HL Deb 10 April 1974 vol 350 cc1334-57

8.18 p.m.

LORD KINGS NORTON rose to ask Her Majesty's Government whether, having regard to the fact that a number of relevant considerations do not yet appear to have been adequately presented to the public, they will undertake not to make a decision on Concorde before Parliament has had a sufficient opportunity to debate the matter. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I believe we are all waiting, some of us with some anxiety, to hear from the Government what their policy on Concorde is to be. But while we have this anxiety to hear from the Government something definitive on this vital matter, I think we do not want them to form their conclusions until after the most careful and deliberate consideration. My chief object in asking this Unstarred Question, is to urge the Government to treat the matter urgently, but still to take every relevant factor into account. The matter is complex; the Government have not been long in Office, and they must take the time necessary to become thoroughly familiar with the necessary detail and to balance all the factors.

My Lords, Concorde has been part of our lives in this country and in France for a long time. Basic research began as long ago as 1956: feasibility and design studies started in 1959. Discussions between the British Air Corporation and Sud Aviation started in 1961 and the British and French Governments signed a collaboration agreement in November, 1962. Perhaps this is the date which we should take as the real starting point. If we do, then we have been on the job together for eleven years. Some 21,000 people are at work in this country on the Concorde programme, many parts for the 16 aircraft already authorised exist, and material has been ordered for six more. Six aircraft have flown. The project is the most imaginative and important to develop in European technology since the jet engine, and despite what has been said about the cost of the programme, I am convinced that Concorde can prove to be a major national asset to Britain and to France.

In view of all this, I cannot believe that cancellation of the project is in the mind of either Government, and I only mention cancellation because it was one of the five options presented by Mr. Wedgwood Benn in his Statement in another place on March 18. These options were presented solely in terms of cost, and perhaps the last four can legitimately be considered on this basis. Cancellation however is an option of an altogether different kind and quite apart from the national issue of abdicating from a leading position in technology, of casting away a national asset, to accept it is to accept a redeployment problem of a most serious kind. Although he was not writing about Concorde, the appalling difficulty of redeployment and the effect it would have on morale are clear from a perceptive article which the noble Lord, Lord Beswick, publicshed in Flight International in January, 1972.

I feel therefore that this option must have been included by Mr. Benn just for completeness: had it not been included, someone would have asked for it: but it is not really possible, and if it were attempted the social damage would far outweigh the monetary savings. But when we look at the other options solely in terms of cost, I feel we are on a more practical and sensible and more readily calculable basis. But—and here I make a most serious plea—I believe that the way all these Concorde figures are presented is utterly misleading. Always we are given the cumulative figures, and never the annual costs.

I know that Mr. Benn's figures have been criticised. I have no special knowledge which leads me to question them and until appraisal of them produces new ones, I accept them. But consider the development cost, put at £535 million at January, 1974, prices, of which so far £405 million has been spent. Taking the 1962 starting date this is an average of about £35 million per annum. Surely, for the most important advance in civil aviation since the jet engine revolution, this is not an unacceptable figure. All the other figures in Mr. Wedgwood Benn's table in Hansard for March 18 should be translated in a similar way to give annual expenditure, actual and projected.

While on this subject of cost there is the matter of running costs. It is reported that British Airways have said that operating Concorde could significantly worsen their financial results by some millions of pounds a year. Even £26 million has been mentioned. These are presumably estimates in which the price of kerosene figures largely. But at a time when alternative fuels in other fields than aviation are being sought, and when we shall shortly be able to influence oil prices with our own oil supplies, it is surely premature to be pessimistic about future prices. My personal belief is that in a few years the situation of hydrocarbon fuels will be vastly different.

Moreover, I understand that these figures refer to the whole overseas fleet, including the Concordes. But surely the important figures are those relating to running a "Concorde only" fleet. This is what must be of interest to prospective customers. My understanding of the manufacturers' calculations is that even with kerosene at 60 cents per U.S. gallon (it was 13 cents last year) Concorde breaks even with a load factor less than 50 per cent. But I think we must be very careful in considering the running cost figures available to us. I believe that, in an effort to be realistic we can be too pessimistic. I can never forget that B.O.A.C. estimated that the VC 10 would not pay. But they could not foresee its immense appeal to the travelling public, and it proved to be one of their great economic successes. It would be a bold prophet who assessed the appeal of Concorde at less than that of the VC 10.

I am prepared to believe, my Lords, that cool appraisal, in the light of prevailing circumstances in Britain and in France, could reasonably lead to some adjustment of the pace at which the programme proceeds, and I would not be too worried which of the options B C D and E was chosen at this stage. But while in the short term it is not unreasonable to decide on the basis of estimated annual expenditure, in the long term, much broader considerations must surely apply. By this I mean that in an age when economic prosperity depends utterly on technological advance, an age when the economic race is to the technologically strong, Concorde can make a major contribution to the prosperity of both nations. The United States has tremendous benefit from its Apollo programme. The Russians, too, have great prestige from their space programme and, let it be admitted straight away, despite the Paris Air Show disaster, from their TU 144. France and Britain, in this heavyweight championship, have the Concorde, and to falter in its development and production would sadly damage our technological status and our economy.

