HS146 AIRCRAFT (Hansard, 14 April 1978)

Sir Bernard Braine (Essex, South-East)
On a point of order, Mr. Deputy Speaker. I am not going back on your previous ruling, but I should like to ask you whether you will report to Mr. Speaker the somewhat unusual circumstances in which the right of objection, which is undoubted for private Members and in no way can be challenged, was exercised in connection with a Bill when not only had the Government given an undertaking of a fair wind for its passage but in the Second Reading debate, which was one of the most memorable debates in the present Parliament, if not in many others, every speaker, from both sides of the House, was so concerned with the problem of urgency and the need to deal with it that the temper of the House was made perfectly plain in a way that I have never known it to be made plain previously. The objection here this afternoon was in defiance of the will of hon. Members on both sides of the House.
May I ask you, Mr. Deputy Speaker, to draw this to the attention of Mr. Speaker?

Mr. Deputy Speaker (Sir Myer Galpern)
Order. The hon. Member can rest assured that Mr. Speaker will read everything that has been said.

Mrs. Helene Hayman (Welwyn and Hatfield)
I am grateful to have the opportunity this afternoon to argue the case for an urgent and positive decision on a matter that is of deep concern to my constituency—the need for a go-ahead by the Government on the HS146 feeder liner project.
This is a case that has been argued in the House previously by myself and by 1911 others, including my hon. Friend the Member for Manchester, Blackley (Mr. Rose), who had an Adjournment debate on the same subject nearly four years ago. Indeed, it has been a long battle and a battle in which we have repeatedly claimed that there was an urgent need for a decision on the future of this aircraft. While not belittling those claims for urgency in the past, I think that now more than ever we have a real reason for telling the Government that they have to make up their minds very speedily.
The situation has changed in two vital respects. One is that the aircraft industry is now in public ownership and that the board of British Aerospace, to which the Government have given the task of assessing the commercial viability of the HS146, has now come forward, as the Minister of State told the House in answer to a Question on Monday, with a positive and unanimous recommendation to go ahead with this feeder liner project.
The other thing that has changed and enhanced the urgency is that the market for civil airliners is at last picking up. One of the few good things about the delays in the HS146 has been that they have coincided with the recession in the world market for civil airliners, and a delay of three and a half years, which could have been fatal had it not coincided with the oil crisis and its consequent effects on airlines and their buying policy, has not been destructive of the project.
We can still go ahead, but if we are to go ahead, we have to go ahead now. A decision now would mean certification in, perhaps, 1981, and the aircraft going into service with airlines in 1982. Anything later than that would mean a loss in the market, and a loss in the market, of course, detracts from the commercial viability of the aeroplane.
The merits of this project have been put forward in this House many times previously. It is an aeroplane that is quiet, that is cheap, that has low fuel consumption, and that can use grass airstrips. It is an aeroplane not of high technology, not marking any great breakthrough in technical advances for the aircraft industry, but designed to meet the need that undoubtedly exists, particularly in the developing world, for a short-haul jet liner that can replace the turboprop aircraft at present in service and, furthermore, 1912 can provide the first airliners for countries that at present have no aeroplanes of their own. The HS146 is, in the words of the aerospace correspondent of the Financial Times, an aeroplane that would be simple, rugged, reliable and, above all, cheap.
I believe that we have a duty to argue the case for the HS146 not simply on employment grounds—I shall come to those shortly—but on very strict commercial and industrial grounds. The market for this type of feeder airliner jet, the 70–100-seater, short-haul liner, is predicted at about 1,200 in the next 10 years. A realistic hope of a share of that market would be 360 for the HS146. In addition, there is the possibility of a military application, which make the figures look even more appealing. But any delay could mean that that market and those market projections would diminish.
Our argument is that the HS146 has always been not a political aircraft but a sensible and sellable project which it is in the interests of this country, as well as of my constituency, to build.
