§ Mr. Austin Mitchellasked the Prime Minister (1) when the Government first learned that Westlands was in financial difficulties; and when they first intervened in the process of finding a solution to the difficulties;
(2) whether she will publish in the Official Report particulars of the initiatives taken by the Government over the past 12 months to save Westland helicopters together with the representations made to foreign governments and foreign firms, showing the relevant dates.
§ The Prime MinisterIt was known throughout 1985 that Westland faced potential financial difficulties. Westland approached a number of British and European companies to see whether an association with them could provide a solution to its problems, but without success. When it became known that Westland had received proposals from United Technologies and Fiat, the Government agreed that the then Secretary of State for Defence should explore further the possibility of an alternative association with Aerospatiale, MBB and Augusta becoming available for consideration by the board of Westland. The then Secretary of State for Defence accordingly had a number of contacts with his opposite numbers in France, Germany and Italy during November and December.
§ Mr. Austin Mitchellasked the Prime Minister whether the disclosures made by the Secretary of State for Defence concerning Cabinet and other discussions concerning the future of the British helicopter industry are to be referred to the Director of Public Prosecutions under section 2 of the Official Secrets Act.
§ The Prime MinisterThat is a matter for my right hon. and learned Friend the Attorney-General.
§ Mr. Austin Mitchellasked the Prime Minister what is her policy towards the intervention of the European Commission in the Westland case; under what authority the commission acted when threatening Westland with loss of contracts in the event of it establishing a link with Sikorski and Fiat; and if she will make a statement.
§ The Prime MinisterThe Commission has made clear that there is no Commission decision or policy on Westland, and that it has no intention of intervening in a private decision.
§ Mr. Austin Mitchellasked the Prime Minister (1) further to her letter dated 1 January to Sir John Cuckney concerning the future of Westland helicopters, whether she will publish in the Official Report particulars of the contributions which would be expected from Her Majesty's Government in the case of each of the existing and prospective future European collaborative projects to 516W which she refers; whether and to what extent letters of intent would be signed within the lifetime of this Government; and what would be the extent of the commitment in terms of money and numbers of helicopters;
(2) whether she will publish in the Official Report a list of the existing and future European collaborative projects together with the stage which each has reached, the role and actual or prospective work load assigned to Westland and the number of helicopters ordered by each of the countries concerned or for which a requirement has been indicated; and what is the Government's estimate of the resultant minimum and maximum annual work load for Westland in terms of (a) design and development and (b) production.
§ The Prime MinisterA commitment has been entered into between Italy and the United Kingdom for the development of the EH101 anti-submarine helicopter. Production orders for the two nations are expected to amount to 90 military aircraft but contracts will not be placed in the near future. Development is being shared equally between the United Kingdom and Italy but obviously I cannot predict what the production share will be.
A memorandum of understanding in which the United Kingdom is participating on equal terms with France, Germany, Italy and the Netherlands governing the feasibility study of the NATO transport and antisubmarine helicopter for the 1990s (NH 90) was signed in September 1985. There is at present no commitment to future development or production on the part of any nation.
Negotiations with Italy and the Netherlands on a battlefield helicopter, a development of the existing Italian Al29 helicopter, have been under way for some time. The industries of all three nations have been planning to be involved in the studies which would follow signature of a memorandum of understanding, whose preparation is well advanced. Recently, the possibility of amalgamating this project with the comparable Franco-German PAH2 has been suggested.
I cannot at this stage comment on the future levels of financial commitment, work load or aircraft requirements in either the transport/anti-submarine or light attack helicopter categories.
§ Mr. Austin Mitchellasked the Prime Minister (1) whether, if the Westland shareholders reject the European consortium proposals for investment in the company, she will make it her policy to dismiss the Secretary of State for Defence;
(2) whether she will now make it her policy to dismiss the Permanent Under-Secretary of State for Defence.
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§ The Prime MinisterNo.
