ROLLS-ROYCE

HC Deb 25 March 1971 vol 814 cc1001-40

10.4 p.m.

Mr. William Whitlock (Nottingham, North)

Several times in recent weeks we have debated the vexed problem of Rolls-Royce. I make no apology for wishing to raise the matter once again tonight, when we are considering the Supplementary Estimates which involve, in the words of the Estimate, the Purchase of certain assets and part of the undertaking, of a company, that company being Rolls-Royce.

Hard negotiations are at present proceeding in America on the future of the RB211, and I would not like to say anything that would be in any way prejudicial to those negotiations. The Government appear at last to be acting with the kind of vigour which should have been manifested at the outset with regard to the difficult problems following the collapse of one of our proudest companies.

I do not wish to speak about such esoteric problems as the legalities involving the repudiation of the RB211 contract, or about the fate of the subcontractors, whose survival is important to the progress of the nationalised company, or about a number of other problems to which hon. Members will no doubt wish to refer. I am concerned with ensuring that, whether or not the RB211 contract goes ahead, Rolls-Royce (1971) Limited shall be in a position to fulfil whatever role is assigned to it, and to fulfil that rôle in a way commensurate with the proud name it bears.

There are four main British actors in the Rolls-Royce drama. First of all, we have the Government, which in this matter must represent the taxpayer, must look at employment prospects and must be concerned with export potential and defence supplies. Second, there is the Receiver, who represents the creditors, and who is legally obliged to get the best price he can for the assets of the old Rolls-Royce company. Third, there is the board of Rolls-Royce (1971) Limited, the Government financed and owned company whose boundaries have not yet been decided. Fourth, no doubt advis- ing the Receiver in the somewhat shadowy background, we have the board of the old company which got into such terrible difficulties.

What worries we is that these four authorities, if one may call them that, appear to be acting not in unison, not with any well-defined goal in view, but in entirely separate and conflicting ways under, as it were, a smokescreen which makes it impossible to decide who is making what decisions and why those decisions have been made. What we must be sure about before it is too late, before the body of the old Rolls-Royce company is dismembered in an entirely unsatisfactory and unscientific way, is that there are co-ordinated decisions which will make it possible for Rolls-Royce (1971) Limited to deliver the goods on the RB211 engine, if the contract is renegotiated, and that the potentialities of Rolls-Royce (1971) Limited are not irreparably impaired by hasty decisions which get rid of essential staff and which close down and disperse essential equipment. It seems to me that some of those things are now happening under the smokescreen I have mentioned.

On 11th February and 11th March I spoke in the House on the amazing record of the Rolls-Royce factory at Hucknall. I spoke in admiration of the men, the skilled engineers and specialists of all kinds, who work there. When leading a delegation to see the Minister of Aviation Supply, I claimed that this body of men was a unique team and a national asset which must not be broken up. Some hon. Members may think those remarks somewhat eulogistic, but I do not think they represent anything other than the true position.

What is happening to the redundancies at Hucknall, Derby and other places is no less than a weakening of this team whose strength and excellence will be needed if Rolls-Royce (1971) Ltd. is to rise Phoenix-like from the ashes of the old company and if the new company is to hold the proud position held by its predecessor. The Minister has said that the question of redundancy is one for the receiver and not for him, just as he has said that the problems of the subcontractors are matters which should be raised not with him but with the Receiver. Surely he and the new Rolls-Royce board must be concerned with the retention of the human assets necessary to make Rolls-Royce (1971) Ltd a viable concern?

I beg the Minister, as I did when I met him in his office, to look more closely into this. His recent letter to me merely passes on statements made to him by others about these redundancies. I do not find what he has to say in any way acceptable or adequate. I ask him not to accept blindly the statements that he has been given. I ask him to probe thoroughly into them. If he does, I am sure he will decide that many of the dismissals which have taken place are criminally wrong and will be bitterly regretted before long when these absent skills are needed.

The kind of people who are being made redundant range from highly skilled engineers with over 30 years' experience, who were shattered by the fact that this company to which they had remained so loyal no longer needed their services, to young men with shorter service, in some cases brilliant young men who are badly needed. Britain cannot do without people of this kind, young or old, skilled engineers, executives or research workers. The Minister should be much more concerned with their plight than is apparent from the letter I have received from him.

On 17th March I spoke in this House about the decision to close the flight-testing establishment at Hucknall by the end of the month. This was raised again by the delegation a week ago. The Minister says in his letter to me: I understand that the Receiver's decision on the flying unit implements proposals which had been under consideration for some time by the management of Rolls-Royce Ltd. and had been very carefully evaluated. What the Receiver did was in the interests of securing the necessary economies in Rolls-Royce Ltd.'s operations and take action which had previously been prepared. It must be clear in principle that the elimination of one of the company's two flying units is likely to be a useful economy. This is true even if initially the closure involves some extra expense. I can tell the hon. Gentleman that my information is that what he has been told about the careful evaluation of the decision to close Hucknall is eyewash. After the merger with Bristol-Siddeley there was, naturally, consideration of rationalisation measures. Last year at the Farnborough Air Show a Bristol executive harped on the need for this rationalisation and argued with me that there was a case for the closure of the Hucknall flight-testing establishment. I went into the matter then and was told that the decision had been taken that there was a need for two flight-testing establishments, each one in proximity to an engine centre. I suspect that the decision to keep two was taken because in the evaluation conducted then Hucknall came out very high and there was a need to keep it because of its position. If the Derby engine division is to be continued, a flight-testing establishment in close proximity to Derby is very necessary. It bodes ill for Derby if the flight-testing establishment at Hucknall is closed.

I have no hesitation in saying that the collection of plant and installations at Hucknall is unique in the world, and the flight-testing side is part of the unit. If the flight-testing establishment is transferred from Hucknall, an entity which has taken more than 35 years to establish will become vulnerable to gradual erosion and eventually to disbandment.

In his letter to me the Minister talked about the initial extra expense of closure, and it would be a large extra cost to move from Hucknall all kinds of complex equipment and plant. There would also be the cost of interfacing the Filton computer, which is incompatible with the airborne equipment of the Jaguar. Since I understand, although I am surprised, that wages at Bristol are higher than they are at Nottingham, there could be increased wages costs. Expense could be incurred in training personnel at Filton who are inexperienced in using the equipment which is at Hucknall. There would be extra costs in communications because of the greater distance from Filton to Derby and to the supply centres for aircraft spares. Some of those additional expenses are continuing and not just initial, but they could be overcome and assimilated in time.

Significantly, however, the Minister has not dealt in his letter with the one big disadvantage of Filton which I mentioned in my speech on 11th March namely, that it is very vulnerable as a base for flight testing because it is near major air routes so that flight testing could be inconvenient, difficult and dangerous. I want to hear from the Parliamentary Secretary why this decision has been taken and why this problem has not been mentioned in the Minister's letter. Those who supplied the other statements in his letter have chosen not to deal with the matter, and I wonder why.

Something wrong is happening. The closure of the Hucknall flight-testing establishment, once carried out, is likely to be irreversible, and, I am sure, in the course of time very much regretted. I wonder who has taken that decision and why. If it is the Receiver, he is interested only in obtaining short-term economies. Should not the Minister be concerned with the long-term consequences of this decision, and should not he be arguing with the Receiver about it instead of merely passing on the lame and inadequate explanations which I have received?

I come to another part of Hucknall's activities around which peculiar things have been taking place. I refer to the hyfil plant, which was closed the week before last. When I learned two weeks ago what was going on, I was greatly concerned. Hyfil has wrongly got a bad name because of the problems associated with the development of the RB211. But all the problems of hyfil associated with the aero-engine are virtually over with one tiny exception, and that is about to be solved. But even if no carbon fibre blades ever go into an aero-engine, I believe that this is the material of the future with a wide range of possible applications. It has an enormous commercial potential, and Rolls-Royce customers are now asking for it. New developments and cost reductions in production are just around the corner. In those circumstances, what has been happening at Hucknall is very strange, to say the least.

