CONCORDE AIRCRAFT BILL

HC Deb 15 February 1973 vol 850 cc1581-611

Question again proposed, That the Clause be read a Second time.

Mr. Biffen

After that brief "commercial", may I now return to the pertinent point raised by the ever-hopeful hon. Member for Burnley of the military significance of Concorde. He said that he has delved into the tortuous history of the project. He will have reflected that when the original announcement was made to the House there were references to the military potential of this aircraft. The point was raised during the Standing Committee proceedings on the Bill. I should like my hon. Friend the Minister to assure the hon. Member for Burnley that there are no tangible or visible military prospects for this aircraft

Mr. Dan Jones

I do not want to flog these points but there have been so many references to the hon. Member for Burnley that I am rapidly getting the impression that I am responsible for this debate. I direct to the hon. Member the observation that the hon. Member for Burnley never attacks or casts doubt upon people who have no chance of answering for themselves.

Mr. Biffen

As far as I know, that extremely pertinent and laudable parliamentary convention which is adopted by the hon. Member for Burnley is also adopted by the hon. Member for Oswestry, which is why he conducted his remarks primarily in terms of speeches he has heard rather than of speeches of which he has been told; and for reasons which I have already explained, I could not be present earlier in the debate. I came in when the hon. Gentleman was speaking and I have done him the courtesy of trying to take up points he mentioned in his speech.

We had better get it right once and for all. Is there a military potential to this aircraft? If there is not, do not let us delude ourselves into further expenditure upon the pursuit of an objective that we cannot realise in this respect. That is the main point I am making.

My second point is that since the cancellation of the Pan American option there has, naturally enough, been a fair degree of speculation upon what is the commercial potential of the project; and our attention has been directed to airlines that have never got into the option queue at all, namely, Latin American airlines of one sort and another. I should be immensely grateful if my hon. Friend the Minister, in answering this debate on the clause and the amendments, could indicate what commercial assessment has been made of the Latin American market.

Before Pan-Am cancelled its option, was that option likely to be exercised purely in relation to the North Atlantic route or was Pan-Am, being a global flight carrier, also considering Pacific routes and Latin American countries? I know not, but it is a pertinent point if we are now being told that there is a possibility of sales to more affluent Latin American flight carriers than Pan American. I ask the question without any hostility and purely out of curiosity.

I come to the point made so eloquently by the hon. Member for Pontefract (Mr. Harper)—he has made up on Report stage for all the speeches we missed from him in Committee—that if we move to a situation where production of Concorde is somewhat less than originally envisaged but none the less it still proceeds, how do we phase production at a lower level of output? How is this to be contrived having, as we must, a certain regard for economy? How do we balance out matters in respect of commitments which we and France have undertaken?

These are difficult questions for my hon. Friend the Minister to answer at this point in time, but we would be doing less than our duty if we did not recognise that there must ultimately come some point when the present pattern of production, divided between this country and France, between Bristol and Toulouse, may have to be recast. That may be one of the unpalatable consequences of the present market situation, because it is the market situation which will determine levels of production.

Do not let us imagine that we shall produce these aircraft merely for their static bewilderment and splendour, and for them to be included as part of the statuary in the Wedgwood Benn Garden of Technology in Basildon New Town, or wherever it may be. We are in this business only to produce aircraft which will fly and carry passengers. So if the market is diminishing we must consider not merely the consequences at the point of production but the consequences for the United Kingdom civil aviation industry. This is where all the other projects, such as the HS146, begin to take on enhanced significance. They cannot he considered totally unrelated to the consequences of a diminished production line for Concorde. These are the implied realities of the order book situation as we now understand it, and the situation will remain as it is unless it is transformed by orders from airlines which at the moment do not appear on the option list.

I hope that my modest contribution, tardy though it is, will enable the Minister to clear up these ambiguities so as to reassure me and those who watch cur proceedings from the sidelines.

Mr. Elystan Morgan (Cardigan)

I rise to make a brief constitutional point, and I hope that it will be none the worse for that. Although Edmund Burke and other distinguished Bristolians over the generations have reminded us that we should take a broad view of matters in this House, there must be a balance between that consideration and the trust which reposes in each and every one of us to be at all times an advocate for his own constituency. Whatever the general case must be, and I accept it, it is right and proper to mention a constituency aspect.

I have no doubt about the general case, but the future development of this aircraft is such in its voracity for public funds as virtually to exhaust the purse of Fortunatus. I have no doubt that the open-ended commitment to which the British Government tied us 10 years ago in respect of this aircraft is of such magnitude as to make the Danegeld appear as if it were a twopenny contribution to a good charitable cause.

I had the impertinence a few days ago to suggest that it would be right and proper for Her Majesty's Government to published a White Paper which would spell out the liabilities that would accrue for us if we were to cancel this project unilaterally. That suggestion, perhaps expectedly so, was pre-emptorily rejected by right hon. Gentlemen opposite, but I see nothing wrong in it. If the House is to be in a position to judge whether this project should be abandoned or not, surely that is the most relevant piece of information it could possibly have.

Of course, there are the jobs of 20,000 persons directly involved here, and perhaps tens of thousands more, and it is a perfectly proper and necessary constituency point for any one of the scores of hon. Members whose constituencies are so affected to make in this House, and they would be failing in their duty if they did not make it. All these matters, however, have to be considered as part of the totality of considerations.

My own constituency point is that we in Cardiganshire have of late been enjoying, if that is the word, a "boom" period. We have probably had more sonic booms in our own constituency than has any other part of the United Kingdom over the past 10 years. When the Government decided some four or five years ago that this particular form of nuisance should be exhibited in a dramatic and presentational way to the country as a whole there were tens of thousands of objections. But these things have been occurring in Cardiganshire over the years, and it is not just the booms of supersonic aircraft which affect us but the pente-costal shriek on the sudden appearance of an aircraft flying at 150–200 feet. That happens scores of times in a single week.

