Orders of the Day — Aircraft Projects (Cancellation)

– in the House of Commons at 12:00 am on 13th April 1965.

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3.55 p.m.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I beg to move, That this House deplores the action of Her Majesty's Government in cancelling the TSR2 project, believing that this decision, following on the cancellation already announced of the HS681 and the P1154, will have grave effects on the future of the British aircraft industry and on the development of science-based industries, while denying to the Royal Air Force these advanced weapon systems; and strongly deprecates the method which Her Majesty's Government chose for announcing their decision to this House.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

It is probably convenient that I should indicate that the Amendment standing in the names of the right hon. Member for Orkney and Shetland (Mr. Grimond) and other hon. Members is not selected.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

It would be in the tradition of the House if I were at once to declare a personal interest, in that I am associated with a firm that was connected in a minor way with the TSR2 project.

The three major points of criticism in our Motion are the effects which the cancellation of the TSR2, coming after the cancellation of the HS681 and the P1154 will have, first, on our defences, and, secondly, on the aircraft and associated industries. The third point is the manner in which the announcement was made to the House.

To deal, first, with the manner of the announcement, we feel most strongly that if the right hon. Gentleman the Secretary of State for Defence had wished to deal fairly with the House on a matter of such importance as this, he would have made a statement after Questions one day, which would have enabled both sides of the House to cross-question him upon it. The House would then have been entering on this debate today with much more information available to it. As it is, we only have the information which the right hon. Gentleman chose and saw fit to give in the body of his statement.

Furthermore, as far as I have been able to discover, there is no precedent for an announcement affecting a particular major item of defence expenditure being made, in the first instance, in the Budget speech, let alone for the Secretary of State for Defence to intervene in the Budget debate to make an announcement, many aspects of which were far removed from matters financial.

Why was it done in this way? Our interpretation is that the Government knew that both this decision and the Budget would be unpopular and would give rise to much criticism, and it was, therefore, politically advantageous to them to wrap up the two together on the same day. While no one would deny to the Government the right to organise their affairs in such a way as to attract the minimum of public criticism, they should not take this to the point of denying to Parliament the right to question the Government at the time of the announcement.

In this instance, the right hon. Gentleman used Parliament as nothing but a platform to make his bare announcement. We were not given the opportunity which the Press conference had—to which the right hon. Gentleman hurried after making his announcement—to question him. I wonder what sort of reception he would have had from the Press if he had used that conference merely to make the statement and to deny Pressmen the opportunity to ask questions? This is exactly what he contrived to do to Parliament. As I said at the time, it amounted to a cynical contempt of Parliament, and it deserves censure.

I now move to the military aspects of the decision to cancel these three aircraft, and I want, first, to deal with the P1154 and the HS681. When, on 9th February, we debated the cancellation of these two aircraft, the burden of the Government's case rested on the time scale. The Secretary of State for Defence quoted the 14 or 15 years in which our existing Beverleys, Hunters and Canberras would have been in service before the new aircraft took over from them. He said that it would have been criminal for any Government to ask the Royal Air Force to continue to fly these aircraft for so long. The picture he painted was of the Air Staff forming up and begging him to cancel these new aircraft and buy something else to keep them flying, even if that was very much the second best. In fact, the story was very different.

First, we must remember that when a new type of aircraft comes into service, it is phased in over a number of years, so that the fact that a type of aircraft may have been in service for X number of years does not mean that any individual aircraft has been flying for that time. Secondly, it is open to the R.A.F., which is really master of its craft, to stretch an aircraft's life, within limits, by regulating its flying hours. In any event, in view of the great cost of modern aircraft, we want to get the longest possible life out of every type in service, and that becomes even more the case as the cost of producing new types rises, taking account both of its serviceability and also its operational performance in relation to any likely opposition. So, both on this account and to take advantage of ever-developing technology, it is advantageous to close the development order for each new project as late as possible.

Of course, this involves calculating military risks and weighing them against the financial and technological advantages gained by delay. Certainly, it can be argued that in a perfect world the P1154 and the HS681 would have come into service a year or 18 months earlier than the dates ruling at the time of cancellation. The point at issue is whether the risks involved in delay beyond this utopian time, as it were, were or were not acceptable. We say that here the Government have taken the wrong decision, primarily because they failed to give sufficient weight to the relative capabilities of the new aircraft compared with the alternatives they were offered by the United States.

The vital factor here is vertical- or short-take-off-and-landing. This is by far the biggest development between our existing and what was to be our next generation of aircraft. It was always, in the opinion of our military advisers when we were in power, an essential feature of the requirement. In the debate on 9th February the Secretary of State for Defence gave the impression that he had totally failed to appreciate the full significance of this when he brushed it aside with the remark that the phantom lacks only vertical take-off and landing capability". —[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 331.] "Only", indeed. V.T.O.L. and V/S.T.O.L. revolutionise military strategy in every theatre of war and bring boundless advantages to the possessor.

More than once we put to our military advisers that if we were to sacrifice this then replacements would come sooner. They were adamant that we would not be right to forfeit the V/S.T.O.L. capabilities. The reasoning for this is quite simple. Owing to the sophistication and accuracy of modern methods of attack, airfields with a 3,000-yard runway are becoming ever more vulnerable, and will continue so to do. This puts at risk the operational ability of aircraft which are tied to the use of such airfields. It follows that fighting aircraft should be V. or S.T.O.L., so that they may be dispersed in penny packets over a number of small strips into which and out of which they can operate.

If they are to be able to do this, they must be supplied with fuel, spares, ammunition, and so on, on those very strips. Hence the need for S.T.O.L. transport aircraft which can fly in and out of those same strips. If the transports are not S.T.O.L., and are tied to long runway airfields, not only does this fact itself make them more vulnerable, but we then require long land, or even sea and land, communications to take supplies forward from the airfield to the strips and thus both increase risks and sacrifice flexibility.

The P1154, the HS681, and the TSR2 as well, were, therefore, interdependent, as it were, and each an integral part of the V/S.T.O.L. family of aircraft needed in the 1970s for strike, defence and supply with a high survival capacity. What is the right hon. Gentleman putting in the place of the P1154 and the HS681? He has put three aircraft, the P1127, the Phantom and the Hercules. Let us look at the military effects of this. The right hon. Gentleman tells us that the P1127 is to have—of course, it has not anything like it at the moment, but will have once it is up-engined—operational S.T.O.L. capabilities and be able to use the short strips. But it will be interesting to know what degree of engine thrust must be put into this aircraft to have a V.T.O.L., or even an S.T.O.L., capability and carry an operational load.

At the moment, it is totally inadequate with a thrust of 12,000 lbs., or of that order. But the P1127, given that it can be operational and dispersed on these airstrips, cannot be supplied on those strips by air. So half the advantage is lost. Furthermore, it will be subsonic and have to rely at all times on air cover from Phantoms which themselves will be tied to the large airfield further back. Again, we have lost the essential flexibility in a battle. Then, of course, both the Phantoms and the Hercules will be based on large airfields which are highly vulnerable. So it would be the greatest mistake if anyone should think that the issue confronting the House today is merely a question of substituting one aircraft for another. By cancelling two V/S.T.O.L. aircraft and buying others without that capability the Minister is to lose the strategic and technical advantages which flow from this.

Since we must assume that these aircraft are to have a life of 10 to 15 years, the Government have denied these untold advantages to our forces until the 1980s. Knowing the enormous importance which the Defence Staff attached to this—indeed, the staff were adamant upon it—I cannot believe that they accepted this serious downgrading except under grave duress. What must have happened is that they were told by the Government that the Government had decided to cancel the HS681 and the P1154, that this was irrevocable, and they were offered the Hercules and the Phantom on a take-it-or-leave-it basis. It was like saying to a man that he could not have a rifle whether he would like it or not, but would he care to have a bow and arrow.

Turning from the fighter and transport aircraft to the TSR2, just as the Phantom and Hercules fall short in many respects of their military requirements, so, also, will the F111. This aircraft as it now is lacks many of the avionics which are vital for strike and reconnaissance in modern war. But, says the right hon. Gentleman, it is the Mark 2 that we shall be getting and this will have the avionics in it. I wish to ask some questions on this.

First, have the Americans given a firm date of delivery for the Mark 2? Has it been funded and is it firmly in the U.S. programme? Has it been put through Congress yet? Secondly, is the right hon. Gentleman satisfied that terrain following, navigational accuracy and bombing delivery systems in the F111 will be such as to meet the staff require- ments laid down for the TSR2? Thirdly, what about reconnaissance?

Even given, which I doubt, that the F111 could satisfy the requirements of the T and the S of our TSR2, what about the R, for it is not a reconnaissance aircraft? The Americans have other aircraft to do this job. I understand that it will not have sideways-looking radar, line scan or moving target indicators, all of which are essential for all-weather reconnaissance.

