HC Deb 26 February 2001 vol 363 cc409-10W
Mr. Gibb

To ask the Secretary of State for Trade and Industry what EU approvals were obtained or have been applied for in respect of the launch aid loan for Rolls-Royce to develop the Trent 600 and 900 aero engines. [150668]

Mr. Alan Johnson

The appropriate information has been made available to the European Commission, which has discretion concerning any necessary EU approval procedures.

Mr. Gibb

To ask the Secretary of State for Trade and Industry if he will list the Government's launch aid criteria for the proposed loan to Rolls-Royce plc for the development of the Trent 600 and 900 aero engines. [150669]

Mr. Alan Johnson

Like other launch investments, the investment for the development of the Trent 600 and 900 aero engines was subject to rigorous appraisal on a number of different counts covering:

  1. (a) Technical viability.
  2. (b) An assessment of the market.
  3. (c) The financial viability.
  4. (d) The extent to which Government's investment was necessary for the project to proceed.
  5. (e) Wider economic benefits to the UK.

Government investment is subject to stringent appraisal by the DTI with external advice from independent financial advisers, MOD and DERA.

Launch investment is not a loan, but is a repayable investment in a public-private partnership which is expected to secure a real rate of return for the taxpayer as well as securing wider economic benefits for the UK. This arrangement is very similar to a Risk and Revenue Sharing Partnership Partnerships (who co finance and/or produce specific programmes. The Government share the market and technical risks and revenues from engines sold.

It is available only to the aerospace sector and stems from the provisions of the Civil Aviation Act 1982.

Mr. Gibb

To ask the Secretary of State for Trade and Industry what rate of return the Government expect to receive on the launch aid loan to Rolls-Royce plc to develop the Trent 900 and 600 aero engines including the(a) applicable royalty rate, (b) interest rate and (c) repayment schedule. [150671]

Mr. Alan Johnson

We expect to receive a substantial real rate of return. However the conditions of the investment are commercially confidential under exemption 13 of the Code of Practice on Access to Government Information.

Mr. Gibb

To ask the Secretary of State for Trade and Industry what steps he took to establish whether private finance would be available for development of the Trent 900 and 600 aero engines; and what reasons were given for it not being forthcoming. [150670]

Mr. Alan Johnson

The Government took advice on this issue from independent financial advisers, who confirmed that Launch Investment was necessary for the project to go ahead. Details of their advice are confidential to Government under exemption 13 of the Code of Practice on Access to Government Information.