I feel that many people do not understand the ancillary advantages of a programme of this kind. We all understand the direct advantage—travel at unprecedented speed to the far corners of the earth. But the impact of the achievement of this aeronautical objective on other technologies—on electronics, on structural engineering, on metallurgical development, on communications techniques, on more mundane areas of technology—is enormous. Those who have studied how aeronautical progress has impinged on engineering industries outside aerospace will understand this. Concorde is the spearhead of a great technological forward thrust, a forward thrust which surely must be sustained, a forward thrust which must inevitably redound to the great benefit of the United Kingdom and France.

If indeed money supply is the major difficulty, even on the basis of the modest figures that derive from an annual cost presentation, then we must keep the project moving forward on a more parsimonious basis until better times permit a more vigorous policy. And if we are to believe—and I do believe—that in only a very few years we shall be in a much more prosperous phase, because of our indigenous oil and gas supplies, then if we must go slower for a while, it need not be for long. And we can do some very valuable work in the next two years. If noble Lords will hear with me for two minutes, I will be specific.

It is likely that a Special Category certificate of airworthiness will be granted to Concordes 3 and 4 in February, 1975. This will permit these aircraft to do the manufacturer's endurance flying trials, and, when these have been completed by the middle of 1975, will permit the granting of a full certificate of airworthiness to the operational type. The operator's route flying will then be done, and it should be possible, from the technical point of view, to bring the aircraft into service late in 1975.

According to present plans, British Airways and Air France will each have three aircraft, the minimum number required to mount a scheduled operation satisfactorily, by April, 1976. But I understand that a total of four production aircraft could be available considerably earlier, so that British Airways and Air France could mount a combined scheduled operation towards the end of 1975. According to Mr. Donne, of the Financial Times, this has already been canvassed, and I strongly urge that it should be reconsidered. We should then have the earliest possible demonstration of the appeal or otherwise which a transatlantic supersonic scheduled service would have, and our subsequent programme could be tailored accordingly.

My Lords, there are many people in the United States and the Soviet Union who hope that our Concorde programme will fizzle out. All those behind the United States' supersonic project, cancelled at enormous expense you will recall would like to have another go, which is only likely if Concorde falters. The Russians would love to have the chance of establishing a transatlantic service. If they did, my Lords, and Concorde was not there already, what would happen? America would revive its supersonic project and a few years later, British Airways and Air France would be buying, at enormous expense, and with shocking effects on our balance of payments, American or Russian aircraft, no doubt respectively justifying the expenditure, as we justified the expenditure on the Boeing 707 after the cancellation of the V.1000, on the grounds that no suitable British or French aircraft was available. It is an unpleasant picture, my Lords. So I submit that to falter now would be a madness, and that we should go forward at the briskest pace consistent with our present means, firm in the faith, my Lords, that Concorde is the vehicle which the world of the eighties will inevitably demand.

8.33 p.m.


My Lords, although our numbers have somewhat dwindled in the House, it gives me very great pleasure to follow the noble Lord, Lord Kings Norton, and to congratulate him and to support him on the important issue he raised tonight on Concorde. My Lords, there have been many occasions in the past, and I hope there will be many occasions in the future, when the noble Lord, Lord Kings Norton, has addressed the House on aviation matters. On all occasions his wide experience, drawn from his distinguished career, offers the House, if I may say so, a quality of thought and wisdom which enriches our debates. My Lords, all those who care about British aviation, both in and outside the House, I am sure will be very grateful to the noble Lord for the way he has expressed with great clarity the value of Concorde both to the British industry and to the country.

My Lords, I put down my name tonight in support of the noble Lord for one simple reason. I believe in Concorde and I believe in its long-term future. I believe there are very good grounds for supporting it. It was interesting for me to read from a recent opinion poll that a great majority of people in the country supported Concorde, although you would think from many occasions from the vocal minority and some of the recent Press reports, that the opposite was the case. My Lords, many, I believe, support Concorde because it has become a tangible part of the British flag despite development cost problems. It is, as the noble Lord, Lord Kings Norton, described, a great national asset; it stands as a shining proof of our advance technological capabilities. It is poised on the threshold of a vast and exciting new chapter of civil air transport; namely, supersonic flights.