All sorts of aircraft with primitive equipment can be used for reconnaissance in good weather, but in bad weather reconnaissance, which is an essential feature of modern battle, there must be very sophisticated equipment. Space is essential in aircraft design. I understand that the Mark 2 is to have the same airframe as the Mark 1. Was the Mark 1 designed to leave enough room for all these electronic devices which are not included in it? Whatever else it may have, the Mark 2 will not have the capability for all-weather reconnaissance. Will the right hon. Gentleman tell us, when he replies to the debate, what aircraft will be available to the R.A.F. for all weather reconnaissance in the late 1960s, when the Canberras and the V-bombers are no longer in service, a function which the TSR2 would have performed? The right hon. Gentleman knows the answer. There will be none, but perhaps he is hoping that his defence review will show him that reconnaissance is no longer a requirement of modern war.

The Government have not decided to order the F111. There is talk that the R.A.F. may be made to take a jazzed-up Buccaneer, but that is way behind any single feature of the operational requirement for the TSR2. To begin with, it was designed as a low-level aircraft to fly over sea and not over land, so its gust response, which is far greater over land, is thoroughly bad. Neither is it supersonic. So if it goes up it will be shot to pieces by fighters, and if it stays on the deck it will be bounced to pieces. Anyway, its navigation, attack and reconnaissance systems just do not compare in any respect with the requirements of the TSR2.

So it would seem to us that both in regard to the Hercules and the Phantom, which they have ordered, and in regard to any other aircraft they may order to take the place of the TSR2 for the latter part of this decade, the Government have seriously downgraded the staff requirements and that the R.A.F. will not now be able to fulfill certain functions which up to October of last year the Government's professional advisers insisted were essential.

It is not agreeable ever to talk of war, but in a defence debate we must think of these possibilities. Supposing we were involved in a localised war in the Far East in the early 1970s, how would the right hon. Gentleman like to explain to our soldiers that the reason that they were under constant air attack was because their protective air umbrella, Phantom-based, had been put out of action, and he had cancelled the P1154? How would he like to explain that our own battlefield strike air power was spasmodic owing to lack of logistics because the C130 lumbering propellered transports had been denied the use of the supply airfield which was targeted by the enemy, and he had cancelled the HS681?

How would the right hon. Gentleman like to explain that the enemy supplies and reinforcements were unimpeded because it was raining and we had no all weather reconnaissance ability, and he had cancelled the TSR2? And, worst of all probably, how would he like to explain that we were in danger of having to escalate into nuclear war because our conventional deficiencies had proved so serious, and he had cancelled all three aircraft? This is the order of gravity of the military decision that he has taken to cancel this whole family of aircraft.

The Government's decision to cancel the TSR2 came as no surprise to us on this side of the House. We always knew that they would do it if they won the election. As must be fresh in the mind of the hon. Member for Preston, South (Mr. Peter Mahon), my right hon. Friend the Member for Preston, North (Mr. J. Amery), who was then Minister of Aviation and, therefore, had great concern for these matters, told the people of Preston beyond peradventure that, if the Labour Party won the election, it would cancel the TSR2. Apparently the hon. Member for Preston, South did not believe him and he issued the famous, or infamous, leaflet averring categorically that Labour must not cancel it. He must be worried at having so misled his constituents. We look forward to hearing his views on this serious matter, if he is lucky enough to catch your eye, Mr. Speaker.

Photo of Mr Peter Mahon Mr Peter Mahon , Preston South

I am grateful to the right hon. Gentleman for giving way. I hope that his subsequent statements will have more veracity than the statement he has just made, namely, that I issued the leaflet. Nothing could be further from the truth. This is a calculated lie.

Hon. Members:

Oh.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

The expression "lie" must be withdrawn. It would require a substantive Motion.

Photo of Mr Peter Mahon Mr Peter Mahon , Preston South

I do not attribute that statement—I have not attributed that statement—[HON. MEMBERS: "Withdraw."] I have not attributed this statement—

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

If the hon. Gentleman explains to me that he was not making it with regard to any conduct or words of the right hon. Member for Bedford (Mr. Soames), of course I accept it. I thought that that was what he was saying.

Photo of Mr Peter Mahon Mr Peter Mahon , Preston South

Thank you, Mr. Speaker. Actually, this statement which has been issued, and to which the right hon. Gentleman has given voice today, is entirely wrong and it does me a severe injustice. In my own interests, I had to take—

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

Order. It is rather hard lines on the right hon. Gentleman who is in possession of the House for this intervention to be so prolonged. The hon. Gentleman will understand this.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

All I was saying was that we look forward to hearing the hon. Gentleman explaining this to the House, if he is lucky enough to catch your eye in the debate, Mr. Speaker. If the hon. Gentleman really believed that the Labour Party would not cancel the TSR2, he must have been exceptionally naïve politically. We all knew that it would, for two reasons: first, because it had a nuclear—

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

On a point of order. The right hon. Member for Bedford (Mr. Soames), whether he likes it or not, has quoted an article—I suppose it is the Daily Express of yesterday's date. The name of my hon. Friend the Member for Preston, South (Mr. Peter Mahon) is especially mentioned. I wish to state that this is not true, that the agent, James Page, is not—[HON. MEMBERS: "Order."] This is a most serious thing.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

What is serious is that the hon. Gentleman rose to a point of order. If so, it must be a point of order with which he is concerned, otherwise it is just cheating. What is the point of order?

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

I am grateful to you, Sir, for your Ruling. Is it not a fact that if a statement has been made which is erroneous and out of order it should be withdrawn by the right hon. Gentleman?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

Order. I do not propose to hear any more. The hon. Gentleman and the House must understand that corrections of statements of fact alleged to be inaccurate or in fact inaccurate do not raise points of order for the Chair. It should not be imagined that they do, otherwise we shall not get rid of this tiresome form of cheating.

Hon. Members:

Withdraw.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I certainly do not withdraw it. I have in my possession the leaflet, and doubtless the hon. Member for Preston, South will explain how it came to be made public.

I was saying that there were two reasons why we were certain—

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Easington

I may have misunderstood the right hon. Gentleman, but apparently he suggested that my hon. Friend the Member for Preston, South (Mr. Peter Mahon) issued a leaflet. Does he stand by that?

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I have in my possession a leaflet which was issued in the Preston constituency, which was printed by M. Bottomley, of Tenterfield Street, Preston, and the responsibility for publication rested with Mr. James Page, of Deepdale Road, Preston. The hon. Gentleman can explain this. The impression which the whole country has is that this was a leaflet issued by the Labour Party in Preston. The hon. Gentleman will have an opportunity to correct that impression later, if he catches your eye, Mr. Speaker.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

On a point of order. The right hon. Member for Bedford (Mr. Soames) made a statement, which I am sure he sincerely believed, but it was a statement of fact about another hon. Member. That other hon. Member has intervened to deny that this was a fact attributed to him. Ought not the right hon. Gentleman to accept that denial?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

As far as I know, there is nothing unparliamentary about saying, accurately or inaccurately, that somebody has issued a statement or a pamphlet. The House will have heard the hon. Gentleman's denial and the right hon. Gentleman's assertion.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I should not like to do any injustice to the hon. Member for Preston, South. That is the last thing that I would wish. I can only tell him that to the best of my knowledge this was issued by the Labour Party in Preston, for which I imagine he had some responsibility during the election campaign. Further than that I do not think I should go into this matter.

Hon. Members:

Give way.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

The reasons why we knew that the TSR2 would be cancelled if the Labour Party got into power were twofold. The first was that it had a nuclear capability and that was enough to horrify the Prime Minister. He was going to have difficulty enough disposing of Polaris submarines in a way which would satisfy his C.N.D. supporters without having another nuclear weapon system on his hands. The second reason was that the Paymaster-General has always been against the TSR2. Indeed, he tabled a Motion critical of it, together with his hon. Friend the Member for Penistone (Mr. Mendelson), and what a formidable combination that is in the Labour Party.

The Paymaster-General, to do him credit, has been against it from the start. He has been perfectly consistent on this. If whoever was responsible for issuing this leaflet had had the Paymaster-General to mark his card he would never have issued it, for the Paymaster-General is regarded very highly by the Labour Party as a sort of witch doctor on defence. His views are highly regarded. Perhaps it is no wonder, for in the country of the blind the one-eyed man is king. Nevertheless, it was plain to us that he would get this way over the TSR2 and I hope that any member of the Labour Party who thinks in future of issuing leaflets affecting this sort of matter will consult the right hon. Gentleman before he does so.

