ROLLS-ROYCE (RB211) (Hansard, 4 August 1971)

§ 52. Mr. Bishop
To ask the Secretary of State for Trade and Industry, if he will make a statement on the future of the RB211 engine.

§ The Minister for Aerospace (Mr. Frederick Corfield)
In my statement to the House on 10th May about the RB211, I reported that the United States Administration was seeking authority from the United States Congress to guarantee up to $250 millions of additional credits for Lockheed. The House will recall that, because of the heavy commitment which we were prepared to undertake on the engine, we wished to be satisfied that the aircraft project itself could be completed. The United States Congress has passed legislation which would permit the granting of United States Government guarantees on further loans to Lockheed. I am awaiting notification from the United States Administration that it is prepared to give the guarantees for the benefit of Lockheed in an amount of up to $250 millions, which amount the United States Administration considers sufficient to carry out the TriStar project. I am also awaiting from Lockheed confirmation of 1583 orders for the aircraft from existing airline customers.
Provided the notification is received as expected from the United States Administration and from Lockheed, I am happy to say that the RB211 programme will proceed and that some 30,000 or more people at Rolls-Royce and in the company's supplier firms can now expect to continue work on this major engine programme. This has been a major consideration in our deliberations on the subject and I hope this will relieve some of the anxieties of those involved whether as employees, Rolls-Royce suppliers or trade creditors.

§ Mr. Eadie
But not U.C.S.

§ Mr. Corfield
Many of those who have in the last few months suffered serious anxiety have at the same time had to exert great efforts to keep alive the prospect of a solution. I wish to record my appreciation of those efforts.
Rolls-Royce will still have work to do in developing the engines for the TriStar. But we shall all be set on a course aimed at completing the project. We hope that the aircraft will enter into service with many world airlines who will recognise its merits and the House will, I am sure, wish the project every success.

§ Mr. Bishop
Is the right hon. Gentleman aware that after the cliff-hanging months the whole House will share his pleasure at such a statement being made and express its own appreciation of the co-operation of the United States Parliament in saving not only 30,000 British jobs but many hundreds of thousands of American jobs? Secondly, following the disclosures this morning, will he explain why it took the Government nine months before they reluctantly and timidly came forward to nationalise Rolls-Royce following the failure of private enterprise? Thirdly, will he explain what safeguards will be taken following the sacking of I.R.C., which acted as a watchdog, to ensure the continued viability of Rolls-Royce and other aero firms? Finally, may I congratulate him on choosing an Oral Question to make a statement today so that he might then be questioned?

§ Mr. Corfield
I thank the hon. Gentleman for some of his remarks. First, 1584 the nationalisation, if that is the right word, was announced at the same time as the collapse of Rolls-Royce, not nine months after. I have made it clear on many occasions that, whatever other merits I.R.C. may have had, it was not the ideal organisation for the watchdog capacity which the hon. Gentleman has in mind.

§ Mr. Boyd-Carpenter
So that the House may fully understand the background and responsibilities in this whole difficult matter, will my right hon. Friend now publish the 1969 I.R.C. report which, thanks to the diligence of the Sub-Committee, we now know to be in the files of my right hon. Friend, as the arguments against publication are no longer valid?

§ Mr. Corfield
I could not agree about those arguments being no longer valid. Publication would undermine the confidentiality of other I.R.C. reports. I have now seen the report myself and I am satisfied that there are still people and projects which could be damaged by its publication.

§ Mr. Benn
May I congratulate the Government most sincerely on the success of their negotiations which have been made possible by the guarantees voted on behalf of American taxpayers by Congress to sustain Lockheeds, which would otherwise not have been viable? This is the first occasion on which Congress has done such a thing.
May I also congratulate the Government on their decision to make further sums of public money available to the nationalised Rolls-Royce to allow it to complete the RB211, on which thousands of jobs in Derby and elsewhere depend? May I ask him to confirm that by concluding this agreement the Government are taking a tremendous risk with public money and that the outcome will depend on many factors outside their control, including the continued viability of Lockheeds?
We wish the Government success in their venture in support of a British industry and in hoping for major orders for this airbus from, among others, B.E.A.

§ Mr. Corfield
I thank the right hon. Gentleman for his remarks. It is relevant to remember that a substantial contribution is being made in this connection 1585 by the British taxpayer. We all accept that projects of this sort involve risk, particularly when one is dealing, as one unfortunately has to deal in this case, with a firm whose financial soundness is in question.

§ Mr. Rost
In welcoming this statement, which will come as a great relief to many thousands of my constituents in and around Derby, may I ask the Minister, now that some of the juicier bits appear to have leaked out from the I.R.C. confidential report about Rolls-Royce, urgently to consider publishing the Government's White Paper on the Rolls-Royce saga, because many of my constituents may well be under suspicion and it would be grossly unfair to them that the sort of rumours being spread about the responsibility for the collapse of Rolls-Royce should reflect unfairly on innocent parties?

§ Mr. Albu
On a point of order, Mr. Speaker. Would you consider the use of the words "leaked out" with regard to evidence given to a Select Committee of this House?

§ Mr. Speaker
I will certainly consider the matter and deliberate upon it, but not immediately. I would like to examine all of the circumstances.