Certain equipment and machinery were taken away from Hucknall to unknown destinations in a secretive manner. Stocks of Hyfil were said to have been shipped to America, again in a "cloak and dagger" atmosphere. All this, along with the closure of the plant at that time, seemed absolutely incomprehensible. It did not make sense from the creditors' point of view, nor from the point of view of any decision which might have been taken to hive off this operation as a separate going concern.

Hovering around like vultures while all this has been going on, have been certain foreign interests which have been trying to engage the hyfil staff and cash in on another British product. If we are not careful, in the not too distant future we shall be buying from abroad the important material which has been developed here.

I do not know who made the decision to close the plant and make the staff redundant, but last week I expressed my concern to anyone who would listen to me—to hon. Members, to journalists and others—about an action which seemed to me remarkably stupid. No doubt in time this percolated through to the person, whoever it was, who made these arrangements, for at the end of last week the plant was given a reprieve and half the staff were offered re-employment, albeit on a temporary basis, pending a final decision on the plant. Why was it necessary for all this to happen? It is just another example of precipitate action which was eventually, but fortunately in this case not too late, seen to be unwise. I ask the hon. Gentleman, as I asked the Minister last Thursday when I saw him with a delegation, to investigate this matter thoroughly. There is a great deal which needs explanation. Conflicting interests have been at work here, and we in this House should know all about them.

Finally, these matters involve decisions which seem to have been taken without regard to the future viability of Rolls-Royce (1971) or to Britain's long-term interests. The Receiver must be concerned with the interests of the creditors, but the Minister has a wider duty, and, knowing him as I do, I am sure that he is all too conscious of that wider duty. If in his efforts to carry out that duty he is impeded by considerations of which I am not knowledgeable and of which the House may not be knowledgeable, I hope the hon. Gentleman will be able to give us information which will go some way to explaining the virtually incomprehensible actions which are detrimental in the long term to the interests of Rolls-Royce (1971) and of Britain.

10.23 p.m.

Mr. Norman Fowler (Nottingham, South)

Like the hon. Member for Nottingham, North (Mr. Whitlock), I recognise how important it is that nothing that is said tonight should prejudice the negotiations which are going on in Washington. I pay tribute to the Government's attempts to renegotiate the RB211 contract. It is important to Rolls-Royce (1971), to the workers there and to the whole country that this contract should be renegotiated. The Government have recognised this and are handling the negotiations with skill and diplomacy. It is particularly important that the people working at Rolls-Royce should clearly understand that everything that can be done in renegotiating the contract is now being done.

I should like to follow what the hon. Member for Nottingham, North said about the potential of Rolls-Royce (1971). I, too, should declare a constituency interest. Men living in South Nottingham work for Rolls-Royce in both Derby and Hucknall. It is Hucknall, which perhaps gets less attention than Derby and certainly less than it deserves, to which I should like specifically to refer.

I visited Hucknall and was extremely impressed not only with the kind of work which was being carried out but by the way in which that work was being done and, above all, the atmosphere.

Clearly, there is now tension and concern about the future. But what came out most clearly was that the Rolls-Royce operation at Hucknall was a team effort. The men are devoted to Rolls-Royce and are prepared at times—I do not exaggerate—to work round the clock in the interests not only of the old company but of the new company. The men at Hucknall—I make no division between management and workers—have in many cases devoted their working lives to making Rolls-Royce a success. No one would claim that responsibility for the tragic difficulties of that company could be laid at their door. I say this to emphasise the fact that they deserve, and can justly expect, to receive the greatest consideration in the situation which Rolls-Royce now faces.

We cannot ignore that we are dealing with the affairs of a bankrupt firm. If that were not the case, there would be no cause for this debate tonight or for the action and the debates which have led to it. As we are dealing with a bankrupt firm, the bitter truth must be faced that there will almost inevitably be redundancies, but the manner in which these redundancies are carried out, the manner in which that policy is implemented, is very important.

Relating those remarks to the Rolls-Royce establishment at Hucknall, two points cause me concern. The first is the point raised by the hon. Member for Nottingham, North—the closure of flight testing at Hucknall. I understand that the Derby part of Rolls-Royce considers that Hucknall is a preferable alternative to Filton.

But what particularly concerns me is the manner in which this decision has been taken. It was apparently taken without any consultation with the project management concerned. It was also clearly taken without any knowledge of future commitments, like the commitment on the RB211. I should therefore like to know on what basis this decision was taken and specifically what economies will result if the Minister is in a position to tell us.

My second concern is about the policy on the carbon fibre, hyfil plant, also at Hucknall, where there have also been redundancies.

I refer to the article in The Engineer of 16th March, an extremely powerful and cogent article, which raised some very worrying facts and made some very worrying assertions about the position. For example, it stated that there is concern about the future of the stocks now accumulated at Hucknall which are of considerable monetary value. I hope that there is no intention, as the article suggests, that they are simply to be scrapped.

There is also concern about the disappearance of machinery and equipment from Hucknall. These have been moved to destinations certainly unknown to senior management there.

My greatest concern is about the possible break-up of the carbon fibre team itself. They were an experienced and highly skilled team. If proof of this were needed, it is that members of that team have been approached by other firms not only in this country but from overseas who were anxious to make use of that team's talents. I would consider it sad if this team were broken up, particularly if the benefit of its work simply went overseas.

I can see the point of a policy aimed at keeping the team in Rolls-Royce (1971) and even of trying to sell it as a separate unit, but not of simply trying to disband it. That policy has very little to commend it and very little in logic to support it. In supporting the Government in their general policy on Rolls-Royce, and particularly in wishing them well in the present vital negotiations, I would press, as did the hon. Member for Nottingham, North, for urgent consideration to be given to the problems of Rolls-Royce at Hucknall.

10.32 p.m.

Dr. John Gilbert (Dudley)

First, I thank the Minister for the letter which I received from him a few days ago and the very gracious apology it contains. I hope that I understand his difficulties. I would like to pay him a personal tribute for the patience he has shown during these long debates on the Rolls-Royce situation, even when he has not been giving us very much information. There is a good deal of sympathy among my colleagues over the way in which he has been abandoned by the Cabinet in this matter. I do not suggest that the Minister and the Parliamentary Secretary are not competent to handle it; in fact I think that they are much more competent than the two members of the Cabinet who have given us very sorry performances for 15 minutes each when they have intervened in Rolls-Royce affairs. But no doubt Ministers feel that this is a point which has been discussed enough.

But many questions still remain to be answered about the Rolls-Royce affair. Despite what the Minister said at Question Time yesterday, there are still many jobs in the balance, I am certain, about which we have no firm information. There are still many families living in anxiety, not only in Rolls-Royce but in its sub-contractors and suppliers. Nothing is more debilitating than nagging doubt about one's future job prospects.

The reason for this uncertainty is that many sub-contractors do not yet know whether they will be able to stay in business. Even if they hope they can, they do not know on what scale this will be possible when this sorry affair is finally resolved.

This problem affects a most reputable and important company in my constituency with particular acuteness. But this is not the only case. Many firms throughout the West Midlands and in the Black Country in particular are also seriously affected; and this area is the heartland of British industry.

All this uncertainty is quite independent of the fate of the RB211, although, of course, it is compounded by anxiety about the state of the current negotiations with the Americans. I do not want to talk about that contract. I would echo everything said by the hon. Member for Nottingham, South (Mr. Fowler) about its importance to the country as well as to Rolls-Royce. But there are many firms which do a great deal of business with Rolls-Royce, not only in absolute terms but as a proportion of their total turnover, which have only a small proportion of that business in contracts involving the RB211.

It is nearly two months since Rolls-Royce declared itself insolvent, but the sub-contractor still have very little idea of where they stand and how much money they can expect. It is all right for the banks; they deal in millions. But for a sub-contractor, perhaps a small engineering firm, £300,000 is a great deal of money and could mean the difference between life and death.

I appreciate that under the requirements of company law there is little the Minister can do to single out subcontractors and help them as a special group. In the small hours in Committee on the Rolls-Royce (Purchase) Act the Minister made a few suggestions, for which I was grateful, though I think my gratitude was due mainly to fatigue. But at least he made some encouraging noises and recognised that for the subcontractors there were only small crumbs on the table.

