§ 4.1 p.m.
§ Mr. Stephen Ross (Isle of Wight)
You, Mr. Deputy Speaker, and I seem to be back where we left off at 6.30 this morning.
I wish to raise maters of ministerial approval for investment by British Rail. I understand that under the Transport Act 1962 decisions on British Rail investment projects should be taken in consultation with the Minister. Although no specific money limit is listed, if a sum over£250,000 is involved it is generally accepted that ministerial consent is needed for such projects as ships, hovercraft, and hotel developments. That is why I am entirely within my rights in raising the question of the future of the hovercraft industry. I asked for this debate particularly because the development of the hovercraft industry on the civil side—and I emphasise that—is at the crossroads.
The principal company in hovercraft construction is the British Hovercraft Corporation, which is a subsidiary of the well-known Westland Aircraft Company, whose main works are at East Cowes, in my constituency. Its total work force is about 2,000 and the current turnover is about£10 million. Apart from our three local authorities, it is the largest employer of labour in the Isle of Wight.
The British Hovercraft Corporation is a direct descendant of the former Saunders Roe Company, which used to build 2530 flying boats. It stopped doing so when flying boats went out of favour. One of the last flying boats to be built crashed into a hillside adjoining my home. It was a very sad occasion. The company then moved into the development of the SR53 rocket turbojet fighter. There were many hopes for the project when suddenly it was cancelled in the late 1950s, putting many of my constituents out of work. The memory of it still haunts us on the island. It had a profound effect on the economy of the island.
It is true that we have since managed to diversify by attracting new industries. We have had Government help in the period since 1958 and we are pleased to have those industries on the island today. All our eggs are no longer virtually in one basket as they were at that time. Nevertheless, any cut-back on BHC now would be a serious matter.
Moreover, at a time of high unemployment and when the relations between management and work force are so good, it would be a tragedy for the nation as a whole if this contract were to end.
This subject was well aired during a short but excellent debate conducted in the other place on 1st May last when the noble Earl Lord Kinnoull asked some pertinent questions about the future prospects of civil and military craft and wanted to know about the industry's progress in respect of the further development of hovercraft. This was prompted by the Government's decision to cancel the construction of the Channel Tunnel, and indeed we supported that decision. That provided an opportunity for hovercraft to play their role in carrying cross-Channel traffic.
The two operators concerned were Sea-speed, which is a subsidiary of British Rail and HoverLloyd, both companies using the SRN4 type craft. Already these companies have captured a substantial share of the cross-Channel traffic. The figures for 1974 show that the hovercraft carried 30.9 per cent. of passenger traffic and 23.9 per cent. of the cars crossing on the existing short sea routes, such as those from Dover to Calais and from Pegwell Bay to Boulogne.
There is a good case for increasing the capacity of those craft and, as is well known, Seaspeed and BHC have reached 2531 a fairly advanced stage in their negotiations for the stretching of these two craft which would increase capacity from 254 to 400 people and the maximum car capacity from 31 to 59. This is an interesting process. The craft is cut in the middle and a further section is inserted. This process has already been successfully carried out by BHC on its SRN6 cross-Solent craft which I use regularly at weekends to get to my constituency.
I do not wish to list, nor do I have the time to do so, all the advantages of this exercise. They were well covered in the Lords debate and it is there for all to read. But suffice it to say that if this contract, which will need Government sanction, is allowed to proceed it will provide the company with the necessary incentive to move into the next stage of development when an entirely new craft, which can compete favourably with existing ships on all Channel routes, can be constructed. I hope that these figures have been shown to the Minister because they are very encouraging indeed. They show that BHC can compete with existing ships.
The figures on energy saving, speed and reliability are highly encouraging. Reliability has been improving with experience over the years. If new and longer routes are introduced—such as routes from Southampton and perhaps up the east coast—the level of fares charged will fall within the bracket of those now obtaining on the cross-Channel ships.
