THE BRITISH AEROSPACE INDUSTRY

HL Deb 15 March 1972 vol 329 cc434-508

2.44 p.m.

THE EARL OF KINNOULL rose to call attention to the future of the British aerospace industry; and to move for Papers. The noble Earl said: My Lords, in my researches over the past debates in the House on the aerospace industry, I have found, apart from the all too frequent appearances of Statements and specific debates on the various crises which have arisen in the industry, that the last debate on the industry as a whole was in 1966—a debate on the Plowden Report, initiated, I may add, most ably by my noble friend the Leader of the House. That Report, the House will recall, examined in some depth the industry as a whole, its efficiency, its role in our economy and its future. I think it is fair to say that the general theme of that debate in 1966 was to stress the need for the industry in national terms and the continued support it must have from the Government to keep it in the first division of world technology—a position it has proudly held really since the beginning of aviation. I say this at the outset because few, I believe, would disagree basically with that theme to-day.

The arguments for a virile, competitive industry are as strong to-day as ever. They include the vital role the industry plays ill our national defence; the in valuable contribution it makes annually in our balance of payments, which, one notices, has risen encouragingly from £101 million in 1964 to £328 million in 1971 and represents some 15 per cent. of the world trade; and, of course, the immeasurable spin-off benefits that arise from this advanced technology. Yet there are to-day, I believe, some who genuinely begin to question the need for the industry; who question whether the benefits of this high-cost technology really measure up to the vast investment of public funds that it absorbs annually; who question whether we are not all sold overboard in the name of technology and who question and point to what has happened to projects such as Concorde and the Rolls Royce RB.211 engine, and the strain both have placed on the Government's aerospace budget.

My Lords, while one respects these views, which on purely commercial grounds may look at first sight challenging, I hope that at the end of this debate my noble friend will be able to assure the House that Her Majesty's Government do not share them and that their policy remains firmly to support the industry to the point where it can continue to remain competitive and to serve the country's interests in the admirable way it has over the years. It is perhaps un fortunate that this debate coincides with a time when the Government policy-makers still await the outcome of the Marshall Committee which for some months has been investigating certain aspects of the industry, for one assumes that to-day my noble friend will be un able to be as forthcoming on policy matters as he would wish. Nevertheless, it is a little difficult for those outside Government to judge just how important the Marshall Committee is to Government policy, for this is yet another internal committee where the terms of reference, the evidence taken and the conclusions reached will never be made public. One wonders a little at the need for this veil of secrecy.

When one is considering the influences which will have the greatest effect on the industry over the next ten to twenty years, there are, I believe, three aspects which the Government should bear in mind in forming their policy. The first is the changing relationship between Government and the industry; the second is our future role in collaboration programmes and what areas we can develop ourselves; and the third is the increasing influence of environment on aviation in general. I do not think it is over-stating the case to say that the first of these—the relationship between Government and industry—is a relationship upon which hangs the continued success or the gradual decline of our industry as a world leader. This relationship has grown closer and closer together over the years as less and less has private investment found itself able to compete with the huge investments required in new projects, with the vast risks they entail and with the comparatively disappointing returns they offer. The Government are finding them selves to-day donning more and more the mantle, albeit reluctantly, of both financier and sponsor of the industry. This role has immense responsibility: a responsibility foremost to keep stability in the industry, particularly over its long term investment; a responsibility to foster a well-balanced research and development programme for the next generation of aircraft and a responsibility to ensure that industry has a fair work I load of both independent and also in collaborative projects.

My Lords, the framework which the Government adopt in this relationship with industry is only one ingredient of success. The other and the major part is clearly up to the industry itself to remain efficient in a fiercely competitive world and to demonstrate, as it has done so clearly in the past, its value in the economy. Those who have studied the industry's efficiency and have read the Elstub Report and have seen, perhaps more recently, the article written by Professor Saul, would, I believe, reach the conclusion that despite the oft-repeated criticism of productivity, or lack of it, the industry has a high degree of efficiency which no doubt could be bettered if it could be given longer runs and more confident forward planning conditions in which to work. The influence on the industry which the Government will undoubtedly have in future is. I believe, a matter which should not be underrated and the vision and lack of timidity which will be required in abundance in the offices of the Board of Trade are matters which I hope the Government will have firmly under review.

It is perhaps comforting to note that other Governments face similar problems with their aerospace industries. Perhaps the most acute case lies in the United States where, for the first time, it has been accepted that no longer can private investment fund a major civil project by itself, and that the resources of Government will be needed in the future. In order to combat the lobbying that may ensue, a new Government office is, I understand, to be set up in America and it will be known as the Office of Technological Assessment, whose prime purpose in life will be to help legislators to separate political invective from scientific fact, on decisions relating to supersonic transport, pollution control and environment.

My Lords, the second major influence to which I believe the industry will undubtedly be subjected is the future success of collaboration, not only with our European partners, with perhaps the formation of European aerospace companies, but also with other countries: Japan, Australia and of course the United States. Much has been written and said already about our experiences of collaboration and I am sure that the Government are well versed in the criticisms already levelled. But I would particularly commend the attention of my noble friend to the recent publication of the S.B.A.C. called A Future Plan for British Aerospace. Among the points made I would draw his attention to two in particular. The first is the sometimes harmful effects design leadership in the hands of our partners could have on our equipment in the future. The second is the desirability of more consultation with industry at the stage of negotiation. Collaboration has come a long way since the first steps were taken and a great deal of credit is due to those who have been involved from the start on the British side and who have patiently built up a rapport, understanding and trust between company partners. I believe that such men as Mr. Alan Greenwood, of B.A.C., deserve particular credit.

My Lords, the third issue which I believe will have a fundamental influence on the aerospace industry is, of course, environment. The strength of the environment lobby and its effect on aviation has already been clearly demonstrated over the decision about the Third London Airport. Here we saw the technologists lining up against the environmentalists and losing hands down, despite having convinced the Committee of Inquiry of their case. No one could accuse the Government of being slow to respond to the demands of environment. Besides coming down in favour of Foulness, targets have been set on reducing noise limits at air ports and controls have been imposed on night flying. From the industry side, intensive efforts have been made to reduce engine noise, witnessed by the RB.211 engine, and work, as we know, is progressing on the elimination of the smoke problem of Concorde. A good deal has been done in this field by industry and I believe it would be generally welcomed if an objective and thorough assessment could be carried out now on the positive contribution which the aerospace industry could make to the improvement of our environment. I hope that my noble friend may comment on this later.

Those are the three issues which I believe will have the greatest effect on the industry in the future. But what of the hardware being produced now, and that in the pipeline for the future? On the civil side, there are of course two projects which both dominate and mop up most of our available resources—Concorde and the RB.211. Both are projects to which the Government have now fully committed themselves. In the case of Concorde, the technical achievement and the lead which the British and French industries now have in supersonic flight is undoubtedly an invaluable asset. The project has been termed Europe's Apollo programme, and it is clearly a very long term programme before any Government investment can be reaped. Concorde has certainly come through some searching investigations as to whether or not it should proceed, and I believe that the Government are to be congratulated for demonstrating in recent months both their confidence and their full support for the project.

The stage of negotiations for sale between airline and contractors has now been reached and the timing could not perhaps have been more unfortunate. For the airline industry as a whole is facing a major and somewhat critical recession—albeit temporarily—and its financial status has been likened by some unkind observers to being more capable of purchasing bicycles than purchasing one £13 million Concorde. The outcome and success of current negotiations is eagerly awaited, and without wishing to tread on any delicate ground there are two questions which I should like to put to my noble friend. First, who will negotiate the rights to fly over the various countries on the anticipated routes, the airlines or the Government? Secondly, are all air lines, including B.O.A.C. and Air France, negotiating separately, or will some economic package deal be struck that makes sense to airlines and would allow a chance for all the major airlines to order some Concordes?

My Lords, the second major project, the RB.211, has been the subject of a number of soul-searching debates in this House and in another place. It is a project to which the Government found themselves firmly wedded virtually from the moment that they took office. As we know, its investment already exceeds some £250 million, and it is a project that involves some thing over 25 per cent. of Rolls-Royce effort and some 34,000 jobs in the British aerospace industry. I believe that the news about the engine is good and no doubt my noble friend will confirm later its progress of certification with the A.R.B. and the F.A.A. One understands that the news from Lockheed about the TriStar is good. But the crux of success is, of course, the sales of this aircraft. TriStar is competing in the coveted air bus market, against what now appears to be a combination of the A. 300B and the DC. 10. I say "combination" because the airlines see these two aircraft as fulfilling apparently both the shorter and also the longer range requirements with the same engine. The success of TriStar and the RB.211 project rests, I believe, on two factors—a breakthrough in sales in Europe and a decision to proceed with a longer range version to compete with the European Airbus/DC. 10 package.

The role of B.E.A., or more accurately the B.A.B., is clearly a vital factor in all this and, whereas one respects their right to exercise an independent and commercial approach to any fleet purchases, there is a case here, I believe, where the Government should request B.E.A. to decide their purchasing policy in the reasonably near future. Whatever then they independently decide can be taken into account no doubt by the Government in their final judgment of what is in the national interest. In saying that, one does not forget the valuable work share which Hawker Siddeley have in the A.300B. This is another aspect that the Government will have in mind.

My Lords when we come to the military side of the aerospace industry, the two projects attracting particular attention are the M.R.C.A. and Harrier. There are to-day an increasing number of aviation experts who consider that, with its VTOL capability, the Harrier has an outstanding potential future in markets abroad. Already we have seen the size able interest in the aircraft by the U.S. Marine Corps and encouraging signs from other countries. The Harrier has not been so favoured at home and I think it more than a little tragic for the aircraft that the Royal Navy has now taken 10 years in its evaluation trials—with still no decision arrived at. Sales abroad are not helped by such tortuous decision-making. I hope that my noble friend will be able later on to say something encouraging about the future development of the Harrier. Of the future projects under study, other noble Lords will, I am sure, be expressing their views, with emphasis no doubt on the potential of STOL and the need for quieter engines, both large and small, as well as our interests both in space and in guided weapons. It is encouraging to note that the rate of research and development carried out by Britain during the period 1960–67 exceeded that of all the E.E.C. countries put together—but even then it matched only some 8 per cent. of what the United States invest annually. I believe it would be of interest if perhaps my noble friend could indicate later the present level of our research and development compared with our European partners.

My Lords, no remarks on the industry, however brief, would be complete with out some reference to those who work in it. They are, I believe, among the most skilled, hardworking, dedicated and, I venture to say, patriotic men and women in the country. Their industry is capable of making a very great contribution not only to our economy but also to our sense of purpose and national pride. Let it never be forgotten that this industry is a growth industry, an industry by which our share of the world market has increased in the last five years from 10 per cent. to 15 per cent.—a remarkable achievement. Yet Governments in recent years have not been exactly steadfast to the industry, as witness the list of cancelled projects. This industry needs and deserves a bold and resolute policy, one that will allow it to retain its place in the world technology and one that will allow it to continue to serve our nation with the distinction that it has achieved in the past. My Lords, I beg to move for Papers.

3.5 p.m.

LORD BESWICK

My Lords, I am sure that those who work in the aerospace industry will appreciate the tributes paid to them by the noble Earl, Lord Kinnoull; and as one who now is included among them for the Record I must say I have an interest to declare which is true in the Parliamentary sense as well as in the sense in which it has been true for the past decades.

We are especially indebted to the noble Earl, Lord Kinnoull, for initiating this discussion at the present time. Decisions taken in the near future could determine the role which this industry will play in our national affairs; and as the noble Earl has said, it could, and should, play a significant if not decisive role, not only in our economic but our social and political future. As briefly as possible let me justify this. The noble Earl said that there are some to-day who question the value of the industry. Certainly it is no longer fashionable, or trendy, to talk of fall-out or spin-off; but the fact remains that any country with serious industrial intentions needs a pioneering technology. Unless a nation has an industry which is continually demanding new knowledge, new materials and new techniques then that nation will fall behind economically, and consequential social and political penalties will inevitably be paid.

Though some tend nowadays to be little the spin-off argument it can in fact be justified in great detail. I have here a long list of items now in wide and valuable use which initially were developed to meet a demand in aerospace. The list is too long to read out but it ranges from aluminium for saucepans, adhesives for furnitures, brakes with exotic friction materials, and, alphabetically, through fuels, greases, micro-miniaturisation, valves for heart surgery, X-ray techniques for metal testing to zenith determination for surveying.

There are other indications of the economic value of this industry. If we are thinking of employment, as we must to-day, this is a labour-intensive industry. Too often these days we establish a new industry in the regions but a big new capital-intensive industry (refinery or chemicals, perhaps) employs comparatively few, and can have even a negligible labour force. Of course one may argue that labour intensiveness can be merely an indication of excess labour; but if one refers to the index of productivity one finds that the aircraft industry heads the productivity league, that is value added per employee, for industries with similar capital intensity. It is sometimes said that, given State support, other industries could utilise the human skills now attracted to the aerospace industry. All that I say on that is that experience disproves it. Recent studies, notably the D.E.P. study into redeployment of labour following aircraft cancellations in 1965 and more recent studies by Professor Wedderburn into Rolls-Royce redundancies, have shown that skilled labour displaced from the aerospace industry. in the sizeable majority of cases, just has not found the opportunity to use those skills with equal effectiveness in other industries.

If there is this important background to the aerospace case (and I could amplify it if time were available) then what about the market? What about the prize? Before I give figures as to what can be done, let us remind ourselves of what has been done. Aerospace is an industry which actually increased its share of world trade in the last decade: from 10.2 per cent. in 1964 to 14.5 per cent. in 1968–69—and this at a time when Britain's total share of world export in manufactured goods declined. The aero space figures show an increase of exports from £102 million in 1964 to £278 million in 1970.

Looking ahead, the potential trade for 1980—and various researches by a variety of people agree on this order of size—is no less than an annual prize of £5,900 million a year for the world, excluding the Soviet bloc and China, and also, to be appropriately realistic, excluding the military market of the U.S.A. In the past three years the West European industry has achieved 25 per cent. of the market in this area. If the Common Market is going to mean anything at all, and if we are going to get, as we shall, commercial as well as technological benefits from European collaboration, then that 25 per cent. share ought to rise to at least 30 per cent. Thirty per cent of £5,900 million is a lot of business.

For Europe and for Britain in Europe, whether as an E.E.C. member or not, to make sure of this 30 per cent, share certain requirements, need, as the noble Earl said, to be met. The industry needs to be efficient. It can now claim, as the noble Earl said—and it can support that claim with facts—that it is efficient. But maximum efficiency in this industry, even above others, depends in large part on the ability to plan confidently and plan ahead. Stopping and starting in this industry is an enormously expensive exercise. Planning ahead with confidence is only possible if there is truly a proper partnership between industry and Government.