Among the Minister's suggestions, he said that sub-contractors could try to get back some money by raising their prices to the new Rolls-Royce company. I am sure that nobody in Washington is listening to my remarks tonight, but if the Americans had been listening on that occasion—to the Minister urging subcontractors to screw the new Rolls-Royce company while the Government were trying to get a better deal from Lockheeds—they would have thought it a most extraordinary posture.

Is the Minister aware of any firm which has succeeded in raising its prices to Rolls-Royce since 4th February? I assure him that that suggestion is a nonstarter as a means of getting more money out for these firms. The sub-contractors need to know quickly what proportion—a rough figure will do; say, within 10 per cent. or even 30 per cent.—of their money they will get back.

In his letter to me the Minister said that £50 million was owed to the sub-contractors as a group. I thought that a rather surprising figure, and, while I am prepared to accept it, I remind him that the Press have put the sum as high as £65 million. Yesterday he said he could not give a more precise figure but that £50 million was, within £1 million or so either way, probably accurate.

Are there any breach of contract cases against the old Rolls-Royce company pending? Could they increase this amount or the amount that will be paid after the secured creditors have been paid? Leaving aside the RB211 considerations, if no such cases are pending does the Minister have knowledge of any cases which may be contemplated and which may affect the situation from the point of view of the unsecured creditors? Or can we take it that the £50 million figure is likely to be close to the final sum, exclusive of anything that may arise in connection with the RB211?

In answering Questions yesterday the Minister expected no further major redundancies, though he could not guarantee that. I appreciate that, but his language represented an ominious slide from what he had said previously. Previously he could not guarantee that there would not be any more redundancies. Now he will not guarantee that there will not be any more "major" redundancies. Is a major redundancy one involving 5,000 or 10,000 men? Where does he draw the line? This sort of uncertainty can only add to the anxiety of those who are still at work.

Moreover, how can the Minister make a statement of that kind—about there not being further major redundancies— unless he has a clear idea of how much the sub-contractors will finally get? The amount they get will determine whether or not there will be more major redundancies. So far the Minister has refused to give an estimate of what proportion of the debts owed to the sub-contractors and suppliers is likely to be paid off.

Mr. Peter Rost (Derbyshire, South-East)

It is impossible to give any precise estimate of what is likely to be distributed to the creditors until it is known whether the RB211 contract will be successfully renegotiated.

Dr. Gilbert

I take that point, and it was to be a parenthesis in my second next sentence. Clearly, one can make an assessment of what one wants to pay, what one wants to see, what one thinks, as a political judgment, should be paid to the sub-contractors as a group so that they are able to remain in business. Whether that amount has to be increased as a result of what may happen with the RB211 contract is another matter, but one can make a political judgment on how much is necessary for the economic needs of the sub-contractors and in consideration of economic implications if they were to go out of business.

The Minister has repeatedly said that he is not prepared to base his price on political decisions of that sort. He insists that only an economic valuation, however arrived at, will be used to determine the price to be paid for these assets. I do not know how he proposes to go about that. There are many different ways for arriving at the price of a business. He has not even given us the guidelines which he will employ in arriving at a valuation.

In these Supplementary Estimates we have the figure of £30 million, and £20 million of that has gone already on the patents. Clearly, we are far from the end of the road as far as extra money is concerned, regardless of whether the RB211 contract is renegotiated or not.

I am interested to know how the £30 million is arrived at. Is it just put in as a plug figure? I imagine that it must be. Surely, the Minister must have some estimate, if the RB211 contract is renegotiated, of what proportion of the final figure this £30 million can be expected to be. Not precisely, but, say, to the nearest £5 million or £10 million is all we need.

Yesterday at Question Time the Minister implied that it could be months before the price was known. He said that Rolls-Royce (1971) Limited could easily be in operation before the price was settled—I accept that—but he said that Rolls-Royce (1971) Limited might be in full operation in a matter of months or weeks. That is good news, particularly for those of us who approve of public enterprise; but why should we have to wait so long for some idea of the price? The price is crucial. There is speculation in the Press, but this is of no help to us whatever.

The whole matter has been thrown into further confusion by the original statement by the Minister that there was a possibility of counter-bidders for the assets of Rolls-Royce. This revelation now appears to have been superseded. I say "appears" advisedly. At Question Time yesterday I asked the Minister why the patents had not been available for a counter-bidder, and I asked him about the procedure for this. All he said was: The patents are an integral part of…Rolls-Royce (1971) Limited."—[OFFICIAL REPORT, 24th March, 1971; Vol. 814, c. 517.] That does not answer the question. What procedures were used to determine the £20 million paid for the patents? Was the receiver allowed to ascertain whether there were any other bidders in the market who would put up the price which the Government would then match? This is crucial. It is not good enough to say that they are part of the assets taken over by Rolls-Royce (1971) Limited.

The inference is that any asset which is an integral part of Rolls-Royce (1971)—whatever "integral part" may mean—will not be subject to this bidding-up process. If it does not mean that, what does it mean? If it does mean that, does it not make nonsense of what the Minister originally said about the assets being available for counter-bidders?

Next, is the receiver acting in any way for the unsecured creditors, or is he representing solely the interests of the secured creditors? Is his motive now merely to get enough to make sure that the position of the secured creditors is assured and then to wind up the proceedings as quickly as possible so that the secured creditors get their money out? If he is not acting in this way, how do we explain the arrangement, such as it must have been, to arrive at this figure of £20 million for the patents? Who in the negotiations involving Rolls-Royce, the receiver and the Government, is actually acting for the unsecured creditors?

I am not concerned about the banks. The matter is a fleabite to them. They can take care of themselves. But for the small engineering businesses up and down the country it is a very serious matter. The Minister must recognise that he has a moral responsibility in the matter, particularly after the exchanges in the House last autumn between the Government Front Bench and my hon. Friend the Member for Heywood and Royton (Mr. Barnett). The Minister is well aware of what I am referring to.

I trust that the Minister will accept that neither in speeches nor questions have I sought to recriminate about the past. My sole concern at every time has been to try to find out information which will put the fears and uncertainties of my constituents at rest. There are very serious human problems involved. I have met a deputation of shop stewards in my constituency. They are not, in the fashionable phrase, "mindless militants". They could not be further from it. They are sober, industrious, hard-working family men. Above all, they are worried men, and worry makes people ill; worry affects whole families; worry prevents people from sleeping; worry puts people off their food. It affects the family atmosphere, it puts school children off their work; it can lead eventually to physical illness. There is nothing more debilitating than prolonged worry in the family atmosphere. These men have been worried for a long time now. We see very little sign that they are getting any answer from the Government that will put them out of their uncertainty in one way or another.

We must not forget that these men have invested their lives in their work. They are highly skilled men, as has been said on both sides of the House. For those past middle age the situation is most serious of all. Their skills represent their whole capital in this life.

This is not a party matter. I am sure that the Minister will realise this. He has been pressed on both sides at Question Time and in speeches to give an answer. It is an answer that we demand to have as quickly as possible.

10.48 p.m.

Mr. Tom Boardman (Leicester, South-West)

I was somewhat disappointed with the speech of the hon. Member for Dudley (Dr. Gilbert). I had hoped for a rather more constructive contribution in view of his very sincere concern, which he expressed in his peroration, for the interests of those who are, as we all recognise, worried about the future. In his speech he spoke of not having recriminations about the past. With his right hon. Friend the Member for Bristol, South-East (Mr. Benn) sitting near him, they are things he would prefer to avoid, I am sure. He also said that he was concerned with finding out the facts and so on, and in almost the same sentence he referred to uncertainty about the duties of the receiver. If he wishes to know what the duties of the Receiver are, he should either read in the Library how they are defined or have listened to the very clear explanations that have been given from the Treasury Bench to questions about this matter. The duties of the receiver are clearly defined.

