MINISTRY OF AVIATION (DISSOLUTION ORDER)

HC Deb 01 February 1967 vol 740 cc420-64

10.24 a.m.

The Minister of Aviation (Mr. John Stonehouse)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Ministry of Aviation (Dissolution) Order 1967 be made in the form of the draft laid before this House on 17th January. This is an important morning for the House of Commons. We are breaking new ground by being here at this time. When we have been here before at 10 o'clock, the House has had a distinctly jaded look, having sat up throughout the preceding night. What a contrast there is this morning! Hon. Members are here, lively and alert, and no doubt we are going to have a very good debate.

I have some reservations about being here this morning, or at least about being here for this debate at this time, as my Department is affected by two debates on the Consolidated Fund Bill this afternoon and this evening, and perhaps tomorrow morning, and I might find myself seeking to catch the eye of the Chair 14 or 15 hours from now.

It appears that right up to the very end my Ministry is still attracting its fair amount of comment and criticism. It is not going out with a whimper. In view of the subject which has been chosen for the Adjournment debate on Friday next, it could be said that we are going out with a sonic bang.

I am moving this draft Order with enthusiasm. I have seen the Ministry from the inside for 18 months. I have been to the larger research establishments. I have had a very close contact with the aircraft industry, and I am satisfied beyond any doubt that the new organisation within the Ministry of Technology offers the best opportunity for our work to succeed.

I think it is a pity that the advice given by a former Minister, Mr. Amery, some years ago that the Ministry of Aviation should be expanded into a Ministry of Science was not accepted at that time. It was left to this Administration to give the Ministry of Aviation a new sense of purpose and direction.

Of course, this occasion is tinged with some regret. We are talking about a Ministry with a considerable history. It grew out of the Ministry of Supply set up in 1939, and the Ministry of Aircraft Production set up a year following that. It has had its great achievements. Of course, it has made its mistakes, but if I might make this last defence for the ugly duckling among the swans of Whitehall, it is much easier to make mistakes in a fast-moving technological environment than in some other placid pools.

This Ministry has been in the centre of political controversy. Some of these political storms have tended to obscure the peaks of achievement scaled by the men in the Ministry. The scientists and technologists in our establishments have been breaking new frontiers, and the combined efforts of the Ministry have helped Britain to be in the forefront of aviation progress. The Ministry has helped to develop great aircraft in the VC.10, the BAC.111 and the Trident, and it has procured some very fine aircraft for the Royal Air Force. In recent years it has helped industry to achieve a very fine performance in the export field, and I am particularly glad that last year exports totalled more than £200 million. This is a very fine achievement, and all those in the industry deserve credit for it, but my Ministry has played some part in it and we have been glad to have given assistance.

Before we finally disappear, I want to pay a tribute to all those in the Ministry who have contributed to these and past successes. I could spend a long time describing the good work of the Ministry, but I want now to put a finger on its fundamental weakness, and it is this, that in pursuing its sponsorship of the aviation industry it has failed to give top priority to commercial objectives and to its wider responsibilities to the economy as a whole. The Ministry of Aviation has been spending £650 million a year; of this, £550 million in expenditure in industry. Much of this total expenditure has been in original research and development, and the brutal truth is that not enough of the value of this has been flowing into industry generally.

Within the Ministry of Technology this vast purchasing power will now be wed for the wider application of the new technologies. In short, there will be more fall-out. In particular, the research establishments will be more closely associated with research which can be valuable to British Engineering generally, and will help our firms, not only in the aircraft and electronics industries, to utilise new techniques and functions. Original research in defence will become more available, as far as security allows, to firms not normally directly involved in meeting defence needs.

All this opens up a most exciting prospect, but the inspiration of this new opportunity will not detract from the most important task we shall still have for acting as the procurement agency for the Ministry of Defence. When I wear my new hat as Minister of State I shall continue to take special responsibility, under my right hon. Friend, for defence procurement functions. There will continue to be the closest possible contact with the Ministry of Defence.

For the time being my senior staff and I will be remaining in the Ministry of Defence building so as to enable these close ties to be maintained. It will be our objective to obtain what the Ministry of Defence requires at the most efficient price and within the time scale that the customer expects. Wherever possible, we hope that specifications will be drawn to enable a civil application also to be achieved. The Ministry of Technology will continue to have the Ministry of Aviation's responsibilities for assisting military exports. Wherever possible, Ministry of Defence specifications again, will be drawn with a view to achieving exports for the products developed by British industry.

The Ministry of Defence itself is very much alive to this need, and my right hon. Friend the Secretary of State for Defence has emphasised, in connection with the Anglo-French VG aircraft, that we hope that if minor amendments can be made which will help to widen the market for this aeroplane these amendments will be incorporated in the plan.

If the House approves the draft Order, the Ministry of Technology will take over sponsorship of the aircraft industry. We believe that this industry has an important part to play. The industry now knows that it will not be spoonfed. In civil aircraft development we must be mindful of the need to secure an adequate return on the taxpayers' investment. New projects will be judged by strict criteria. We will take into account all the factors of import saving and export potential, as well as the fall-out of new developments.

There is every hope that we can establish realistic collaborative projects with Europe and thus secure a basic market among our European allies which will provide commercial opportunities for our industry in this field. It will be the task of the Ministry of Technology to help to secure this opportunity for the aircraft industry.

At present the Ministry of Technology has 6,000 staff, of whom 5,000 are non-industrial and 1,000 industrial. The Ministry of Aviation has about 31,000 staff, of whom 19,000 are non-industrial and 12,000 industrial. Included in the 31,000 there are 18,000 at the eight research and development establishments. All these staff will now join the Ministry of Technology. The combined Ministry will have about 37,000—

Sir Gerald Nabarro (Worcestershire, South)

My particular interest is that I have the Royal Radar Establishment in my constituency, at Malvern. Where are the employees of that establishment included? Are they in the 19,000? Where will they go?

Mr. Stonehouse

The employees of the R.R.E. are included in the 18.000 at the eight research and development establishments, in which the R.R.E. is included. All this staff will become part of the responsibility of the Ministry of Technology.

Mr. Neil Marten (Banbury)

The figure that the Minister gave presumably includes those who have already gone to the Board of Trade, so the total figure would probably be nearer 40,000 than the figure he gave.

Mr. Stonehouse

Yes. The Ministry has already lost responsibility for supervising the regulations governing civil airlines. That has already gone to the Board of Trade. I cannot quote off the cuff the exact number of staff involved in this transfer.

The combined Ministry will have about 37,000, staff and will, therefore, be among the five largest Ministries in and around Whitehall. From the outset all these staff will be treated together with unified seniority lists and promotion opportunities. I am confident that the men and women who make up the Ministry of Aviation will welcome the change that this merger gives them and the opportunity for services that it provides.

The phoenix of the Ministry of Aviation may die on 15th February but it will fly again with renewed strength and vigour within the new Ministry of Technology. I commend the draft Order to the House.

10.37 a.m.

Mr. Rober Carr (Mitcham)

In opening, the Minister referred to our innovation this morning, and welcomed the fact that instead of being jaded at this hour of the morning we were fresh and vigorous. I agree with him. I only hope that he and I and all other hon. Members—and you, Mr. Speaker—will be equally fresh and vigorous this time tomorrow morning. We have a lot of business ahead of us. I am also somewhat surprised that so many hon. Members opposite who urged upon us these morning sittings, and expressed the view that it was wrong for hon. Members to have other work to do in the morning, should evidently themselves be indulging in a hard day's work elsewhere. It is a somewhat disappointing start from that point of view.

We are dealing with a most important question. It is not a minor affair but a major one. The organisation which the House is being asked to set up today will be responsible each year for the spending of huge sums of public money, measured in hundreds of millions of pounds. The effectiveness with which that money is spent, both scientifically and industrially, will have a great bearing on the future technological capability of this country and our political potency and material prosperity.

Apart from the importance of this section of the Government machine, it has always seemed to me that Parliament has too few occasions on which to examine the organisation and methods of the Executive. We feel that Parliament should take advantage of the opportunity provided by this change to probe deeply into the nature of the change and its purposes. From this side, at least, we shall have many comments to make and many questions to ask. It is only fair to warn the House that we feel that this may take a considerable time—probably longer than we have available to us this morning.

I congratulate the Minister on his appointment. At the same time, I sympathise with him on the somewhat ironical position in which he finds himself, for his maiden Ministerial speech is also his own funeral oration. Politically—and I stress "politically"—he seems to be suffering the fate of the drone. He told us that he goes willingly and gladly to the consummation of his fate. I had better not pursue this analogy too far; one would hate to think of the Prime Minister in the rôle of the queen bee.

I hope that in his new appointment the Minister will maintain his enthusiasm for aviation. He talked about different hats. I notice with interest that he and I are wearing Concord ties. I hope that this is a good augury; although I wonder why his tie is the blue version while mine is the red one?