I hope, and expect, that Her Majesty's Government, after digesting the Report from Sir Robert Marshall and colleagues, to which the noble Earl referred, will decide that they will as a matter of policy support the aerospace industry. But they will be unfair to themselves unless this support is based on a more complete form and sense of partnership than has been the case in the past. I go as far as to say that without partnership of State and industry it is a waste of time and money to attempt to stay in this business. In one form and another, one gets this partnership in other countries the U.S.S.R., on the one hand, and the U.S.A., on the other, are examples. Maybe a more immediately relevant example is France. We have a good deal to learn from what has been achieved in that country—once the national decision was taken to have an aerospace industry.

I am not here talking simply of financial support, though obviously that has a part to play. Continuity and consistency of policy is of the essence of these things, plus a knowledge by individual companies of the forward planning by Her Majesty's Government. A certain amount has been done to help in this respect. The position now is better than it was a year or two ago. The noble Lord the Secretary of State for Defence referred a fortnight ago to steps taken to ensure better liaison on the military side, and that I am sure is to be welcomed. But a proper forward strategy means suitable integration on both civil and military sides. Could we not have an Aerospace Council, meeting under the chairmanship of a Minister to whom would be given full and frank information of Governmental needs and prospects of support, and which would enable industry to make more informed decisions and, equally frankly, to indicate its problems.

There have been such occasions in the past, under the chairmanship, I recall, of the late Sir Stafford Cripps and later. somewhat similarly, under Mr. Julian Amery. We could learn from those experiences. One lesson that we could learn I suggest, is that the Council would need to be more broadly based than it was on those occasions, with more than just representatives from within the industry: and to ensure continuity, I should like to see a member or members of the Opposition included. I do not ask for a decision on this suggestion, but I should welcome an indication that the idea will be considered.

There is another factor which, pre sumably, will be considered by the Mar shall Report and which certainly could have an impact on the effectiveness of the British industry. I refer to its shape and structure. There is a school of thought which favours one airframe and one aero-engine company for Britain. I have heard it argued that this would put a timely end to the "Buggins's turn" method of allocation of Government orders; and that it would prevent un seemly soliciting for contracts. From the industry viewpoint, there are obvious and exciting attractions to being a national monopoly. A very plausible case can be made out for the merger between the two existing major airframe companies, but I hope that Her Majesty's Government will not fall for this line of argument. A customer seldom finds his bargaining position improved if he has the choice of one supplier at home or the opportunity of a trip abroad. Of course, I recognise that the owners of the present companies have more than a little to say as to what should happen to the present set-up, but the Government do have both responsibility and power to influence events in this field—I have in mind both their influence as a customer and their resources of monopolies legislation. I ask that the noble Lord who is to reply will give us to-day a little of the thinking on this aspect of the matter.

The industrial pattern in Britain is also very relevant to the future pattern in Europe. If we bear in mind the volume of business which I have already indicated, the general view of those who have given thought to this is that two European airframe companies should be the ultimate aim. With two British units we could have a share in each of these two European groups. If we whittled down the British industry to one unit, then almost inevitably the tendency would be towards a nationalist solution, with Britain versus the rest. I ask the noble Lord, Lord Drumalbyn, is that really what we want?

On the engine side, we already have a British monopoly. There are few who know about these things who would now claim that it is an entirely satisfactory position. This is not the occasion for speculating about future European developments on the engine side. The immediate, indeed urgent need is to get the Rolls-Royce position on a really healthy basis. Her Majesty's Government have invested a lot of British money in this business, and it really is indefensible that the leadership is still on a temporary basis. The noble Lord, Lord Cole, and Mr. Morrow rendered a tremendous service when they responded to the invitation to take over in that regret table emergency. But in fairness to customers, workers of all grades, and not least to the British taxpayers, the Government should make possible present and future leadership for Rolls-Royce which its past achievements deserve. Such a leadership, if it is to be fruitful, must include an effective engineering capability. I say no more on that, but here again I trust that the Minister who is to reply will be able to say that acceptable decisions are imminent.

In these debates in either House it is usual for pleas to be made—and the noble Earl, Lord Kinnoull, made some to-day—for additional financial support for one new project or another. I am happy to say that, apart from a plea for participation in the post-Apollo programme, about which I shall say a little more in a few moments, there is no potential project languishing for lack of Government support. I must say something, however, about the remarkable effort now being made throughout industry and in Government establishments to reduce, indeed almost to eliminate, aircraft noise as we know it. The evidence given to the Roskill Commission on this issue was, to put it mildly—and I believe the noble Lord, Lord Kings Norton, will agree with me on this—lamentably inadequate. When some of us argued that the decision on London's Third Airport should take into account the prospect of reducing noise at source, we found a quite irrational, if politically very popular, pro-environment and anti-technology attitude. The truth is now emerging—and this is what I wish to stress—that technology, properly planned and used, is the friend, not the enemy, of the environment.

There has been quite remarkable development in engine design. The RB.211 engine in the Tri-Star aircraft, to which the noble Earl referred, will intro duce a new era so far as noise is concerned. If we take the area of noise pollution at an airport, the so-called noise footprint, as being 30 square miles to-day, to-morrow, with the Tri-Star, the area affected to 90 PNd13 is 3 or 4 square miles, and in the days after to-morrow—if we ensure, as we can, that this comes about—by 1980 at any rate, with further engine refinements and an airframe which will take this reduced noise from the earth even more quickly, we can get down to just under or just over 1 square mile. Let me repeat that territory which is affected by aircraft noise will be just above or just under 1 square mile as compared with 30 square miles to-day. We can, therefore, get for short or medium haul, transport and communications which our economy needs and with no amenity penalty for society. In these circumstances I hope Her Majesty's Government will not take any decision about remote airports which would deprive our economy and our society of the benefits which technology can bring.

There is another important area in which a Government decision needs soon to be made. By July we have to decide in principle whether to accept the United States invitation to participate in the post-Apollo programme. It is an immensely exciting, productive and—let us face it —expensive programme, certainly to the United States. The cost to them will be 51 billion dollars over six or seven years Europe is invited to come in and contribute 10 per cent. If we (the United Kingdom) go in, our share will be 3 per cent. or 4 per cent. I suggest we do go in, and for two reasons. In the first place, there will be a tremendous accession of knowledge. We shall have a superb opportunity to sharpen techno logical, scientific and administrative skills. Secondly, we shall have the right to launch satellites—the right, not the possibility depending upon good will—and we shall have the right to participate in the whole potentially productive programme. By that I mean sharing techniques in the examination and analysis of the earth as a whole; of sophisticated weather forecasting; of detailed crop assessment; and of geological and oceanography analysis for the determination of mineral deposits. Extraordinarily sensitive analysis will be possible and we should share in it. All this would be in the current decade and by the next century it is reasonable to suppose that men and materials will be shuttling through space, moving from here to Sydney in a matter of two or three hours.

I said earlier that in Europe there was room for two major groups of airframe companies. It is aerospace which has done more than anything else to unify Europe and it will go on to unify the world. By the end of this century the process of unification will have gone on and I suggest there will be room, on the earth, for two groups only in the aerospace business dealing with space activities such as are indicated in the post-Apollo programme. I believe that we in Britain should be part of one of those groups. If that is the position we want, the decision must be taken in principle by July if we are to participate in post-Apollo; and I ask whether the noble Lord, when he comes to wind up, can give us any indication of the Government's thinking.

To sum up, if I were asked to advise Her Majesty's Government about their attitude to aerospace, I would say in the first place: "If you find it too hot, stay out of the kitchen. If, however, you decide for good economic, social and political reasons, to have a British aerospace industry, then continuity, confidence and full information must be the essence of this partnership. More over, it must be a two-way affair, with adequate safeguards for ensuring that the British people get full value for any money which they invest." If the investment is made in that spirit, with developing collaboration with other countries, I believe the return on investment in national terms can be immense.

3.25 p.m.

EARL AMHERST

My Lords, I should like to thank the noble Earl, Lord Kinnoull, for introducing this debate to-day and also for the terms of reference given, which are so wide as to enable us to discuss almost every aspect of the industry. I want to limit my remarks to the effect on civil aviation and to ask a few questions on that aspect. I should also like to ask one or two questions relating to Maplin, but they involve certain matters of road transport and so on upon which I do not expect to get an answer to-day. How ever, I should like the Government to make a note of them.

In the first instance I wish to talk about Concorde. When the project was first mooted, we on these Benches welcomed the idea; and it is perfectly true, as has already been said, that this aircraft represents a break-through in technical achievement far ahead of anything else in the rest of the world, including America and even Russia. As it stands to-day, the diameter of the cabin of the Concorde is roughly that of the Comet, which rather indicates four-abreast seating. As air craft go to-day, it is a comparatively small one. Further, as I understand it, the range at the moment is limited. With an acceptable payload and the proper margin it can certainly do London, Paris and New York but not a great deal further. This is a limitation which could be adverse to its competition with long-haul airlines other than B.O.A.C. or Air France. I am credibly informed that Concorde to-day would require four refuelling stops between here and Australia, whereas the Jumbo Jet would require only two. Great alarm has been expressed in some circles as to the cost of the Concorde and also about the way in which the cost of research and development has escalated, even after making allowance for the fact that there has been a devaluation in the meantime. But the cost has gone very high indeed, and it may go even higher.

Here I should like to turn your memories back to the Vickers Viscount—a remarkable aircraft. When that first appeared it was short on capacity and range, and it was not until we had an extended version, with increased capacity and range—I am not sure whether it was Mark II or Mark III—that it finally came into its own and achieved the world-wide success which it did, a success which it still enjoys in certain parts of the world. So at the moment I do not see any reason why we should be unduly cast down in gloom over the costs of the Concorde, provided that we are planning and thinking far enough ahead. We should now be well on the way to the Mark II, with extended capacity and range. I think originally it was thought of as doing long journeys to Australia, Tokyo, South Africa and even China. We have to get the range and capacity up. That does not necessarily entail the redesign of the aircraft entirely, because much of the instrumentation and ancillary equipment can be used again; it does not require redesigning and re-jigging, which is not the least of the cost of research and development. Surely having incurred this vast expenditure, this is not a time to give up. We ought to follow through with a Mark II or Mark III so that in due course we shall be able to recoup and cash in on the lead that we have so far established technically.

It has been hinted to me that our French partners are already planning for a Mark II. When the noble Lord comes to reply I wonder whether he can tell us that our own people are equally far ahead with their thinking. Also may I ask whether he is aware of various rumours that there is talk of a possible tripartite effort as between ourselves, the French and the Americans. I do not know whether that has any connection with what the noble Lord, Lord Beswick, was talking about, but it may have. It is interesting to note that in addition to the large number of skilled people employed by the British Aircraft Corporation on this project, there arc, I believe, some thing like 70,000 skilled people scattered in workshops all over the country employed in producing ancillary equipment, which I should have thought was in itself a national asset.

As to the much discussed sonic boom, I am credibly informed that it is now possible to pinpoint its effect on the ground, in that the vibration comes down from the sky in a cone. The extent to which the base of this cone spreads over the ground is commensurate with the height of the aircraft, the temperature of the air and the windspeeds at the time. Further, at a height of something like 60,000 feet the sonic boom is almost inaudible at ground level. Therefore with a Mark II or Mark III Concorde, which probably will fly higher, is it not possible to expect that the sonic boom will disappear altogether so far as those on the ground are concerned? I am told that the Concorde has to travel about 200 miles from take-off before it can get to a supersonic height. Surely it is possible to navigate this aircraft, therefore, so that most of its supersonic flights are over oceans or sparsely populated territories.

On the subject of noise, I understand that the American engine firm of Pratt and Whitney now have in production for their engines a device known as a "Hush kit" which will muzzle the noise of the 727. As a result, the noise is now reduced to a level that is acceptable to the Noise Certifications. There is no doubt that the airport authorities round the world are becoming increasingly sensitive on this point. So if our own engines are not similarly silenced they are liable to be discriminated against. I wonder if the noble Lord who is to reply can tell us whether Rolls-Royce are well ahead with this muzzling of the engine noise, both in respect of the RB.211, which is to power the TriStar, and with the Spey so as to make the Trident competitive with the 727 so far as noise is concerned? And will the Government, if necessary, continue to lend financial assistance?

As regards Maplin, I want to draw attention to one or two facts and one or two problems, but I am not expecting the answers on these points to be given to-day. We note the Government's decision to go ahead with the Maplin development. We feel that there are several major problems which still have to be resolved before vast sums of public money are finally committed. Was not the requirement to set up this new air port formulated on the calculations of the Roskill Committee, which in turn were based to a large degree on aircraft movements and traffic estimates as then applied to Heathrow and Gatwick Air ports? But the tendency of operators now is to fly bigger aircraft; and does that not involve lesser frequencies? Also, recent traffic trends point to a greater growth in the demand for inclusive tours than for scheduled services, and not all the inclusive tour operations are confined to Heathrow and Gatwick. Here it may be noted that B.E.A. accounts for something like half the movements at Heathrow, if not more. But from 1975 it will be likely to be flying larger air craft, with a resulting drop in the number of movements. The year 1980 has been announced as being the date when the first runway is to become operative at Maplin. But will the estimates of aircraft movements and traffic demands that were made a short while ago bear significant relation to what may be happening in 1980? Should not the question be looked at again? I am not expecting an answer to that question to-day, but simply asking that a note be made of it.

As we know, to-day on high days and holidays, and on those occasions when weather holds up movements, Heathrow is just about bursting at the seams. The capacity of public waiting rooms is filled to overflowing. One of the worst bottle necks is that wretched tunnel through which all passenger traffic has to pass both going to and coming from the central buildings. I am told on good authority that to-day the last passenger to disembark from a full jumbo-jet has to wait for nearly an hour before he can be reunited with his baggage and be on his way out of the airport. Imagine the jam if, through weather or other causes, two or more jumbo-jets disgorged their nearly full loads within minutes of each other. I do not know if this position can be held up to 1980; but I think it is a matter which should be noted. Was it not an error of judgment on the part of the Government, I think last year, to close their options by declaring that no more runways were to be constructed either at Heathrow or at Gatwick?

My Lords, interlining is a big and important factor in the airline business, whether it is short haul to short haul—a passenger from the Midlands wanting to make a connection with the flight to Saltzburg, or vice versa; or a short haul to long haul—someone from Scotland wanting to go on by another flight to Hong Kong; or, indeed, long haul to long haul—a passenger from Teheran headed for Chicago. The saving of time spent on the ground is the essence of the operation and is absolutely essential on short-haul flights, such as to Amsterdam, Brussels or Paris. To-day, such a flight takes only about 40 minutes in the air; and probably by 1980 the time taken will be less.

