HL Deb 07 April 1987 vol 486 cc896-8

3.2.p.m.

Lord Bruce-Gardyne

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 are yet in a position to announce their decision regarding the request from British Aerospace for £750 million of taxpayer finance towards the cost of their participation in the A330 and A340.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

My Lords, Her Majesty's Government are not yet in a position to announce a decision regarding the request from British Aerospace for launch aid towards the cost of participating in the Airbus A330 and A340, but discussions with the company continue.

Lord Bruce-Gardyne

My Lords, I am grateful to my noble friend for that reply and, in particular, for the note of caution which it strikes. Would my noble friend care to comment on the revelation from the chairman of Airbus Industrie yesterday, that in 13 years of trading this great corporation has failed to turn a penny piece of profit for any of its participants? Could he also explain, in the light of views expressed on previous occasions in your Lordships' House, what benefit there can be to the shareholders in British Aerospace in the contraction of orders for any of these models unless there is a profitable return in real terms from the acceptance of those orders? Could he say whether any of the orders so far received for the airbus been taken on a basis of profitability?

Lord Lucas of Chilworth

My Lords, I am afraid that I cannot comment on what the chairman of Airbus Industrie said. As regards the activities of British Aerospace and bringing a benefit to the shareholders, that is surely a matter for the shareholders to determine—not for me.

Lord Underhill

My Lords, is this not the third occasion on which there has been a Question in your Lordships' House when the Government have replied that they are still considering the matter? On the last occasion did the Minister not agree that sales of the A320 had been unparalleled and that it had been a great success for this country? Is not time now running out, and should not an urgent decision be made by the Government in order that we can be a participant in this European venture instead of just being a contractor?

Lord Lucas of Chilworth

My Lords, I do not wish in any way to be offensive to the noble Lord, Lord Underhill, but the answer to his first question is, yes. The answer to his second question is, yes, and the answer to this third question is, no. As regards the question of time running out, we are in touch with airbus partner governments on the progress of the A330 and A340 projects. As I have said previously, there are complex matters and take some time to resolve, bearing in mind that they are under consideration by our governmental partners as well.

Baroness Burton of Coventry

My Lords, is it not correct that delay has already cost the consortium several orders? Is it not also true that if discussions are prolonged much further it will lose still more orders? Is that what the Government wish to bring about?

Lord Lucas of Chilworth

My Lords, I am not aware that there is delay. Certainly, there is consideration of this important and complex matter. I do not believe that this has cost orders, because an announcement has been made of 104 commitments from nine airlines for the A330 and A340. I believe that to be a very encouraging position which we shall certainly take into account in our deliberations.

Lord Beswick

My Lords, while agreeing with the noble Lord that this is indeed a complex matter, not least because Airbus Industrie is not in itself a profit-making organisation as we know it—it is not a company, as we know it—would the noble Lord not agree that, leaving aside any question of the actual amount or the terms of any loan, it would be quite intolerable if these two projects went ahead without Britain being a partner?

Lord Lucas of Chilworth

My Lords, the noble Lord, Lord Beswick, will know better than I that we are not talking in terms of a loan; we are talking in terms of launch aid. Of course we wish to give British Aerospace what support we can in launch aid, as we have done in the past, so that our British aerospace industry can play its full part in the world industry.

Lord Underhill

My Lords, is it not a fact that the Minister agreed on the last occasion that although we use the term "launch aid", it is, in effect, a loan and the moneys will be repayable? Is it not also a fact that there has been one delay in Airbus Industrie being able to announce that it is definitely going to launch these two programmes, partly because the United Kingdom's decision is awaited? Therefore is it not an urgent matter for Airbus Industrie as well as for British Aerospace and its workers?

Lord Lucas of Chilworth

My Lords, the position of British Aerospace's participation, and thereby the Government's position vis-àvis British Aerospace, is one—but only one—of the factors. It is anticipated that Airbus Industrie will take all the necessary formal decisions to launch the programme later this month, by which time we should be in a position to give our considered response to British Aerospace.

Lord Bruce-Gardyne

My Lords, might not the tolerability of the proposed taxpayer investment in this project be best judged if my noble friend and right honourable and honourable friends who are Ministers in the department concerned, should they decide to give a favourable response to this request from British Aerospace, were themselves committed to putting, let us say, 5 per cent. of their individual personal net worth behind British Aerospace as a gesture of their confidence in the effectiveness of this investment?

Lord Lucas of Chilworth

My Lords, what an interesting and unique way of raising money! However, it would not perhaps be quite sufficient to satisfy British Aerospace's need in this regard.