Since the debate in the other place the Cairncross Report has been published. Unfortunately, we are now about to go into recess without having had an opportunity to debate that report. Indeed, this is the reason why I am so pleased that I am able to raise this matter today because the decision will arise during the recess. I suggest that the report provides greater evidence of the potentialities of the use of larger and more efficient hovercraft. I refer merely to the summary of their findings, in paragraph 35, where they state thatThe future of Hovercraft particularly as a premium service should be seriously considered".HoverLloyd, a private company, is reported to have made a profit of some 2532 £200,000 on its operations with three slightly wider craft last year, despite increased fuel costs. This shows what can be done. Seaspeed made a profit in 1973. It may well be the reason for the Cairn-cross Committee querying why British Rail have not charged a premium for their more rapid cross-Channel journey and improved interchange facilities.
Another important matter is the immediate challenge of the French, with the Sedam N500. They were astute enough to carry on with their hovercraft development at the same time as the Channel Tunnel, covering the situation from both aspects. Their hovercraft will have an equivalent number of passengers to the SRN4 and it is now in an advanced stage of construction. There are advances being made also to a lesser extent in Japan and the United States. The Americans are building two 2,000-ton craft.
I hope that the Under-Secretary read the interesting article by John Petty in the Daily Telegraph of 21st July last, under the heading "British Technology Humiliated". It would be an absolute tragedy and another example of allowing others to cash in on our inventions if his dreary prognostications were proved to be true, and the French allowed to take over where we left off. They will be able to offer their craft within the next 12 to 18 months, and, if we are not going ahead, it is fairly obvious that British Railways, possibly HoverLloyd and possibly even Seaspeed, may be forced to purchase from France.
The seven unions at British Hovercraft have desperately wanted to see the Minister of Transport to tell him personally of their conviction concerning the future viability of large hovercraft. They are 100 per cent. behind their company in this and absolutely convinced that they have the right machine for the right job. I have tried to arrange a deputation, for which there is an application. The unions, among many of us, from Sir Christopher Cockerell, the inventor of the hovercraft, downwards, together with those Members of Parliament who have taken the trouble to go to British Hovercraft and see for themselves, would be horrified if the wrong decision were taken. I was at BHC with two Labour Members only recently.
2533 In conclusion, I want to emphasise that the British Hovercraft Corporation is no lame duck company. Far from it. It received a Queen's Award for its export performance only a few months ago, and the military side is doing very well. All it asks is that, should the British Rail management, after its board meeting on 4th August, indicate to the Government that it wishes to place the contract for stretching its two SRN4s, the Government should accede to its request without delay.
Speed is essential in this matter. The first hovercraft should come in for stretching this winter. Such action could well generate a world market large enough to make the development of a new craft a commercial proposition in its own right. It would also stimulate advances in technology, which would benefit the whole range of craft they have to offer, and help them maintain the favourable position they have built up in overseas military markets.
I understand the suggestion made in the other place that finance might be arranged through the European Investment Bank, but, judging by the criteria under which the bank advances money, it would appear to be a non-starter. In the other place, the noble Lord, Lord Beswick, gave grounds for optimism in his far-reaching reply. I hope to hear rather more in that direction from the Minister—I am grateful to him for staying here on a Friday to hear my pleas—when he replies.
§ 4.15 p.m.
§ The Under-Secretary of State for Industry (Mr. Gerald Kaufman)
I congratulate the hon. Member for the Isle of Wight (Mr. Ross) on his stamina in being able to speak at two ends of the day on behalf of his constituents. I also congratulate you, Mr. Deputy Speaker, on your stamina in being able to grace us with your presence in the Chair for the hon. Member's two contributions.
The hon. Member made, as one would expect from him, not only a highly knowledgeable contribution but the type of contribution phrased in moderate terms which often makes more impact on a Government than more strident interventions.
Hon. Members will recall that the British Hovercraft Corporation recently 2534 put on a display in the Upper Waiting Hall of the House relating to its production. I understand that some hon. Members attended subsequent briefings. Part of this exhibition was concerned with the future development of hovercraft, and it no doubt generated an increased awareness by hon. Members of the importance of this industry for future travel and freight transport as well as in the application of the air cushion principle in lifting heavy and awkward loads.
The outlook for hovercraft is brighter than it has been for the last few years and there is now a much wider acceptance of a steadily increasing variety of hovercraft as a possible solution to particular transport problems or the use of the principle to solve difficult civil engineering problems. This has come about by the industry's steady and successful efforts in convincing possible customers of the capabilities and versatility of their product.