§ Mr. Austin Mitchellasked the Prime Minister whether the letter sent by the Secretary of State for Defence to Lloyd's Bank International regarding investment in Westlands represents Government policy.
§ The Prime MinisterThe then Secretary of State's letter of 3 January to the managing director of Lloyd's Merchant Bank was confined to questions relating to his responsibilities for defence procurement.
§ Mr. Austin Mitchellasked the Prime Minister (1) further to her letter dated 1 January to Sir John Cuckney concerning the future of Westland helicopters, whether she will make it her policy that no orders will be placed for production models unless and until it can be shown that the military requirement can be met at an acceptable cost and that the European consortium is also the most cost-effective source of supply, in the event that Westland accept the European consortium proposal;
(2) further to her letter dated 1 January to Sir John Cuckney concerning the future of Westland helicopters, whether she will list in the Official Report the considerations which will be taken into account in deciding which helicopter comes from the most cost effective source; what weight will be given to the reduction in public revenue and the increase in public expenditure which would result from a loss of jobs in the United Kingdom; and whether contracts for the supply of the military helicopters will be open to tender on a specification which will admit competition from the United States of America as well as European firms;
(3) what is the Government's policy regarding discrimination against United States suppliers of defence materials.
§ The Prime MinisterAs I said in the letter to which the hon. Member refers, Government policy will remain that the United Kingdom should procure its helicopters from the most cost-effective source. Our policy is to secure the best long term value for money on a national basis in procuring the equipment which the armed forces need for their tasks. Accordingly we buy British whenever it is sensible, economic and consistent with our international obligations to do so, and acquire from overseas only when the advantages of cost, performance and time scale outweigh the longer term benefits of procuring the British alternative. The criteria used in deciding the source of our requirements are set out in the 1983 open government document "Value for Money in Defence Procurement".
§ Mr. Austin Mitchellasked the Prime Minister, further to her letter dated 1 January to Sir John Cuckney concerning the future of Westland helicopters, whether any of the Governments and companies belonging to the European consortium have collaborated with the United States Government and/or United States firms on defence projects in the aircraft field; and whether he will publish particulars in the Official Report.
§ The Prime MinisterCollaboration in development and production is widespread in the aircraft and associated equipment field. Examples for some of the companies to which the hon. Member refers include
British Aerospace:Harrier AV8A, AV8B, GR5; Hawk for USN; all with McDonnell Douglas.518WAgusta:Licence build of various United States helicopters (Boeing Chinook, Bell 212 and 412, and Sikorsky S6IN) before turning to in-house design and development (A109, Al29)MBB:Manufacture and assembly of Phantom for German air force.
§ Mr. Austin Mitchellasked the Prime Minister whether the Government were aware before 29 November that an agreement was to be signed in London on that date between Lloyds International Bank and two companies owned by foreign Governments to form a consortium to seek a major shareholding in Westland.
§ The Prime MinisterI understand that Aerospatiale and MBB formally appointed Lloyds Merchant Bank to advise them on 5 November. The Government were made aware of the appointment shortly after.
§ Mr. Austin Mitchellasked the Prime Minister (1) whether the Governments which made the threats against Westland communicated these threats to Her Majesty's Government; whether this was done before the threats were made public; what was the reaction of Her Majesty's Government to these threats; and if she will publish the terms of any communication she has sent to the Governments concerned expressing the Government's views on the matter;
(2) which European Governments and companies have indicated that a number of projects in which Westland is expecting to participate with other European companies may be lost to Westland if the United Technologies/Fiat proposals are accepted; to whom the indications have been given and in what form; and if the Government will make it its policy to institute proceedings before the European Court of Justice in respect of any action by any of the Governments or companies concerned which would discriminate against Westland on the grounds that it 'had accepted help from a non-European firm.
§ The Prime MinisterI have nothing to add to my letter of 1 January to Sir John Cuckney, a copy of which has been placed in the Library.
No doubt the Governments and companies will be considering the position further once Westland's shareholders have reached a decision.