We cannot ignore the employment factor. If we go ahead, we are talking about 20,000 jobs—perhaps more if the market is better than we have estimated—throughout the aircraft industry and its sub-contractors in the 1980s. If we do not go ahead, we are talking about at least 3,000 redundancies in British Aerospace, 1,500 of which would be at Hatfield. In that event the damage to my constituency—an area which has a record of which the country is proud in terms of aircraft production—would be devastating.
The decision on the HS146 comes at a time when, because of the pick-up in the greater optimism of world airlines and aircraft industry, this country, British Aerospace and the Government have to make enormously complex and long-term decisions about a whole range of options in the civil area. Now that there is confidence that there will be a new generation of civil aircraft, our contribution to that new generation has to be worked out in terms of collaboration and international negotiations—perhaps across the Atlantic, perhaps in Europe. Those negotiations on the larger aircraft will be tremendously complex and will, I believe, take time.
1913 There is an advantage in arguing for the HS 146 now. It is an aircraft on the civil side on which we can take the decision to proceed alone and which we are capable of producing alone. Obviously—there are strong possibilities of this—some international collaboration on some percentage of the aircraft would be extremely useful, but not a sine qua non of going ahead with the project as it is with every other larger civil project that confronts us.
If we go ahead, we maintain not only staffing levels on the production side of the industry but the vital design capability which is this country's richest asset in terms of the aerospace industry. Without that, we shall be less able to compete and to collaborate with the 160- and 180-seaters—the larger projects to be considered and which we have to decide upon in the course of the next weeks and months. I believe that this is a crucial point, because the aircraft industry has always depended on the expertise and skill of those who have contributed so much of their lives in the past to it. Without them we do not have an aircraft industry that can compete in world markets. Those people have had a tremendously difficult four years. They have had uncertainty, they have seen redundancies in the industry, and they have seen projects such as the HS 146 put on ice.
I have for four years nagged the Government to go ahead and to give a full decision on the HS 146. But it would be wrong not to recognise publicly that without what the Government have done in the past, without the funding from the Department of Industry and without public ownership of the aircraft industry, Hawker Siddeley's decision in 1974 to withdraw from the project would have been final and fatal. We would not be having this debate today, and there would be no chance to build the HS 146, because it would have been killed stone dead then. That is why I think it right to pay tribute to what has been done in the past.
Morale in the industry is beginning to pick up. At last it is talking about what it will build, even though positive decisions on the larger aircraft have not been made. There has been a major breakthrough in aerospace as well as in the United States which is significant for 1914 the whole airframe industry in this country.
There is another reason why it is particularly important for the Government to look with favour on the first major recommendation to come out of British Aerospace. It was a unanimous recommendation of a body to which the Government have given the job of assessing the viability and desirability of going ahead with aircraft projects. I believe that in this case we should approve the decision of British Aerospace, back its judgment and allow it to go ahead.
There is a whole host of decisions to be made on aircraft policy, but an early decision on the larger collaborative projects is, in my view, unlikely. On the other hand, an early decision on the 146 is absolutely essential. The detailed market surveys carried out recently, and all the reports which have come back from the sales teams which have been going round to the world airlines, point to this factor. Inevitably this applies to the small airlines. We shall not obtain one large launching order for the 146. By its very nature, the fact that it is an aircraft for the developing world means that we shall have to sell in small batches.
There is every indication that the small airlines are now willing to commit themselves to go ahead. If now we say that we are building the 146, they will do so. If, however, we say that we are to continue with this lump of ice, we must remember that it is melting rapidly. If we do not go ahead now, the market is such that other aircraft will be sold. If other aircraft instead of the 146 are sold, we shall eat into this eventual market and we shall diminish its financial viability. That is why it is essential, in terms of the market, employment in the aircraft industry, and the morale of an industry which has served its country well in the past, financially and otherwise, and wants to do so again in the future, that the Government should come quickly forward with a positive response to British Aerospace's request to go ahead and so end the indecision which has hung over all our heads for the last four years.