My Lords, with all of these encouraging thoughts, it is perhaps tragic that at this very moment, when it is about to leave the nest, Concorde is surrounded by a massive choking cloud of uncertainty, an uncertainty based on criticisms most of which can never be proved or disproved until it goes into service; an uncertainty which, while it exists, can only damage and sap the morale and impetus of all those involved in this great project; an uncertainty which needs to be lifted as quickly as possible. I am sure the noble Lord, Lord Beswick, would agree with that since I believe he wrote that in his very perceptive article in Flight last January.

My Lords, in saying this I do not blame the Government wishing to review the whole of the Concorde programme on taking office. The development has reached a very vital stage and it has many problems to be faced, not least the production line and the acceptance at international airports. But my Lords, I question the Government's handling of their review, in particular the value of publishing an official D.T.I. Statement, a Statement hardly helpful to negotiations with any would-be purchasers, and a Statement which was promptly challenged on fact and queried on interpretation by the British manufacturers, B.A.C. Perhaps the noble Lord, Lord Beswick, could tell us later whether the Minister consulted our French partners before publishing the Statement; and why, in view of the importance of that Statement, no prior consultation took place, apparently, with B.A.C.?

My Lords, that Statement, as the noble Lord, Lord Kings Norton, has said, sets out five options which the Government felt that they were faced with. One of these, of course, was cancellation. In view of the seriousness of this course of action, as the noble Lord has already said, would the noble Lord, Lord Beswick, consider—if clearly this option is not to be proceeded with, but other options need to be examined in depth and time with our French partners—an early announcement which could help to remove the speculation of cancellation? My Lords, while we are on the question of cancellation, and in view of the very wide gulf between the D.T.I. Statement and the B.A.C. subsequent statement, can the noble Lord, Lord Beswick, also undertake to publish at an early date an agreed statement covering all the factors of cancellation including the likely unemployment in Bristol?

My Lords, when one challenges critics of Concorde as to why they think the costs of Concorde have escalated over the last twelve years, almost always one finds that the blame goes entirely on irresponsible estimating of the manufacturers. The facts, of course, do not bear this out at all. The facts as I am informed, are that over the past 12 years 37 per cent. of the increase has lain at the door of inflation; 31 per cent. has been due to the change in specifications; and only some 20 per cent. on new technology. I think that that is a very remarkable figure. Perhaps the noble Lord, Lord Beswick, could confirm those figures.

The second point that critics of Concorde often argue is that no airline wants Concorde. This again I believe to be far from the truth, and in the case of British Airways I am of the view, although I am not of course quoting anyone, that every single member of the board of British Airways is pro-Concorde. But at this moment British Airways is faced with a dichotomy of interests. It has a clear financial duty laid down by Parliament to look after the commercial interests. So of course have many of the other—in fact, all the other—independent airlines, Concorde must therefore be available on the right terms, particularly when airlines are faced with the staggering recent increases in fuel.

My Lords, what are the right terms? I believe the terms are very clear. They are not the present terms being offered, particularly when one sees as a background the present short-term financial problems facing the whole of the airlines, and also when one recognises that Concorde is essentially a long-term investment. The right terms, I submit to the House, are to lease Concorde to the airlines. This would give a most valuable flexibility on funding and a much needed injection of confidence to the airlines. Leasing would I believe ensure a reasonable number of Concordes going into service, which is the only way in which many of the present imponderables vexing those involved with the present Government review can be settled. Leasing would also show the world that the British and French Governments regard Concorde as a long-term investment—an investment which, given time, as the noble Lord, Lord Kings Norton, has said, will surely encourage America and other countries to become partners. My Lords, I believe that the fate of Concorde rests now in the Government's having the will to see it through. To its critics we know it resembles a white elephant. To its supporters it represents the obvious future of civil air transport. I hope that the supporters win, for cancellation at this stage could bring, I believe, irreparable harm both to the short-term and long-term interests of our aviation industry.

8.42 p.m.


My Lords, I welcome very much the opportunity created by my noble friend Lord Kings Norton for an examination of the current pros and cons of Concorde, but I beg to question whether this is not the wrong time altogether to attempt to take anything but a holding opinion on this great project. In my view, it would be totally wrong to cancel the project at this stage and to end up with nothing at all to show for the multi-million pounds that, in good faith, we have spent on this unique development. I submit that we have suffered too much in the past by dropping aircraft projects before they have been really disproved or proved. Take for example the Princess flying boats, the burly Brabazon, the Vickers 1000, particularly the TSR2, and especially half the programme for the now well proven and highly successful VC10.

I submit that if we run out of courage on Concorde to-day we invite being looked upon as global commercial cowards—a reputation that ill becomes those who were once the leading merchant adventurers of the world. I sometimes wonder, as an engineer and an airline operator, whether we have in our civil servants and our Treasury officials and the like, a proponderance of brilliant academic ability but perhaps a lack of technical and mechanical sympathy and enthusiasm. Let us review what in fact we have in Concorde to-day. We have the design and prototype-making of a very, very fast aeroplane that handles well, does the speed for which it was designed, has shown in considerably long tests no obvious fundamental structural or aerodynamic faults. True, it has cost a lot of money and is going to cost more. But it is not the cost of the Concorde that has escalated; it is the value of money that has gone down.

