THE HELICOPTER INDUSTRY

HL Deb 09 February 1978 vol 388 cc1191-225

4.16 p.m.

The Earl of KINNOULL rose to ask Her Majesty's Government what potential they foresee in the civil and military application of helicopters, and what support they are proposing to give to the British helicopter industry to develop its competitiveness in the world markets of the future. The noble Earl said: My Lords, while we all recover from that major poultry extension order, I rise to say what a privilege it is to move an Unstarred Question at this early hour and to have such an early lift-off. I am sure that other noble Lords who have indicated that they are going to take part in this debate are delighted by this, and I hope that that delight will be enhanced when eventually we hear the winding-up speech of the noble Lord, Lord Winter-bottom, and what he has to say, whether it be inside or outside his brief.

I should say at the start that I regret I cannot claim to have any special expertise in the use of helicopters, such as that possessed by other noble Lords who are to follow me in this debate—notably, of course, my noble friend Lord Glenarthur, who, as the House knows, is an experienced helicopter pilot and is in fact involved in the North Seal oil operations. As I shall not have a chance to welcome him at the end of the debate, I should like to say at the beginning how delighted I am that he has chosen this occasion on which to make his maiden speech, and I wish him well.

The purpose of my Question today falls into three parts. The first is to ask the Government whether they recognise and accept that the helicopter market has become a major growth area in aviation. The second is to ask whether they accept that, in certain key areas of this growth, British industry has currently nothing to offer, and indeed has no funded projects for the future with which to compete in some of these markets—as we see from recent orders won by the French, the German, the Italian and, of course, the American industries. The third purpose, and perhaps most vital of all, is to ask the Government what their national helicopter policy is and whether they intend to assist the industry to recover its competitive capability.

I think it is true to say that for many years helicopters have been the poor relation of aviation. In some ways their development teething problems have run parallel to those in the hovercraft industry, although perhaps not with such severe toothache. Both offered enormous opportunities in a multiplicity of applications, and both suffered from that inherent ailment that civil transport carrying operations were not, in their original form, viable. The helicopter, of course, has gone a long way further than the hovercraft. We know that on the military side it was largely enhanced by the operational experience in Vietnam; its military strategic value is now without question.

On the civil side, we learn that helicopters have developed in a number of areas. We know that their use in agricultural crop-spraying is increasing, particularly in Third World countries; we know of their use in the police service and in the lighthouse service; and we know of their increased use in inter-city communications and, indeed, in inter-airport communications. We know of one scheduled passenger service, from Penzance to the Scilly Isles, which British Airways' helicopter division has run so successfully. I am sure that there are many grateful passengers who have been on that trip and who have successfully avoided the somewhat inclement weather on the sea that separates the islands from the mainland.

However, perhaps the most dramatic role of the helicopter is its search and rescue rôle; almost every week one reads headlines about rescues, whether it be of a snowbound train in the Highlands or the lifting off of the crew of a trawler or a drifting oil-rig. One never ceases to admire the bravery and skill of both the civilian and the military crews who patrol our shores and who perform such marvellous work in search and rescue.

In the development and growth of the helicopter, I have left out the rôle in which it has been most influential—that is, in connection with North Sea oil. Paradoxically, one of the key factors in the speed of development of our rich national asset has been the invaluable and unique service which helicopters have been able to provide. Where would the development of the North Sea be today without the vital communication services provided by British helicopter operators?

All these rôles of the helicopter have helped to provide a dramatic upsurge in world demand. At a recent international helicopter conference in San Diego there was uniform agreement on the forecast for the future potential market. In Europe, there is likely to be a demand for 300 to 500 helicopters in the next two years, compared to the existing 1,450—an increse of 30 per cent. In the world market, the forecast demand for the next decade is, I understand, somewhere near 20,000 new helicopters: 8,000 military and 12,000 civil.

How does the British industry stand ready to compete for this vast potential market? The House will know that, effectively, Britain has one private sector company, Westland, which was formed from an original amalgamation of five companies in, I believe, 1959. My noble friend Lord Duncan-Sandys was the instigator of that amalgamation. Westland has survived well in what is, undoubtedly a high-risk industry. It is a company which devotes three quarters of its efforts to helicopters; and, perhaps wisely, its policy has been to concentrate on the design and development of military projects while, on the civil side, concentration is on production under licence from the American Sikorski Company. If I may say so, the choice of the American company was a good one. Westland has produced very successful helicopters under licence, including the civil S 61, the Wessex, the Whirlwind and the Sea King; but perhaps the company's most notable achievement in the past ten years—and it is a welcome one—has been the highly successful collaborative partnership with the French which was instigated in 1967, and which was set up to produce jointly the design and production of three military helicopters, the Lynx, the Gazelle and the Puma. I am advised that all these designs have proved highly successful in performance, production and sales; and no doubt the noble Lord will give us some figures at a later stage. Clearly, it is to be hoped that these three projects will be the forerunners of further European collaboration. Indeed, I believe that Westland regards its future as very much a part of the European industry.

All that is good news, and I do not intend to detract from Westland's achievements or to criticise our single manufacturing company for the gaps that the industry is at present unable to fill. That company is primarily geared to military design. It has a high engineering specification and, of course, very high costs. It is not at the present time geared to the simpler commercial version. Having said that, if we look at our industry, I think it a very poor reflection on its present state, and on Government policy for the industry to allow a situation where, out of something like 80 helicopters operating in the North Sea, only two are British; where, in the demand for the larger, next-generation civil helicopter for the North Sea, the British industry apparently cannot compete; where our Army, seeking a new, larger, heavy-lift helicopter—and they have been seeking it for over 10 years—has eventually had to place a £100 million order with America; where British Airways, seeking the next generation of the larger civil helicopter, have had to (or are about to) place a £30 million order with America; and where even our lighthouses are serviced by French, German and Italian helicopters. These are the gaps; and, while we drift along, our competitors, French, German, Italian and American, are grabbing these markets.

Turning briefly to a happier note—that is, on the operating side—the North Sea, as the House will know, is operated entirely by British operators. I think that theirs is a success story without equal. They are fiercely competitive, but their record on the North Sea for reliability and safety, often in horrific conditions, is a proud one. They make an enormous contribution to North Sea oil and to our balance of payments—a contribution which is difficult to assess and which often goes unrecognised. I hope that the noble Lord will be able to give some recognition to this in his reply today.

On the scale of movement in the North Sea, I understand that some 25,000 people a month are moved on to and off oil rigs and that there are over 400 movements a day, often to 150 miles out at sea. The House will know that the largest British operators are Bristows, an independent and vigorous company. It is interesting to note that, out of their gross turnover of £50 million, half is earned abroad—and, of course, they also have the responsibility of training many of our military pilots. British Airways, too, are very successful operators and do a splendid job on the North Sea. Of course, they pioneered the first civil transport service to the Scilly Isles. There are now a host of other smaller operators.

We hear of complaints from the operators. We hear of their having to face increasing charges. I should like to ask the noble Lord whether, for instance, he can confirm that since 1975, the landing charges at Aberdeen have risen from £4.50 per landing to £77 today; and whether the air operators' certificate has risen from £2,000 in 1975 to £40,000 today. It is a very large increase. How can it be justified? Finally, is it true that, if a helicopter contract is operated abroad for over three years, the operator is liable to suffer import duty? I have given notice to the noble Lord beforehand of all these questions.

