Aerospace Industry (Hansard, 12 January 1994)

§ 3. Mr. Hanson
To ask the President of the Board of Trade what assessment his Department has made of the future prospects for the British aerospace industry; and if he will make a statement.

§ The Minister for Industry (Mr. Tim Sainsbury)
Prospects for long-term growth in the aerospace industry remain good.

§ Mr. Hanson
In the light of the projected job losses in the defence industries which will impact heavily on the aerospace industry, will the Minister today give a firm commitment to implement the unanimous recommendations of the Select Committee on Trade and Industry, particularly those relating to defence diversification?

§ Mr. Sainsbury
As the hon. Gentleman knows, orders from the Ministry of Defence are a matter for my right hon. and learned Friend the Secretary of State. He will also know that, as a result of the peace dividend, which we all welcome, the number of such orders is likely to be significantly lower than it was in the 1980s. We discuss that matter with the industry and do what we can to help it overcome it. It is, however, a problem not just for the industry in the United Kingdom but for industries throughout the world. As the hon. Gentleman will be aware, the United States aerospace industry looks likely to be cut by about a third as a result of the drop in orders.

§ Sir Thomas Arnold
What steps is my right hon. Friend taking to maintain good trading relations with China? Is not that a major export market for aerospace?

§ Mr. Sainsbury
My hon. Friend is right to identify China and the whole Asian and Pacific rim area as a major source of opportunity for aerospace exports—not just of complete aircraft but of aero engines and equipment. My hon. Friend the Minister for Trade and the whole Government are giving a great deal of attention to that area.

§ Mr. Fatchett
In The Observer last Sunday, the President of the Board of Trade claimed that there was now a partnership between the DTI and leading British companies. Against that background, can the Minister explain why every leading British aerospace company that gave evidence to the Trade and Industry Select Committee complained about the lack of support from his Ministry? Why is it that leading British aerospace companies, in contrast to their counterparts in France, Germany and America, cannot rely upon the Government for long-term help and for a strategic view of the industry's future? Is not it the case that the Government and the Ministry simply have no view of the long-term importance of Britain's aerospace industry?

§ Mr. Sainsbury
Perhaps the hon. Gentleman would like to study a little more carefully than he has the evidence that was given to the Select Committee and, if he is able, to develop a slightly closer dialogue with the aerospace industry. If he does, he will find that the situation is very different from that which he describes. I assure the hon. Gentleman and the House that the Government will continue to support this important industry in the way that we have done consistently and effectively since 1979, with a programme of support amounting to more than £1.5 billion.

§ Mr. Nicholas Winterton
My right hon. Friend will be aware of the immense importance of the regional jet division of British Aerospace based at Woodford in the north-west. It is especially important to my constituency and to that of my hon. Friend the Member for Hazel Grove (Sir T. Arnold), as well as to Cheadle and Tatton. What is the Minister's understanding of the current position in the negotiations between British Aerospace and the Taiwan Aircraft Corporation? In the spirit of partnership that is so vital to industry nowadays, what assistance are the Government giving to ensure that the negotiations are ultimately successful?

§ Mr. Sainsbury
I recognise the importance of that aerospace plant to my hon. Friend's constituency and those of my other hon. Friends. As he will be aware, we have kept in the closest possible touch with the company and have provided it with a great deal of assistance in the course of the negotiations. I understand that the companies have so far been unable to conclude a deal. However, talks on possible collaboration are continuing and I understand that AVRO, which is the name that British Aerospace has given to the venture, is considering other options. A welcome development is that the general fortunes of this business are improving.

§ Mr. Beggs
Will the Minister join me in welcoming today's announcement by the newly appointed Minister with responsibility for the economy in Northern Ireland that unemployment in the Province has fallen below 100,000? Regrettably, that is still 13.3 per cent. of the work force. Does the Minister share my concern that 400 redundancies have been announced at Shorts, the most efficient and effective unit in the Bombardier group? Will he assure me that he will support Shorts as it seeks to obtain new orders overseas which will enable it to reinstate those who have been made redundant and create new employment opportunities?

§ Mr. Sainsbury
I join the hon. Gentleman in welcoming the reduction in unemployment in Northern 163 Ireland, but I recognise, as he does, that it is still far higher than we would like it to be. Indeed, I welcome the reduction in unemployment throughout the United Kingdom. Shorts is a remarkably successful company whose productivity has been transformed and it is using the considerable skills of its work force to great effect in the aerospace industry. I join the hon. Gentleman in regretting the recently announced job losses and, of course, my Department will continue to give as much help as it can to Shorts to enable it to obtain orders not only in this country, but throughout the world.