§ 3.49 p.m.
§ THE MINISTER OF STATE, MINISTRY OF TECHNOLOGY (LORD DELACOURT-SMITH)My Lords, with the leave of the House, I should like to repeat a Statement which is being made in another place by my right honourable friend, the Minister of Technology. The Statement is about Beagle Aircraft Limited. It is as follows:
"When the Government decided in 1966 to take over the Beagle Company, there was a reasonable possibility of the company becoming self-sufficient within a few years. These views were in line with those of the Plowden Committee on the Aircraft Industry which recommended that the Government should give assistance to the building of light aircraft, but should review progress from time to time if the light aircraft business were not approaching the objective of self-sufficiency within a few years.
"As was explained to the House during the passage of the Industrial Expansion Bill, the company then expected to break even in 1972. The company's board have recently reassessed the position and put revised proposals before my Department. Despite considerable achievements during the intervening period the board have represented strongly to me that a commercially viable future would require the development and introduction of a wider product range, including new designs of twin-engined aircraft. Production would be needed on a large scale demanding larger sales, including significant penetration of the American market. Such a programme would require additional working capital of £6 million over the next few years and probably more later to build on the foundations which the board would by then have laid. This reassessment puts the break-even point three years further off.
"After giving the most careful consideration to these proposals the Government have regretfully concluded that, having regard to the need to contain Government expenditure there is not sufficient priority to justify the 32 investment of further public funds in this enterprise in the face of the many competing demands on national resources.
"In the circumstances, the board of Beagle Aircraft Ltd. have had no alternative but to ask their bankers and the Government to appoint Mr. Kenneth Cork as Receiver and Manager as the appropriate step for the preservation of the undertaking and the assets of the company. This the bank and the Government have agreed to do.
"I am not sorry that we made this effort to bring the industry back on its feet. In this we have been excellently supported by the management and workers of the company, who have made the most valiant efforts.
"I hope that those parties who have recently expressed interest in the acquisition of the company will come forward with firm proposals, which will secure the employment and the long-term prospects inherent in the aircraft already developed."
THE EARL OF BESSBOROUGHMy Lords, we on these Benches are grateful to the noble Lord, Lord Delacourt-Smith, for having repeated that Statement here. We naturally deeply regret that it has been necessary to appoint a Receiver. I thought that the company had been doing fairly well with the Pup aircraft, even exporting them to the United States, as well as to South Africa and elsewhere. The noble Lord must forgive me for having partially lost my voice; but may I ask him what is to happen to the aircraft they are exporting at the moment? Secondly, can the noble Lord say anything further about the parties who may be interested in taking over the company?
I wonder whether any thought has been given to tying up with European partners? I asked this question of the noble Lord in another context only the other day. However, I recognise that the Government are heavily committed on other capital projects, and I certainly would not urge them to raise another £6 million in this particular case to enable the company to develop a wider product range and new designs. None the less, we deeply regret this decision, and hope that other firms, either in Britain or in Europe, will come forward to help 33 save this company which, in the past, has had a good record. I would join with the noble Lord in a tribute to the management and workers in the company.
§ EARL AMHERSTMy Lords, we on these Benches also thank the noble Lord for making the Statement, and express our regret that this company should have been overtaken by ill-fortune. We note that it is possible that interests may be coming forward to provide the necessary finance so as to enable the company to carry on. In the meantime, can the Government say what is to happen to the staff of all categories, both in this country and overseas—if there are any overseas? What is to happen to the aircraft that have already been constructed, but not sold? I think that question has already been asked. And what is to happen to those aircraft that are mow partially constructed in the workshops? Lastly, I should like to repeat a question which has already been asked. Is there any possibility of a link up with Europe that could provide a wider market for this company than has been the case?
§ 3.55 p.m.
§ LORD DELACOURT-SMITHMy Lords, I am grateful to the noble Earl, Lord Bessborough, and the noble Earl, Lord Amherst, for the comments which they have made. We share to the full the regrets and disappointment which they have expressed at the situation which has arisen and the conclusion to which we have felt obliged to come.
