HC Deb 27 February 1985 vol 74 cc319-21
5. Mr. Robert Atkins

asked the Secretary of State for Trade and Industry when he last met British Aerospace representatives to discuss the future of the company.

The Minister for Information Technology (Mr. Geoffrey Pattie)

I see the chairman of British Aerospace plc and his senior colleagues frequently.

Mr. Atkins

Does my hon. Friend not recognise that the future of the company will be in grave jeopardy if the European fighter aircraft project does not go ahead? Does he not agree that jobs in my constituency and in many other constituencies and the British aerospace industry as a whole will be affected adversely if something does not happen shortly? Does he not recognise that that would cost the Exchequer a great deal in lost tax and in the payment of more unemployment benefit? Does he not agree that it would be better to let the project go ahead and keep people at work?

Mr. Pattie

My hon. Friend no doubt knows that the Government and my Department in particular are fully aware of the issues he raises. The question is less one of when and whether the project will go forward, than of one in what form. That is what is occupying our attention at present.

Mr. Carter-Jones

Is the Minister aware of the difficulties that have arisen about selling the super 748 to the LIAT company? Is he aware that 10 countries wanted the 748, that the airline wanted it and that the Caribbean Bank wanted it, but that the European Commissioner said no? Will he ensure that the European Commissioner does not say no in future?

Mr. Pattie

I cannot give the House an undertaking that I can prevent any European Commissioner saying no in future. The hon. Gentleman will be aware of the satisfactory outcome that appears to be in prospect in regard to that matter. The Government have offered support in the form of grant-aid from the aid trade provision representing 38 per cent. of the value of the British Aerospace bid. The balance of the contract price has been offered on normal terms.

Mr. Warren

Bearing in mind the way in which my hon. Friend is always keen to promote exports, will he consider the difficulties that beset British Aerospace, in that if it cannot get export credit guarantee cover for exporting, it should not be expected to pay a levy of 7.5 per cent. to the Ministry of Defence on a successful sale? Will he have words with his opposite number in the Ministry of Defence to try to introduce some rationale?

Mr. Pattie

These matters are frequently the subject of close exchanges between my right hon. Friends in the Ministry of Defence and our Department.

Mr. Beggs

Does the Minister agree that British Aerospace is not dependent upon the award of the contract for the RAF basic trainer, whereas Short Bros in Belfast would be justified in having that contract, since it receives only 2 per cent. of defence work?

Mr. Pattie

I hope the hon. Gentleman and the House will agree that the prime consideration has to be the technical acceptability of the aeroplane for the needs of the Royal Air Force. Only when that has been assessed — that process has not yet been completed by the Ministry of Defence — can consideration be given to any of the matters which the hon. Gentleman has rightly brought to the attention of the House.