I must make it clear to the House that because of the antecedents of this Order—what we regard as the unnecessary delays and incompetences which have led up to it—we do not welcome it. But before I come to the substance of the reasons for our objections, I wish to add my tribute to that of the Minister to the Ministry of Aviation and all those who have worked in it since the then Conservative Government established it about 11 years ago. I do not bid the Ministry of Aviation farewell because in spite of our doubts about the Order—because of how it has been arrived at and so on—we may in the end find that there is no need to say farewell to it because although it will be under a different name, its life will continue.

The bringing forward of this Order at this time represents yet another breach of faith on the part of the Prime Minister, who said in reply to a direct question from me about the timing of this change: As to implementation of the Plowden Report and decisions consequent upon that, my right hon. Friend the Minister of Aviation will have time while he is still within hi; Department to deal with that question."—[OFFICIAL REPORT. 16th June, 1966; Vol. 729, c. 1662.] I urge hon. Members to note the words "will have time", in reference to my question about the timing of this change. By no stretch of the imagination can anybody claim that there has yet been implementation of the major Plowden proposals. We had vague and woolly-phrased declarations of intent before Christmas about the future structure of the industry, but we know that the discussions and negotiations are far from finality, let alone implementation.

It may be argued, if we accept that the Government are determined to put through this change, that it is better that it should be put through quickly, even before Plowden is implemented. However, this does not alter the fact that, on this matter, the Prime Minister promised one thing and is doing the opposite. Maybe this is becoming such an obsessional disease with him that his name will be left behind in the English language like the names, for example, of Boycott and Spooner, so that we will be able to give moral guidance to our grandchildren by telling them not to do "a Wilson".

My hon. Friends and I see nothing sacred in having for all time a separate Ministry for aviation. However, we believe that the timing of this change has been extremely badly arranged, that the way in which it has been timed during the last year has inevitably caused distraction to Ministers and officials who needed to take extremely urgent decisions and that it has, therefore, caused delay over very important matters. We therefore feel that the operation up to this stage has been put through with incredible ineptitude, for which we primarily blame the Prime Minister.

It seems to us that the distraction and delay which have inevitably been caused by an administrative upheaval of this kind would have been worth while only had the change been part of a really radical reform. But instead of a radical reform, all that we have had so far is the Prime Minister imitating the grand old Duke of York and marching his men up Whitehall and down again. We have had extraordinarily ponderous elephantine administrative manoeuvres merely to reach the present position.

Mr. Norman Atkinson (Tottenham)

Get on with it.

Mr. Carr

The hon. Gentleman tells me to get on with it. I tell the Government to get out into the industry, talk to the people who have been affected by these decisions and then to see whether they agree with what I am saying.

Mr. Atkinson

I told the right hon. Gentleman to get on with it because I have heard him on at least five occasions leading us up the hill and then down again in respect of what he would describe as "Wilsonian heights".

Mr. Carr

I repeat that the views I am expressing are strongly held by those affected at all levels throughout the country. It does no harm to make these views clear in the House. It is one of our tasks to air such views.

Mr. Eric Lubbock (Orpington)

The right hon. Gentleman is correct in saying that some people in the industry agree with the views he is expressing. However, that is by no means universally the case. I certainly know of leaders in the industry—those with whom I have been in contact—who have not gone on record as being violently opposed to these changes in the terms being used by the right hon. Gentleman.

Mr. Carr

The hon. Gentleman has misunderstood me. I am at present expressing the strong feelings that are felt throughout the industry about the delay that has taken place, and I have been describing the elephantine administrative manoeuvres that have been required to reach this position, regardless of the basic merits or otherwise of the change. When the Prime Minister announced in the House last June his basic decision to abolish the Ministry of Aviation, he broke one of the simplest rules of good management. He announced his decision to abolish the Ministry without first having formed a clear opinion of what he wanted to put in its place. That has caused the delay and criticism to which I referred.

Regardless of the basic merits of whether or not the change is a good one, the way in which it has been done has caused a great deal of criticism and considerable suspicion about its outcome. The way in which the Prime Minister tackled this whole business has resulted in five months of indecision, accompanied by one of the classic battles in Whitehall's corridors of power—and the real problems of the industry got pushed into second place.

What have we got if this Order goes through? We have got, as the Minister made clear in his opening remarks, a Department called the Ministry of Technology in which the old Ministry of Aviation element will be far the biggest and most powerful part. But, if this is what was wanted, we could have got there quite simply and quickly. That is the substance of the first part of my criticism. All that the Prime Minister had to do in November, 1964 was to change the name of the Ministry of Aviation and add some new functions to it. The end product would have been the same. It could have been just what we are getting now.

Instead of that quick, simple and tidy process, which would not have caused delay, we have had the most extraordinary convolutions and arguments spread over two-and-a-quarter years. Parliamentary time and public money have been wasted in setting up a new Ministry of Technology with new Ministers, new officials and new offices. Now more Parliamentary time and public money are being wasted in abolishing the old Ministry and arranging for it to merge with—or, as I think more likely, to take over—the new one.

Sir Stephen McAdden (Southend, East)

I wonder if my right hon. Friend would consider delivering these forceful arguments rather more slowly so that they can be assimilated by hon. Members on this side of the House and in the optimistic hope that one or two Socialists will come into the Chamber to listen to them?

Mr. Carr

I shall bear that in mind because I want to be audible and understandable to hon. Members who are present.

One thing that this proves clearly is that, whatever else the Prime Minister is, he is not good top management material. He seems to have the instincts and qualities of one of those company promoters who shift assets from one shell company to another.

One question that the House should ask before allowing the Government to have this Order is, how does the change marry with the recommendations of the Plowden Committee? The Plowden Committee, after all, was set up by this Government to advise on the future of the industry and its relation to the Government.

I was surprised that in moving the approval of this Order the Minister had nothing to say about this. The proposal before us does not match the Plowden Committee recommendations at all. The Plowden Committee recommended certainly that the Government should undertake an early review of the future of the Ministry of Aviation but it said in paragraph 501 of its Report: The main purpose of any change in the arrangements would be to foster a more direct relationship on military aircraft procurement between the Service Departments and the industry. That, the Committee said, would be the main purpose of any change, but the setup with which we are being presented this morning completely rejects that view. It might he right to reject that view, but when we have had an inquiry such as the Plowden Committee inquiry and we have turned away from one of its most important expressions of opinion, the reasons for that rejection should be explained and closely argued in this House.

Mr. Robert Howarth (Bolton, East)

The right hon. Gentleman would be more fair if, when drawing attention to paragraph 501, he also read out the drawbacks against the suggested course of action listed in paragraph 502.

Mr. Carr

Certainly I admit that the Report drew attention to drawbacks, but I did not want to quote too lengthily. As the hon. Member has mentioned paragraph 502, one should also refer to paragraph 503 where the Committee indicated the sort of possible compromise which certainly does not marry with what is being put before us this morning. I think that I am justified in saying that in the proposals that the Government are putting to us, they are departing from the views of the Plowden Committee, and we ought to know, if this is right—it may be right—the reasons for rejecting the advice of the Committee which the Government set up specially to advise them on this matter.

Sir G. Nabarro

Will my right hon. Friend bear in mind that we are limited for time this morning and that a large number of his hon. Friends wish to participate in this debate for constituency and other reasons? We have to finish at 12.30 p.m. and if my right hon. Friend goes on at this pace he will still be occupying the Floor at 11.30 p.m.

Mr. Carr

I am receiving some conflicting advice from my hon. Friends. I can assure my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) that I have no wish to do anything but to put the points which we on this side of the House believe are important and which need to be considered.

The second theme running through the Plowden Committee Report and relevant to this question, was the need for closer and deeper consultation in decision-taking between the Government and the industry. Yet the Prime Minister admitted openly when announcing this decision last June that the industry had not been consulted at all. What is the purpose of behaving and governing like that? All the time the industry, which had not been consulted, had worked out alternative proposals after careful thought and based on great experience. Surely it would have been not only courteous and a matter of good will to the industry but also wise in the national interest that those proposals should have been considered by Ministers before the apparently irrevocable basic decision was taken and announced.

The third dominant theme in the Plowden Committee Report was the need to relieve the aircraft industry of much of the detailed control imposed on it by the Ministry of Aviation. "Getting bureaucracy off the backs of industry" is the way in which some members of the Plowden Committee have described it in conversation. Before passing this Order the House should ask how the proposed change will bring this about, how it will help to get bureaucracy off the backs of the industry.

This seems to require two main things: first, a change of method in evaluating projects, estimating costs, defining operational requirements, developing modern techniques of cost and technical management and modern types of contracts. Does what is proposed mean that all would go on as before? We do not believe that this Order should go through without the Government dealing with some of these questions which are absolutely basic to the effective expenditure of the money—hundreds of millions of pounds a year—to which the Minister referred.

Secondly, and with all respect and admiration for the merits of civil servants individually, getting bureaucracy off the backs of the industry—if it means anything at all—must surely mean having fewer civil servants interfering with it. The Minister told us how many civil servants there are at present in the Ministry of Aviation who are to be transferred to the Ministry of Technology. He told us that all of them are to be transferred, but what are the projected numbers for one, two and three years ahead? What reductions are planned? In what categories are those reductions to be made? Are reductions in some categories to be offset, as they might well properly be, by increases in other categories? If this main theme of the Plowden Committee is to be achieved, reductions in total there must be.