I make this plea, therefore. A short time ago the Government came to the conclusion that the western route was marginally preferable to the eastern route for Concorde testing. Geographically, there does not appear to have been very much in it. In either case a fairly straight course of 500–600 miles could have been found. Marginally, the argument appears to have been decided in favour of the western route. In that respect I suspect that certain very strong French considerations were brought into the equation. There was a danger that the force de frappe might be interfered with or that aircraft coming from Orly or Le Bourget might in some way be inconvenienced. I am guessing that that was the consideration, but I may be wrong.

Mr. Benn

What my hon. Friend says, in fact, misrepresents the position. There were two alternative routes. The decisive factors were the helicopter air-sea rescue in case anything happened during the test run that might affect the pilot, and the precision of the calibration of instruments. The consideration he has mentioned had no part whatsoever to play in that decision. I recognise his constituency interest but I am certain he would not wish to leave a false impression.

Mr. Morgan

I am grateful to my right hon. Friend for that explanation but I am sure he will recognise that there was no question of total absence of helicopter cover on the eastern route, so it was in any event a fairly marginal consideration in that respect.

Together with all the massive financial considerations, one should in a Select Committee at the same time weigh these other questions of interference with amenity in an area which, unhappily, over the past 10 years has seen more interference, probably, than any other constituency in the British Isles.

10.15 p.m.

Mr. Michael Heseltine

Having listened to this debate virtually without interruption since the start of it many hours ago, I can say that if ever there was a more convincing argument for not having a Select Committee on the Concorde programme at this time we have had it today. Everyone understands that over 11 years we have developed a remarkable aircraft, with considerable technological achievements. We are now in a situation when many of our fellow citizens are doing all in their power to sell this aircraft to airlines across the world. It is a very difficult thing to sell aeroplanes at the best of times. It is particularly difficult to sell new technology aeroplanes.

The effect upon the salesmen involved in that situation of the sort of carping criticisms which are raised by hon. Members opposite as a background to the efforts that have to be made must produce one of the most demoralising situations imaginable. If that is the beginning of what a Select Committee might do at a crucial time in the programme, I am more convinced than ever that a Select Committee would not at this time add anything to our knowledge of the Concorde programme.

Let me give some examples of the sort of things we have heard. We have heard the hon. Members for Bristol, Central (Mr. Palmer) and Coventry, North (Mr. Edelman) saying that there is waste on the shop floor, with the implication that the management is no good and the men are perfectly all right—all the old traditional divisions one would expect from hon. Members opposite. One can imagine the effect upon the companies concerned of these innuendoes. Was there one single example to substantiate these innuendoes? Not one. It was just the old attempt to drive divisions between the companies involved in producing this aircraft.

We are asked time and again for more information on a whole range—of what? Was I asked a range of specific questions on which information was not available? Was I told where I could have said more and on what occasion? Have any hon. Members opposite read the 1¾-hour speech I made in Committee, answering question after question, giving probably more information than any Minister has ever given in one speech on the Concorde programme? Has any hon. Member opposite read this week's Flight dealing with the report of Sir David Pitblado, the Comptroller and Auditor-General, which sets out in enormous detail many of the matters on which more information was being sought? If they had done so, how can they go on saying that the House has not been given information on Concorde.

The right hon. Member for Orkney and Shetland (Mr. Grimond) referred to this as a rich man's toy, as though that was some way of helping in the efforts being made by those responsible for selling this project, as though that in some way describes the remarkable pressures that exist on all of those who have to travel professionally across the world for business, administrative or political reasons and to whom a vehicle of this sort has enormous virtue.

Then we had all the old environmental arguments produced once again by the hon. Member for Putney (Mr. Hugh Jenkins)—not because he seeks information but because he is a dedicated opponent of this project. I do not mind that at all. I have always respected the rights of people who opposed this project in any way, if that is what they want. I believe that if the hon. Member was on this Select Committee he would not be there to obtain more information. That would be completely to misunderstand his purpose in being on that Committee.

Mr. Hugh Jenkins

The hon. Member cannot destroy the idea of a Select Committee merely by suggesting that it would not be a good one if I were a member. He is making absolutely certain that we on this side vote for the clause. That is his achievement.

Mr. Heseltine

We shall see what hon. and right hon. Gentlemen want to vote for when the time comes. From 1964 to 1970 hon. Gentlemen opposite were making exactly the same decisions as I have to make. They had the same information as is available to me in making the same assessments. They acted in precisely the way that I have acted except that I have given more information.

The reasons are clear. I will start with the speech of the right hon. Member for Bristol, South-East (Mr. Benn), who feels that there is no reason why all these arguments about secrecy should now be allowed to stand. That was not his view when he was the responsible Minister, but it is easy in opposition to change one's mind and say that if one gets back into Government one will behave in a totally different way. Let us look at the three reasons why it would be wrong to breach the procedure which he and I and all other Ministers responsible for this situation have followed.

Let us take the basic issue of the selling price. Is it wise in commercial aircraft sales to reveal the price at which we are prepared to negotiate with one airline or another? Should we break down the price so that every airline knows the terms that we are offering to other airlines? It is arguable that if every hon. Member knows what the price is, so will all the airlines. They will immediately take the best part of every package that is offered to any airline and make a composite package. They will say "That is the point at which we start to negotiate".

