HC Deb 29 January 1969 vol 776 cc1303-7
5. Mr. Fortescue

asked the Minister of Technology what support his Department is giving to the British Aircraft Corporation's 311 aircraft project; and whether he will make a statement.

8 and 9. Mr. Robert Howarth

asked the Minister of Technology (1) if he will make a statement on the latest negotiations for the building of a European airbus;

(2) if he will provide funds for the building of a British 200/250 seater short, medium range aircraft powered by Rolls Royce RB211 engines.

17. Mr. Onslow

asked the Minister of Technology if he will now make a further statement on the A300 European airbus project.

22. Mr. Marten

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

Mr. Benn

My Department has continued discussions with French and German officials and with industry about the A300B. The three Governments will take a decision about this as soon as possible.

The British Aircraft Corporation's BAC311 design may be considered as a possible alternative which I shall be studying at the same time, keeping the French and German Governments fully informed.

Meanwhile, I have made it clear that there can be no advance commitment to Government support for either aircraft. Each will be evaluated on its merits, against stringent economic criteria against a background of severe restraint in Government expenditure.

Mr. Fortescue

Will the Minister accept that we on this side appreciate that he is now faced with the most crucial decision for the British aircraft industry since his Government cancelled TSR2 and failed to cancel Concorde? Will he assure the House that he does not mean to destroy the aircraft industry by refusing Government support to either of these projects?

Mr. Benn

The demise of the aircraft industry has often been predicted. All I would say about the first part of the hon. Member's Question is that four years after the cancellations to which he has referred, exports per head in the industry were twice as high as in 1964. [Interruption.] All money is made out of obsolescent technology. If anybody thinks that money is made from new technology, I would say that money is made out of technology when the learning curve has been passed. The point with which I want to deal in relation to the latter part of the hon. Member's question is that we are interested, as the firms are, in making money by making aircraft. That means devising aircraft that will sell in the markets which are opening up. That alone is the reason for delay. That is why the consortium itself withdrew the A300 proposals.

Mr. Howarth

Can my right hon. Friend confirm that it is still the Government's intention, however, to give support to the building of an aircraft of the size indicated in the Questions? Does he appreciate that it is suggested that the French and Germans, plus other European partners, may go ahead without us in the next few months, using an American engine? It would be tragic to miss an opportunity and waste the large amount of money which has already been spent.

Mr. Benn

I think that the money which has been spent was properly spent, because it at least helped us to avoid going ahead with support for the A300, which the firm subsequently decided to withdraw as a design. The industry is full of rumour—it is a very rumour-full industry—and I would not believe everything I read in the newspapers about alternative plans. We want to back projects that will sell. Since that ought also to be the interests of the firms, I do not see much danger of a division between us in the long term.

Mr. Onslow

Will the Minister understand that there is nothing in the Government's past record concerning the aviation industry which gives us any confidence that they will get the decision right? Is the right hon. Gentleman prepared, at the end of a long period of muddle, which is primarily his own responsibility—[HON. MEMBERS: "Look at the export figures."]—to see the British industry prevented, because of comparatively small sums of money, from taking advantage of the opportunity which lies ahead of it, bearing in mind that if this aircraft is not built the consequences to the balance of payments will be serious?

Mr. Speaker

Order. Technological questions and answers should also be reasonably brief.

Mr. Benn

Nobody knows better than the hon. Member and his colleagues about cancellations—I think, £250 million worth of cancellations. The decisions which we have taken so far have been right.

Mr. Onslow

What decisions?

Mr. Benn

We decided not to proceed with the BAC211, and BAC has now come forward with an aircraft which, had we supported the 211, would not have fitted this market. The A300 proposals were withdrawn not by us but by the firms.

Mr. Marten

In the balance of argument between the two aircraft, would not the Minister agree that airlines will buy the machine which is most suitable for their route patterns and economics and will not buy for reasons of a political consortium? What is the difference in price between the two proposed aircraft?

Mr. Benn

I cannot answer the latter part of the question, because the full evaluations of price depend on the amount of money that the aircraft would cost and these have not yet been brought forward. That is why the firms have not provided the necessary figures. I absolutely agree with the hon. Member that the aircraft business is now a business that begins with the market and ends up with the design to meet it and does not involve supporting every design which may be brought out by the firms.

Mr. Corfield

Will the Minister bear in mind that his attitude to E.L.D.O. has already seriously undermined the confidence of our potential European partners in the Government's bona fides towards European co-operation, bearing in mind that any further prevarication or withdrawing from the consortium could do fatal damage not only to the British aircraft industry but to the whole concept of technological co-operation with Europe?

Mr. Benn

Nothing would be more fatal to international co-operation than to launch into projects, as the hon. Member's colleagues did, that were not viable in the long run. E.L.D.O. was a perfect example of a non-viable project which diverted resources from the aircraft industry or from computers or other industries in which the basis of international collaboration exists. I must underline again that under Sud leadership the firms withdrew the designs for the A300. The hon. Member will remember the Anglo-French variable geometry proposals. Everybody in Europe is now looking together to find viable projects, and that is quite right.

Mr. McMaster

In view of the very unsatisfactory nature of the reply to the Question, I give notice that I will raise this matter on the Adjournment.