At the moment of introduction of this new system of Government organisation we should have been told what the Government have learned from the further study recommended by the Plowden Committee of American and French methods in this field. What were the results of that study? Are those lessons to be applied, and how does this change affect that issue? What is to be the rôle of the great research stations about which my hon. Friends are so naturally concerned? Are they to continue at more or less the same size? If so, does that mean that their work will be diversified? If that is so, there are many people of great scientific experience who have doubts about the wisdom of that. Or are they to be reduced to smaller size; and, if so, how much?

These are by no means the only question which should be answered. We should be told, for example, how the new organisation affects the management of our space programme. It must be notorious by now that the division of responsibility which exists within the Government for the management of space is proving, as each month passes, to be more and more unsatisfactory and more and more in need of unification. Surely this is the moment to put it right, when Government organisation of these matters is being changed. But is it to be put right? This is one of the important functions which go with the Ministry of Aviation, and we have heard nothing about it.

Then there is a matter of great concern to all of us as individual Members of Parliament. That is the effect of the change on the subject of Parliamentary Questions. Hitherto we have had a Ministry of Aviation. We knew that Questions for that Ministry came on on one day, and we knew that on that day, when the Minister of Aviation was top of the list, we could get our Questions dealt with. But now it seems to be already extremely unsatisfactory. It is now extremely difficult to get Questions down about those functions of the Ministry which have gone off to the Board of Trade. They are swamped in a large number of other subjects and are clearly being dealt with by Ministers—I do not blame them for this—who have so many other interests that they are much less versed in and much less on top of the aviation job than they should be or were under the previous set-up.

There is another aspect concerning Parliamentary Questions which we should get clear as we make this change. We should ask for a clear definition of the division of responsibility between the Secretary of State for Defence and the Minister of Technology with the functions that he will be assuming if the Order goes through. Many hon. Members have found it difficult to understand, and most unsatisfactory, the way Questions relating to the production of military aircraft have been shifted backwards and forwards—transferred between—the old Ministry of Aviation and the Ministry of Defence. There is a difficult borderline here, but it has struck a number of hon. Members—not merely hon. Members on this side of the House either—that this shuffling backwards and forwards was done more often for political convenience than for any other reason. This situation should be redefined at this moment.

Then there is something we want to know about the position of the Minister himself. We understand that he is to become a Minister of State in the new Department. We would like to know more about his real relationship to the Secretary of State for Defence and his real status in the Government. Here, perhaps, his salary is a sign to the House of what that status is to be. We know what it is at present. We realise that this could be explained by the operation, however misguided, of the incomes policy. As a Minister of State in the Ministry of Technology, he could either be a Grade I Minister, as we understand it, with a salary of £7,625 per annum, or he could be a Grade II Minister of State at what we believe is his present salary of £5,625. When all questions of the incomes policy are put on one side and are at an end, in which category is the Minister of State, as he is to become, to be? In view of his heavy responsibilities, and in view of the importance of the function, we believe that he should be—

Mr. Lubbock

On a point of order, Mr. Deputy Speaker. I wonder if you could help hon. Members on this subject. There are 11 of us intending to participate in this debate—[HON. MEMBERS: "Hoping to."]—and the right hon. Member for Mitcham (Mr. R. Carr) has already been on his feet for half an hour. Could you appeal to him to curtail the length of his speech?

Mr. Atkinson

Further to that point of order, Mr. Deputy Speaker. This speech has now been going on for nearly half an hour. This is obviously an exercise for Front Bench participants. Many of us are of the opinion that morning sittings are not designed and have net been created to give Front Bench speakers opportunities of this sort. Is it possible for you to say whether you w ill consult Mr. Speaker and discuss this matter with him, with a view to his perhaps issuing an interpretation of the recommendations which have been made, so that there can be some guidance for Front Bench marathon athletes of this sort?

Sir G. Nabarro

Further to the original point of order raised by the hon. Member for Orpington (Mr. Lubbock), Mr. Deputy Speaker. Is it not a fact that the Order has to terminate in debate at 12.30 in order to leave half an hour for the Adjournment?

Hon. Members

No.

Sir G. Nabarro

Would you rule, then, on the interpretation, Mr. Deputy Speaker? Is it one o'clock?

Mr. R. J. Maxwell-Hyslop (Tiverton)

Of course, it does not.

Sir G. Nabarro

In reply to that interruption—of course it does not, only if the Government give further time. Will it be extended?

Mr. Deputy Speaker (Sir Eric Fletcher)

If the hon. Member for Worcestershire, South (Sir G. Nabarro) is addressing me on a point of order, it would be more convenient if he continued to put the point of order to me.

Sir G. Nabarro

Mr. Deputy Speaker, could you appeal to the respective Front Benches, having regard to the fact that there are 11 Members on this side of the House seeking to catch your eye, to curtail their speeches to a reasonable length? My right hon. Friend the Member for Mitcham (Mr. R. Carr) has now been on his feet for 33 minutes.

Hon. Members

A good speech, too.

Sir G. Nabarro

It may be a very good speech, but there are a great number of other hon. Members who can make very good speeches, particularly on constituency matters. Is it not a recommendation for morning sittings that Front Bench speeches should be reasonably short?

Mr. Deputy Speaker

In reply to those three points of order, the House will be aware that no limitation has been placed by the House on speeches during morning sittings any more than during any other sittings of the House. I am sure that the right hon. Member for Mitcham (Mr. R. Carr) will have heard the observations which have been made to me on these points of order.

In reply to the point of order raised by the hon. Member for Tottenham (Mr. Atkinson), I will certainly bring what has been said to the notice of Mr. Speaker. With regard to the point of order raised by the hon. Member for Worcestershire, South (Sir G. Nabarro) the debate will continue until half-past twelve, when we shall proceed to the Adjournment.

Mr. Stephen Hastings (Mid-Bedfordshire)

rose—

Mr. Anthony Royle (Richmond, Surrey)

Further to that point of order, Mr. Deputy Speaker. I ask your advice. Is it not correct that the pressure for morning sittings came from members of the Labour Party? Pressure mounted to such an extent that we are having this debate this morning. Is it not, therefore, extraordinary that the benches on this side of the House should be filled while there are only seven members of the Labour Party present?

Mr. Deputy Speaker

It is not in order during the debate on this Statutory Instrument to discuss the arrangements which were made by the House for morning sittings.

Mr. A. Royle

Further to that point of order. Is not the point I have made connected with the point made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) about the length of the speech being made by my right hon. Friend the Member for Mitcham (Mr. R. Carr)? It is a very good speech and a very important speech, because my right hon. Friend is raising some points which are very important to the aviation industry—

Mr. John Rankin (Glasgow, Govan)

It is the Opposition who are complaining.

Mr. David Webster (Weston-super-Mare)

Behave yourself.

Mr. Royle

—and he is doing so very ably. It is surely not beholden upon hon. Members opposite—the five or six, or perhaps the seven, who are here—to complain.

Mr. Deputy Speaker

It is not in order during this debate to consider whether it is a good thing to have morning sittings or not. That is something that has been decided by the House. All I can indicate to the House are the circumstances in which the debate should take place.

Mr. Carr

If I have been on my feet for about 33 minutes, I can only say that one of the main reasons has been the number of interruptions to which I have given way. Perhaps it was wrong of me to give way, but I was attempting to be courteous to the hon. Members who sought to intervene. Both sides of the House should realise that we are this morning discussing the Government organisation which is to be responsible year by year for the expenditure of—I think this was the figure given by the Minister—£500 million or £600 million of public money. We do not regard this as a matter which can be briefly debated. We do not think that a two-hour debate is adequate for it. If the Government choose to put it on in the morning and that is all we have available, it is not our fault; but we should not be doing our duty if we did not treat it, as I deliberately described it in my opening sentences, as a major subject. That is what we are doing.

I was about to sum up, and this I shall now do. What really matters, and what is urgent for the technological virility and capability of Britain is that Government management of the great lead technology of aerospace should be made more professional and more effective. This goes far deeper than the organisation of Departments. It goes to the very roots of traditional Whitehall methods and to the roots of Treasury control in particular. Let us be honest and above party politics in this and admit that we have not in the past managed these affairs particularly well, and let us admit also that our failures in this field are not to be found or, for that matter, to be cured in terms of party political dogma. They are not due to the incapacity of particular Ministers or officials. They are rooted in the inappropriateness of the Whitehall system itself, a system which was developed in far-off days for entirely different purposes and conditions when problems of Government participation in the selection and control of the advanced technological projects of the modern age were not so much as dreamed of.

In the debate on the Plowden Report exactly a year ago today, I put forward on behalf of the Opposition nine proposals for the modernisation of our management methods in relation to procurement. I did my best to put them on a non-partisan basis, and they were not unkindly received by both sides of the House. We welcome the fact that some progress has been made towards their adoption, but there is still a long way to go.