§ Mr. Corfield
Perhaps I could first say to my hon. Friend that, if his definition of "juicier bits" roughly accords with mine, then I can find very little confirmation of such bits in the report. I am prepared to publish the summary which was officially made available to the previous Government and to myself. I would ask the House to bear in mind that there is a departmental inquiry taking place and I have made it clear in the House that I am perfectly prepared to make the whole report available to it.

§ Mr. Whitehead
Is the right hon. Gentleman aware that while my constituents in Derby warmly welcome the vote in Congress, they are only too well aware that the whole decision eventually hung upon the vote of a Kentucky senator? Will he now tell the House, since production on the RB211 is to go ahead, firstly, that there will be no further redundancies in the Derby engine division and, secondly, that some scheme will now be brought forward to allow worker shareholders to transfer at par to the new company 1586 whose profitability and viability has been assured?

§ Mr. Corfield
I am sure we are all grateful to the Kentucky senator, but in both of our systems a majority of one is sufficient. As to the redundancies, I am sure the hon. Gentleman will appreciate that the figures I gave in my statement were taken from the figures supplied to me by Rolls-Royce of the people actually employed on this project. Obviously, one cannot give an absolute guarantee in projects of this sort that there may not be changes of mind on the part of customers or major snags. I am immensely optimistic, but I am in no position to give that guarantee.

§ Mr. Hordern
Will my right hon. Friend say how it is that the I.R.C. came to present a report to the right hon. Member for Bristol, South-East (Mr. Benn) which said that millions of pounds would be needed by Rolls-Royce which in its view could not be a viable entity, and yet the right hon. Gentleman took no action to set this right? How can he appear in this House on this subject in a white sheet?

§ Mr. Corfield
With due respect, the report does not make those comments. I will publish the summary, in which it is quite clear, as it was certainly clear in the subsequent letter received from Sir Joseph Lockwood, that the I.R.C. did consider that its proposals would make Rolls-Royce viable.

§ Mr. Faulds
Will the right hon. Gentleman initiate a public inquiry into the sale of Rolls-Royce shares by individuals, not excluding members of the Board, who stood to gain by inside knowledge of the company's situation which was withheld from the Government of the day?

§ Mr. Corfield
I have already reminded the House that there is a departmental inquiry in progress.

§ Mr. Faulds
A public inquiry. This may come up again.

§ Mr. Onslow
The hon. Member is always coming up again.
Would my right hon. Friend convey to all those who took part in the difficult negotiations the appreciation of the hon. Members on both sides—which we owe to him, too? Will he also convey to 1587 them our gratification that the outcome of this affair puts the lie to stupid accusations which have come from certain people that this Government had sought to sabotage Rolls-Royce? Would he confirm that the full text of the I.R.C. document will be made available to the Board of Trade inquiry and that those who have commented on it will be invited to give evidence?

§ Mr. Corfield
To the first three questions of my hon. Friend I can say "Yes". To his latter comments I shall have to give some consideration.

§ Mr. Dalyell
Amid the euphoria, is this not the occasion to go along to the Treasury Solicitor and to those who advised the Attorney-General and discuss seriously the advice given to successive Governments in the case of Beagle and Rolls-Royce as to whether it was really necessary to put these firms into the hands of the Official Receiver at all? Is it true that Governments have to do this if they are not to incur the accumulated debts of firms in this position? This is a fairly serious question for the legislative committee of the Cabinet, and this is the time to ask it.

§ Mr. Corfield
This is a serious question on which successive Governments have taken the best legal advice available. The legal advice taken confirms, with no doubt at all, that the interpretation of the law was as I have put forward in the House.

§ Mr. Roy Jenkins
Does the right hon. Gentleman appreciate that on this side of the House we are grateful for his firm reply to his hon. Friend the Member for Horsham (Mr. Hordern) which put the matter into proper perspective? Will he also accept that we are glad that the vote in the United States Senate has gone the way it has—I thought it was a senator from Montana rather than Kentucky who had the decisive vote; but in any vote with a majority of one any of the 49 can be regarded as being decisive. Will the right hon. Gentleman accept that as a result of their policies the Government are extremely lucky, through a vote of 49 to 48 in the United States Senate, not to be presented with a further massive increase of unemployment and the collapse of a major industrial project? Will they endeavour so to 1588 conduct matters in future that they are not so dependent on chance votes outside this House?

§ Mr. Corfield
Of course we are grateful, but for the right hon. Gentleman, who has been a Chancellor of the Exchequer, to come forward and even imply that we should go ahead with an international project when there is grave doubt that the only reasonable market for this engine, namely this aircraft, will be built, astonishes me.

§ Mr. Kilfedder
On a point of order. May I ask for your guidance, Mr. Speaker? I wished to put a question to the Minister for Aerospace, but I was not called. There is a Rolls-Royce factory in my constituency. I was the only Member with such a factory in his constituency who was not called—[HON. MEMBERS: "No."]—and who, as far as I know, rose. I was not called on the last occasion that the Minister made a statement. As this matter is important to Northern Ireland, I should like your guidance, Mr. Speaker, about how I can be called when a matter affecting hundreds and hundreds of workers comes before the House.

§ Mr. Speaker
I shall not take the hon. Member's remarks as a reflection on the Chair. However, many hon. Members' constituents are affected, either directly or indirectly, by the Rolls-Royce decision. The Chair has to be the guardian of the time of the House, and it is not possible to call every hon. Member whose constituents are affected, which I very much regret.