§ Mr. Austin Mitchellasked the Prime Minister whether her letter dated 1 January to Sir John Cuckney concerning the future of Westland was written in the knowledge that the Secretary of State for Defence would be writing to Lloyds Bank International on the same matter.
§ The Prime MinisterThe then Secretary of State for Defence's letter was written in response to a letter of 3 January from the managing director of Lloyds Merchant Bank.
§ Mr. Austin Mitchellasked the Prime Minister (1) what is the policy of Her Majesty's Government towards the future survival of Westland helicopters;
(2) what is the policy of Her Majesty's Government towards maintenance of a complete helicopter manufacturing facility in the United Kingdom which would not be dependent on supplies from the Continent in time of war; and to what extent this will be realised in the case of the proposals put forward by the European consortium and by Sikorsky-Fiat, respectively.
§ The Prime MinisterThe Government would wish to see a United Kingdom helicopter design, development and 519W manufacturing capability maintained if possible. As a private sector company, it is for Westland to decide the best route to follow to secure its future and that of its employees.
§ Mr. Austin Mitchellasked the Prime Minister whether the Government intend to make it a condition for placing an order for helicopters with a European consortium that no shares in any of the companies concerned will be bought by an American company.
§ The Prime MinisterNo.
§ Mr. Austin Mitchellasked the Prime Minister, further to her letter dated 1 January to Sir John Cuckney concerning the future of Westland helicopters, whether, in the event of Westland agreeing to collaborate with the consortium on joint projects, the company will be given access to finance on the same scale and on no less favourable terms than the other participants; and whether the Government will make it their policy to protect Westland from unfair competition from foreign state-controlled and state-supported companies.
§ The Prime MinisterWestland will continue to have the same eligibility for Government support as other United Kingdom companies in the private sector.
§ Mr. Austin Mitchellasked the Prime Minister (1) whether Her Majesty's Government are satisfied that the Governments and companies which have threatened to discriminate against Westland will not use their position in the consortium to transfer output and employment from the United Kingdom to the Continent in the event that the European consortium offer to Westland is accepted: and what safeguards have been agreed to seek to ensure that this will not happen;
(2) what she estimates would be the value of the work which would be put at risk for Westland if it collaborates with Sikorsky-Fiat; and if she will publish in the Official Report the basis on which the calculation was made.
§ The Prime MinisterThe Government will resist to the best of their ability any attempts by others to discriminate against Westland just as they would resist attempts to discriminate against any British company. The commercial arrangements between Westland and companies which may become shareholders in it are a matter for Westland and the other companies concerned.
§ Mr. Austin Mitchellasked the Prime Minister what representations have been made by the Italian Government concerning the Sikorsky-Fiat proposals; what part Fiat would play in these proposals; and if the threats to Westland have been extended to Fiat by the Governments and companies referred to in her letter to Sir John Cuckney dated 1 January.
§ The Prime MinisterThe Italian Government indicated on a number of occasions, most recently on 7 January, a clear position in favour of strengthening of European collaboration and maintaining and developing collaborative programmes. Within this framework they would prefer the European consortium's proposals. The role of Fiat in the event of the United Technologies/Fiat proposals being accepted is a matter for the companies.
§ Mr.. Austin Mitchellasked the Prime Minister whether she will institute an inquiry into the publication of recent 520W correspondence between the Solicitor-General and the Secretary of State for Defence; and if she will make a statement.
§ The Prime MinisterI shall reply to the hon. Gentleman shortly.
§ Mr. Teddy Taylorasked the Prime Minister, pursuant to her reply of 19 December, if Her Majesty's Government have conditionally approved the purchase of six additional Sea King helicopters from the Westland company in the event of it accepting the financial offer from the European consortium; and if she will make a statement.
§ The Prime MinisterI refer my hon. Friend to the answer being given today by my hon. Friend the Minister of State for Defence Procurement to the hon. Member for Yeovil (Mr. Ashdown).