May we be assured by the right hon. Gentleman, when he winds up either today or on a later occasion when the debate finishes, that the change proposed in this Order will be made the occasion for carrying such reforms forward in a more urgent and radical way? Further, may we be assured that Ministers will look more deeply and with a new mind into the very nature of Departmental responsibility itself? Many people both inside and outside the House who have had some experience of both Government and industry are coming increasingly to think that we shall get the necessary professionalism and continuity of management and the close knitting together in mutual responsibility of Government and industry only if we set up a managerial authority one stage removed from Government itself.

The public expenditure which can be afforded for aero-space development can and must properly be decided only by the Government of the day; but within that limit there is an increasingly strong case for technical policy-making and the programming of major objectives to be put in the hands of new aviation space councils comprising members from the Government, industry and other outside sources and served by independent secretariats providing technical, commercial and financial expertise of the best obtainable quality.

If the Government will make a serious attempt to answer some of the questions I have asked and give us confidence that the Departmental change proposed will be made to mark the beginning of a driving process of Governmental reform and modernisation going to the very roots of Departmental responsibility itself, we shall be glad to see the change go forward with our blessing. But if not, if these questions and points are not to be replied to seriously by the Government, then our worst and original suspicions will be confirmed, suspicions that out of what we believe the Prime Minister started as a piece of political jobbery will be borne nothing but administrative impotence.

11.15 a.m.

Mr. Robert Howarth (Bolton, East)

I was not happy about the purpose of this Order, and I was a strong opponent in more private gatherings of the proposal to wind up the separate Ministry of Aviation. I do not like the proposal. It may be that this is because my limited experience of Parliament has always been, as it were, under the umbrella of a separate. Ministry and I cannot, therefore, make an objective comparison with the situation as it was before. After listening carefully to what has been said by the Minister and by the right hon. Member for Mitcham (Mr. R. Carr) who, when he got away from the rather heavy political points which, I suppose, he felt he had to make, made some very fair and constructive comments, and after hearing the answers which, I hope, we shall have later this morning, I may feel happier about the proposal than I have up to now.

Those with whom I have contact who have had experience of divided responsibility for this subject, that is, prior to 1959 and the setting up of the separate Ministry, assure me that the division of responsibility had the effect of introducing delay and frustrations which do not augur well for the suggestions being made in this instance. I recognise that this is arguable, and we shall, obviously, have to watch future developments very carefully. We hope that the Minister's optimistic forecast of how it will work will come true.

I particularly welcome the Minister's emphasis on his determination that the future will be used particularly to stress the commercial approach. We have in Britain in the past—responsibility here rests upon both the industry and the Government—missed opportunities which have been open to us in the commercial field, and we shall have to make up for this in the future. My attitude to the specific subject of debate and to all other aerospace questions is determined by my appreciation that the growth of air transport nationally and internationally is proceeding at such a rate that on the passenger side there is a doubling every five years and the freight market is growing even faster. These changes are of such a character that they are not appreciated by many people. I think that this applies particularly to many of the leading people both in the Government and in industry outside aviation, and from this failure spring many of the mistakes we have made in the last two decades.

Trying to be objective, I think it fair to say that there have been mistakes both in the short period when this side has had responsibility for events and, certainly, in the 13 previous years. I think that the main reason is that so many people failed to grasp the rate of growth of air transport. Until one gets that in perspective, so many of the mistakes are made that have led us into the situation where America now undoubtedly holds a commanding position. While those of us who are eager to see our entry into the European Economic Community hope that we shall be able to redress the situation in the years ahead, the gap is now so great that we face an immense task.

I appreciate the eagerness of so many hon. Members to enter the debate and I shall try to be brief, but I shall try at least to answer the right hon. Member for Mitcham in what I thought was his major criticism of the Government, that we were introducing the change before we had implemented most of the recommendations of the Plowden Report. I was brushing up on the Report as the right hon. Member was speaking, and my reading of it leads me to the opposite view, that under the heads of the summary of recommendations at the end of the Report one can pick out item after item where the Government have either taken or are taking steps in line with the Report. Our debate today arises from the recommendation of the Report that the future of the Ministry of Aviation should be looked at.

Another major heading is "International Co-operation". Surely the announcement only a few weeks ago of the successful agreement to go ahead with the Anglo-French variable geometry aircraft fits into that category? The agreement is welcomed by the industry and adds to a much happier feeling in it in the past month or two than possibly there has been in the past few years. My impression is that there is a renewed confidence in the industry. As we now know, the Minister is taking his responsibility to the Ministry of Technology, and I am sure that if he has his way that confidence will rapidly grow throughout the whole industry.

Another heading in the Report's summary of recommendations is "Exports", and we have heard the record of the industry there. Steps have been taken and are being taken in regard to civil aircraft. They have not yet matured, but many of us hope that progress will be made this year with the air bus. Aid has been given to specific civil projects, amounting to many millions of £s, which we hope will enable those products to be sold in wider markets.

There is a heading "Light aircraft". We all know of the proposals, which have been widely welcomed on both sides of the industry, for the take-over of the Beagle Aircraft Company, a company which has performed exceptionally well. The aid that we hape will be channelled to it, and possibly the agreement with Sud Aviation, should enable it to meet the very strong competition from America.

Under "Organisation of the Industry", it is true that discussions are still proceeding on the proposals to merge the airframe side of B.A.C. and Hawker-Siddeley and to introduce an element of public ownership. Naturally, such things take time, and I am not surprised that we have not had a final decision. The matter is being discussed with industry and I hope that we can get agreement on it. To complain on the one hand that the proposal to dissolve the Ministry of Aviation was not discussed with industry and then grumble because the Government have not reached finality on the question of organisation seems to me to be wanting it both ways. In proceeding on this matter in the way that they have, the Government are moving in the right direction.

Under nearly all the headings in the recommendations in the Plowden Report, one can point to action that has been or is being taken by the Government, and I therefore think that that part of the right hon. Gentleman's speech was particularly weak.

But when we come to the list of detailed and technical questions he put to the Minister I felt that he was on very strong ground, and that his questions were important and pertinent. I hope that we shall have satisfactory answers. I do not suppose that we shall have them all today, but I hope that we shall have them as time goes on and that we get the sort of answers that will support the optimism which I now have in the aerospace industry.

The right hon. Member asked whether we have looked at the American and French experiences. It is rather interesting to look at the French experience at least. Rather in parallel with our own proposals for the merging of aero-frame companies, such proposals are going ahead apace in France also. It could well be that both countries, recognising the difficulties we have relative to America, are arriving at rather similar conclusions.

I am at one with the right hon. Gentleman in his statement that we obviously need to free the industry from bureaucracy as much as we can. That is a laudable aim with which no one would disagree. But the aviation industry is unique in the amount of money it receives from the taxpayer. Clearly, one cannot hand out something like £500 million per annum to aviation without very strong assurances that it is being used correctly and wisely by those to whom it is passed. I hope that we can develop, on the aeroframe side at least, a mixture of public and private ownership which will get the best from both, and which will enable the initiatives and responsibility which both these sections show to work for the benefit of the aviation industry.

There is one other point which is an encouraging feature of the scene at present, and is undoubtedly linked with the subject under discussion this morning; it is the setting up of the Select Committee on Science and Technology—our first meeting takes place today. Many of us hope that it is possibly a precursor of more specialist committees, and obviously I am thinking of one solely for aerospace questions. That might be optimistic, but there are on the Committee a sufficient number of members with aviation interests to ensure that the aerospace industry is covered in our discussions. I look forward to the development, through the work of that Committee and possibly future committees, of an independent, technical and, certainly on this subject, bipartisan approach which will be of benefit to the nation and the industry.

Finally, I take this opportunity of congratulating my hon. Friend the Minister for his record both in his period as a junior Minister at the Ministry of Aviation and his actions in the short period of his tenure of office as Minister of Aviation. His record is outstanding, and he gained the confidence of the industry. It has come to know that he has the confident that in his new post, as I believe it is to be, as Minister of State at the Ministry of Technology, with responsibility for aviation, we shall have the sort of attitude and encouragement which has been lacking over many years in the past. I am exceptionally confident for the future, despite the unease I had over the proposal to wind up the Ministry. Many of the events over the past few months have completely changed the picture, and I look forward to being a very critical observer of the scene ahead, which I hope will measure up to the forecast of the right hon. Gentleman.

11.29 a.m.

Mr. Hugh Fraser (Stafford and Stone)

I assure the House that I shall not speak very long. We all, on all sides, would like to wish the Minister well in his new job. It strikes some of us, however, that this has been, so to speak, a reverse takeover bid and that there is little change except that, in the view of many of us on this side, the Ministry of Aviation will be attached to the wrong sponsoring Department. This is an alarming thought after so much time has been given by both the present and the previous Government to the fate of the Ministry of Aviation. As my right hon. Friend the Member for Mitcham (Mr. R. Carr) said, it would have been much easier to have taken over the Ministry of Technology and to put the hon. Gentleman in charge of it.