What is to be the situation at Maplin? If all the scheduled services, both long haul and short haul, are to be concentrated at Maplin, interlining should be easy, so far as transit time is concerned. But if they are to be divided, and if the short-haul service stays at Heathrow and the long-haul service goes to Maplin the position will become intolerable, because the journey by road between the two is very long and the time taken will be unacceptable—certainly for the short haul, if not for the long haul. Are we expecting that by 1980 we shall still be finding our way in coaches along the motorways in denser and denser traffic, trying to get from London to the air port? Surely the construction of a proper railroad from Maplin to London—probably extended to Heathrow—is the only solution. I know that mention was made of this idea the other day, but there was no reference to what kind of rail way could be used. Should it not be something entirely new: a very fast ser vice, with no intermediate stops, and not trying to operate with existing stock along the existing tracks, to edge its way as best it may through existing traffic into Fenchurch Street, Liverpool Street, King's Cross or St. Pancras? This will not do. I have put down for note that if Maplin is in fact to be extended to take care of the whole of our future civil aviation requirements in the South of England we shall have to build it to a scale commensurate with those requirements. On that basis I wonder whether we could get away from the rather unimaginative name of "Maplin"? Could we not call it "Great Britain Main", or something more imaginative?

I should now like to ask a question or two. First, can the Minister tell us whether, after we have gone into the Common Market, conditions for civil aviation within Western Europe will remain as they are to-day? That is to say, will the Government bilateral air agreements continue that way or will Europe become a kind of cabotage area for all European-based operations? Recently at Schipol Airport I noted that passengers travelling between destinations within the Benelux countries were not allowed to avail themselves of the duty-free shops. Will our entry into the Common Market mean a change in immigration, customs and such facilities for our air passengers?

My second question is on the subject of the British Airways Board. Now that that Board is responsible for the provisioning of both B.E.A. and B.O.A.C., presumably the thinking that has so far been done individually as regards each Corporation will have to be done again in the light of their joint requirements. That will surely take a little time (perhaps the Minister can en large on that) and it may be that we shall not get a ruling as to whether B.E.A. is to get the TriStar, the European airbus or the DC 10, much before the end of this year, which means a considerable wait. Can the Minister also tell us whether the setting up of this Board represents the ultimate intention of the Government to amalgamate two Corporations but possibly preserving the two separate operating identities so as not to lose the enormous amount of good will that both Corporations have arduously built up over so many years. This is a matter with which the staffs of both Corporations are very much concerned, and the answer to this question will perhaps enable them to assess what their individual fates and destinies will be.

My Lords, I know I have asked a great many questions, but I have given the noble Lord advance notice of some of them, so perhaps he will be able to answer at least one or two.

3.43 p.m.

THE EARL OF BESSBOROUGH

My Lords, I am most grateful to my noble friend Lord Kinnoull for initiating this debate. Although it seems unlikely that my noble friend on the Front Bench will be able to announce much in the way of new departures or take-offs this afternoon, in view of the fact that the Government may be considering, or waiting to consider, the Marshall Report, none the less it is I think useful that your Lordships who have certain special knowledge of the problems of the aircraft industry should have this opportunity of offering up their knowledge and their ideas before the Government makes up their mind about the future of the industry and indeed perhaps before exercising any possible influence over the new British Air ways Board in their choice of aircraft for the two British Airways Corporations.

I am certainly not going to cover the whole spectrum of aerospace, but the problem which is uppermost in my own mind—and if I judge it rightly I think it is probably uppermost in the mind of the noble Earl, Lord Kinnoull, and also in the mind of the noble Earl, Lord Amherst—is Britain's separate interests in the Lockheed 10–11 TriStar with its Rolls RB.211 engine and Hawker Siddeley participation in the European Airbus. Clearly, it would be to this country's advantage if both these aircraft turn out to be successful in their somewhat different but unfortunately not wholly different roles. In particular, my Lords, I would be greatly disturbed if British airlines decided to order the TriStar and reject the European Airbus altogether just at a time when we are entering the European Economic Community. In fact, I greatly deplore the last Government's action in pulling out of this project all Governmental aid, just as I greatly applaud Hawker Siddeley for having had the courage to remain in the project on their own account.

Frankly, my Lords, I see absolutely no reason why the A.300B European Airbus should not be just as successful an aircraft as the Lockheed 10–11, and I say this after having gone into the matter in some depth both in visiting Lockheed in California and in visiting both Messer schmitt-Boelkow-Blohm in Munich and, of course, Aerospatiale in Paris and Toulouse, where the first Airbus proto type is being very rapidly assembled. I found that they were working three shifts on it. I was very much struck, in my last visit to Toulouse, by the determination of our French and German friends, and particularly General Henri Ziegler and Herr Ludwig Boelkow, to make this aircraft a success. I was struck also—and this was somewhat new to me—by the interest of other European countries in the air craft; by the fact that the Dutch are constructing the mobile part of the wings, the Spanish the tail and the doors, with other European countries providing com ponents.

So far as this country is concerned, apart from Hawker Siddeley, some 98 British companies are already involved and if B.E.A. order this Airbus there would be, I gather, some 118. They may not all be very large companies but in in total they are very considerable. It was quite clear to me in visiting Munich, Manching, Paris and Toulouse, that the European aerospace industry really is coming into being. For example, the problem of sending out Hawker Siddeley wings from Chester by air has proved an extraordinarily simple operation—remarkably simple. People thought that it would involve great problems. It has not done so. It was done in a day; and on the very next day I saw the 50 or 60 Hawker Siddeley engineers fitting the wings to this aircraft. Having been a Minister concerned to some extent with aviation on two occasions, I know the problems involved and I know how hungry the aircraft industry can be—how their costs can escalate perhaps faster than in any other industry. None the less, I should now personally like to see Her Majesty's Government—as well as Hawker Siddeley Aviation—backing the European Airbus again in full partnership with the Germans and the French, for I think this A.300B will be a very successful aircraft.

This does not mean to say, my Lords, that I do not hope that Rolls-Royce will sell the maximum number of RB.211 engines to Lockheed. If only there had been a reasonable expectation of an early delivery of the higher thrust RB.211 engine—RB.211–61 I think it was called—then surely it could have been fairly certain that Rolls might have powered the stretched version of the European Airbus. As it is, there is no doubt in my own mind that the CF.6 with its higher thrust—and it is running well in the DC.10—is at present the best available engine for this twin-engined Airbus. I most sincerely hope, however, that Rolls may ultimately be able to widen the market for the RB.211 by providing an engine for the European Airbus which would then become a virtually, wholly European aircraft.

I am also impressed, my Lords, by the co-operative efforts going on in the production of the multi-role combat aircraft which my noble friend mentioned. I have confidence, too, in the success of this project. In the course of it we are learning what very useful partners the Ger mans as well as the French are in the European aircraft industry. I stress the word "partners" because the Germans have not been conspicuously successful in their own national aircraft since the Second World War, except perhaps with their helicopters. It is worth mentioning however—I was struck by this when in Manching—that ever since the Germans themselves started overhauling the American Starfighter there has been a considerable reduction in the accident rate. At all events, I think that experience over both the Airbus and the M.R.C.A. means that a number of lessons have been learnt in European co-operation since the Concorde management system was first set up. I hope that the noble Lord, Lord Kings Norton, will say something on the problem of management systems, because I think it goes to the very root of European co-operation. The Concorde system has its defects, but I think there is no doubt whatsoever that Concorde itself is a superb achievement in advanced aviation design and construction. And I would suggest, in parenthesis, that Pan American's some what disparaging remarks about it recently are mainly designed to get the cost of the plane reduced, rather than a reflection upon its future performance in commercial use.

As your Lordships will see. I am fairly well briefed on the latest developments in the European aircraft industry, and I take this opportunity of saying how grateful I am to Hawker Siddeley, the B.A.C. and members of the French and German aircraft industries when I visited them recently. They were not afraid to speak frankly of their problems generally. There are, however, two points regarding financial arrangements for European aero space projects which I should like to mention. They are purely personal views and I do not know how practical it would be to achieve either objective. However, I think that if we cannot achieve the kind of direct cross-frontier mergers which the noble Lord, Lord Beswick, suggested—I agree very much with what he said on this subject—then further consideration should be given by European aircraft firms themselves to arrange for reciprocal investment in each other's companies, in the same way as Aerospatiale has an 8.9 per cent. interest in Messerschmitt. This is clearly not an ideal solution. It has been described to me by some of those in the industry as being rather messy, and it increases the number of people on the board. It is not an ideal solution, but I wonder whether it is not a preliminary step which might be worth taking, as between a British and a Continental firm, in order to increase the number of links to keep us closer together on the financial side.

The other financial point I would raise is whether or not it would be an advantage to establish within the European Economic Community some kind of European financial agency or a European development bank which would finance advanced co-operative projects. If we are going into Europe, my Lords, for God's sake! let us be European minded and press on with the establishment of appropriate European institutions now—I repeat, now. We should need them, even if we did not 20 into the Common Market.

I must say that I sympathise with some of my friends in the French aircraft industry when they say that after the war they ordered large numbers of Viscounts and Comets from us, but we never ordered a single Caravelle although the initial aircraft had Rolls engines. Nor did we go in with them over their Atlantic or the Transall, with its Tyne engines. Although I recognise that on various occasions General de Gaulle was never very co-operative with us and that General Dassault was, and maybe is still, somewhat nationalistically minded, none the less I think that the French have some reason to complain that in aero space we have not been sufficiently European minded ourselves in the past. How ever good our VC 10, our BAC 1–11 and our Tridents may be—and they are first-class aircraft—their sales would, in my view, have been much more extensive throughout the world had they been co operative projects. And I certainly think the present Government were right not to go ahead with the BAC.311 in the light of the advanced state of development of the TriStar and the European Airbus, to say nothing of the DC 10, mentioned in the debate, which has already been ordered by many countries in the world.

LORD ORR-EWING

My Lord would my noble friend allow me to intervene? Surely it would be right to say that the Anglo-French V.G. was a sincere effort to co-operate on an advanced military aircraft, and the French pulled the rug from under our feet without any warning at all.

THE EARL OF BESSBOROUGH

My Lords, my noble friend is completely correct, and, as a mater of fact, I was going to mention that in order to balance my argument. But we in this country have always very much tended to criticise the French and perhaps not criticise ourselves, and I thought it had not been said so clearly before. When I came back this time from Toulouse it struck me very much that there were two sides to this problem.

Let me just ask: What about the future? I am glad that over the next 18 months £500,000 of Government money is being put into the development of V/STOL, Q/STOL or R/ToL—reduced take-off and landing. These must be the aircraft of the future and the noble Lord, Lord Kings Norton, always speaks to us with great authority upon this subject. On the engine side, I am sure there is a market for a quiet engine in the 25,000 lb. class to replace engines used in the current breed of long-range subsonic transport and to power the new generation of V/STOL. The French are already co-operating with American General Electric on such an engine. I hope very much that it may be possible to extend the General Electric—SNECMA collaboration into a truly European affair involving Rolls-Royce. I do not think this has happened yet, but I welcome the initiative which has already been taken by Rolls towards the establishment of a European company.

My Lords, I am coming to the end of my speech but would say just one brief word about rocketry, satellites and space craft. As a Minister I was responsible for conducting negotiations in the European Space Conference regarding our continuing to co-operate with Europe in launchers as well as satellites, and also with the American Government and NASA over the post-Apollo programme. I must say that I was not very happy with the European Space Conference. It seemed to me to be an even more clumsy organisation than either ELDO or ESRO, with even more countries represented on it. Until a proper management system—I come back to this again—has been worked out, I am not unduly hopeful about the future of this organisation as at present constituted. But, again, that is not to say that we should not continue to co-operate with our European neighbours.

On the building of the application satellites, I am content. The main problem is whether or not Europe should have an independent launching capability. Certainly while I was concerned with these matters I felt it was totally uneconomic for Europe to build her own launchers when the Americans were so far ahead and were able to do the launching for us at very much reduced costs, but I recognise, of course, that it could well be the United States will say at some time or another that they cannot launch our satellites. If only from the defence point of view—and defence applications are of primordial import ance—that would place Europe in a most difficult position. Already, if I am to believe Mr. Chapman Pincher—and most of your Lordships as well as those in another place seem to believe every word he says; indeed, he is often right—the Americans have indicated that they may wish to withdraw from launching the European navigational satellite. I should find it difficult to make up my mind whether or not we should continue with the French and the Germans in ELDO launchers at God knows what cost. Above all, there must be clearly defined responsibilities. Curiously enough, I believe the French have achieved this, particularly with their military missiles.

Again, I am doubtful about the post-Apollo programme, although I follow the noble Lord, Lord Beswick, to a certain extent in what he said. It was certainly ill-defined in my time, a year and a half or so ago, and I am afraid it is still rather ill-defined. Moreover, as the noble Lord, Lord Beswick, has said, the whole of Western Europe is being offered only a 10 per cent. financial interest, and I suppose, as he said, that only 3 to 4 per cent. would come to Britain. Industrial participation is therefore not likely to be very large. However, I feel certain that in principle the shuttle system should in the future prove more economic than sending up astronomically ex pensive expendable rockets. To be able to bring back the first stage to earth, to be re-used, must greatly reduce the cost of maintaining these essential satellites, whether they be for communications or navigational, weather or earth resources purposes.

My Lords, in preparing these notes I wondered whether I would perhaps be giving the impression (and this was referred to by my noble friend) that every thing in the aircraft industry on the Continent is advancing successfully while in some respects we were rather behind in this country. I should like to correct that now. There is no doubt whatever that our partners in Europe need us just as much as we need them. We are on the threshold of entry into the European Community. Our friends in Europe recognise the aircraft industry as a primary instrument in the advancement of their industrial capability, particularly in competition with the giants to the East and to the West. Only by the closest integration of their capabilities can the European nations hope to make this competition effective. I believe profoundly that our future must lie in collaboration, but I believe also that the continuation of a strong and effective British industry is an essential part of this collaborative venture. It would be a tragedy of the first magnitude if the starvation of our own industry led to a fragmented approach in Europe or to European aerospace in which we were not playing a leading part. We must get ourselves up to date. There is no doubt in my mind that a very large part of Europe's security and her economic progress lies in the air and that this country has a major part to play in the European strategy.

4.5 p.m.

LORD KINGS NORTON

My Lords, at the end of February we had a long debate involving 41 noble Lords, based on a Green Paper called A Framework for Government Research and Development, and of the total Departmental expenditure in 1971–72 of £645.5 mil lion we concentrated attention for two days almost exclusively on £27.7 mil lion. Now that £27.7 million really came under the heading of "research", not of "research and development"; and as I remarked in that debate the Command Paper did not discuss development, and with the exceptions of the noble Viscount, Lord Caldecote, and myself noble Lords made little direct reference to the rest of the R. and D. expenditure. To-day I feel that a much larger section of the £645.5 million and development itself are very much—although per haps only by inference—two of the main subjects which we are discussing.

The Ministry of Defence has a research and development expenditure in Table 2 of the Rothschild section of that Green Paper of £259.3 million. The Department of Trade and Industry has a figure of £205 million. Of that £464.3 million a very considerable proportion is already devoted to development in the aircraft field. I have not been able to discover for certain how much, but I deduce from Command 4578, page 22, and Command 4891, Annexe B, a figure of £202.7 million. One would expect that in so appreciable a sum some new work of high importance to the future of the aerospace industry must be fructifying, and I hope, my Lords—and in this I am perhaps more demanding than the noble Earl, Lord Bessborough—that we shall hear some encouraging remarks about the Government's intentions when the noble Lord, Lord Drumalbyn, speaks, perhaps in abundant amplification of his reference to engineering studies for a short/medium haul airliner in his reply on March 7 to the noble Lord, Lord Thomas.

