HL Deb 02 May 1978 vol 391 cc5-8

2.45 p.m.

The Earl of KINNOULL

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they consider British Airways' request to purchase £200 million worth of replacement aircraft from the U.S.A. has national repercussion far outside any short-term commercial advantage; and whether they will make a Statement.

Baroness STEDMAN

My Lords, there are a number of different aspects of the national interest to be taken into account in this matter, and the Government will give proper weight to each of them in considering their decision.

The Earl of KINNOULL

My Lords, in thanking the noble Baroness for that short reply, is she aware that in the view of many people the technical arguments for the choice of the Boeing by British Airways, including the odd science of the forecasting of traffic growth over the next 15 years, is somewhat thin; and is the noble Baroness aware that the BAC 1–11 has proved since the war to be one of the most successful aircraft throughout the world? Is she aware that there are over 220 aircraft flying on world airlines, and that it has proved well designed and, indeed, has passenger appeal?

Baroness STEDMAN

My Lords, British Airways' present interest in the Boeing has nothing to do with any aspersions they might be thinking of casting on the BAC 1–11. They are very proud of what the BAC 1–11 has achieved, and we hope to continue sales of those aircraft. At this point of time they are considering the two different machines, and the Government have yet to make up their mind which one to support.


My Lords, can the noble Baroness say whether the Government will be any nearer a decision by next Monday, when there is an Unstarred Question on this subject?

Baroness STEDMAN

My Lords, I should have thought it extremely unlikely.


My Lords, does the noble Baroness recall that in 1963–64 BOAC wanted to buy Boeing 707s and Parliament forced them to buy the British VCIO, which was both very profitable and very popular? As the argument between buying Boeing 737s or BAC 1–11s is narrowly balanced and takes in many factors, would it not be a good idea for the Government to set up a Joint Select Committee to report on this issue and make recommendations?

Baroness STEDMAN

My Lords, that is certainly a point I will bring to the notice of my right honourable friend, but I think it is a question of trying to get a decision fairly quickly in order to have the replacement machines available by 1980.


My Lords, will the noble Baroness; accept that the charm and urbanity of her first Answer were not matched by its informativeness? Can she perhaps enlarge on her charming and urbane reply and tell us what are the relevant considerations and in what order of priority a ad scale of importance the Government will consider them?

Baroness STEDMAN

My Lords, these are matters which are now being considered by the various Departments concerned. I am afraid I cannot give any more information as to the relevant priorities of all the Departments concerned; there is more than one Department involved in this. What we need, of course, is a short-haul aircraft, mainly for European journeys. We have to start the replacement of those aircraft by 1980 in order to complete it by 1985. My information is that it means pulling out pilots for training on any new aeroplane that comes in, and the replacement has to be spread over this period because there is a limit to the number of staff who can be pulled out for training before we take delivery of the new machines.

So far as the Boeing and the BAC 1–11 are concerned, there is the question of the noise factor, which we have to take into account by 1986. There is the question of delivery. All these things have to be weighed up. The Government have power under Section 4 of the British Airways Board Act to give the Board directions of a general character, but they have not the power to say: "You will buy this machine or that machine"


My Lords, if the matter is of such urgency, is not the appointment of a Joint Select Committee, as suggested by my noble friend, therefore a matter of great urgency?

Baroness STEDMAN

Yes, my Lords. I said that I would bring it to the notice of my right honourable friend.


My Lords, will my noble friend bear in mind that on all sides of the House there is considerable disquiet about the possibility of this order going to the firm of Boeing?

Baroness STEDMAN

Yes, my Lords. I am aware of the disquiet, and so are all the Departments that are dealing with the matter. We are trying to make the proper assessment now in order to come to the right conclusion in the end.

The Earl of KINNOULL

My Lords, will the noble Baroness tell us whether British Aerospace have advised the Government of the likely effect on jobs should the order go to Boeing, and secondly, the likely effect on their design leadership?

Baroness STEDMAN

My Lords, my information is that there might be problems on design leadership so far as British Aerospace is concerned, if the order did not go for the BAC 1–11. So far as jobs on the shop floor are concerned, I am also advised that there would be a lot of what I suppose we would term subcontracting available if the Boeings were ordered. There would be plenty of work on the shop floor. One of the difficulties if we go for Boeing and not BAC 1–11 is that British Aerospace feel that there is a real danger in losing some of their design teams.


My Lords, would the Minister agree that this is not a question short-term until 1980, but takes us far into the 1980s as regards British civil aviation future policy? Would she agree that it embraces not merely a short-term commercial advantage, but also the question whether our national carrier is to have, in a highly competitive world, the best possible aircraft which it considers most suitable? Secondly, following that, will the Government not have to consider the policy for the 1980s—whether it is a British-USA proposition, using Rolls-Royce engines, or the possibility of a European project which will use foreign engines? Those are grave and difficult issues. May we hope for a fairly early and positive decision?

Baroness STEDMAN

My Lords, the decision that is before the Government at the moment for the current proposal relates to an immediate British Airways requirement which is quite separate and distinct from the question of further aircraft replacements in the medium-long term and the long term. The acquisition of the 19 Boeing 737s now would not commit British Airways to American suppliers for further aircraft. That is something that would have to be considered when the time came. There is no commitment to any further orders for the larger planes as and when they become necessary. The airline will be free to consider which of all the aircraft that are then available, be they American, British or European, are the ones that best fit their needs, and make the necessary submission to the Government.