§ The Minister of Technology (Mr. Anthony Wedgwood Benn)
With permission, I wish to make a statement.
Hon. Members will already know that Rolls Royce Ltd. has been successful in gaining a most valuable order in the United States to supply RB.211 advanced technology engines for the Lockheed Airbus.
This order is of particular importance. It constitutes a foothold in the American civil aircraft market far bigger than anything which we have achieved before. It is of special value to the British economy, and is, above all, an outstanding encouragement for the skills and technology of British industry.
Her Majesty's Government gave Rolls Royce full support in its efforts to obtain the order. In accordance with normal practice, the Government have agreed in principle to grant launching aid for the RB.211, subject to agreement on satisfactory contract terms. This aid takes the form of a contribution by the Government to the costs of developing the engine and getting it into production. It will be recoverable over sales of the engine and was therefore reflected in the price Rolls Royce quoted.
Details of the launching aid are being negotiated.
We can be justly proud of the company's achievement in designing the RB.211 engine and in winning the order in the face of determined competition.
The House is aware that the Rolls Royce RB.207 engine, which is of the same advanced technology design, has been adopted for the European Airbus. This aircraft should be complementary to, rather than a rival of, the American aircraft. It will be of shorter range and more economical, and hence should be better suited to many airline routes, particularly in Europe. The securing of the RB.211 order by Rolls Royce does not lessen in any way our support for the European Airbus and our determination, in association with our French and German partners, to do all we can to ensure 45 that this aircraft meets airline requirements and can thus be a commercial success.
§ Mr. Maudling
This is a great achievement by British industry. We on this side of the House would also like to pay our tribute to the company, to Sir Denning Pearson, Mr. Huddie and all the team who have achieved so much in this remarkable sale. Will the Minister stress, as I think he should, that this is an example of what British firms can do in selling in the American market, despite all that is often said about political difficulties? If people have quality, price and effort, they can sell on a very great scale.
§ Mr. Benn
I am sure that the whole House would want to convey the congratulations given by the right hon. Gentleman, and it might also, on reflection, want to add that this is an interesting example of a partnership between Government and industry which has made this possible. I think that the right hon. Gentleman is a little less than generous in not making any reference whatsoever to that aspect.
§ Mr. Robert Howarth
Would my right hon. Friend confirm that this first-class news shows that the British aerospace industry has both an actual and potential in the export field which goes against those who suggested that it should be reduced in size? Will he continue his efforts to give it further encouragement.
§ Mr. McMaster
While welcoming this news, which will also mean work for Short Bros. and Harland in building the cowls for these engines, may I ask the right hon. Gentleman whether he would reconsider building a British airframe, such as BAC.211, in which this engine could also be used?
§ Mr. Benn
The hon. Gentleman raises a separate issue in reopening the question of the BAC.211. As the House knows, the Trident 3B has been chosen for the particular application discussed last year. As for the possible repercussions of this on Shorts, in which the 46 hon. Gentleman has a direct interest, it is true that Shorts have worked with Rolls Royce, and the possible beneficial by-product of this contract is one, although not finalised in character, which gives added encouragement to us.
§ Mr. Philip Noel-Baker
Does my right hon. Friend agree that this event confirms that my constituents, Rolls Royce, are the finest aircraft engine manufacturers in the world? Can he give an assurance that no similar mistake will be made in future as that which was made over the VC.10 a little while ago?
§ Mr. Lubbock
Is the right hon. Gentleman aware that this is the greatest export achievement ever in the history of this country? Will he convey to the workers of Rolls Royce, Sir Denning Pearson and the officers of the Ministry of Technology the warmest congratulations of the House and the country as a whole? Is it not a fact that Rolls Royce gained this order in the face of very stiff competition from the United States and that the RB.211 is better in terms of price, economy of operation and, above all, noise levels? Finally, would the right hon. Gentleman say what savings there will be on the development of the RB.207 as a result of the programme for development of this particular engine?
§ Mr. Benn
I am grateful to the hon. Gentleman for his comment. I sent a message to Sir Denning Pearson immediately the contract was announced. I am grateful to the hon. Gentleman for what he said about the work of my Department, which refers particularly to my hon. Friend the Minister of State who has worked extremely hard in conjunction with Rolls Royce. Unfortunately, I cannot, off the cuff, give the hon. Gentleman an answer to his detailed question about the effects which there will be on the development costs of the RB.207. But the two engines have much in common, one being, in a sense, a scaled-down version of the other. But if we get the 207 application in the airbus, 47 as we hope, Rolls Royce will be in the forefront, as the hon. Gentleman rightly says, with engines which are cheaper in operation, technically superior and which have the great advantage of reducing aircraft noise, which is of great interest to people in this country and in every other country.