No commercial aerospace manufacturer dealing in this situation should be subjected to that degree of pressure. It is for that reason that the right hon. Member for Bristol, South-East who was responsible for the taxpayers' money and all the companies responsible for selling Concorde, did not reveal that information. Nor will I—for the same reason.

There is an element in the Government levy of recouping the taxpayers' money for research and development in each price quoted, which neither this Government nor the last Government revealed. Why not? That is because every airline would have said "That is not part of the production cost. That is not something the manufacturers are concerned with. That is what the Government have in it. The Government will not stand up to commercial pressure, so we will take that off to start with".

Mr. Benn

The hon. Gentleman is making a vigorous speech. However, he will know that neither the selling price nor the levy was fixed before the change of Government. Both matters were under discussion at the time of the change of Government.

Mr. Heseltine

The sort of arguments which were put to the right hon. Gentleman were precisely along the line of trying to persuade him to name the figure for the development of Concorde. The right hon. Gentleman, for reasons which I believe, did not give the information for which he was asked.

I am giving examples in the three areas in which I might be asked and, indeed, I am continually asked, for information. I will not give it. To do so would be to prejudice the greater interests of this country, which has invested £500 million in the project.

My hon. Friend the Member for Bristol, North-East (Mr. Adley) dealt with the third area extremely well. He said that the problem about the Concorde options is that they were signed art some time in the middle 1960s and became markers on which everybody focused, watched and waited. My hon. Friend suggested that at the moment an option goes everybody regards it as a major tragedy. They may be extremely sad events, but they have become such significant elements in the Concorde programme that they have fixed public opinion on the options.

That is not a problem which one would normally expect to find in the sale of aircraft. One is not normally dealing with the long lead time which is involved in the Concorde programme. My hon. Friend is right; the signing of the options probably was not helpful to the programme. We could not have known that at the time, but probably it was not helpful. The fact is that every time a forecast is made, public opinion fixes upon it. If it happens to be wrong, the alarms build up, the danger signals build up and a background of doubt and uncertainty is well established long before any decision is reached one way or the other.

That is a very difficult background against which to sell. The House must fully understand that if we are involved in high technology programmes with all the difficulties associated with them, the uncertainties and long lead times, hon. Members will have difficulty in reconciling their legitimate interests with the commercial interests of the companies involved.

There are real areas where it would not be in the interests of the project to reveal the figures of the sort I have been describing. That has been the view of every Minister in the past who has been in the position in which I find myself. I can see no reason to change that view. I do not believe for one moment that if the Opposition returned to power they would move from that situation in the reality of office.

Mr. Palmer indicated dissent.

Mr. Heseltine

The hon. Member for Bristol, Central shakes his head. I should be interested to see what he would do if he were in my shoes.

Mr. Benn

The hon. Gentleman is not doing justice to his case. To start with, he attacks the ideas of the options. Does he believe that any Government would have felt able to go ahead with this expenditure if the options had not been published and known?

Secondly, the hon. Gentleman said that the Opposition would support his view. It was the Opposition, when in power, who set up the Select Committee, and my hon. Friend the Member for Bristol, Central (Mr. Palmer) pioneered the interrogation of Ministers on matters which had previously been secret and, by publishing Green Papers, opened up for public discussion issues which had hitherto been made public only when the Government had reached a view.

Mr. Heseltine

The right hon. Gentleman is fully aware that the options came in large measure after the start of the Concorde project. He referred to it as starting in the 1950s, but the treaty was signed in 1962, and most of the options came in the mid-1960s.

Let us consider how much information the right hon. Gentleman was prepared to reveal. On Second Reading we discovered that the right hon. Gentleman had negotiated with his French opposite number, M. Chamant, an agreement whereby either Government could terminate the project. Did we discover this when the agreement was negotiated? Did the right hon. Gentleman come to the House and say "The options are open. We can reconsider the project. It is open to either Government to cancel within the terms of the agreement that I have negotiated"? He did not. When did we discover the existence of the agreement? We discovered it on Second Reading of this Bill. That was the first time that the information was made available to the House. If that is the kind of secrecy which the right hon. Gentleman believes he can use when in Government, how has he the effrontery now to say that the Conservative Party is behaving in some quite different way?

Mr. Benn

The hon. Gentleman might also add that his party signed a secret treaty with the French which was never revealed to the House, and only became known to the incoming Government in 1964, which provided for no break clause whatsoever. The Labour Government restored a degree of freedom of action which, as far as the House was concerned, was always present because the previous Government had never revealed that they had signed a secret treaty.

Mr. Heseltine

Why is it so wrong for my party in 1962 to have signed a secret treaty which was not revealed to the House when the right hon. Gentleman negotiated a treaty of even larger significance in 1968 which he did not reveal that to the House?

Mr. Benn

We restored freedom of action.

Mr. Heseltine

The right hon. Gentleman, from a sedentary position, says that they restored freedom of action. Why did he not tell the House so that it could decide the freedom of action? It was freedom of action to the Government, not to the House of Commons, that the Labour Government restored, and they did not let the House know that they had this freedom of action back.

Let us be quite clear so that no one has any doubts. Before the Labour Party lost the last General Election the freedom of action under the right hon. Gentleman's treaty had already been lost because the parameters within the treaty had been passed. Therefore, the freedom of action existed for the Labour Government but not for the Conservative Government.

Mr. Benn

The hon. Gentleman is wrong again. We agreed with the French that we would set parameters to permit a genuine review of the project. At the first review, when the parameters were reached both sides agreed to go on. The same freedom of action exists for this Government which they would not have had if we had not negotiated this with the French.