The United Kingdom hovercraft industry still has a considerable technical lead over its overseas competitors and this lead can be maintained only by adequate research and development. Apart from the industry's own considerable research and development effort, financial support from outside sources is expected to amount to£1.4 million in the current financial year. This includes military commitments and funds provided by the National Research Development Corporation as well as by the Department of Industry under the Science and Technology Act.
The NRDC, whose support is of great assistance to the industry, normally channels its funds in support of industry's own research and development projects through its subsidiary, Hovercraft Development Limited. The NRDC does not make grants but will share with a company, usually on a 50–50 basis, the cost of developing a new product and will expect a financial return on its investment. The NRDC has recently agreed to contribute about£1½ million to assist the development by Hovermarine Transport Limited of a 20-seater sidewall craft designated HM5.
§ Mr. Stephen Ross
I am grateful for the fact that the Minister mentioned Hovermarine Limited. It may be felt 2535 that, as my debate was on the future of the hovercraft industry, I should have Bone much wider and mentioned other firms. I should not like it to be thought that, because I dealt with one company in the main, I was not aware of the existence of and efforts being made by other firms.
§ Mr. Kaufman
I appreciate that. The hon. Gentleman would be hard put to it to mention all the hovercraft companies, his constituency being the centre of the hovercraft industry, which is one reason why he is particularly suited to raise this subject in the House.
This latest development represents a significant advance over the existing HM2 which carries 65 people and which itself continues to be successful. Apart from major new craft, modifications and new ideas for engines, propulsors and skirts are constantly being tried and tested in order to enable the next generation of hovercraft to travel faster, to have even fewer journeys than hitherto cancelled because of the state of the sea, and to provide increased comfort for passengers.
In the debate in another place, one noble Lord gave a somewhat deterring account of his earliest journey in a hovercraft and of the ordeal of the child who travelled with him. Things are much better now.
Research and development to achieve these objectives are going on continually. The British Hovercraft Corporation, which is based in the hon. Gentleman's constituency and is the largest employer of labour in the Isle of Wight, hopes to secure an order this year from British Rail to "stretch" the two SRN4s at present in operation on the cross-Channel routes. This is obviously a matter of great concern and the wish for a decision is understandable. This is not a matter to be decided by my Department. It is for the Department of the Environment.
I understand from the Department of the Environment that the British Railway Board is expected to decide during August whether its present SRN4s should be "stretched".
The hon. Gentleman pointed out the unusual nature of this "stretching" operation. It consists of cutting the craft in half, leaving the more complicated bow 2536 and stern installations and engines and machinery intact, and inserting a 56-feet section in the centre. This somewhat crude piece of surgery will increase passenger capacity from 254 to 400 and car capacity from 31 to 59. The decision by British Rail to make the modification was, of course, delayed for two years or so mainly by the proposal to construct the Channel Tunnel, and it is now reviewing its cross-Channel hovercraft and ferry operations since the tunnel project has been abandoned.
I recognise that British Rail's decision is of considerable importance to British Hovercraft Corporation in maintaining the position of its craft on the vital Channel route. If the decision is to go ahead, the Corporation hopes to use the experience gained in the development of the next generation of large passenger and vehicle hovercraft. This new BH88 hovercraft—which is not expected to be significantly larger than the stretched SRN4—will incorporate a number of new features related to power plant, propulsion system, lift system and craft resistance. BHC hopes that collectively these improvements will reduce power consumption by 40 per cent. and give a fuel saving of 60 per cent. The craft will be able to operate in up to a force 9 gale with consequent reduction in cancellations because of weather and sea conditions. BHC expects such a craft to be able to compete on equal terms economically with ship ferries.
The British Hovercraft Corporation has, besides the SRN4 craft, two other types of hovercraft in current production —the SRN6, which is a general utility craft capable of carrying 38 passengers with a lengthened version for 58 passengers, and the BH7 logistic and fast attack military vehicle. The Corporation has had particular success in selling the military craft overseas, and there are good prospects for it particularly in the Middle East where it has already made good sales. One important overseas contract that the British Hovercraft Corporation has won is that for development of the bow seal for the 2,000-ton surface effect ship development programme for the US Navy.
