HC Deb 04 November 1974 vol 880 cc659-62
1. Wall

asked the Secretary of State for Industry if he will make a statement on the future of the HS146.

15. Adley

asked the Secretary of State for Industry if he will make a statement on his discussions with Hawker Siddeley on the future of the HS146.

16. Mr. Dalyell

asked the Secretary of State for Industry if he will make a statement on his discussions with Hawker Siddeley concerning the HS146.

20. Sir D. Walker-Smith

asked the Secretary of State for Industry what representations he has received from Hawker Siddeley Aviation Limited regarding the development contract for HS146 and the company's decision to suspend work on the development of this aircraft; what replies he has made; and whether he will make a statement on the position in the context of employment and prospects in the civil aviation industry.

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

The Government are still considering the future of this project but the House will be kept informed.

Mr. Wall

Does the right hon. Gentleman agree with the firm that this project is no longer financially viable? If not, will he give further Government guarantees, or invest further Government money, to save the project? Will there be a tripartite study on viability in the very near future?

Mr. Benn

I shall try to deal with those three points. The Government are not satisfied that the arguments put before them by the firm are valid. That is why we are still engaged in a review. I should very much like to have organised a tripartite discussion but that was not acceptable to the firm. The question of Government funding does not arise since funding has not been requested by the firm and the Government's review is not complete.

Mr. Dalyell

What representations have been received from British Airways, in the event of not going ahead with the HS146, about replacements for existing aircraft?

Mr. Benn

I cannot answer in detail for British Airways, as my hon. Friend knows, but clearly the market at home for this aircraft, or the extent to which it would be necessary to purchase aircraft abroad to meet a demand for such an aircraft were it not available, is one of the reasons why we are going into the matter in greater detail.

Mr. Adley

After the right hon. Gentleman's deplorable mismanagement of the Court Line affair, is it likely that Hawker Siddeley Aviation will look to him as a perfect partner for future investment projects? Is it not justified in fishing to prevent his "doing a Beagle" with its jobs, its workpeople and its investors?

Mr. Benn

The hon. Gentleman should know that I am advised that the company is in breach of its contract.

Mr. James Johnson

Is my right hon. friend aware that, whatever may have been said to him by management, thousands if not tens of thousands of workers, whether in the design office or on the shop floor, believe that in this aircraft they have a winner? They believe that there are markets for it overseas. Therefore, they ask the Minister to stand firm in this matter. May I ask, however, whether it is a fact that Sir Arnold Hall has not yet seen the Minister? May I ask my right hon. Friend if and when he will see him in this matter and do something definite about it?

Mr. Benn

I am hoping to see Sir Arnold Hall, though not in the tripartite context that I have been continually pressing upon him. It is not only the workers in the industry and the managers who had confidence; right up until the beginning of July I had every reason to believe that the company itself shared that feeling. One of the reasons why I have not felt able to agree to what the company says is that the arguments presented to me by the firm are not self-evidently accurate. Therefore, we are anxious to look at the matter together with those concerned.

Sir D. Walker-Smith

Is not the basic problem here that, owing to the inflationary situation, the rise in the price of oil and the diminution of demand, the company cannot quote the fixed forward prices that customers demand? What efforts are the Government making to assist with practical solutions to that problem? Will the right hon. Gentleman put a specific agenda and specific proposals for tripartite talks before the company and the unions?

Mr. Benn

On the latter point, I have sought very hard to get tripartite talks going, without success. Everybody recognises that inflation creates serious problems for the aircraft industry. On the other hand, those problems are not confined to the British aircraft industry and they are not confined to this country. It would be very dangerous indeed for anyone in this country to assume that the present level of world inflation makes it necessary for us automatically to destroy projects upon which the long-term health of British industry depends. These are the reasons why we want to go into the matter in greater detail.

Mrs. Hayman

In view of the fact that while the Government review is going on redundancies are taking place at Hatfield and other factories and the design team on the HS146 is in danger of splitting up, at his meeting with Sir Arnold Hall will my right hon. Friend make as much attempt as is possible to ensure that the project is continued and funded in the interim while the review which is to take a final decision takes place?

Mr. Benn

I am well aware of what my hon. Friend says. Indeed she and others have made the point very strongly, and so have the trade unions concerned. I should be deceiving the House and the workers, however, if I gave them the impression that it was within my power at this moment to safeguard jobs in a company that has taken action that, I am advised, is in breach of contract.

Mr. Heseltine

The Secretary of State for Industry tells us that he first heard about the problem at the beginning of July. It is now the beginning of Novem- ber. How many meetings has he held with the company, and on what dates?

Mr. Benn

To give an accurate answer I should need to respond to a Written Question with all the details set out clearly. But the hon. Gentleman misheard me. I said that at the beginning of July there was no evidence of any problem whatever as far as this aircraft was concerned, and that the matter had been brought to my attention. I was in fact in receipt of a letter 48 hours before I was told that the board intended to terminate this contract, and I do not believe that with an aircraft that has such a long-term prospect it is sensible to seek to operate on that basis. Since then I have tried without success to bring about tripartite talks. I shall now have to proceed by a series of bilateral talks.

Back to