The Under-Secretary of State for Industry (Mr. Les Huckfield)
My hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman) is a tireless campaigner on behalf of her constituents, 1915 and particularly on the issue of the Hawker Siddeley 146 feeder liner. She has advocated its merits many times in the House and has put a comprehensive and complete case this afternoon.
This matter is important to my hon. Friend's constituents who work at the British Aerospace factory at Hatfield. It is also important to the many other workers at British Aerospace sites throughout the country, and it is important for the commercial future of British Aerospace itself. For these reasons, it is understandable that my hon. Friend should have taken this opportunity to make her representations and to have the matter debated this afternoon. At the same time I hope that she will understand when I say that I am not in a position to give definite answers to many of her questions.
The stage that has been reached in approaching a decision on the project is already well known. British Aerospace recommended to my right hon. Friend the Secretary of State at the end of last month that the project should go ahead. Under the Aircraft and Shipbuilding Industries Act, the Government's approval is required for any aircraft development which is likely to cost more than £25 million. We are now considering whether to give that approval.
I can assure the House that we are considering the recommendation urgently, and we hope to be able to announce our decision soon. At the same time, I must tell the House that, precisely because of the importance of the decision, we are considering the recommendation extremely carefully. We shall not be rushed into making a decision before we are satisfied that it is the right one.
My hon. Friend will appreciate that I cannot anticipate the Government's decision. She has rightly pointed out that between October 1974 and nationalisation in April 1977 the Government kept the project alive by funding limited work to preserve the option for British Aerospace. My hon. Friend is right to put that into perspective. Since nationalisation, limited funding has been continued by British Aerospace. This funding has enabled a number of technical improvements to be made to the design of the aircraft. It has enabled studies to be made of various military transport derivatives 1916 of aircraft, which could be critical in ensuring sufficient sales. It has above all, enabled discussions to take place with other manufacturers abroad about the possibility of some degree of collaboration on the project.
British Aerospace's recommendation that the project should go ahead involves a substantial sum of public resources. The investment involved would be about £250 million at today's prices. We need to be satisfied that, over the full life of the project, this investment would earn a satisfactory return. There is certainly no question of the development being subsidised by the Government; nor has British Aerospace suggested that this should be done. The project will be assessed from the point of view of its effect on the commercial future of British Aerospace, taking account of the need to preserve a viable civil aircraft manufacturing capacity. The Government have to decide whether, in the context of British Aerospace's operations as a whole, the HS146 project offers the prospect of a return consistent with commercial criteria.
I have stressed the importance of the decision that has to be taken because of the size of the investment involved, because jobs are involved and, above all, perhaps, because this is the first major development decision that has had to be taken since nationalisation. Having said that, however, I think that it would be a mistake to over-emphasise the importance of the decision. It is true that many jobs would be guaranteed by the project, including jobs in the equipment industry. But that is not to say that these jobs would be lost if the project did not go ahead. That would be true only if no alternative work was found to replace it. In fact, British Aerospace is still actively engaged in discussions with potential collaborative partners in Europe.
There have also been proposals for possible collaboration from American manufacturers, though British Aerospace will not engage in direct negotiations while the European talks continue. The HS146, important as it is, is a relatively small development by comparison with the major international projects that may be embarked upon. One of the Government's concerns in deciding whether to approve British Aerospace's recommendation is to be sure that the project can fit in with 1917 whatever other work we hope British Aerospace obtains and that it does not take up excessive financial and physical resources.
I apologise that I have not been able to answer more directly at this stage some of the questions that my hon. Friend has rightly raised. I repeat, to my hon. Friend, her constituents and British Aerospace workers throughout the country, that the Government are fully seized of the importance of the project for those employed by British Aerospace at Hatfield and elsewhere in Britain. They are also fully aware of the importance of the decision 1918 in view of the determination of British Aerospace to establish itself in the long term as a manufacturer of civil aircraft.
At the same time, we are anxious to assess British Aerospace's recommendation in the context of its overall financial prospects and the decisions that are likely to be taken on international collaborative projects in the coming months. We hope to be able to announce a decision on the HS146 soon and are treating it as a matter of the highest importance.