I am sure that the hon. Gentleman will be interested to hear something of the wider situation. He has properly raised 2537 his general constituency interest, but this is a much wider area of activity than that to which he has referred.
On the United Kingdom military prospects, the Royal Navy Hovercraft Trials Unit is testing the military utilisation of craft in a variety of naval roles including mine counter-measures. If the mine counter-measures application is successful, this could open up an important new market for the hovercraft industry.
Besides the bigger craft that I have already mentioned, some seven other hovercraft manufacturers in the United Kingdom construct smaller hovercraft. These manufacturers look mainly to overseas markets where they have had considerable success, and they are continuously developing new designs. Besides being used for pleasure, the smaller type of hovercraft is used in surveying, inshore rescue, as ambulances and for general transport.
The industrial applications of the hover principle are also proving to be extremely important in solving certain civil engineering problems. Industry is gradually becoming aware of the possibilities in the fields of materials handling, and the possible applications seem to be increasing. These range from small hover-pallets to large hoverplatforms, and even large oil storage tanks have been moved in one piece by the air cushion principle without the need to dismantle them, which was often the only way to do the job in the past. Air Cushion Equipment, which pioneered this method of moving tanks, has recently interested contacts in the United States, where the potential is great, and has now gone into partnership with a large American company.
The main markets for hover platforms appear to be overseas for work in an inhospitable terrain. Mackley Ace has built two 750-ton air cushion transporters for use in the Persian Gulf and has obtained an order for two transporters to be used on the Alaska pipeline. Hover-trailers International Ltd has developed a range of air cushion vehicles for working over marshland, and these are selling overseas. The British Hovercraft Corporation has developed with the Central Electricity Generating Board a system for reducing the axle loading on transporters. Before this development, it was often 2538 necessary to strengthen roads and bridges before large loads such as big transformers could be moved across them.
There has been criticism in the Press from time to time that Sir Christopher Cockerell's invention has not been used to the best advantage of the United Kingdom. It has taken a long time to achieve a wider acceptance of the totally new development which the hovercraft represents, but markets are now opening up and our industry is taking full advantage. It was to be expected that other countries might emulate our success, and, as the hon. Gentleman pointed out, some are now taking more interest in the construction of hovercraft. The French, as he told us, are building a 225-ton craft to compete on the cross-Channel route and the Americans are developing the 2,000-ton naval hovercraft, though there is as yet no firm commitment to the construction of this craft.
I hope that journalists, rightly giving their readers information, will not be too lugubrious. There is a great tendency in the Press not to recognise the major achievements of British industry, whether by the correspondent in the Daily Telegraph or anybody else. It is right that the Press should warn us against complacency, because far too many experiences in the past which have upset us so much have stemmed from complacency. I do not complain that we should have drawn to our attention the need always to be up to the mark.
It was inevitable that competition of this kind would arise, but it is happy for us to know that these other countries still have some way to go. It seems likely that the United Kingdom hovercraft industry will hold its paramount position in the world for some time to come.
When news is not often as bright as it might be, I welcome this opportunity to give details of a real success story for British industry. With new technology being applied to the construction of hovercraft all the time, I am sure that the United Kingdom industry is set for a bright future.
§ Mr. Stephen Ross
I am grateful to the Minister for his encouraging reply and the history which he has fairly put. I hope that the record he has given will be shown 2539 to his colleagues and that the Government will feel that this is a form of technology which should be given every encouragement to go on. That means that the next stage in the hovercraft development which I have suggested can be given through the Seaspeed extension. I am grateful for the hon. Gentleman's courteous answer.
§ Mr. Kaufman
I am obliged to the hon. Gentleman for what he said. We need to secure a viable, profitable industry providing long-term, well-paid em- 2540 ployment for its employees and giving us a gain on the balance of payments. That is what we want. It seems to me from what I have seen of the situation in the hovercraft industry that that is what we are likely to get. I hope that the industry will be encouraged by the hon. Gentleman's interest and concern. On behalf of the Government, I assure the industry that we are anxious and hopeful for its success.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-eight minutes past Four o'clock.