It was the speeches of the hon. Member for Nottingham, North (Mr. Whitlock) and of my hon. Friend the Member for Nottingham, South (Mr. Fowler), who expressed a sincere interest in the problems facing their constituents, which caused me to intervene. I recognise the interests of their constituents, and, rightly, they both spoke in support of those interests. But I ask that the interests of those constituents, not necessarily just at Hucknall or in other parts of Nottingham, should not be put above the interest of people in other parts who supply the components to which the hon. Member for Dudley referred in rebuilding out of this disaster a strong, viable, profitable unit.

I should like to deal with three aspects—the past, the present and the future. On the past, the great problem is the uncertainty facing the suppliers about whether they will be paid their bills. This is a cause of considerable concern. Hon. Members on both sides of the House may feel that there is some moral obligation in respect of companies which, from 1968, have been led to believe that this was an underwritten concern. Small businesses, which hon. Members on this side of the House support, often started in people's backyards with a few hundred pounds of savings, have become heavily committed, perhaps unwisely, to one customer. Many of these businesses will suffer severely if the debts owed to them by Rolls-Royce which they have allowed to accumulate cannot be met.

I know that my hon. Friend the Parliamentary Secretary is very conscious of that matter and I recognise the grave problems which exist in making distinctions between one firm and another. But if there is anything which can properly be done within the framework of the law and the philosophy which I support I hope it will be done for these small firms.

On the present, it is the uncertainty which is the cause of much concern. I criticised the hon. Member for Dudley at the beginning of my speech, but I share his view about the worry of those who do not know where their future lies, whether they be owners or workers in small businesses, or component manufacturers in Dudley, Nottingham or—and this is of deep concern to me—Leicester. The problems which face my hon. Friend in arriving at the answer are great. We hope that he will be able to find a good solution for them. The sooner that the answer can be found, the better it will be for the peace of mind of all concerned.

Turning to the future, it is here that I join issue with the arguments put forward by the hon. Member for Nottingham, North. He said that the Government should decide whether Hucknall should be retained rather than Filton. I do not believe that this matter can be decided by considering one constituency's interest as against another constituency's interest. The future of what the hon. Gentleman referred to as the human assets—perhaps a rather crude term—will depend on rebuilding from this disaster an aero-engine industry which is viable and profitable. A commercial decision made on proper economic judgments should decide what shape and form it must ultimately take.

I do not believe that any service will be done to those to whom the hon. Gentleman referred as brilliant men—a description which I entirely endorse—if. in order to maintain their jobs for the time being, we build or locate a structure at a place which is unsuitable. I am incapable of expressing any opinion whether these establishments should be at Hucknall or Bristol or anywhere, but whatever is rebuilt out of all this, let us ensure that we take into account the lessons of the recent past and build the new company in a way in which it will not only be the great technical concern which Rolls-Royce always has been but will be capable of securing the high rewards which we expect and must pay to these men for their skill and brilliance and of earning a proper return on the capital to be invested.

Unless all these constituent parts can be put together correctly and properly, we shall, although saving certain jobs in the short term, be faced inevitably in the future with a similar disaster. Whilst I share all the sentiments which have been expressed about the human problems involved, I hope that my hon. Friend will see that, while talent is important, the decision made will enable us to rebuild our aircraft engine industry in a way which ensures that these human talents can be properly rewarded by a profitable, viable and sound concern.

10.56 p.m.

Mr. Leslie Huckfield (Nuneaton)

Although I follow the hon. Member for Leicester, South-West (Mr. Tom Boardman) in his defence of the smaller sub-contractors who have been of importance to previous contracts of Rolls-Royce, I hope that he does not think that, basically, the aero-engine or aerospace work of the future can be done in any small or medium-sized country without a large measure of Government support. The whole lesson of RB211 affair for this country, particularly in relation to the aerospace industry, is that projects of this kind will require a large measure of Government support in addition to some of the commercial judgments and values to which the hon. Gentleman referred.

Listening to some of the comments and debates in the House over the last few weeks, I have been a little distressed by many of the sentiments expressed on both sides about the RB211, because they seem to have assumed that the contract was as good as done and was not to be saved or renegotiated. It does no harm for us to be reminded occasionally of the fact that, before 4th February, the TriStar test programme had been going very well. It was on schedule; the engine supplies from Rolls-Royce had been delivered to Palmdale on schedule; the progress towards certification was well advanced on schedule. According to Aviation Week and Space Technology this week—if one can believe the reports, and they are usually accurate— At Rolls' Derby Engineering Centre, the No. 11 production engine last week was run at a thrust of 42,900 1b., which is the testbed equivalent of 38,700 1b. at the critical hot day performance take-off thrust. Engineers said changes in inlet guide vane geometry will increase hot day performance to just under 4,000 1b. thrust shortly, which is 600 1b. below contract specification. If a project of this size at this stage of development is only 600 1b. below contract specification, that project is going very well indeed considering the very advanced aero-engine technology we are dealing with.

Despite all the gloomy sentiments, sentiments which at times seemed to want to kill off the project, despite all the gloomy prognostications, both the Tri-Star and the RB211 are still going very well. It is because of this, apart from the sentiments which have been expressed tonight, that I hope that the Minister will be able to give more enlightening news than has been the case in the history of this Rolls-Royce affair so far.

My hon. Friend the Member for Nottingham, North (Mr. Whitlock) referred to hyfil carbon fibre blade technology research. It has always been my understanding that carbon fibre blade research would have contributed, had it been entirely successful, and I understand that it has not been far from that, to a great weight saving in the performance of the engine. I wonder whether the Minister can say whether the country is to discontinue this research completely. I am sure that he will agree that if we can maintain our lead in this research, we shall be making an important contribution to the advance of aero-engine developments. We know that one or two of these research projects have already been shipped to the United States, but can the Minister say whether the closure of the hyfil research centre means that we are to pack this up altogether, because, after having tested this project in the Rolls-Royce Conway engines in the VC10 operated by B.O.A.C. and having taken the project a long way, it seems a tremendous waste of money to the country now to abandon the hyfil blade technology.

It has not been admitted by Government spokesmen—not that much about anything has been admitted by Government spokesmen—that one of the reasons for the cost over-run, for the cost escalation, in the RB211 development may have been that Rolls-Royce was carrying out a dual research project into both titanium blades and hyfil blades. It may be that that is why the project has been dropped. I hope that the Minister will be able to offer enlightenment on this question.

What can the Minister say about the reported seizure of certain RB211 engines from the Pacific Airmotive Corporation of California? This is a matter which my hon. Friend the Member for West Lothian (Mr. Dalyell) has tried to raise under Standing Order No. 9, without much success. If the Whitaker Corporation is to set the precedent under Californian law, as it would appear, what will happen to the other Rolls-Royce assets and properties and other things which may be attached to Rolls-Royce, not only under State of Californian law but under State of New York law and under the laws of various other state legislatures in the United States and other national legal systems throughout the world? I shall be particularly grateful for more information from the Minister about this reported seizure by the Whitaker Corporation.

Can the Minister tell us more precisely about the security of the patents? I have been told that Rolls-Royce was paid some £20 million, 48 million dollars, for the Rolls-Royce patents, and the Government are reported to have paid this. Does this mean that Rolls-Royce patents are absolutely secure throughout the world under various other national legal systems? Does it mean that Rolls-Royce affairs are now completely in Government hands? Can the Minister give us any further information?

I should like to stress my constituency interest, representing, as I do a fair proportion of those employed by Rolls-Royce at the Parkside and Ansty factories in Coventry.

It is often assumed that the West Midlands does not have unemployment. I can only say that, if there is any feature which is noticeable and important about the current recession which is being deliberately induced by the Government, it is that the West Midlands has taken its toll and its fair share of unemployment just like the rest of the country. When my constituents come to me at my Saturday morning surgeries asking me to find them jobs, I know that they have tried everything else and I know that the situation is desperate.

It is because the situation is becoming desperate as regards jobs in Coventry that I hope that the Minister and the receiver, with whom he claims to have little contact from time to time, will bear in mind that the unemployment situation in Coventry and the West Midlands, as my hon. Friend the Member for Dudley (Dr. Gilbert) has stated, cannot be treated lightly. We have already had lay-offs in my constituency and at Rolls-Royce because of the company's bankruptcy. These are lay-offs and redundancies which have not been directly connected with the RB211 project. They have been connected with the fact that the only assets that many small firms had were the moneys they were owed by Rolls-Royce. In this context, although my hon. Friends have many pressing claims to make about the unemployment situations in their constituencies, I hope that it will not be forgotten that the claim of Coventry and the unemployment difficulties of Coventry are equally serious on this occasion.