Our partners in France are going ahead. Russia seems undaunted by the tragic crash at the Paris Air Show when super-abundance of enthusiasm in the cockpit exceeded the caution needed at the controls of such a sensitive flying machine. In contrast, our Concorde, the Anglo-French version, embodies a control system that sternly and automatically prevents any overloading of stresses on the structure in a manoeuvre, no matter how exuberant the pilot may be. That is a fundamental difference. And so commercially I contend that to-day we simply do not know what are the true costs versus the ultimate earning ability of the Concorde project as a whole. True, the recent rise in fuel prices is a sombre problem, but so it is to all forms of turbine transport. No one knows yet, until all the tests are finished, what the true cost per seat mile or per tonne kilometre for cargo makeweight will be on the Concorde. No one really knows how much more money will be required to get the engines acceptable to airport and environmental authorities as regards pollution by noise and particle emission. But, as in other areas of development, the major moneys on solving these problems have already been spent. To carry on with the development is not throwing good money after bad; it is using more money to make good money even better.

We all know that there has not been immediate response from the airline markets of the world to Concorde in its present form. But let us not forget that a modest nine have in fact been ordered, which means that when six of them, as my noble friend Lord Kings Norton has said, are operational, British and French national airlines can begin scheduled services. Only then shall we know the real cost benefits of the job, and in the interim period between now and then we clearly, to my mind, must go on building slowly the rest of the 16 aircraft for which parts and components have already been made and in effect paid for. True again, we should during that interim period clear our minds of any highfalutin' ideas that very high employment and mass or continuous line production can be justified at this point of time. We have to be satisfied now with batch production, which may be not the most economical method in the long flight, but we must trim the wings of Concorde to the prevailing economic air; and above all, my Lords, not let it stall and fall.

8.48 p.m.


My Lords, it was, I suppose, about 34 years ago that I went to work at the Royal Aircraft Establishment and at that time at the Ministry of Aircraft Production there was a director called Roxbee Cox. We learnt at the Royal Aircraft Establishment that Roxbee Cox was a very shrewd man. I am glad to see that he is here in another form this evening with us—and he remains as shrewd as he was then. My Lords, this problem of aircraft is an extremely difficult and complicated one. It is very easy to make a ship exactly like the previous ship—occasionally it has to be towed to Bermuda. One finds that it is not difficult to make a locomotive which is not very different from the previous locomotive. But when you move to making aircraft, and make something which is quite different from what has been done before, you are faced with an entirely different problem.

I have been appalled over the last few years to read the illiterate nonsense which has appeared in the Observer, in particular. It is so stupid, so ill-informed that it is incredible, telling us that the Concorde is no good. They told us first that it would not fly. When it flew, then they had to switch round and find some other excuse. They then found that an American with the best motives in the world—it is true that the Americans had recently cancelled their supersonic programme, but that does not matter—found that there were extreme dangers in supersonic flight. He happened to be a physical chemist, as I am. I am no engineer. My only connection with this problem of aircraft is that I spent three years of the war at the Royal Aircraft Establishment. This physical chemist did some very careful calculations and found that at a height, 10,000 feet higher than Concorde would fly, there would be an effect upon the ozone concentration. Of course the Observer immediately said, "Ah, well, of course this means that the ozone concentration will be affected and consequently the amount of photo-chemical radiation which comes through to ground level will be vastly increased by Concorde." Abolutcly untrue; absolutely and totally untrue because the calculations had been done for 10,000 feet higher. The man who did the calculations never claimed that those calculations were other than preliminary ones, but even accepting them the whole of that environmental argument was irrelevant to Concorde. But the Observer blew this up as a matter of major importance. The Observer, which from the time of Garvin has been wrong on almost every subject under the sun, today wants to be wrong also on every subject concerned with aircraft.

When we look at this matter we have to ask ourselves: what is this cost of Concorde? The Observer talks about a thousand million pounds and then splits it between France and this country. But this money has never been spent on building aircraft; it has been spent on investigating supersonic flight, which is quite a different matter. It is an important matter; it is a highly important matter. This money has been spent and we have learnt what are the problems of supersonic flight. Some of your Lordships may have been to the Royal Aircraft Establishment at Farnborough and seen what they have done. What have they done? They have had a whole team at work for years studying the effects of radiation upon aircraft at high altitudes.

To call this the cost of building Concorde is absurd. It is important that these effects should be found out, and it is essential that we should do it if we are ever going to fly at high altitudes. I do not know whether we are, but if we are we must surely know in advance what are the risks involved.

