§ Mr. Terry Walkerasked the Secretary of State for Industry what is his latest estimate of the development and production costs of Concorde, and production receipts; and under what contractual arrangements and statutory authority such expenditures are being incurred.
§ Mr. VarleyThe latest estimate of the manufacturers' total development costs in Britain and France is £1,141 million. The expenditure is divided as follows between actual past expenditure and estimated future expenditure:
latest estimates of the manufacturers' receipts from the sale of aircraft, engines and spares to the end of 1978 is £157 million in the United Kingdom and 1,475 million francs in France. This is divided as between actual past receipts and estimated future receipts as follows:
Britain £m. France Fr.m. Actual receipts to 31st December 1976 at prices and exchange rates prevailing when income was received. 99 1,148 Estimated receipts from 1st January 1977 to 31st December 1978 at January 1977 prices and at an exchange rate of £1=8.5 francs. 58 327 Totals 157 1,475 Development and production of the aircraft in Britain are carried out under 249W procurement contracts placed on my behalf by the Secretary of State for Defence with the British Aircraft Corporation Limited and Rolls-Royce Limited. All contracts provide for the payment of the firms' fair and reasonable costs and for incentive payments related to performance. Both firms are required to remit to the Government all receipts arising from activities and sales achieved through the provision of the contracts.
Development expenditures are incurred under the powers conferred on me by Section 1(1) of the Civil Aviation Act 1949 and production expenditures under Sections 8(1) and 8(2) of the Industrial Expansion Act 1968, from moneys voted by Parliament.
The limit of £250 million on production loans and guarantees contained in the Concorde Aircraft Act 1973 does not apply to the method of financing currently in use. Net Government expenditures and commitments under such arrangements are not expected to exceed this figure by the end of the financial year 1977–78. I will, however, continue to keep the House informed.