Concorde Aircraft (Hansard, 5 March 1969)

§ 4 and 5. Mr. Barnett
asked the Minister of Technology (1) what is the highest price at which he estimates the Concorde aircraft will be sold; and if he will make a statement on discussions he has had with interested parties on the eventual price:

§ Mr. Benn
The selling price is regularly reviewed with the manufacturers. But it would not be right for me to speculate about the final price since this will be a matter for negotiation between the manufacturers and the airlines. We have accepted that a substantial part of the research and development costs will not be recovered.

§ Mr. Barnett
As the taxpayers will have to foot the bill at the end of the day, is not it right that they should have an idea of what the estimated cost will be to them as a proportion of the research and development? Whilst one welcomes the prestige from this aircraft, will not it be of little importance by comparison with the financial cost to the taxpayer in due course if it is not a viable proposition?

§ Mr. Benn
My hon. Friend points out that if Concorde fails it will be a costly venture. That is true. But, although I am very keen to make available to the House as much information as I can, it is not for me to estimate what the return will be until we know finally what the cost of development is and what the market is. Even if the cost of development were to rise, if the market were to be very large indeed it would turn out to have been an investment where the taxpayer would not lose. I am giving the best estimate I can, but on the present estimates we do not expect to recover our full research and development costs.

§ Mr. Boyd-Carpenter
Is it intended to impose a royalty payment on the sale of each aircraft with a view to recovering for the Exchequer at any rate some part of the massive expenditure on R and D?

§ Mr. Benn
Most certainly, a system of levies based on the number of aircraft sold, and rising as the number of aircraft sold rises, has already been the subject of discussion. This is the way in which we would get back as much of our R and D costs as we would hope to recover.

§ 11. Mr. Hastings
asked the Minister of Technology if he will make a statement on progress with the Concorde project.

§ 13. Mr. Onslow
asked the Minister of Technology whether he will now make a further statement on the progress of the Concorde project.

§ Mr. Benn
The successful first flight of 001 on 2nd March has been a tremendous encouragement to the thousands of people on both sides of the Channel who have been working so hard for the success of this project. B.A.C. hopes to have the second prototype flying about April or May. Concorde now has to prove itself in flight-testing.

§ Mr. Hastings
May I offer my sincere congratulations, which I am sure will be widely echoed in the House as a whole, to all those who were involved in Concorde's first flight, those in industry and in the Establishments?
Can the Minister say, in view of the Americans' time lag with their S.S.T., which is about five to seven years, what the latest estimate of initial sales of Concorde is likely to be in numbers of aircraft, even if he cannot give the value?

§ Mr. Benn
First, I should like to associate myself with what the hon. Gentleman has said. Indeed, I sent messages to both the British and the French firms and to André Turcat and his crew on the occasion of Concorde's first flight.
It is difficult for me to answer the question authoritatively, because it depends on the selling price, which we do not yet know. It depends on what restrictions, if any, are placed upon supersonic flying over land. Within the broad band of figures which have been published, it is not possible to be more exact.

§ Mr. Onslow
I hope the Minister accepts that this side of the House would like to be associated with the congratulations which he has expressed so much more generously than the Prime Minister did yesterday.
Is the right hon. Gentleman aware that we shall require to be assured that there is no danger of a hold-up in the funds necessary to establish the economic viability of Concorde on either side of 398 the Channel? Can the Minister say at what stage he expects the necessary sonic boom tests to be held?

§ Mr. Benn
The progress of the flight testing depends on technical factors on which it would not be sensible for me to pronounce. The firms have made a statement on the timetable that they foresee. We will have to await the progress of those tests.

§ Mr. Ellis
Whilst greatly heartened by the success of the first flight, may I ask my right hon. Friend whether he recognises that the delays on the engine side on the production runs for Rolls-Royce caused a substantial number of redundancies? Will he ensure that when he comes to make decisions, in accordance with the plan that he is unfolding, they are taken as quickly as possible so that the effects of any delays will not mean that we have more men redundant than necessary?

§ Mr. Benn
I fully understand my hon. Friend's point. I have discussed this matter with the people concerned at Rolls-Royce in Bristol. But I must make clear that decisions about Concorde will be made by customers for it, not by Ministers acting alone. We have to ascertain the market prospects for this aircraft. We have already ordered longdated materials. There are two prototypes and two pre-production aircraft being built. I think that the slight slippage in the progress will inevitably affect the production programme.

§ Mr. Bessell
Is the Minister aware of the immense sense of pride which many people felt in the achievements of technologists in this country and in France on the take-off on Sunday? Is he further aware that if the continuing trials are successful, this aircraft will have a greater and more beneficial effect upon Britain's exports than anything which has happened in recent years?

§ Mr. Benn
I agree with what the hon. Gentleman says. It is true that a successful Anglo-French supersonic airliner flying across the Atlantic will mean that we should hear a little less about the technological gap.

