HC Deb 01 February 1984 vol 53 cc249-52
5. Mr. Haselhurst

asked the Secretary of State for Trade and Industry whether he has yet reached a conclusion about the launch aid for the A320 Airbus; and if he will make a statement.

considerable over-capacity of the European foundry sector. In our view Ford must be allowed to make these commercial decisions without Government intervention, and that will secure long-term competitiveness.

Mr. Beaumont-Dark

Does my hon. Friend agree that the foundry industry is as important to the motor industry as it is to the steel industry? Will he outline his plans for talking to the foundry industry and helping with the rationalisation programme, which must go on if the industry is to survive?

Mr. Trippier

If the foundry industry is to prosper and have a long-term future, it probably needs rationalisation. We in the Department of Trade and Industry are only too pleased to listen to any pleas which the industry brings to the Department. The decline in foundry production to which reference is made in the substantive question asked by the hon. Member for Newham, North-East (Mr. Leighton) and in my initial reply occurred over a period of 10 years, during part of which time the Labour party was in office.

Mr. Williams

Does the Minister not realise that the situation in the foundry industry shows clearly the absurdity of adding British deflation to world recession? Is he aware that since the Government came to office 18,000 jobs have been lost in this industry in the midlands alone and that a further 15,000 will be lost in the next four years unless there is a change of policy? Indeed, what policy do the Government have? It is not good enough for the Minister simply to say that he is willing to listen to pleas from the industry. What positive strategy do the Government have for the development of the industry?

Mr. Trippier

The right hon. Gentleman is on very weak ground. At the risk of hammering the nails out of sight, I remind him that the decline in the industry began in 1978 when the Labour Government were in power.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

The Government have not yet reached their decision about launch aid for the A320 Airbus but expect to do so shortly.

Mr. Haselhurst

Does my hon. Friend agree that there is no comparable alternative project which could sustain British capability in civil airframe manufacture and that it is therefore crucial to our remaining in the industry at all that an early and positive decision be taken on launch aid for the A320?

Mr. Lamont

My hon. Friend is right. The project is clearly of crucial importance to our civil aerospace industry. That point is well taken. I cannot say very much more. I note what my hon. Friend has said, but we are very close to reaching a decision.

Mr. Barry Jones

May I warn the Minister that if launch aid is not forthcoming many hundreds of my constituents at the Broughton works may lose their jobs? Is he aware that unemployment in Clwyd is now more than 24,000 or 20 per cent.? Is he also aware that the Broughton factory is one of the finest reservoirs of industrial skills in Wales?

Mr. Lamont

I am well aware of that, and I am familiar with the hon. Gentleman's comments, as he has made many representations to us. The employment considerations are, of course, extremely important. He will recognise, however, that huge sums of public money are involved. The application for launch aid for the aircraft itself involves more than £400 million, and the related V2500 engine project involves a further £113 million. The decision must therefore be weighed very carefully, but the points that the hon. Gentleman makes are well taken.

Mr. Hayward

My hon. Friend the Under-Secretary of State said on 19 December that it was hoped to deliver a decision by the end of January and we have now gone beyond that date. Is my hon. Friend the Minister of State aware that further delay is not helpful on a decision which was then described as significant for both British and European airbus industries?

Mr. Lamont

It is indeed significant, but it involves huge sums of money. It is therefore right that it should be properly researched and evaluated. The Germans have still to make their decision and our timing has been closely related to theirs. I assure my hon. Friend that a decision will not be long delayed.

Mr. Carter-Jones

Is the Minister aware that Boeing has a virtual monopoly? In the interests of good British-American relationships, will he encourage the A320 Airbus by injecting a little competition into the field? Is he aware that there will be great joy on both sides of the House and among all the workmen if he provides the necessary aid to sustain both engine and airframe capacity in this vital area of technology?

Mr. Lamont

As Airbus Industrie has said, Boeing faces strong competition from it, especially with the wide-bodied aircraft. If Boeing is not to have a monopoly, a European aerospace industry must be developed. All the points that the hon. Gentleman makes will be taken into consideration.

Mr. Colvin

Is my hon. Friend aware that one market in which Airbus Industrie already has Boeing knocked for six is in the far east, where the rate of growth in civil aviation is about twice that of the rest of the world? Will he comment on the viability of the project and confirm that it is in no way another Concorde, but is a project of great commercial promise?

Mr. Lamont

I do not want to comment on the viability issue, as my hon. Friend will understand, because that is precisely what we have to research and make up our minds about. We have to decide whether this is a good commercial proposition which will earn money for this country; whether it will serve in sufficient numbers to make moderately impressive sales and yield returns in dividends. We must not forget that many aerospace projects have failed to do that. We do not need to refer only to Concorde. I have to tell my hon. Friend that no aircraft project in this country since the Viscount has repaid its launch aid to the Government. That is not what we like to see. If we are to have an aerospace industry—and we want one—it must earn money for the country.

Mr. Stott

The Minister must be aware that the A320 is not Concorde—it is nothing like Concorde. He will no doubt be aware that his hon. Friend the Member for Kingswood (Mr. Haywood) sponsored an Adjournment debate on 19 December last year, during which there was a remarkable degree of unanimity between his hon. Friends and mine. The hon. Gentleman must be aware that there is a clear consensus of support for the A320. It is vital that support from the Government is forthcoming in order to sustain our airframe manufacturing industry. Is the Minister aware that my hon. Friends the Members for Coventry, North-East (Mr. Park) and for Eccles (Mr. Carter-Jones) and I will shortly be departing for Toulouse? Perhaps the Secretary of State would nod sagaciously in my direction if a favourable conclusion to this matter is to be forthcoming immediately.

Mr. Lamont

Even before the hon. Gentleman told me, I can tell him that I was aware that he was going, I believe at 3.30 pm, hotfoot to Toulouse. I assure the hon. Gentleman that the hospitality of Mr. Beteille and Mr. Lathiére is extremely good. I am sure that he will take a very warm message to them, to judge from what he has said.

I am aware that the A320 is a different aircraft from Concorde. I believe that it is a different shape. The A320 is a very different aircraft, in the sense that it is designed to be a replacement for existing aircraft in an identified segment of the market. That point is well taken. I repeat that we have to evaluate the economics and the commercial viability of this project. It is not enough to say that this is an important industry. We must make sure that this is a good project. That approach is exactly the same as that of the German Government.