§ The Secretary of State for Defence (Mr. Denis Healey)
I rise to inform the House that after discussions with our French colleagues, M. Messmer and M. Jacquet, my right hon. Friend the Minister of Aviation and I have today signed a Memorandum of Understanding on the joint development of two military aircraft.
The first is a supersonic fixed-wing aircraft which we shall use both in the Royal Air Force and the Royal Navy as an advanced trainer to replace the Hunter and the Gnat, and which the French will use both as a trainer and in the light strike rôle. Both Governments will commit enough funds to enable the prototype stage of aircraft and engine to be completed, and the intention of both Governments is to proceed to full production.
Both Governments are convinced that there will be a wide variety of uses for aircraft with variable geometry in the middle and late 1970s and thereafter and this is the basis for the work which is to be done on the second aircraft. The Memorandum of Understanding provides for each side to examine such an aircraft in relation to the projected operational needs, to formulate the technical specification and to make preliminary industrial studies, with the full intention of entering upon a joint project in due course. Both Governments will commit funds for the design, construction and development of the engine and the provision of engines for the prototype aircraft. Safeguards have been written into the Memorandum to enable either Government to withdraw for reasons of national importance.
This Agreement, Mr. Speaker, puts the seal on the recent understanding between President de Gaulle and my right hon. Friend the Prime Minister. It offers far-reaching prospects for the future of our 1007 respective aircraft industries and an exciting challenge to the skill and experience of our scientists and engineers on the frontiers of aerodynamics.
§ Mr. Soames
I congratulate the right hon. Gentleman on seeking to maintain the momentum of Anglo-French cooperation in the aircraft industry which was pursued so vigorously and effectively by the previous Government, particularly as to the Concord.
Is the right hon. Gentleman aware that agreement with the French on the trainer project had been virtually completed in October of last year? Will he tell the House why it has taken so long to reach fruition with a formal signing? Will he confirm that the swing-wing aircraft is only a design study and that there is as yet no operational requirement or specification for it? Will he endeavour to make this a truly European project? With this in view, has he in the early discussions he has been having with the French also had discussions with the Germans and other European countries?
Finally, would the right hon. Gentleman also confirm that in his view it will be necessary still to order the F111 to bridge the gap between the Canberra, which will be going out of service in the late 1960s, and this aircraft, which will be coming into service in the middle or late 1970s, made necessary by the cancellation of the TSR2?
§ Mr. Healey
I thank the right hon. Gentleman for his kind words. I understand the natural chagrin he feels that he was unable to conclude such an agreement while his party was in power.
As for the reason for the delay between October and the present, when we got into office we found that the basis on which the previous Government were negotiating made it quite impossible to reach an agreement with the French, because the previous Government wanted the strike trainer itself to have variable geometry and this would not have met the French time scale. It was only because the present Government were prepared to adapt their operational requirements to those of a potential co-operator, something which the previous Government never did in any field, that we were able to reach the agreement today.
1008 On the question of the use of the variable geometry aircraft, as the right hon. Gentleman knows, it is likely that we shall have to withdraw from service during the middle and late 1970s the Buccaneer, the Lightning and the Phantom. We are satisfied that the variable geometry aircraft now under consideration with the French Government is likely to be a suitable replacement for some, or possibly all, of these aircraft, which will then be obsolescent.
On the question of co-operation with other European countries, the French Government and we ourselves recognise the advantages which can flow from associating other allied Governments with the projects at a suitable stage. We have, therefore, agreed to consider jointly at the oppropriate stage informing other Governments of the nature of our projects and inviting them, if this seems suitable, to co-operate with us on the projects themselves.
On the question of the F111A, it is a fact that the variable geometry aircraft now under consideration with the French would not be in service in the Royal Air Force until eight to 10 years after we require a replacement for the Canberra and, therefore, there is no relationship between the F111A problem and the variable geometry aircraft now under consideration with the French.
§ Mr. Paget
Would my right hon. Friend tell us a little more about what is meant by the cancellation clause, which he said may be invoked for reasons of national interests? Are the national interests contemplated a change brought about in our commitments, a change brought about in the escalation of price within the contract, or what?
§ Mr. Healey
The cancellation clause relates primarily to the question of the likely performance and cost of these projects, both of which are still at an early stage. Under the Memorandum of Understanding which we have signed, either side can withdraw from either project by giving 12 months' notice. Until 1st June, 1967—that is, over two years from now—either side can withdraw from the variable geometry aircraft without giving 12 months' notice, but the Government withdrawing will be required, if the other so wish, to complete their work on the engine within 1009 agreed financial limits. I must point out to my hon. and learned Friend that we should not have entered into this arrangement if we had thought it likely that we should wish to withdraw.
