HC Deb 09 February 1994 vol 237 cc277-8
8. Mr. Lewis

To ask the President of the Board of Trade how he proposes to assist the aerospace industry in the north-west.

The Minister for Industry (Mr. Tim Sainsbury)

The aerospace industry in the north-west benefits from a positive business environment, Government support for military and civil exports, specific Department of Trade and Industry programmes to help the industry and substantial orders from the Ministry of Defence as a customer.

Mr. Lewis

I put a similar question and the Minister gave a similar answer a month ago. What happened? In that month, British Aerospace at Lostock has shed another 300 jobs. Since the Conservative party came to power in 1979, about 5,000 jobs have been lost at that plant. When will the Minister really do something instead of coming here and talking bull?

Mr. Sainsbury

I welcome the hon. Gentleman's recognition of the consistency of my answers. I suppose that if I changed them, I would be accused of making a U-turn. Naturally, we all regret the job losses, but I think that the hon. Gentleman is aware that the change in the requirements for defence equipment underlies those losses and I am sure that we all welcome the reasons for that change. The problems that that change is causing the aerospace industry are widespread. They are worldwide and do not affect merely this country.

If I can give the hon. Gentleman two examples, between 1989 and 1993, the United States aerospace industry is reckoned to have lost one third of all its jobs; and the German industry, Deutsche Aerospace, recently announced 16,000 job losses. We regret the job losses at Lostock, but it is inevitable that changes in defence requirements will lead to changes in the requirements for staff.

Mr. Hawkins

My right hon. Friend will be aware that many of my constituents work for British Aerospace at Warton. Does he agree that, during the past decade, the aerospace industry has made a consistent and positive contribution to the United Kingdom balance of payments—£2.3 billion last year. In contrast to the negative comments by Opposition Members, the British aerospace industry is a continuing success and will go to even greater strengths once the European fighter aircraft 2000 is built by many of my constituents.

Mr. Sainsbury

I am happy to join my hon. Friend in paying tribute to the industry's considerable achievements, especially in exports. The industry is uniquely helped by the Government and has received more than £1.5 billion of Government support since 1979.

Mr. Eastham

Now that the Minister has expressed regret at the massive loss of jobs in the aerospace industry, what positive measures is his Department taking to give some positive encouragement to the aircraft industry for the development of the C130 large aircraft?

Mr. Sainsbury

The hon. Gentleman will be aware from the reply that I just gave that the Government have given consistent and very substantial support to that industry through a number of programmes. The Royal Air Force's choice of aircraft is a matter for my right hon. and learned Friend the Secretary of State for Defence. However, I can give an assurance that my Department is keeping a close eye on the alternatives and on their importance for the British aerospace industry.

Mr. Mans

Does my hon. Friend agree that the sale of Rover to BMW will allow British Aerospace to concentrate on its core activities—in particular, its aerospace activities in the north-west? Does he agree also that it is still important that Government launch aid is available for long-term civilian projects in the aviation industry?

Mr. Sainsbury

I am glad that my hon. Friend draws attention to the advantages to the British aerospace industry of BAe's recent sale of Rover to BMW. That matter was rather overlooked by the carping critics of the Opposition. BAe emphasised the advantage when, in its letter to my right hon. Friend the President of the Board of Trade, it drew attention to the fact that this arrangement enabled it to progress plans for the turbo-prop and regional jet businesses based at Prestwick and Manchester.

Mr. Fatchett

During the past six weeks, more than 1,000 jobs have been lost in the aerospace industry in the north-west of England. The people affected will be leaving British Aerospace with a small redundancy payment after many years of service. What sort of leadership is British Aerospace giving to the industry when its chairman, John Cahill—a tax exile for nine months of the year—is to receive a golden handshake of £10 million? Would not it be better for British Aerospace to improve its business practices? Does not the Minister agree that such behaviour is totally unacceptable and totally wrong for Britain's aerospace industry?

Mr. Sainsbury

I suppose that it would be too much to expect the hon. Gentleman to recognise the benefits to British Aerospace's aircraft interests that have been brought about by the sale which I mentioned, but perhaps even he will recognise that the figures to which he has referred—figures that he, like me, will have seen in the press—arise from the very significant increase in the value of BAe's shares. That increase reflects the market—[Interruption.] That is a typical reaction from the Labour party. A company is successful—it increases its profits and its value—and the Labour party complains. Labour Members want to see failure, not success.