I now turn to the financial aspects of this complex—the Hercules, the Phantom and the F111, on the presumption that the Government will decide to order the F111. It is exceedingly difficult to be precise on this, because the Government have given us so little information. To take, first, the comparison in price between the TSR2 and the F111. How much cheaper would it be to cancel the one and order the other? It will be cheaper, of course, since the Americans are prepared to offer it at a price which ignores the cost of research and development and in the long term it is well worth their while to do it. When I say that the Americans are prepared to offer it at a price ignoring the cost of research and development, is the Secretary of State for Defence shaking his head?

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Then the right hon. Gentleman says that it does not ignore the cost of research and development, in which case I refer him to a statement to the House of Representatives by Mr. McNamara, in February of this year, when he said that 146 million dollars had been spent in purchasing 10 F111 aircraft, that is, 14½ million dollars per aircraft. This is something over £5 million and out of proportion to the figure about which the right hon. Gentleman was talking to us, and it stands to reason that it does not contain the very heavy research and development costs. Certainly, it would be well worth the while of the United States Government to sell on these terms, taking into consideration the advantages which they will gain in the long run. But how much cheaper will it be?

The right hon. Gentleman told us in his statement that the order would be cheaper than the TSR2 by £300 million on a full programme of 150 aircraft. He also told us that the cost of a full order of TSR2 would be £750 million, less £125 million already spent, which comes to £625 million to spend from now. Looking at the same sum from the F111 point of view, Mr. McNamara tells us that the full programme was about £357 million and to this must be added what the Minister of Aviation told us yesterday was a sum of £70 million for cancellation charges. These added together come to £427 million, compared with £625 million for continuing with the TSR2, that is, a difference of £200 million and not £300 million.

The right hon. Gentleman gives us a sum of £70 million for cancellation charges. I agree that he did not give that as a firm figure, but as the sort of figure he had in mind. I hope that he will bear in mind that not only is there the immediate loss of the TSR2 itself to the company concerned, but, also, there is the effect on the company and its sales of the BAC111 and of the VC10, and the proportion of overheads which those aircraft will have to bear without the loading of the TSR2. This will have to be taken into account when it comes to the cancellation charges. It may be, therefore, that the cancellation charges will be more than £70 million, but, apart from that, the figure for the difference is £200 million and not £300 million.

The right hon. Gentleman said that if we were to go for 100 of the TSR2 aircraft they would cost less than £5 million each to be spent from now and that would come to £500 million minus, but we do not know how much minus. A hundred Fl11 aircraft, on the basis of the price for 150—for I gather that it would be in the same proportion if we bought fewer aircraft—would cost £238 million. Again, there are the cancellation charges to add to that, bringing the total to £308 million against £500 million. Therefore, the saving again would be less than £200 million and I cannot see how the right hon. Gentleman can come to make it £300 million.

Then there is the vital question of dollar expenditure. When the Chancellor of the Exchequer announced the cancellation he made the announcement in the context of releasing resources which would help our balance of payments. To buy the F111 would cost between £240 million and £360 million in dollars, according to the number bought. Let us strike the mean and for argument's sake say that we buy 125 aircraft for £300 million. Then there are the Hercules and the Phantom orders coming to £230 million. Therefore, with the three orders together, the total commitment would be for £530 million in dollars. And what about the spares? It is usual to allow for the whole of an aircraft's life about 40 per cent. of the cost of the aircraft as the cost of spares. I agree that the more British engines and equipment are put in the aircraft the less the dollar expenditure on spares, but allowing for that it seems to me that the Government are committing us to a dollar expenditure over a period of years amounting to £600 million.

At the same time, the cancellations, added together, would have a most serious effect on the future of the aircraft industry's exports, running at between £100 million and £150 million a year, and which this year seemed to be achieving a higher figure. Quite apart from the effect on our defences and on the aircraft industry, let hon. Members look at the effect on our balance-of-payments. How do we make up this loss across the exchange? Are there military orders which the right hon. Gentleman has agreed with the Americans to be placed here to make up to some degree for these vast orders, or is he hoping to make it up from the redistribution of skills and resources out of the aircraft industry? If so, how many men does he expect will leave the industry? Quite apart from the intense human problem which this creates, how will the shifting of people into other industries make up in exports for anything like such prodigious dollar expenditure on aircraft and equipment? We await with interest the right hon. Gentleman's argumentation on this.

I ask the right hon. Gentleman to arrange for two things. The House has totally inadequate information on the extent to which the Government have entered into commitments with the United States. We have to piece the picture to- gether from snippets of information divulged here and there, mostly from across the Atlantic. Will he, please, collate all he feels able to give the House and put it in a White Paper? What financial commitments has he made, and over what period will they have to be paid?

We fear that, as the last Labour Government did with the American Loan, this Government are mortgaging the future, trying to get their defence on the cheap by buying hardware on the "never-never" and leaving the next Government to be saddled with the dollar bill. But at least in the 1945 Parliament we knew what the deal was both in terms of cash and in terms of time. Will the right hon. Gentleman, therefore, let us have a White Paper setting it all out and including something for spares?

I know that he has not yet decided how many F111s he will buy, but could he set it out on the basis of the sort of order he has in mind, perhaps doing one sum with 100 aircraft and another with 150? We feel strongly that the House and the country are entitled to this information in full.

Secondly, I ask him to ask his right hon. Friend the Minister of Labour to do a special operation over the next 12 months or so to follow up all those who leave the aircraft industry as redundant. We shall then be able to see how many go into exporting industries, how many into others, and how many go abroad. Only thus will the Government be in a position to show the advantages which they claim will flow from a run-down of the industry. I hope that the Government will agree to both those suggestions.

I turn now to the effect which the cancellations will have upon the aircraft industry, of which the main components are the two airframe companies and two more making engines. The industry's gross takings have been running at something between £300 million and £400 million a year from home sales, both military and civil, and between £100 million and £150 million a year in exports. Its exports are solid worth to this country since the import content in aircraft is minimal. For example, only 6 per cent. of the cost of the BAC111 is contained in imports.

The industry has been highly successful with both its military and its civil projects. In recent years, it has encountered growing difficulty with foreign sales owing to the hard selling techniques which the American industry has been indulging, with all the advantages flowing to it from the much bigger base from which it operates. Nevertheless, our industry is just now in a cycle of high exports, thanks principally to the BAC111, the VC10 and the Hawker 125. These, together with the Concord, are its main civil projects.

On the military side, it has the HS681, the P1154, the TSR2, and the P1127. The cancellation of its three big military projects has pulled the carpet from under the industry's feet. It was having a hard enough struggle anyway to sell the BAC111 and the VC10 in the face of American competition, but things will be much harder for it now. It is natural that its American competitors should now be saying that, with the loss of these three military projects, the British industry is on its way out and anyone who buys British aircraft needs his head examined. It is like buying a motor car, so the argument runs, from a firm which is going out of business. It is no wonder that we read in the Press that people in Washington are cock-a-hoop.

The mere fact of these cancellations has already done great damage and, as I said before, the overheads are put up on the aircraft which the industry is now selling. But what of the long-term effects?

Recently I have frequently heard and read the Minister of Aviation saying that he wants to see a virile and prosperous aircraft industry. Very well. Will he tell us what will be the loading of the industry in three years, by mid-1968? Let me tell him how I see it. He can confirm or deny what I say when he speaks. The orders for the VC10 and the BAC111 will have run out in 1968, and so will those for the Trident and the HS125. So on the civil side the industry will be left with the Concord as its only major project.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

Is the right hon. Gentleman assuming that there can be no development of these aircraft, particularly the BAC111 and the Trident? Has he read in the Press about the follow-on orders from B.E.A. for a longer-range Trident?

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Yes, but this must be a factor which one cannot weigh. One cannot tell to what extent they will be developed. As things now stand, on the other hand, one cannot see the run for the VC10 and the BAC111 continuing beyond 1968. So the industry will be left with just the Concord as the only major project.

On the military side, orders for both the P1127, as I see it, and the modified Comet for Coastal Command will be through to all intents and purposes. So, as things now stand, apart from the Concord, which will be occupying a few thousand men, perhaps 20,000—and the Government have cast a pretty black cloud over that—the airframe industry cannot see production orders for one rivet to be put into one metal sheet after 1968. Nothing at all. The gestation period for an aircraft is long. If there is to be anything in production on any factory floor by 1968, the initial R. and D. contracts have to be placed now, and they must be followed up with production contracts.

This is the point I put to the right hon. Gentleman: what are these R. and D. contracts going to be?

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

Will the right hon. Gentleman explain why, for the purposes of one argument a short while ago, he says that the industry, had we left. it alone, was at the beginning of a most brilliant export cycle, and for the purposes of a different argument now, he says, in a way which is most damaging to the industry, that we have no export prospects of any sort?

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Not a bit. I said that at present the industry is on a peak cycle of exports, and that this is the moment the right hon. Gentleman chooses to pull the carpet from under its feet and cancel the orders on which its strength depends.

