§ Lord Bruce-Gardyne asked Her Majesty's Government:
§ What requests have been received from British Aerospace plc for additional support from the taxpayer and for exchange rate guarantees in connection with their participation in the Airbus project; and what reply has been given.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)My Lords, I have met the chairman and the chief executive of British Aerospace to discuss difficulties faced by the company in connection with its participation in the Airbus project arising from the present low value of the US dollar. I have received no firm proposals for additional support or exchange rate guarantees.
§ Lord Bruce-GardyneMy Lords, I am most grateful to my noble friend for that reply. Can he give an assurance that under no circumstances will exchange rate guarantees or indemnities be offered to British Aerospace in respect of its obligations under the Airbus contract? If they were, that would surely be not merely provocation but even a justification for a trade war with the United States.
§ Lord Young of GraffhamMy Lords, my noble friend knows full well that "under no circumstances" is a difficult undertaking for anyone in my position ever to give. Since the launch aid contract was announced only on 14th May of last year, and at that time the rate of exchange was 1.68 dollars to the pound, I hope that British Aerospace will find that the difficulties which it contemplates today will not be too serious. I give an assurance, if such assurance is required, to my noble friend that should I vary in any way the Airbus launch aid I shall come back to tell your Lordships' House.
§ Lord UnderhillMy Lords, does the Minister appreciate that there was general support throughout the House for the launch aid for the new versions of the Airbus, partly because of a desire to take part in an important European co-operative venture and partly because it would provide employment in this country? Has he seen the report that contracts for the Airbus wings for the two latest models have been allocated to Textron Aerostructures, an American firm, to the total of £380 million and that eventually Aerospace has it in mind to give £1 billion of contract for the Airbus wings? Is that against the general principle on which we supported the Airbus project?
§ Lord Young of GraffhamMy Lords, no. The launch aid is to help British Aerospace in the design and development of the wing contract. The production of the wings is not in itself launch aided and it must be for the company to place contracts where it sees it to be in its best interests.
§ Lord Bruce-GardyneMy Lords, may I ask my noble friend in the light of his reply to my supplementary question whether Her Majesty's Government bear in mind that we were told consistently in the case of Concorde that it was always best to put in further money rather than risk losing the investment that we had already made, and that that always turned out to be untrue? Is that not a salutary warning for us in the case of Airbus?
§ Lord Young of GraffhamYes, my Lords. I hope that my noble friend is aware that we are under new management today.