From the Minister's speech in opening the debate, two themes are clearly dominant in his mind and that of the Minister of Technology. One is that the idea of the possibility of greater aviation sales should be instilled in the Ministry and the other is that in some mysterious way there should be a greater fall-out. I believe that in both these directions—the commercial interest and fall-out—the Government would have been better advised to attach the Ministry to either the Board of Trade or the Ministry of Defence. If we are to pursue the commercial interest, I believe that the Board of Trade would have been a better sponsoring Department. For pursuing the question of fall-out, I am quite convinced that the Ministry of Defence would be the area in which it would be greater.

From my connection with the Ministry of Aviation in the old days, I am convinced that the greatest fall-out comes from the major project and not from tinkering about with minor projects. This is true both in this country and in the United States of America.

The Ministry of Technology is not itself a major Department of State. It is not a Department of great influence of power or a Department with any specific objective except the generally rather vague one of pursuing technological advance. To judge from the Minister's entry into practical economics in various matters, his performance has not been of the highest order. The Ministry of Technology is, therefore, probably the wrong Department, and I am sorry about this.

As my right hon. Friend the Member for Mitcham has said, the main problem today is to bring the Ministry of Aviation down to size. I am quite certain that we can learn, and should have learned, something from the American and French systems. The Minister would, I think, agree that the great decisions in aviation matters are made not by individual Departments, but by the Cabinet. The Cabinet has to make these decisions because huge sums of money are involved. Looking back, one sees that, whether the decisions which are taken are right or wrong, they are eventually made at Cabinet level.

There is, therefore, a great deal to be said at this stage for the type of organisation, which one certainly sees in the United States and which, I think, we are moving towards in this country, which makes certain that great projects are properly administered. In every department of the Ministry of Aviation, one always saw the problem of the endless escalation of costs. This was not the fault of any one person in particular but was the general fault both of the industry and of the Ministry. I believe that if we could apply the type of management techniques to which my right hon. Friend has referred—the type of techniques which we were in process of applying to major military air projects and which the Americans now apply to things like the S.S.T.—this would be the great area of progress.

The fate of our aircraft industry is today crucial. On the one hand, its exports have been the highest ever, but, on the other hand, no fewer than 1,300 highly-skilled people left the industry last year. The industry is very much at the turning point.

Equally, the problems of the proposed amalgamation are by no means easy. My belief is that this is being done the wrong way round. I am not sure that instead of B.A.C. taking over Hawker-Siddeley, it should not be the other way round. These are matters of decision, and these decisions should be taken by a strong Department rather than a weak and rather airy-fairy Department like the Ministry of Technology.

I should like to ask the Minister this question. We have seen a reorganisation inside the Ministry of Defence. We have seen specialisation, of which I am absolutely in favour, in procurement and one Minister being made responsible for all the goods, services and arms flowing into the Ministry. These are enormous in size. How and where precisely does the Minister stand in relation to the Ministry of Defence today? As I see it, this present proposal makes a further area of discussion between whoever orders military aircraft and the organisation procuring them. This seems to me to be thoroughly bad organisation.

As the Plowden Committee so clearly stated, one thing which should be made absolutely clear is the need for the most direct possible relationship between the biggest sponsor of aircraft, which must remain the Ministry of Defence, and the manufacturer. Under this new arrangement, however, we are to have a system which interposes two Ministers in front of the Minister of Defence when previously there was only one. This must be bad and it must have a bad effect. It is something which needs to be cleared up.

I am sure that the Minister is wished well by the whole House. We have got to wish him well, because the aircraft industry is in such a sad condition. We hope that he will do something to put it right. I believe, however, that the instrument which he is being given is a most difficult one to manage and that, on the whole, this arrangement has been badly done.

1.37 a.m.

Mr. Tam Dalyell (West Lothian)

We could, I think, agree that the problems covered by the Order are probably as complex and difficult as those faced by any Minister of the Crown in the twentieth century. On this account my hon. Friend the Minister deserves well. As he himself has said, it is easy to make mistakes in a fast-moving technological society. I welcome very much what he said about the future of the Royal Aircraft Establishment at Farnborough. It will bring Farnborough's work far nearer to British engineering in general.

I must, however, tell my hon. Friend, both as a supporter of the Government and as a Member who, since entering the House in 1962, has concerned himself with science and technology matters, that I am profoundly disturbed by what appears to be going on in the world of British aviation. My hon. Friend said that he would have the closest possible contact with the Ministry of Defence, but I hope that in his new rôle in the Ministry of Technology he will consider it his job to probe deeply what is going on in the Ministry of Defence, because frankly it seems to me that what President Eisenhower called the military-industrial nexus has taken over the defence and major technological policies of this Government.

The procurement policies on which decisions are being made between now and March seem to me to be likely to determine our defence, foreign affairs and technological policies for a decade to come. Just as the American order of Minuteman determined the whole American strategy of Counterforce, so I think that Aviation decisions have a great effect on our foreign, defence and technological policies. I must tell him also that, perhaps in a very naive way, the apparent enthusiasm with which he referred to military exports made me feel very sad, and sick.

Mr. Lubbock

I wonder if I might ask the hon. Gentleman something?

Mr. Dalyell

No. I say that simply because there are many other hon. Members who wish to speak.

Two weeks ago, the Defence Secretary announced an initial agreement on the Anglo-French Variable Geometry aircraft which is to come into service in 1974. This is not the occasion on which to discuss the defence aspects of that. However, the A.F.V.G. is a hugely expensive project, compared with which Sky-bolt, Blue Water and Blue Streak were relatively cheap articles.

The cost of the research and development on the A.F.V.G. is estimated at £200 million, and the unit costs, assuming that 1,000 are required, are reckoned to be;£1.5 to f1¶ million. On another occasion I would argue that these figures are grotesque under-estimates. For what purpose is it intended? East of Suez? I can hardly believe that the Government are making the assumption that Britain will be pursuing roles in the Far East in 1974. It is quite clear that the the decision in favour of the A.F.V.G. stems directly from the supposed future needs of the British aircraft industry. Therefore, the subject is directly relevant to this Order.

Here is the situation which faces the incoming Minister. Many skilled engineers and designers who were engaged in the initial stages of the Concord find that their work is largely completed. In addition, design work on the Jaguar is largely finished, and my guess is that the Government are now face to face with the prospect of design teams breaking up and a consequential brain drain to America unless a vast military order is forthcoming. It may be that this very month the Government will be faced with the proposition that, unless we have a military aircraft industry, we opt out of civil aircraft and a whole range of technologies.

Based on the current state of my knowledge, my view is that the decision to go ahead with the A.F.V.G. is a deeply mistaken judgment. It is up to the Ministry of Technology to do the probing. If I am right, and these decisions come basically not from our long-term defence needs in the 1970s but from the immediate needs of the defence industry, its engineers and designers, it is definitely relevant to this Order and to the duties of the incoming Minister. He should go about his work in an inquisitorial fashion.

It seems to some of us that employees and employers in the defence industry are in precisely the same position as those members of the Trades Union Congress who, in the 1930s, asked for battleships to be built to provide employment to feed wife and kids. The major task of this Ministry may he to bring about a constructive shift in policy. I am very conscious of the needs of those engineers and designers, and so I say to the Minister that his talks on Friday in Paris about the air bus are of crucial importance, and I hope that he will come to some arrangement with Scandinavian Airlines, Lufthansa and Air France on the development of the air bus, because many of our designers and engineers would find that all their talents were fully extended in trying to make a simple, cheap, subsonic air bus. As I shall argue later, markets for it could not be less favourable than the markets for the Anglo-French Variable Geometry aircraft.

If the argument is that the air bus does not provide an exciting challenge to those at the frontiers of aero-space knowledge, then Britain, or better still a European technological community, should become engaged on multi-disciplinary projects such as particle physics engineering or exploration of the seabed and many other matters which we can think of. I would agree with the right hon. Member for Stafford and Stone (Mr. Hugh Fraser) when he talks of the need for a major project which can and does raise possibilities of value to industry and in fallout. A major effort for the exploration of the seabed is the sort of thing which ought to be discussed with the Hornig Committee set up by the President of the United States for co-operation between European and United States technology.

In the meantime, it is the first major and disagreeable duty of the Minister of Technology and of my hon. Friend in particular to have rough, tough, unpleasant scenes with the Ministry of Defence to get it to drop the Anglo-French Variable Geometry aircraft and break the vicious circle whereby we have to build ever more sophisticated aircraft in order to be able to build even more advanced systems in the next generation.

After all, where does this come to a halt, unless one has some kind of a weapons freeze? It is not a question of unilateral disarmament or anything of that kind. We have already reached a situation where no country will risk attacking these islands, in view of our existing defence mechanisms, and no country will ever take liberties with another nation which has Polaris. So I say that this Ministry is intimately bound up with policies of defence and foreign affairs.

