§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
§ Mr. Harry Cohen (Leyton)On a point of order, Mr. Deputy Speaker.
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)Order. Is the hon. Gentleman aware that his point of order takes time out of the Adjournment debate?
§ Mr. CohenYes. Yesterday I was tabling questions to the Home Secretary. I tried to table a question asking whether he would call for a public report to include names and evidence of the—
§ Mr. Deputy SpeakerOrder. The hon. Gentleman is not allowed to read a disorderly question.
§ Mr. CohenI wish to raise an important point of order with you, Mr. Deputy Speaker. I would ask you to listen to it as there has been a massive distortion—
§ Mr. Deputy SpeakerOrder. The hon. Gentleman cannot repeat the text of his question.
§ Mr. CohenI shall not do so. My point of order concerns the existence of a public report that includes names, and evidence of the Commissioner of Police of the Metropolis's statement in which he said that there are people in national life and local government who are trying to make foul and dishonest attacks on the police.
§ Mr. Deputy SpeakerOrder. If the Table Office has refused a question, the hon. Gentleman must pursue the matter with Mr. Speaker and not in the Chamber.
§ Mr. Deputy SpeakerOrder. I have made my judgment. I call Mr. Lewis Carter-Jones.
§ Mr. CohenOn a point of order, Mr. Deputy Speaker. I think that you should hear me out. I am asking you to consider the distortion of a question that I wanted to ask. I was merely allowed to table a question suggesting that the Commissioner of the Police of the Metropolis should be dismissed. That is a long way from the question that I wanted to ask. Will you investigate and stop this bureaucratic distortion of what hon. Members want to ask?
§ Mr. Deputy SpeakerThe hon. Gentleman must take up that matter with Mr. Speaker, not in the Chamber.
§ Mr. Lewis Carter-Jones (Eccles)I am grateful for the opportunity to speak about the development of aid for Leeward Islands Air Transport. I know that the Minister strongly supports what I have to say but I am worried that the Europeans are influencing the decision. The Minister must have an inexperienced young man behind him as his Parliamentary Private Secretary, as he tried to stop me intervening in our earlier debate. I was trying to help the Minister. The Minister is an old friend. We are political opponents but share a common conviction on this matter.
I am worried that decisions in Europe do not take account of the interests of the people who want aid. The Lomé convention demands that when aid is given, the interests of the recipients should be taken into account. The people who receive aid are entitled to state their views. They are entitled to say that they are grown up, that 392 they are men, that they know what they want and could they please have it. The Minister is not a grandfather yet but I am and I know that grandchildren make demands that are sometimes easier to meet than are those of one's children.
The ten countries in the Leeward Islands make a plea which is reasonable, well-considered and which should be met. Someone is standing in the way of that request being met. I speak without notes because I feel strongly about the issue. Between 1939 and 1945 I flew aircraft in that area. I am a member of the executive committee of the Commonwealth Parliamentary Association. I have met people in the eastern Caribbean who are extremely well-informed and say that they want and need the Super 748. I should like the European Commissioner to hold my hand and fly with me in the aircraft which he proposes should be used in the eye of a hurricane and see whether he is frightened.
The Leeward Islands Air Transport company, the 10 Governments involved and the Caribbean bank involved all want the Super 748. We demand nothing more than that. I know that the Minister for Overseas Development is on my side. Why are the Europeans being so foolish in their first decision about aid to the Caribbean? I wonder whether they are being foolish or sinister. The French are a nice people. As a Welshman I find them nice on the rugby field, but I am not sure whether they are nice when it comes to economic decisions. Does the Minister think that the decision has been made wisely?
All 10 Governments involved want the Super 748. The airline operates in difficult circumstances. The Minister would be frightened if he had to land four times a week in the airports in that area. British Aerospace has been generous. It has told Governments that LIAT want the aircraft and that it approves it. If LIAT wants advanced technology as distinct from appropriate technology British Aerospace is willing to accept a delayed decision. Indeed, British Aerospace is prepared to say, "All right, take the 748 advanced version. Let us support the islands in their need for tourism. If, at the end of the day, we are wrong, it can be undone and the money which is available can be used later for an advanced technology." I have never heard of such a reasonable and generous offer.
§ Mr. John Wilkinson (Ruislip-Northwood)The hon. Member for Eccles (Mr. Carter-Jones) was courteous enough to say earlier that I could intervene in his speech. As chairman of the Conservative party's aviation committee, may I associate the Conservative party with his remarks and say that it would be wrong if the professional and technical selection of the Super 748 by the Leeward Islands Air Transport company were overturned by the diktat of the EC aid authorities?
§ Mr. Carter-JonesWhat a lovely intervention! It shows the Minister that all hon. Members agree completely on this matter. We are worried that a decision is about to be made that is completely opposed to what the people of the area require.
I repeat that all 10 Governments and the airline involved want the Super 748. It is a very difficult area in which to fly aircraft. In 1979, I was involved in rescue operations after hurricanes and I flew in such an aircraft, which is superb and the best available. If the Super 748 is not chosen, there will be anxiety on both sides of the House and a demand for an inquiry.