Mr. Heseltine

That is not so. The parameters provided that at a fixed point of research and development commitment a review could take place. That fixed point was passed before the Labour Government left office and, since it has been passed, it is not possible for us to rely on the treaty negotiated by the right hon. Gentleman, because it is no longer capable of being used. Therefore, the freedom of action is not available to this Government as it was to the Labour Government, though that was not revealed to the House at the time.

Having revealed the dilemma in which Ministers find themselves, within which they have always been prepared to accept they were right to remain, I will go on to reply to some of the points raised in the debate.

My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) asked how long the £250 million will last. Our judgment is that it will be sufficient, taking into account contingencies, including inflation, to run through 1975–76, after which we believe that, on all the calculations that we can make, the programme, allowing for the revenue from airlines which purchase the aircraft, will become increasingly self-financing.

I am sure that the whole House understands that we run up to this order of expenditure only if we produce the aircraft on a considerable scale. If we do not produce the aircraft, we do not need to lend the money to the manufacturers to finance their production. The calculations we make indicate that we have sufficient funds. If we wish to raise the amount by the additional £100 million provided for in the Bill we have to do so by affirmative resolution. My hon. Friend asked whether the Public Accounts Committee was to examine the project, and I believe the answer is "Yes". It has already done so on four previous occasions and very detailed information is available.

10.30 p.m.

My right hon. and learned Friend the Member for Gloucestershire, South (Sir F. Corfield) raised the question of the relationship between production and sales, and my hon. Friend the Member for Oswestry (Mr. Biffen), who raised the matter in Committee, return to it tonight. It is difficult to judge in any sphere of production or commerce to what extent there should be an inventory and how far ahead of the market production should proceed. It is a judgment for which there are no rules. A decision must be reached in the light of the available facts and figures. But there must be a relationship between sales and production. That is not to say that production must slavishly follow order after order, but there must be an assessment based upon the sales position, and matters cannot be conducted in any other way.

Mr. Benn

The Minister said a moment ago that the parameters that we discussed with the French in 1968 as the basis for a joint review had been overtaken by escalation and the passage of time, and that is obviously true. Is he telling the House that he now has no agreed criteria with the French for reviewing the project and that the position is as his Government left it in 1964, because that is a very important statement?

Mr. Heseltine

That is precisely the position the right hon. Gentleman left us with when we came into power in 1970.

Mr. Benn

The Minister cannot get away with that, because we negotiated parameters with the French in spite of the treaty. If he says that the parameters were exceeded by 1969–70, he is correct. Has he made any attempt to do what we did and agree a rational system of criteria with the French so that both Governments can sit down and see how the project compares with the criteria that have been set? Has anything been done since 1970 on that?

Mr. Heseltine

The right hon. Gentleman made an arrangement with the French under which the project could be cancelled. The purpose of that presumably was that the right hon. Gentleman thought it possible that he would want to cancel. This Government, having come to office in 1970, examined the project and decided to give it every support. In those circumstances I can confirm that we have not negotiated with the French conditions upon which some subsequent cancellation could take place. Our whole emphasis has been on supporting the project.

Mr. Benn

The Minister had better get this right. It is an important point. We negotiated criteria with the French which allowed us to review the project, and, having reviewed it, we decided to continue with it. The Minister is now telling the House that he has no criteria upon which to base negotiation and discussion with the French. He is, therefore, back in the position of 1962 where, without criteria, he is simply going forward on a treaty basis. If that is the case, perhaps he will confirm it.

Mr. Heseltine

I have made the position clear. The right hon. Member has used a euphemism in saying that he could review—review for the purpose of possible cancellation. That was the arrangement he made with the French. When we came to office, the options already having been closed because the parameters had been passed before the Government were elected, we decided to go on with the project. I say in fairness to the right hon. Gentleman that by that time it was easier to see the likely final element of costs because we were closer to the certificate of air-worthiness position; nevertheless we have not sought to go back to the French and say "You had arrangements to review with a view to cancellation with the Labour Government. Those arrangements have been overtaken by events. We need a new set of criteria". Our purpose was to commit the Government to making a success of the project in the light of all the evidence available to us, and we did not, therefore, seek to renew the arrangements which would have enabled the Labour Government to cancel. It is true that they did not cancel in the event. That is the precise position as I understand it.

My hon. Friend the Member for South Angus asked about options. He quoted a large number of dates upon which different figures for options had been given. There is nothing about this information which is not readily available to the House. But it probably would not be helpful to read out rows and rows of figures showing the changes on the different dates. I shall compile the make-up of all the lists and let my hon. Friend have them, but I assure him that all the information is available and is simply a sequence of events where some options have disappeared as airlines have decided not to take them up. If the House wishes me to do so, I can give a list of the options existing tonight—

Mr. Bruce-Gardyne

The only point that we wish to get clear is whether the outstanding options of Air France and British Airways have disappeared.

Mr. Heseltine

They are not on the lists. I confirmed that when my hon. Friend was speaking.

Mr. Bruce-Gardyne

There is one other point which is rather important. It was raised by Sir George Edwards at his Press conference. It concerns the possibility of production being concentrated on one production line at Toulouse. It would be helpful if my hon. Friend could assure the House at this stage that in no circumstances could there be any possibility of the British taxpayers' funds being committed to continuing production on that basis.

Mr. Heseltine

Let me repeat what I have said outside. My hon. Friend is correct. This arose from a statement made by Sir George Edwards at a Press conference. No proposals of this kind have been made to me. At the moment, I regard it as an important part of the manufacturers' responsibilities to look at all the options as they see them. Having done that, it is for them to tell me what they think. It would be unthinkable for me to give them directives about what they should do. It is up to them to analyse the situation and then to come to me. Obviously decisions would then have to be taken by the Government. But there are no proposals of this kind before me.