If Concorde is flown commercially, it will be the best tested aircraft ever flown in human experience. This is what I find so extraordinary: on the one hand people say, "Look at the appalling environmental risks you take"; but on the other hand if you set about trying to investigate these environmental risks they say, "But you are being grossly extravagant". They cannot have it both ways. You are either going to say that you ignore the environment or you study the environment. The study of the environment for Concorde has been the most careful and thorough ever done in human experience, and when one talks about a thousand million pounds, the Observer and all their satellites are talking absolute bunk when they say that this money has been wasted. It has not been wasted. Every bit of this money has gone towards producing something of importance and significance in human knowledge.

I am one of these ridiculous people called pure scientists. I am not an engineer; I know nothing about the construction of these things. What I do know is this: knowledge is extremely important and significant for the future of mankind, and unless we have knowledge we grope in the dark, and what has been spent so far on Concorde has been of immense value and significance to the future of mankind. So that even if we had never built a single aeroplane that flew supersonically I would regard what has been spent so far as money well spent.

The question then arises as to what do we do in the future. That is a different matter. I do not know; I am unable to say. I am neither an economist (thank God!) nor am I a technologist. I do not know the answer to these questions. But what I would say is this. Surely from this point on, having reached this stage, we now go ahead on straight matters of assessment of the economic advantage, neglecting entirely what has been done in the past, because that has been a contribution to our basic understanding. It has not built a single Concorde that will fly in service.

What do we do next? We are now faced with a totally different problem. If we decide that we do not go on with the development of Concorde then we have to recognise that—what is it?22,000 people will be thrown out of work. All right, this may be a thing that we can do. We should be a little careful (should we not?) if we threw the same percentage of miners out of work from the mining industry? I merely illustrate that we are dealing with an industry.

If we scrap Concorde, do not imagine that these 22,000 people can be switched to building houses. This is the great fallacy of the present time. People imagine that if you are spending £10 million or £100 million on building aircraft, you can magically switch that over to finding the same amount of money for doctors. But you know, my Lords, they are not the same people. The people who have been trained as aerodynamicists or as builders of aircraft are not also people who can be technicians in hospitals or who can be doctors. Nor can they build houses—well, perhaps they can build houses but they would be damned inefficient at it and it would be a highly extravagant way of using skilled manpower to turn them over to doing something else.

I am not saying that necessarily we should go ahead with this, but I say that the Government must pay very careful attention to how the people who have been trained to build aircraft are going to be used. If they say that we should stop Concorde, then everyone in the Bristol area has the right to say: "What is happening to my job? Where am I going to go?" I know that this argument can be carried too far, and that it would mean that one never closed down a dying industry. But do we regard the aircraft industry as a dying industry? If not, then it seems to me we have to pay a great deal of attention to the argument that we must continue building advanced aircraft. I do not know the answer, but I am sure that the Government (who I know are a very wise Government; the wisest we have ever had) will pay every attention to this.

9.1 p.m.


My Lords, it is a privilege to follow such a fascinating, and I can only say scintillating, speech such as the one we have been privileged to hear from the noble Lord, Lord Wynne-Jones. I felt rather sorry for the noble Lord, Lord Kings Norton, because he has introduced a debate on a very important subject with a remarkably thin House. But one of the quirks of your Lordships' House is that the importance of the subject is not necessarily reflected in the attendance within the Chamber.

My Lords, I have indeed much sympathy with the Government over this problem, as I did with the last, because we are dealing with a huge gamble. The stakes are high, the prizes are high; or they may be low—they may even be a minus quantity. But the fact is that the stakes are high. The difficulty, of course, is that not all the prizes can be measured in financial terms. My noble friend Lord Thomas was right when he said that it was impossible to know the cost. How does one quantify in money terms the value of spin-off, or the value to this entity or another of research, or the breaking up of design teams, or the effect. whether physical or emotional, of unemployment, or the dropping (if drop we do) of one sphere in which we are overall leaders in the world? These facts cannot be measured in money terms, yet they have a direct bearing on any decision which is taken.

There are many who say that Concorde should be allowed to progress only if it can be shown to pay its way, and that a strict balance sheet should be drawn up to see whether Concorde is viable. Of course it is entirely right to draw up a balance sheet, but with the best will in the world such a balance sheet cannot be accurate. If anyone had known when the project was first mooted that the most accurate figures which could then be produced of the actual cost would be as we know them to-day, I do not suppose the concept would ever have got off the ground. But, equally, when to-day people try to evaluate whether Concorde will be financially viable when put into service, there are so many imponderables that it is impossible to calculate with even a modicum of a degree of accuracy what the result will be. Even the original estimate of British Airways varied between a plus of £6 million and a minus of £26 million.