393 I wonder whether the Minister would be willing to fly with me and say, "All right, mate, you and I can go together because we have been involved for a long time in the problems of disability and technology". Will he fly with me—he is young and I am old—together with the European Commissioner, in the French aircraft into a hurricane, shall we say next week? I should tell him that the eastern Caribbean requires the new aircraft next week, because the existing one, which has already made between 60,000 and 80,000 landings, is clapped out by any standards. The aircraft that will fly in tomorrow has already done 60,000 landings and tomorrow it will have done 60,000 plus one. Would he be happy with that? That is what he is imposing upon the people of the area.
When the Minister presents his case in Europe, I hope that he will remember that the Caribbean countries need an aircraft that is reliable and sturdy, that can land in all circumstances, no matter how difficult, and that can carry full loads on time at all times.
To digress for a moment, I should tell the Minister that I am not happy that the eastern Caribbean depends upon tourism. However, that is the way that the cookie has crumbled. The Minister and others before him have made the eastern Caribbean a tourist area, and we must accept that, however reluctantly. But having accepted it, we must ensure that the new aircraft meets the needs of tourism not in 1986 or later, but now. The decisions that are being made in Europe are either silly or sinister. Will the Minister invite the responsible Commissioner to join us in the moment of great difficulty when we fly in the eye of a hurricane in the untried, unproved and unknown airccraft which Europe wants us to accept for the Caribbean, or will he support us strongly in Brussels by saying that the aircraft that everyone wants is known and has been operated in the area? That aircraft is the HS748. The various options can be considered and decided upon later to everyone's advantage.
§ The Minister for Overseas Development (Mr. Timothy Raison)It is useful that the hon. Member for Eccles (Mr. Carter-Jones) has raised this topic, which has attracted considerable publicity in recent weeks.
The interest shown in the aircraft replacement programme of Leeward Islands Air Transport, LIAT, obviously reflects the vital role that this airline plays in the development of the Caribbean. Development aid is not normally used for re-equipping airlines. LIAT is an exception because it provides a public air transport service between the islands of the eastern Caribbean.
The present company is owned by 11 shareholding Caribbean Governments and was formed in 1974. LIAT is incorporated in Antigua and its operating area covers 15 island states and territories in the eastern Caribbean.
With no scheduled passenger boat services between the islands, air transport is the only means of transport for business, family and tourist travellers. The tourist industry in the region is heavily dependent on LIAT. Without a reliable air service this industry could not continue.
Before examining the details of the European development fund project for replacing LIAT aircraft, I think it is important to establish the role of the Commission and member states on procurement matters. The choice of contractors for projects financed by the European 394 development fund is a matter for the Commission, which has to act in conjunction with the recipient states in accordance with the rules laid down in the Lomé convention. Under the terms of the convention, the Commission must ensure that the economically most advantageous offer is accepted. Member states expect these rules to be fully and fairly applied in all cases, but are not themselves involved in the examination of tenders and the placement of contracts. Member states play their part much earlier when they approve the project proposals which give rise to the placing of contracts.
I shall set out the history of this project. In 1983, following an EDF-financed study, EDF aid totalling £3.4 million was provided for improving LIAT's operational and financial performance with an "immediate needs package".
The EDF project is intended to follow this earlier investment in equipment as part of an overall programme of improvement. It results from an EDF-financed study in 1983 on LIAT's aircraft requirements. This concluded that LIAT's aging 48-seater British Aerospace 748s should be replaced by four new turboprop short haul aircraft of similar passenger capacity.
Following a request from the Caribbean Economic Community, the European Community agreed to finance the procurement of these new aircraft at a cost of 26 million European currency units. Of this 16 mecu would be loaned by the Commission to the Caribbean Development Bank for on-lending to LIAT; and 10 mecu loaned by the European Investment Bank to LIAT's shareholder states to finance new share capital and shareholders' loan to the company.
The Commission and EIB project proposals were approved by member states in February 1984. Approval was on the clear understanding that the three European manufacturers of suitable aircraft—British Aerospace, Fokker of the Netherlands and Aerospatiale/Aeritalia, a French/Italian joint venture — should be allowed to negotiate with LIAT for the aircraft to be procured. It was also agreed that the Commission would engage independent consultants to observe the negotiations between LIAT and the manufacturers. The exact specifications of the aircraft to be supplied would be subject to negotiation, but the aircraft finally selected should represent the economically most advantageous offer.
Negotiations between LIAT and the three manufacturers were opened in April. The independent consultant—Lufthansa—and the Commission delegate in Barbados took part as observers in the proceedings of the LIAT selection committee. In July this committee made a unanimous decision in favour of the British Aerospace Super 748. Its choice was subsequently endorsed by the LIAT board and the Caribbean Development Bank, which communicated this decision to Brussels.
