HC Deb 16 April 1969 vol 781 cc1124-8
3. Mr. Fortescue

asked the Minister of Technology what is his present policy regarding Government support for either the A300B airbus or the British Aircraft Corporation 3–11.

6. Mr. Marten

asked the Minister of Technology if he will make a further statement on the European airbus.

12 and 13. Mr. Robert Howarth

asked the Minister of Technology (1) what is the Government's policy towards the building of a large twin-engined short/medium range airliner;

(2) what decision has been arrived at regarding the requests for the European Airbus Consortium and the British Aircraft Corporation for funds for the building of the A300B or BAC 3–11.

26. Mr. McMaster

asked the Minister of Technology when he expects to make a decision on the joint development and production of a European airbus.

27. Mr. Hastings

asked the Minister of Technology whether he will now make a statement on the future of the British Aircraft Corporation's 3–11 project.

The Minister of Technology (Mr. Anthony Wedgwood Benn)

Ministers concerned with the A300B Airbus project met last Thursday to discuss the economic and commercial prospects and the terms of the financial assistance requested by the firms. I had to make it clear that Her Majesty's Government were not yet satisfied with all aspects of the project, in particular with the market and economic prospects development costs and recovery, and the lack of a firm commitment to a European engine. The French and German Governments are, however, satisfied with the general outline of the present proposals, and for the time being will pursue the project on a bilateral basis, while keeping us fully informed.

The British Aircraft Corporation has kept me informed of the progress of its work on the BAC 3–11 but has not yet submitted a final proposal for Government participation.

Mr. Fortescue

Would the right hon. Gentleman be a little more forthcoming? Now that it is generally accepted in this country and others that we have pulled out of the airbus project, if B.A.C. can tell him that it has, say, 50 firm orders for the 3–11 will he be prepared to look very favourably at financial support from the Government?

Mr. Benn

There are many implications in what the hon. Gentleman said. First, we have not pulled out of the airbus project, but we were not satisfied that sufficient progress had been made to justify us in going ahead with it. I must make it absolutely clear that we must reserve the right to look at the BAC 3–11 or any other aircraft project in terms of its returns and the Government investment in it before reaching a decision, but this is clearly understood by all the companies concerned.

Mr. Marten

Does the right hon. Gentleman realise that if we go for the 3–11 it is probably our last chance to keep in the big subsonic airliner business? Once a decision has been taken, will the Ministry press on as quickly as possible so as not to miss this market?

Mr. Benn

We all accept that it is a very big market, one which, as the hon. Gentleman says and knows very well, is a big slice of future markets. But aircraft are products like everything else, and it would be quite wrong for us to go ahead with a product until we were satisfied, first, that it would sell, and, second, that it would produce a reasonable return for the taxpayers who invest in it.

Mr. Howarth

May I ask my right Friend to explain what has changed between, say, December of last year and this month with regard to the proposals for a European airbus? As I understand it, the idea was to have a European market for this aircraft. This surely still remains. Why have we decided not to support the proposals now put forward by the consortium?

Mr. Benn

What has changed between December and now is three things. First, the consortium withdrew altogether from the A300 project. Secondly, the French and Germans, whom we thought that we had carried with us on the two matters of advance orders before the go-ahead and a European engine, have to some extent altered their view on these matters.

Mr. McMaster

Are not the Government in grave danger of falling between two stools? If we do not come to a decision on the A300B, will we not lose the benefit that Hawker Siddeley have already contributed to the development of the A300B and also lose the Rolls-Royce engines, besides doing a great deal of political damage to this country in withdrawing from the consortium?

Mr. Benn

I think that the hon. Member is too gloomy about this. First, the position of Hawker Siddeley as a member of the consortium is not necessarily affected by this. Secondly, Rolls-Royce is a highly competitive aero-engine company and, having got an engine into the Lockheed 1011, I think it very likely that it would be extremely competitive in respect of the A300B. Thirdly, in my judgment the greatest political disaster would be if we were to abandon economic criteria in the investment of public money in advanced technology.

Mr. Hastings

Will the Minister ensure at least that the British project, the BAC 3–11, does not founder or die during the initial evaluation period? If the initial orders are satisfactory, will the Minister consider this proposition? Will he consider inviting Hawker Siddeley, for instance, to join in the project to the tune of, say, 30 per cent.? I do not know what the figure should be. If such a situation should develop, what price would the Minister place on the continuation of the A300 and the Franco-German airbus?

Mr. Benn

I am not disposed to say anything that would damage the A300B. I must be quite candid with the House. We have been a party to these discussions for many years. The French and Germans understand that we have reached a different view on the facts as now presented to us. But I do not want to knock or attack that project.

As far as Hawker Siddeley and B.A.C. are concerned, I have always made the Government's view quite clear that if a firm comes to us with a proposition we will evaluate it, but that it is not for the Government to tell firms what to produce or how to do it, because then we would get into the most unfavourable position of all when the firms come later and say, "We are building this project only because you asked us to. Now, will you bail us out?" That would be utterly destructive and unsound investment in advanced technology.

Mr. Rankin

As my right hon. Friend has accepted the idea of an aircraft of this performance for B.O.A.C. on world routes, should not B.E.A. be entitled to a similar type of aircraft on the European side?

Mr. Benn

There is no doubt that the world needs this sort of aircraft and there is certainly no doubt that the Government would like to see a British manufacturer, with partners, being able to meet it. I am, however, afraid that there is also no doubt that it will not be possible for the Government to support a proposition which does not meet this need at an economic cost.

Sir H. Legge-Bourke

Whilst I would not quarrel with many of the factors which the Minister is, quite rightly, bearing in mind in coming to these decisions, I am sure that he will appreciate from the Questions this afternoon and public reaction outside that this is not a matter which he can leave with any more uncertainty than is absolutely necessary for any length of time.

Will the Minister, therefore, give an assurance that, as soon as he possibly can, he will put everybody clear as to what the Government's intentions will be? Will he recognise that he cannot hope to make much impression with Europeans if he gives the impression that at one moment he is coming in and at the next moment he is popping out again?

Mr. Benn

Nothing would be more fatal to European collaboration than for the British Government to be ready to finance anything that was international and advanced regardless of its prospects. I believe, although I say it myself, that the British view on this and on other issues is well understood and respected in Europe. I do not, however, accept that we have delayed. We have said all along that we would go ahead if there was a market and a European engine. Neither of these things has emerged and our partners, for reasons of their own—I do not blame them—have decided to go ahead. The fact is that we have reached a decision at the moment, and it must not be thought that we have delayed, havered or dithered on this issue, because we have not.