RB211 Engine

HC Deb 21 April 1971 vol 815 cc1160-3

11. Mr. Carter

asked the Minister of Aviation Supply if he will make a statement on the RB211 contract.

12. Mr. Sheldon

asked the Minister of Aviation Supply what replies he has received from Lockheed to the offer made by Her Majesty's Government to continue production of the RB211; and if he will make a statement.

14. Mr. Scott-Hopkins

asked the Minister of Aviation Supply what plans he now has for the development and sale of the Rolls-Royce RB211.

Mr. Corfield

I have been asked to reply.

Lockheed is consulting its bankers and customer airlines about the principal terms of a new contract for RB211. Exploratory talks on subsidiary matters are continuing between Lockheed and Rolls-Royce. I hope the negotiations will reach a definitive stage shortly. Meanwhile work on RB211 continues under the Government's indemnity to the receiver.

Mr. Carter

I thank the Minister for that reply. Whilst I welcome the newfound optimism surrounding the RB211 contract, is he aware that cancellation would make worse the unemployment situation in the Midlands? Will he bear that very much in mind in the remainder of the negotiations?

Mr. Corfield

These factors have played a very considerable part in the Government's whole approach in their endeavours to re-create a contract with Lockheed for the RB211 to continue.

Mr. Sheldon

Since the Prime Minister said yesterday that the essential part of keeping the Rolls-Royce contract going was guarantees as to the future of Lockheed, and since these seem likely to require Congressional approval, which may take many months, what is the Minister doing about the sums of money that will be required for Rolls-Royce if it is to keep this worth while project going?

Mr. Corfield

The best I can say now is that these negotiations are going on at this moment. They are in a delicate stage. This is something we clearly have very much in mind, but it would be in the interests of everyone if I did not make a statement, anyway for a day or two.

Mr. Warren

As some weeks ago I suggested that the Lockheed 10–11 customer airlines could be usefully invited to Derby to see the excellent technical progress on this engine, has my right hon. Friend been able to review this proposal?

Mr. Corfield

I understand that Rolls-Royce (1971) has issued invitations on the lines of that suggestion.

Mr. Walter Johnson

Is the Minister aware that the ticking over in regard to the RB211 engine is very demoralising to those who work in the industry? May I ask him not to agree to send the 2nd XI which I gather is going to America at the end of this week to continue negotiations, but to go over himself and try to expedite the negotiations for everyone concerned.

Mr. Corfield

I appreciate that the delay is disturbing, but it is also disturbing to us for financial reasons. I am confident that the negotiations are going on as fast as is practicable, but if it appears necessary at a later stage for a Minister to go over, that will certainly be considered.

Mr. Maxwell-Hyslop

Does the indemnity from the Government to the Receiver still expire on 29th April, the date given when it was announced?

Mr. Corfield

It has been further extended.

Mr. William Rodgers

Would not it be true to say, in view of what the right hon. Gentleman has said, that the future of this great project, which has great importance to Britain at a time of very high unemployment, now depends primarily on a decision of the American Congress?

Mr. Corfield

I think that that is so.

Mr. Rost

While I welcome the Government's initiative to get the RB211 going again, will my right hon. Friend bear in mind that the continuing uncertainty is causing some confusion as to who is actually running Rolls-Royce? Who is giving the orders? Is it the Government, the Official Receiver, the Board of Rolls-Royce Limited, or the Board of Rolls-Royce (1971) Limited?

Mr. Corfield

What is abundantly clear is that the major factors in the negotiation, the price of the engines, the development costs and so on, are matters for the Government, since it is Government money. There are more peripheral matters on the contract of a technical sort which are clearly best dealt with by the company. As regards the delay, the future and so on, it is also abundantly clear that we cannot afford to embark on putting in very large sums of Government money if there appears to be a major risk of Lockheed's collapsing at a most expensive stage for us without achieving the savings in the redundancies and so on. That is why we are very anxious to have a guarantee from the other side.

Mr. McNamara

In reply to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers), the Minister made the most revealing statement that the future of the whole project depends upon the American Congress. Can he indicate what plans the Government have for dealing with the situation should the American Congress decide not to support Lockheed? What plans has he for employment, to meet the problems of the sub-contractors and so on? It is a very serious statement which he has just allowed to slip out.

Mr. Corfield

If I did say that the whole project depended on the American Congress, I withdraw that. What I meant to imply was that the next step towards giving the necessary guarantee must rest with the further elaboration of the statement Mr. Connally was reported to have made yesterday.

Mr. Onslow

Since it is clear that the decisions next in line to be taken are to be made on the other side of the Atlantic rather than this, is not it very mischievous of hon. Gentlemen opposite to suggest that a project of great interest to both nations is one on which our partners across the Atlantic are likely to drag their feet?

Mr. William Rodgers

This is a very serious matter. Despite his qualification, the statement made by the right hon. Gentleman is properly of concern to the House. No one wishes to interfere with the course of the negotiations, but I hope that both sides recognise that the future of a very large American industry is involved. Would the right hon. Gentleman say quite plainly that, whatever the decision of the American Congress, and whatever the recommendation of Mr. Connally to Congress, that will not be an end to the matter and that Her Majesty's Government will make a decision which will then be subject to debate and decision in this House?

Mr. Corfield

Of course the Government will make a decision, but if they are to be responsible for the taxpayers' money they have to make that decision with some knowledge and assurance of Lockheed's ability to carry out its share of the bargain.