HC Deb 09 August 1972 vol 842 cc454-6W
Mr. Warren

asked the Secretary of State for Trade and Industry if he will make a statement about the future of Short Brothers and Harland Limited.

Mr. Michael Heseltine

In the past four years, Short Brothers and Harland Ltd. has made real progress. The company continues to sell its Skyvan aircraft in a highly competitive market and to make a substantial contribution to the Lockheed TriStar and Fokker Fellowship aircraft. It has developed a new shoulder-fired ground to air missile, Blowpipe, and continues to make worldwide sales of its highly successful Seacat and Tigercat missile systems. These achievements, under difficult conditions, are much to the company's credit and provide a basis for its continuance as a centre of advanced technology in Northern Ireland.

However, the situation in Northern Ireland and the relatively low level of business activity in the aircraft industry generally have made it impossible for the company to obtain sufficient new orders. Without a new programme of work there would be over 2,000 redundancies in Belfast in the next 18 months. The Government have therefore decided to take the following measures:—

  1. (i) In view of promising sales prospects, I am under-writing the production of further Skyvans.
  2. (ii) I am sanctioning preliminary work on the development of the Sky-van as a 30 seater passenger aircraft. A decision on full development and production will be taken when required.
  3. (iii) My right hon. and noble Friend the Secretary of State for Defence is arranging for existing requirements for Seacat guided missiles to be accelerated.
  4. (iv) In addition, my right hon. and noble Friend is placing a substantial order for Blowpipe missiles and associated equipment needed by the army. There are good export prospects for this weapon.

The Government's aim is that Short Brothers and Harland Ltd. should, after a capital reconstruction, operate on a fully independent commercial basis. That aim cannot be achieved at once but I have asked the board of the company to undertake a thorough re-examination of all possibilities for securing the long-term future of the company and to submit proposals. In the meantime outstanding interest on Government loans totalling £1.9 million will be waived. Payment of future interest will be decided year by year. Those dealing with the company can do so in the knowledge that the Government will ensure that its obligations are honoured.

The board of Short Brothers and Harland Ltd. has assured me that these measures will enable it to continue the business satisfactorily for the foreseeable future. I will inform the House of any change in the position.