One of the points the Minister made in his statement yesterday was that the Westland tender to produce the Bell under licence was substantially lower than the Short Brothers and Harland tender to produce the Hiller. We should have a reassurance as to whether there will be a genuine economy in accepting this lower tender. Westland is presumably working to full capacity whereas Short's is working at undercapacity. Clearly, if Westland receives the order, Short's overheads, which are of a constant nature, will have to be charged to a smaller proportion of Government contracts so that the Government will inevitably have to pay more for Shorts products. From the economic point of view, therefore, this is a rather doubtful proposition.

Again, one wonders whether the Westland bid is not something of a "loss leader". Is it possible that it is cutting the price below the appropriate level and intends to make it up in other directions? One hopes that the Government will be watching for this sort of tendency and making sure that prices are reasonable. The right hon. Gentleman has been unlucky recently over prices, so we cannot have the same amount of confidence as we might have had a few months ago. Perhaps he can also reassure us on that.

The other rather odd thing is that the Government are so concerned, apparently, about not placing an order for a higher tender. According to the recent Report of the Estimates Committee, when there was a choice between the Hawker-Siddeley 748 and the Handley-Page Herald he selected the 748 although the R.A.F. preferred the Herald, which was at a lower price. It seems odd, therefore, that the Government should now be so concerned to obtain aircraft at a lower price when these very important circumstances of public policy and support for Shorts are involved.

My hon. Friend the Member for Eton and Slough touched on the perpetuation of the Westland monopoly position. Westland is an excellent firm producing first-class helicopters, but at the same time one cannot help feeling that it is rather unhealthy that it should have a complete monopoly of helicopter production. Before the forced amalgamations carried out in the aircraft industry by the then Minister of Aviation in 1959 and 1960, there were three aircraft companies producing helicoptersߞBristol, Saunders-Roe and Westland. Complete monopoly was given to Westland. There have been some complaints about Westland deliveries being sometimes slower than expected. Sometimes there has not been complete satisfaction with the after-sales service. A special inquiry was made recently into troubles with Westland helicopters in the Far East. We all know that all aircraft firms have troubles of various kinds so there is nothing exceptional about this. But one feels it probable that Westland would perhaps stir itself rather more if it had not this complete monopoly in the production of British helicopters.

The Government claim to be opposed to monopolies in other respects. One of the inducements to hon. Members opposite to accept the Resale Prices Bill is the promise of further action against monopolies. But that does not appear to be the case here. This is a case of strengthening an existing monopoly. I hope that the Minister will address himself to that question, because the position seems to be most unsatisfactory.

There are obvious advantages in the Hiller helicopter, and the Minister will no doubt let us know why these have been ignored. Obviously it will bring work to Northern Ireland, which is particularly desirable, but if the Hiller helicopter had been accepted, Short Brothers & Harland would also have obtained the exclusive rights to sell this product in Europe, in Africa, in the Middle East, and in the Commonwealth. That would have meant a big increase of work for Short Brothers & Harland, and of course of employment for Northern Ireland. Those are important considerations, and I wonder whether enough thought was given to them.

The other circumstance which I think one should take into consideration is that already this country is using Hiller helicopters, and so far we have not used any Bell helicopters. There is a lot to be said for having some standardization in helicopters. For instance, the Royal Naval Air Service is using the Hiller OH23G for training people at its Culrose training establishment, and the Army is also using it for initial training in helicopter flying. From the point of view of standardization it seems that considerable advantages would have been gained from selecting the Hiller helicopter.

I come to the final, and I think the most important, point, and that is why was it necessary to buy foreign helicopters at all? We have this excellent company, Westland, which makes a wide variety of helicopters. It makes several marks of Whirlwind, Wessex, Belvedere and Wasp. Is the House to understand that it could not have produced a light helicopter suitable for the requirements of the Army?

The only reason why Westland has not been able to produce this is that it has not received an operational requirement to produce a light helicopter for the Army. We can to some extent absolve the Minister from blame for that, because clearly it is up to the Ministry of Defence to produce an operational requirement for a light helicopter, and this should have been done years ago. The Minister of Defence has obviously been in a state of somnolence about light helicopters, and it was left to the emergency in the Far East, in Borneo and Sarawak, to draw attention to the Army's desperate need for light helicopters.

