HC Deb 18 April 1983 vol 41 cc4-6
3. Mr. McCrindle

asked the Secretary of State for Industry if he has had recent discussions with British Airways or British Aerospace regarding the possibility of an order from the airline for the Airbus A320; and if he will make a statement.

The Under-Secretary of State for Industry (Mr. John Butcher)

The Department of Industry has regular contact with British Aerospace on Airbus matters. Airbus Industrie has made a presentation to British Airways on the proposed A320. It is for the airline to form its own commercial view.

Mr. McCrindle

Is it true that the Government are leaning on British Airways with a view to having an order placed for an aircraft which is neither suitable for its requirements nor likely to be ready in time? Should not the Government be very cautious before investing heavily in another aircraft, the market for which is not yet proven, and which, apart from its employment prospects, might very well end up as another political aircraft such as Concorde?

Mr. Butcher

I can reassure my hon. Friend that we are not leaning on British Airways. We are saying to British Airways that it should take its commercial decisions with commercial factors in mind. We look at the decision on the A320 in a similar commercial manner and will want to see its launching justified by a viable project which maximises advantages for the customers for that aircraft.

Mr. Barry Jones

The wings of the present Airbus are made with skill and great ability in my constituency, and the whole area is proud of the factory. Does the Under-Secretary understand that in my area there is irritation, bewilderment and some anger that the present Airbus is not flown by British Airways, whereas Lufthansa and Air France both back the Airbus?

Does the Under-Secretary believe that an acceptable solution would be to have an airbus powered by Rolls-Royce engines? Will the Government soon come off the fence and hack the A320 project with Government money?

Mr. Butcher

The hon. Gentleman is justifiably proud of the work force and the plant in his area. With regard to Government backing for the present Airbus, or for the A320, we shall, as I said earlier, look at each project in terms of its viability. Each must stand up in its own right.

I have some sympathy with the hon. Gentleman's point that we should wherever possible attempt to incorporate Rolls-Royce engines. Unfortunately, one of the reasons for the delay in the evaluation of the A320 project is that the consortium must decide whether to power the A320 with the new technology engine from Rolls-Royce and Pratt and Whitney or with a SNECMA — General Electric derivative. That decision will in turn affect the view that customers have of the aircraft's viability.

Sir Anthony Meyer

Has not the whole Airbus project succeeded on its merits, without any of the assistance that it might reasonably have expected from European airlines, which are thus throwing away the possibility of creating a viable European aircraft-building industry which would provide many thousands of jobs?

Mr. Butcher

We hope that the co-operation that we have seen with the Airbus project can be carried forward and that it will be built on not only by the airframe manufacturers but by the engine manufacturers.

Mr. Orme

Does the Minister agree that there is a crisis in the British aircraft industry and that the ordering of the A320 is essential to maintain that industry at a reasonable level? Does he further agree that no country in the world today builds aircraft without direct subsidy and that a decision by the Government on the project is urgently needed?

Mr. Butcher

I do not believe that the British aircraft industry is suffering from a crisis or from a loss of demand any greater than that of our international competitors. If the right hon. Gentleman is implying was that we should be concerned about the recent figures given by British Aerospace, I would explain to him that British Aerospace would have been able to declare a 19 per cent. increase in trading profit in 1982 but for the fact that it had to put aside £100 million as a contingency provision for increased stocks and reduced prices. Our position is not markedly worse or better than that of our competitors.