Turning to two general questions, can the noble Lord advise us what progress has been made on the inter-airport service between Heathrow and Gatwick and who is to operate the service? Are Her Majesty's Government aware that the existing London heliport at Battersea is now too small to accommodate the growing demand for commercial use? Would the Government support a larger site in London in, say, Surrey Docks, if planning considerations made it viable and acceptable?

Finally, I should like to ask the noble Lord whether British industry will have any rôle at all in the £300 million order for the military Chinook? All these questions—and I am sure that there will be many more from other noble Lords—are important. Perhaps the most important message which I hope the noble Lord will be able to give today is that the Government recognise this industry, recognise the need for a national policy and intend to support the industry. Yesterday's debate, which was so ably moved by my noble friend Lord Selsdon, posed one major question among many, and that was how, as a nation, we could best invest our oil revenues flowing from the North Sea. I can see no better or more appropriate way to use some of that revenue than for it to be re-invested in an industry which has played a major rôle in the North Sea. I hope that the Government will see to it that in the future British industry is able to supply British helicopters to British operators in the North Sea.

4.31 p.m.

The Earl of KIMBERLEY

My Lords, I am sure all noble Lords will once again be indebted to my noble friend Lord Kinnoull for asking a Question of this nature, as he has done on numerous occasions before, and I hope he will do so again in the future. It is worth while taking a brief look at the operations of British Airways, as they have had 30 years of experience in operating helicopters, and, as the noble Earl said, they have operated for 12 years over the North Sea. As has also been said, the noble Lord, Lord Glenarthur, who is going to speak after me, knows far more about the subject than those of us here—certainly myself—as he is one of the people who fly helicopters over the North Sea to the oil rigs. I would not dream of trying to tread on his toes as he is a far greater expert than I am. I look forward to his speech with great interest.

The North Sea operations have given cause for a lot of satisfaction; but we must not forget that this scheduled service which has been mentioned is probably the only one in the world of its type that is operated at a profit. While it is not possible to compare North Sea work with the Penzance/Isles of Scilly operations, because one is of national importance and the other may not be considered so, we must consider that the largely unheralded success of the Penzance/Isles of Scilly route not only shows, but proves, the economic viability of a scheduled helicopter service. I am afraid that far too often in the past this has been ignored. One must also bear in mind that the board of British Airways helicopter division are both dedicated and enthusiastic, as well as knowledgeable, advocates for rotary wings.

When British Airways started, life was not very easy; but with a little help from the Government in the way of a small investment with single-engined helicopters, after a short while that investment was repaid many times over. A simple example is when Lands End airport was shut there was a saving, in one small instance—it may not appear to be very large—of £120,000 a year. So, like all things, the single engine paved the way for the multi-engine. Also, while this was going on and people are inclined to forget this—way back in 1949–1950 British Airways pioneered a night mail service. It ran for quite a long period of time every night, whatever the weather, from Peterborough to Norwich. This of course was one way to prove and to ensure that the navigation and approach aids were suitable and adequate. Since then these aids have become much more sophisticated and have been improved in many ways.

Briefly, I should like to return to the Penzance/Isles of Scilly service which was inaugurated in 1964. The few figures I am going to quote are of great interest. When a fixed-wing aircraft was operated, the annual passenger figures amounted to about 28,000. Two years ago, the figure for helicopter passengers was 84,000. Last year the figure was about 90,000; and it is anticipated that it will be in excess of 90,000 this year. These are absolutely astonishing figures because they were achieved with one—I repeat "one"—helicopter. The regularity and punctuality of the fixed-wing aircraft was about 78 per cent.; with the helicopter in the past six years it has been nearly 98 per cent.

In addition to this, passenger-handling costs—it is a small heliport, I know it well—amount to 40p per passenger, whereas on a major airline at London Airport the passenger handling costs are something like £6 per passenger. There are obvious reasons for this: far less staff is required; large fire tenders and trucks are not required, and runways do not have to be maintained. I agree that this would not work on long routes; but on short routes there is what is known as "block time". For those noble Lords who do not know this, block time on a short route is extremely important. It is a percentage of the aircraft's cruising speed, and on a short run like that from Penzance to the Isles of Scilly the block time is 83 per cent., whereas on a jet from London to Paris it is only about 50 per cent. This is due to the fact that the aeroplane has to taxi around the airport and often has to be stacked up waiting to land.

Virtually all the civil helicopters in service today have been developed from the military versions. Therefore with the civil helicopter there has usually been some form of compromise; but the scheduled service to the Isles of Scilly has proved conclusively that, even with the existing compromise equipment, profits are possible. Therefore I say that if we have some new, even more advanced machines, British Airways will have an even larger profit. The design effort should be concentrated on a compound helicopter. By this I mean a helicopter from which a large portion of the flight load can be—for want of a better word—off-loaded on to aerofoils when the machine is in cruising flights. This has several advantages: it leads to a higher cruising speed; it leads to considerably fewer stresses being placed on the rotor system, thus greatly prolonging the life of the rotor; it also makes considerable cuts in expensive maintenance systems on the gear boxes and other mechanical parts.

With modern technology today there is no earthly reason why a compound helicopter or rotor craft carrying 100 or 120 passengers, cruising at 280 knots, with a range of 500 nautical miles, could not be built. All that is needed is the initiative to proceed. The civil requirement is here now, and I should like to ask the noble Lord whether there is a similar military requirement which could be the catalyst to get this project moving. It is true that helicopters make a certain amount of noise, and it is a noise which is slightly different—because most of it comes from the rotor—from that of a fixed-wing aircraft. I am sure Westlands, who are undertaking research on rotor tip design and on other aspects, are doing something about this. But research and development in these things is again extremely expensive and, as the noble Earl said, any money that could come from the North Sea and might be put into research and development would be money well spent.

It is slightly incongruous, in one way, to think that about a year ago British Airways celebrated the silver jubilee of the jet age. Twenty-six years ago the Cornet first went into service and, if my memory serves me right, it is about a year and a half ago since British Airways initiated the first supersonic transport service to America; so I think we could say that British Airways is probably the only airline in the world to operate through a speed spectrum of zero to mach 2.2.

Let us look back over the last 25 years and compare the progress that has been made in rotor flight: it is, alas! rather sad and pathetic. In fact, the general lack of progress throughout the world in vertical take-off and landing aircraft, other than for the Harrier, is abysmal. I have been given to understand that the British Airways Board has not so far asked for any detailed consideration, much less a decision, on utilising helicopters as distinct from, or in addition to, fixed-wing aircraft on short-haul and high density routes.

I have also been given to understand that British Airways for some time have been encouraging Westlands to take a more positive attitude in the civil helicopter field. Furthermore, I believe that Westlands are trying to do that but, as with many other projects, very often their hands are tied because of the high research and development costs, particularly if there is no prospect of a reasonably-sized firm order at the end of the exercise. I think the same problem is occurring with Rolls-Royce about getting their Gnome engine certified for civil use. I do not want anybody to think that to say this is in any way implying criticism of Westlands or Rolls-Royce. It is merely trying to show that I believe British Airways are not irrevocably committed to American aircraft and would welcome a new British helicopter.

