HL Deb 19 December 1984 vol 458 cc646-8

2.55 p.m.

Lord Bruce-Gardyne

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

The Question was as follows:

To ask Her Majesty's Government what proposals they have recently received for additional taxpayer finance for Lear Fan Ltd.; and what response they have given.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)

My Lords, the company's current plans for the future financing of the project do not include any further provision to commit additional taxpayers' funds beyond those already committed under the September 1982 financing agreement. When that agreement was negotiated Her Majesty's Government made it clear that they would provide no further funds beyond those committed by the agreement. This remains the position.

Lord Bruce-Gardyne

My Lords, I am most grateful to my noble friend for that information. Nevertheless, can he confirm that, under the terms of that agreement, the British taxpayers are still exposed to the tune of some £20 million of taxpayers' money for this new second gullwing Northern Ireland project; that it still has not obtained and shows no sign of obtaining a United States' certificate of airworthiness, which is absolutely essential to its success; and now that the operators have scaled down the level of employment that they expect, the likely cost to the British taxpayer of every job created on this second gullwing project could amount to over £30,000 a job? Is that money really well spent?

Lord Lyell

My Lords, the answer to my noble friend's first question is, yes. Indeed, the Government are still committed to the sum of 24 million dollars—I shall leave it to my noble friend's arithmetic to convert the currency. To turn to the gullwing of this aircraft—and perhaps my noble friend is an engineer—I understood that it was anhedral and dihedral as regards the wings. My noble friend asked about certification. On 12th October this year the Federal Aviation Administration granted what it called "Type inspection authorisation" to a Lear Fan 2,100 aircraft. I understand that the current forecast is that the basic type certificate for an unpressurised aircraft will be obtained by 1st March next year, and the hopes are that a full type certificate for a pressurised aircraft will be obtained by early 1986.

My noble friend's third supplementary question covered the arithmetic of the total cost per job. Of course my noble friend will be aware that the amount of employment of 1,100 new jobs is an estimate, but we hope that it will be fulfilled.

Lord Underhill

My Lords, can the noble Lord give an assurance that if this aircraft receives a certificate and goes into production, there will be employment on its production in Northern Ireland and not elsewhere? Whatever may be the events concerning Lear Fan, will he not confirm the importance of public investment in Northern Ireland? Does he recall what was said last night on the appropriation debate, that some 45.8 per cent. of total employment in Northern Ireland is in public sector employment?

Lord Lyell

My Lords, I am very grateful to the noble Lord for drawing attention to our interesting debate last night. I could not confirm or quibble with his arithmetic; I might look into that later. However, your Lordships will want to know that this new revised agreement provides a realistic figure of 1,100 jobs in Northern Ireland, and the revised agreement is more specific in terms of the manufacturing work on this aircraft which is to be carried out in Northern Ireland. The effect of this agreement is that 80 per cent. of the manufacturing work will be done in Northern Ireland.

Lord Bruce-Gardyne

My Lords, before we leave this subject, may I suggest to my noble friend that all experience shows that it is usually cheaper to pay compensation for the abandonment of an agreement entered into than to squander further good money after bad in fulfilment of an agreement which should never have been entered into in the first place?

Lord Lyell

My Lords, at the outset I gave an undertaking that the total exposure of the Government is, I think, 9.14 million dollars, and 15 million dollars as a guarantee to a loan. I think in my first statement I said that no further funds would be committed beyond those already outlined in the agreement of September 1982, and this remains the position.

Lord Leatherland

My Lords, when the Minister gives us these figures on costs in terms of dollars can he translate them into pounds? We are not an American colony yet.

Lord Lyell

My Lords, even I was aware that we are not an American colony yet, but the contract is drawn up in terms of dollars. Perhaps if the noble Lord would care to read with me the financial papers, we might note the constantly fluctuating exchange rate, but the contract to which I have referred is drawn up in dollars.