EUROPEAN SHORT-MEDIUM RANGE AIRBUS (Hansard, 26 July 1967)

§ The Minister of State, Ministry of Technology (Mr. John Stonehouse)
Agreement was reached to proceed immediately with the first stage of the joint development of a European short-medium range airbus. A Memorandum of Understanding, the principles of which were agreed, will be signed before 15th September, 1967.
I am happy to say that the aircraft will be powered by Rolls Royce engines and work on them will be undertaken jointly by Rolls Royce, S.N.E.C.M.A. in France and M.A.N. in Germany. The aircraft will be designed jointly by Sud Aviation, Hawker Siddeley Aviation and the Arbeitsgemeinschaft Airbus. Sud Aviation will direct the airframe work and Rolls Royce will direct the engine work. A joint company will be formed to promote the sales of the aircraft.
It has agreed that the full development stage—in about 12 months' time—should proceed provided that certain conditions, including national airline commitment, which will finally establish the viability of the project are met.

§ Mr. Carr
This is obviously an extremely important decision for the future of British civil aviation, which will have to be probed in much greater depth than is possible today. I should like to ask the hon. Gentleman three quick questions.
First, what safeguards have been agreed against unilateral withdrawal by any of the partners in the project, and will he publish the agreement, as the Conservative Government did over Concord? Secondly, what assurances have been received from the European airlines to buy these aeroplanes and at what stage will those assurances have to be converted into firm orders? Thirdly, how does the Government envisage that Britain will be able to maintain her design capability in the future when we do not have the leadership in any advanced airframe project, either military or civil?

§ Mr. Stonehouse
I agree with what the right hon. Gentleman said about the importance of this project. We regard this as the beginning of a new era in cooperation in European aircraft production, based as it is, unlike any other product, on a national airline commitment which establishes the market base and ensures the product is not a cost to the economy but a bonus to the three economies involved.
On the first point, there can be no safeguards against withdrawal during the first stage, because, as I said, this is subject to certain conditions, including airline commitments, but also including proper industrial arrangements to ensure efficiency. It will be up to the Governments concerned to decide at the end of the 12 months whether these conditions are being met.
On the second quick question, the airline commitment should be delivered by the Governments concerned at the end of the first 12 months when the aircraft is designed and when the airlines have an opportunity of placing a firm order for an aircraft, the characteristics of which they are aware
Regarding the third question, I agree with the right hon. Gentleman that this is a very important point. We have emphasised during these talks that the British aircraft industry is not only outstanding in the field of aero-engine design, but also in airframe design, and we would expect, in the event of any future joint civil project being developed with Europe, that design lead to come to us.

§ Mr. Rankin
I congratulate my hon. Friend on the accomplishment of this agreement which, I can assure him, will be warmly welcomed by the aircraft industry. However, could he guide us by telling us how he reaches a figure of 1,000 aircraft sales for an aircraft of this particular medium-short range type? Could he—

§ Mr. Speaker
Order. The question must be reasonably brief otherwise we cannot have many questions.

§ Mr. Stonehouse
I thank my hon. Friend for his initial remarks. There has been a great deal of work done on the project over the last two years. It must. be satisfying to all those who have been involved, long before I came on the scene, 742 that this has now come to a successful conclusion.
As to aircraft sales, the production of 1,000 aircraft demanded by 1985 is an expert assessment. Of this figure, something like 400 to 450 will be bought within the United States and about 300 to 350 in Europe. We would hope to achieve sales for the European airbus of approximately 300 aircraft out of the total of 1,000.

§ Mr. Lubbock
Is the right hon. Gentleman aware that this statement will be heartily welcomed on this bench where we have always preached the virtues of Anglo-European co-operation? Is he satisfied that the rate of progress of this project is fast enough for us to compete in third markets with the Lockheed projected airbus? Secondly, have any orders been taken for hardware on the engine side that is to say, what orders have been placed with Rolls Royce for preliminary work on the RB207?

§ Mr. Stonehouse
On the first point, we are satisfied that concerning the engines there will be no delay in development of the RB207 for the dates that are required for the in-service of the aircraft. The aircraft will come into service in the spring of 1973. This is a little late for one European airline—Air France—but for most airlines it is well in time for their particular requirements for this aircraft, which is 1975 onwards. Provided that we can keep to the in-service date for the European airbus, the spring of 1973, we will not find that the American competition will be very embarrassing to us.

§ Mr. Arthur Lewis
Would the Minister explain how it is that he is answering this Private Notice Question when all this information was given on the 7, 8 and 9 o'clock news this morning and in the papers? Could he explain how it is they got all this information?

§ Mr. Stonehouse
After a conference of this character it is usual for the Press to be advised of the results. I answered the question which was asked.

§ Sir Ian Orr-Ewing
Is the right hon. Gentleman aware that now that this decision has been taken it underlines the need both by the aircraft industry and by B.E.A. for an urgent decision on the Trident 3B, which could be in service 743 several years ahead of 1973 and on which a decision is now urgently needed?

§ Mr. Stonehouse
This is a matter primarily for my right hon. Friend the President of the Board of Trade, but my right hon. Friend and I are in close touch with him about it.

§ Mr. Dobson
Can my right hon. Friend tell us how many prototypes are planned for this aircraft? Secondly, has any thought been given yet to its production? Will it be made in the way that Concord is made with separate parts in separate countries and assembled in separate countries?

§ Mr. Stonehouse
On the first point, it will be two or three. On the second point, there will be one production line in the interests of efficiency.

§ Mr. McMaster
Will the Government's willingness to back the project affect their willingness also to back either the Trident 3B or the BAC211, which are designed to fill the gap of capacity which it is commonly accepted B.E.A. will have?

§ Mr. Stonehouse
As I have said, this is a matter primarily the responsibility of my right hon. Friend, but no decision has yet been made about supporting the BAC211 or the Trident 3B.

§ Mr. Rankin
On a point of order, beg to give notice that when opportuntiy affords I shall raise the matter of the airbus agreement before Parliament adjourns.

§ Mr. Speaker
I suppose I must be generous and take it that the hon. Member missed the airbus.