§ 19. Mr. Biffen
asked the Minister of Technology if he is now in a position to quantify the substantial rises that have taken place in the development costs of the Concorde.

§ Mr. Benn
Not yet, Sir. The development costs are still under review between the two Governments.

§ Mr. Biffen
Is the right hon. Gentleman aware that that reply is bound to cause some disquiet among many hon. Members who have the most prudent regard for public expenditure, especially in view of the reports of successive Public Accounts Committees on this project? Can the right hon. Gentleman give any indication of when he hopes to conclude the discussions he is having with the French authorities so that Parliament may be informed about this vital figure?

§ Mr. Benn
We are talking not about actual public expenditure but about estimates of development costs. As the project proceeds, and as the firms, particularly now that the flight test has taken place, have the opportunity to observe the aircraft under development conditions, they come along from time to time with proposals, which they cost themselves, for further work. These then have to be processed by the two Governments and an agreed figure arrived at by two Ministers. It would be wrong to leap out of this partnership to answer a question before I am in a position to give an answer. The actual costs are published. We are talking about the estimate of further development work that requires to be done.

§ Mr. Hugh Jenkins
My right hon. Friend is talking about leaping out of the partnership. Is it not the case that he is unable to leap out of it even if he wants to do so? At what point would it be possible to break the agreement? [An HON. MEMBER: "At no point."] Is that the case? Is it the fact that my right hon. Friend can never escape from this agreement if he wants to do so?

§ Mr. Benn
My hon. Friend has raised a separate point, which the Attorney-General would have to answer, about interpreting the agreement. I was talking about the working relationship which I must have with my partners in France if this progress is to be handled in a businesslike and competent way. That was the only point to which I was referring.

§ Mr. David Price
Would not the right hon. Gentleman agree that until the prototypes have gone supersonic and done their full flight tests it is impossible to 400 give any indication of what the ultimate market will be, and the extent to which the R and D costs may be recovered or not, and that all speculation is entirely in the air until the prototypes have completed their flight tests?

§ Mr. Benn
That is not absolutely accurate, because if there were insuperable or expensive difficulties which came to light early it would be possible to say before the flight tests that the thing was not a success. What one cannot be sure of until the end of the tests is that it has succeeded, but with that qualification it is true that Concorde has to prove itself.

§ 20. Mr. Biffen
asked the Minister of Technology what is the estimated effect on the prospective sales of the Concorde aircraft arising from the decision of the German authorities to prohibit supersonic flight over Germany.

§ Mr. J. P. W. Mallalieu
I understand that the Federal German Government's present view is that supersonic flights should be prohibited over populated areas. The firms' published forecasts of Concorde sales already assume that there will be some restrictions on supersonic flight over such areas.

§ Mr. Biffen
Inasmuch as the hon. Gentleman and his colleagues are acting on behalf of British taxpayers whose money is invested in the development costs of this aircraft, can he say what view the Government take about this? Do they feel that it would be prudent to base a market forecast of likely sales for this aircraft on the assumption that it would not be allowed to fly over land areas in Western Europe or North America?

§ Mr. Mallalieu
That is the basis on which the provisional estimate for sales has been made, that there will be a total ban on overland flights, and that the plane should be able to take a trip to New York with a full pay-load.

§ Mr. Boston
Will my hon. Friend comment on the conflicting reports about noise levels? There have been some encouraging reports from Sunday's highly successful first test that the noise levels on take-off were not as great as had been expected. Can my hon. Friend give his view——

§ Mr. Speaker
Order. Supplementaries must be linked to the Question on the Order Paper.

§ Mr. Boston
On a point of order. Mr. Speaker. I understood that this was connected with supersonic flights and also with noise——

§ Mr. Speaker
Order. The Question is about Germany banning supersonic flights. The hon. Member must ask a supplementary question on that.

§ Mr. Boston
Perhaps I might put it this way: there is concern in various places about supersonic flights and noise levels, and I wonder whether my hon. Friend can comment on this and say whether the position seems to be more encouraging than we were led to expect from some directions previously?

§ Mr. Mallalieu
I do not think Sunday's flight was a fair test of noise, because the engines were not on full thrust, but the reports, so far as they went, were encouraging.

§ 29. Mr. Robert Howarth
asked the Minister of Technology if he will now announce the date of the first flight of 002 Concorde at present being ground tested at Filton, Bristol.

§ Mr. Benn
The manufacturers estimate that the first flight of 002 will take place in April or May.

§ Mr. Howarth
Would my right hon. Friend arrange, in view of the widespread public interest that exists, for this occasion to be given the maximum Press and television coverage, in contrast to the unfortunate affair at the time of the roll out?

§ Mr. Benn
I will discuss this informally with the firms. I know that there will be a great deal of public interest in the first flight of the 002, and I am grateful to my hon. Friend for making the point.