Having made that general statement, there are some tasks for next week. The first thing which the Minister has to look at on the question of the A.F.V.G. is third party sales. Some of us cannot believe that the claims made for third party sales are justified. It is argued that for the Anglo-French Variable Geometry aircraft, British needs are between 120 and 150. France's requirement may be between 120 and 150. However, the assumption of a unit cost of £1½ million depends on the production of 1,000 units. It seems to some of us that we are faced with the obligation to sell 700 A.F.V.G. aircraft. But where are our markets for them? Is it argued that Belgium is a potential customer, to whom we have the greatest difficulty in selling the Jaguar? Are we arguing that it is to Germany that we should sell A.F.V.G. aircraft?

Mr. Deputy Speaker

Order. I must ask the hon. Gentleman to relate his observations to the content of the Order.

Mr. Dalyell

Mr. Deputy Speaker, in his opening speech my hon. Friend himself raised the question of exports. Since Germany has joint funding relations with at least two American aircraft companies, how is it supposed that the Germans will be interested in a substantial order of an overweight Anglo-French Variable Geometry aircraft which—

Mr. Deputy Speaker

Order. That may be so, but this Order deals with the transfer of functions and the hon. Gentleman's observations must be related to the proposal to transfer the functions to another Ministry.

Mr. Dalyell

In the transfer of functions, the incoming Minister will have to deal with the question of break clauses. Again, the most obvious example is the break clause arrangements for the Anglo-French Variable Geometry aircraft. I relate my argument to this Order by saying that, once we have taken the decision which may be taken in March to go ahead with this kind of order for the A.F.V.G., it affects the industry for which the Minister is responsible.

It is all very well arguing that one can have break clauses. One cannot have break clauses without massive industrial dislocation. Once a decision has been taken, a great deal of momentum gathers. In my view, this is a very serious matter for the Ministry.

Again, there is the Government's claim that we are streets ahead of the United States in variable geometry techniques. That is the kind of ludicrous claim which underlines confidence. If we say that we are ahead of the technology of the United States, how is it that three years before we could do anything the United States had at least 14 F111's swinging their wings over Oklahoma and northern Texas day and night practising variable geometry?

Those are questions of great urgency for this Minister, and perhaps the most urgent question of all concerns Anglo-French relationships. Why is it that they are going ahead with the Mirage 3G and start an agreement with us on A.F.V.G.?

Is it seriously argued that D'Assault would continue the project without a green light from the French Government? For what rôle, in the absence of an east of Suez policy of their own, do the French want on A.F.V.G.? Does De Gaulle, or his successors, want the Germans to purchase the A.F.V.G.? If it is argued, as it has been, that they cannot go ahead with one-engined aircraft such as the Mirage 3G, it is fairly easy to do wing bed testing on one engine and then change to two engines from one.

Discussing this subject is like opening Pandora's box, and a very deep probe will have to take place into it. Yes, Pandora's box. I am sure that it will reveal many of the difficulties which the Governments of modern States have been up against since the Second World War. This situation reflects what is perhaps a quiet change in the aviation policy of the Government, because I understood my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) to say that this Government would not mollycoddle the aircraft industry, and, when he cancelled the TSR2, rightly or wrongly, I was completely behind him. In my view the decision on the A.F.V.G. aircraft is a quiet reversal of Government policy.

The Minister has a duty to the Labour Party, to the Government, and to Britain to make these points clear, because vast expenditure on aircraft will have an effect on all the other policies of the Government, especially in exports, and one can name others, such as science teachers, schools, skill in industry, and so on. It is pathetic that we should have discussions with the Secretary of State for Education and Science about modest help for overseas students. This is miniscule expenditure compared with what we are debating today and the expenditure of the Ministry involved in this Order.

I hope that the Government will give the gravest reconsideration to their important decisions before March, and will instil into their policy a greater ingredient of what I rather modestly call basic Socialist policy, by rethinking the A.F.V.G. concept.

11.52 a.m.

Sir Ian Orr-Ewing (Hendon, North)

First, I have to declare an interest, as is customary in the House. Those who are connected with either electronics or engineering in any sphere probably have some interest in this subject, because every worth-while firm has contracts with the Ministry of Aviation.

Secondly, it is a rather strange bit of organisation by the Government who have selected such an extremely important debate for this morning sitting, when so many people want to speak. We remember that morning sittings were designed to get us home early. It is rather a strange coincidence that this debate should be held on the same day as a debate on the Consolidated Fund Bill which, by tradition, is not a short debate. I wonder how this strange marriage came about. Many of my hon. Friends wish to speak and make valuable contributions to the debate, but as we are so curtailed this morning I hope that they shall have other opportunities to speak on this vitally important subject.

I thought it a sad reflection on the state of affairs that during the opening speeches there were only five back benchers on the Labour side, after the tremendous demand for these morning sittings, but there were many times that number on our side.

I am sorry not to follow the hon. Member for West Lothian (Mr. Dalyell). I want to speak about whether we have got this organisation right. As I said during the debate on the Plowden Report, as did my right hon. Friend, I believe that in this technological age we probably have not got the right organisation. Whitehall is not the right organisation for controlling highly scientific and sophisticated projects of this kind. I believe that in the long run we ought to set up separate corporations or separate organisations for conducting business of this kind. This is bound to take time, and I shall therefore concentrate my remarks on some of the disturbing aspects of the present proposals.

I have worked in the electronic and engineering industry for about 20 years, and for seven years I was a junior defence Minister. One thing that came out quite clearly during my experience was that progress was very much quicker when the customer was brought near to the provider. There were two examples of this up to a few years ago. After the war, the Air Ministry had to go through the Ministry of Supply to get its requirements, and there was this very large buffer state interposed between the operator and the provider. In the Admiralty we had a different system. We did not have to go through a buffer Ministry. We went directly to the supplier, with the result that we got our goods to meet our needs more economically and more quickly. This is one of the basic faults of the present proposals. This is brought out very forcefully in paragraph 499 of the Plowden Report, which seems to have been disregarded, and I hope that when the Minister eventually winds up on some future occasion he will tell the House how he hopes to speed up the system of queries going backwards and forwards when there is this vast buffer state in the middle.

Dealing first with civil aviation, I regret that nobody from the Board of Trade is present to hear this debate. After all, the Board of Trade is to take one-third of the staff, 8,653 people, from the Ministry of Aviation. The other 16,000 are going across to the Ministry of Technology. Presumably the Corporations and the Independent airline operators will frame their requirements to the Board of Trade which will then get in touch with the aircraft companies. The Board of Trade is to be responsible for looking after the export potentialities, so presumably the Royal Air Force attachés in overseas countries, and also the civil air attachés, must now report to the Board of Trade. This is rather muddled and confused, because they will have two bosses, one on whom their promotion will depend and another to whom they will report.

In, the military field we have the Ministry of Defence, and presumably the Minister of State for Equipment will be responsible for these matters. He will report to the Ministry of Technology, and the requirements will then be passed to the firm concerned.

Since this Government came into power, and contrary to what the great majority of the electorate thought, there has been a tremendous cut in the number of aircraft projects. One can think of the P1154, the HS681, and that most promising aircraft that the free world has ever produced, the TSR2, yet there has not been any reduction in staff, in fact rather the reverse as one sees from looking at the figures for the Ministry of Aviation. We have only one advanced military project, the 1127, and outside this field we are dependent on Anglo-French co-operation, on the Jaguar, on helicopters—as we heard recently—and on the Anglo-French Variable Geometry aircraft.

If we have not got a very good organisation for managing and controlling British industry, and a British industry which is far more concentrated than it was a few years ago, is it not even more important that we should have a flexible and fast-reacting organisation when we are concerned not just with our own industry, over which we have considerable power, but with French industry as well?

It is my experience that the French have very strong teams of civil servants, many of whom are trained in technological subjects and who can speak the scientific language of the day. I wonder whether the Ministry has been a little loth to make up its deficiencies. We all acknowledge that, unhappily, our system for recruiting civil servants has not given the priorities which it should have given to people with scientific training, technical backgrounds, and industrial experience. These matters must be put right, and I hope that in due course they will be.

In the interim, however, would it not be wiser to make use of some of the expertise which exists in industry? The Americans take along to their design conferences people from industry. They have never for a moment hesitated to do so. A sort of slightly ivory tower attitude taken in Whitehall suggests that one should not take a person from industry to these conferences because, in some way, he is tarred with the commercial brush. If we want to get this settlement, and to have British units and systems incorporated in these joint projects, it is important that the Minister should take along people who thoroughly understand the systems that are being developed, to a much greater detailed extent than is possible for any civil servant.

We are just starting the Estimates season. How will the Government apportion the defence portion of this large sum of money as between the different Service Ministries? Are we going to see the military portion of research and development, as it concerns defence establishments, reproduced in the Defence Estimates? If it is not, the claim of the Minister of Defence that he will keep the global sums spent on defence down to £2,000 million will be a phoney claim, and there will be a rigging of figures. This problem must be discussed. It should be cleared up before we start the Estimates debates.

Who will supervise the ground environment? The ground control of our civil aircraft generally has risen from and is now co-ordinated with that of our military aircraft. Who will look after this? Again, the development of navigational aids has generally emerged from military navigational aids adapted to civil needs.

