§ Mr. Wilkinsonasked the Secretary of State for Trade and Industry what support Her Majesty's Government is giving to the M45H aero-engine project.
§ Mr. Michael HeseltineOn 21st January my predecessor informed the154W House that provided satisfactory arrangements could be concluded between the firms, Her Majesty's Government would provide up to £11 million launching aid to Rolls Royce (1971) Ltd. to enable the company, in collaboration with SNECMA, to complete the development and undertake production of the M45H aero-engine for the VFW Fokker 614 aircraft.
Signature of contracts was unhappily delayed by the crash of the first prototype aircraft on 1st February. However negotiations both between the firms and also between the British and German Governments have now led to satisfactory arrangements for the project's continuation and contracts were signed between the firms on 31st October.
Her Majesty's Government have agreed to a request by Rolls Royce (1971) Ltd. to increase the maximum for their launching aid to £13.6 million. The increase is to cover the United Kingdom share of future additional costs, particularly those arising from the delay to the production programme caused by the prototype crash.
Provision will, as normal, be made in the launching aid agreement with Rolls Royce (1971) Ltd. for the Government to recover its investment through a share in the revenue from M45H sales. There is more uncertainty than usual whether this aid will be fully recovered. This was originally a private venture entered upon by Rolls Royce Ltd. and SNECMA, and in the special circumstances following the collapse of Rolls Royce Ltd. the Government have decided to accept this uncertainty.—[Vol. 829, c. 296.]