But, so far as the public is aware, the situation on the development front is very much the same now as it was a year ago and, indeed, the year before that. There would seem to be little in the way of new projects. In the engine field, Rolls-Royce are still working on the RB.211 for the Lockheed Tri-Star, on the RB.199 for the M.R.C.A. projects, on the M.45 for the VFW.6–14, on the Adour for the Jaguar, and on the BS.360 for the no longer novel Anglo-French helicopter programme. One would like to hear of another fan engine, smaller than the RB.211, perhaps in the range which the noble Earl, Lord Bessborough, mentioned of 25,000 lb. thrust and perhaps with a variable pitch fan and designed for quietness. In mentioning the variable pitch fan I must confess an interest because I am a director of a company, Dowty Rotol, which has developed one.

The noble Lord, Lord Beswick, referred to me when he spoke about quietness and, if I may, I would like to follow him for a few minutes on that subject because we are in a phase of engine development of a most interesting kind. We all remember the days when aeroplanes were propelled by piston engines driving airscrews. We remember with gratitude the Viscounts and the Vanguards with their turbine engines driving airscrews, but in the many years after those aeroplanes were introduced we got used to jet propulsion engines. Then the jet propulsion engines began to be replaced by what were called by-pass engines, in which some of the air inhaled through the front did not go through the engine, and we have seen the proportion of air inhaled at the front which does not go through the engine increase until we are really back at the situation of an engine driving a great airscrew, the only differences from the old days being that the engine is a turbine engine and that the airscrew is a multi-bladed device which we generally call a fan, and is shrouded in a way that obscures the fact that the engine has great physical similarity to the old-time engines of the past.

A great merit of this apparently reactionary move away from the pure jet, this greater and greater approximation to propulsion by a fan or a screw, is that it produces less noise, and we see our way now much more clearly to providing tolerable noise levels and of great power, as the noble Earl, Lord Bessborough, said, with this kind of engine. There is no doubt in my mind that a range of engines of this kind is required, and I urge industry and Government to get together to decide what should be launched.

And are there not possible projects which at the same time could be achieved quickly and still represent big advances? For instance, has serious consideration been given to the possibility of developing from the present VC 10, with its 4 Conway engines, an improved and stretched VC 10 with two RB. 211 engines—another use for that quite admirable machine? This would make it a much more powerful and a much quieter aeroplane. Has serious consideration been given to a similar but rather longer-term possibility of replacing in a stretched version of the BAC 1–11 the rather noisey Spey engines with two quiet fan engines, perhaps this very engine to which the noble Earl, Lord Bessborough, and I have referred already this afternoon.

In the aircraft field, to the best of my knowledge, there are at present no new projects except the new jet trainer, the HS1182. The Concorde continues its majestic progress. B.A.C. still has its share of the Jaguar and the M.R.C.A.; Hawker-Siddeley still provide their part of the A.300B; the Harrier goes on; the Avro 748 finds new roles, and the Nimrod, with its origins in the distant past, continues. But where do we find—and this has been said before, not only to-day—the major prototypes of the next generation? Do we not need successors to the Harrier such as the P.11–54, which was cancelled in 1965? Do we not need an aeroplane capable of supporting the Harriers, which themselves are intended for close support of around operations? The maintenance of such aeroplanes in advanced combat positions presumably needs the backing of maintenance crews which can only get near to the Harrier positions if conveyed in machines them selves at least the STOL type. One remembers with regret the HS681, also cancelled in 1965, which could presumably have filled this very role.

In the civil field the years go past and still there are no decisions in the vital VTOL and STOL fields. We are all waiting for Sir Robert Marshall's Report, but we do not really know whether it is likely to deal with these matters. I gather this afternoon that it is not likely to be published. Perhaps the noble Lord, Lord Drumalbyn, will be able to tell us whether or not it will be published. But what is important is whether or not the report will pave the way to decision, because certainly the lack of decision is, in my view, extremely serious. Our great aerospace industry is still doing wonder fully from the trading point of view, but inevitably on the splendid types initiated in the distant past. It cannot continue for ever to make money out of ancient designs—although, as I shall point out a little later, the way some of these ancient designs have been developed is quite remarkable.

The noble Lord, Lord Beswick, in a most interesting suggestion, referred to the possibility of setting up an Aerospace Council. I find that I have been thinking along not dissimilar lines, conceivably along lines which could be taken up more immediately. I feel that in the reorganisation of procurement in the field of defence, which we debated in May of last year, there must have been set up a unit concerned with long-range planning of aircraft and missiles for defence purposes. It would indeed be very odd if this were not the case, and it would be very strange if the work of this unit did not lead to decisions being taken, leading on to prototype machines. I should like to feel that there was a corresponding unit at work in the civil aviation field for filling the role once filled by the Director of Long-Term Planning—a post long since abolished. I believe that it is necessary to set up in civil aviation a high-powered and continuing body which will say authoritatively what is wanted in the short term, in the middle term and the long term. With clearly stated objectives, the right research can be done; the right development can be done.

When the noble Earl the Leader of the House, in his speech at the end of the debate on the Green Paper at the end of February, following what the noble Lord, Lord Beswick, had said at the beginning, referred to the disproportion which has for so long existed between what is spent on research and development and the increase in our gross national product, he implied, I think, that we require to give very close attention to how better we can feed back the results of our research in our total national effort in the industrial sphere. He was of course right, but he was thinking of only half, or less than half, of the picture. What is essential is to set precise objectives representing significant advances on our current practice, and in the achievement of these objectives there will he defined for us the research and development that needs to be done. In the short-term areas it will be nearly all development in the long-term areas it will be what in the earlier debate we referred to as strategic research. But this continuing planning body should have a rolling plan, so that the short term becomes the actuality, the middle term becomes short term, the long term becomes middle term and so on. There must be continuity.

In the system which was explained to us for procurement it was clear that the executive department in both the military and civil fields was the Ministry of Defence, and it is clearly necessary that the long-range planning unit in the civil field, which I hope will be brought into existence, and the long-range planning unit in the military field, which I deduce, perhaps incorrectly, must exist, must be in the closest contact. If they are, I think that tremendous economies in project work and prototype construction could be achieved. I believe this point is of such importance that I must ask noble Lords to bear with me for a few minutes while I elaborate.

I want to draw attention to the fact that many years ago there was a great American bomber called the B.29, or Super-Fortress, a military machine of the first order. It led directly to the famous transport aeroplane known as the Stratocruiser. The Super-Fortress and the Stratocruiser had the same wings and the same tail unit, and a great deal else in common. The Stratocruiser itself was developed into the military tanker known as the KC.97. The American tanker aeroplane known as the C.135 led straight to the Boeing 707. If there had been no tanker there would have been no 707. These, my Lords, are examples in which the means of fulfilling a military objective were so similar to the means of achieving a civil objective that virtually the same aeroplane, with certain adjustments, fulfilled both roles. Long, long ago an aeroplane called the Comet was designed. It was a civil aeroplane which had a great initial success, but met great disaster. But it was persevered with, became a successful civil aeroplane, and, behold! has become the world's best maritime reconnaissance aeroplane, the Nimrod. Once again the civil development and the military development have been done on the same basic design. The HS.748, once purely civil, is also the Andover military transport. And we have read recently of the Jumbo-Jet, the Boeing 747, being used for military purposes as the carrier of the most advanced airborne radar.

I want to put forward the thesis that this ability of the same basic design to fulfil military and civil objectives should not be allowed to be a matter of chance and coincidence, but should be a deliberately sought objective; that when the long-range planning unit in the civil field has decided what it would like to have it should compare planning notes with the long-range unit in the Ministry of Defence to see where, in the two programmes, the same basic design could be made to fulfil civil and military objectives. There would have to be compromise, there would have to be give and take; but I believe that with such a policy we might even halve our development costs and that, with vision on both sides, we should avoid some of the appalling economic disasters which we have sustained in the past. Just think, my Lords, what happened to the Beagle Company; yet to-day a military version of the Beagle Pup, called the Beagle Bulldog, is being built in quantity in Scotland. Scottish Aviation are building 98 for Sweden, 15 for Malaysia and 130 for the Royal Air Force—243 aeroplanes. Moreover, there are 25 Jetstreams being built for the Royal Air Force by the same company which, if they had been ordered sooner, might have saved the famous Handley Page company. Both in military and in civil aviation we need to look far ahead and to formulate our needs.

Finally, in his most interesting speech the noble Earl, Lord Bessborough, suggested that I had views worth hearing on the matter of the management of international companies. In answer to that suggestion, all I can say is that in a speech which I made to the Society of British Aerospace Companies at their great annual dinner in September, 1970, I indicated the difficulties which are experienced by international companies which are dependent for manufacture on national companies. I said that there would be enormous advantages and great savings if there could be brought into being true international companies with their own design offices and their own production facilities, drawing their design staffs from a whole variety of European companies and using nationals of a variety of European countries in their factory, centred perhaps on some city which would be inobnoxious from any possible political point of view, such as Geneva or Luxembourg. I believe that if there were international companies of that kind—it would not need many; one or two could be brought into existence—there would be a great saving for all the countries which were collaborating in air craft design and construction.

I should like to say, at the end, that in the matter of the future of aerospace some of us heard a most interesting talk in Westminster School last night from Dr. Paine who, until a year ago, was the head of NASA. The plans for the future of aerospace which he outlined—the international plans, not only American ones—were of such tremendous interest that one could not help feeling that one wanted to be part of this tremendous project. Whether or not it will be possible I do not know, but I feel that many of us here would like to know the Government's view on participating, even to the small extent which has been indicated this afternoon, in the space shuttle. In final conclusion—I am now concluding for the third time—may I add my thanks to the noble Earl, Lord Kinnoull, for giving us the opportunity this afternoon of having this most interest ing debate.

4.23 p.m.

LORD HARVEY OF PRESTBURY

My Lords, may I also say "Thank you" to my noble friend Lord Kinnoull for initiating this debate. I believe that your Lordships' House, and the other place, have not debated for many years this very great industry, which is earning for the country something like £320 million a year in exports. Those figures are impressive to-day, but they are from projects which were brought about some ten years ago. Unless something is done for this industry, the export figure is bound to run down in the years ahead.

This country has nothing to be ashamed of in its technology. Since the beginning of the war, this country has invented radar and the jet engine. But if you were to ask any American to-day who invented the jet engine, you would be told that it was invented in America and not by Whittle. Now we have super sonic aircraft, electronics, the hovercraft, North Sea gas and oil. This country of ours has immense opportunities if we go into the high level of technology. The great Powers—the United States, the Soviet Union and France—can feed themselves, but we cannot; we have to export to live, as has been said time and time again. We either stay in this great technological race or our standards of living are bound to suffer.

I do not want to bring Party politics into the few remarks I am going to make, but I well remember that at the Labour Party Conference at Scarborough in 1963 Mr. Wilson's great theme was science and technology. This caught on a great deal and had a great effect on the result of the 1964 General Election. But what happened in the six following years? We had the cancellation of the TSR 2, which was probably the best military aircraft this country has ever made. It had gone supersonic, and the test pilot, Wing Commander Beaman, had told us that it was easier to fly than the Canberra. Australia shied off it because they were led to believe that if Labour were elected they would cancel it, so they went to America and bought the F.111. We had to order American aircraft ourselves, and that is where the money has gone. We ordered the Phantoms. The Labour Government spent millions of pounds in the United States on Phantoms and the Hercules transport, which is now in service after twenty years in design. Therefore, I should like to ask my noble friend what are the Government going to do, because the whole of this industry is looking for a lead. We have been warned that we may not get a lead to-day, until the Marshall Report is out. Very little will be said, but in the weeks and months ahead the industry is expecting something from the Government. I know that they have been fully occupied with many other problems in recent months, but nevertheless this is an important subject. What the industry needs is a long-term programme. The noble Lord, Lord Kings Norton, to whom we all listen with very great respect in these matters, referred to the marrying up of military projects with civil ones. He is absolutely right; this is the sort of thing that ought to be studied by the Government and those involved.

Concorde is a difficult subject to argue. The costs have soared out of all recognition. It is almost impossible to-day, with a venture such as Concorde, to get even near to what the cost might he by the time it enters service. Technically, Concorde has gone well. There has been good collaboration between Britain and France in this respect, but much depends on whether an order is obtained from an American airline for it. If there is no order from the United States, it seems fairly certain to me that we shall have resistance from the Americans about allowing the aircraft to fly into Kennedy Airport. They will fight to keep it out on some pretext or other because they have not got such an aircraft of their own, although I am told that the noise factor will be quite favourable by the time the Concorde is introduced into airline ser vice. The airlines are short of funds to-day, but some of them are just beginning to turn the corner and perhaps will be in the black 12 months hence.

I should like to see Governments get together and to try to pool this great project. Of course what the country ought to be doing, together with the French Government, is thinking about the successor to the Concorde. This was referred to by the noble Earl, Lord Amherst. The aircraft is viable; the economics are good, but of course if it is stretched, and the power of the engines increased, it will have a far better pay load and far greater range enabling it to go to countries such as Australia. We want to keep in this race. I am told, and I believe, that the Americans might well be interested in coming in with the British and the French in studying this project and having a joint effort. This would be a magnificent thing if it could be brought about, because it would enable us to get their good will and financial backing. Of course it is not just the aeroplane; there is an enormous technological fall-out from designing and developing an aircraft such as Concorde in such fields as metallurgy, hydraulics, and right the way through the whole of the engineering industry. No figure can be placed on what can be achieved from it.

The aerospace industry in Great Britain employs something like 212,000 people; the United States 600,000 and France 53,000. And just look at what France has achieved with those 53,000 people in building military aircraft and selling them. Of course often they do not mind where they sell military aircraft. They sold them to South Africa; they cancelled orders for Israel, as it suited their book. They are quite ruthless in the way they go about selling their military equipment throughout the world. We ought to be doing more with our great and highly trained labour force. In the United Kingdom, there are something like 100,000 people in B.A.C., Hawker Siddeley, Westland and Rolls-Royce. The other half of those employed are spread over 400 ancillary companies making equipment for the aircraft. The noble Lord, Lord Beswick, talked about having two airframe companies—Hawker Siddeley and B.A.C. I support him in that. If you merge two great airframe companies it will ruin competition, and we want to see competition. Rolls-Royce do not have competition to-day and we are all too well aware of the problems which they have had.

We in Britain have a technology which is far superior to any of the others, including the French, but there is a very good case for working together. British industry can continue to make major contributions to our balance of payments by high-conversion ratio exports and by avoiding imports. But Government investment is to-day essential. We can not get along in this industry to-day without Government investment. It is estimated that in the Western world's markets for equipment something like £80,000 million will be required over the next 20 years for military equipment, and £40,000 million for transport and other civil aircraft. That is £6,000 million per annum over the next 20 years. During the past 20 years, Britain has secured about 15 per cent. of the Western world's aerospace business. So if one takes 10 per cent. of the figures I have just quoted, that could mean £600 million-worth of business per annum for the United Kingdom. Those are not negligible figures when we look at our overall economy.