We have not properly explored, let alone reached, the full capacity of helicopters in aviation, either civil or military. If only a percentage of the enthusiasm, the drive and technical know-how that went into Concorde could be directed to research and development into vertical take-off and landing aircraft, we in this country—through Westlands and with the co-operation that Westlands have in France with Aerospatiale—could make Europe the leaders of the world in vertical take-off and landing transport. So, my Lords, I say: "Let us be pioneers, through British Airways and Westlands, by showing the world how to do it." The export market for a new generation of a compound helicopter or rotor-craft is vast, and instead of pouring money down the drain, as we so often do on some of the lame ducks, may I ask the Government whether they would consider subsidising British Airways in respect of orders for a new helicopter and that Westlands could be given a loan with which to build it, as the project today is completely viable and feasible?

4.44 p.m.

Lord GLENARTHUR

My Lords, it is with much humility that I rise to make my maiden speech in your Lordships' House this afternoon. I am very grateful for the kind remarks made by my noble friend Lord Kinnoull and by the noble Earl, Lord Kimberley. For two reasons I am particularly grateful for this opportunity to discuss the British helicopter industry. I think this debate has already shown what a vitally important part helicopters have played in so many areas, and I am sure it will highlight the need for constant and continued development in this country both in manufacture and operation. Secondly, it is customary to make a maiden speech on a subject with which one is familiar; and I must declare an interest. As you have already heard, my Lords, I am a professional helicopter pilot, flying for British Airways in Aberdeenshire; so to a large extent I am talking from my own experience of the helicopter world.

I do not intend to go into a detailed history of the helicopter. Suffice it to say that these complex machines reached a point in their development in the late 1930s which corresponded to the position of fixed-wing aircraft before the First World War. Of course, enormous progress has been made since then, but the fact remains that, in comparative terms, helicopter development is still some 20 or so years behind.

The key characteristic of the helicopter is its flexibility of operation. It is uniquely versatile and, because of this, it is commercially attractive in so many different roles. It does, of course, require specialised engineering and servicing skill, but it does not need—and, indeed, this was pointed out earlier—the cumbersome and expensive airports and the complex support to which we have become so accustomed.

This afternoon I should like to develop two themes: first, the potential in the growth of the helicopter industry generally, which I hope will highlight two areas open to the British helicopter manufacturing industry, and, secondly, the future use of helicopters to replace fixed-wing aircraft in some areas. It is anticipated that over the next 10 years some 20,000 helicopters will be required worldwide and, as we have heard, 12,000 of them will be civil. That is interesting, because it is the first time that we have seen the civil requirement outstripping the military. There are various reasons for that civil growth. But the main reasons are that the military have demonstrated the versatility of the helicopter, that there has been considerable technological spin-off from the military to the civil element, that we have seen a widespread use of helicopters to support offshore energy exploration and that there has also been an increase in the use of helicopters to increase agricultural efficiency by spraying crops to cope with the food requirements of an expanding world population. In addition, the introduction of the gas turbine engine has vastly improved the performance and the power-to-weight ratio of the helicopter. Last but not least, there is a continuing need for door-to-door transport for the executive and others in the age of saturated surface transport.

The two existing areas which show the greatest growth potential are, first, what is known as aerial work, which includes activities such as crop spraying, inspecting power lines and aerial crane-work and, secondly, offshore work. On the United Kingdom civil register at the moment there are about 350 helicopters, 30 per cent. of which are used in the aerial work category. The British Helicopter Advisory Board, a non-profit-making organisation which seeks to promote the use of helicopters in this country, estimates that by 1985 63 per cent. of all helicopters worldwide will be committed to aerial work, largely as a result of the expanding need for helicopters to meet the food requirements of a world population which is expected to double by the year 2000.

Opportunities have already arisen for British specialist companies to tender for contracts in many parts of the world to aid agriculture; but at present the agricultural helicopter operators use a number of small and unspecialised helicopters, such as the ex-military Bell 47, a very small aircraft, which they convert to civil standard for a very small price—£20,000 or so apiece. Of course, the insurers do not like crop spraying, and so on, because the very nature of the job calls for Very low and accurate flying, and I am afraid that aircraft become damaged not infrequently. The hourly cost of a spraying helicopter is about the same nowadays as its fixed-wing counterpart; but the advantages of a helicopter's "down wash"—the thrust of the blades to assist the spread of whatever agent is being administered—and the agility of the helicopter are an enormous asset. The big drawback is its lack of capacity to carry enough of whatever it is it is spreading, in order to avoid frequent topping-up; this is time-wasting and expensive.

What is required is a very basic and simple specialist agricultural helicopter. There is no need for any sophisticated electronic gadgetry. Yet no manufacturer that I know of is developing such a machine, although the operators are crying out for one. It seems such a suitable opportunity now to encourage development in this field, so that in years to come advantage can be taken by the experts in this field of the opportunities already arising, using specialist tools for a specialist job.

The exploration for and development of offshore oil and gasfields has already given a very significant boost, as we have heard, to worldwide helicopter use. There is no doubt whatever that, without the helicopter, it would have been quite impossible to develop the resources with anything like the speed which has actually been achieved. Not only is the helicopter the only practical vehicle by which to carry out rig crew changes, and to shuttle people from rig to rig and from oilfield to oilfield, but it has proved invaluable in the commercial emergency situation; for example, when a rig has been threatened with shut down of either exploration or production because of lack of a spare part or suitably qualified knowledge to sort out a problem on site.

Furthermore, the helicopter has been a valuable source of confidence to those working offshore, who know that in the event of injury, or the need of evacuation, either individually or of an entire rig, this can be carried out effectively by helicopter under the most appalling weather conditions. I am sure that your Lordships will have read—indeed, we heard about it this afternoon—of the oil rig "Orion" which went ashore off Guernsey last week, and the part played by helicopters in that emergency. And, of course, contracts exist to use commercial helicopters in a search and rescue rôle.

One hopes that those responsible will look closely at the very cheap and effective service supplied by civilian organisations in recent years to supplement either the existing or any future service responsibility, both at extreme range offshore and on land as well, and will acknowledge the experience and willingness on the part of crews—and I should like to point out that I have not contributed in this respect myself—to set about this work the whole time. It is a very cheap and valuable source of confidence both to those offshore and, for example, those in the mountains of Scotland, and I hope that we shall continue to be able to provide it.

Offshore work accounts for some 20 per cent. of today's helicopters, although it accounts for a much greater proportion of flying hours, and it is predicted that by 1985 the oil support operations will account for 22 per cent., while the number of rigs increases from about 270 at the moment, to perhaps, as much as 700 worldwide. The large United States manufacturer, Sikorsky, has estimated that by the early 1980s some 50,000 passenger trips per week, as opposed to 25,000 now, will be required on the North Sea oil alone. It is also anticipated that the helicopter's share of drilling, exploration and development costs, which is about 1½ per cent. of the operations worldwide and 2 per cent. on the North Sea, will increase as development moves to the tougher areas. It is also expected that the oil industry will buy between £750 million and £1,000 million worth of helicopters throughout the 1980s.