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

Surely, even the right hon. Gentleman knows that, so far from being on a peak, we are now at the end of a four-year decline in exports. He really ought to choose his language about the industry a little more carefully.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

These are the figures which I have in mind. The right hon. Gentleman will be able to confirm or deny them. The average over the last considerable number of years shows exports running at £100 million to £150 million a year, and this year, 1965, the forecast is of exports of £180 million.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

In answering the Minister, will my right hon. Friend take into account that the British Aircraft Corporation has taken options to sell 21 BAC111s, and only last week in Australia, the Americans, by using despicable methods, obtained the order against the 111?

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

It is natural that the American industry should try to take the fullest possible advantage of the situation into which the Government have put our industry.

From the industry's point of view, it is no good the right hon. Gentleman talking in vague terms of possible co-operation on this, that or the other project with European countries. We all have long experience of the difficulty of agreeing on both time-scale and requirements with other countries. The fact that a certain project has been canvassed is not of itself any good to the industry. The industry needs firm orders if it is not to stand down its design teams and its labour, not in thousands but in many tens of thousands.

Will the right hon. Gentleman, therefore, tell us what firm orders he can see being placed with B.A.C. and Hawker during the next few months, and what these orders will be worth? Will he also say what size in terms of manpower he expects the industry to be by the middle of 1968?

If the right hon. Gentleman cannot talk in terms of firm orders at this juncture, when the industry cannot look forward to future development of these military aircraft, then I know that the industry hopes that he will spare it the platitudes about wanting to see a virile and prosperous industry, for this cannot be achieved without Government orders and only the Government can tell the industry what those orders will be.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

The hon. Member for Fife, West (Mr. William Hamilton), who follows these matters very carefully, is astonished to hear me talk in terms of an aircraft industry of the size of ours or anything like it being viable without the Government placing military projects. Does he realise that the American aircraft industry survives and gets its strength by 80 per cent. military orders and 20 per cent. civil orders? The proportion here has been about 75 per cent. military and 25 per cent. civil.

There is no difference between the Minister of Aviation and me over the need and desirability to make arrangements which will enable the British aircraft industry to co-operate on projects with European industries to provide it with a larger base and market. But this does not come about from one month to the next. It takes time. A good start was made by my right hon. Friends the Members for Preston, North and for Monmouth (Mr. Thorneycroft), first, with E.L.D.O., then with the Concord and then with the agreement with the French that no firm operational requirements would be issued until there had first been an attempt to harmonise them with the other country.

We always considered that this family of aircraft—the P1154, the HS681 and the TSR2—that we were developing was the last generation which would be built purely by the British industry to a purely national requirement. We were sure that, between now and the time when the next requirement would need to be considered with the industry, we would catch the tide with Europe and would be proceeding with general European requirements. This would have followed on the industry's present loading but the Government have withdrawn projects from the industry before it has caught the European tide.

The Government have cancelled the projects without having any firm orders even of research and development contracts to put in their place. It was not many months ago that the Minister of Aviation set up the Plowden Committee to look at the future of the industry. But, as things stand, there will be no aircraft industry in 1968 for that Committee to look at unless the right hon. Gentleman puts orders into it. Does he think that the Committee will be able to discuss the future with the industry and be able to give worth-while answers when the industry first needs to know what orders he has to put into it and at the moment right hon. Gentlemen cannot tell it?

The Secretary of State for Defence has set up a defence review to make recommendations about commitments, on the one hand, and what is necessary in the way of weapons, on the other. But before he knows what those recommendations are he has decided, on existing commitments, to cancel all these aircraft, denying the forces the weapons systems they need to fulfil those commitments.

The Government have got themselves into this mess by their bad decision to cancel all three of our military aircraft projects. We deplore it for the harm it does to our defences, for the harm it does to the aircraft industry and its associated industries, for the burden it puts on our balance of payments, for the effect it will have on the country's future in the technological race and for what it symbolises as the Socialist view of the Welfare State—free prescriptions, subsidised coal mines and inadequate defences. It deserves censure both by the House and by the country.

4.45 p.m.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I appreciate very much the tone in which the right hon. Member for Bedford (Mr. Soames) moved the Motion—as much, indeed, as I disagree with the Motion. I will try to answer him in the same terms. He asked me a large number of questions about the facts which lie behind the decision that the Government have taken, and I shall try to answer most of them during my speech. Those I miss, and which it is possible to answer on this occasion, my right hon. Friend will try to deal with later.

I agree with the right hon. Gentleman on one basic point. The Government's decision to cancel the TSR2 raises the gravest questions of defence, economic and foreign policy. I shall deal with these questions first before dealing with the way in which the Government announced their decision. I know that there are deep and genuine divisions of opinion in the House on the merits of the decision, but I hope that at least hon. Members, on both sides, will consider the facts on which we based that decision with the serious attention that they deserve.

The right hon. Gentleman put his finger on the main point at the beginning of his speech. The fundamental reason for our decision on the TSR2 was that the cost of the programme we inherited was out of all proportion to the aircraft's military value. In this, our decision differs from the decisions we took two months ago on the P1154 and the HS681, where the operational requirements of the R.A.F. were decisive, even if the economic factors had not been important too.

From a great deal of what the right hon. Gentleman said, I could not help feeling that he believes that the Defence Secretary has no right to concern himself with questions of cost—that, somehow or other, this is the Chancellor of the Exchequer's problem and that the Defence Secretary should concern himself only with the military needs of the Services. That is probably the most fundamental division of opinion between the two sides of the House. This sublime indifference to costs, which betrayed itself throughout the right hon. Gentleman's speech, is one of the major reasons for the economic difficulties in which the country finds itself, and at a time when defence costs are rising steeply it is the job of the Defence Secretary, as well as that of the Chancellor, to make certain that the taxpayer gets the maximum value for every £ allocated to defence. If he fails in this duty, either defence costs will bankrupt the nation, or we shall find that excessive expenditure in one particular field of defence is ruling out expenditure in other fields which may be equally vital—and the result may be dangerous deficiencies in manpower or equipment and that we send our forces into action short of men or without the tools of their trade.

This, in fact, was the danger we faced when we took office last October and looked at the aircraft programme to which the previous Government had committed themselves. During the four years from 1969 to 1972 the total cost to the taxpayer of the three projects in the aircraft programme that we have cancelled would have been over £1,200 million, and of this, the TSR2 alone would have cost about £740 million. That was simply in those four years. I ask hon. and right hon. Members opposite to accept that, if we had been prepared to accept this bulge in defence expenditure, we would have faced a choice between drastic cuts in the social services or no less drastic cuts in other vital items of military equipment for all three Services throughout this period.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Hendon North

If I rightly understood the Minister, he said that the cost of the TSR2 alone in the four years 1969 to 1972 would be £740 million. How can this be so, when we were earlier led to believe that the total cost of the TSR2, including the R. and D. programme, was £750 million, of which £125 million had already been spent?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

As the right hon. Gentleman may remember—or perhaps this happened after he left office in the Defence Ministry—long-term costings in the Ministry of Defence have for some years been based not only on the capital cost of military equipment, but also on the running cost and spares throughout the period concerned. This is fundamental to an understanding of the problem.

The hard fact is that the TSR2 was too expensive. It was using up far too much of the resources available not only for defence, but for the expansion of our exports and of our economy at home. I honestly do not believe that any right hon. Gentlemen opposite could in their hearts deny that they would never have authorised full development of the TSR2 in September, 1960, if they had properly assessed the research, development and production cost of the aircraft. The tragedy is that when costs began to mount right hon. Gentlemen opposite did nothing to control them; they simply sat helplessly by and let things rip.

It was eight years ago that the Air Ministry produced its general statement of its needs for a tactical strike and reconnaisance aircraft to replace the Canberra. At that time the R. and D. cost was expected to be under £40 million. Two years later, the Air Staff issued the detailed operational requirements for the TSR2. That was in May, 1959.

It is important, I think, to point out that this operational requirement—I think that right hon. Gentlemen opposite will confirm this—has remained substantially the same throughout the last years. It is not true, as has been so often stated in the Press, that the staggering increases in cost arose through the Air Staff continuously demanding new and improved capabilities for the aircraft.

But staggering the increases were, The first detailed estimates of cost were made in October, 1960, when the contract for full development was placed with B.A.C. By that time the R. and D. cost for the aircraft had more than doubled—it was estimated at £90 million—and the production cost was estimated at at least £1·5 million each. On the basis of these figures, and assuming an order for rather more than 150 aircraft, which was the previous Government's programme, the total capital cost for research, development and production would have been about £330 million. At this stage the target date for the aircraft's entry into service was the end of 1965—the present year.