The problems of Rolls-Royce were partly of their own making. Like many other great concerns in this country, they have employed far too many people in the post-war years. But do not let us underestimate what Rolls-Royce can achieve. The people there have had a rough time and they need encouragement. It was partly the Government's fault many years ago which deprived Rolls-Royce of a viable balance of military and civil business in the United Kingdom. International collaboration is a difficult problem. The Concorde will probably be 20 or 30 per cent. dearer because it is being manufactured in two countries, and we cannot ignore that factor. I have heard the figure of 40 per cent. quoted as the increase because of the dislocation.

The United Kingdom has an overall balanced capability in airframes, engines and equipment, but this can be retained only if we undertake national programmes. My noble friend Lord Bessborough referred to B.E.A.'s re-equipment. It is easy to give advice on these matters and it must surely be left to the management of the Corporation to decide what is most suited, but some times one might say, "An emphasis here would help the country." My feeling is that, having put these tremendous sums of money into Rolls-Royce—and here I differ with my noble friend—we must back it. Lockheed's are not finding it easy to get orders in competition with Douglas. They are not doing too badly, but they need initial orders. If the TriStar measures up to what B.E.A. want, I believe they would get more out of that than they would out of the European Airbus, although there are great dividends to be obtained from the European Airbus, which is a very fine air craft. These matters must be taken into consideration.

I should like to be told by my noble friend what is to be the replacement air craft for the Hercules. Will it have an STOL capability. We had an 11–54 project on the books some 10 years ago, but successive Governments neglected it. Have we gone on with the 11–54, knowing that we lead the world with the Harrier vertical take-off aircraft? We again have a lead over America and any other country, but, as has already been, said to-day, the Navy have been dithering for ten years about whether or not to order the Harrier, although the United States Marines already have it. We can sell this aeroplane only if it is in our own shop windorw, flying off our ships, if we have any ships which are capable of using it.

What we need is a bold and courageous policy for the future. I have been connected with this industry for something like forty years, and I know that when the British designers and workmen get down to a job they are second to none. But they must be given an opportunity to design and manufacture; otherwise we shall lose the brains in the design offices and people will either go abroad or disappear into other industries. But this industry holds a great fascination and a very great challenge. So I say to the Government that they should encourage those in the industry, help our balance of payments and keep Britain in the fore front of this great industry.

4.36 p.m.

LORD THOMAS

My Lords, I can do no better than follow the example of my noble friend Lord Beswick in declaring an interest in the aerospace industry. I listened to his remarks with great admiration and respect, and I find myself in danger of repeating a good deal of what has already been said because I am in so much agreement with the remarks that have been made. But I declare my interest inasmuch as, having been Chair man of B.O.A.C. for nine years and 11 Ministers, I am now chairman of an independent airline and am also engaged in the manufacture of sophisticated components for the aircraft and other industries. So, in a sense, I am both a buyer of aircraft and a seller of aircraft parts. That gives me a keen interest in and insight into the affairs of the aerospace industry.

As I indicated, much of what I was going to say has already been lucidly and effectively said, and I shall be brief. I propose to concentrate my comments under two headings; that is, the lack of integrated long-range planning in the past, and the lack of drive at the moment in supporting and progressing what is already in the pipeline. With my experience in the aviation industry ever since 1947, I am very conscious of the fragmented and un-integrated policies that were adopted resulting in the failure to follow through with aircraft such as the TSR 2. Had we followed through with the TSR 2, and had we followed through more courageously with the Hermes and other aircraft of that kind, we should not have been driven into the necessity of buying American airframes as well as American engines.

I think that the administrative pattern in the aerospace industry that is being set by the Government to-day shows promise of a very great improvement. In stead of having so many fragmented pieces in the set-up, it looks to me as though, with the formation of the British Aircraft Board and the probability of B.O.A.C. and B.E.A. being brought closer together, with a much more rationalised view of the relative situations of the Corporations and the in dependent airlines, the pattern of planning is emerging as something much better. We must have learned by now that in aviation, even when it is given a fancy name like "aerospace", the technical potentials, what the market wants, what the competition is offering and the environmental requirements of airports have all to be related. That is why I am strongly in favour of the suggestion of my noble friend Lord Beswick, of a unified, concentrated focal point for decision making. This point was emphasised by my noble friend Lord Kings Norton. I am sure that the sooner we get back to having this supremo in aero space affairs—get back to, as I say, a focal point of decision—the better it will be for all of us.

Noise pollution is, we all know, a tremendous problem at the present time, and Lord Beswick's reference to reducing the noise footprint from 30 square miles to one is no fantasy; it is a technical possibility. As Lord Kings Norton said, the development of the by-pass engine, with the reverse variable-pitch blades on (whatever you like to call it) the fan or the first stages of the compressor, can have a tremendous effect, not only on noise but also on the length of runway requirement for taking off and landing. The ordinary prime jet sends out a thin stream of very fast and very hot air. That would stall at take-off or at slow speeds, the acceleration of the aircraft was slow at the first part of the runway and it did not reach flying speed until a lot of concrete had been used up. So the prop-jet, the turbine driving a large propeller, was produced. That was good for take-off and short landings, but it did not have the high maximum speed that air travel nowadays demands. So next there came the by-pass engine, followed now by this design with the variable-pitch blades on the first stages of the compressor. That not only reduces the amount of distance—of feet—required for take-off: it equally shortens the landing run. But more specifically, perhaps, the by-pass element of the compressor produces a kind of tube of enveloping cold, fairly slow-stream air which surrounds the jet, takes the noise out of it, reduces the decibels, and makes the aircraft a much quieter and much more acceptable machine.

Designs like this are comparatively cheap to make in the pilot stage, but when it comes to the prototype stage then Government help is needed because the expenditure nowadays is very great, taxation is high and P.V. ventures cannot readily be done. As my noble friend Lord Harvey of Prestbury said, when British technicians, designers and scientists really get down to it, nobody can beat them; but they must be supported with plenty of money and enthusiasm, and not have all their features and ideas nibbled away by criticism and fragmented arguments. Take the Concorde. The day before yesterday I was at Orly, in Paris; and there they are putting tremendous enthusiasm behind the Concorde. On the airport apron there is a full-scale mock-up of the machine, and the public, the taxpayers, can go through it and see what they are paying for. There is a bar called the Concorde, a restaurant called the Concorde—they are really "selling" that Concorde. The result is that everybody one comes across has the impression that the Concorde is a French aeroplane. It is not: it is an Anglo-French aeroplane, and without British engines there would have been no Concorde. It is up to us to generate the same kind of enthusiasm and to get behind the Concorde effort, into which we have poured so much money, and push it along. Let us get somewhere with it.

As I said, my Lords, many of the things I was going to say have already been said, so let me simply express the hope that the Government will be able to tell us something about the prospects of bringing quieter flying into the service of the public. Shorter take-off and landing will make it possible to have better sited airports and the co-ordination that is going on in the aviation world will, I am sure, result in increased efficiency. Years ago I boldly put up the idea of putting B.E.A. and B.O.A.C. together, rationalising engine maintenance, catering, training and things of that sort. Even in those days (Lord Beswick will remember this) there was a potential saving of about £2 million. To-day, of course, it is going to be more. Even by developing short take-off and landing aircraft, and re-arranging the maintenance facilities at London Airport, there is a good 70 acres of valuable land which could be saved. Instead of dashing out to Maplin or somewhere halfway across the North Sea, let us make better use of the airports that we have now, cut down our overheads and enable ourselves to put in, at Heath row or Gatwick, better facilities for handling passengers—and particularly, may I say, for handling luggage. The noble Earl, Lord Amherst, drew a frightening picture of two fully-laden jumbo-jets coming in and of the passengers trying to get their luggage through the customs, and so forth. I nearly interrupted to ask when last a fully laden jumbo-jet ever landed, but I refrained. But there is no doubt that we do need better luggage-handling facilities, as well as improved passenger-handling facilities. At Orly, they have long, moving travellators: passengers just stand still and travel about a mile. We do not have such facilities at Heathrow. But even with that facility for passengers we have to realise that, whereas a passenger can walk, a suitacase cannot; so there must be some very good and speedy method of getting luggage processed through the airport.

My Lords, that is about all I have to say. I am looking forward to the day when we have what I might call the shrouded reversible compressor device. We really ought to get on to what Handley Page started years ago, and that is blowing over flaps and rudder bases, so that we can ultimately get to aircraft that can operate on 2,000-feet runways. That will give us very much better city-to-city services, and look after places like Wales, where there is very little flat room for building big airstrips. But if we can get on with the STOL and the VTOL we shall produce a really viable civil aviation or aerospace industry. Above all, my Lords, do not let us run out of courage on the Concorde. That would be a disaster; we should be the laughing stock of nations. Those of us in the business feel that Concorde has now got over the hump and just wants more push, more courage and more enthusiasm be hind it. With regard to aerospace and aviation generally, I agree that it has in it a very big defence element. I fully take the point that Lord Kings Norton made, about the relationship between military and civil aircraft. If we have a good civil aircraft industry it can produce good military aircraft. I hope that our watchdogs in the Defence Departments do not get gun-shy for the want of a few pounds.

4.49 p.m.

LORD ORR-EWING

My Lords, when I was in another place I was always told that speeches in this House were unique for the knowledge that was brought into the debates. I think that my noble friend Lord Harvey of Prestbury and I, who are two of the most recent arrivals here, would say that this afternoon's debate, initiated by my noble friend Lord Kinnoull, is a good example of a debate which reveals the expert opinion of people who really know what they are talking about to a degree which is seldom produced in quite so effective a manner in another place.

I have been reading and considering what have been the turning points in aerospace. I would suggest that one of the turning points was the 1957 White Paper, which was the product of Mr. Duncan Sandys. I have been re-reading that White Paper, and on the whole it stands up well to current thinking. I think there is an over-emphasis on the deterrent and an under-emphasis on the manned aircraft. There is too much dependence on rockets and too little dependence on manned aircraft. Since publication of that White Paper, in the last fifteen years, we have learned that the manned aircraft is absolutely essential for accurate recognition purposes, for surveillance and for reconnaissance. These aircraft are also needed to challenge people who may wonder whether we are resolute enough to intercept aircraft that enter, or try to enter, our airspace. That Defence Paper of 1957 (in page 9, paragraph 62) said: Work will proceed on the development of a ground-to-air missile system which will in due course replace the manned aircraft. As a result of that decision, work was then stopped on any aircraft to succeed the P.1., the Lightning, which was really our last fighter aircraft. If that decision had not been taken we should not have had to spend hundreds of millions of pounds in buying Phantoms from the United States of America.

I think that the second milestone in the industry was probably the Plowden Report in 1964–65. Here, if I may, I will paraphrase, first, a general observation. There was a desire that collaboration with Europe should be paramount on all large defence projects. That led to the Anglo-French V.G. and to other projects of that ilk. Second, in particular—and here I quote verbatim: A maximum effort must be made to harmonise military requirements among the allies and to this end they must be ready to sacrifice national military needs. I think that if there is a third milestone it is probably the Marshall Report, and therefore it is appropriate that we should be discussing this on the eve of the publication of this Report. I hope that we shall get a sense of urgency behind the Government's consideration of this Report and an announcement to Parliament of where we stand and of what the future holds for the aerospace industry. For too long aerospace has been in the doldrums waiting for a lead of this nature.

I want later to go back to the Plowden recommendation that we must harmonise our military requirements with our allies and to this end they must be ready to sacrifice national military needs. This industry, as many speakers have said, has had an exemplary record. Last year, it exported £328 million and in fact if it had not existed we should have had to spend even larger sums of money on civil and military aircraft from overseas. The fact that B.O.A.C. has spent £250 million on 707 aircraft and spares reflects how much we should have had to spend if we had not had an efficient airospace industry of our own in order to equip B.U.A., B.E.A. and B.O.A.C. and to meet our military needs.

I should like to endorse what every noble Lord has said and therefore I make no apology in talking about military and civil matters together. If you do not have a military aircraft business you do not have a civil one at all. Every other nation recognises this, and it is important that we should go on recognising it here. On the other hand, I do not accept one of the implications of the Plowden Report: that we can never again afford to produce our own military aircraft. I think one has only to look at Sweden. Sweden has only 16 million people and has had a whole generation of very advanced aircraft, of which the Viggen is the latest. Here is an admirable air craft. If a country of the size of Sweden, without the military advantage that we gained during the war, without the tremendous impetus that we had during the war, can do that, then I am sure that we should not throw in our hand and lose self-confidence in this important capability.

Some 30 years ago, Sir Winston Churchill said, just after the Battle of Britain: The only real security on which sound military principle will rely is that you should be master of your own air. I do not think in this day and age we should all accept that, because air defence must be a co-ordinated international undertaking with Western Europe. But it is interesting to see that whereas we have tended to downgrade our national interests and national abilities, this is not so in France. I came across a quotation from the French Prime Minister as recently as June, 1971, which really illustrates just bare philosophy. M. Chaban-Delmas says something very similar to what Sir Winston Churchill said 30 years earlier: Any nation which wishes to remain mistress of its own destiny must be mistress of its skies. That is why France chose to dominate her own military aviation, defence aviation assuming the role for France of trump cards. … This defence tool, military aviation, is inseparable from the development of civil aviation. France has backed up those words by actions. Whereas we have not got military aircraft to sell around the world, she has; and, as my noble friend Lord Harvey has said, she has fewer scruples.

I have a list of places where France has sold the Mirage. Apart from those (some 50) held over to go to Israel, nearly 600 Mirage aircraft of various marks are on the list. There are 110 to Libya, 106 to Australia, 90 to Belgium, 54 to Iraq, 40 to South Africa and 30 to Spain. I could go on. Here is an aircraft which, with spares, exceeds in value £2 million each; and she has sold 600. One imagines what that did for the strength of her economy and her balance of payments. The same applies to the Magister, a simple ground-attack aircraft. Apart from the German numbers, which I do not know, some 240 Magister aircraft have been sold over seas. Look at the Alouette. The Alouette helicopter has been sold to 30 different countries. If France can do it with an aerospace industry less than half ours in size, and considerably less than ours in scope and experience, surely we should not lack self-confidence in this particular field.

I heard, under the last Government, Mr. Wedgwood Benn (who had some rather strange ideas, I felt, at the Ministry of Technology) say that perhaps we had given too much consideration to aerospace developments and avionics, that it had been a hot-house plant, the darling of successive Governments, and that he wondered whether it would not be better perhaps now to start designing, say, more up-to-date laundries, more efficient stores and stock control by electronic methods; and would not this be a better way in which to spend our money? Surely we must back success. The aerospace industry has had a story of success over the last 30 years. This is not the moment to draw back. As other speakers have mentioned, we pioneered the turbo-prop first, then the civil jet, radar, and many others.

