CONCORDE

HC Deb 31 July 1974 vol 878 cc801-8

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn)

With permission, I should like to make a brief statement on the future of Concorde.

My right hon. Friend the Prime Minister has already reported to the House that he has agreed with the French President that the 16 aircraft already in production should go ahead, but no further commitment was made.

I hope to find an early opportunity to discuss the detailed terms and conditions for completion of the 16 aircraft with my French opposite number the Secretary of State for Transport, M. Cavaille. I shall report to the House again after that meeting. I have every hope that this will put us in a position to press on with the project and ensure that Concorde enters service with British Airways and Air France at the earliest possible date.

The development of Concorde to a point at which entry into service is some 18 months away is a tremendous achievement by all concerned both in Britain and in France. The recent series of transatlantic flights were an impressive demonstration of Concorde's reliability in conditions similar to airline operation. They are due to be followed up by an extended series of route-proving flights in the first half of next year.

The manufacturers will continue their efforts to sell Concorde. Serious negotiations for the sale of two aircraft are in progress with Iranair, and the first British production aircraft, Series 202, is to make a demonstration flight to Teheran next week.

I should like to thank all those concerned with Concorde for their patience during the long uncertainty which has surrounded the project in the first half of this year and which we now hope to see resolved. We must redouble our efforts to ensure that Concorde is a success.

Mr. Heseltine

I am sure that the whole House will join in the Secretary of State's remarks about the dramatic aviation achievements of Concorde on the North Atlantic in recent weeks.

Could the right hon. Gentleman tell the House, first, what are the latest costs for the development of the project? Second, what are the latest costs for the production of the first 16, and the outcome of the likely trading position on the sale of those 16? Third, the Minister says that he hopes that we shall press on with the project, but at what time does he need to take a decision on further production beyond 16? Fourth, what estimates has he received of the employment prospects on the project over the next 12 months?

Mr. Benn

With regard to the first question about the exact figures, I am committed by an earlier statement to give the House further figures following those that I published in March. If the hon. Gentleman would allow me, I should like to do that in an orderly way at an appropriate moment. I am not in a position to give updated figures today.

On the second point about employment—

Mr. Heseltine

Costs of production.

Mr. Benn

Yes. That will be covered by what I have just said. On the second point about employment, I think that the House recognises—this is why the review took place—that whereas we had originally hoped that, when the first orders were placed, the other options would be converted into orders, that has not in fact developed. In the discussions that my right hon. Friend had with the President of France, the agreement was to produce the 16 aircraft. This creates problems which it is my intention to discuss with the management and unions concerned.

Mr. Palmer

Can the aircraft workers of all grades in Bristol and district—my right hon. Friend and I share a common interest in the representation of Bristol—now look forward to a period of settled employment in work on this great project of which they are rightly proud?

Mr. Benn

My hon. Friend rightly points to another capacity in which I have an interest. I think that all those working on the Concorde over the years have learned to live with a measure of uncertainty, and it is very much to their credit that they have done so. What I promised them, and have always promised them, is that I should be entirely candid and truthful, whether the news was good or bad. I fulfilled that pledge in the statement that I made in the House in March, and I have invited them to come and see me to discuss the implications of the statement that I have now made.

Mr. Pattie

Is the Secretary of State aware that there is great disappointment at BAC Weybridge, in my constituency, at the failure to order materials for the further three aircraft, and does he not feel that this will reduce our ability to meet new orders once the aircraft comes into service in 1976?

Mr. Benn

I appreciate all the anxieties that surround this project because I lived with them for some time. I am grateful to the hon. Gentleman for bringing the delegation to see me recently in order to explain fully and candidly the nature of the special problems at Weybridge. But I believe that the House must have due regard also for public expenditure. It cannot contemplate ordering to put Concorde on the shelf against possible future orders. I think it better that all concerned—the workers, the management, the local communities and the House itself—should be confronted with the inevitable difficulties in which this decision involves us all.

Mr. David Steel

May I press the Secretary of State to give the House one figure, that is, the total expected cost to the taxpayer of the 16 aircraft programme? Would he say also that the Government do not intend to enter into any further commitment to build future aircraft until the 16 have got firm orders from a buyer?

Mr. Benn

I have dealt with the latter question in the answer I have just given. We do not think it right to order for the shelf. I think that everybody, even those involved in the aircraft, must understand that. On the total cost, I am committed, as I said, to make a full statement. A number of representations were made to me about the figures published in March, representations coming from the management and from British Airways and also from the unions and the communities involved. If the hon. Gentleman would allow me, I should like to make a statement at an appropriate moment with full figures.

Mr. Terry Walker

Is my right hon. Friend aware of the deep sense of gratitude felt by the aircraft workers in the city of Bristol for his statement today and also for the personal part that he has played in safeguarding the work for the industry? Two things now need to be clarified. First, the flight corridors for Concorde need quickly to be finalised if any sales are to be made. Second, we all recognise that before the other three are proceeded with there must be some definite orders for the aircraft. Can my right hon. Friend assure the House that every step is being taken by BAC to sell this aircraft in a positive way?

Mr. Benn

I am grateful to my hon. Friend for what he has said. I have had the difficulty, which I think he appreciates, of wider responsibilities for public expenditure and the future of the aircraft industry, as well as my known connection with the people in Bristol, who have been very patient in understanding that I had to discharge those responsibilities in a way which took account of the full national responsibility—not always a very easy thing to have to do.