I readily admit that if these targets for cost and delivery which were set and accepted in 1960, had been maintained, the aircraft would have been worth the money. Indeed, we might have sold a substantial number to other countries, too. But by October, 1963, only three years later, the time when the Australian Government decided in favour of the American aircraft as against the TSR2, the forecast of total costs had doubled again. The writing was on the wall. A year later, when we assumed office last October, the total bill for research, development and production was about £750 million. This would have meant a levy of £50 on every family in Britain. The conclusion is inescapable: either right hon. Gentlemen opposite completely failed, five years ago, to recognise the complexity of the project which they were launching, or they failed to exercise the necessary control of the programme once it had been endorsed.

By the time we took office in October last year—and I confess that this came as a great surprise to all my right hon. Friends who were concerned with the problem—only something under £100 million of the total estimated costs had been spent. But the estimated "inservice" date for the aircraft had slipped back by two or three years to 1968. In other words, we still had £650 million to spend if we decided to complete the programme we had inherited.

On a programme of about 150 aircraft, each TSR2 would have cost us at least £5 million in capital expenditure—twenty times the cost of the aircraft which it was supposed to replace. But because there was still more than half of the R. and D. costs to pay, if we had reduced the programme to about 110 aircraft, each aircraft would have cost at least £6 million, of which £5 million still remained to be spent. Unit costs would increase still further as the total order for the aircraft was reduced. For example, about 50 aircraft would have cost on the average nearly £10 million each.

Against this background, any Government with the slightest sense of responsibility to the taxpayer would have had to get a review of the programme going. The tragedy is that right hon. Gentlemen opposite funked the decision for so long. All of these facts were known to the previous Government. In fact, they had been known for nearly a year before they finally left office. If they had had the political courage to take the decision then, the nation could have been saved some £40 million. By October, 1964, the TSR2 programme was costing us £1 million a week.

Yet the decision was far more daunting then than it would have been in October, 1963, because when we came into office, about £100 million had already been spent on the TSR2 and the first aircraft was flying. To cancel at this stage was a far more difficult decision than it would have been a year before.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

The right hon. Gentleman referred to the loss of the Australian order, just over a year ago. Does he recall that when the Australian mission was in London, considering buying the TSR2, he and his colleagues were indicating that if they came into power it was quite likely that the contract would be cancelled? How can he blame the previous Government for the loss of a large order which went to America?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I have had the advantage of discussing the Australian decision with members of the Australian Government since I have been in office, and I can assure the hon. and gallant Gentleman that they were absolutely certain, when they looked at the comparative cost of the two aircraft, that there was no alternative open to them, although, as Sir Robert Menzies said at the time, he was British to the boot straps. It was simply a fact that on the costs available to them, provided by the right hon. Gentlemen then in power, there was no alternative for any Government which had an interest in their taxpayers' welfare.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I will try to give way fairly regularly in the course of my speech, but I must be allowed to ration my declension as I go along.

As I say, it was a very much more difficult decision for us to take when we came into power last October than it would have been for the previous Government a year earlier. We therefore felt that it was essential for us to obtain the best possible information on the likely cost and performance of the TSR2 and of possible alternative aircraft so that both the financial and the military consequences of cancellation could be fully assessed before the decision was taken. This we have now done, and it will be many months before any further information of real significance becomes available.

I honestly do not believe that we could excuse any further delay in taking a decision when every week the TSR2 continues it costs the taxpayer a further £1 million.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I will give way in a moment.

My right hon. Friend the Minister of Aviation has been in constant contact with the manufacturers of the TSR2 to see whether it would be possible to obtain a fixed-price contract as a protection against any further escalation in its cost. We told the House two months ago that we were doing so. But, as I told the House last Tuesday, the manufacturers were unable to offer a fixed price. What they did instead was to offer what they called a target price. Savings below or costs above this target price would have been shared between the manufacturers and the Government. But above a comparatively small figure any further substantial cost increase would have fallen on the Government alone.

The total liability which the airframe and engine firms were prepared to accept was £11½ million, only 2 per cent. of the target price—and hon. Members will see that B.A.C., which was the airframe firm, confirmed this in posters which it put on the notice boards at Weybridge yesterday—for a project which has already escalated by £400 million, or 150 per cent., in the last four years and has at least three more years to go before delivery starts. In other words, the firms were unable to give us any assurance that the Government's ultimate liability would be limited.

Even on the basis of the target price, the cost of the programme would have been substantially higher, about £30 million higher than the forecasts which we had received when we came into office last October. I do not believe that any Government would be justified in inflicting an open-ended commitment of this kind on the British taxpayer. We had no alternative but to decide on cancellation.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Has the right hon. Gentleman any experience of any aircraft company, making any sophisticated military aircraft, ever being prepared to give any Government the sort of assurances to which the right hon. Gentleman is now referring?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I do not deny that we faced B.A.C. with a difficult question when we asked it for this assurance, but, against the background of our experience of this programme over the previous six years, we would have been defaulting in our duty to the public if we had not tried to get such an assurance. Our announcement that we would try to get it was welcomed by right hon. Gentlemen opposite, who now complain that the company was unable to give us the assurance. They did not complain when we tried to get it.

I now turn to the military implications of this decision.

Photo of Sir Alec Douglas-Home Sir Alec Douglas-Home , Kinross and West Perthshire

Will not the right hon. Gentleman say something about the cost of the alternative?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Of course I shall, but I cannot talk about the cost of the alternative until I have discussed the military implications of the decision.

I now turn to the military implications of the decision. We should have been failing in our duty to the Royal Air Force and to the nation if we had cancelled the TSR2, despite the powerful economic arguments, without ensuring that if the Royal Air Force was required to carry out tasks which demanded an aircraft with characteristics similar to those of the TSR2, we should be able to obtain such an aircraft at a cost the nation could afford. I know that some of the more irresponsible stories which have circulated in the last few weeks have caused grave anxiety throughout the R.A.F. I speak not only for myself as Secretary of State for Defence, but for all my colleagues in the Cabinet when I say that there is no member of the present Government who would consider for a moment sending the R.A.F. into action without the aircraft which are militarily necessary for the job to be done.

I want to discuss what is necessary. The TSR2 was designed as a successor to the Canberra for tactical strike and reconnaissance. I hope that the House will bear with me if I describe what is the rôle of a tactical strike and reconnaissance aircraft in our military strategy, and what characteristics such an aircraft may require in the 1970s, for it is essentially the period 1970 to 1980 that we are now considering.

First of all, reconnaissance. I agree with the right hon. Gentleman that reconnaissance is absolutely indispensable. Besides its importance to the commander in the field, reconnaissance can be of critical importance to the Government in Westminster as a means of providing them with reliable and up-to-date information in what may be a very rapidly developing situation. Accurate knowledge, in time, of what is going on may often enable the Government to control and influence a political crisis so as to ensure that fighting does not take place.

Where there are good defences, reconnaissance in the 1970s may well demand an aircraft which is able both to penetrate at low level and also, when a picture with wider coverage is necessary and possible to obtain, to fly supersonic at high level.

These types of sortie—low-level penetration capability and the high-level supersonic capability—are just what is needed for the tactical strike rôle as well. That is why it was decided both here and in the United States that one basic aircraft design could carry out both these tasks.

I therefore come now to the second task—tactical strike.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Before the right hon. Gentleman leaves reconnaissance, is he implying thereby that the F111 will have an all-weather reconnaissance capability? If so, I draw his attention to the fact that Mr. McNamara has said that he is not proceeding with the reconnaissance version of the F111.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

If hon. and right hon. Gentlemen opposite will contain themselves a little, they will find that I shall answer all their questions in the course of my argument. Certainly, I shall answer that question.

I agree entirely with the right hon. Gentleman that control of the air above the battlefield is indispensable to any land operation. This was a lesson which we learnt the hard way in the last war and all subsequent experience has confirmed it. Nobody hopes more than I do that we shall never have to use this type of capability in actual war, but we must face the fact that a growing number of countries in all parts of the world now have formidable air striking forces of their own, often provided at small cost by the Soviet Government. It is our known ability to strike back at such forces in case of need which provides the best assurance that they will not be used against us or against our friends.

I do not want to be specific here, for reasons which we will all understand, but if hon. Members think for a moment about our present problems outside Europe they will realise that it is the knowledge that we could, if necessary, strike successfully at the enemy's main bases which is the best guarantee against the dangerous escalation of a local conflict into major war. I am talking here, of course, exclusively in terms of conventional weapons.

This is the case, and I fully accept it, for having as part of our total defence capability some aircraft with a capacity for tactical strike and reconnaissance. In my view, it is an irrefutable one if Britain proposes to maintain any capacity for military action on her own in any part of the world. In fact, if our commitments were cut so as to enable us to do without this capacity, we would be able to do without most of our Army and most of our Navy as well. But it is a much more complicated matter to decide how many such aircraft we require and what specific performance they should be capable of.