But even to-day we have four areas in which we could play a leading part. First is the VTOL, the Harrier, and the possible civil spin-off which could come from that idea. The second is the supersonic Concorde. Here I agree most heartily with what my noble friend Lord Thomas said: that we really must sell this with some confidence. What has happened to this nation of shopkeepers that we allow everyone else to beat the drum on behalf of an aircraft jointly developed and on which we have pussy-footed for so long? Let us go out and sell it in the way in which it deserves to be sold.

Thirdly, I would recommend effort concentrated on quieter engines. Here support would be forthcoming from all over the world. It is possible, as the noble Lord, Lord Beswick, said in his most interesting opening speech; and this is where I think money should be invested. It is a much better investment, as I have always said, to pack aircraft into an existing airport, like London Air port or Gatwick, and make them quieter and therefore more acceptable, than to spend hundreds of millions of pounds putting down new concrete strips miles away from the centres of population. I will not quote the figures again—they have been quoted several times; but whereas the United Kingdom share of world trade has been going down in the last ten years, the record of aerospace world trade has gone up, which is wholly admirable.

I want to turn for a moment to inter national co-operation. I believe in co-operation with E.E.C. I also believe in partnership between our Government and our industry. I believe in a partnership between our industry and the French, German and Italian industries. But inter national partnerships of this sort are founded on a national partnership. I know that here I am speaking to the converted, because my noble friend the Minister of Defence has fought a valiant battle to try to get Ministries closer to individual firms. But we still have an immense way to go. I know of several instances where the Germans and Italians have representatives from their firms actually sitting at desks in their Ministries and working on joint international projects. I have never once heard of that happening here. Civil servants will consult a firm which is concerned with an international project, but the liaison, though better than it was, is not nearly good enough. I urge my noble friend to try to break down this reticence on the part of civil servants. They are admirable people but they like their power, and they do not like to devolve it to industry. I urge him to do his best to continue with the progress which he is already making in that direction.

So, my Lords, let us, of course, have international collaboration when it is possible and essential. Secondly, as said earlier, let us carry on with our own national development. There are many areas in which we can do this, and particularly in respect of missiles. Thirdly, if we have to buy abroad—I know that I have said this before—may we be assured that there is a quid pro quo for everything we buy. I am still unconvinced that we have a quid pro quo for EXOCET. I believe that surface-to-surface missiles, French designed, will cost us between £80 million and £100 mil lion before the order is over. Where is the offset? I understand that we are having talks about LANCE, the American missile. Are we to get a quid pro quo there? I understand, also, that we are having talks about Electronic Counter Measures, PODS, which probably we need badly. But here again, are we to have a quid pro quo from the Americans? We are about to make an order for SPARROW. Is this to be offset by something the Americans are to buy from us? If so, let us be told about it. But, if not, let us put the matter right before we finally sign the order. It is my belief that we are going to spend some £200 million on the list which I have just given to your Lordships, on purchases from the United States, so it is very important indeed in the long term that they should buy similarly from us.

If I may summarise, my Lords, I urge, as other noble Lords have done, that as soon as conceivably possible the Government, after considering the Marshall Report, should lay down the broad lines. I have suggested four areas where I think that we could push with Government support: VTOL, STOL, both military and civil (the civil one is of supreme importance); supersonic travel; noise, and I would add one more, blind landing. Secondly, I ask for the maximum co-operation and liaison between the Ministries and British industry. The National Defence Industry Council is a beginning. The noble Lord, Lord Beswick, suggested that we might have an Aerospace Council; that is an alter native suggestion. I do not mind which sort of Council it is so long as industry and Government grow closer together, as happens in America. I was told only yesterday by a friend of mine who had returned the previous day from America, where he had been to a symposium on some defence projects, that there were 500 people from industry listening to the defence outlook on certain aspects, and no holds were barred. It was absolutely open. I think that on one occasion the small British contingent of three were asked to withdraw when there was some discussion on laser technology, but outside that the meeting was absolutely open to discussion—what the U.S. Defence Ministry wanted, with American industry saying what it could do to meet those needs. So let us push on with a similar partnership.

And, please, if we have, as indeed I know that from time to time we do have, to buy aircraft or missiles from abroad, because we cannot always back good horses, let us have a firm quid pro quo. I have not sought to advocate any more support for our aerospace industry than other nations give to their aerospace industry, but we are entitled to have the same amount of support. Lastly, my Lords, I would say that to do nothing is itself a decision to surrender the position of a very proud and a very capable industry.

5.6 p.m.

EARL ALEXANDER of TUNIS

My Lords, I am particularly pleased that my noble friend Lord Kinnoull has placed this subject before the House for debate. He has made pertinent points clearly and crisply, and his knowledge of aerospace matters is well known to your Lordships. After eight knowledgeable speeches little remains for me to say. This country has a proud record in aviation. In the days when it was a sport Britain broke records continuously for speed, height and so on. The tradition is still maintained by Sheila Scott. When aviation became a science we gave the world the swing-wing, the jet engine, radar and so on. This subject was covered by my noble friend Lord Harvey of Prestbury, I believe that no other country has done more than this country to improve the standard of aviation in terms of safety and efficiency.

After those pro-British remarks, my Lords, I should like to turn to the multi national role that we are now playing: I am thinking in terms of the Concorde programme. I believe that this aircraft is going to be one of the biggest and most successful that we have produced for a long time. Perhaps I may look for a few minutes at the American aerospace industry; it has quite a number of advantages over others. First of all, it can offer far better financial terms to buyers, including no down-payments for aircraft, and 12 to 15 years to pay. Also the American Government is preparing a Bill to form an aerospace reconstruction finance corporation which will guarantee loans up to £350 million for companies like Boeing which are building commercial aircraft. Gladly I see that they are not continuing with their super sonic transport. Of course our super sonic transport, the Concorde, as I said, is a marvellous prestige vehicle for this country and for France. I believe that we shall very soon be seeing the fruits of our collaboration.

It is easy to criticise the way in which the taxpayers' money is being spent, but such criticism usually gets a wide audience. Costs are a big factor but research has to be undertaken. For example, the research into jet noise to which reference has already been made affects all of us. Due to this research, the RB.211 is now probably about the quietest engine in the world. But naturally these improvements can be introduced only when they are commercially justified. In other words, it is impracticable to put the RB.211 engine into an aircraft which is nearing the end of its service life. But noise abatement laws being what they are, these commercial considerations have to be tempered by social needs. Anyway, it is just one example of the aviation industry's aim; that is, to build aircraft that will make a profit for the industry and for the airline, and that will conform to the standards of safety, noise limits and so on to the benefit of all.

The problem of transportation of any kind is now becoming very serious. For instance, if I may digress for a moment, the country is now criss-crossed with roads, motorways, canals and railway lines, and saturation of surface routes is surely not far away. The airspace above is now criss-crossed with aircraft routes, the saturation of which is causing much concern to air traffic control. Large aircraft need lots of room, and safety margins require most up-to-date aids to navigation. All this leaves us with little room to manoeuvre. Here I come up with a suggestion which has been gaining more currency during the past few years. I am sure that most of your Lordships have seen or heard of the flight last week of the Goodyear airship: others might also recall the intense activity in airships some 40 years ago. Here I must declare a small interest. I am a director of a subsidiary of Manchester Liners, which is in the Furness Withy Group, although I do not happen to be a shareholder. The company, Cargo Airships, has made certain studies into the viability of the airship as a cargo-carrying system. Might it not now be worth reappraising the airship? I do not mean this as an alternative to the aircraft, of course, which it is not, but as a complementary system with air transport.

I should like to mention briefly a few of the many advances that have been made in the past 30 or 40 years. For instance—and I am sure your Lordships are aware of all these points—navigation systems have become far more sophisticated and weather forecasting much more reliable. Aero-engines have become highly efficient and have a much better power-to-weight ratio. We have materials such as carbon fibre, of which this country controls the world rights. We have Dacron, a lightweight, composite material which is used in the United States for balloons and so on. And we have non-flammable gases. So it seems to me that we have a distinct advantage over those engineers, brilliant though they were, of the 'twenties and Thirties, who had goldbeaters skin and such things at hand.

That is the case for the physical air ship. First, it is much less noisy than to-day's aircraft. Secondly, it does not need a vast fixed base or the infra structure of a modern airport with its miles of tarmac. It has most of the advantages of the helicopter, but is much safer and much cheaper to run. Thirdly, the airship becomes more efficient the larger it is. For example, if the length and diameter are doubled the gross lift is increased seven to eight times, which is considerable. Fourthly, an airship does not need power or forward speed to keep it in the air, which is another very important safety factor. Lastly, although much slower than the aeroplane, the air ship could fly door-to-door from, say, a city in this country to a city on the Continent, which with a block time against aircraft would fare very well. And of course the goods for shipment by airship would be much cheaper.

We have never thought of the airship as being a passenger-carrying vehicle. I am confining my remarks to its cargo-carrying capabilities and its contribution to the aviation and export industries of this country. I should like to quote a passage from a paper entitled The First Principle of Flight, by Max Rynish. He says: If we now have the technology needed to build the sophisticated supersonic Concorde, then surely we have sufficient to make an essentially simple low-speed structure such as the airship. However, there are two problems to be overcome first, not technical problems, but human ones. The first is that there is a lot of money tied up in the present world cargo transport system, and no matter how unsatisfactory they are there are a lot of people with a strong and vested interest in perpetuating them: people as apparently diverse as shipowners and dockers' trade union leaders, lorry manufacturers and shipbuilders, roadbuilders and railwaymen. He says later—and I think this is most pertinent: All the essentials except the airship already exist. It is well within our skills and scientific knowledge. The airship was too far ahead of its time. Now we have the materials at hand; we have the techniques and expertise. Now is the time to reappraise this by no means novel form of transport with a fresh mind. I cannot believe that there could be objections on the ground of cost. Finally, I hope that at the first opportunity the Government will take a long hard look at the airship.

5.16 p.m.

LORD REDESDALE

My Lords, along with many other noble Lords who have already spoken, I should like to add my thanks to the noble Earl, Lord Kinnoul, for giving us the opportunity of discussing British aerospace to-day. I may sound a bit of a Jonah at this point, but many of the matters that have been raised in the debate leave later speakers with not much to say. However, talking about the 1971 figures, which I think have been mentioned already at least five times, the magic figure of £328 million was an all-time record. This is wonderful news. The S.B.A.C., as one group, thought that the figure would be only £278 million. In fact, January again shows record figures. It is not surprising that the S.B.A.C. were surprised that this figure was as high as it was, because most of these sales are on replacement items, which were for projects started not per haps as much as ten years ago, but get ting on for ten years ago. If the sales are to continue upwards, there have to be new projects. But I am afraid, referring back to my being a Jonah, that 1972, 1973 and 1974 will probably not hold up to these record figures, although I hope that I shall be proved wrong. Obviously there is an inflationary factor which holds these figures up. It will not be until 1975, when projects such as the Concorde and the RB.211 come into their own, that we shall start building up our export figures again. The point I am making is that we have had new projects over the last ten years, and therefore we shall have a rather leaner period unless we start a number of projects now which will come into their own in the 'eighties.

Following on from this, there are many other countries which have now seen the potential of having their own aircraft industry. Without mentioning the obvious ones that have become well established, such as France, we have Canada, Australia, Japan, South Africa, India, Israel, Egypt and certain South American countries who have started building up an industry. It is a pity if we are allowing our industry to fall back. One of the reasons why the American industry has been strong for so long is because of its strong internal route system. This allowed for relatively cheap fares. Admittedly, in the United Kingdom some of our shorter route fares, such as London to Edinburgh, have gone up considerably, whereas the London to New York fares have, taking into account inflation, declined in cost. However, if we had a non -IATA fare system in Europe, as was mentioned by the noble Earl, Lord Amherst, then I believe it would strengthen the European airlines considerably.

There is one small problem about this. The noble Earl mentioned that the E.E.C. had laid down rules in the Treaty about this. In fact, under "Transport" the Treaty covers rail, road and waterways, and under Article 84(2) it says: The Council shall have power to decide by a unanimous decision, whether, to what extent and by what procedure appropriate pro visions could be made in respect of sea and air transport. It would seem then that it is up to us now, or at the earliest opportunity, to urge the Council of Ministers to reach a unanimous decision about air transport within the E.E.C. If, as I believe it will, this builds up a stronger airline order book for the European aircraft industries, it is important for us to go in as leaders of projects and not to tail along, as we have done on such projects as the A.300B. The only way in which we can lead projects is through R. and D. schemes.

The noble Lord, Lord Thomas, spoke very knowledgeably about the reversible thrust, variable pitch fans. This is a project which could help us in the one area in which we are leaders at the moment; that is, the V/STOL area. It we put sufficient backing behind the scheme it would obviously give us a tremendous lead and we could once again be leaders in a project and not followers on. One point that the noble Lord did not make about the variable pitch fan is that it can be used at speeds which vary from the landing speed right down to shut-off time. At the moment, of course, the existing reverse-thrust jets have to shut off at about 70 knots because of the danger of ingestion of stones as the aircraft over takes its own thrust. This obviously does not apply with the reversible fan because it is blowing out and throwing away through its blades at the front, and not pushing the aircraft forward. I have been told—I am not sure whether I am right about this—that there is a danger of this particular project being either shelved or postponed due to lack of support. If this were to happen, I think it would be a very great pity.

May I end by making this point. The feasibility study which has been put in hand—I do not know how much money has been put behind it, but I gather it is somewhere in the region of £1 million—for V/STOL recently for B.O.A.C. and Hawker Siddeley is a project which I feel must receive most of our support in the immediate future if we are to remain leaders in such projects.

5.24 p.m.

VISCOUNT CALDECOTE

My Lords, I must apologise to the noble Earl who initiated this debate for not being here to hear his speech. I should like to concentrate on two points. First, as to Europe, although I know that this debate is concerned with British aircraft, I believe that the future of our industry is indissolubly linked with the European aircraft industry. Much has already been achieved in collaboration with our European friends, but we must face the fact that many of the projects on which we are collaborating have not proved altogether to our advantage, Concorde is certainly a fifty-fifty partnership and it is going extremely well. I think it can truly be said that though it is a fifty-fifty partner ship, it is one for which we can take much credit, because at the very beginning we took the initiative, very largely based on work which was done in the Royal Aircraft Establishment at Farnborough.

In subsequent collaborative projects such as the Jaguar, the Airbus, the M.R.C.A.—in each of these we have to some extent sacrificed our position, and perhaps from an altruistic attitude or for one reason or another we have put our competitors (as they still are to some extent) in Europe in a stronger position than they enjoyed before the collaboration started. We cannot ignore that situation. We have to accept, sadly, that Europe still consists of a number of nations with their own aerospace policies. They are still looking after their own interests, just as we should, until Europe comes much closer than it is now. We have not yet got a well-defined common objective in Europe. As I say, there are many vested nationalistic interests which are still very strong. I believe that to some extent we have lost ground because we have been playing the game, as we so often do, by Queensberry rules that other people have not always followed. We have sometimes lost because we have not exploited British successes as we should have done. Indeed, as other noble Lords have pointed out, we did not exploit the success of the Harrier, the vertical take-off aircraft and other successful projects such as the VC 10 and the like. But this is all water under the bridge, and all we can seek to do now is to learn from the past.