The United States and France have equipped their armies with similar types of light helicopters for years. It is extraordinary that this country should be backward in that respect, and I hope that the Minister will be able to explain why an operational requirement was not given to Westland, or to some other British firm, for a light helicopter to avoid this unfortunate matter of ordering helicopters from abroad.

Mr. McMaster

Does not the hon. Gentleman think it odd that the Minister himself should put Hiller in touch with Short Brothers & Harland with a view to producing helicopters, and later give as one or two main reasons for not selecting the Hiller that Short Brothers & Harland had no experience in manufacturing helicopters? Surely that is a strange procedure?

Mr. Cronin

It is not entirely unknown for the Minister to act in ways which are not completely comprehensible to everyone in the House. Some of us on this side of the House think that sometimes the Minister shows an adroitness and dexterity in dealing with matters from a political point of view which is not entirely consistent with the frankness that we sometimes expect.

In view of the lateness of the hour, I do not think that I should carry this argument much further. But the House must feel that it is a very serious blow to the prestige and morale of the British aircraft industry that, on top of this order for Phantoms for the Navy, we have now declared that this light helicopter, manufactured by Italians and designed by Americans, is to be used by the Army, when we have available in this country an aircraft industry second to none. The aircraft industry can rightly feel that it has been let down, and the Minister certainly owes the House a careful and detailed explanation of his decision.

2.25 a.m.

The Minister of Aviation (Mr. Julian Amery)

I am grateful to my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) for having given me this opportunity of expanding a little the statement that I made to the House yesterday. I was glad, too, to hear the hon. Member for Loughborough (Mr. Cronin) correct a statement by his hon. Friend the Member for Newton (Mr. Lee) that the requirement for a unit light helicopter had been with us for some years. The subject is one in which I have had a great deal of personal interest. When I was at the War Office, six years ago, I was a strong advocate of the adoption of the unit light helicopter, but it is only in very recent times—within the last few months—that this requirement has passed all the hurdles to which our weapons are subjected, and has been accepted as necessary.

It is because this decision has been taken at a time when the operational need has been urgent that we have had to look abroad for a suitable model. I join my hon. Friend in regretting that Westland was not in a position to offer a suitable British model. There was no firm requirement before the firm, and it certainly would have been asking it to gamble to expect it to produce a model on its own initiative. Some may feel that the matter had been sufficiently discussed to encourage the firm—and the investment required is fairly small—to have done a little more work than it has done in this field. But we must accept that, the decision having been delayed as long as it has been, there was no choice before us but to go for a foreign model.

There were three models that might have met the requirement. There was the Hughes. This just measured up to requirements, but left no stretch. It was not powerful enough to meet any extra demand, either for lift or size. There were then the Hiller and the Bell. Both exceeded the requirements. On technical grounds there was not much to choose between them. The Hiller had the edge in certain respects, and the Bell in others. The Army—the customer—was ready to adopt either.

The hon. Member for Loughborough has noted that the Royal Navy already has some Hillers in service. That was a point in its favour. It is our policy—and it has been accepted by the House—that if it is possible we should standardise our requirements. But the Royal Navy has only about 22 Hillers in service. When we are considering an order which, at a minimum, is 150, the issue of standardisation appears in a rather different perspective, viewed against the fact that the Navy has only 22.

The hon. Member referred to the export prospects that might have accrued to Short's had the Hiller been adopted. There are also some important export aspects to the Bell. The export interest was in fact finely balanced. There was the important issue of employment. We all know how critical unemployment in Northern Ireland has been, but, as the House knows, the question of the helicopter affected only somewhere between 80 and 120 jobs. I am not saying that 80 to 120 jobs is not important, but against the whole background of the problem they are only one consideration. There was then the issue of expertise.

Mr. McMaster

I wonder whether my right hon. Friend will correct me if I am wrong, but I understood that with the Hiller helicopter Short's got exclusive rights for Europe, Africa and the Commonwealth, whereas the Bell rights were for Italy only, and have no potential export at all, as far as I can see.

Mr. Amery

Perhaps my hon. Friend will wait a little. I think I shall be dealing with his point in a moment.