As the House knows, the Government are now looking at Britain's defence needs in the 1970s right across the board; at the political premises; at the proportion of our national resources which we can afford to devote to defence; at the relative cost and effectiveness of alternative weapons systems; at the nature of the commitments and tasks which we shall require our forces to meet; and at alternative ways of meeting these tasks. Indeed, if the previous Government had carried out studies of this kind and had taken the trouble to relate equipment to tasks in this way, we might have avoided the serious crisis in the defence budget which is the cause of the current debate.

We recognise, at any rate, that we must decide what commitments it is right for us to accept in the 1970s; on what measure we must allow for the unforeseen contingency, which is usually the contingency which occurs in fact; on how far we must be prepared to act on our own; and on what it is essential as opposed to just traditional to do in order to preserve our interests and discharge our legitimate responsibilities.

If our studies show that it will still be necessary to retain in some or all overseas theatres a tactical strike capability, then we must relate the type of aircraft we require to the various levels of threat and to the various geographical theatres or areas in which we may have to operate. It is only then that we can finally decide whether some aircraft with characteristics similar to the TSR2 will still be needed, or if some or all of the tasks allocated to our forces can be met by other aircraft, for example, the Buccaneer or the Phantom—though I must point out that these are aircraft which have to operate from relatively long concrete runways or carriers at sea, and that they have a smaller range and payload. For example, at 900 miles from base the Phantom could not operate at all and it would take five Buccaneers to drop the same weight of bombs as one F111A.

This is a very large and complex problem which demands a full analysis before decisions can be made. We cannot decide what kind of aircraft we need until we have completed our defence review. If we can perform all or part of the tasks with British aircraft, or with aircraft already in the programme, of course we shall do so. But we cannot guarantee that we shall be able to do so without an aircraft with performance similar to that of the TSR2.

That is the reason why we have taken an option on the F111A, and it is also the reason why, however much we sympathise with the aspirations which lie behind the Liberal Amendment, we would not be able to accept it.

Photo of Mr Neil Marten Mr Neil Marten , Banbury

One rôle of the TSR2 which the right hon. Gentleman has not mentioned is its ability to penetrate very deeply, carrying the nuclear deterrent. I do not know whether the right hon. Gentleman will raise this question during the debate. Was not one of the Government's reasons for cancelling the TSR2 their dislike of the nuclear deterrent?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I sometimes wonder whether the hon. Gentleman, with all his past experience in the Services, takes the problem today at all seriously. If he did, he would not make such silly remarks.

Photo of Mr Neil Marten Mr Neil Marten , Banbury

On a point of order. The right hon. Gentleman has just accused me of not taking this matter seriously. I do take it very seriously. I should like—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. That is not a point of order. Hon. and right hon. Gentlemen must take the cut and thrust of debate.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I will answer the hon. Gentleman. I tell him, as he should have known, that the TSR2 is designed purely for a conventional rôle. Hon. Members and right hon. Members opposite discovered a nuclear bonus when Skybolt collapsed and they found it necessary to dress up the pretence of a nuclear deterrent for purely political purposes.

The F111A is the name of the Air Force version of the plane now under development in the United States which was earlier referred to as the TFX. As hon. Members will know, it has now been flying for several months. Like the TSR2, the F111A will use a low-level high-speed flight as a means of penetrating defences and will use relatively short take-off and landing as a means of dispersal and forward deployment. Because of its variable geometry, the F111A will combine these two features with a rather wider capability, including air defence, which, incidentally, was not planned for the TSR2, and it will have a substantially greater ferry range than the TSR2.

But, without going into detail, I think that the right hon. Member for Preston, North (Mr. J. Amery) was right when he wrote in the Sunday Telegraph last weekend that there is little to choose on military grounds between the F111A and the TSR2. With respect to the right hon. Member for Bedford, I think that, if he had the knowledge of capabilities which his right hon. Friend the Member for Preston, North has from having served for so long during a critical period at the Ministry of Aviation, he would agree with his right hon. Friend on this, and he would agree with me.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I would agree that on performance there are pluses and minuses on both sides which, perhaps, come out more or less the same, but where the F111 Mark 1 or Mark 2 is seriously deficient is in the avionics and electronics which can be put in it for the reconnaissance rôle.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

That is not the view of my advisers. I hesitate to quote advisers, although right hon. Members opposite took pleasure from sheltering behind the advice which they got when they were in office. But I will give the right hon. Gentleman some of the answers to the questions which he asked on this point, because I agree with him that it is very important.

The bulk of our purchase, if we took up the option, would be the F111A Mark 2—that is to say, the Mark 1 airframe and engine with an improved avionics fit which the United States Government are now considering. We have discussed this arrangement thoroughly with the United States authorities. We now have a very clear picture of their intentions and of the costs involved. We have taken full account of these in our calculations.

On the question of reconnaissance capability, we have been able to satisfy ourselves that it would be possible to fit into the F111A the TSR2 reconnaissance pack, including linescan, sideways-looking radar and cameras. Therefore, from the reconnaissance point of view, the Fl l lA will be in every respect the equal of the TSR2. Incidentally, the right hon. Gentleman asked me when the Mark 2 of the F111A would come into service. If we took up the option, we would get our first deliveries at the beginning of 1969—that is, the same time as the first deliveries of operational as distinct from training aircraft of the TSR2, although the order would be completed a good deal earlier because the American rate of production, given their domestic run, is considerably faster than ours.

On the Nav/Attack system, it is the view of my advisers that, on balance, there are pluses and minuses, as the right hon. Member for Bedford said. There is no significant difference between the Mark 2 avionics for the F111A and the Nav/Attack system planned for the TSR2. It may well be possible to accommodate some of these systems in the F111A, but this is something on which I should not like to commit myself until we have studied the possibilities in more detail. These improvements in the avionics fit which are the only difference between the Mark 1 and Mark 2 represent only a small part of the total cost of the aircraft.

So far as the rest of the aircraft is concerned, we have succeeded in obtain- ing a maximum price from the United States Government for the F111A if we choose to buy it, and this enables us to give the House some idea of the difference in cost between this aircraft and the TSR2.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

I should like to be clear on this. Is it the Fl11A Mark 1 or Mark 2 which is to be delivered in 1969? If it is the A type, will that be capable of flying below enemy radar?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

The answer to both questions is "Yes". I made it clear that no decision has been taken on the F111A. We have nearly nine months to consider whether to place even a very small initial order for training purposes, and we have nearly two years to decide on any follow-up order. This policy gives us the flexibility which we need to complete our defence review, to decide what commitments must be met and the best way of meeting them. Even if we decided to buy the maximum number of F111A aircraft covered by the option, we should save £300 million compared with thesame number of TSR2 aircraft. This includes account of money already spent on the TSR2 cancellation, costs, spares and running costs. [HON. MEMBERS: "What about the balance of payments?"] I will come to the balance of payments question in a moment. I will try to give right hon. and hon. Members opposite all the information that they need to come to the same decision as we have.

This saving of £300 million is the most pessimistic view, and I should certainly hope to increase it. At this size of order the F111A is under half the total research, development and production cost of the TSR2. For the reasons which I have already given, because of the large research and development cost of the TSR2, over half of which has yet to be spent, the cost advantage of the F111A increases dramatically as the size of the order is reduced. The nature of he option gives us a degree of flexibility which we simply could not have achieved under the previous Government's programme.

I must remind the House, because it is important as regards our balance of payments, that, although we intend to place initial orders within the next two or three months for the Phantom and the C130, we have choices there also as to the final numbers that we decide to order. If dollar saving were the main consideration, we might reduce our purchase of these aircraft to accommodate the necessary order of the F111A.

I turn now to the economic consequences —

Photo of Mr Cranley Onslow Mr Cranley Onslow , Woking

To assist us in our arithmetic, can the Minister tell us the maximum price which he has been able to obtain from the United States Government?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I would like to be able to give it, but I am not empowered to do so by the nature of my agreement with the United States authorities.

I turn now to the economic consequences. Inevitably, the picture cannot be completed at this stage, but the arrangements which the Government have made over the whole aircraft programme not only save us very large sums of money—a minimum of £600 million all told—but will also free resources for more constructive work at home and give us the flexibility which we need to review not only our commitments, but also the choices there are in the kind of forces that we need to meet them.

I see that the right hon. and learned Member for St. Marylebone (Mr. Hogg) has dismissed this saving of £600 million as a paltry thing that is beneath consideration. Let me point out to him that it represents a saving of well over £40 in taxes for the average family in this country, or to put it another way, the cost of 200,000 houses. And this is only the saving if we order the maximum number of aircraft allowed for under the various options. If, as I hope, we are able to reduce the numbers we require, the saving will increase proportionately.