Thirdly, who will co-ordinate the activities in space? For week after week, month after month and year after year, we have had no indication from the Government who said that they were devoted to "the white-hot scientific revolution." This is the most important field for the future, and yet we do not know and have never been told who is responsible, and who will co-ordinate activities.

Mr. Lubbock

Oh, no.

Sir I. Orr-Ewing

I am sorry for the only Liberal Member present. I have been on my feet for eleven minutes and I propose to continue.

In introducing the debate, the Minister of State said that he was dedicated to import saving. I only wish that some of his predecessors had been more dedicated to import saving, because we have spent, or have committed ourselves in the last 2¼years to spending 2,000 million dollars on American aircraft. He said that if mistakes had been made they lay in the fact that the Ministry had failed to give sufficient priority to commercial applications. I ask him to revise the general thinking about profits in the aircraft industry. Contracts are being negotiated, but even today they are being negotiated in the aftermath of the Ferranti discussions and debates that took place in the House. If he is to obtain the confidence of the industry, he must realise that if it is to take risks—and risks which cannot be accurately calculated—it must be reasonably rewarded by profits of between 10 per cent. and 20 per cent. This point came out in the Lang Report.

I now pay tribute to the fact that the Minister has not only recruited many new costing officers, but that they seem to be of an excellent calibre and are very competent. But the question of profits is still a dirty word, and the Minister will not get efficiency in the industry unless he can persuade people to take risks and to reward them for doing so. If their profits are unduly high, he might devise some system under which some of the extra profits go back to the Government and the Department. At the moment I am told that they are thinking of 12½ per cent. as the maximum profit. This is not realistic when a firm is developing a sophisticated product in which a tremendous risk is involved.

In this connection, in paragraph 90, the Lang Report said: We nonetheless deprecate the idea of a Ministry having a general right to post-cost fixed price contracts. This practice of post-costing appears to be growing in the Ministry. A fixed price contract is made and it is then reviewed and adjusted, probably downwards. If industry has done its work correctly and has taken a risk, it should get some of the rewards. Unless the Minister works along these lines, he will not get the system into operation and we shall not get the technical strides in the industry—in the thousands of firms involved—that he and the House desires.

If the Minister acts as I suggest he will build up good will. It is a co-operative operation. It can only work with good and close understanding and confidence between the civil servants and the industrial people with whom they are negotiating. I hope that he will give the matter careful thought and will deal with it together with the points that my hon. Friends have raised.

12.5 p.m.

Mr. Norman Atkinson (Tottenham)

I am concerned about the future of the aircraft industry and the development within our own Ministerial set-up. I am also a willing supporter and admirer of my right hon. Friend, who has undertaken this work for the Government. I would have liked to say something about that this morning, but I am also passionately concerned about the democracy of this House and the rights of back benchers. It is a very sad occasion for me to have to sacrifice my right to talk about the things that I wanted to talk about in aviation, but I want to make one brief comment on the present situation.

The right hon. Member for Mitcham (Mr. R. Carr) spoke for 40 minutes. I consider this to be a complete abuse of the time of the House.

Sir Ian Orr-Ewing

On a point of order. This is monstrous, Mr. Deputy Speaker. The hon. Member for Tottenham (Mr. Atkinson) started the whole series of points of order, which took 10 minutes of my right hon. Friend's time.

Mr. Deputy Speaker

The hon. Member is not entitled to accuse another hon. Member of abusing the time of the House.

Hon. Members

Withdraw.

Mr. Atkinson

I shall not withdraw, because I want to make a further comment on the matter. The right hon. Member for Flint, West (Mr. Birch) recently walked into the Chamber. There is a great danger, under our procedure, that he could be called as a Privy Councillor. It could happen. That was his purpose in walking into the Chamber.

Mr. Deputy Speaker

We shall make more progress if the hon. Member confines his speech to the Order dealing with the transfer of functions.

Mr. Atkinson

I understand that the Minister would like to reply to the debate at about 20 minutes past 12.

Sir G. Nabarro

Oh, no. Not on your life.

Mr. Atkinson

I understand that this was the—

Sir G. Nabarro

On a point of order. Can you guide the House, Mr. Deputy Speaker? As the time is now 12.9 p.m., is it your intention to allow this debate to be wound up when—I believe I am correct in saying—12 of my hon. Friends have been sitting here since 10.24 a.m. trying to catch your eye and listening to interminable interruptions, bogus points of order and the like? Can we have your assurance that the Minister will not be called a second time—or that any other Privy Councillor will be called—until back benchers have participated in the debate?

Mr. Deputy Speaker

What time this debate ends has nothing whatever to do with me. I shall follow the normal practice of the Chair of continuing to call whichever hon. or right hon. Member happens to catch my eye during the debate.

Several Hon. Members

rose—

Mr. Deputy Speaker

Order. Mr. Rankin.

Mr. Rankin

Further to that point of order. In view of my one particular interest in this debate and the fact that there is a duty on me this morning, I am drawn between these two interests. I would like to know clearly what will be the position if the Minister intervenes at any time before 12.30 p.m. Would that mean that at that point, and the Minister having completed his remarks, the debate would be finally terminated?

Mr. Deputy Speaker

I will answer the hon. Member's point of order.

Several Hon. Members

rose—

Mr. Deputy Speaker

Order. It would be more helpful if I answered one point of order at a time. The answer to the point of order raised by the hon. Member for Glasgow, Govan (Mr. Rankin) is that this debate will continue until it is terminated. [Interruption.] Order. When the hon. Member for Tottenham (Mr. Atkinson), who is now addressing the House, concludes his remarks, it will be my duty to call whichever hon. or right hon. Member happens to catch my eye.

Mr. H. P. G. Channon (Southend, West)

Further to that point of order—

Sir G. Nabarro

Mr. Deputy Speaker—

Mr. Deputy Speaker

One at a time, please.

Mr. Channon

May I inform you, Mr. Deputy Speaker, that I am in the same position as the hon. Member for Govan? I, too, wish to have an opportunity of addressing the House on this matter, but unfortunately I have been called by the House to take part in a Standing Committee this morning. May I have your assurance, Mr. Deputy Speaker, that there will be no question of this debate being closured and that no closure Motion will be accepted by you this morning?

Mr. Deputy Speaker

It might simplify matters if I explained, in answer to that point of order, that no question of a Closure arises while I am in the Chair because I have no power to accept a closure Motion.

Mr. Channon

Further to my point of order. Even if you were not in the Chair, would the Chair have any power to accept a closure Motion this morning?

Mr. Deputy Speaker

As I said, I have no power to accept a Motion for the Closure. The hon. Member's point of order is, therefore, purely academic, for I have no reason to suppose that a Motion to closure the debate will be moved.

Mr. Atkinson

As the Chairman of the Parliamentary Labour Party Technological Group, I would have liked to have made a contribution to the debate this morning. [HON. MEMBERS: "Go on."] I propose instead, as a protest against the 40 minutes taken by the Opposition Front Bench speaker, to sacrifice my right to speak in this debate. I do so as a protest to the length of time taken by the right hon. Member for Mitcham (Mr. R. Carr), which I regarded as an abuse of the democracy of the House. I therefore appeal to the next speaker who catches your eye to allow some time—

Mr. Cranley Onslow (Woking)

On a point of order. Is it not a fact that the limits of time which may be split up among hon. and right hon. Members according to the way they catch your eye, Mr. Deputy Speaker, are set by the Government's allocation of the time available and that, therefore, the Government must bear the responsibility if we have insufficient time to discuss these matters?

Mr. Deputy Speaker

I do not understand this complaint about insufficient time. The hon. Member for Tottenham (Mr. Atkinson) is entitled to take as long as he likes to make his speech, in precisely the same way as the right hon. Member for Mitcham (Mr. R. Carr) was entitled to make his speech.

Mr. R. Carr

I am obliged to the hon. Member for Tottenham (Mr. Atkinson) for allowing me to make my position clear. Since he has on several occasions referred to my speech and has said that he regarded it as an abuse of Parliamentary opportunity and procedure, I think that he should, in fairness, consider the fact that the length of my speech was due largely to the number of interruptions made during it. I also urge him, in fairness to the whole House and not just to one hon. or right hon. Member, to consider, when referring to Front Bench speeches, whether there should be one Front Bench speech from each side or two shorter ones. The Opposition had the intention of having only one Front Bench speech in this debate.

Mr. Atkinson

Nevertheless—

Hon. Members

Withdraw.

Mr. Atkinson

I will not withdraw what I said. Front Bench speeches of such length represent a denial of opportunity to back benchers. Therefore, as a protest against this sort of practice, I shall sacrifice my right to speak in this debate. I close my brief remarks in the hope that you, Mr. Deputy Speaker, and Mr. Speaker will have some discussion about the practice whereby three or four hours of our time is taken up each Parliamentary day by Front Bench spokesmen, making speeches which are often devoid of comments which are germane to the debate in hand. I apply the same views to this business of Privy Councillors being called. With that protest, I sit down.

Several Hon. Members

rose—

Mr. Deputy Speaker

Order. Sir Gerald Nabarro.