Several hon. Members have realised the difficulty, because it is a very short time since the Pan-American and TWA decisions. However, as soon as I have anything further to say I shall ensure that the House is made aware of the situation. At the moment, however, I cannot do that.

I was asked whether I had anticipated the Pan-American decision and had asked in advance some of the questions which are now being asked. Although I was obviously aware that the Pan-American decision could go either way, I did not think it right to inquire of the manufacturers what they would do if the Pan-American decision went the wrong way. I can think of no act more likely to undermine the morale of the companies concerned than a message from the Minister, a month before a decision of importance to them is due to be taken, asking "What will you do if it goes the wrong way?" I would not dream of imposing a strain of that kind on the manufacturers. Obviously the manufacturers must look at the situation as they see it. As soon as there is anything that I can tell the House, I shall do so.

My hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson), in a very powerful speech, was the first hon. Member to draw attention to the vast amount of information which is available on this subject. There have been a number of Parliamentary Questions and debates. There is the Standing Committee inquiry on this Bill. There is a whole range of newspaper comments of one kind and another. They add tip to a very detailed set of information on the project, subject only to the proviso which I made earlier.

I turn now to the point made by the hon. Member for Coventry, North about the costs involved in technological developments. Let us not try to avoid this very obvious fact. Any attempt to cost in advance a project of this kind is a very difficult exercise. It must be remembered that it is a project which no one else has ever done and that it is the second largest that the world has seen, following only the American space programme. There have obviously been a considerable number of changes during the life of the project—changes in technology and in design and specification. All the problems of inflation have distorted the situation.

We have now reached the stage where we believe that the design is much closer to being fixed. Although the development phase is not over, we can see areas where it should be possible to freeze the design specifications. In this circumstance, we are now discussing with the firms whether we can enter into fixed price contracts to try to cope with the problem of anticipating future costs. It is difficult, because there is a degree of technological development still to do, but we are trying to do that.

Mr. Palmer

I agree with all that the hon. Gentleman has said about the difficulties of this kind of advanced technology, but is he still suggesting that there is no possibility of waste, of avoidable mistakes being made? His complacency is extraordinary.

Mr. Heseltine

No one who has followed the position of any Minister responsible for the project could say that any of them has been complacent. There has been a continuing scrutiny by Parliament through the Public Accounts Committee on four separate occasions, through the Defence Department Procurement Executive and through negotiations with the companies. But it is beyond doubt that trying to develop such a project is very difficult, especially for the time scales and the technological problems ahead.

I was asked about the South African trials. They have been as successful as we hoped, but it is too early to say what the read-out from them will be. There is no reason why I should not make available any information that I feel might be helpful as soon as I have it.

We have not yet taken the noise readings of the pre-production model flying at Toulouse. It is in the early stage of its testing programme, so I cannot give further information on that.

Mr. Dan Jones

The Minister told one of his hon. Friends that he would answer the observation I made, that the Concorde has military potential.

Mr. Heseltine

Many questions have been raised, and I want to deal with as many as I can. My hon. Friend the Member for Oswestry (Mr. Biffen) was almost the last hon. Member to speak, so his comments are rather low in the packet, but they will come up before I finish.

My hon. Friend the Member for Hastings (Mr. Warren) spoke of the costs involved and the suggestion that in some way we have been wasteful in this country. The Americans spent hundreds of millions of dollars on their SST and cancelled it. Looking at the costs incurred by the Americans on developing engines and so on, whether the same sort of problem exists, though not to the same degree, we realise that this kind of high technology involves large expenditure.

Mr. Warren

I am sorry that I did not make myself absolutely clear on the point. I was saying that the amount of expenditure we have found necessary was the amount of expenditure that could have been predicted to be necessary. I only want to know whether my hon. Friend accepts that there are methods of cost control which could be applicable and which should have been exploited by now, so that we have confidence that control exists.

Mr. Heseltine

I fully see that. I wonder whether my hon. Friend has read the description of how cost control methods are applied in monitoring the Concorde programme. There is detailed cost control. For example, no change involving expenditure of more than £10,000 can be made without reference to the technical experts of the Defence Department Procurement Executive.

Moreover, we are trying to negotiate a fixed price on the production side and we have negotiated profit incentives with the manufacturers to see that they have a real incentive to keep the costs down and to minimise the selling price. However, we made clear to the House at the time that in the end the British Government have to stand behind the manufacturers simply because of the total scale of the commitment.

10.45 p.m.

My hon. Friend the Member for Hastings asked about the cash situation. The development cash is split 50–50 between the Governments of Britain and France, and the cash in the Bill is for the production arrangements within this country. That is a matter for the British Government. The French have made arrangements with their own companies, in which we are not involved, for the production of the Concorde there. The only exception to that is that parts manufactured outside this country and bought in by British manufacturers will be covered by the production finance.

Last, but not least, I come to my hon. Friend the Member for Oswestry. I confirm, as I did in Committee, that I know of no military application for Concorde.

On the question of Latin American airlines, I am immensely reluctant to get involved again in the situation of options and naming airlines and prospects. Anyone who has been involved in a sales campaign realises that the last thing that one does is to publish a list of prospects. That puts the prospects off. I do not think that I shall go down that track again. That is the duty of the manufacturers, and I believe that they are exploiting the opportunities.

Mr. Biffen

I appreciate the point that my hon. Friend has made, and I cavil not at his reply, but is he able to say whether the Pan-Am options were purely in respect of the North Atlantic route, or whether they covered other routes too?

Mr. Heseltine

That is a matter for Pan-Am. I do not know the answer, but I imagine that they were not restricted to the North Atlantic because of the numbers on which they had options. I do not know the answer, particularly as Pan-Am placed the options before it knew its present route patterns.