I echo the sentiments expressed by my hon. Friend the Member for Dudley in asking when we are to know the price to be paid. It does not provide much comfort to a small firm which is seeking short-term liquidity to engage in tooling up for new projects to be told that the company may be worth about £50 million. I realise that the precise valuation of the company's assets and the precise outcome of the possible renegotiation of the RB211 contract cannot be carried out overnight. I would accept this. My constituents would accept it. The sub-contractors would accept it. Like my hon. Friend the Member for Dudley, I stress once more to the Minister the fact that this situation is causing a tremendous amount of worry and it is adding to the uncertainty which many of my constituents have already witnessed throughout the West Midlands and, indeed, throughout the whole country with already existing bankruptcies of sub-contractors in connection with Rolls-Royce. When a sub-contractor sees other companies around him, and other companies throughout the country, going bankrupt it is very worrying, particularly when the dole queue is lengthening every week. That is the situation in Nuneaton and Bedworth.

I hope that the Minister can give the House some information about what effect he expects the advancing of the payment of investment grants will have for many of the smaller sub-contractors. We were offered a dim ray of hope when the Minister said that the payment of investment grants would be advanced, but does he think that this will provide all that much succour and comfort to companies who were dependent on Rolls-Royce and who are desperately seeking short-term liquidity? Has the Minister's project study team made any precise study of the effects of the advancing of the payment of these investment grants? It is my evidence that, although this was at least a gesture in the right direction, it will not go very far along the road to solving the problems of many small companies.

Has the Minister any other information to offer about what kind of further guarantees or what kind of under-writing or what kind of conversations with the bankers have been considered by his Department? It would be nice, to say the least, to be assured by the Minister that other guarantees have at least been considered. Has the possible offsetting of the payment of S.E.T. or the delaying of the payment of certain other required State contributions been considered? Has any other kind of assistance been considered. If the Minister can provide some information on this, it would be gratifying to many of my constituents to know that at least the Government have thought about it.

Finally, I once more express my hope and make my assertion that this is a project which will continue. It is a project upon which the whole of the British aero-engine industry now depends. We have Concorde, which is going ahead; but with yesterday the Senate voting on the S.S.T., other things may happen. RB211 represents a very important development in quiet engine technology. It also represents a very substantial capital and human investment in the people and resources of the country.

I hope that when he winds up the debate, the Minister will appreciate that while we express constituency concern and the concern of all hon. Members who have been asked questions by anxious cconstituents who could be unemployed, many of us speak on behalf of the country, which we want to go ahead as an advanced technological nation. We realise that we have not the vast resources of the American budget or the domestic market of the United States, but I think that I speak for all my hon. Friends when I say that we believe that aero-engine technology has a definite rôle to play in the future of this country. Even if the Minister cannot say much about that tonight, can he offer a ray of hope that I can convey to my constituency this weekend?

11.11 p.m.

Mr. E. S. Bishop (Newark)

The presence of hon. Members for this debate, particularly the presence of my right hon. Friend the Member for Bristol, South-East (Mr. Berm), my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) and many hon. Members on the Government benches, in view of the limited circumstances of the debate on the Supplementary Estimate, indicates the importance which we give to the situation facing Rolls-Royce at this time.

I thought that my hon. Friends who have spoken from the back benches got to the core of the problem when they mentioned the human assets involved in this Rolls-Royce drama. There has hardly been a situation for many years in which there has been so much concern, national and international, with all the jobs which are affected and all the prospects underlying that for the future of the British aero-space industry. All this has been tied up with events of the past few months.

In this time the Opposition has been a responsible Opposition. It has demanded information when it felt it necessary and safe to do so and on other occasions it has been responsible enough to recognise that there must be areas of confidentiality. But those areas of confidentiality must not be abused by the Government in a failure to give information which the Opposition has rightly demanded. Our attitude right from the start has been absolutely open on this. My right hon. Friend the Member for Bristol, South-East has been with us in demanding a White Paper which could give the information and satisfy many of the questions which have been asked time after time in recent weeks.

We have been forthcoming in demands for an inquiry to go into the situation for we have nothing to hide concerning the contract. I reiterate the statement of my hon. Friends that the Government should be willing to publish the contract because there could surely be no matters of confidentiality involved there. I shall not reiterate all the questions which my hon. Friends have asked in recent weeks, some of which have been repeated tonight, but in this situation as it affects human values we demand to know what action of a positive kind has been taken to meet the effects of redundancy. Hon. Members opposite have demonstrated their concern about the way in which this affair has been handled by Her Majesty's Government. There has been no evidence of real consultation with all the parties concerned, no evidence of consultation at management level between the old and the new boards or with the Receiver, the unions, sub-contractors or the workers.

One of the most important aspects of the situation with which we are faced is the vital importance of retaining the confidence of the industry to maintain the workers who have put their lives into it and, probably more than anything else, the importance of keeping design teams together. Without the design teams there can be no future for Rolls-Royce, whatever the situation may be following the negotiations now taking place in Washington. What will happen if the design teams are broken up? Anyone who knows the industry must realise that it takes at least two years to get a team of people to work together in a satisfactory way. There are the air dynamicists, the experts in matters of weight and all the other specialists who take at least two years to get to know each other and appreciate the demands made on each other. A design team, once it has been broken up, is lost to the industry as a whole, and it is useless until it gets working again.

It is in this situation that we are now negotiating in Washington. It could be very serious indeed if the Government do not do something positive to restore the confidence which is gradually being sapped away from this important Rolls-Royce aerospace industry.

The trade unions are often called irresponsible. My own union, D.A.T.A., is regarded as one of the most militant of unions, but it is these unions which have provided the men of the calibre, experience and skill in recent years to make the Rolls-Royce aero-engine division what it has been, a leader in aerospace technology. These are the people who have a right to demand of the Government that they shall be told where they stand.

In this House, day after day, we have been receiving deputations from Rolls-Royce, from Derby, Belfast, Watford, Leavesden and other places, all demonstrating, by the visits of constituents, that there is widespread concern. They come to ask us, as Members of Parliament, what is happening to their industry and what are the Government's plans because they have no information at the places where they work. Their managements do not know where they stand. They can get no information at all. We all know that consultation and communications are the basis of confidence in the industry, and it is most important at the present time.

My hon. Friend, the Member for Nottingham, North (Mr. Whitlock) and the hon. Member for Nottingham, South (Mr. Fowler) have referred to the uncertainty at Hucknall and the dissipation of some of the plant on the hyfil process. Here again we demand an answer to give confidence to those affected. We have heard of the cessation of flight testing at Hucknall and we have heard also of people leaving the industry and going overseas. Here is a situation in which the Government seem to be standing by, suggesting that the people concerned should be looking after themselves. But that is not good enough.

The situation in which the Government have agreed only partially to nationalise the industry is surely one which cannot be defended at this time, when some of the profitable parts of the industry are being hived off while the Government are carrying those aspects of the industry which are socially necessary but which nevertheless are a possible liability to our resources, financial and otherwise.

All this is taking place at a time when unemployment figures are rising to over 800,000. These people are in a particularly difficult situation because, unlike others who may leave their companies and seek work elsewhere, they are concentrated in these areas and no one can help them because the Government lack any positive policy, except good intentions, in doing what they can to help the people affected.

One is entitled to ask the Government what they are doing to provide alternative work for these people if they leave the industry. The important thing is that they shall not leave the industry but that they stay by their drawing boards and their benches and in their offices in order to make sure that the people negotiating in Washington can assure the Lockheed Corporation and the United States Government that the resources are there if the negotiations succeed, as indeed we hope they do.

