HC Deb 19 October 1966 vol 734 cc185-90
2. Mr. A. Royle

asked the Minister of Aviation when he proposes to confirm the production order for the Concord; and if he will make a statement on his visit to Toulouse in September.

The Minister of Aviation (Mr. Frederick Mulley)

It is, of course, for the airlines to confirm the reservations and options which they have taken out for this aircraft. But if the hon. Member is referring to the question of production financing, this is a subject we are discussing with the firms concerned.

I went to Toulouse at the invitation of M. Pisani, the French Minister of Equipment, to join him in a visit to the Sud Aviation factory engaged on Concord. I also took the oportunity of visiting the Breguet factory. I was much impressed with what I saw and with the evident enthusiasm of these firms to make a success of their Anglo-French projects.

Mr. Royle

Is the right hon. Gentleman aware that his Answer is very unsatisfactory? Has not the time arrived when a firm decision should be taken by the British and French Governments to provide money so that the production line can be laid down? Unless this is done, inevitably we shall drop further and further behind and will not hold the position of being two years ahead of any American development. Would the Minister give an assurance that he will continue to be responsible for the Concord programme and not the Ministry of Defence or the Ministry of Technology?

Mr. Mulley

I cannot add to what my right hon. Friend the Prime Minister said about the future of the Ministry of Aviation. On the other points, it is quite wrong to assume that there has been any delay in the Concord programme, and, contrary to suggestions, there is no difference between the British and French Governments on the question of production financing. This is a matter which has to be discussed with the companies, because there was no such provision in the original treaty.

Mr. R. Carr

Can the Minister assure the House that the Government understand that in this big project time really does mean money and that, if this project is to be a commercial success, getting it into the air one month earlier or six months earlier would make a very big commercial difference?

Mr. Mulley

I am very well aware of the importance of avoiding slippage, but it is unrealistic to think that the Government are in any position to bring the programme forward. We are keeping to the time scale which the firms concerned say is the right time scale having regard to the very considerable problems which this aircraft poses.

Mr. Royle

In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible moment.

3. Mr. Brooks

asked the Minister of Aviation whether he will make a statement on the future of the Concord project.

11. Mr. Barnes

asked the Minister of Aviation whether, in view of the escalating cost of developing the Concord supersonic airliner, the Government will now withdraw from this project.

Mr. Mulley

My right hon. Friend the Prime Minister confirmed with the French Prime Minister on 8th July our intention of proceeding with the Concord programme while maintaining constant scrutiny of the financial aspects. That remains the position. I would add that the latest estimate of £500 million, of which the United Kingdom will pay half, covers, unlike the earlier estimate, the further work that will be needed after the standard required for the certificate of airworthiness and includes an overall contingency of £50 million. We shall keep a close watch on costs, and Monsieur Pisansi, the French Minister of Equipment, and I agreed at our meeting on 8th September steps to strengthen the control of the project. Airlines have already taken out 65 reservations and options for the aircraft, and I am glad to be able to report that the development programme is proceeding extremely well.

Mr. Brooks

In view of the staggering increase in the development costs of this project, which is of the order of three times in three and a half years, would not my right hon. Friend agree that the whole commercial justification for this venture must now be regarded as suspect? Instead of having a lot of vague talk about technological fall-out, which is used to justify a lot of sloppy accounting, is it not time that the technological results of the extra £225 million which has been added since May, 1964, were assessed with careful scrutiny?

Mr. Speaker

Order. Supplementary questions must be shorter.

Mr. Mulley

As I said in my Answer, we are watching very carefully the financial aspects of the programme. To put the present estimate in proportion to that given by the then Minister, Mr. Amery, in July, 1964, it is proper to compare £275 million then with £370 million now, because this estimate two years ago did not include costs of £80 million for expense beyond the certificate of airworthiness, or the overall contingency which we have, in conjunction with the French Government, thought it prudent to allow.

Mr. Barnes

Would the Minister not agree that the money which the British and French taxpapers must pay out would be much better spent pioneering more conventional aircraft to bring down the costs of travel for tourists and improve the standards of safety, and that this would make a lot less noise than the Concord is likely to make?

Mr. Mulley

It is always possible to make suggestions about spending money in different ways, but that option, as was explained in 1964, was not open to the present Government.