Some years ago I was involved in the European Aircraft Trade Association, commonly known as AICMA, and in 1967 we held a conference in London of all the European trade associations, in which many of the big European companies took part. The intention was to try to get the industries and the companies of various European countries together to adopt a concerted policy for the European aerospace industry as a whole. It was a very interesting conference: some good papers were presented, several of them by British engineers and aerospace industrialists. We made some progress, I think, and finished up by making quite a large number of recommendations—I should like to quote one of them in a moment. Unfortunately the attempts which were set in motion by that conference to pull together the European aircraft industry and to adopt a common policy completely flopped at that time. This was largely owing in the first place to French intransigence.

I remember very well that we were making good progress. We had, I thought, the co-operation of the president of the French aerospace trade association, the opposite number of the S.B.A.C. in France. We were making good progress to get together to concert plans; but of course plans of that kind involve the giving up of some national sovereignty, and quite suddenly the policy of the French delegation changed. It became clear that from somewhere above, somebody—the General probably—had said "Non": and that was the end. There was no further effective collaboration. The second reason why those attempts failed was because of governmental apathy, not only on the part of the British Government but also by other European Governments—a lack of keenness really to get together and face this problem of the industries and companies concerned with European aerospace reaching a common policy. Many were sitting out on nationalist wings and maintaining nationalist policies.

One of the recommendations we made was to the effect that Governments should be urged to set up an inter-governmental working party to identify obstacles to satisfactory European co-operation in the aviation field and to remove those within the competence of Governments; and that the initiative in this respect should be taken by the British Government without waiting for developments in the political field such as the Common Market negotiations and the like. A rather similar recommendation had in fact been made a little time before by the Plowden Committee. Subsequently it was suggested that the first step should be to set up a small permanent European aerospace secretariat. It would serve the Ministers when they met, follow up their decisions, do the staff work in preparation for their meetings and initiate any detailed studies required through existing national organisations. This was contained in a speech I made to the AICMA Council, and I finished by saying, "If we in Europe are serious about co-operation, surely this is the least that should be done." I still believe that it is the least that should be done; but nothing was done and neither of those recommendations ever progressed any further. I believe that was a great pity, because I do not think it is satisfactory to deal with collaboration on an ad hoc, project by project, basis. You must have an organisation of people talking to each other, backed up by an international secretariat which will do work unbiased by vested national interests but entirely devoted to the welfare of the European aerospace industry.

I do not believe that collaboration with America is the complete solution to our problems of the mounting cost of aerospace development. I believe the solution lies in forming a strong European aerospace industry by some of the means that I have suggested, forming international mergers of companies as well as just collaboration ad hoc on projects. From that base of a strong European aerospace industry it will be possible to collaborate much more effectively with the great American aerospace industry on equal terms and without giving away our position.

Secondly, I should like to turn to the subject of space. I think the British efforts in space have been rather sad. They have been far, far less successful than they might have been, and than they could have been, backed up as they are by a tremendous amount of experience and engineering knowledge. That situation has been due to divided responsibility here, and lack of clear objectives in a policy. This situation should have been made much easier by the establishment a little while ago of the Ministerial Aerospace Board which was to deal with space as well as other matters. But from what I hear this has not made a great deal of progress so far as space is concerned.

I do not suggest that we should get involved in hopelessly expensive projects like man in space. But why in heaven's name did we opt out of the communication satellite project in earlier days? I remember so well when working in the aerospace industry when I was on the S.B.A.C. Council that we had a meeting in the early 'sixties with the Minister of Aviation and the then Postmaster General to discuss communication satellites. At one end of the table were those two Ministers, at the other end were the S.B.A.C. delegation. We pleaded for a long time for a policy, for an effective positive policy, on communication satellites; that we should go into the communication satellite business be cause it was a technology that was going to be of great value to the industry, be cause it was something useful and not just spending money on research in space for spending's sake. It was something that was going to revolutionise, as it has done, international communications. The reply of the Post Office was that if some body put up a communications satellite they would be happy to take a few channels in it but they were not interested in supporting the British aero space industry in developing or designing satellites. So far as I remember, the Ministry of Aviation's reply was that it was all too expensive and, in any case, the Americans were getting on with the job and there was no place for us or, indeed, for Europe. It is true that it was only through the initiative of British industry itself which got in touch with the great American companies that were developing communications satellites, that the British industry has had a useful part to play in this very important and advancing technology.

I ask Her Majesty's Government: what is their present policy on space? Have we moved at all in the past ten years? Have we a policy on what I call "useful space"? I leave aside space research merely for the advancement of know ledge of the upper atmosphere and the like. Space systems, or weather satellites, communications satellites, navigation satellites and the like, are here to stay. They are not some passing phase, they will grow as time goes on. They are important leaders in technology. Perhaps one of the most important aspects is the tremendous effect that they have on the reliability of components. Are we really saying that this is something that is beyond us? If it is beyond us, is it beyond the capability of the European aerospace industry? Are the Government satisfied with the organisation for space in Britain and Europe? The signs are not too good. There was the recent threat by the United States to withdraw the availability of a launching rocket for the European research satellite—one of the T.D. series, I think. Happily, that difficulty was resolved. It shows what happens when you rely on competitors to launch your satellite project.

I have heard rumours—and perhaps this is the case; I should be interested to know whether it is—that the work on the ion motor, which is of considerable value in space work, is to be or has been stopped. Recently, I have heard of the propositions being put forward by America for work on a space shuttle. I remember six or seven years ago a lot of work being done in British industry on a space shuttle—this is, a space vehicle that can go into space and can come back. I do not think a penny was subscribed by the Government; it was a private venture initiative. It was not developed, it was a paper study—it would have been far too expensive to have gone beyond that stage. It was good work but it was never followed up. Here we are again, rather in a Harrier situation, where I believe we are still trying to make up our minds whether we should respond to the American initiative and whether we should take part in this programme of applied research, possibly leading to development in the future. If we opt out I do not believe that all the European aerospace industries will opt out. I am very worried that we shall find ourselves tagging along "tail-end Charlie" again in space.

It seems that although we have moved a long way there is still some lack of determination or sense of urgency. We seem to be losing opportunities, good though our work is in so many fields in which we could lead. We lead in a few but we could lead in so many more fields. What we need in space, as in so many other aerospace fields, is a long-term plan so that those who are working in the industry can keep their morale high, the companies concerned can lay their plans and Governments can support them through research in Government research establishments, and financially.

Finally, I should like to reinforce some of the points that the noble Lord, Lord Redesdale, made. It is important to remember that the record aerospace exports last year came from decisions made ten or more years ago, and from work done in the intervening period. If we do not take decisions now—and there is a horrible gap, as others have pointed out, in the civil aircraft programme—then the 1980s are going to be a very lean time. Let us build on our know ledge and experience, which is so big and so worthwhile, and ensure that in future we get a fair share not only of the work but also the leadership in collaborative projects.

5.39 p.m.

LORD TREFGARNE

My Lords, I should like to begin by apologising to my noble friend Lord Kinnoull for not being in my place when he rose to speak. He knows that I had another meeting which I had to attend. I have only one topic that I want to raise this afternoon. As we know, the Concorde project has cost us nearly £900 million and I suppose it is not beyond the realms of possibility that it will cost a little more before it is completed. Having spent that vast sum of money, we are putting all that at risk by not planning far enough ahead for the financing of the production of the aeroplane—by that I mean assisting the airlines to purchase it once it becomes available.

Of course, so far as B.O.A.C. and Air France are concerned, and no doubt the major American carriers as well, this will not present any great problem. But the success of the Concorde projects depends not solely upon the large orders from the major carriers, but also from what we hope will be a very great number of small orders from a very great number of small airlines. One can think of a number of airlines in Africa, in South America, in the Middle and Far East which perhaps have a requirement for only one, two or three aircraft and which are going to be very hard pressed to find the sort of money that is required to purchase and to finance the introduction of the Concorde.

I believe that the only practicable solution to this problem is for a company to be set up—and because of the sums of money involved it will have to be a company with joint French and United Kingdom Government backing—to lease these aircraft to the smaller airlines. My Lords, we must not delude ourselves about the sums of money which will be required. We ought to be thinking in terms of another £1,000 million to finance this project, and clearly the money would have to be found jointly from the two major Governments involved.

My Lords, I have in mind a system whereby all the aircraft to be manufactured, except perhaps those committed to the major airlines, should be purchased by this company and leased out to these smaller airlines. It may be that in addition to the basic leasing arrangement this company ought also to offer some sort of service for what is known technically as the major rotable components—I mean, of course, in particular so far as the Concorde is concerned, the engines. These engines are bound to be extremely expensive even by present-day standards, and at the present time, especially when the Concorde first starts in service, they will have only a very limited life expectancy. But as the project develops and as more and more Concordes come into service, then the engines will become more and more reliable, the time between overhauls will increase and the economic burdens therefore will decrease. But I hope the Government will consider very carefully the question of financing the purchase and after-sales support of the Concorde, and perhaps my suggestion will have some merit in it.

5.44 p.m.

THE MINISTER WITHOUT PORT FOLIO (LORD DRUNIALBYN)

My Lords, first of all may I add my congratulations to my noble friend Lord Kinnoull on initiating what has proved to be an extremely interesting debate. I know he had a long time to wait, but the subject relates to an industry of extraordinary importance which affects so many aspects of our national life.

We have ranged very widely in the debate, from a national space programme down to the duty-free shop, and I do not think I could possibly be expected to take up all the points that have been made. But one or two noble Lords were good enough to indicate in advance some of the questions they were going to put and I hope to be able to deal with most of them, as well as those raised by other noble Lords in the course of this debate. But as has been frequently said in the debate, this is an occasion when the role of the Government speaker is primarily to listen, for the debate has taken place just as we are expecting to receive the advice of the committee chaired by Sir Robert Marshall, the Secretary, Department of Trade and Industry, which was set up to consider the future of the British aerospace industry. I am there fore not in a sposition to-day to deal with all the issues which have been raised the major ones must obviously await whatever may result from the Government's consideration of the commit tee's report.

May I say straight away, my Lords, that this has been a debate in which many speakers of great experience have spoken and what they have said will most undoubtedly be taken into account and carefully considered when the Government come to consider the Marshall Report.

LORD BESWICK

My Lords, I am sorry to interrupt the noble Lord so early in his speech, but do I understand that this report has not yet been presented? If not, when is it expected?

LORD DRUMALBYN

My Lords, I am tempted to answer by a French word, but I will say almost right now. As I understand it, it is on the point of being presented at the moment. Perhaps I may say this now: I have been asked whether the report will be published. It is most unlikely, but when the Government have made their decisions then no doubt they will announce those decisions to the House as they always do.

It may be acceptable to your Lordships if I indicate briefly what the Government see as the main framework against which policy will be considered. I believe the first point to make is that it is really out of date to look at the industry in a purely national context. The two most important forces which will shape the industry's future are international—first, the development of a world market for aerospace products; and secondly, the entering of this country into the enlarged European Community. I should like to consider these two forces in turn.

The current world recession in the market for aerospace products is still upon us. In the civil sector, this has combined with the ever-increasing costs of developing new projects to present the industry in America and Europe as well as in Britain with a whole range of problems. Production of existing types, as has been said time and time again in this debate, is in many cases slowing down or coming to an end and manufacturers are cautious about launching successor projects. Exhaustive, sober and realistic market appraisal exercises are now recognised as an essential prerequisite to the launching of a new civil type. The market for increased speed and size can no longer be taken for granted, and manufacturers cannot rest on the assumption that if only their product is technically superior it is sure to be a money spinner.

Though sales in some civil sectors remain depressed, the future markets for civil aerospace, it is universally recognised, will probably be very large indeed, and though the challenges to be faced will be no less than in the past, there is every confidence that through further techno logical advances in quietness, reduction of pollution and short take-off and landing, aerospace can continue to offer to the community its speediest and most efficient form of international transportation.

Clearly British industry will gain from this expansion, only if it is internationally competitive. This brings me to my second major consideration—the entry of Britain into the enlarged European Community. For some years now it has been recognised that the future of the British aerospace lies in the orientation of a strong indigenous industry towards inter national collaboration particularly in Europe. Many cross-frontier links between British and European firms have been established, both on individual projects and sometimes also on a range of projects. We hope and believe that our entry into Europe will lead towards the strengthening of these links and the establishment of more permanent industrial relationships, and I take very careful note of what my noble friend Lord Caldecote has just said on this subject. By sharing development costs, by pooling financial and technical resources, by undertaking integrated research programmes, by reducing wasteful competition, by rationalisng capital facilities and seeking to achieve economies of scale, the European aerospace industry can put it self in a position to compete effectively with the American giants in the world market. The corollary of an integrated European industry should be a movement by European airlines and air forces towards harmonised purchasing policies.

On the defence side, we have already gone some way in this with our NATO allies, and I believe we should look for even greater harmonisation of operational requirements and co-ordinated procurement. The airline problem may be more difficult. Airlines, understandably, defend fiercely their right to choose the machines which they believe will enable them to compete most successfully. The grouping of airlines in Europe has already begun to set the pattern for rationalised purchasing, and the British Government, in establishing the British Airways Board, have recognised that the possibilities for rationalised purchasing by B.E.A. and B.O.A.C. must be carefully examined. The future strength of the European civil aerospace industry will greatly depend on its ability to capture an adequate share of an increasingly rationalised European market. The ideal to aim at—and it is one which requires reciprocity on the part of others—is to provide European manufacturers with the advantages of a large market without depriving customers of freedom of choice.

There is no doubt that British industry fully appreciates the benefits of closer links with Europe, and the need to establish a more permanent European industrial base. A topical example has been the formation of a consortium comprising B.A.C., Messerschmitt-Bolkow-Blohm, of Germany, and SAAB-Scania, of Sweden, which was announced last month. The consortium will jointly examine the prospects of the development and production of a Q/STOL airliner. Another example is the Rolls-Royce proposal, to which my noble friend Lord Bessborough referred, that a consortium of European aero-engine companies should be created for the purpose of fostering joint projects. There is no doubt that the basis for closer industrial collaboration exists, and that the will towards it is waxing stronger.

My Lords, that is the commercial background as I see it. What about the Government's role? On the defence side as the industry's major customer, and on the civil side through the policies of launching aid and other assistance, the Government have continued to afford massive support to the industry. In military research, development and procurement, the Government are spending over £300 million per year. As to the civil industry, since 1945 support has been sustained at a high level, and is currently running at a level of over £100 million a year. The present Administration have effectively supported the three major programmes which will see the industry into the 1980s; that is to say, Concorde, the RB. 211 and the M.R.C.A. We have given a new impetus to Concorde, the project which we launched 10 years ago. We have, in the face of cancellation threats, enabled the RB.211 programme for TriStar to go ahead, and we have maintained essential activities of Europe's leading aero-engine manufacturers, Rolls-Royce, after the company's collapse a year ago. On the M.R.C.A., steady progress continues.