The flight authorisations—the capacity of Concorde to land at key airports—have always been seen to be absolutely central to the success of the aircraft. During the period of review it was not possible to pursue these with perhaps the single-mindedness that will now be possible, but I have had the opportunity of discussing this with some American authorities and others, and I think that my hon. Friend may be sure that we shall see that the rights that Concorde needs to fly into these key airports will be pursued by both the Governments, and by the manufacturers, with great vigour.

Mr. Tebbit

Will the right hon. Gentleman understand that there are many of us who think that in the interests of public expenditure it is he who ought to be put on the shelf until—[Interruption.] Could he now say whether—[Interruption.] Will the Government Chief Whip be quiet for a moment? Will the Secretary of State say whether he stands by or now disclaims his estimate of 18th March that the British share of the production losses on 16 aeroplanes would be between £200 million and £225 million? Second, will he say when the rundown of employment starts at Weybridge unless further authorisation for production is given, and third, whether he stands by the Government's statement that British Airways will be reinbursed for the losses which it says it will make on the operation of this aircraft?

Mr. Benn

I disregard the hon. Gentleman's preliminaries. I think that he recognises that the figures published in March were the best figures available to officials in Whitehall. When they were published a number of alternatives were put forward, and—as I believe I have told the House—we were able to improve on the accuracy of these forecasts as a result of the fact that we operated in a system of open government in this respect.

The hon. Gentleman referred to rundown. The rundown on the basis of 16 aircraft begins at different centres at different times because, as he knows, some preliminary work is done in Weybridge and goes to, say, Bristol for finishing. That is the nature of the problem which his hon. Friend the Member for Chertsey and Walton (Mr. Pattie) raised, which I sought to deal with.

As regards British Airways, that is a matter for the Secretary of State for Trade. I have made it clear that the British Airways' calculations all hinge upon a forecast of the load factor for Concorde. That factor has often been central in the calculation of possible profitability in the use of new aircraft, and one must not be hynotised by figures when those figures rest upon assumptions. That is something that cannot be clarified completely until one knows the actual load factor. The VC10 is a good parallel.

Mr. Donald Stewart

Does the right hon. Gentleman realise that his decision to continue the most expensive confidence trick in British history will be heard with great regret by those who have any regard for ordinary business common sense or who have any regard for the environment? It is an affront to all who are concerned with the missing houses, hospitals, schools and so on in this country. Will the right hon. Gentleman agree that a fair and rational decision now demands immediate cancellation of this lunatic project?

Mr. Benn

The hon. Gentleman has said with great vigour what a number of people think. Those views were put forward by the Anti-Concorde Project, by Mr. Richard Wiggs in his evidence to the Government. What he says is reflected in the views of others.

I do not take the view, when the finest skills in Britain and France for half a generation have been put into an aircraft which is capable of demonstrating its technical ability, that common sense dictates that it should be cancelled within a month or two of entry into service. But that is a matter of defining what is common sense.

I think that, on reflection, the hon. Gentleman may see that he is probably saying something relevant and important about the way in which Parliament and the public should approach the beginning of new projects. He will find that I am on record as having made equally trenchant observations.

Mr. Cryer

Will the Minister accept that some of us feel that the trade unions have been manoeuvred into supporting this project because of the potential loss of jobs? Will he assure us that he has in mind some plans for transfer of many of these jobs to socially more useful work when the 16 planes have been completed?

Mr. Benn

I know what my hon. Friend has in mind, but he is doing less than full justice to the view put forward by the trade unions in the evidence that they submitted to me. That is available. I made it publicly available to those who were interested and who got in touch with my Department. The view of the workers involved—if candid discussion takes place with them, as it has done with me over many years—is that they were never asked whether they wished to produce this project. They were told that the only way in which they could earn a living in the aircraft industry was by producing Concorde. There is great resentment on the part of the trade union movement that it does not have a greater say in the determination of the projects in which its members are to be involved. I share that view, and there is a case, as I tried to say earlier, for much greater openness before projects of this kind are entered into.

Mr. Cope

Like the Secretary of State's constituents, mine also will welcome the statement, as he is aware. It seems, however, that he has now admitted that the figures that he gave on 18th March were not as accurate as they were made out to be. In other words, the figures were wrong. Would it not have been better to consult BAC and, indeed, the nationalised French aircraft companies about the figures before causing his constituents and mine four months of the greatest anxiety?

Mr. Benn

I cannot accept that, because the figures I published were inherited from the previous administration. The hon. Gentleman, as he will recall, was the personal assistant to the Minister who had those figures and did not publish them. Of all hon. Members, the hon. Gentleman is unfair to rebuke me for publishing figures that must have been available to his own Minister, and, for all I know, to himself, so that people could have confronted the nature of the problem we all have to face.

Having said that, I am not suggesting that the figures prepared by the civil servants were inaccurate in that sense. They had prepared, as officials always do, the best figures available to them. However, the case for opening up internal documents is that considerations that might not have been reflected in figures in the Government's hands could then be brought in by those who had other evidence to bring to bear. If I had not published them, British Airways—or certainly the manufacturers—would not have been able to submit their own evidence on what the figures should be.

Several Hon. Members rose—

Mr. Speaker

Order. We cannot debate the matter now. Mr. Benn, the next statement.