Mr. Gresham Cooke

In view of the money being spent and the great effort being put into this project, would it not be ridiculous now to drop the Concord? Since two Concords would be equal in carrying capacity across the Atlantic to 25 "Queen Marys", is it not wise to go on with the project?

Mr. Mulley

I have reported the confirmation given by both Prime Ministers in July.

4. Mr. Brooks

asked the Minister of Aviation on what date Her Majesty's Government's financial commitment to the Concord project will cease.

Mr. Mulley

The estimate of £500 million, to which I referred in reply to the previous Question, covers the development of the Concord up to its full planned performance which it is expected to achieve in 1973. The subject of production financing is, as I said in my reply to the hon. Member for Richmond, Surrey (Mr. A. Royle), currently under discussion with the firms concerned.

Mr. Brooks

Would my right hon. Friend say where, in the original agreement, there is any information given about the terminal date of this subject?

Mr. Mulley

I could not without notice quote chapter and verse from the agreement. My recollection is that no firm date was put in the agreement because at that time it was not possible to forecast when the full development would be completed.

Mr. Rankin

Is it not a fact that the Concord as originally projected now no longer exists and that we are dealing with a stretched version of it, and that this, in addition to causing the normal increase in costs, is also helping to increase the original figure that was mentioned?

Mr. Mulley

It is perfectly true that the present specification is a vast improvement on the original one in terms of range, payload and the number of passengers to be carried.

Mr. R. Carr

Can the right hon. Gentleman confirm that this amended version has a much bigger profit-earning capacity and justifies a larger investment?

Mr. Mulley

It is difficult to go further on the profit aspect, although studies done by independent airlines suggest that it should be possible to run the Concord profitably when it comes into service.

7. Mr. Dalyell

asked the Minister of Aviation what study he is making of the efficiency and economy of the sharing arrangements between the British and French Governments in relation to the Concord project.

Mr. Mulley

Before embarking on such a study, I think we need more experience of the way these arrangements work out in practice.

Mr. Dalyell

What exactly is meant by the platitude used by the Minister in answer to a previous Question today: "constant scrutiny of the financial aspects"?

Mr. Mulley

That hardly arises on this Question, but I can tell my hon. Friend that, in conjunction with the French, we have made substantial changes in the actual machinery for controlling the project. We now have a small executive on both sides of the Channel comprised of full-time personnel, and, in addition, a number of official discussions on the financial and economic aspects of the Concord are going on with the French.

Mr. Hastings

Would the right hon. Gentleman not agree that any split of work on the project should be decided on an engineering and not on a political basis?

Mr. Mulley

It is unfortunate that the hon. Gentleman did not convey that to his hon. and right hon. Friends when they were in Government at the time when they drew up the treaty. The division of work between ourselves and the French companies was laid down—how it should be divided—in very great detail in the treaty which we signed in 1962.

Mr. Hale

Would my right hon. Friend bear in mind that Her Majesty's Government cancelled British military aircraft on the ground of escalating costs, delay in production and the necessity for speed? Have we not now reached the time in the present situation when a Ministry of Aircraft Production might initiate a "buy British" policy on a much bigger scale?

Mr. Mulley

I do not think it is possible to contemplate a project of the magnitude of Concord on a purely national basis.

Sir A. V. Harvey

Would the right hon. Gentleman take into account the fact that, the contract having got so far successfully, it now requires immediate backing for production? Will he look into this matter urgently and instil confidence in his hon. Friends who have doubts about British craftsmanship, realising that this is a world achievement which needs the backing of every hon. Member, particularly since the world recognises this as a great development?

Mr. Mulley

I am not only looking into the production aspect, but, as I have said, discussions are well advanced with the companies concerned.

8. Mr. Dalyell

asked the Minister of Aviation what steps he is taking to intro duce incentive contracts in the Concord project.

Mr. Mulley

Incentive contracts will be introduced wherever possible.

Mr. Dalyell

Does not the Minister agree that the Public Accounts Committee would require an answer that is more satisfactory than "wherever possible"? Could it not be "as soon as possible"?

Mr. Mulley

It is not a question of "as soon as possible" in a complicated development programme concerning such an advanced project. Frankly, there are parts of the programme that are not susceptible to incentive contracts at an early stage. We are certainly anxious, as are our French colleagues, to use incentive arrangements as far as possible and as soon as possible, but it would be wrong to suggest that the whole of this development programme could immediately be put on an incentive basis.