HC Deb 21 May 1969 vol 784 cc411-8
11. Mr. Biffen

asked the Minister of Technology what additional data have emerged following the recent test flights of Concorde to determine whether or not there will be sufficient commercial demand to enable a repayment of a substantial element of publicly financed development costs by means of a levy on individual aircraft sales.

Mr. J. P. W. Mallalieu

The early test flights which have been at subsonic speeds have been encouraging. The demand for Concorde will, however, depend on the performance of the aircraft at its sustained supersonic cruising speed, which is not expected to be reached until the first half of 1970.

Mr. Biffen

Does it remain the Government's expectation that a substantial—I emphasise the word "substantial"—amount of the development costs will be recouped by the taxpayer, as these have been publicly financed?

Mr. Mallalieu

We shall not be able to tell that until we know what orders will come on, but the House has already been told that we should hope to recoup about a third of the development costs.

12. Mr. Onslow

asked the Minister of Technology what estimate he has made of the effect on Concorde sales prospects of the United States Government's decision not to back the manufacture of a United States supersonic civil transport aircraft.

Mr. J. P. W. Mallalieu

No such decision has been taken. The United States Administration is still considering whether or not to proceed with the development of a supersonic transport.

Mr. Onslow

Would the hon. Gentleman agree that the indications are that a decision to proceed is unlikely in the near future and that, meanwhile, since we enjoy a considerable lead over the possible competition, it would be a false economy—all other things being equal—to allow the pace of our own endeavours to slacken?

Mr. Mallalieu

There are no indications yet available about the American attitude, but I agree that our present lead is very useful.

13. Mr. Fortescue

asked the Minister of Technology whether he will make a further statement about Concorde.

24. Mr. Michael McNair-Wilson

asked the Minister of Technology what recent discussions he has had with the French authorities about progress with the Concorde project; and if he will make a statement.

28. Mr. Rankin

asked the Minister of Technology if he will make a statement on the progress of Concorde.

42. Mr. Brooks

asked the Minister of Technology what financial limit Her Majesty's Government have laid down beyond which they will not be prepared to support the research and development programme of the Concorde.

Mr. Benn

I apologise for the length of this Answer.

The results of the early flights have been encouraging.

The official estimates, published in 1966, of the costs to the two Governments of the joint extra-mural development programme comprised a basic estimate of £450 million plus an overall contingency of £50 million.

The latest basic estimate, calculated on the same price level, is £600 million. After allowing for the effects of devaluation and of pay and price increases in both countries, this becomes £730 million. This increase is obviously a matter of serious concern and is one of the points we and the French Government will be considering when examining the future of the project.

There are still many uncertainties to be resolved. The basic estimate of £730 million does not include a contingency allowance for major unforeseeable difficulties; measures to overcome such difficulties, if approved, would involve higher expenditure. If further changes involving anything more than a 15 per cent. increase in the estimates were proposed, we should probably be facing a demand for a fundamental redesign of the aircraft. I shall circulate further particulars in the OFFICIAL REPORT.

My talks with the French Minister responsible, which will include all financial questions, have had to be postponed until after the French Presidential Elections.

Mr. Fortescue

I thank the Minister for his frank statement of the present position. Will he once again reassure the House that up to now all the flight testing has been highly successful—perhaps even more than we hoped—and that if all goes along these lines the full details of these test performances will be with the airlines by the middle of next year, and that we may expect orders for several hundred aircraft to be placed by the end of next year, with an in-service date for the first of, perhaps, 1973?

Mr. Benn

In view of the experience that we have had with advanced aircraft it would be foolish of me to confirm in detail a timetable of the kind put forward by the hon. Member but, as I have made clear on a number of occasions, this period of flight testing is a period of decision for Concorde and ultimately Concorde's future will be decided by airline orders. I cannot go beyond what has been said about the encouraging nature of the flight tests because the evaluation of data naturally takes some time.

Mr. Michael McNair-Wilson

Can the right hon. Gentleman say whether there is any truth in the statement that the French are intending to spread some of the Concorde finance to cover the A300B airbus?

Mr. Benn

That is a matter for the French Minister. It is not for me to comment upon the deployment of French resources.

Mr. Rankin

In view of the fact that the figures which have just been given us by the Minister have been fairly widely expected, and in view of the fact that we have advanced so far in the creation of this aircraft, would it not be a very unwise action to think about turning back or abandoning it, or even proposing to proceed with it on less magnificent lines?

Mr. Benn

I think that the answer to my hon. Friend is that this aircraft has always involved great technological and economic uncertainty. As the Minister responsible in this country for advising the Government on the deployment of these gigantic sums of public money, I am bound to look at it in terms of the return. The House knows me well enough now to know that I try to apply this in the case of the A300, E.L.D.O. or any other project for which I am responsible. That is the only way we can do it.

Mr. Brooks

Is my right hon. Friend aware that he has not answered my Question No. 42? It would be interesting to know whether there is any limit whatsoever to Her Majesty's Government's commitments. Will he indicate whether, if the 15 per cent.—plus extra expenditure is incurred, and we go into a redesign phase, it will still mean that neither this country nor France will have an opportunity to withdraw?

Mr. Benn

I think that I did answer that question, because I said that measures to overcome such difficulties—that is, above the basic commitment—if approved, would involve much higher expenditure. I also made clear in my answer that, as in all other matters, the subject of my hon. Friend's question is discussed with the French Government.

Mr. Corfield

Will the right hon. Gentleman refer again to the question asked by my hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson)? It is clear that the suggestion that the French will go slow could have a considerable effect on the continuity of employment in the various factories in this country which are concerned with Concorde. Can the right hon. Gentleman give us some idea of the way in which this extra money will be spread, on an annual basis? It will obviously not be required in a lump sum. Can he give us some idea of the spread per annum?