My hon. Friend's third question was about production being less than originally expected. I think that I have dealt with that in the reference to Sir George Edwards' review that is being carried out.

I hope that I have answered as many of the questions as I can in the time that we have. I am the first to agree that this is an immensely large subject and that one can discuss it for many hours, but the fact is that I have tried consistently to give whatever information I could, subject to the fact that there is a responsibility on Ministers to protect anything that might seem to prejudice the project.

It is arguable—and no doubt the House will go on arguing—that the use of Select Committees should become more widespread. The crucial aspect is the point at which a Select Committee intervenes and the sort of restrictions that it might want to impose upon itself. That is a matter which it is wrong to consider in the context of Concorde, and it is even more wrong to consider it in the context of Concorde at a time when everybody knows that all of us, on both sides of the House, have done all in our power for a long time to make a success of this project.

To make it work in the real sense of the word we have to sell the project, and we have to give every support to the salesmen who have to negotiate with airlines across the world. That is what the Government are committed to doing, and in the light of this debate and the answers that I have given I ask the House not to press the clause but to leave us to decide on sufficient funds to match the production programme that could come from a successful sales campaign.

Mr. Bishop

We have had a useful debate. I was sorry that the Minister got rather excited and a little aggressive in his opening remarks, because by so doing he proved the point that my hon. Friends and I have been making, which is that if the Government are not prepared to give the House the kind of information which it ought to have, and of which the public should be aware, hon. Members are forced to raise points which might be raised in Committee in a more responsible way with those present to answer their allegations, which would be far preferable.

It may be thought by some that we have spent a rather long time on this measure. I believe that on Second Reading, in Committee and tonight we shall have spent about 17 hours in all. This is on a Bill which involves spending £350 million more than has been spent. I think very few would say that 17 hours is too long a time to spend discussing that amount of money. Apparently the Government consider this quite adequate scrutiny for such an immense amount of money, yet on the Education (Milk) Bill 21 hours were spent for an alleged saving of £13 million a year and 29 hours were spent on the Museums and Galleries Bill for obtaining an estimated £1.6 million. That is the kind of Parkinson's priority of this Government.

Mr. Adley

Is the hon. Member not proving that the vast majority of hon. Members fully support the Concorde project and that we understand the reasons why the Opposition felt the need to put down these amendments? We spent far more time discussing the question of milk in schools because there was bitter party controversy, whereas this great national project has healthy all-party support. Is the hon. Member suggesting that if a Select Committee was set up and there was full scrutiny, the unions would care to subject themselves to time and motion studies? How deeply does he want to go into this kind of cost estimation?

Mr. Bishop

I am not sure what point the hon. Member is making. Most people realise that if one asks for an immense amount of money, Parliament has to have accountability and stewardship and show how the spending is being monitored.

When he began his remarks, the Minister made allegations. I think most of us would not doubt the skills and ability of those concerned with Concorde. We are not the "knockers"; the knockers are those who refuse the right of others to know what is going on. The Richard Wiggs of this world make headway only because there is no one to answer their allegations and thereby damage is done. In Standing Committee my hon. Friends and I asked questions and there were no answers. There is not time now to go into a repetition of those questions. I spoke for over an hour at the first sitting and my hon. Friends spoke at great length. We were not filibustering but asking questions to which we wanted answers which we have not been given.

If the Minister is not prepared to give the facts in this open session, the case for a Select Committee is well made and is underlined. The Minister said that he regretted some of the questions my hon. Friends have asked. If he deplores that Members of Parliament have a right to ask for accountability for money taken from our constituents as taxpayers, that loophole is the only way in which he can gag the situation. Andrew Wilson, in a series of articles in the Observer, has made damaging allegations against the project, and in many cases they have not been answered.

I turn to the Sixth Report of the Expenditure Committee, on which the majority of members are members of the Minister's party. There we see questions about the control of the project which are the basis of the amendments we are discussing. Paragraph 78 says: At all times our concern has been with objectives and control. It is necessary to emphasise this because of a tendency in some quarters to equate the discussion of costs with 'knocking' Concorde. We do not accept that Parliament can abdicate its duty to scrutinise expenditure on Concorde or should mute such criticism as it may consider proper. Nor do we share the view sometimes expressed that announcements of anticipated escalations in cost were better withheld or minimised because they might have frightened Parliament into abandoning the project. We think it is right in terms of continuing safeguards for the taxpayer that facts and forecasts should be made plain at every stage. We are not persuaded that the commercial risks involved in doing so are serious enough to divert Parliament from its proper role That is the finding of the Committee, which went to some extent into the spending on the Concorde.

It had to make the point, which also underlines the need for a Select Committee, that, with their other obligations, its members were not able to go into the question in necessary depth. In paragraph 81, the Committee said: It is not easy to deduce from published statements how much money the Government expect to have to set aside for production losses in the future. These are some of the questions we have been asking. Paragraph 82 of the report said: The danger is that assumptions about production costs and sales may be as optimistic as the estimates of development costs made ten years ago. With the denial of any information about the proportion of development costs to be recovered on such sale and the assumptions made about total sales, Parliament is unable to judge for itself the risks involved in the further investment of public money. Paragraph 83 said: …following speculaton in the aviation press and a statement by the President of Aerospatiale, the Minister confirmed to the House that £13m. was the basis of the pricing formula. We appreciate the problems of agreed confidentiality that arise from our partnership with the French Government in this enterprise and sympathise with the difficulties that have faced British Ministers from time to time. However, Governments cannot be absolved from their duty to the House and we strongly believe that increased openness is in the public interest. The right hon. and learned Member for Gloucestershire, South (Sir F. Corfield) will remember that, as Minister, he was asked questions when we read in the British Press reports from the French Press on the French Minister's announcement about the price of the Concorde. I asked the right hon. and learned Gentleman what the price was, and—and perhaps he was right at the time as far as the agreement went—he told me that he was unable to give us the figure without the authority of the French Minister, although we already knew the figure from the French Press. Admittedly, in a later Question the right hon. and learned Gentleman did give me the information.