§ Sir Ian Orr-Ewing
Has the Secretary of State come to any agreement on the development of the ancillary equipment for these advanced projects with the French? In particular, is the British electronics industry to be given a reasonable chance of tendering for and developing the necessary equipment? Would he bear in mind that some very sophisticated equipment was developed and virtually completed for the TSR2 and that some of this at least might be available and suitable for incorporation into one or both of these projects?
§ Mr. Healey
I will certainly bear the latter point in mind. I can assure the hon. Gentleman that British industry will be given full opportunity to tender for the equipment in both aircraft, though it is far too early to say precisely what will be the requirement for the ancillary equipment.
§ Mr. Dalyell
Are the preliminary industrial studies to begin soon, because from the correspondence the Secretary of State entered into with me, he will know that there is some urgency about this in relation to Ferrantis and the electronic complex round Edinburgh?
§ Mr. Healey
The studies have, in a sense, already begun and they will proceed as fast as we can possibly bring them forward. We are fully conscious of the need to give British industry the maximum opportunity to tender for part of this project in time to keep it going.
§ Mr. Maude
Could the Secretary of State be a little more specific about the far-reaching prospects for the aircraft industry? Is he saying that a trainer and a design study for a variable geometry aircraft will fill the gap caused by the cancellation of three major projects? Whereas these new projects would have come in very nicely in the programme after the three major projects, if they had been carried through, will it not leave a gap in the aircraft industry which these new projects will not wholly fill?
§ Mr. Healey
I must point out to the hon. Gentleman, as I have already to the House in an earlier debate, that there would have been no chance whatever for accommodating either of these collaborative projects inside our aircraft programme if we had kept in the programme the three purely British projects, which we have now cancelled. There would simply not have been the money available. There would not have been the money available for the three British projects either, and that is why we have cancelled them.
§ Mr. Frank Allaun
Will my right hon. Friend give the House a very approximate estimate of the total cost of these projects, because before embarking on such sophisticated measures as this should not we have some idea of the tremendous expenditure involved, particularly as many of us think that it would be better spent on non-military projects?
§ Mr. Healey
I cannot give my hon. Friend the full details of the cost of the projects, because that will depend on the number of aircraft ordered. The unit cost of the aircraft finally produced will depend on the size of the total market. We recognise the advantage, for that reason, of associating not only two but more countries in the project at a suitable stage. But I can tell the House now that the agreement commits us to an initial expenditure of about £20 million on the two aircraft.
§ Mr. Lubbock
Is it the Government's policy to try to set up machinery for co-operation with the European aircraft industries in a much wider field than this, or are any future ventures of this kind to be carried out on a purely ad hoc basis such as, for example, the aircraft which we are currently discussing with the French?
Can the right hon. Gentleman say whether any offer has been made to the other European aircraft industries to participate in the production of the strike-trainer aircraft, even if they cannot be involved in its design and development?
Finally, can the right hon. Gentleman say to what extent the design or development work of these two projects that he has mentioned will enable the firms in 1011 the industry to hold on to staff which would otherwise have been displaced by the TSR2 cancellation?
§ Mr. Healey
In reply to the last point, it will not be possible for the firms to hold on to all the men displaced by the previous cancellations, nor would it be our desire that they should do so. One of the reasons for the earlier changes in the aircraft programme was to enable the country to deploy resources more efficiently from the point of view of the national interest as a whole. This inevitably means some running down of the total number of people employed in the aircraft industry.
As to the other question, we are continuing contact with all other European countries which have aircraft industries. I discussed the possibility of common projects with the German Government when I was in Germany a few weeks ago, but it is our experience, which I think right hon. Gentlemen opposite will confirm, that any international project is a very difficult thing to get off the ground.
One cannot really start usefully an international project on the basis of more than two countries co-operating. Once one has got it started, there may well be a case for associating others. As I have already explained, this is envisaged in the Memorandum of Understanding.
§ Mr. Soames
Would the right hon. Gentleman confirm that the specification will be such as to enable this aircraft to carry and deliver, if need be, the tactical nuclear weapon?
§ Mr. Healey
I cannot confirm that at present. What I can say is that we are satisfied that the operational requirement for a variable geometry aircraft of medium weight and size is fully established in both countries.