The noble Lord, Lord Kings Norton, was entirely right when he said that this is not the value of Concorde, but an estimate of the likely effect of Concorde's operations on the airlines' total financial result. That is a very different thing. But how can any figure be more accurate when there is not, even now, one route yet agreed in the whole world, when one does not know whether one can fly to Tokyo via Russia, or whether the Americans will allow Concorde even to land at Kennedy Airport?—or if they do what fare structure they will be prepared to agree for a transatlantic flight. Nor can it be accurately forecast what would be the effect on the passenger complement of the aircraft if all the first-class passengers were siphoned off from a subsonic aircraft and put into Concorde. That would be fine for Concorde, but damaging for other aircraft which might well be flown by the same airline. Again, over what period of years should an aircraft be depreciated? The normal is to depreciate aircraft over 14 years, but when they are operating, as Concorde does, with a skin temperature of 120 degrees Centigrade I find this quite frightening. As someone said the other day, rather succinctly, "Fried chicken"! But when you are operating with figures of this kind, figures which are totally unknown, how can one get any reasonable degree of accuracy from a depreciation figure? We are therefore operating a very big gamble.

My Lords, the prospect of Concorde is an exciting challenge. I think that everyone who has spoken this evening has indicated that this is an exciting challenge, one in which at the moment we are leaders of the world. One thing that is satisfying to know is that it is an issue which rises above Party politics, because people in all Parties are in favour or against Concorde. But the important thing is that the decision, when taken, should be as near the right decision as we can hope to get it. I think the Government were entirely right to review the whole project of Concorde. I would only recall (and I do this in no sense of criticism but in a sense of historical fact) that one of my noble friends behind me referred to the TSR 2 which was cancelled some years ago because of its tremendous cost. I know that many people went through a lot of heart-searching over this decision. In fact the TSR 2 was cancelled because the F111 was cheaper. But, in the event, the F111 proved an unserviceable aircraft, and we had to pay out £48 million in compensation in order not to have the F111. Yet we did not have the TSR 2 either, and the design teams were broken up. It is easy to cancel a thing at a stroke, my Lords, but he who does so bears a heavy responsibility for the summary execution of the years of research that have gone before.

I would say to the noble Lord, Lord Beswick, that I sympathise with him and with his Government in the decision they have to make. I hope that he will permit me to make a criticism over the way in which this matter has been handled. I do not make any criticism of the fact that the Secretary of State considered it right to go into all the facts and the figures and to try to come to a decision. But I do criticise his presentation of the case. I am bound to say that I doubted the wisdom of giving all the details and the figures for public scrutiny. Certainly it is right that the taxpayer should know how much money is involved in this, and what his stake is. But there comes a point where commercial considerations have to be taken into account; and in any business where there is risk the total divulgence of the nature of the risk merely vastly increases the risk and makes the chance of the bird's coming home to roost even more slender. I think the figures which the noble Lord's right honourable friend gave were the figures of the Department of Trade and Industry, and, as I understand it, there was no consultation between the Department and the British Aircraft Corporation, who are in large part the manufacturers of this aircraft. That seems to me extraordinary, because when one is trying to get at precise figures one would have thought one would have consultation with the manufacturers in advance of publishing those figures.

Then the presentation of those figures was such as forced British Airways to issue its statement in regard to what it considered the operating costs of Concorde. Your Lordships will remember that it was said that it was likely to be at the lower end of the scale of plus £6 million to minus £26 million. Of course, that is very damaging to Concorde. That would have been fine and justifiable if the decision had been taken to cancel, but if that comes out in advance of a decision, and if the decision is not to cancel, then you are presented with the task of having to try to sell an aircraft of which all the bad points have been elicited in public in advance. I should have thought that was unfortunate. Of course, in this respect British Airways are not renowned for their generosity of anticipation of results. As the noble Lord, Lord Kings Norton said, when the VC10 was being considered they said, "This is going to be a terribly expensive aircraft to run; it will not be commercially viable." Yet in fact when the aircraft came into operation it was commercially viable and proved a financial success. The trouble then was that we could not sell any VC10s abroad.

After all, my Lords, the Concorde is in essence a partnership; and one must share with one's partner the successes, the failures, the problems and the difficulties. I was surprised that the noble Lord's right honourable friend did not see his French counterpart before announcing these figures. In fact, he announced the figures, and then went down and saw the people at Bristol; and it was only after that that he went and saw his French counterpart. I do not say this in an offensive way, and I hope the noble Lord will not take it as being in an offensive way. But I thought, if I may say so, that this was a method of presentation which could have been improved upon.


My Lords, if I may intervene on that point, in fact the French were told before the publication of the figures.


My Lords, I am glad to have that information, which I did not know, and I am grateful to the noble Lord for giving it to me.

My Lords, the Government have a great responsibility over Concorde. If it is cancelled we drop our lead in one sphere of the world's activities in which we are years ahead of other countries. I have never been one for approving huge prestige projects just because they are prestige projects. One hopes that a prestige project will have something other than prestige and will be a useful and viable entity as well.