I was dealing with the issue of expertise, and the skill which Westland has undoubtedly acquired in the production of helicopters. It is perfectly true that we encouraged the Hiller firm to make contact with Short's. This was, I think, because Westland already had an agreement with Bell, and it was obviously useful to us to have the maximum infor- mation to see where our interests would lie between the two. But when it came to expertise in the matter—and this is one of the issues, though I do not say the main or decisive one, but one which had weight with us—Westland undoubtedly knew more about helicopter production.

The hon. Gentleman the Member for Loughborough has spoken a little critically of the Westland monopoly. He has better reason than most of us to speak critically of helicopters. The argument which, I think, is one permissible on this side of the House, is less so for those who were so closely associated with the advocacy of nationalisation. It reminds one a little of Satan rebuking sin.

But it looks to meߞI think we can say thisߞthat the argument between the Bell and Hiller was extremely finely balanced. It was not a very easy decision to take. So we put it out to tender to see what the financial position was, and the Westland bid was substantially cheaper. My hon. Friend asked me what the differential was. It is not the practice to go into details of these things, but if I were to say to him that it was not far from 20 per cent. it would give some idea of the pretty marked difference which came out of the competition.

Mr. Stratton Mills

Can my right hon. Friend confirm that the decision was on the basis of the final tenders from both parties?

Mr. Amery

There was only one competition tender by both parties. As so often happens in these matters, news leaks out of what one side or the other has done, and there are approaches for giving lower prices, but I think the House appreciates that it is impossible to carry on business on that basis, and that we have to take the figures submitted in the competition. As my hon. Friend will realise, Short Bros & Harland are very dependent at present on taxpayers' support and there is a limit to which the firm can embark on what might be called a "loss leader" approach to these matters.

Mr. McMaster

Is my right hon. Friend aware that in the revised estimate Hiller had accepted some reduction in the original price quoted to Short's? This should surely be taken into account.

Mr. Amery

I assure my hon. Friend that it is not possible in these matters when we have competition and state the terms of the competition clearly and precisely for both sides to re-tender several times. Had we allowed a re-tender from one direction we would have had to allow it from the other. This is not the way in which the Government can conduct business. The issue was a critical one no doubt for both firms. They both had an opportunity of tendering on an equal basis.

Mr. Stratton Mills

Will my right hon. Friend confirm that the price being paid to Westland is the price it submitted in its original tender? Would he confirm that the price that is to be paid to Westland for the Bell Agusta is the initial price it submitted and not a revised price?

Mr. Amery

That is my understanding of the position.

The hon. Member for Loughborough asked whether there is real economy in all this or whether we are simply to be landed with extra overheads from the firm which loses? This could cut both ways. Both firms are working mainly on Government account. Neither is fully employed, so I do not think that is a valid point. The first 50 of these helicopters are to be bought from Agusta where there is an established production line. That is so as to get these 50 helicopters quickly to meet the Army's requirements as soon as possible. Some will be flown direct from the works in Italy to the Middle and the Far East. We are very glad to buy these aircraft from Italy because the Italians are buying a great deal from us in the form of aero-engine exports, running into tens of millions of pounds.

Another 100 helicopters will be ordered from Westland and built over here. The ultimate requirement for the Army and the Royal Marines may be considerably more than this 150. Of course, I and the whole House recognise the natural disappointment felt in Northern Ireland over this issue, but I thought that Mr. Wrangham put it in proportion in his statement today. It is an important issue, but not a major or decisive one in the context of the overall problem facing Short's.

I though[...] that my hon. Friend the Member for Belfast, East put the point very well in his supplementary comment on my statement yesterday. If one looks at the overall picture, no fair-minded person would disagree that the Government have made a considerable contribution to stimulating work at Short's in a period when the aircraft industry generally has been in a process of regrouping and contraction. There has been [...]he £10 million additional grant given for the completion of the Belfast Seacat programmes. There has been the sub-contracting on the R.A.F. VC.10s, which is already under way. There is the sub-contracting proposed on the Hawker Siddeley 681. My hon. Friend asked how much this will be. I am not in a position to say exactly, but we have said that it will be a substantial element. It has to be remembered that in both cases, the subcontracting on the VC10s and the HS681, there will be an additional price to be paid by the Royal Air Force arising from the split in the work. This is a subsidy to the maintenance of employment in Northern Ireland. There is also the support for the development and initial production of the Skyvan.

Although Northern Ireland faces a special problem which is different from that of this island, no other aircraft group has received support from the Government in quite the same way.