Mr. Stonehouse

rose—

Hon. Members

Sit down.

Sir G. Nabarro

I thank you very much indeed, Mr. Deputy Speaker, for allowing me to catch your eye. I happily give way to the Minister to intervene in my speech.

Mr. Stonehouse

I am grateful to the hon. Member for Worcestershire, South (Sir G. Nabarro) for his usual courtesy. I wish to make it clear that if I had the opportunity to catch your eye again, and the leave of the House to speak again, Mr. Deputy Speaker, in view of the great interest in this debate and the large number of hon. Members who wish to contribute to it, I would recommend to my right hon. Friend that more time should be allowed for this debate to be continued. [HON. MEMBERS: "Hear, hear."] That was the only point I wished to make, and if I should have time to speak this morning or on another occasion, I would do my utmost to reply to the detailed, and, if I may say so, some of the very sensible points that have been raised by hon. Members on both sides of the House.

Sir G. Nabarro

I am sure that I speak for all my hon. Friends in expressing our gratitude and appreciation to the right hon. Gentleman for his realistic assessment of the Parliamentary position this morning. I did not greet with unalloyed enthusiasm the prospect of morning sittings on topics which were supposed to be of non-controversial, mundane and minor matters. [Interruption.] It is true that I had a Question down on this subject, but I urge a closer examination of the Order Paper.

Mr. Hugh Jenkins (Putney)

The hon. Member for Worcestershire, South (Sir G. Nabarro) was just addressing one of his hon. Friends. Although the back of the hon. Member for Worcestershire, South may be a better view than the front, does he consider it in order to present his back to me?

Sir G. Nabarro

Really.

The topic we have been discussing this morning fulfils none of the requirements of a morning sitting. This is not a minor topic. Indeed, it is a topic of massive national importance. It is not a mundane topic. Flying at 1,500 to 2,000 m.p.h., whether by Concord or military aircraft, cannot be considered of mundane significance. It is most certainly not a non-contentious issue. What is done with the Ministry of Aviation and the massive scientific technological resources which that Ministry commands is anything but non-contentious.

I castigated my right hon. Friend for the length of his intervention. I do not propose to emulate him.I, too, could comfortably talk for 38 minutes on this topic—

Mr. Marten

Keep going.

Sir G. Nabarro

—but I will take only another two or three minutes in which to complete my remarks, bearing in mind the number of my hon. Friends who wish to speak.

My constituency of Worcestershire, South contains the Royal Radar Establishment at Malvern which I do not exaggerate in saying has the greatest concentration of scientific and technological manpower in Britain today. The future of about 2,500 scientists there is, of course, a matter of great interest to us all. My desire is that the right hon. Gentleman, when he eventually replies to this debate, will give me a number of important assurances on behalf of those employees of his Ministry at the Royal Radar Establishment.

The first is that the coherence and concentration of manpower at that establishment will not be derogated in any way by the transfer of Ministerial parentage from the Ministry of Aviation, about to die, to the Ministry of Technology. The second question is that there will not be any fragmentation of this important scientific and technological development which has settled and grown up at Malvern since the war years. The third is that the stature of the Royal Radar Establishment, when it assumes the Ministerial parentage of the Minister of Technology, will be at least as great as it has been in earlier years under the aegis of the Ministry of Aviation.

Those are the three questions which I put to the right hon. Gentleman. I assure him that there have been misgivings among civil servants at the Royal Radar Establishment, the more so as the Prime Minister, when I questioned him on this topic after he had made his statement on 16th June last, was somewhat indeterminate in his reply to me. Therefore, when the Minister answers the debate, I should like him to be a great deal more specific in what he says.

I asked the Prime Minister in a supplementary question: Is the Prime Minister aware that the greatest concentration of scientific manpower affected by his announcement today is at the Royal Radar Establishment, at Malvern, in Worcestershire? As that Establishment works for the Ministry of Defence, for the Ministry of Aviation and for the Board of Trade in maritime and nautical matters, will the Prime Minister say whether it is the intention to fragment it, to disperse, or to pass it in total to a new Ministerial parent and, if so, which parent? We know the answer this morning, that it is being passed to the Minister of Technology, but what has caused a great deal of uncertainty among my constituents are the words which the Prime Minister used in the course of his reply. I shall not read all of it because the first part was a tribute, a very deserved and rightful tribute, to these workers, but the operative words were: There is no question at all of fragmenting the establishment. It will continue as it is. I think that I am pretty safe in saying that this establishment will pass, with the rest of responsibility for the electronics industry, to the Ministry of Technology."—[OFFICIAL REPORT, 16th June, 1966; Vol. 729, c. 1664.] "Pretty safe"—it is for that reason that I ask the rather more penetrating questions this morning in my speech, which has lasted four minutes only—[Interruption.] I wish my right hon. Friend the Member for Mitcham (Mr. R. Carr) would not wink at those behind him—four minutes only in contradistinction to his 38 minutes.

I hope that when the right hon. Gentleman replies he will answer those three particular points that I have put to him. I have no objection to this translation to the Ministry of Technology so long as the stature of the Royal Radar Establishment, with all its ramifications and the great reputation that it has earned in earlier years, is not in any way derogated by the translation from one Ministerial parent to another.

12.24 p.m.

Mr. Eric Lubbock (Orpington)

The various important questions raised this morning could not possibly be dealt with in such a short debate as we have had. I am sure we are all extremely grateful to the Minister of State for saying that further time will be given to consideration of this subject. I wish that could have been made clear earlier in the debate, because then many of the points of order with which you, Mr. Deputy Speaker, have had to deal could have been avoided and we could have got on with the debate.

In the short time which remains, I want to take up one or two of the criticisms made by the right hon. Member for Mitcham (Mr. R. Carr), with whom I most heartily disagree. I certainly accept the Minister of State's invitation to give an enthusiastic welcome to this Order, because I am certain that it is in the best interests of the industry and various establishments under the control of the Ministry of Aviation, such as that mentioned by the hon. Member for Worcestershire, South (Sir G. Nabarro), the Royal Radar Establishment in his constituency. I feel convinced that this establishment and the many others which are passing to the Minister of Technology under this Order will have a secure and profitable future under the able guidance of their new Minister. Many of the criticisms we have heard this morning and on other occasions from the right hon. Member for Mitcham are invalid and of no effect.

The right hon. Gentleman had some fun with the Prime Minister's various statements and the way in which, he alleged, they had been altered by the course of events. He likened the Prime Minister to a company manipulator who transfers subsidiaries from one parent company to another. I liken the right hon. Gentleman to a shareholder in a company which has been taken over but who thinks he still has the right to attend company meetings and pontificate on its affairs. If he studies the Prime Minister's statement in greater detail, he will find that there is no inconsistency in the decision which was finally made, even though a considerable length of time elapsed—and this is the criticism I make of the Government, the seven-and-a-half months delay—since the Prime Minister's statement last June and the transfer of Functions Order we are considering this morning.

The right hon. Member seemed unable to make up his mind whether this transfer was too soon or too late. He said on a number of occasions that he did not object to it in principle, and this morning he reiterated that there was nothing sacred about the Ministry of Aviation but he thought the timing caused distraction and delay within the aircraft industry and the establishments of the Ministry of Aviation. When we first debated the matter on 16th June, 1966, he said that it would be folly: to make such an administrative upheaval of this kind when so many fundamental problems of the aircraft industry are in the melting pot …".—[OFFICIAL REPORT, 16th June, 1966; Vol. 729, c. 1662.] We did not hear quite so much about that this morning, but the fact is that a number of the important problems which faced the industry and the Government at that time have been solved or are well on the way to solution after these seven-and-a-half months.

The aircraft industry has always had fundamental problems because it is an industry of rapid technological change. If one accepts that the time was not ripe to make the change in 1966 an equally good case could have been made in practice every year when there are new pro- jects, development and arrangements for collaboration with Europe and say that it is not the right time. The right hon. Gentleman would then have said that it is not the right time, we are not against the change in principle but would like it to be delayed. Or, as he said this morning—this was a suggestion I have not heard before—if it had been done when the Government first came into office he would have had no objection.

I could have understood this argument if, for example, the Royal Radar Establishment had been put under some other Ministry and the Royal Aircraft Establishment had been taken into the Ministry of Technology. The only criticism one can make of the Government is that in June 1966, when it was first decided to transfer the industry, they did not at once say that it was impossible to transfer one part to the Ministry of Technology and the rest to the Ministry of Defence. That seems to have been the main cause for the delay, and it was quite unnecessary.

This is no more of an upheaval and confusion for staff of the Ministry of Aviation than if there had been a change of Minister without a transfer of functions. If, for example, the Minister of Technology had suddenly become the Minister of Aviation, the staff would have been in exactly the same position as they are now when they come under the control of the new Ministry. I am convinced that this will have no effect on the establishments and staff of the Ministry.

The right hon. Member for Mitcham said that many of the problems awaiting settlement after the Plowden Committee Report still remain to be dealt with.

It being half-past Twelve o'clock, the debate stood adjourned.

Debate to be resumed To-morrow.