§ 1. Sir A. V. Harveyasked the Minister of Aviation what steps have been taken by Her Majesty's Government to bring about the successful conclusion of an order for VC10 aircraft from Middle East Airlines.
§ 54. Mr. A. Royleasked the Minister of Aviation why he was unable to complete the VC10 deal with Middle East Airlines.
§ The Minister of Aviation (Mr. Frederick Mulley)We kept in the closest touch with B.A.C. and with Middle East Airlines throughout the negotiations, and were prepared to offer substantial financial support. It ultimately became apparent however that the cost of securing the order would be so great as to be unjustified.
§ Sir A. V. HarveyI recognise the difficulties in negotiating this contract and the very useful part played by the Parliamentary Secretary, but is it not a fact that the day before the final negotiations were due to be concluded the Government announced the cancellation of 1290 the investment allowances and this had a material effect on the British Aircraft Corporation in trying to make a concession which might have brought useful export orders to Britain?
§ Mr. MulleyThe change in investment allowances had no bearing on the proposal the Government were considering, which was for a sale of aircraft and involved a loan by them to the M.E.A. and finance to the company. It was a deal for a direct export sale. Therefore, no question of investment allowance arose.
§ Mr. A. RoyleIs the Minister aware of the great admiration for the Parliamentary Secretary and the hard work he did in trying to arrange this deal? Is he also aware that the right hon. Gentleman's failure to persuade his Cabinet colleagues to provide credit for this sale has damaged and depressed the sales effort of the British aircraft industry?
§ Mr. MulleyI am grateful for the fully deserved tribute to the Parliamentary Secretary, but I cannot accept that the failure to give investment credit terms in this instance damaged our industry or our export prospects.