Sir F. Corfield

I am sure that the hon. Gentleman will accept that the only reason was that this was regarded as confidential for the reasons which my hon. Friend the Minister for Aerospace has given. Once one indicates the special terms available to certain airlines, one is pressed, and is almost unable to resist the pressure, to spread them to other airlines. The fact that this confidentiality was breached by the French Minister did not make the effort I made to safeguard the negotiating position in any way less honourable or less wise.

Mr. Bishop

I think the right hon. and learned Gentleman helps to make our point. When we have a project which has been developed by two countries, there are naturally problems and difficulties. It may well be that keeping Parliament and public informed has its own problems. But the fact remains that an attempt should be made in order to make it possible for those involved to have information.

In Standing Committee we asked many questions, and we feel we have a right to the answers. Amongst other things, we wanted to know what part of the research and development was absorbed in the production costs, and what answers there were to the noise and pollution problems—a relevant question in many parts of the world for many airlines. We wanted to know what details were available of costings of the various types.

Does the Minister really believe that a cloak of secrecy helps to allay public misgivings? Does he expect the House to accept that it has little right to know these things? It is too much of him to expect the House, in its ignorance, blithely to say "Go ahead with production although we do not know whether anyone will want it in the end". Information has been given from time to time.

The Opposition is the party which backed the Bill on Second Reading, but we want adequate safeguards for the House and for the public. If a referendum were taken in the country, I think the vast majority of the people who have to find the money and whose future is involved from the point of manufacture would be behind the Opposition in saying "You have no right to vote this kind of money without these safeguards".

11.0 p.m.

I made the point earlier that while we have been sitting here, our hon. Friends in Standing Committee upstairs have been discussing cost control on much smaller things, and it seems paradoxical that here we are told that it is outrageous to query how this vast sum of money is being spent. The Minister reprimanded my right hon. Friend for secrecy in the later years when he was responsible at the Ministry of Technology. Does he say that my right hon. Friend was right or wrong to reveal the changes in the treaty? If he believes that my right hon. Friend should have revealed the changing situation at that time, surely he will concede that he ought to be just as frank with the House on this occasion.

It is now suggested that the Minister must not be as frank with the House as my right hon. Friend has been. [Laughter.] It is all very well to laugh about this, but there is this change in the situation, because, whereas my right hon. Friend suggests that as a result of the negotiations there was greater freedom of action, the House now gets the impression that those options are now closed. If that is so, will the hon. Gentleman say so?

Mr. Michael Heseltine

The options were closed before the last Labour Government left office.

Mr. Bishop

This makes a difference. If the minister says that we must go on with concorde because the options are closed and we cannot escape—

Mr. Heseltine

I did not say that at all.

Mr. Bishop

Will the Minister clarify the position then?

Mr. Heseltine

All I asked from the right hon. Gentleman was consistency. He negotiated something in secrecy—something which he revealed years afterwards. I asked for no revelation of the facts about options. That was something that he wanted to consider today. It is absolute hypocrisy to suggest that we should reveal to the House of Commons things which in practice the right hon. Gentleman never revealed when he had the chance.

Mr. Bishop

A few minutes ago my right hon. Friend made the point that the Labour Party wanted to review procedures, and this is the fundamental point. I recall that I made my maiden speech on 5th November 1964 in support of Concorde, as I am now in support of it, and it was during those months that the Labour Government reviewed the situation. We found a situation where the treaty did not enable us to escape. However, my right hon. Friend was concerned with reviewing the treaty from that point of view. If the Minister now says that the treaty is such, under his control, that the House has no means of getting out of it, this is a serious point. We should like to think that we are going on with Concorde because we want to do so and not because we cannot escape from the clauses. The Minister ought to be given the opportunity to clairfy the situation.

Mr. Heseltine

I made the position clear. That is why we did not go back to the French to try to renegotiate the terms.

Mr. Bishop

I presume the treaty is the same as when my right hon. Friend left office and we have parameters for variation.

Mr. Heseltine

That is absolutely right. The treaty is exactly the same and the parameters had been passed before the Labour Government left office.

Mr. Bishop

I will not pursue this point. I am prepared to do so, but I am not sure that it will be very helpful. If we are saying that we are going on with Concorde because we have no means of getting out of an obligation—[HON. MEMBERS: "No."] All right, the Minister says that we have the means of opting out if we wish.

My right hon. Friend was anxious to make sure that the parameters and criteria are being negotiated and are known by our partners on the other side of the Channel. The debate tonight might be better conducted in a Select Committee, with secrecy if necessary. As we are deprived of this facility we have to come into the open and ask questions which seemed to embarrass the Minister at the beginning of his speech.

When we started this debate we were discussing new Clause 1 and Amendments Nos. 2 and 3. The basis of all those amendments was that at the £300 million spending stage a Select Committee should be set up to tell the House the state of play. The Conservative Party, which represents big business so well in other ways, shows a lack of acumen when conducting public business in the House of Commons. Most people, having seen the spending of £300 million, would be anxious to know the state of play. They would want to know whether the Concorde project was going vertically up into the clouds with further liability to the taxpayer, or whether the spending would tail off—in which case we should be agreeably surprised. If there is no Select Committee at that stage we shall go on blindly until the money is exhausted. The Minister will come back to the House demanding more money, with secrecy.