Following meetings in Brussels in September and October, the Commission informed the CDB and LIAT that their choice could not be considered to be economically the most advantageous offer. The Commission claimed that the economic and financial analyses carried out both by their technical services and by the consultant favoured the French/Italian ATR 42 offer. LIAT continued vigorously to contest this decision and the Commission agreed to reconsider its position if LIAT could demonstrate that some crucial factors had been left out of the Commission's analysis. A detailed 395 economic rebuttal of the Commission's case was presented yesterday to the Commission by the Caribbean Development Bank. Caribbean representatives are planning to discuss this submission with the Commission next week and a final decision on the selected aircraft is expected shortly after that.
I share Members' concern about the problems in reaching agreement on the placing of a contract for new aircraft. When this project was approved by member states in February, it was hoped that the first aircraft could be delivered within six months. LIAT still remains in need of an immediate solution to the problems of its aging fleet. This was apparent during my visit to the Caribbean last month. Everywhere I went Ministers made clear to me their overwhelming preference for the Super 748 and their dissatisfaction wih the Commission's analysis. I urged the LIAT board to present any additional information it had to the Commission, and I am glad that that has now been done.
I understand that LIAT wants Super 748s because these are available for early delivery and will therefore lead to an immediate improvement in its financial position. Super 748s have proven reliability, and since LIAT already operates similar aircraft, their choice would avoid the retraining and maintenance problems of operating a different aircraft. Moreover, I understand that the British Aerospace offer contains a guarantee to buy back the aircraft at any time up to four years after their acquisition for the amount paid for them. This would give LIAT the possibility to consider new technology aircraft as and when the latter were proven and if the airline decided they were right.
On 5 October the annual general meeting of LIAT's shareholders resolved not to purchase unproven new technology aircraft at present and thus rejected the ATR 42 offer, since the aircraft will not be commercially available for 18 months. The airline also has doubts about the operational suitability of the ATR 42, especially over the number of refuelling stops required.
The Commission's task in reconciling the requirements of the airline, the competing claims of the manufacturers and the need to ensure value for money from EDF investments is not easy. The Commission wisely sought expert assistance. Having received the report of the independent aviation consultants on the economically most advantageous offer, the Commission could hardly ignore it. Its subsequent decision in favour of the French/Italian offer was made after considerable economic and financial analysis. The Commission took the view that it could not be expected to re-examine its decision unless objective counter-evidence was produced to demonstrate shortcomings in its analysis.
However, LIAT has now produced this counter-evidence. Its detailed analysis apparently concludes that the British Aerospace 748/ATP solution is economically superior to the ATR 42 solution when realistic assumptions concerning aircraft scheduling and traffic 396 growth are made. In addition, LIAT claims that the analysis confirms that the various operational arguments already deployed against the ATR 42 remain valid.
In recent weeks I have spoken about LIAT both to Commissioner Pisani and to the Director-General for Development, expressing my concern over the problems the Commission has encountered in reaching agreement with the recipient Caribbean Governments over replacement aircraft. I wrote to Commissioner Pisani last week following my visit to the Caribbean. I indicated the concerns of the Caribbean Governments and others who have expressed their deep anxieties about the future of LIAT, for whom this project represents so much. I informed Commissioner Pisani that LIAT would be sending a further detailed economic analysis in support of its choice of aircraft. I know that he will review this most carefully. He has always respected the developmental needs and wishes of Community aid recipients. I believe he could be persuaded by objective analysis showing that the Super 748 offer is economically the most advantageous.
The House is understandably united in its desire to see British Aerospace secure the EDF contract for supplying new aircraft to LIAT. I share that wish, but we must respect the Commission's authority in this matter and the Lome convention rules on placing EDF contracts. Those rules were designed to ensure that aid gives value for money. Adherence to them is essential to our long-term aim of improving the quality and effectiveness of EDF aid. The House should also be aware that insisting that the Commission rigorously applies the Lome tendering rules has worked to the United Kingdom's commercial advantage.
§ Mr. Carter-JonesWe are all in total agreement about this matter. All we want is for the Commission to say that it will make an honest judgment. The Minister must realise that he has support from both sides of the House, but some of us will say to the Commission, "If you cannot make an honest decision after honest surveys by expert people, and you allow your prejudice to show, do not be surprised if the Brits are very unhappy about the way in which decisions are made in Europe."
I shall press for a full-scale inquiry into the way in which the Commission makes decisions about matters such as this. I am in total agreement with the Minister and I support him all the way, but I reserve the right to say that I want a full-scale inquiry.
§ Mr. RaisonThe hon. Gentleman has summed up the position by saying that we want an honest judgment. I have made it clear to Commissioner Pisani that the United Kingdom expects the procurement rules to be fully and fairly applied in the case of the LIAT contract. However, I believe that Commissioner Pisani will ensure that that is done. The force of the debate and the points that LIAT has made must be considered with great care.
§ Question put and agreed to.
§ Adjourned accordingly at three minutes to Three o'clock.