It is perhaps a sad reflection on Great Britain's participation in this field that, as we have heard, a recent survey in December showed that some 77 individual machines were operating over the North Sea, and that only two of these were British. Of course, the Sikorsky S.61, which is the work horse of the North Sea, has proved to be a thoroughly satisfactory machine. But it seems a shame that, because of decisions taken by successive Governments, and, I think, a lack of interest and foresight within the United Kingdom helicopter manufacturing industry, no British civil contender has been available, and even now nothing is on the books. Despite that, much pioneering and development work has been done on the job by the companies taking part, and I particularly refer to the development of full instrument flying capability and flight in icy conditions, which is one of the more serious hazards with which we have to contend.

An article in one of the papers, some few weeks ago, put forward a very strong case for using some of the North Sea oil revenue to exploit the lead gained by Concorde in aircraft development. Indeed, only yesterday your Lordships were discussing what to do with some of the revenue from North Sea oil. I applaud the idea floated by this article and by my noble friend Lord Kinnoull, especially at a time when the British aircraft industry looks as though it could have a tough patch ahead. But I think that it misses one important point. There seems to be every reason to use some of the revenue to exploit that field of aviation which has made possible the production of this saviour of the British economy, and to try to close the development gap which exists between helicopters and fixed wing.

This leads me to my second point, which is the use of helicopters to replace fixed wing in certain areas. Commercial passenger services were tried throughout the 1950s but they all failed, not through want of trying, but because the economics were wrong. The helicopters were unable to carry a sufficient load and they were not economical. The opportunity in this country to develop potentially viable helicopters in this role was sadly lost in the 1950s and early 1960s, when development of two Westland projects—the Westland Westminster and the Fairey Rotodyne, which was subsequently taken over by Westland—was abandoned.

At the time of the Rotodyne cancellation, the American Boeing Chinook was under consideration to fill the medium-lift helicopter requirement of the Air Force. An order was placed, spares were contracted for and very expensive equipment design modifications were put in hand. In 1967, the order was cancelled, so we lost both operational development in our own industry and also the use of the American aircraft. But now, as we have heard, some 15 years after the original idea, we have ordered 30 of these machines for the Air Force. I think that this speaks for itself. So much opportunity has been wasted and time lost.

The built-in delay factors in fixed-wing flying over distances such as that from London to Paris lie in the time it takes to get to the airport, to be processed, to board the aircraft, to taxi around for some time and, after a comparatively short flight, to repeat the process in reverse at the other end. Four and a half hours is about the average door to door time from central London to central Paris now. A helicopter may fly more slowly, but it does not need acres of concrete, and by operating from city centres it cuts out the need to crawl in traffic from a city centre to the outlying airport. There is no time wasted in taxi-ing, and helicopters can be established in the cruise and on track very quickly. A suitable helicopter would halve the time it takes to get from central London to central Paris, door to door. And it is very pertinent, as the noble Earl, Lord Kimberley, said, that processing costs at Heathrow are about £6 a head and at Penzance 40p or 50p.

The pioneers of trials in the early 'fifties saw the advantages of helicopters in this role. But only now are we beginning to see suitable aircraft appear which are viable and which could make their dream come true. It looks as though the shuttle between Gatwick and Heathrow will begin in the summer. I am sure that this trial will give confidence to the public at large, to those co-ordinating fixed-wing and helicopter traffic and to the supporting ground services, which have not so far been involved in this kind of operation. I believe that, in due course, the service will probably be expanded to take into account the other London airports, which we now hear are to be developed and, I hope, the centre of London as well.

The aircraft to be used has been proven on the North Sea. It is utterly safe, and is a very suitable vehicle with which to start the operation. But I am sure that, if we are to capitalise on the expanding market, we must concentrate on developing a helicopter of 120 or, maybe, 200 seats—a kind of mini-Jumbo with vertical take-off. And, of course, we do not necessarily need to bear the entire burden ourselves on our own industrial companies' shoulders. It could be clone in conjunction with other countries, as we have done in the past, although we could no doubt give a lead.

It has been suggested that the Highlands and Islands airports, which lose about £1 million or £1½ million a year, should be done away with in their present form, and that a helicopter should replace the fixed wing on this service. Such a suggestion has enormous merit, particularly if the scheme is expanded to include small isolated towns and villages between which surface transport, particularly in the winter—and two weeks ago we saw what happened in the North of Scotland—is slow and impossible. We now see suitable medium sized aircraft coming on to the market, cheaper to operate than the present range, much more sophisticated and with passenger appeal. They need a clear area the size of only about half a football pitch to operate from—indeed, half a football pitch would do admirably.

Of course, in the entire field of commercial operations the environmentalists will, very rightly, have their say. At the moment helicopters are fairly noisy machines. There are few bodies better qualified to judge than your Lordships, who have one of the few permanent helicopter lanes in this country going up the river past the windows of the Palace of Westminster. I have not been in your Lordships' House for very long, and I hope that I shall be forgiven for being an enthusiast, but certainly I do not find that the noise of helicopters flying overhead is any more intrusive than that of fixed wing traffic. Helicopter noise is, indeed, often masked by the noise of the big jets.

I have already spoken for too long, and I am grateful for your Lordships' patience. However, my experience of operating helicopters leads me to believe that there is enormous scope to make use of their versatility and flexibility. Opportunities have been missed in the past; there is no doubt about that. But let us now get things moving within the civil side of our own helicopter industry. Let us be progressive, and not over-cautious, and give the kind of lead that we as a country have customarily given to the successful development of aviation and the timely introduction of helicopters into commercial helicopter services within the United Kingdom and Europe.

5.2 p.m.

Lord BALFOUR of INCHRYE

My Lords, I feel sure that all your Lordships will be grateful to the noble Earl, Lord Kinnoull, for two reasons: first for giving us the opportunity to discuss this important subject, and secondly for giving us the opportunity to hear the fascinating, knowledgeable and much appreciated maiden speech of the noble Lord, Lord Glenarthur—a man who is doing the job that we are discussing tonight. I feel particularly glad to be allowed to follow the noble Lord, because I played a small part in lifting him out of the Army Helicopter Unit and getting him into a position where his services would be at the disposal of British Airways.

I wish to touch briefly on only three points; they have been touched on to some extent by other noble Lords. First, I regret that there is not one single civil aviation helicopter project on the drawing boards of our aircarft industry; nor has there been for many years past. When we look at the developments that have taken place and are taking place in the helicopter world in the United States, France and Germany, it is a lost opportunity for this country. We must admit our error of omission.

My second point is that no country is more suitable for helicopter operation than the United Kingdom. It is an ideal short-haul country. Noble Lords have already touched upon the Penzance to Isles of Scilly short-haul service. I was chairman of British European Airways Helicopters at the time that we started the service. We knew that we were bound to lose money for a year or two. That did not matter at the time because we wished to find out whether a regular helicopter service could be developed. In its first year, the service carried 27,000 people, and last year it carried 88,000 people. It has been a viable service for the last five years, making profits formerly for British European Airways, and now for British Airways, which proves that a well run and well organised short-haul helicopter service is today a viable proposition.

