Zimbabwe: Supply of Aircraft (Hansard, 18 October 1984)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have offered money from the Aid and Trade Provision to the Zimbabwe Government in support of the British Aerospace tender for the supply of aircraft to Zimbabwe.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, careful consideration has been given to British Aerospace's request for assistance. However, on this occasion we have decided not to provide support from the Aid and Trade Provision.

§ Lord Hatch of Lusby
My Lords, is the noble Lord the Minister aware that this decision, which is to be so bitterly regretted and will be regretted very widely in this country and in Africa, makes it virtually certain that the contract will therefore go to the Dutch Fokker company because the Dutch Government, in contrast to our Government, now pay something over 1 per cent. of their gross domestic product in aid and have included aid in the Fokker company's tender? Does the noble Lord not recognise that this decision means fewer jobs for people in the aerospace industry in Britain, a loss of prestige in central Africa and grave disappointment for the continued close relationship between Zimbabwe and the United Kingdom?

§ Lord Lucas of Chilworth
My Lords, our understanding is that the Dutch authorities are still considering support for the Fokker bid for this contract, but that it has not yet been offered. I cannot accept that our inability to provide aid for the BAe contract will necessarily make fewer jobs available as the success of the 146 is manifest in orders from America and other places. Nor do I feel that there is necessarily any loss of prestige.

§ Lord Beswick
My Lords, perhaps I may ask the noble Lord to promise to have this matter looked at again. Is it not a fact that Zimbabwe really wants the 146 aircraft? If it buys the Dutch Fokker F28 it will simply be because of the subsidy which the Dutch Government are making available to the Fokker aircaft company. Will the noble Lord bear in mind that if this order, which is worth some £70 million, goes to the Dutch it will have quite an influence on the sale of other aircraft to countries around Zimbabwe?

§ Lord Lucas of Chilworth
My Lords, I can give no assurance that the Government will look again at their decision in regard to this matter. The noble Lord should remember that in the event of Fokker obtaining the contract there would be a considerable United Kingdom element in the building of that aircraft, in that Rolls-Royce provide the engines, Short Brothers provide the wings and other United Kingdom companies also provide parts of the aeroplane.

§ Lord Beswick
My Lords, yes, I have seen the arithmetic. But if the noble Lord looks at that arithmetic he will find that the British content of the 146 is higher. I should also like to ask the noble Lord to bear in mind that the recent report of the House of Commons Trade and Industry Committee calls attention to the way in which we are losing export business because of the aid that is being given by our European friends in their export bids. Will he see whether we cannot at least match what the Dutch are doing?

§ Lord Lucas of Chilworth
My Lords, I have said that we are not prepared to reconsider this matter. There is no question of matching or mismatching. The application for support under the Aid and Trade Provision has to satisfy various commercial, industrial and developmental criteria. In this case the costs of support and competing claims on funds made it impossible for my right honourable friend the Minister to agree that this was a right and proper use of those funds.

Lord Paget of Northampton
My Lords, is the noble Lord aware that Zimbabwe used to be the area in Africa with the largest food exports; that even during the period of sanctions it exported food in substantial quantities; but that it is now suffering from famine, and that the Government are much to be congratulated on not encouraging the waste of short African funds to produce a state airline, for which there is no commercial excuse except in order to build up the prestige of that government?

§ Lord Lucas of Chilworth
My Lords, I understand what the noble Lord has said, although I do not know whether I would quite agree with all the inferences contained in his remarks. But certainly he will recall that since April 1980 we have pledged an allocation of some £112 million worth of developmental assistance to that country, with which we have good relations.

Lord Paget of Northampton
My Lords, should it not concentrate on feeding its people?

§ Lord Lucas of Chilworth
My Lords, it is not for this Government to tell the Zimbabwean Government exactly how it should attend to its internal affairs.

Lord Bruce of Donington
My Lords, is the noble Lord really saying to the House that where tenders are submitted by British firms without any intervention or assistance from Her Majesty's Government, and where firms in other countries, particularly those friendly to this country, submit tenders that are aided one way or another by direct subsidy, this Government will allow this state of affairs to continue indefinitely?

§ Lord Lucas of Chilworth
No, my Lords, I am not saying that.

§ Lord Merrivale
My Lords, much as one would very much like to see an increase in the sales of British Aerospace aircraft to developing countries, could the Minister ensure that British Aerospace take a greater interest in the maintenance and servicing of those aircraft, and a general interest in the countries in the developing world to which they have already sold aircraft? I think that my noble friend will know to which country I refer as he had a meeting in regard to this particular country last Monday afternoon.

§ Lord Lucas of Chilworth
My Lords, as my noble friend will recall, British Aerospace was returned to the private sector in 1981. It has continued to be a very highly successful company in world aerospace markets, and in part that is no doubt due to attending to those matters to which my noble friend has drawn attention.

§ Lord Beswick
My Lords, I wonder whether the noble Lord would make it clear that my noble friend Lord Paget is not entirely right in what he said. Is it not a fact that it is not here a question of building up an expensive new state airline: it is a question of replacing British aircraft that have given good service over some 25 or 30 years? They must now be replaced. It is essential that Zimbabwe has an efficient air transport service in the country.

§ Lord Lucas of Chilworth
My Lords, of course I do not deny the substance of what the noble Lord says, but in this instance the Government did not consider that the likely commercial and developmental benefits justified the aid that was sought.

§ Lord Hatch of Lusby
My Lords, would the noble Lord not agree that whatever reservations some of us on this side of the House may have about the Aid and Trade Provision, this is a case where aid could be married with commercial interest in this country, providing more jobs in this country and providing products which the Zimbabweans want from this country if we will only give them the chance? Is the noble Lord not conscious of the fact that such a decision will have repercussions throughout central and southern Africa, where we have a long and distinguished record of supplying aircraft, and that as a result of this decision the British aircraft industry and British aircraft workers may very well be denied the opportunity over the next 10 years to replace the aircraft which in the past have been provided from this country?

§ Lord Lucas of Chilworth
My Lords, I thought that I had explained this matter. Indeed, the letter which my right honourable friend the Minister of State wrote to the noble Lord, Lord Hatch of Lusby, on 2nd October stated that very careful consideration was being given to this application by all departments of state. I said quite clearly that on this occasion my right honourable friend the Minister had not found sufficient evidence to justify that expenditure being made. I do not accept that the repercussions which the noble Lord, Lord Hatch of Lusby, puts forward are in fact as obvious as he would perhaps make out.