British Aerospace (Hansard, 17 January 1983)

§ 11. Mr. Norman Atkinson
asked the Secretary of State for Industry what recent discussions he has had with the chairman of British Aerospace; and whether the future work programme was discussed.

§ Mr. Butcher
I and my colleagues in the Ministry of Defence have regular contact with the chairman of British Aerospace. The future work programme has been among the topics discussed with him.

§ Mr. Atkinson
How much longer is the Minister prepared to lie back and allow British Aerospace to be sabotaged by the fictitious accountancy that is now distorting prices so much that the chances of the BAC 146 succeeding are quite remote? When will the Minister write off at least £200 million of the development costs which rightly belong to his colleagues who are answerable for defence charges? Is that not the way to proceed and thus give a chance to British Aerospace?

§ Mr. Butcher
I reject the hon. Gentleman's accusation about fictitious accountancy. I shall refer his comments to my right hon. Friend the Secretary of State for Defence.

§ Mr. McNally
Does the Minister agree that aerospace, more than most industries, needs to collaborate and work closely with the Government of the day? Does he further agree that, with the developments in the agile combat aircraft, the airbus, the variants of the Coastguarder and the medium-range turbo aircraft for Europe, British Aerospace and its workers have fulfilled their share of the bargain, and that there now needs to be a sense of urgency on the part of the Government to give the aerospace industry a long-term perspective and a chance to compete with the Americans?

§ Mr. Butcher
I agree with the hon. Gentleman that the workers of British Aerospace should be congratulated on their recent record. They have increased productivity, and they have done their best to meet the objectives that the management set for them. The hon. Gentleman is quite right in saying that there are a number of areas in the aerospace industry where close co-operation with the Ministry of Defence and, on occasion, with the Department of Industry, is necessary. We have honoured our commitments, going back to 1978, on a rate of return of 5 per cent. I believe that we have also been consistent on launch aid. We recognise that there are occasions when special measures are required.

§ Mr. Richard Page
Following the failure of the Arianne launch in September 1982, and with it, sadly, the British Aerospace Marecs B satellite, for which we are the prime contractors, can my hon. Friend say when its replacement will be launched? Will my hon. Friend confirm that British Aerospace is doing a magnificent job for satellites in Britain?

§ Mr. Butcher
The French have a problem to resolve, but we are hoping that it will be in the spring of this year.
May I take this opportunity to congratulate British Aerospace and other leading contractors on the British satellite aspects of this programme for choosing that part of the programme that has the best commercial rate of return.

§ Mr. Eastham
The Minister is congratulating the work force of British Aerospace, but is he aware that it is now 13 faced with considerable redundancies? I am particularly thinking of British Aerospace at Manchester, which is deeply involved in the civil airline projects. Would it be useful for the Minister seriously to consider creating some kind of window whereby British Aerospace could purchase one or two 146 planes to help the industry during this difficult period?

§ Mr. Butcher
It would be unwise to make statements from the Dispatch Box on forward-order decisions. I agree that in recent years some parts of British Aerospace's productive capacity have been under great pressure. I know, as will the hon. Member for Coventry, North-East (Mr. Park), that one of the sites that has been affected is Bitteswell. I fully understand the anxiety of the hon. Member for Manchester. Blackley (Mr. Eastham). However, I do not think that he will expect me to give such a commitment this afternoon.

§ Dr. John Cunningham
As British Aerospace is the major producer of high technology, high added-value products for which there is world demand, as it has had acknowledged successes and has the prospect of more exports, in particular the A320 airbus and the agile combat aircraft, why are the Government dragging their feet on launching aid, particularly when it is well known that many jobs are now threatened in the industry, which should be expanding?

§ Mr. Butcher
The Government are not dragging their feet on launch aid for the airbus. Britain's position is similar to that of the Germans. The French have allocated money in advance from public sector funds, but Britain and Germany are waiting to be satisfied that the project will provide a proper commercial rate of return. Britain, through the Ministry of Defence, is discussing collaboration on the agile combat aircraft with the German and Italian air forces.