My third point, which relates to Scotland, has also been touched on by the noble Lord, Lord Glenarthur. There is much controversy in Scotland about the Highlands and Islands airports being taken over by the British Airports Authority. There is very understandable resistance from local authorities because they foresee higher costs, higher standards of manning and higher charges all around than have been the case for several years past. I believe that the Government should consider scrapping those airports and, if necessary, devoting the money saved to supporting financially inter-town and inter-city helicopter services in Scotland.

I should dearly like no fixed-wing aircraft to fly North of Glasgow, Edinburgh, Aberdeen or Inverness. I should like each of those centres to have instead what may be termed bus-stop helicopters, radiating out to serve quite large communities that have no effective communications. That would be imaginative action on the part of Her Majesty's Government.

Such action could not be taken at once, but it could be the objective. It could be worked on gradually so that the helicopter becomes the standard method of transportation in the remote and far distant areas of Scotland and replaces the expensive airports and the expensive maintenance of fixed-wing aircraft. That is the picture in my mind which I hope other noble Lords will share with me. By doing that, we should not only develop the operation of helicopters; we should also encourage our industry to serve those needs.

5.7 p.m.

Lord GISBOROUGH

My Lords, first may I congratulate the noble Lord, Lord Glenarthur, upon his maiden speech. Not only did he make a most able and uniquely well-informed speech; he delivered it like a veteran, and possibly rather better than many a veteran of this House.

At present, the major use of helicopters seems to be for military purposes. I understand that the Puma and the Wessex are due to be replaced fairly soon by a machine that is produced as a result of a collaborative agreement between the United Kingdom, France, Italy and Germany. I understand that the United Kingdom will play a big part in the new design and that we are seeking to lead the design. I should be interested to hear from the noble Lord who is to reply whether the United Kingdom will be taking the lead.

On the military side, at present the heavy-lift helicopters are American. They seem to be highly satisfactory and are liked by the Services. The military demand is probably not sufficient for this country to embark upon the production of heavy-lift helicopters. The civilian market, however, appears to be another story. It has already been mentioned that the forecast is that 20,000 helicopters will be produced in the next 10 years and that the majority of them will be for civilian rather than military purposes.

There is a very strong, rising demand, as all speakers have mentioned, for helicopters. For example, one firm that I know of had one helicopter on charter in 1969; now they have no fewer than eight on charter. That is excellent. Also, they are finding that there are increasing sales to be made abroad. This point has also been mentioned by two speakers. Those sales are largely for on-going projects such as crop spraying which will, if anything, increase as countries become better able to improve their agricultural standards.

While Westlands have had a success story with the Commando—20 of them have been sold to Egypt and another 10 are going there—it seems that the British industry has treated the civilian market with disdain and has ignored the greater civilian demand with their present generation of rotary wing helicopters. For example, just two or three Pumas are operating in the North Sea, and I understand that only two Gazelles are operating as civil helicopters in the United Kingdom. While there was a suggestion that the Lynx should be converted to play a civil role, I gather that this project has also been deferred. This is a great pity. The Italian Jet Rangers, with their United States engines, are used instead; and I am told that their maintenance cost is about half that of the British aircraft, the Gazelle. So, of course, the United Kingdom operators are using the American plane for their executive charter market particularly—that is, four seats plus—because of the Gazelle having poor and expensive maintenance, and also lacking comfort compared with the Jet Ranger.

I understand the United States and the French and Italians are now working to produce a medium heavy-lift machine for the corporate market, of six to 12 seats, and the United Kingdom operators are likely to have to buy this in future. I also understand that the RAF will have a requirement for these sort of machines, and in spite of the fact that this EEC machine is going to be on the market at some stage in the future they are going to be supplied with the 30 Chinooks rather than the EEC machines.

It has already been suggested that the Government should support and give incentive to the United Kingdom manufacturers to produce more comfortable and economic civilian charter machines and to take advantage of this increasing growth which is quite apparent, particularly for the corporate charter market and for the agricultural market. They should encourage developers to try to make certain that the Puma Wessex replacement is fully developable for civil use. Secondly, even the Italian Jet Rangers have United States engines. I was always brought up to believe that Rolls-Royce made the best engines in the world. Surely they should be able to produce a suitable small turbine for helicopters, which could then be sold to the Italians, if not used in our own machines.

Thirdly, I think it is essential that much more suitable helicopter facilities should be developed. Battersea is not good enough for the long term. It is no good looking 10 years, or any short number of years, ahead; one has to look a long time ahead. We have to realise that the situation in the long term is that there will be more and better sites, not only in London but also in other cities, and these should be planned for the future. There is a large environmental lobby and there must be a compromise with them. Of course, if there are more sites available, then the amount of noise on any one particular site would be much less because the use would be dispersed over greater areas.

My Lords, I believe the United Kingdom has the skill to produce helicopters. They should be able to design, they should be able to build, and there is no reason why they should not sell, not only the machines but also the engines. It is a very high growth industry, and there would be an increase in employment if more were to be built in this country. We have the opportunity, with the good things from oil, to create this investment. I hope we shall meet this challenge which is coming to us in the future.

5.14 p.m.

Lord TREFGARNE

My Lords, I think I can do no better in my opening remarks than echo the words of the noble Lord, Lord Balfour of Inchrye, who said most succinctly that we had two reasons for thanking my noble friend Lord Kinnoull tonight; first, for raising this most important matter in a debate so appropriately timed after our debate yesterday, and secondly, for creating an opportunity for my noble friend Lord Glenarthur to make his most excellent maiden speech. I believe we were all impressed by the most clearly expressed and deep knowledge of the noble Lord's observations and by his very clear and forthright delivery. I hope that he will speak again in your Lordships' House both soon and often.

I do not want to go in any depth into the manufacture of helicopters. My remarks will be directed more towards the operations in the North Sea. But I should like to sound a caveat. I think all the noble Lords who have spoken so far have regretted, as indeed I do, the absence of a British civil contender for the major orders which are likely to come in the near and medium term. It is indeed the case that British Airways Helicopters are in the process of taking decisions for the re-equipment of their fleet, and no doubt the same applies to Bristow, the other major civil helicopter operators. Of course, as several noble Lords have mentioned, there is likely to be a substantial market outside the United Kingdom in the years to come.

My caveat is that the costs and, indeed, the risks of launching a new civil project are very substantial. It is unhappily the case that the military and civil certification codes are not the same; indeed, they are very different. A helicopter duly certificated for military use is by no means automatically acceptable to the civil authorities. The manufacturer, even when he is considering a virtually identical machine, must run two parallel development and test programmes if he is to achieve both military and civil certification at the same time or on a similar time-scale.

It appears that the directors of Westland take the view that the risks of embarking upon a civil programme at present are too great for them to justify to their shareholders. It seems that British Airways are only prepared to place an order for two or three helicopters at this time. Indeed, one must say in parenthesis that their existing fleet, although almost entirely consisting of S.61 helicopters, was brought in penny numbers; they did not buy all 22 machines at the same time. Thus, if the suppliers of those machines had started their production on the assumption that they would sell 20 or more helicopters to British Airways, they might, at the outset anyway, have been disappointed.