It is true, of course, that the cost of the F111A, if we buy it, will have to be paid in dollars. But the terms of the credit facilities which the United States Government have agreed should be made available to us will greatly reduce their impact on the balance of payments. As my right hon. Friend the Chancellor of the Exchequer has already pointed out, over the next five years the cancellation of the TSR2 will free for redeployment resources of at least £350 million. During this time, we have to pay out only about £20 million in dollars. Incidentally, this is almost exactly the dollar cost of the American components in the TSR2. The bulk of our dollar payments would be spread fairly evenly over the following eight years. There is every reason to suppose that if we make proper use of the released skill and resources that will result from this cancellation there should by then be a substantial improvement in Britain's balance of payments.

Our export industries are crying out for the sort of skilled manpower which will be released by the decision to cancel the TSR2. As far as we have been able to judge, the TSR2 was supporting up to 20,000 jobs. Not all the people who filled them will now have to find new jobs. But in any case, at the moment there are 25,000 vacancies nationally for skilled engineers, or 3¼ vacancies for every engineer unemployed. For draftsmen, who will be released in very large numbers by this decision, there are 5 vacancies to every draftsman unemployed. We deeply sympathise with those who have worked so hard and so long on a project on which such hopes were based, and we shall do our level best to help them.

The Government are already closely in touch with both the employers and the unions. The Employment Service will make special arrangements, where necessary, to send in special teams of employment officers to the factories involved in the cancellation. Where retraining is necessary, and cannot be provided by the new employer, we shall make available the facilities of Government training centres and other schemes. The terms of severance payment, an all-important consideration for those concerned, are by negotiation between individual employers and their employees, but the Government expect that their contractors will act as good employers and the Government will themselves be prepared through their contractual payments to bear a reasonable share of the burden of severance payments.

My right hon. Friend the Minister of Aviation will be dealing later in the debate with the effect of our decision on the aviation industry. But I should like to say a few words on this from the purely defence point of view. The fact is that for too many years we have been spending far too much money on too few aircraft. This has not been in the interest of the Services, the aviation industry or the nation. The day of national self-sufficiency in aviation is past. We must co-operate with other countries to share research and development costs and to provide a sufficiently large market for production. The British aviation industry cannot hope to prosper, as right hon. Gentlemen opposite seem to think, by producing smaller and smaller batches of military aircraft for this country alone at higher and higher costs. It just is not on. Man for man, our aviation industry is the equal of any in the world. The basic cause of its difficulties is that until now the Government have consistently chosen the wrong sort of military projects for the size of the potential market.

I know that the American aircraft companies often employ unscrupulous methods in making sales, but the fact is that, so long as the American domestic market for military aircraft is 10 times the size of ours, we can hope to retain a capacity in this field at a time when the cost and complexity of aircraft is continually rising on one condition only: that is, if we decide from the start to co-operate with our allies. That is why my right hon. Friend the Minister of Aviation and I went over to Paris a month ago to discuss collaboration with the French on the development and production of a strike/trainer and a joint programme for a variable geometry aircraft in the second half of the 1970s.

That is why I spent half of my time with the German Defence Minister last week discussing the possibility of co-operation in meeting our common needs for vertical take-off aircraft. That is why we are continuously in touch with the United States on collaboration in the development and production of aircraft engines.

But the future of our aircraft industry is likely—

Photo of Mr Stephen Hastings Mr Stephen Hastings , Mid Bedfordshire

As a result of what he has told the House, can the Minister name any one firm project which he has agreed which will be presented as an order in some form to the British industry?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

We hope to sign an agreement with the French Government on the first two aircraft which I have mentioned, possibly in the next few weeks.

The future of our aircraft industry—and this, I think, is common ground on both sides of the House—is likely to lie essentially with Europe rather than with the United States, and above all with France, because the French aircraft industry is of the same order of size as our own and faces similar problems. My experience in recent weeks in discussing the situation with representatives of various European countries is that all the European aircraft industries are beginning to recognise that they must hang together or they may hang separately.

It is quite clear that the sort of co-operation that we are now able to discuss with the French and German Governments would have been totally impracticable had we kept the TSR2 in our programme. I ask right hon. and hon. Members to remember the costs of aircraft production of the previous Government's programme: £1,200 million in the four years from 1969 to 1972; £740 million on the TSR2 alone. If we kept these aircraft in the programme, the resources for development of other aircraft during those years simply would not have been available. The country would not have been able to afford it. So that by the time the TSR2 programme was finally completed in the middle 1970s, we would probably have found that there was no European industry left with which we could co-operate, and for that reason we would have come to the end of the line ourselves as well.

It is this fact that no country of our size can any longer afford to produce the more sophisticated modern weapons for itself alone which makes so much nonsense of all the talk by right hon. Members opposite that, by co-operating with our allies or buying foreign equipment, we are somehow giving up our independence—[Interruption.] This was said at great length in the last debate by the hon. Member for Stratford-on-Avon (Mr. Maude), who is to wind up the debate for the Opposition tonight.

Right hon. Gentlemen opposite know perfectly well that independence in the field of defence has been impossible for many years. Interdependence is the only possible basis for a defence policy in the second half of the twentieth century. Right hon. Gentlemen opposite recognised this basic fact when they decided to base Britain's nuclear power in the 1970s on Polaris missiles bought from the United States. They recognised it when, a year ago, they decided to base the protection of the Royal Navy against air attack on Phantom aircraft bought from the United States. They recognised it when they allowed British forces in Germany to become dependent on American nuclear weapons by cancelling Blue Water in 1962. Right hon. Gentlemen know, if their hon. Friends behind them do not, that the Royal Air Force in Germany and the B.A.O.R. do not have a single atomic weapon which they can use until and unless, the United States have given their consent.

Right hon. Gentlemen opposite know these facts, but they have done their best to hide them from their supporters in the country. They know as well as we do that even the TSR2 is a symbol not of British independence but of interdependence with the United States. It would have depended entirely on American computers made or assembled in Britain under licence. We are living in a world which is technologically one today. If we accept that fact and act upon it, we can draw benefit for ourselves and others. If we sink into daydreams of total national independence in defence or in technology, or in foreign policy, we shall sink inexorably into national decline.

Photo of Sir David Price Sir David Price , Eastleigh

Will the right hon. Gentleman explain why in my constituency during the election campaign—this is a real matter in terms of integrity—the Labour Party published a pamphlet saying that a Labour Government would reverse the Tory policy of increasing dependence on foreign supplies, for example the VC10 and the Phantom incidents? Can he explain this statement which had the imprimatur of the Labour agent in my constituency?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I cannot explain it, any more than I can explain the pamphlet which was published in Smethwick by the Conservative candidate on the question of racial segregation.

It is because they know in their hearts that what I have said is true that right hon. Gentlemen opposite have felt it necessary to attack not so much the decision that was taken as the way in which we announced it. I regret that it was necessary to make the announcement in the Budget speech—[HON. MEMBERS: "Why was it?"] If hon. Gentleman opposite listen, they will get the answer and will be wiser after getting it. As I was saying, I regret that it was necessary to make the announcement in the Budget speech, but I believe that if hon. Gentleman opposite had not so disgracefully abused the rules of the House by raising bogus points of order there would have been little in practice to complain about. It would have been impossible to make the announcement before Tuesday, because I did not agree the nature of our option on the F11A with Mr. McNamara until late on Monday afternoon—well after Question Time.

It would, I suppose, have been possible to make a statement after Questions on Tuesday, but I do not believe that the House would have wanted to delay the Budget by that procedure, and certainly the right hon. Member for Bedford raised no objection when I suggested to him on Monday that I should give the details in the course of a speech in the Budget debate, following the Leader of the Opposition and the Leader of the Liberal Party. Neither I nor anyone else undertook to make this speech precisely at 7 o'clock. We would have been infringing our privileges if we had done so. But in suggesting that I might speak at about 7 o'clock—

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I do not know to which conversation the right hon. Gentleman is referring, but I imagine that it must have taken place after the last possible opportunity had gone by for him to be able to make that statement in the House.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

It was a conversation on Monday afternoon after Questions.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Hendon North

May I draw the right hon. Gentleman's attention to the fact that no statement—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I cannot have two hon. Gentlemen on their feet at once. If the right hon. Member who has the Floor does not give way, the hon. Member who is seeking to intervene must sit down. May I suggest to the House that the Budget debate is over.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I will give way to the hon. Gentleman.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Hendon North

I am sure that the right hon. Gentleman would not like to mislead the House. The Chancellor said: I hope that they will not feel that it is an undue inconvenience to wait from five o'clock until seven o'clock."—[OFFICIAL REPORT, 6th April, 1965; Vol. 710, c. 284.]