We now have no I.R.C., which, in the circumstances in which we are placed, could have given help to Rolls-Royce and other firms, and, indeed, to the subcontractors affected by the failure of Rolls-Royce. Her Majesty's Government should have been more positive in their actions. The nationalisation of the company was meant to be a life-saving operation, but the management, the workers, the sub-contractors, and all concerned, are still struggling in the water. Her Majesty's Government are blindly throwing out lifebelts when they should have been putting lifeboats to sea in readiness for the time when they can see the direction in which they should go.

The House will marvel at the responsibility, tolerance and understanding of the workers who have been so adversely and, in many ways, unnecessarily affected by the prevarication and lack of direction of Her Majesty's Government. We are told that the Industrial Relations Bill has been justified in the circumstances. The lack of direction has been such that the old board, the new board, the Receiver, the management, the workers and the subcontractors do not know where they stand. They have merely been told by the Government that they must stand on their own feet. Standing on one's own feet is not easy when all concerned are floating in a sea of doubt.

If the Rolls-Royce workers and the sub-contractors acted as they could reasonably be expected to act in the circumstances the Government would have to bring back troops from Northern Ireland to dispel the riots. In all the circumstances, the way in which the Government have handled the situation in the last few weeks has been deplorable.

Mr. Tom Boardman

In view of what the hon. Member has said, will he make clear whether he supports or condemns the action of the Rolls-Royce workers who came out on strike on 18th March?

Mr. Bishop

I am suggesting that in all the circumstances, and in view of the way in which they have been treated in this deplorable situation, a much more militant and, in some cases—as hon. Members opposite would say—unreasonable action might have been expected.

Mr. Boardman

Does the hon. Member support them?

Mr. Bishop

I marvel at the fact that in the circumstances they have been so responsible. People are leaving the industry. No one knows what the position is, and the Receiver is unable to give them any guidance. We do not know the extent to which the Receiver is in charge in relation to the old board and the new board. The Government do not seem able to give any directive. It is quite deplorable that in such circumstances hon. Members opposite should think that by passing the Industrial Relations Bill they can get discipline from people whose militancy might reasonably have been much greater in the circumstances.

Mr. Boardman

I am sure that the hon. Gentleman would not like to be misunderstood on this point. Perhaps he will make it clear whether, speaking from the Opposition Front Bench, he supports or condemns the action that the workers took on 18th March.

Mr. Bishop

I think that I have made my position clear.

Mr. Boardman

No, you have not.

Mr. Bishop

If they are fair, hon. Members opposite will recognise that in the circumstances in which the workers have been placed—

Mr. Boardman

Does the hon. Member support or condemn?

Mr. Bishop

—we might have expected far more militant action than we have seen.

Mr. Boardman

Answer!

Mr. Bishop

I want to underline the importance of the Government—even at this late hour—doing something, and not only to answer the questions that my hon. Friends have been putting forward time after time. We have been taking the initiative quite responsibly, despite the problems of confidentiality. It is important, even at this late hour, that the Government should assure all those affected that they know what is to be done and where they should be going. If the negotiations in Washington are to succeed there will have to be assurances that the Government are retaining the design teams, preserving the confidence in the industry, and maintaining jobs and the work flow. If that is done, when the negotiations succeed, as we hope they will, the production lines will be going once again.

If the negotiations do not succeed—and we all very much hope that that will not be the case—the Government should have alternative plans ready now in order to assure the workers and all others affected that they have a future, because the future of the aircraft industry depends as much as anything on Rolls-Royce going ahead with production, and with alternative production, even if the RB211 engine is not part of it.

We know very well that one of the negotiating strong points at Washington must be an assurance to Lockheed and the United States Government that there can be no alternative to the RB211 engine without unnecessary delay and higher and escalating costs. Anyone who thinks that it is possible to take an engine out of an aircraft and whip in another in its place in a short space of time is ignorant of the circumstances of modern aircraft production. It cannot be done, and that is one reason why we must assure the future, not only of the RB211 but of the industry. I emphasise that the Government have a great deal of urgent work to do to restore confidence, the lack of which is sapping the industry, and without which the future of the firm, of this engine and of the aircraft industry itself cannot be assured.

11.26 p.m.

The Parliamentary Secretary to the Ministry of Aviation Supply (Mr. David Price)

This is the fifth debate in a series of debates on Rolls-Royce since 4th February, when the old Rolls-Royce company went into receivership, and it is a further sign, if it be necessary, of the real and continuing interest and concern of the House over the consequences of that receivership. That has been the theme of all the speeches this evening. Obviously predominant in our minds is the future of the company and of all those connected with it, whether directly or indirectly. The reason for this debate is that Class VI, Vote 19, bears directly on the vital and very complicated problem of how we can produce a meaningful future out of the financial collapse of the old Rolls-Royce company.

I realise only too well how very concerned right hon. and hon. Members on both sides are about the consequences of the insolvency of the old company, and all the speeches have been directed, in part at least, to that aspect of the problem, but it has been especially true of those hon. Members who face daily the very real and understandable anxieties of their constituents who are most directly affected. I would be very insensitive indeed if I did not share to the full the concern of the House.

Hon. Members have posed many questions, and I shall do my best to answer as many as I can tonight. Inevitably, I shall not be able to answer them all, especially some of the more particular and detailed points, but I undertake to write to hon. Members on such questions, because I am also conscious that it would not be the wish of the House that I should detain it for too long. At the same time, I must warn that I have little new to tell hon. Members, and that applies especially to the negotiations with Lockheed. I am sure the House will agree that this is a very important factor in all our considerations.

As the House knows, high level talks are taking place in America at the present time. The British team is headed by a very senior Cabinet Minister, my right hon. Friend the Secretary of State for Defence, and this is some evidence of the importance which the Government attach to the negotiations. The House will appreciate that it would be quite wrong of me to speculate on the likely outcome of the negotiations, or to attempt to assess the negotiating positions. All hon. Members who have spoken have shown that they understand the necessity for me to remain silent tonight on this important aspect of the future of Rolls-Royce. Those who know me will realise that silence does not come easily to me. I am grateful to the House for its forebearance which I shall emulate. This is why I say that I have little new to tell.

Mr. Anthony Wedgwood Benn (Bristol, South-East)

We have heard tonight that Lord Carrington and the Attorney-General are returning. Could the hon. Gentleman tell us whether this is, as it were, just an opportunity for consultation at home or whether it marks in any sense a critical point in the negotiations?

Mr. Price

The right hon. Gentleman has the advantage over me because I think that he came to the bench later than I did. Frankly I cannot comment.

I would like to deal with the Supplementary Estimate. The expenditure for 1970–71 which was contained in Class VI Vote 19 is that announced by my right hon. Friend the Minister of Aviation Supply in his statement to the House on 8th March. As he then said, this Supplementary Estimate for 1970–71 covers the £20 million already advanced to the receiver from the Contingency Fund for the acquisition by the Government of certain assets of Rolls-Royce Ltd. and likely further payments on account to be made to the receiver in the current financial year.

In the debate of 11th March the Lord President of the Council said that the £20 million Maid to the receiver was: …to meet the acquisition by Her Majesty's Government in the United Kingdom as a neces- sary act of official policy of all the patents previously held by Rolls-Royce Limited and its subsidiaries."—[OFFICIAL REPORT, 11th March, 1971; Vol. 813, c. 666.] He explained on that occasion the purpose for which this had been done. The £20 million is therefore part of the figure of £30 million we have shown in the Estimate as being required for the purchase of certain assets and parts of the undertaking of Rolls-Royce. The remaining £10 million would be paid to the receiver as a further instalment towards the price to be paid. This may help the hon. Member for Dudley (Dr. Gilbert). The instalment is provided for in the heads of agreement the signature of which was announced on 19th March by my right hon. Friend in answer to a Written Question. As he said in that reply, the heads of agreement provide for payment of a fair price by negotiation between the parties to the heads of agreement.