So far as the position of the aircraft at present in course of construction is concerned, as I said, a Receiver and Manager has been appointed, with power to continue the business for the time being. We must give him time to examine the position, and at this stage I cannot anticipate the outcome of his examination. As to the position of the employees, the situation is that there are approximately 580 at Shoreham-by-Sea, and a further 500 at Rearsby, near Leicester. Their future in the light aircraft industry will depend upon the outcome of the operations of the Receiver and Manager. Noble Lords have asked about the interest shown in this company by other interests, and the possibilities of further finance being forthcoming 34 from sources other than Her Majesty's Government. At this stage I cannot say more than that the points which have been made in respect of the European and United States markets are very much in the minds of those who have been concerned with this situation. There are indications of interest from a number of quarters—these include major American concerns—but I do not think that either I or my right honourable friend can give any further details at this stage.
§ LORD PARGITERMy Lords, may I ask the Minister what is the present asset value of the company as a going concern? What relationship does that bear to the £6 million extra?
§ LORD DELACOURT-SMITHMy Lords, I cannot give a figure for the asset value of the company as a going concern. That will only emerge in the course of examination of the situation by the Receiver. The figure which my noble friend has quoted of £6 million is the sum which has been put into this company in the period since 1966.
§ LORD BALFOUR OF INCHRYEMy Lords, I have listened to the Minister's Statement with deep regret, as has been expressed by other noble Lords. May I ask the noble Lord whether he does not feel that Parliament and the public are entitled to rather fuller information than is contained in a Parliamentary reply on such matters as the amount of public money which has to be written off? Also, such information as to the number of men who will be thrown out of work; the numbers of aircraft which have been produced, and, most important of all, some further information as to why this debacle has come about for a company which we were told had bright prospects, enjoyed public confidence, public money and had a market available in the medium type of aircraft? I would press the Government to issue a White Paper giving further details of this very sad transaction.
§ LORD DELACOURT-SMITHMy Lords, as I have already said, it is a situation which is a matter of disappointment and regret to all of us. I am sure that the noble Lord will agree that it was right that a Statement should be made to Parliament at the first possible moment, and this has now been done. 35 There will no doubt be further opportunities for more detailed examination and debate upon the subject. That is not a matter for me. I will communicate to my right honourable friend the suggestion that has been made about the possibility of a White Paper, or some other fuller statement upon the matter. At present, as I have indicated, the conduct of the company's operations has passed into the hands of the Receiver, and to some extent we must await the outcome of his examination of the position.
§ LORD GRANVILLE OF EYEMy Lords, may I ask my noble friend this question? If no other concern is likely to come forward to take over this young and enterprising company, does this mean that we shall virtually disappear from the light aircraft manufacturing market?
§ LORD DELACOURT-SMITHMy Lords, as I think my noble friend will be aware, there is at least one other company operating at present in this country in this field. It is certainly the hope of my right honourable friend that it will be possible, in the light of the Receiver's inquiries, to achieve a solution which will make use of this country's long experience and skill in the light aircraft field.
§ LORD HANKEYMy Lords, would the Government agree that the failure of this company, after a considerable injection of Government assistance, must be partly attributed to the "squeeze"? Would the Government watch the operation of the "squeeze" and its effects rather closely, in order that further failures such as this may be avoided?
§ LORD DELACOURT-SMITHMy Lords, I am afraid I cannot accept the implication of the noble Lord's question. I do not think it can be said that the "squeeze" has been a factor of the importance he attributes to it in this case.
§ LORD BROUGHAM AND VAUXMy Lords, would there be any chance of the Government's reducing the tariff on imported aircraft so that people who need these aircraft, either for business purposes or otherwise, will be able to buy them more readily than they can when they 36 have to pay out so much money because of very high import duty?
§ LORD DELACOURT-SMITHMy Lords, I am afraid that that is another question.