Mr. Benn

On the hon. Member's first point, in my other capacity, as a Member for a Bristol constituency, I am concerned with the employment consequences of the development programme. At the same time, the management, in phasing the programme, is also taking account of the fact that there has been a slippage, and this is one of many important factors taken into account. As far as the latter part of the question is concerned, escalation does not mean spending more each week but that some of the problems are more formidable and require longer to solve, which, in turn, means that the total sums spent during the programme are greater. That is what the hon. Gentleman was saying.

Mr. Sheldon

Does my right hon. Friend realise that his statement will cause astonishment and dismay at the progress of this folly that we have undertaken, or that was undertaken by the previous Government without the necessary safeguards? Will he now use the opportunity afforded by the change of Government in France to take up with them the whole question of dropping this elaborate scheme and making sure that we concern ourselves only with those prospects which have a chance of becoming commercially viable?

Mr. Benn

I think that my hon. Friend has overdone his comments. This aircraft, if successful—and I should add that a great deal of effort is being put in on both sides of the Channel and in both Governments and industries to make it a success—will be substantially ahead of possible rivals, and if it meets the requirements of the airlines it will bring in substantial earnings to this country. Having said that, however, I am bound to look at it with that criterion in mind and not the criterion of simply saying that because it is advanced and sophisticated therefore we must necessarily abandon the normal criteria for the support of such projects.

Sir A. V. Harvey

I recognise the progress made with Concorde both in France and in Britain, but has the right hon. Gentleman taken into account—bearing in mind the lead that Britain has over the Americans—the possibility of our American friends going out of their way to baulk this aircraft flying over the United States on some pretext—noise, or some other technical factor—which could have a damning effect on the whole project, even if it works well?

Mr. Benn

As the hon. Gentleman knows, the design aim in terms of noise is about the same level as that of a subsonic aircraft. As for the supersonic bang, this is a matter which is bound to be considered internationally, and by countries individually. I am sure that the hon. Gentleman will not read into some very difficult community pollution problems—which is what we are talking about—any particular ill will on the part of the American Government in respect of this Anglo-French aircraft. The problems are difficult enough without attributing to others motives in this matter.

Mr. Palmer

Does my right hon. Friend agree that in any new scientific and technical field of this kind too much immediate cost-consciousness can be financial folly in the long run for the future of this country?

Mr. Benn

I can assure my hon. Friend that the problem is not a matter of immediate cost-consciousness. If I may put it starkly to the House, the question is: do the customers want this aircraft? We must consider the possibility that because of payload, range, noise, or other reasons this or any other aircraft may not be acceptable to the market, and in that case it would not be the penny pinching attitude of the Government that would be preventing success but the fact that we have not produced something that people wish to use. These are considerations that have to be in our minds.

Following is the information: 1. The latest basic estimate of £730m. is divided as follows, as between actual past expenditure and estimated future expenditure.
British Government French Government Both Governments
£m. £m. £m.
Actual costs from 29th November, 1962 (the date of the Anglo-French Agreement) to 31st March, 1969, at the prices and exchange rates prevailing when the costs were incurred 170 160 330
Estimated costs from 1st April, 1969 to completion of the programme, at January, 1969 prices and an exchange rate of £1/11.85 F 170 230 400
Totals 340 390 730
2. The difference between the latest estimate of £730m. and the former estimate of £450m. is made up as follows:—
Latest estimate 730
additions due to devaluation of the £ in November, 1967 40
additions due to pay and price increases since January 1966 in both Britain and France 90
Latest estimate, reduced to 1966 prices 600
Increase over former estimate, at 1966 prices 150
Former estimate, at 1966 prices 450
3. Of the increase of £150m., £20m. is attributable to increases in overheads at the contractors. Of the remaining £130m., about two-thirds is attributable to design changes:—
  • —to meet specific new requirements proposed by the airlines and airworthiness authorities;
  • —to maintain the aircraft's prospects of achieving its target payload/range performance (including major modifications to the wings, fuselage, and engines);
  • —to improve the runway loading characteristics of the undercarriage;
  • —to improve the performance and reliability of various items of equipment, and
  • —resulting from three major exercises to reduce weight-growth.
The remainder is due to underestimation of the time and effort required to complete the programme as originally planned.
15. Mr. Onslow

asked the Minister of Technology what plans he has for a further series of sonic boom tests; and if he will make a statement.

Mr. J. P. W. Mallalieu

We have no plans at present for separate tests of sonic booms. Concorde's boom will be measured during the aircraft's flight test programme. The test routes on which Concorde will fly supersonically have not yet been decided.

Mr. Onslow

When such a decision is taken, will the hon. Gentleman make a statement so that people can understand precisely what is happening? Will he draw some profit from the last mismanaged series of tests, so that the new series of tests, when they come, are properly organised?

Mr. Mallalieu

We will certainly make a statement before they take place.

Mr. Younger

When studying the question of sonic booms from the Concorde point of view, will the hon. Gentleman bear in mind the outstanding qualities of Prestwick Airport for test flying, where, because it is near the sea, 'planes may be flown in and out without booms occurring over land?

Mr. Mallalieu

I am not sure about the latter part of that supplementary question, but, on the former part, I entirely agree that it is a magnificent airport.

Mr. Rankin

Would my hon. Friend at least say whether the Concorde tests will be held under terrestial or oceanic conditions?

Mr. Mallalieu

It is possible that, for safety reasons, there will be some overflying of land, but the bulk of tests will take place over the sea.

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