There will accordingly be further negotiations and pricing of the assets, because this is a complex operation, given the volume of the assets to be precisely defined and evaluated as well as certain other points on which the heads of agreement expanded and elaborated. This process will take some time and would certainly carry us well into the next financial year. Supplementary Estimates will therefore be laid before t?-e House for any further payments which fall to be made to the Receiver on the acquisition of the assets in accordance with the settlement reached about the price for the assets. I hope that this assists the hon. Member for Dudley. The figure of £30 million is accordingly no indication of the total amount which will be paid for acquiring these assets for operation by the new Rolls-Royce. It is just a payment on account. The Supplementary Estimate includes £50,000 for a loan of working capital for Rolls-Royce (1971) Ltd. pending that company taking possession of the assets and its full capitalisation as a going concern.

It might assist the House if I explained that my right hon. Friend on 23rd February told the House of the setting up of the new nationally-owned engine company Rolls-Royce (1971) Ltd. He also announced that Lord Cole would be the new company's chairman and the names of those who had agreed to be members of the board of directors. The board of the new company has since then been able to begin formulating the new company's policies and in particular to plan the transition from receivership to Rolls-Royce (1971) Ltd. of those parts of the Rolls-Royce Ltd. undertaking which the new company will be taking over.

I am well aware that, until this phase is completed, there will inevitably be uncertainty in the minds of hon. Members, members of staff and the public at large, but with the continuing uncertainty over the fate of the RB211 contract, which forms at present a substantial part of the aero-engine programme of Rolls-Royce Ltd., the new company's board has not been able to make as much progress with formulating plans and policies as they otherwise would have done. It has taken part in negotiating heads of agreement on the acquisition of assets as well as assisting the Government in negotiations with Lockheed about the possibility of a new contract for the RB211.

I am aware that this problem of transition from receivership to Rolls-Royce (1971) Ltd. is a period we would like to get over as quickly as possible. Hon. Members may have seen in the Press—it has not been given the publicity it might have been given—that Lord Cole announced on 19th March that with the signing of the new agreement it was possible for the new company to begin operations and that this would be done stage by stage in collaboration with the receiver. The first phase would be for the new company to take over certain selling functions.

He announced a number of appointments made to the senior management of the new Rolls-Royce in the technical, financial and personnel fields in preparation for the take-over of functions from the receiver. He added that others would be announced later to enable co-ordination and rationalisation of activities in the various divisions acquired from Rolls-Royce in other fields relating to contracts, marketing and production. The exact date of the company's new assumption of its functions remains to be determined, but co-operation between the receiver and the new Rolls-Royce should ensure that the transition is as smooth as possible and is completed quickly. In this context "quickly" is a matter of weeks rather than months.

An important aspect is continuity for existing customers of Rolls-Royce. I assure the House that customers of Rolls-Royce for aero engines and for marine and industrial gas turbines need not worry about continuity in supply. They can expect to find the new Rolls-Royce, in consultation as necessary with the receiver, ready to continue dealing with them on long-term as well as on short-term orders. I want to stress this matter because there may be an impression that it is just a holding operation. I would also add that Rolls-Royce customers interested in other products should similarly be able to continue trading with the new company, Rolls-Royce Motors Ltd. set up to carry out the business of Rolls-Royce Ltd.'s Car and Oil Engine Divisions.

I am able to give one little scrap of news to the House. I have been told that the board of the old Rolls-Royce Ltd. have today invited shareholders to attend a special meeting on 19th April, the purpose of which will be to consider a resolution declaring that the affairs of the company ought to be investigated by inspectors appointed by my right hon. Friend the Secretary of State for Trade and Industry.

The hon. Member for Nuneaton (Mr. Huckfield) asked me—and, indeed, answered his own question—about the technical state of the RB211 engine. The RB211 has been performing well in the development flight programme. Various technical problems remain, but I think that we can be reasonably confident that they can be solved. It is time and cost which have the real bearing.

In fact, RB211 engines have been run for a total of 4,073 hours. The latest engine performance has been to 42,300 1b. on a standard day. The thrust on a hot day—"hot day" for this purpose is defined as about 84 degrees Fahrenheit—has been raised to 38,700 1b. I think that the time which has passed in the negotiations with Lockheed is some evidence of the confidence that they have in the capacity of Rolls-Royce to bring the RB211 to the standard that they require for the TriStar.

Mr. Bishop

Can the hon. Gentleman say to what extent these encouraging developments are within the specification which is aimed at? To what extent have we to do further research and development on these points before we achieve what is regarded as a satisfactory engine?

Mr. Price

I should prefer not to say any more tonight, but I shall be happy to write to the hon. Gentleman about that.

I was about to observe that the hon. Members for Nuneaton and Nottingham, North (Mr. Whitlock) asked whether the present state of the RB211 work under a receiver, as they put it, would in any way prejudice the negotiations which are going on. I should like to make it clear that the receiver is being paid by the Government for the RB211 work which is necessary to maintain the ability to continue the project without further delay under a new contract. The day-to-day control of this work is in the hands of a professional officer of my Department stationed at Derby. One of his duties is to maintain the capability to go on with the RB211. So, although in certain other matters it may appear to some hon. Members that certain projects or activities of Rolls-Royce in which they are particularly interested have been prejudiced, as they allege, by the management coming under the receiver, it is not true of the RB211.

Mr. Phillip Whitehead (Derby, North)

I apologise for not being present at the commencement of the hon. Gentleman's speech. Is he aware that some personnel made redundant in the Derby aero-engine division were working on the RB211? How does he reconcile that with what he has just said?

Mr. Price

I understand that, in a desire to be fair across Rolls-Royce, some of those who were working on the RB211 were made redundant and were replaced by more senior staff or workpeople who moved on to the RB211 work. I understand that this was to ensure equity of treatment across the various Rolls-Royce activities.

The hon. Member for Nottingham, North and my hon. Friend the Member for Nottingham, South (Mr. Fowler) asked a number of questions about the carbon fibre work. I should like, without detaining the House too long, to mention something about this work.

It is necessary, in discussing this topic, to distinguish some of the different establishments and units concerned. Rolls-Royce Composite Materials Ltd. is a wholly-owned subsidiary of Rolls-Royce Ltd. Its objective is to market hyfil carbon fibre for any use to which it can be put; not merely to supply the aeroengine requirements of Rolls-Royce Ltd. for carbon fibre.

One part of the Hucknall establishment of Rolls-Royce Ltd. contains a carbon fibre production unit. At other Rolls-Royce establishments there is research of various kinds, and some of this—for instance, at the Old Hall establishment at Derby—is devoted to carbon fibre.

Rolls-Royce (1971) Ltd. will be taking over various Rolls-Royce research units, and where these can carry out work on carbon fibre research the new company intends to continue such research on a scale appropriate to its engine programme as a whole. The receiver is in charge of Rolls-Royce Composite Materials Ltd. and will be seeking to dispose of it to the best advantage. I understand that he is also continuing at about half strength the carbon fibre production unit at Hucknall with a view to the contribution which it can make to the prospects of Rolls-Royce Composite Materials Ltd. and hence to the price he can secure when selling those assets. Rolls-Royce (1971) Ltd. does not propose to take over the Hucknall carbon fibre production unit or Rolls-Royce Composite Materials Ltd.—

Mr. Benn

I hope that I shall be forgiven if I have missed this, but is not the Parliamentary Secretary now making, for the first time, a statement of Government policy on behalf of the Receiver?

Mr. Price

That is what I have been asked for.

Mr. Benn

I am now speaking in a constituency interest. This is the first time that any such statement has been made. It represents a fairly significant statement of policy, that the Government have assented to the Receiver dividing the carbon fibre from Rolls-Royce, without, so far as I know, any public discussion.

Mr. Price

This, I understand, is the decision taken between Rolls-Royce (1971) Ltd. and the receiver, that the former do not want to take over the assets of Rolls-Royce Composite Materials, whereas they do wish to go on with such of the research work as is appropriate to their aero-engine programme.

The hon. Members for Nottingham, North and Nottingham, South raised the question of reports. They referred particularly to reports in an engineering journal that there had been disappearance of stocks of carbon fibre and machinery from the Hucknall plant. I understand from a member of my staff who spoke to Rolls-Royce at Hucknall that there have been no unauthorised movements of carbon fibre or machinery from the Hucknall plant and that the report is not true.