I hope that the noble Lord's Government, when they come to make their decision, will take very carefully indeed into account one other factor, and that is the possible cost of damages in compensation. The other day, in a supplementary question, I asked the noble Lord, Lord Beswick, what in fact was the assessment of damages to the French Government, and he said that was a hypothetical question. I do not think it is a hypothetical question. I accept that the answer may not be known and it may not be possible to know it, because if you cancel you either have discussions with the Government or you are taken to court; you do not know the results. But an assessment must surely be made, because upon the level of compensation which may have to be paid could well depend whether the act of cancellation would become more expensive than the act of continuing with the Concorde. Even the British Aircraft Corporation have said that in their view the difference between cancellation and continuation is only a matter of £35 million, without taking into account any damages which might have to be paid to the French Government.

I would ask the noble Lord, Lord Beswick, one final question. He knows more about this plane, I suppose, than almost anyone else in this House, and I have frequently seen him wearing the Concorde tie. Whatever the financial arguments may be, I have a sneaking feeling that he himself would be sorry to see this aircraft cancelled. One accepts that when one is in Government one is obliged to accept decisions which are unpalatable, but I hope that he will be able to give the House the assurance that on Concorde the Government will not take a decision with the French Government until after the new French Government comes into power following the new Presidential Election. Clearly any decision of such a nature as this should be taken with the wholehearted consent of a Government. I hope that the noble Lord will be able to give me the assurance for which I ask. It seems such an elementary and na¿ve question to ask that I hardly dare ask it, but in some odd way I thought it might be desirable to ask it, and I hope that the noble Lord will be able to give me an affirmative reply.

9.15 p.m.


My Lords, I have listened with great interest to all the opinions expressed. I, with others, am grateful to the noble Lord, Lord Kings Norton, for giving your Lordships the opportunity of expressing your views. I am particularly grateful to him for saying that he does not expect me, on this occasion, to give definitive answers to all the questions that have been raised. My approach to this issue, as is that of my right honourable friend and indeed the whole Government, is that we want to get at the truth. That is the reason why those figures were published. The noble Earl, Lord Ferrers, and the noble Earl, Lord Kinnoull, have suggested that the manner of publication was mistaken, and I appreciate why they make that charge. But I would say that before we took office such was the weight of pressure built up for cancellation that the publication of these figures has given us a valuable opportunity to review the situation properly. In my judgment publication has been justified.


My Lords, will the noble Lord give way for a moment? Would he agree that while it is obviously vital to publish figures, one should get them right? The charge that we are making is that they were not right.


My Lords, the figures which were published were figures which had been prepared before we took office. It would have been wrong if we had tampered with them in any way. We thought that it was right to say, "These are the figures. Now let us look at what has been said," and that is what we are doing. We now want to get at the truth; but the truth in this matter, as in quite a number of other human affairs, is many sided. Nothing could be more complex than the economics of Concorde, and nothing could be more mistaken than to consider them only in the short term. My duty, I conceive, tonight is to put some aspects which ought, in my view, as a member of the Government with some responsibility for looking at these matters, to be considered as well as those bare figures put forward in the Statement by my right honourable friend.

First, about the aircraft itself, as others have said, we are not here talking of some airy-fairy project which might or might not do what is claimed for it. We are talking of an aeroplane which is actually flying and which, on the basis of flight measurements and assessments made to date, shows every prospect of meeting the contractual guarantees to British Airways. As to costs, the noble Lord, Lord Kings Norton, put them, I thought, in the proper perspective when he said £35 million a year so far. There are some people who talk of expensive white elephants. No doubt, if one looks at these things from a certain standpoint, the wonderful St. Paul's Cathedral could be called an expensive white elephant. Certainly the seat/mile costs of worshipping God could have been brought down if Christopher Wren had designed a tin-roofed mission hut. But he took a wider and more hopeful view of mankind's future.

In my view, mankind in the future will want to travel, safely and comfortably, at more than the speed of sound. We shall not be able to stop that. It is the proper development of that facility with which we should now be concerned. If we cancel Concorde Britain will have no influence whatsoever in this important aspect of mankind's future activity. I agree absolutely with the noble Lord, Lord Kings Norton, and the noble Earl, Lord Kinnoull, that the longer-term view and the longer-term market must be borne in mind. Moreover, if we are assessing sales and profitability let us remember the markets generated in the years ahead for spares by an aircraft sold now. Britain's exports are now profiting by sales of spares for aircraft types sold 10, 15 and 20 years ago.