There has been a great deal of misrepresentation by Mr. Wiggs and his anti-Concorde team. Questions have been posed and not answered. Damaging allegations have been made about the project and its prospects to which there has been no reply. The Minister may claim, properly, that he has no time to answer all these misleading allegations, but with this important project, with all the doubts about technical variations, escalations in cost and so on, the country should be given more facts and fears should be alloyed.

One cannot but be impressed by the enormous amount of paper which is distributed by the anti-Concorde team immediately after events have occurred. We have been deluged with information. Where do the resources come from, for the costs must be high?

New Clause 1 asks the House to appoint a Select Committee when expenditure reaches the ceiling voted in the Bill. In Committee we hoped to get the Minister to agree to come to the House with an affirmative order at each stage of £50 million spending, to satisfy the House of the reasons for the next spending stage. That request has been declined, and we are relying on new Clause 1, which provides that a Select Committee shall be set up at a later stage.

This project does not concern only the British Government, our manufacturers and the British Aircraft Corporation; it involves the French Government, the French manufacturers and, indeed, the French people because of their contribution to the project. Some of the questions tabled here are also being tabled, possibly with much more frequent answers, on the other side of the Channel. We suggest that our people should have the same facilities as the French people to know what is going on.

Amendment No. 2 calls for publication of an annual White Paper, though we feel that such a procedure would not be as satisfactory as the setting up of a Select Committee. The Sixth Report of the Expenditure Committee says in paragraph 91—I remind the House that it is a Committee with a Conservative majority Many lessons of Concorde for Government and Parliament have been spelt out over the past few years by Select Committees and others. It is our view that there has been inadequate Parliamentary control and too little information publicly given. With a project of this size, not involving military secrecy, there should have been, and should now be, at least an annual White Paper. If we cannot have a White Paper, surely Parliament has the right to expect an annual White Paper which can be debated. We are spending vast sums of money and the public will be unaware of what is involved until the sum of money comes up for review before Parliament. We believe the case for a White Paper is fully made out.

There are technical aspects to be considered, and administrative control in the executive is provided for in the 1962 agreement. It provided for the setting up of two standing committees of officials from both countries to supervise the progress of the work and report to the Government and propose necessary measures to ensure the carrying out of the programme. The Concorde Direct Committee—the CDC—may be likened to a board of directors with the chairmanship alternating between the countries each year. The CDC keeps in touch with the Concorde Management Board, and the groups of officials deal with a wide range of technical matters, operational, commercial, and the rest. In the absence of a Select Committee or a White Paper, we are dependent on this group of officials to coordinate the activities between the two countries.

The Minister obviously has very great faith in the officials to carry out the job in all its technological and commercial aspects, but we have only to recall what happened over the Ferranti Bloodhound to realise the dangers of what can happen when things are found out too late. We also have in mind the setting up of Rolls-Royce (1971) Limited, which took over the situation from the original company following events with the RB211.

Here are two instances in which we feel that the House should have greater safeguards. We have today had an opportunity to examine all our misgivings, and there are misgivings outside the House as well as within it.

11.15 p.m.

A Select Committee, an annual White Paper and thorough scrutiny on both sides of the Channel would make those involved in the spending on this intricate project far more careful and efficient. I have no doubt that in the absence of these safeguards those involved, knowing of our concern, will be much more forthcoming in accountability matters. I hope the Minister will bear in mind the facts we have put before him in Committee, during Second Reading and now.

The Minister said that he had given an enormous amount of information, and that we had asked over 800 questions. He said we have the right to ask questions. I made the observation at the time, and I make it now, that the House not only has that right but it is entitled to expect answers. He will recall that on Monday at Question Time I put supplementary questions to him about the prospects for Concorde with JAL and Qantas, the possibilities of landing rights in the United States and the possibility of a commercial agreement with the USSR on a supersonic corridor to the Far East. He rather shook me off by saying "You will have to wait until later in the week"—apparently tonight—"to get the answers."

I reiterate some of the points I made in Committee. First is the changing situation for Concorde. Many people now accept that Pan-Am's decision on Concorde was based not so much upon the commercial or technical merit of Concorde but upon the company's ability to undertake further commitments having regard to its financial position and its obligations with existing aircraft. The prospects for the future are much more hopeful. The Americans are now relieved of the obligations of the Vietnam war and have stopped the moon landing project. There is a need to find alternative work for the B-52 manufacturers, and others. This leads us to expect that the Americans will not want to harm Concorde's prospects by declaring that it has noise and pollution problems. To do so would be to undermine their efforts to pursue their own, similar, project.

The decision by Pan-Am and TWA not to take up their options means that others who want to buy, JAL and Qantas, and maybe the Chinese and others, will have the chance of getting in earlier. The prospects of an agreement with the USSR means that the world is moving towards an era of supersonic travel, with Concorde playing a real part.

I hope that as a result of the insistence of my hon. and right hon. Friends the Minister and all those involved in this project will be more forthcoming. They will know of the deep concern among members of the public and Members of this House about these matters. My hon. Friends and I do not intend to press this amendment—

Mr. Hugh Jenkins

Oh, yes.

Mr. Bishop

—and I therefore beg to ask leave to withdraw the Motion.

Mr. Jenkins

No.

Question put, that the clause be read a second time:—

The House proceeded to a Division—

Mr. Hugh Jenkins

(seated and covered): On a point of order, Mr. Deputy Speaker. Is it possible to register my support of the new Clause without putting in Tellers?

Mr. Deputy Speaker (Mr. E. L. Mallalien)

There is no means of doing that beyond what the hon. Member has already done.

Question negatived.

Bill read the Third tune and passed.