Mr. Cronin

On the question of light helicopters, can the right hon. Gentleman say why an operational requirement for a light helicopter was not formulated by the Government and given to the only British firm which could handle it—Westland—a long time ago, several years ago, when the need for a light helicopter has been obvious to other countries for their armies for several years? Why suddenly, just last year, was it decided by us that a light helicopter was essential for our Army?

Mr. Amery

I thought that I had made a considerable concession to the hon. Gentleman in telling him that I had for long been interested in the light helicopter. However, there are priorities, and other things have to be done. It is only in recent months that this priority has been accepted and established, and the requirement formulated. The hon. Gentleman may criticise this, but it is a valid explanation why we have had to turn at this juncture to foreign sources of supply rather than to our own. I regret that this has happened, but it is so.

Mr. McMaster

I appreciate my right hon. Friend giving way so frequently. Further to his last comments on the sub-contract work on the VC 10 and so on, if the VC 10 order is increased—perhaps for use as a Shackleton replacement—would my right hon. Friend consider placing part of the design work or setting up a second production line at Short's, which would be a very economical thing to do for this aircraft and would maintain the work force at the level which my right hon. Friend has guaranteed?

Mr. Amery

My hon. Friend has infinite resources for advising on new ways by which work may be brought to Short Bros & Harland. I can assure him that everything he says will be carefully studied. I am not in a position to talk about the Shackleton replacement, except in the most hypothetical terms.

I turn to the problem of the future of Short's. The hon. Member for Loughborough asked if there were prospects of more orders for Belfasts and if the R.A.F. wanted more of these aircraft. I have to say that there is now no additional requirement from the R.A.F. Equally, I can assure him that there is no intention of ordering American aircraft in the strategic freighter rôle. He also asked about the Skyvan and why we took so long to make up our mind. The truth is that the latest figures submitted by Short's on which the present decision was taken were available to us only last December. That was a substantially revised estimate, varying from the estimate put forward in the summer by large sums of money.

On the overall future of Short's, I said just over a year ago that I thought the production labour force would not fall far below 6,000. Now it is at about 6,500, and I am leaving aside the design team. Those who have studied the problem will, I think, agree that it will remain a little above or just below the 6,000 level up to the end of 1965.

There is also a substantial measure of agreement that as the Hawker Siddeley 681 programme comes forward—from the middle of 1967—employment should also be maintained around the 6,000 level; not far below that figure at certain periods and, sometimes, a little above it. Thus, between the end of 1965 and the middle of 1967, there may be a gap of about 18 months and it is argued that, if nothing happens to bridge that gap, the labour force could fall to about 4,000. That is on the most pessimistic estimate I have seen. But this pessimistic view is based on a number of assumptions which I do not think the House will be disposed to accept. First of all, it is based on the idea that all existing Belfast and Seacat orders would have been fulfilled precisely on time. Short's have a very good record for delivery, but it does happen in the best aircraft firms that one gets occasional slippages. It also presupposes that there would be no new orders for the Belfast or the Seacat or the Skyvan; my own recent visit to South America encouraged me to think that there was a market there for the Seacat, and the firm has encouraged us to believe that there is a market for the Skyvan. There is also the prospect of other work, not widely discussed or perhaps even considered at present. There may be modifications to existing aircraft—certain marks of the Canberra, perhaps—but there is also the whole prospect of the Shackleton replacement.

I would be misleading the House if I spoke of any firm project at this stage, but hon. Members would, I think, be equally misled if they formed their judgment of the likely level of the labour force on the assumption that no new work will materialise by 1966. On that basis, most of the aircraft firms in the country would be heading for the rocks. So, by and large, I stand by what I said a year ago, that I do not think that the labour force will fall below 6,000 for the rest of the decade, and I hope that that is the assurance my hon. Friend seeks.

Today we celebrated Lord Brabazon's 80th birthday, and I am glad that it should have fallen to me to have the opportunity this evening to pay a personal tribute to him and to his contribution to aviation. In his lifetime we have seen the extraordinary evolution of air power. The first plane he flew averaged 38 miles an hour, and we have now come to a period when 2,000 miles an hour is about the record that has been achieved by a plane. In this vast expansion Short's have played a distinguished part, and it is my own faith and conviction that their day is far from ended.