§ Mr. Edelman
Is my right hon. Friend aware that many thousands of aero engine workers in Coventry as well as in the Midlands generally are profoundly grateful to him, to his Ministry and to the Government for the backing which they gave to Rolls Royce in its superb achievement? Would he say what measures he is taking to ensure that an adequate number of aero engine engineers are available, particularly as under the Tory dispensation so many of them left the industry in 1961?
§ Mr. Benn
I think that my hon. Friend will agree that the appeal of Rolls Royce to engineers of high quality, now that these orders are available to them, will be enormous. If we get more orders of this kind, the problem of the brain drain simply will not exist. I should also mention that the National Gas Turbine Establishment, one of the establishments of the Ministry of Technology, will be available and will be of enormous value to Rolls Royce in the development of this engine. I thank my hon. Friend for what he said about the work of my Department.
§ Mr. Onslow
While the whole House will welcome the order for the RB.211, may I ask him whether he is satisfied that sufficient financial and physical resources will be available to Rolls Royce to enable the RB.207 to be developed in time for the airbus to meet the specifications which he has set?
§ Mr. Benn
I made a particular point of stressing that in my statement. We are confident—and indeed it was our duty as the sponsors of the 207 engine for the European air bus to be confident—that Rolls Royce can do the 211 for the Lockheed airbus and the 207 for the European airbus within the time scale. But if the hon. Gentleman says that this will mean a supreme effort by Rolls Royce, there is nothing new about that, and we are confident that Rolls Royce can make it.
§ Mr. Bagier
In view of the great possibility of an expansion in the aero engine industry because of this order and possible other orders, will my right hon. Friend use his influence to try to ensure that such expansion takes place in the development districts?
§ Mr. Marten
Is it not true that the work on this engine was started a number of years ago and has now reached the point of culmination? Is it not rather puerile, therefore, for parties to try to score points out of this order, the great credit for which—let us face it—goes to the industry?
§ Mr. Benn
I have paid a very warm tribute to Rolls Royce, but in looking at the total story of the success it is evident that the work involves, and has involved, a useful partnership between the Government and Rolls Royce, and it is right and proper that this should be said. [HON. MEMBERS: "All Governments."]
§ Mr. Whitaker
Further to that reply by my right hon. Friend, despite the extraordinary grudging attitude shown by the right hon. Member for Barnet (Mr. Maudling) to pay tribute to public servants who are unable to speak for themselves, will he convey congratulations not only to Rolls Royce but also to members of the Department and to the Commercial Section of the Foreign Office, whose hard work over a long period has contributed towards this magnificent order?
§ Mr. Benn
It is perfectly true, as my hon. Friend says, that the work which has been done in relation to this contract has involved other Departments besides the Ministry of Technology, and it is quite right that tribute should be paid to their work in this respect. I rather regretted that the party opposite should see fit not to make a reference, in the official comments from the Deputy Leader of the Opposition, to the part which had been played both by the civil servants who were working when he was in office and by the civil servants working in the present 49 Department. It is rather unfortunate that the Civil Service becomes involved in political controversy when the party opposite are in opposition.
§ Mr. Emery
Will the right hon. Gentlemen realise that this side of the House is quite definite in praising what Governments—all Governments, in other words—have done to achieve this order? Will he, however, tell the House a little more about the launching aid, which is the question I wish to ask? The right hon. Gentleman has been slightly vague about this. He said that further information and plans have to be worked out. Can he give any idea of what the total sum is likely to be or any other information?
§ Mr. Benn
Until the negotiations have been completed—and I should, of course, make it known to the House at that stage what had happened—it is not possible to say exactly what the sum of money will be. We are, however, talking about a 70 per cent. launching aid. In addition, there is the work of the National Gas Turbine Establishment, to which I have referred. It is, therefore, fairly substantial help which we are giving. But since we shall be getting the money back by a levy on sales—and this is reflected in the price which Rolls Royce was able to quote—this is a perfectly normal arrangement. I will, of course, make available to the House such information as I can when the negotiations have been completed.
The only point which I was making was that we hear so many speeches from the party opposite about the Government geeing off the back of industry that it would not be a bad idea when there is a successful partnership to pay rather more tribute to what has happened.