I think it follows from this that the launching of a single helicopter project could only he done with the aid of public money, and Parliament, as guardian of the public purse, would, I feel sure, wish to be satisfied that that money was prudently invested. I hope and believe that, if Westland were to be granted money to assist in the development of a civil variant of one of its existing designs, that would be a successful project and I think that the Government or whoever advanced the money could look for a proper return in due course, But the directors of Westland clearly do not take that view, and surely they are at least as expert as we are. Thus, if it were to be suggested that public money be used for this purpose, I believe that the Government would need to be satisfied that that money was being prudently invested. Indeed, they would need to be satisfied, for example, that British Airways would be able to purchase the aeroplane proposed in sufficient numbers. At the moment British Airways are thinking of buying only two or three new helicopters, certainly in the first instance. Thus, at least at present, I feel that the fundamental requirements of such a project are not met.

Let me repeat that, from the figures that we have heard tonight and from the knowledge that the various expert noble Lords who have spoken have conveyed to us, there seems to be a major world market for these machines. I would certainly agree that the possibility of public money to support the launch of a new civil project is worthy of examination, but it should be criticial and not simply a euphoric examination based upon the alleged future of the North Sea and other markets. As I have said, the cost of producing these civil helicopters is very great and it is for that reason that the orders that the British manufacturers—namely, Westland—will require must amount to at least 20 helicopters. The present proposals for British Airways Helicopters and others really do not meet the requirements.

I turn to the question of operations in the North Sea. I am somewhat concerned about the facilities provided in the North Sea for the helicopters. There are some points that I should like to put to the noble Lord, Lord Winterbottom. I regret that I have not given the noble Lord prior notice of these questions and he may not, therefore, be able to answer them tonight, but perhaps he can write to me in due course or let me have the information in some other way. As we have heard, the North Sea operations have grown at a very considerable rate. I suspect that the rate of growth, particularly at Aberdeen, somewhat took the authorities by surprise. It may have been very difficult to predict the precise rate at which the operations would grow and I do not, therefore, necessarily criticise them for failing to see in advance the size of the operation that would grow up on their doorsteps in a short period.

As we have heard, there are now 80 or so helicopters operating regularly in the North Sea. Those helicopters have to share their airspace with many other users including, of course, the military. The Under-Secretary of State announced the other day that a new Tactical Weapons Unit (TWU) is to be opened at Lossie-mouth. That will involve a significant increase in the number of military aircraft operating at low level in that part of the world. Already, of course, the military operate in that part of the world in respect to fishery protection operations and, to some extent, in high level interdiction operations. In themselves, those operations do not, of course, conflict with those of the helicopters, but the aircraft so operating are required to take off and land at their airfields and, in so doing, they of course operate through the helicopter zones. There is, of course, the additional requirement for the physical protection of the rigs in the North Sea.

I suspect—indeed, I believe—that all this needs absolutely first-rate radio communication facilities. The only perfect solution would be a form of stationary satellite, but I fully recognise that that would be beyond the cost resources, certainly of the United Kingdom. Thus, we must rely on three primary methods of communication: first, the forward relay systems; secondly, the high frequency link systems; and, thirdly, the VHF facilities already existing on the rigs themselves. None of those systems by itself provides an answer. Indeed, I think that all parties have now eliminated the high frequency link as any form of answer to this difficulty. Therefore, we have at present forward relay stations and rig facilities.

The forward relay stations, which are by and large operated by the national air traffic service—part of the Civil Aviation Authority—have been chosen as the primary solution to the problem. I would accept that that is the right decision in all the circumstances. However, I am concerned that the installation of these relay stations has proceeded very slowly. Indeed, as of today, there are still three relay stations required to complete the coverage, despite the fact that additional relay stations were opened only recently. I am informed that the funding for these additional three stations has not yet been provided for. I am quite persuaded that the Government ought, as a matter of urgency, to take steps to ensure that these facilities are brought into service as soon as possible. The funding of the Civil Aviation Authority and national air traffic facilities has always been something of a delicate matter. Therefore, I believe that on this occasion the Department of Energy ought to produce some of the mony required. I believe that it is in the region of £1 million initially for the three facilities, plus an annual charge to keep the stations operating. So much for communications.

The other problem is the question of navigation facilities in the region. There are three systems which can be used. I need not bother your Lordships with the details. Two of them are already in existence and operating satisfactorily, but there is a third system which, I suggest to the noble Lord, is really not proceeding as swiftly as it should. It is the use of secondary radar to supplement the very difficult primary radar situation which eixsts in that part of the world.

Your Lordships will know that primary radar is not a very happy facility used at low level. Thus, a secondary radar facility has been in existence in Scotland for some years. I understand that the Civil Aviation Authority is considering the installation of new secondary radar in parts of Scotland, but it has not yet been completed or even, I think, started. I recognise that, for its efficient operation, secondary radar requires the aircraft to be equipped with a certain device called a transponder. I ask the noble Lord—this is, perhaps the most important question that I must put to him today—why it is that British Airways Helicopters has been so slow in fitting transponders into its fleet of helicopters. I understand that, out of the fleet of 24 only two are fitted with this device. It is quite a simple matter to install it and not as expensive as many of the other modifications which are often required to be carried out. I hope that the noble Lord will convey to BAH my view, at least, that this is a facility that they ought to install at the very earliest opportunity. Indeed, pre-sure could perhaps be brought to bear through the medium of the CAA because, of course, it would be right that all the helicopters in the region—not just the British Airways ones—should be fitted with this equipment.

There is another matter which gives me some cause for concern and that is the safety of some of the landing pads on the rigs themselves. I cannot pretend that I have ever operated on to a North Sea oil rig in a helicopter, but I understand that there is considerable disquiet about the safety of some of the pads. I make it clear that this by no means applies to all of them. There are a few pads which are, I think, quite well known to all concerned, and which are really very hazardous, largely because of the obstructions very close to them. That means that the helicopters can operate only from a certain direction, and such an exercise becomes very dangerous when the wind is not in the most appropriate quarter. The CAA is not, it seems, required to approve these pads as such—that is to say, they are not required to be licensed airfields because the legislation does not insist upon that in this sort of facility. However, I hope that the noble Lord can give me an assurance that the Authority does in fact inspect all these pads and insists upon whatever changes are necessary to ensure that the risks are minimised.

Recently there has been considerable correspondence in the trade press and elsewhere about the need for the carriage of cabin attendants. Indeed, the CAA granted a number of dispensations from the requirements in all sorts of circum stances. The purpose of attendants on these routes is not, of course, to serve the coffee, but to help the passengers out in the event of an accident, to facilitate the use of the emergency equipment, to open the exits and so on. I should have thought that, in the larger helicopters, there was really no case for allowing the operators not to carry these attendants. I understand that these dispensations are being progressively run down, but I would express the view that the sooner that is achieved the better.

