HC Deb 10 May 1971 vol 817 cc10-2
12. Mr. Barnett

asked the Secretary of State for Trade and Industry if he will make a statement on Concorde.

Mr. John Davies

My right hon. Friend the Minister for Aerospace and I met M. Chamant on 22nd April. We were not able to make the thorough review we had originally intended because not all the information was available. We were, however, encouraged by the satisfactory nature of the flight test result to date.

We accordingly decided to authorise the start of manufacture of four more production aircraft, bringing the total number of production aircraft under construction to 10, and the ordering of long-dated materials for a further six aircraft.

The latest estimate of development costs at December, 1970 prices is £885 million. Further details will be circulated in the OFFICIAL REPORT.

We shall, of course, continue to keep a close watch on the project, and I will be meeting M. Chamant later in the year to examine progress.

Mr. Barnett

In view of the further massive escalation in costs, would the right hon. Gentleman confirm that cancellation at this stage could very well mean, including the further production costs authorised, costs exceeding £1,000 million jointly between ourselves and the French? In view of the Government's declaration about a more open style of government, would not the right hon. Gentleman consider giving to the House costs of cancellation compared with costs of continuing the project and the likely price obtainable in the narrow range of the likely number of sales? If the right hon. Gentleman does not give those figures, the House must assume that there will be even further escalation.

Mr. Davies

These discussions with the French try to cover forecasts the whole time. Like the hon. Gentleman, I am concerned about the rising costs of Concorde, but the truth is that at this stage it would indeed be very unwise to do other than proceed with this project, which we are doing.

Mr. Tebbit

Would not my right hon. Friend agree that for the second or third time running he would be well advised to tell some of the ignorant critics that most of the information for which they ask is published, and has been published particularly in the last three weeks, in Flight magazine, and that if they read it and assimilated it they would not ask such stupid questions?

Mr. Davies

I will not associate myself with every one of those expressions, but a lot of information is available.

Mr. Benn

I hope the right hon. Gentleman will appreciate that the House is entitled to hear authoritative figures and not to rely entirely on what it reads in magazines, which are not always accurate.

Will the right hon. Gentleman tell us two things? First, what has been the increase in the estimate in current prices, or December, 1970, prices, since the last statement was made? Second, could the right hon. Gentleman assure the House that no decision is taken by the Govern- ment as between Concorde and the RB211 about which we are to have a statement later, and that each will be considered on its merits?

Mr. Davies

It was with a view to giving the House authoritative figures that I said what I did. At December, 1970, values, the increase is £60 million over the last estimate, which was £825 million, making the figure £885 million now, as I said. I think that that was the question which the right hon. Gentleman wished to have answered.

As regards his second point about any decision trying to play off the RB211 against the Concorde in one sense or other, there is absolutely no question of that being done.

Following is the information:

CONCORDE—STATEMENT ON DEVELOPMENT COSTS FOR OFFICIAL REPORT
The latest basic estimate of £885 million is divided as follows as between actual past expenditure and estimated future expenditure:—
British Government French Government Both Governments
£m. £m. £m.
Actual costs from 29th November, 1962 to 30th April, 1971 at the rates prevailing when the costs were incurred 280 245 525
Estimated costs from 30th April, 1971 to completion of the programme at December, 1970 prices and an exchange rate of £1= 13.33 FF. 160 200 360
440 445 885

The difference between the latest estimate of £885 million at December, 1970 prices and the former estimate of £825 million at June, 1970 prices is made up as follows:—

£m.
Former estimate at June, 1970 prices 825
Pay and price increases since June, 1970 15
Later date for obtaining Certificate of Airworthiness 15
Additional expenditure on the propulsion system 10
Other adjustments to the programme 20
Present estimate 885

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