Mr. Whitlock

The hon. Gentleman said "unauthorised" movements. I did not suggest that there were any unauthorised movements but that there was a movement authorised by someone unknown, in an extremely cloak-and-dagger atmosphere, in the utmost secrecy, so that people on the spot did not know what was going on. This is surely a very strange business.

Mr. Price

The hon. Gentleman is on another question, and I will naturally recheck for him.

The hon. Member for Nottingham, North also criticised the decision to close down the flight testing unit at Hucknall. He received a letter from my right hon. Friend yesterday and I have nothing to add to what my right hon. Friend said. The hon. Gentleman asked me who took the decision. The answer is very simple: it was the receiver, after consulting the board of Rolls-Royce (1971). The hon. Gentleman has argued the case that Hucknall is to be preferred to Filton. I am not in a position to argue the differences with him, except to reiterate what my right hon. Friend said in his letter. I shall be happy to make any further inquiries and to see whether I can add any more information to what the hon. Gentleman has already received from my right hon. Friend.

Mr. Whitlock

If the hon. Gentleman studies my speech tonight, he will see that I said that what his right hon. Friend said in his letter to me does not cover all the points which I made a fortnight ago, which were those I made when I led a delegation to see him a week ago. I should like him to check these points and, at the third time of asking, perhaps to answer them.

Mr. Price

I will do the best I can for the hon. Member.

Mr. Benn

I apologise for intervening, but the decision about Composite Materials is a pretty big decision. Here is a piece of research and development work, funded heavily by Government, central to the success of the RB211 when it was sold to Lockhead, which we are told tonight—so far as I know it has not been previously announced—is to be sold as a separate concern.

In making their statement about the acquisition of Rolls-Royce, the Government said that they did it on national security grounds. This composite material, carbon fibre, is, so far as I can make out, to be sold without consultation with the Government. The Minister said nothing about the Government being asked whether they regarded carbon fibre as necessary for their defence or other work. It is evidently to be a purely commercial negotiation. As a purely commercial negotiation, the decision of Rolls-Royce (1971) Ltd. is to tell the receiver, "We do not want it. You sell it to somebody else".

If this major decision—there was a Select Committee on the subject and the Minister sat on it—has been taken in this way, then it is surprising that it should have been announced in this way, without our having an opportunity to consider the implications fully. Will the Minister amplify what he said? If not, we are bound to regard it as an announcement of a major decision in a most casual and unsatisfactory way.

Mr. Price

I fear that I cannot tonight help the right hon. Gentleman further. However, I note his remarks and undertake to convey them to my right hon. Friend.

I can only repeat what my right hon. Friend has said on a number of occasions about the sub-contractors and suppliers of the old Rolls-Royce company; the Government are very conscious of their difficulties and anxieties. At present—and this may be slightly encouraging—we are not aware of any substantial number of insolvencies of firms known to be sub-contractors of Rolls-Royce Ltd.

I am not sure what the hon. Member for Dudley, or any hon. Gentleman opposite, wants the Government to do, short of simply picking up the bill on behalf of the taxpayer. That is the logic of some of the speeches we have been getting. But I do not think they are asking us to pick up all the debts of the old Rolls-Royce company when they accuse us of not being helpful. As my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) pointed out, it is extremely difficult to take one class of unsecured creditors over another and to give them special treatment, for that is what would be involved.

Dr. Gilbert

The hon. Gentleman has put his finger on the original dilemma in which the Government placed themselves by their decision. The more one tries to screw Lockheed, the less will be available for the unsecured creditors. This has always been the trouble with handling the problem in this way. At this stage we are merely asking for information to be given to the sub-contractors as quickly as possible. In other words, how much can the unsecured creditors expect to get? If their fate is to be settled, let them know it quickly.

Mr. Price

I appreciate the hon. Gentleman's desire for early information, but until the fate of the RB211 contract is known, it is impossible to say how much will be available, or even begin to indicate it to the unsecured creditors. It is obvious to us all that if the contract is successfully renegotiated, the unsecured creditors will be better placed with regard to whatever final distribution is available.

Dr. Gilbert

There is no difficulty in letting the unsecured creditors know how much might be available in total. The problem which arises from the RB211 situation is to know what total amount the unsecured creditors' claims will be. That is a separate matter, but it is easy to set a price.

Mr. Price

With respect to the hon. Gentleman one just does not set a price like that. If he were to ask the Receiver now, he would find it difficult to indicate to the hon. Gentleman the total realisation of the sale of the assets of Rolls-Royce. I am trying to help the hon. Gentleman and he is trying to help the sub-contractors. Speculating on what the final realisation of the assets will be and the total of claims will be will not help them. The claims, as the hon. Gentleman rightly recognised, are dependent on whether there will be any further claim if the contract were not renegotiated.

The hon. Gentleman asked whether there were any actions pending for prior claims against the assets of the old Rolls-Royce. I do not know. I do not know what may be emerging somewhere in the pipeline.

I come now to the question raised by the hon. Member for Nuneaton regarding the attachment of RB211 engines in California. My right hon. and learned Friend the Attorney-General had planned to be present for this debate to assist the House on some of these legal matters. I am no lawyer, but, if the House will bear with me, I shall read a short statement which I have received on this matter. I ask hon. Members not to question me on it because, not being a professional lawyer, I should almost certainly mislead them if I proceeded to give my interpretation of it.

On 94th March, Marcus Brothers obtained an attachment in Los Angeles Sheriff's Court on five RB211 engines held by Pacific Airmotive en route to Lockheed. Pacific Airmotive undertakes despatch and maintenance for Rolls-Royce. Marcus Brothers was acting on behalf of its parent firm, Whitakers, which is a creditor of Rolls-Royce for nickel supplies. Subsequently, by local agreement between Lockheed, Marcus and Pacific Automotive, the engines were released to Lockheed for use in the flight development programme. But I understand that they remain subject to the court's authority. We have arranged that the receiver will take under the RB211 indemnity such action in California as he may be advised is appropriate to assert and establish his rights under the debenture trust deed.

Next, the question of the patents. Again, this is a matter which should be addressed to my right hon. and learned Friend. I think that the House recognises that the reason for his absence tonight is more important than the answering of our questions.

Time is going on, and I have probably detained the House a little too long. I undertake to study carefully all the speeches of hon. Members on both sides and to write to them in more detail on some of the questions which they have put to me. I remind the House of the wise concluding words of my hon. Friend the Member for Leicester, South-West, that the new Rolls-Royce can best secure the future of all the people concerned by deploying its activities in the most economic manner. The new Rolls-Royce will have 100 per cent. public ownership of the equity. I recall to the House some wise words of the right hon. Member for Bristol, South-East when he was speaking from this Box in 1969: …in my judgment, the greatest political disaster would be if we were to abandon economic criteria in the investment of public money in advanced technology".—[OFFICIAL REPORT, 16th April, 1969; Vol. 781, c. 1127.]

Mr. Bishop

I emphasise the seriousness with which we regard the Minister's announcement tonight about the selling off of hyfil, the carbon fibre part of Rolls-Royce. It seems a monstrous way of dealing with the situation. I was about to say that it was completely unreasonable to make the announcement at midnight, in these circumstances, but, of course, the hon. Gentleman could not be aware of the timing.

Surely, the Government and the receiver cannot anticipate at this stage enough, especially at the height of negotiations, about the future of Rolls-Royce and whether the RB211 goes ahead or not, and in the circumstances, the Receiver cannot anticipate whether he ought to sell or to keep the carbon fibre aspects. It would be better if Her Majesty's Government were to make a fairly comprehensive plan for the development of Rolls-Royce, and have it debated, before major decisions of that sort were taken.

Mr. Price

The new Rolls-Royce intends to carry on with carbon fibre research as it might be applied to aero-engines. As the hon. Gentleman knows, one of the delays with the RB211 was in changing from hyfil to titanium. The engine tests I talked about earlier were always with titanium and not with hyfil.

Mr. Bishop

Is not this an asset that we might later come to feel was of very great commercial value to Rolls-Royce in the research situation, and which in the event could now be commercially exploited by other people? Indeed, we might have to buy back some of the rights to use it.