Finally, I should like to look briefly into the future. Perhaps I may touch on the question of civil routes—city-centre to city-centre operations—which have been mentioned by so many noble Lords this afternoon. I am all in favour of such operations when they can be shown to be viable, but the truth of the matter is that, thus far at least, the economic development of the helicopter has not, in general, reached the point where there is any likelihood of economic operation in these circumstances. I feel sure that British Airways Helicopters stands ready to mount such operations when, and if, they can be shown to be viable and, above all, when suitable helicopters are available.

I should have thought that the only scope was on certain specialised routes like that to the Scilly Isles, which has been mentioned. Many noble Lords have explained how rapidly that service has grown in recent years, but perhaps I may add in parenthesis that, although that is, indeed, the case—and I am sure that the figures we have heard are accurate—that service is a dead loss in the winter, and only in the summer can it be regarded as viable. We have had an interesting and useful debate. I believe that the noble Lord, Lord Winterbottom, has been given considerable fuel for his reply, and I look forward to hearing it.

5.32 p.m.

Lord WINTERBOTTOM

My Lords, before I attempt to reply to this extremely interesting debate—and I say that in all sincerity because this is a subject in which I am genuinely interested—first may I convey my congratulations to the noble Lord, Lord Glenarthur, on his excellent maiden speech. He spoke with clarity and authority about a subject which he knew, which is something your Lordships' House deeply appreciates. As he was courteous enough to indicate to me in advance a somewhat searching question which he was going to ask me, I also think he was practising another virtue—namely, he was watching the clock in front of him. The question that he has put to me today will be answered in writing.

I say quite sincerely that I welcome this opportunity of discussing the British helicopter industry. The House has already expressed its gratitude to the noble Earl, Lord Kinnoull, for initiating this debate and I join with the House in those congratulations.

It is particularly timely that this matter should be raised now, as we have been vividly reminded recently of the immense value of helicopters in emergencies—oddly enough, noble Lords did not touch on this—both in the operations following the terrible blizzards in Scotland, and also in the rescue of men from the oil rig which ran aground off Guernsey. In all these crises helicopters played an invaluable role, and we can be proud that British helicopters, manned by highly skilled British pilots and crew, were in the forefront of the action.

These recent incidents provide just two examples of the wide variety of uses to which both military and civil helicopters are now put, and I shall talk about some of the major applications a little later, as well as describing the ways in which Her Majesty's Government have supported, and, indeed, expect to continue to support, the British helicopter industry. First, however, I think it is useful to be clear what we mean by the British helicopter industry. In this country the only helicopter manufacturer is Westland Helicopters. This private firm is the principal operating company of Westland Aircraft, a group which has a number of other subsidiaries, including, of course, British Hovercraft. Westlands has specialised in military helicopters, normally developed initially for Ministry of Defence requirements, but which lead to very substantial export business with foreign customers.

As has been pointed out, Westlands are at present engaged in the manufacture of the Puma, Gazelle, Lynx and Sea King helicopters. Of these, the first three have been produced under the Anglo-French collaborative agreement of 1967. As noble Lords know, design leadership on the Puma, whose development was financed by France before the package was agreed, and on the Gazelle, rests with Aerospatiale and, on the Lynx, with Westlands. Production of all three aircraft is divided between the United Kingdom and France. The Anglo-French helicopters have been enthusiastically received by the United Kingdom Services. They incorporate a number of technical innovations. West-lands, for example, received the MacRobert award of the Council of Engineers Institutions for design features incorporated in the Lynx, the British-designed member of the family.

Equally important, the aircraft have already sold or promised to sell well in export markets, with the active assistance of the Defence Sales organisation. Export of the Puma and Gazelle, which came into service in 1969 and 1972 respectively, exceed sales to the United Kingdom and French Governments, while export orders of the Lynx already exceed 35, even though the aircraft has only just entered operational service. The prospects of further substantial export business are promising, particularly in the Middle East. As regards the Sea King, this is basically a Sikorsky design in which United Kingdom equipment fit for both the air-sea warfare and sea-air rescue roles has been installed. Again, it has achieved considerable success overseas in competition with Sikorsky. About 40 per cent. of sales to countries outside the United States and the United Kingdom have been from Westlands' sources. These are fine achievements, recognised by the company's receipt of the Queen's Award to Industry for both technological and export achievement, for which, as I am certain noble Lords will agree, the company can be justly proud. If, therefore, I may revert to the Question on the Order Paper, the United Kingdom has supported the industry through its defence procurement policies, and the industry has demonstrated its competitiveness in world markets.

As far as the military uses of helicopters are concerned, these, of course, fall into a number of broad categories, each of which requires helicopters with differing characteristics, although even within these categories quite a wide range of helicopter types can be used depending on the operation environment. The United Kingdom Armed Services operate a range of helicopter types, which complement each other in providing a broad and flexible airborne capability. The Ministry of Defence intends to maintain and improve this capability by procurement of new helicopter types as those in service are phased out, and by a programme of improving the weapons and sensors carried. This policy might best be illustrated by a brief listing of the main categories.

An important function of military helicopters is reconnaissance. The second important function is anti-submarine operations. In the battle area helicopters are widely used for rapid movement of troops and equipment. Helicopters can also contribute directly to the battle by mounting direct fire weapons. At the moment, the Army's Scouts are fitted with the SS11 anti-tank rocket and the Royal Navy's Wasps, Wessex and Lynx can be armed with the AS12 rocket. The Army's Lynx will be fitted with the TOW anti-tank missile as soon as these are available and the naval version will carry the Sea Skua missile which is currently under development.

The capability to lift heavy military stores to forward areas by helicopter is of course, an important aspect of Army logistic support. Up till the present the United Kingdom, forces have lacked this capability, which is, however, now being filled by the order, mentioned by a number of noble Lords, placed for Boeing Chinook medium-lift helicopters. I shall return to the point about the equipment of these helicopters in the course of my speech. As was said earlier, the Armed Services also use helicopters to a very great degree for search and rescue.

It is clear from this short description of the main applications of helicopters that all three Services will continue to need helicopter support for the foreseeable future. To maintain our technical base, the Ministry of Defence is continuing to place research and demonstrator programmes on industry in the key areas of helicopter technology. The present generation of United Kingdom military helicopters will require replacement from the late 1980s onwards and we see United Kingdom industry playing a major part in meeting these requirements, and initial studies on the first of these requirements, the Sea King replacement, have already been placed on industry.

New helicopter development programmes of course involve considerable expenditure on design and experimental engineering and other forms of investment. It is natural, therefore, that many of the helicopters of the future will be designed and produced on a collaborative basis. We are discussing the scope for such collaboration with our European allies. The noble Lord, Lord Gisborough, I think realised the need for this collaborative effort in order to lessen the national burden on development expenditure.

The Anglo-French programme has proved successful, and we see advantage in continuing, and if possible extending, this collaboration in the future. Collaboration avoids wasteful duplication of resources, and in particular, and in addition, assists the efforts of NATO towards increased standardisation in equipment procurement. We also see collaboration as a means of strengthening both United Kingdom and European capability on helicopters, so that the industry is better able to compete in world markets. Last year the IEPG (which is a development of Eurogroup) nations provided outline details of their probable helicopter requirements up to the year 2,000. It has now been left with Europe's four helicopter manufacturing nations—the United Kingdom, France, Germany and Italy—at both Government and industrial level to consider procurement options. Westlands are playing an active part in the industrial discussions. The road to collaboration is never an easy one and agreements cannot be expected to be reached overnight. None the less, I am pleased to see from the recent statement made by the Westlands chairman that the United Kingdom industry also strongly endorsed the search for closer co-operation in Europe.