As to other aircraft, in recent months we have brought forward defence orders to meet some of the industry's short-term problems. The orders for the additional Buccaneers and Nimrods, and the selection of the HS. 11–82 (to which the noble Lord, Lord Kings Norton, referred), Bulldog and the Jetstream are highly satisfactory answers to the respective defence requirements. In our procurement policy for military aircraft, as in other areas of the defence equipment programme, we assess rationally the best way of meeting our operational requirements out of our industrial and financial resources, acting either on our own or in collaboration with our allies. Only when there are compelling reasons of timing or of costs, or when there was no British equipment available or in prospect would we decide to buy from abroard. For these reasons we attach great importance to maintaining a vigorous industrial base, and to strengthening our relationships with the defence industries. This not only means regularity and frequency of contact at all levels, which is something on which great emphasis has been put in this debate; it also means a continuing endeavour to organise and phase the defence equipment programmes in such a way as to promote in our suppliers continuity of work so far as possible and the efficiency that is born of confidence and a clear appreciation of future needs. One noble Lord after another has stressed this as what they believe should be the Government's objective; and it is the Government's objective.

The industry's most important project on the military side is the M.R.C.A., Europe's most advanced military aeroplane. The programme review last summer, in conjunction with our German and Italian partners, confirmed that satisfactory progress towards the achievement of costs, performance and time-scale targets was continuing. The industrial partnerships responsible for the management of the airframe, engine and equipment programmes have grown in strength and harmony and yielded valuable experience in collaboration which should contribute towards the evolution of an integrated European industrial base.

On the civil side, Concorde production is under way, and the Government have declared themselves fully behind the companies' drive to secure the first firm orders. I note what my noble friend Lord Orr-Ewing said about the need for enthusiasm, and I can assure him that the Government are fully behind this. Good progress is being made with the RB. 211. The engine has now received an Airworthiness Certificate, and the results of recently completed tests justify the expectation that full standard certification, by both the U.S. Federal Aviation Authority and the British Air Registration Board, will he achieved this month in time for the first deliveries of the TriStar to airlines in mid-April.

For the civil industry generally, how ever, the prospects are less fully defined, as one would expect in a market in which demand is by nature periodic or cyclical; but I do not doubt that the demand will rise again. Some say that the airline recession will end this year; some that it may not finally lift until 1975. All are convinced that it is only temporary, and that the civil aerospace markets of the 1980s are likely to be larger than we have yet experienced. The European industry should continue to be able to capture a proportion of most of these markets, as the noble Lord, Lord Beswick, said. The Government, for their part, have been ready to consider launching aid for any project put forward by the firms which meets the criteria of substantial market prospects and of technical and financial soundness. Though future prospects for S/TOL and perhaps V/TOL are exciting, we have to bear in mind that there is no merit in launching a project of the kind pre maturely, before definite market prospects related to a specific design and a specific system have been identified and have crystallised. The Government are pressing ahead with studies aimed at establishing the optimal design and operational characteristics of short or restricted take-off aircraft that are quiet, and B.A.C., Hawker Siddeley and Rolls-Royce are, with Government assistance. undertaking in parallel exploratory engineering studies into some of the key technical areas. Ultimately, our concern must be with the very broad question of operating economics within a total transportation system. The design of the vehicle is only a part of the total appraisal process.

My noble friend Lord Kinnoull asked who will negotiate rights to fly over particular routes: will it be Governments or airlines? In reply to that I would simply say that the Government have powers under the Civil Aviation Act to regulate or prohibit commercial super sonic flying over land and are at pre sent considering how these powers should be exercised. But it is for individual Governments to decide whether, and if so how, they should regulate commercial supersonic flying over their territory. Most of Concorde's potential routes are in fact over international waters.

My noble friend also asked about the Harrier—and one or two rather harsh things have been said about successive Governments' attitudes to the Harrier. As the House is aware, trials of the Harrier were carried out from "Ark Royal" last year and these made an important contribution to our studies. They showed that V/STOL aircraft can be operated effectively from a ship's deck and that there are no technical or logistic reasons which will prevent V/STOL aircraft from being deployed at sea. We are pressing ahead with these studies, in which the Royal Navy and the Royal Air Force are working together. Beyond saying that they are likely to continue for some months yet, I will not promise a date by which they will be completed; but when conclusions have been reached I can undertake that a further statement will be made to the House, because I realise from what has been said to-day that there is a great deal of interest m this matter. The noble Lord, Lord Beswick, in a very interesting speech, advocated the creation of an aerospace council. He made a plea for an ever-closer partner ship between the Government and the aerospace industry, and I am sure this is a matter which will receive careful attention in the course of the next few weeks. Much is, of course, already done, and there is a great deal of consultation at all levels, both formal and informal. I am not sure whether an aerospace council would be the best answer, but it is one suggestion that will almost certainly be considered. The noble Lord, Lord Kings Norton, also referred to the need for consultations between the Government and industry and suggested long-range planning. He mentioned the close relationship between a number of military and civil aircraft in the United States of America. As I have said, we shall certainly look carefully at the general issue, but I would not have agreed that consultation does not already exist. Indeed, as regards transport air craft there is, as noble Lords will know very well, a high-level body of long standing—the Transport Aircraft Requirements Committee—which brings together the leaders of our airlines, the R.A.F. and the aircraft industry, to consider together the future needs, both military and civil, for transport aircraft.

LORD KINGS NORTON

My Lords, may I interrupt the noble Lord for a moment to say that there is widespread disenchantment with the TARC?

LORD DRUMALBYN

My Lords, if that is so, one answer may be to improve what we have got; another may be to consider other solutions. The co-ordination that exists between the responsibilities for civil aviation policy on the one hand and military policy on the other has been explained by my noble friend Lord Carrington, and the Board that co-ordinates this works in conjunction with the procurement executive—if that is the right phrase. It is always known as "P.E." and I am afraid I forget these terms from time to time.

The noble Lord, Lord Beswick, referred to Rolls-Royce management. He rightly paid tribute to the great service rendered by the noble Lord, Lord Cole, and Mr. Morrow, and, I would add, the whole board of Rolls-Royce 1971, who last year took on a very difficult job in the national interest which less public-spirited men might easily have found an excuse to decline. I accept what the noble Lord has said about the need to secure the leadership of the company for the future. The main responsibility for doing this of course rests with the chair man of the board, but I can assure the noble Lord that they are well aware of the importance and urgency of this task, and I am sure they will consider with care the importance laid by the noble Lord on this subject.

LORD BESWICK

My Lords, if I may interrupt for a moment, surely it is not quite correct to say that the responsibility lies with the chairman of the company. The responsibility lies with the Minister who appointed the chairman. If the pre sent chairman is only a temporary chair man, then I am asking for some decision to be made about the future chairman.

LORD DRUMALBYN

My Lords, I understand that and I think that what I have said covers it, but the noble Lord also referred to an engineering capability—I think those were the words he used—and that is essentially a matter for the chairman, unless the noble Lord means that the chairman should be somebody with an engineering capability; but that is not quite what he said. Perhaps I have now spelt out what he means.

The noble Lord also spoke about noise. I agree that we now have firm evidence that future aircraft should be much quieter than we had previously dared to hope, but it will be very many years before these quieter aircraft completely replace the existing noisier types, and we cannot expect that their introduction will eliminate the noise problem completely. The need for a third London airport to provide relief as quickly as possible for those suffering from noise at London's airports, and also to take London's future traffic, which is developing so fast, still remains.

On the other question mentioned by the noble Lord, namely, mergers in this country and whether we should have one airframe company and one aircraft engine company, I can understand the thought that underlies the question. Over the past decade or so the increasing cost of launching projects, and their diminishing numbers, have led to widespread amalgamation of aircraft and aero-engine companies, both in the United Kingdom and other countries. I do not think we can yet say that this process has come to an end. Indeed, I think that we are moving rather towards the eventual establishment of a truly international aero space industry that transcends existing national frontiers. I recall that the E.E.C. Commission favoured the establishment of cross-frontier companies rather than the establishment of national companies which might subsequently amalgamate or might, as I think the noble Lord said, have a nationalistic approach here. What ever may have been the opinion of the Commission on this matter, I am not certain that it has received full support with in the E.E.C. itself and I think we have rather to hold our fire on this subject at the present time. I have no doubt that it will be one of the points that will be dealt with by the Marshall Committee. I need say no more than that the point the noble Lord made so well has been fully taken on board.

The noble Lord also raised the question of the post-Apollo programme. That is something that we are still examining, and we are considering whether we should participate in this programme. We are continuing discussions with our European partners and, jointly with them, with the United States authorities, and a decision will have to be reached by the European Space Conference later this year.

LORD BESWICK

My Lords, I am sorry to interrupt the noble Lord again, but my understanding is that we shall have to take a decision, in principle at any rate, by July. Can the noble Lord indicate when a decision is going to be taken by Her Majesty's Government whether we are to accept the invitation?

LORD DRUMALBYN

Yes, my Lords, I think the noble Lord is right about that. We shall have to take a decision in the quite near future and it may be that we shall take it towards the end of next month.

My noble friend Lord Bessborough also raised a point about the European Launcher facilities. The Government have already decided to seek only ob server status in the European Launcher Development Organisation, and not to contribute further to the development of a European Launcher. Regarding the European Space Research Organisation and the European Launcher Development Organisation, the Government have declared their support for the creation of a unified organisation which would assist towards the better management of European space projects.

The noble Earl, Lord Amherst, raised a number of points as to some of which he was good enough to give me notice. He asked about the stretched Concorde. Other noble Lords have put the point that we should be now thinking about Concorde Mark II. No proposal has been submitted by the manufacturers; but if and when it is we shall naturally consider it against the hard economic criteria. But the first priority, surely, must be to make a success of the present aircraft. There are still two and a half years to go before Concorde is expected to enter service, and our first priority must be the success of the present design.

The noble Earl also raised the point about supersonic flying over land and asked about the sonic boom. There is no evidence that even large scale super sonic transport operations will have any adverse effect upon health or climate; but further research is in any event planned in the period before Concorde enters service, and the British and French authorities will be keeping a careful watch on the situation in the light of the results of research and the build-up of operational experience. The regulation of supersonic flying overland, as I said, is not a matter for international action; it is for each country individually to decide whether, and if so how, it wishes to regulate supersonic flying over its own territory, though international discussion of the problem, as opposed to regulation, is the responsibility of the sonic boom committee of ICAO. It is also worth noting that the Council of Europe welcomes the development of the Concorde as a means of enhancing Europe's competitive position in modern technology. I think the noble Earl suggested that if one went high enough there would not be a boom at all. I am in formed that boom intensity depends on the aircraft's weight and shape, on speed and on flight latitude as well as altitude. At ground level sonic boom from Concorde in cruise at 60.000 ft. would not differ significantly from the booms produced at somewhat lower cruise altitude of current test flying: that is around 50,000 ft. on the West Coast track. I seem to have dealt with most of the points I had noted. Some of them were dealt with by other noble Lords.

LORD HAWKE

My Lords, would the noble Lord answer something about which my noble friend Lord Trefgarne asked—this question of marketing this immensely expensive machine, because unless the means of marketing are there it will never get into service?

LORD DRUMALBYN

My Lords, I did take note of my noble friend's very interesting suggestion. I am sure he would not expect an answer to-day on that matter. But the question of marketing as such is bound to be one for the manufacturers. I thought my noble friend was more on the question of the financing of the purchases.

LORD HAWKE

That is what I mean by "marketing".

LORD DRUMALBYN

My Lords, the noble Lord, Lord Kings Norton, spoke about research; and here, of course, is an area in which undoubtedly the Government have a most important role to play. The aeronautical research programme undertaken within Government establishments and under contract in industry constitutes the scientific basis on which future projects will rest. Many of the technical features now helping to sell British aerospace products, civil as well as military, around the world first saw the light of day in a Government engineering laboratory. This work complements the high qualities of design and manufacture which have always been associated with British aerospace companies.

My noble friend Lord Kinnoull and others paid a tribute to those who work in the industry. That is a very well-deserved tribute with which I personally and the whole Government would like to be associated. It is through a good deal of their work that we have not only the construction of the planes but the concept of the aircraft.

The pattern in the industry since the mergers of the early 1960s has been, broadly speaking, the maintenance of out put at a steady or even increasing level, but a slow but steady reduction in the work force as efficiency and productivity have improved. In the last two years the work load has declined and the work force has been further reduced as a result of the aerospace recession. These are difficult times, but the present pause gives us a valuable opportunity to organise and shape our industry in a European context so that it is well prepared to meet the challenges, both technical and commercial, that lie ahead, and to meet them competitively and profitably. The Government intend to do their best to seize this opportunity. In the past, also, the industry has proved well able to overcome difficulties and to meet challenges, and I believe that in future it will do so at least as well.

LORD ORR-EWING

My Lords, could my noble friend answer the point put from these Benches? May we have an assurance that when we do buy from overseas we shall henceforward try to get an offset agreement?

LORD DRUMALBYN

My Lords, of course, whenever one enters into a collaborative venture of any kind, especially in the aircraft sphere a joint venture, then inevitably those engaged in the venture will want to see that their work load matches approximately the financial contribution they are making to it. This is quite inevitable; and there must be a good deal of hard bargaining and determination on the part of our negotiators to make certain that we get our work load. But how far it is possible, as between one joint venture and another, to stipulate for a quid pro quo I cannot say. I think perhaps my noble friend is asking for something a little different. He is asking that where we do purchase from abroad, whether it be the U.S.A., France or anywhere else, we shall seek to relate that purchase to sales we hope to make. I have every sympathy with this point of view. I do not think that in my position I can say more than that this is something I will urge very strongly upon the Government. It is something, I am sure, of which they are fully aware, but I suspect that it is a little more difficult to achieve in practice than may appear on the surface. But my noble friend the Secretary of State is very well aware of these things, and I am sure that we shall seek to do our best in this.

6.20 p.m.

THE EARL OF KINNOULL

My Lords, at the start I must confess that I felt very unworthy to open this debate. Having listened to the speech of my noble friend Lord Caldecote, when he took us into outer space, I knew then that I was totally out of my depth. I am most grateful to all noble Lords who have taken part in enriching this debate with their well informed speeches. It would obviously be invidious to pick out one speech. Perhaps I could thank my noble friend Lord Drumalbyn for replying to the debate so thoroughly and for answering the numerous questions. I believe it has been a useful debate. I hope it has been a valuable debate, and that some of the points which have been raised will be taken up by the Government when they frame their policy. If they do so, the purpose of the debate will have been achieved. I beg leave to withdrew the Motion.

Motion for Papers, by leave, withdrawn.