HC Deb 12 December 1966 vol 738 cc36-9

The following Question stood upon the Order Paper:

104. Mr. ALFRED MORRIS

To ask the Minister of Aviation whether he has yet concluded his negotiations about the future of the Beagle Aircraft Company; and if he will make a statement.

The Minister of Aviation (Mr. Frederick Mulley)

With permission, Mr. Speaker, I would now like to answer Question No. 104.

Pressed Steel Fisher Ltd. on account of its other commitments, does not wish to retain its interest in the light aircraft field. In these circumstances, we have, as I informed the House on 30th November, been examining with the company means by which the future of its subsidiary, the Beagle Aircraft Company can be assured.

The Government have now agreed, subject to the approval of Parliament, to acquire at a price of £l million the assets of the Beagle Aircraft Co., including the work already well advanced on a range of British light aircraft. The House will be asked to approve the necessary legislation. In the meantime, the Government will continue to provide the funds necessary for day by day operation of the Beagle Aircraft Co., on whose board the Government are to be suitably represented.

I am glad to add that in line with the Government's policy of co-operation with Europe in aircraft manufacture, and with the agreement of the British and French Governments, Beagle has been exploring with Sud Aviation, in France, arrangements for a joint policy between Beagle and Sud Aviation covering the development of a comprehensive range of light aircraft to compete in world markets. It is the agreed aim to develop and extend these arrangements wherever it is of mutual benefit.

Beagle represents the best opportunity for us to compete in the growing world market for light aircraft. The successful continuation of the company will make a useful contribution to our balance of payments and the company should, with full Government backing, be able to command an increasing share of the world market.

Mr. Morris

May I assure my right hon. Friend that that reply will give widespread satisfaction? Is he aware that this will be taken as evidence of the Government's readiness to do what private enterprise is apparently not prepared to do—to maintain the British light aircraft industry?

Mr. Mulley

I am grateful to my hon. Friend. It is the Government's intention to make a success of this venture.

Mr. R. Carr

I appreciate the right hon. Gentleman's personal courtesy in letting me have advance notice that he was to answer this Question, but is he aware of the Opposition's growing objection to the Government's habit of making what are important announcements of policy by answering Questions rather than by making statements which, by normal convention, the Opposition have a chance to see in advance?

Secondly, is he aware that the Opposition deplore this further example of back-door nationalisation, which, we believe, is made necessary only by the general lack of confidence in British aviation created by the Government and by the capital famine caused by the Government's economic policy?

Mr. Mulley

I gave an assurance to the right hon. Gentleman's hon. Friend the Member for Woking (Mr. Onslow) that I would make a statement as early as possible.

Mr. Carr

A statement.

Mr. Mulley

The Question asks for a statement to be made.

I completely repudiate the right hon. Gentleman's suggestion that the Government are in any way responsible for a failure of private enterprise. The only alternative to letting this company close, and 1,000 people become redundant, was for the Government to take over responsibility. I believe that light aviation is an industry in which we should be successful in getting a useful share of the world market. If I were to take the right hon. Gentleman's advice it would mean that, instead of saving aviation, we would let this branch of aviation perish.

Mr. A. Royle

Will the right hon. Gentleman give an assurance that there is no intention of allowing this company to diversify its production into other things apart from light aircraft?

Mr. Mulley

The Beagle Company is exclusively concerned with aircraft work and I have no desire to change that pattern, but to ask for an assurance of that kind is quite out of keeping with reasonableness. If it should turn out that adjustments have to be made, they will be made.

Mr. Urwin

Would not my right hon. Friend agree that this is a further clear indication of the Government's deep concern for the advance of technology, as opposed to the attitude of private enterprise in the past?

Mr. Mulley

It is an indication of the Government's concern both to foster our exports and to do what we can to assist the aviation industry.

Mr. Onslow

As it is the Government's economic policies which have driven this firm to the point where it has to be nationalised because it is in danger of failing the nation, will the right hon. Gentleman now tell us who will run the nationalised firm and what rate of profit he expects on the money invested?

Mr. Mulley

As I said, legislation will be necessary and the House will have ample opportunity to discuss the future management. The steps which are arranged as an interim measure are that the Government will have representatives on the board of Beagle.

As to the profit rate, I confess that for a considerable period it will be necessary for investment to be made in the company to develop aircraft, as is always the case, whether with Concord or any other aircraft, when there has to be an expensive development period before a return can be obtained from production sales.

Therefore, there will not be a profit for some years to come, but in the long run—and we have to answer the challenge in the long run—we have either to do this, or let this valuable part of aviation die.

Mr. R. Carr

Can the right hon. Gentleman tell the House whether the legislation will be in a separate Bill, or will form part of the other legislation which, in the recent aviation debate, he told the House would be forthcoming?

Mr. Mulley

It would be wholly wrong of me today to indicate the exact timing and nature of the legislation. I have informed the House as soon as possible after the agreement was settled this morning. If the House wants to be informed at the earliest opportunity, it will understand that we have not had a look at all these other matters.