The EARL of KINNOULL

My Lords, could the noble Lord say whether these negotiations cover civil projects as well as military projects?

Lord WINTERBOTTOM

My Lords, I am going to touch on civil projects in a moment. Obviously, the two must go together, since I believe there are now on the drawing board civil versions of the Gazelle, and I believe also the Lynx. May I turn for a moment to the 30 Chinook helicopters being ordered from Boeing Vertol. This in no way conflicts with our policy of closer links with Europe, as neither the United Kingdom nor Europe has ever sought to develop a helicopter in this class. European requirements have traditionally been met either by direct purchases from the United States or by licensed manufacture. In this case, the limited United Kingdom requirement for 30 Chinooks would not have justified setting up manufacturing facilities in this country. Agusta, Boeing's European licensee, were approached but were unable to meet the United Kingdom requirements. There was, therefore, no option but to purchase from the United States if this requirement, strongly supported by the all-party Defence and External Affairs Sub-Committee in another place, was to be met. None the less, the terms agreed with Boeing Vertol provide for substantial offset work to be placed in the United Kingdom, subject only to our industry being competitive. We have also made it clear that we attach importance to as much of the offset as possible being placed with the major helicopter firms. Extensive discussions between Boeing Vertol and Westlands have already taken place.

May I now turn to the civil market. As noble Lords have pointed out, while there has been a growth market throughout the world, which noble Lords believe will continue, it is dominated by the United States of America. Nearly 60 per cent. of the world's civil helicopter fleet is in the USA, and this has provided US helicopter manufacturers with a vital base to develop and produce aircraft, not only for their domestic market, but for overseas requirements. The noble Earl, Lord Kinnoull, touched on this. The sheer scale of the American business presents very considerable difficulties to manufacturers from other countries who wish to compete with US suppliers and try to secure a share of the world civil market. I mentioned earlier that West-lands have concentrated on military helicopters; this has inevitably meant that most of the United Kingdom civil requirements—such as oil rig servicing, et cetera—have been met by overseas suppliers, particularly American, as the United Kingdom does not produce models which compete in such markets. Noble Lords pointed out that only two British helicopters are operating in this North Sea area. I understand that Westlands have recently said that they will need to look increasingly at civil helicopter markets in the future. This is understandable and welcome, because if they are successful it would further help to secure Westland's future as a major helicopter manufacturer.

If Westlands were to propose launching a new civil project, the Department of Industry would naturally be prepared to consider a request from the company for financial assistance. However, in the light of the US pre-eminence in the civil market, it would clearly be necessary for us to give careful consideration to the likely financial and commercial viability of such a project. Some preliminary discussions have already taken place between Westlands and Department of Industry officials concerning the various forms of Government assistance which might be available to the company. This, I think, will meet the points made by the two noble Earls, and also by the noble Lord, Lord Trefgarne, in his winding-up speech. He properly pointed out the need to apply proper commercial caution before launching a project in this new area of helicopter manufacture, but it is something which, provided that the necessary commercial safeguards can be met, is desired both by Westlands and by the Department.

Lord TREFGARNE

My Lords, I am grateful to the noble Lord for giving way. Following on this, can the noble Lord say which of the various legislative opportunities will be used to provide this launching aid? If my memory serves me aright, there are at least two Acts under which aid could be granted; namely, the Civil Aviation Act and the Industry Act 1972. Are there any others, or which has been decided?

Lord WINTERBOTTOM

My Lords, I am afraid that I cannot answer that. It is one of the regrettable facts of life that if a Government want to spend money they usually find ways of doing so. I am cer- tain that if this was considered to be in the national interest, funds would be found from one source or another. After all, in its time NRDC has provided substantial funds for technological development.

I trust that I have said enough to reassure your Lordships that Her Majesty's Government are firmly convinced of the need to maintain a strong British helicopter capability. However, I would add that the future of the industry does not rest solely in the hands of Government. The industry itself has a major rôle to perform. Until the next generation of military helicopters begins to enter service in about ten years' time, export and civil sales are bound to play an increasingly important part in the health of the industry. In these areas the initiative must come from industry. The Government can, of course, help. The Defence Sales Organisation has offered, and will continue to offer, industry support in the military export market. The Department of Industry is always prepared to consider supporting promising civil projects. But success will, in each case, depend primarily on the industry remaining competitive in terms of cost, delivery and performance. The helicopter industry is highly competitive and for its future health and security there must be a determination by the company, management and others alike to work together to improve its competitive position. Without this determination Government support will count for little.

That is the formal answer to the technical aspect of today's debate. A number of important and interesting points were also made which come outside the responsibility of the Department of Industry, for which I am answering. The noble Lord, Lord Trefgarne, raised three important and interesting points relating to the rising congestion of air traffic in the Scottish area, not only because of North Sea oil developments but also military developments; for example, he mentioned the Tactical Warfare Unit going to Lossie-mouth. I am afraid I cannot give him answers today to those points, though I believe them to be valid, but I assure him that I will bring them to the attention of the appropriate Departments and will attempt to give him a composite answer to the various points he raised in this important area.

The noble Lord, Lord Balfour of Inchrye, made an interesting point which should be borne in mind during the negotiations taking place for the production of a civil version of existing military helicopters in this country; namely, that the United Kingdom is a most suitable place for helicopter operations. We are not a single island but a flotilla of islands and we must be able to move freely from one to the other. I have flown from island to island in Scotland in light aircraft. Such aircraft carry two or three people and if we wanted to move more than that number at a time then obviously the helicopter in an improved form would be of enormous value.

The various points noble Lords raised outside the ambit of the purely technical will be studied by the Department of Trade, the Civil Aviation Authority and the British Airports Authority, and when I have had time to study in detail what noble Lords have said I will see that the appropriate contributions are drawn to their attention and, where an answer is required, I will attempt to provide one.

The noble Earl, Lord Kinnoull, made a very important point when he drew attention to the rising landing charges at British Airports Authority airports and the cost of certification by the Civil Aviation Authority; that the growth in cost seems to have run faster than inflation. I will be able to give him an informed answer only when I have taken informed advice.

The Earl of KIMBERLEY

My Lords, does the Minister have any information about the compound helicopter; whether any initiative has been or will be shown to develop it, particularly if there was shown to be a military need, which would be the catalyst which would help to produce one with a high cruising speed and larger capacity?

Lord WINTERBOTTOM

I am afraid, my Lords, that I cannot give the noble Earl an answer to that question tonight. I think one noble Lord mentioned the Fairey Rotodyne which was, I believe, a compound helicopter. If there is any likelihood of such an idea being re-born—it is not a new idea, as the noble Earl pointed out—I will let him know. I thank the noble Earl, Lord Kinnoull, for initiating this debate, which I have enjoyed and which I hope will be useful.