CONCORDE (PRODUCTION FINANCE) (Hansard, 21 July 1972)

§ The Minister for Aerospace (Mr. Michael Heseltine)

I beg to move, That the Concorde (Production Financing) Order 1972, a draft of which was laid before this House on 5th July, be approved. The order seeks approval to increase the sums that may be advanced under Section 8 of the Industrial Expansion Act 1968, for the financing of Concorde pro- 1271 duction from £100 million to £125 million.

I welcome to the Front Bench opposite for the first time the hon. Member for Ilkeston (Mr. Raymond Fletcher). I think I carry the whole House with me in saying that he deserves a fuller House for his maiden performance on the Opposition Front Bench.

As the House knows, the manufacture of 16 production Concordes has been jointly authorised by the French Government and ourselves. In the United Kingdom expenditure on these aircraft has reached £30 million, and the total commitment covering orders placed on suppliers and components being manufactured by French companiesis approximately £75 million. We estimate that the present limit of £100 million in the Act will be reached by the end of 1972.

It was estimated in 1968 that £100 million to £125 million might be required for the financing of Concorde production. A ceiling figure of £100 million was, therefore, incorporated in the 1968 Industrial Expansion Act with the provision that this might be extended to £125 million with the approval of the House. It is now clear that this figure was too low. It was too low for reasons of inflation and because the development programme is spreading out over a longer period than was expected at that time. With commitments already standing at £75 million, it is necessary to take action to increase the limit of £100 million to £125 million to ensure the smooth continuance of the programme

If orders for Concorde arrive in the numbers we hope, we shall almost certainly find it necessary to raise this figure further, but it is difficult to estimate at this time exactly what figure we should have in mind. I am considering this matter very carefully with a view to coming back to the House for a more permanent arrangement.

The campaign for the sale of Concorde has got off to a good start, particularly with the announcement from BOAC of its intention to order five, and the soon-to-be-announced order, I hope, from Air France and the decision of His Imperial Majesty the Shah that Iran Air will be placing an order for three aircraft. All these matters take time to bring to a 1272 detailed conclusion, and the airlines which hold option on Concorde now have varying periods of time after the signing of the BOAC and Air France orders within which the options have to be converted into firm orders.

When all this has happened, we shall be able to see with greater accuracy the amount of production finance that is likely to be required in this country by United Kingdom manufacturers. I ask the House to regard the present order as a holding operation which, by increasing the statutory limit to £125 million, will give more time to see how things are going and to review the estimate of the amount likely to be required.

I hope that the House will approve the order.

§ Mr. Raymond Fletcher (Ilkeston)

First, may I apologise to the House and the Minister for the unavoidable absence of my right hon. Friend the Member for Bristol, South-East (Mr. Benn). Unaccustomed as I am to speaking from the Dispatch Box, may I welcome the order as part of the pre-natal care given to this project by by right hon. Friend and the previous Labour Government. That care has produced a lusty infant. We cannot very well object to the act of birth that has taken place or the Minister's subsequent efforts in his capacity as midwife in this remarkable project.

I came prepared to do battle with the anti-Concorde lobby, but I do not see it present and therefore I have nobody to do battle with. However, it is relevant to read into the record the current edition of the Environment Journal which contains fascinating information about the noise level of the Concorde compared with two other aircraft. Concorde comes remarkably well out of the comparisons made in that article. It is also necessary to point out that the teething troubles of Concorde are largely over and done with. If there are any small problems remaining, I am sure that they will be satisfactorily resolved.

I feel that in this aircraft we have not only a potential world beater but a project of which everybody in the House and in the country at large should be proud. I do not speak only of those who designed it or who directed the project but of every single person who 1273 worked on the project, whether it be the people who made the jigs or those who cleaned up after the day's work was finished.

In welcoming the order, I congratulate everybody engaged on the project. I also congratulate the Minister for Aerospace on his remarkable capacity for salesmanship. The tour which he has just completed has been successful. It is also a remarkable tribute to the capacity of this aircraft that it has generated enthusiasm among those who have seen it and flown in it, and particularly those who have had prolonged conversations with people who made it. I speak with all the enthusiasm of a convert because I did not always take that view. Even though some of us may still have reservations about Concorde, we must remember that abortion may be legal in this country but infanticide is not. We have a lusty infant on our hands. It is in these somewhat quasi-medical terms that I welcome the order.

This does not mean that any subsequent order asking for further funds will not be subject to economic examination on both sides of the House; that is very much in the future. For the present we wish the Minister, Concorde, the entire project and everybody engaged in it all success because they rightly deserve it.