Much has been made of the British Airways' estimate of the effect on their finances of the Concorde operation—and I choose those words deliberately. They did not say anything about a loss; they talked about the effect on their finances. Each airline must do its own sums and British Airways are looking again at their assessments, but there are other aspects of those original figures which, as the noble Earl, Lord Kinnoull, and the noble Lord, Lord Kings Norton, said, should be borne in mind.

A significant proportion of the British Airways' figures which have been bandied about relate not to the failure of Concorde but to its success. It is an assessment of the unsuccessful way in which other services would lose first-class passengers to the Concorde service. One survey suggests that from 65 per cent. to 90 per cent. of first-class passengers would prefer to pay a first-class fare plus a 10 per cent. surcharge and travel by Concorde. Even more interesting was the number of economy passengers who, given something worth while extra in terms of speed, would also pay that surcharge. Some 35 per cent. to 60 per cent. depending upon the route, said that they were interested. Incidentally, one may well reflect upon the hypothetical situation if British Airways did not operate Concorde and Air France did. The British, the American and the other services would still lose their first-class passengers to the Concorde service—and it would be a quite unqualified loss in that case.

The noble Earl, Lord Ferrers, spoke about the prizes to be won. I am reminded of the evidence which was given to the Congressional Committee on Science and Aeronautics on February 22, 1974, when one expert witness said that if supersonic aircraft are operated but not by the Americans from now to 1985 that will represent a potential loss of revenue to United States' airlines of up to 30 billion dollars through the loss of their first-class passengers to the supersonic services. There is one other point to be made if one is considering operating costs, before we condemn a particular aeroplane because an airline is making out a case for financial assistance as British Airways are doing. Both Pan Am and TWA are now making a case to the American Government for subsidies wholly on the basis of 747 operations—not Concorde operations.

Noble Lords have asked about cancellation costs. The figure of £80 million which we found had been reached is the best estimate of strict contractual liability, plus statutory redundancy payments and unemployment benefits. They are being re-examined and no adjustment has as yet been made, but there would undoubtedly be additional indirect costs and social dis-benefits. The Lord Mayor of Bristol, when he led a deputation to the Prime Minister, referred to calculations made by the Bristol Polytechnic which estimated £67 million as the cost in the Bristol area alone in income tax, social security benefits et cetera and the consequent multiplier effect, all in addition to the strict contractual cost. Moreover, as the noble Earl said, various figures have been used in the TSR.2 case as to the cancellation costs, but one must bear in mind the consequential losses from the subsequent purchase and then cancellation of the F.111 aircraft. I agree with what the noble Earl said about that.

The noble Earl, Lord Kinnoull, spoke of ancillary benefits, and he had the courage to use the term "spin-off". It is now a little old-fashioned to talk about spin-off, but there has been a very real one. If I may mention it, I had it brought home to me when I travelled up to Stockport last year on British Railways' high-speed train. At 125 m.p.h. someone threw a brick at the cab window and in the ordinary way that window would have been smashed, the driver would probably have been severely injured, and there may have been tragedy on the train. In fact, the cabin window withstood that impact. They did not know who I was and I inquired about the material. I was delighted to be told that it was a material developed for the Concorde aircraft.

My Lords, I want to say something about pollution. I am second to none in wanting a cleaner world and a more pleasing environment. But I wish some of those who spend so much time and money in frightening people about, for example, the effect on the upper atmosphere ozone content of Concorde would spend more time in picking up empty Coca-Cola tins from the street. Moreover, my admiration for the high-minded attitude of the anti-Concorde project is decidedly lessened when I read in their latest expensive advertisement that we should hand over our share of the Concorde to the French for nothing. Apparently all their doubts about the environmental damage dissolve if they are caused by the French and not by the British.

The various options open to us are to be considered in depth, I assure noble Lords opposite, in the light of the quite remarkable number of representations which have been made to us directly and indirectly and, of course, in the light of what has been said here this evening. I will not confirm or deny the figures which the noble Earl gave. I will simply say that they are being studied, but that before a decision is reached the latest figures can be offered. These options must also be considered with our French partners. Talks are taking place at official level, but the examination at Ministerial level is delayed by the French Presidential Election. I cannot give a precise date when my right honourable friend will have his next meeting with French partners, but I can say that there will be no decision until that examination has taken place. I hope that gives the noble Earl the assurance for which he has asked.

I have listened now to many delegations, mostly of trade unionists, who are proud of Concorde and want to see it in service and selling to the airlines. They all stress, however, that it is not simply a matter of retaining jobs. It is not a matter of empty pride or prestige. It is more to do with the basic confidence of the British people to keep abreast of technical developments and to maintain our place in the world. Many underdeveloped countries are looking forward to getting a better living from higher commodity prices. Countries hitherto dependent on peasant economies are developing their secondary industries. If there is any scope left for us in the world and if we are to pay our way we shall need to concentrate more and more on science-based sophisticated production. I hope that it will be against that background that we shall make the eventual decision on Concorde.

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