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Exactly. In suggesting that I might speak at about 7 o'clock, we were assuming, a little too readily, that the Leader of the Liberal Party would want to speak on the first day of the Budget debate, and that hon. Gentlemen opposite might divide on some of the Budget Resolutions, but I really do not see how, by getting up at twenty minutes past six instead of at seven o'clock I inconvenienced anyone. The Leader of the Liberal Party left the House before I rose to speak and did not return until after half past seven, and I took care to give the right hon. Member for Bedford a copy of what I had to say in plenty of time for him to read it before I spoke.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

The right hon. Gentleman has referred to my right hon. Friend. My right hon. Friend did not realise that it was necessary for him to speak to enable the predictions of the Chancellor to come true.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I am sure that that is the case. Our error, if we committed one, was to ensure that the House obtained the fullest possible details of our decision as soon as possible. I agree that in doing this we were breaking the precedent set by right hon. Gentlemen opposite.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I cannot give way. The last major cancellation which right hon. Gentlemen opposite announced was the cancellation of Blue Water in 1962, but they took care to wait until the House had risen for the Summer Recess before they revealed their intentions to the public. In fact, of the 30 major aircraft and missile projects which the right Member for Preston, North told us in 1963 had been cancelled by the previous Administration after spending more than £250 million, they announced the cancellation of only six in Parliament. Twenty-four were announced by the Ministry to the Press, or were concealed until long after the cancellations had been made.

The fact is that the complaint of hon. Gentlemen opposite about the way the announcement was communicated to them is as bogus as the points of order which wasted 50 minutes of parliamentary time last Tuesday. It is a fainthearted attempt to conceal from the nation the fact that the decision which the Government have taken in cancelling the TSR2 is one which they themselves would have taken years before if they had had any sense of financial responsibility and an ounce of political courage. They simply lacked the guts to face the facts. They funked the decision when they should have taken it. We did not. It is as simple as that, and I ask the House to reject their Motion with the contempt that it deserves.

5.39 p.m.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I think that the House would have appreciated the right hon. Gentleman's speech rather more if he had come out with a full apology for the way in which the announcement was made. It is common ground that it was a great mistake on his part not to submit himself to the normal cross-examination to which all of us have often submitted ourselves in announcing unpopular decisions. Of the great decisions which had to be announced by our Front Bench when we were in power, I can remember none that was not made at the Dispatch Box. There may, of course, have been some smaller incidents which were not so announced. The decision on Blue Water was taken after the House had risen.

Before I turn to the right hon. Gentleman's other remarks, I want to register the strongest possible protest against the shabby confidence trick which the Prime Minister inflicted upon my constituents and the whole of the aircraft industry. The right hon. Gentleman came to Preston in June last year and assured the workers of the English Electric Company of the B.A.C. that he foresaw a long and useful life for this magnificent aircraft in a conventional rôle. He said: Mr. Amery is always spreading rumours that Labour will cancel the TSR2. I repudiate these rumours. Our position with the TSR2 is exactly the same as the Government's. If it works and does what is expected of it at a reasonable cost"— [Interruption.] I am glad that hon. Members opposite rose to that fly, because the right hon. Gentleman went on to say: we shall want it, although not in the nuclear rôle. We look forward to its success, although we shall not know for many months whether it is successful. We look forward to its production. Only two things could possibly have justified the Government's cancelling the TSR2 after that statement. One would have been if the aircraft had failed to perform adequately, and the other would have been if, when right hon. Gentlemen opposite came into power, the costs had proved to be very different from what they thought they were at the time.

The Secretary of State for Defence, in a discussion with me six months before his right hon. Friend spoke in Preston, said that he thought that the total cost would be £1,000 million. This was the advice which the then Leader of the Opposition was receiving from his right hon. Friend. When the right hon. Gentleman made this statement about the £1,000 million, I countered it by saying that I thought that the development costs would be about a quarter of that and the production costs slightly more. The Press, which was quite good in its arithmetic, concluded that the programme—and we were thinking of 110 and not the full 158 aircraft—would cost £550 million. The right hon. Gentleman has told the House that 100 aircraft would cost about £600 million, so there is not a big gap in the figures.

This was the information which was in the mind of the Prime Minister when he spoke in Preston. It could not have been less than £550 million, and it might have been as much as £1,000 million. Yet, with this information in his mind, he assured the workers of Preston that their jobs would be safe and that the Labour Party would go on with the programme. This was to treat them with a disgraceful lack of candour, even in an election year.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

The right hon. Gentleman is a master of candour. He will recall telling me—and he was the man with the facts; I was not—that when I gave those figures I was exaggerating the unit costs by a factor of 10. This was the information that he gave me, speaking as Minister of Aviation, at a time when he knew that the information he was giving me was totally incorrect.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I am glad that the right hon. Gentleman has referred to that passage. At the time, because he thought that we were ordering only 30 aircraft, he claimed that they would cost £50 million each, and I said that on research and development and production this was ten times exaggerated. I was not far out as it proves. The right hon. Gentleman and his colleagues owe a large proportion of their majority in this House to the way in which the Prime Minister misled the electors of Preston. The trick worked in Preston, South. It will not work again. I was interested to see that at a meeting held there the other day, outside the English Electric Works, Labour Party supporters put up posters saying "Don't Blame Labour For Wilson".

The truth is that the right hon. Gentleman certainly—and I believe that this is true of his right hon. Friend—always meant to scrap this programme. It seems pretty clear that the decision was taken before a full consideration of the implications and the possible alternatives. I have been very alarmed by the replies which the right hon. Gentleman has given my right hon. Friend about the TFX Mark 2. It is still not clear from what he said whether a development order for the TFX Mark 2 has been placed. If so, will he say what American agency has placed it? Are we certain that it is going ahead? He told us that he was advised that the necessary electronics and avionics could probably be fitted into it. He did not seem to know for certain. Yet, in his responsible position, this is something that he ought to be absolutely clear about before cancelling one aircraft in favour of another. Or is all this talk about the TFX Mark 2 a smokescreen to delude the air marshals so that he can give them, instead, the Buccaneer?

I thought that the right hon. Gentleman was a stout defender of the rôle we need the Royal Air Force to fulfil. I read with great admiration the speech of Lord Shackleton in another place on the subject of aircraft, but I was rather alarmed to hear the right hon. Gentleman say that in certain circumstances the Buccaneer and the Phantom might discharge some of the rôles—with perhaps fewer aircraft—of an aircraft of the TSR2 or TFX Mark 2 type.

He went on to suggest that the balance of payments problem might make it attractive to buy fewer of these aircraft. When we have a Government downgrading the operational requirements of certainly two and possibly three major military aircraft projects, and when we have them now downgrading or cutting the numbers to be supplied to do a job, we are getting very near to making the Royal Air Force a laughing stock among the air forces of the world. If this is what the Government succeed in doing the right hon. Gentleman will not get recruits to come forward. He will not be able to maintain the high standard which the Service has maintained through the years.

There is much loose talk about aircraft being over-sophisticated. I hope that the right hon. Gentleman does not pay lip-service to the idea, or believe in his heart, that there is very much in this doctrine. We are facing potential enemies all over the world who are extremely well equipped, and it is essential that the Royal Air Force should have the best possible weapons system available.

I want to say a word about the implications of the decisions that have been taken upon Britain's standing in the world. Policy has to be matched with power. The two must go hand in hand, and in step. If we were to cut out the TSR2 or the TFX Mark 2 type of aircraft in Europe—and on an earlier occasion the right hon. Gentleman suggested that his mind was moving in that direction—the alliance in Europe would become entirely dependent upon the Americans and the French for its reconnaissance and its strike power. Is this desirable? If we were to cut it out in C.E.N.T.O. we would be unable to give nuclear support to the C.E.N.T.O. Alliance. If we were to cut it out in the Middle East we should be unable to repeat the successful Kuwait operation after the Canberra goes out of service. If we were to cut it out in South-East Asia we should be unable to fulfil the rôle which is now filled by the Canberra.

The greatest importance attaches to this decision, and I do not understand why there has to be this full analysis and this fresh defence review of commitments which, if there they are accepted, can be discharged only by weapons systems of this sort. We hope and believe that the right hon. Gentleman stands by these commitments, although it is clear that many of his hon. Friends do not and that there is a serious division in the Government on this point.

The other day, in a public speech, the First Secretary of State said that many of these overseas commitments must go, and the Chancellor of the Exchequer at the Dispatch Box last night talked in the strongest terms about cutting our overseas commitments. I hope that the right hon. Gentleman and Lord Shackleton, together with others who have the right ideas, will fight for the maintenance of the Royal Air Force even if they cannot fight for the maintenance of the aircraft industry. But they have weakened their own case by already cancelling the best equipment that was available and by increasing our dependence upon foreign purchases of foreign aircraft.

The right hon. Gentleman made very great play with the savings which he claimed would be obtained by this cancellation. I should like to ask him a simple question, has he allowed for the tax element? I know that it is not a major one, but it is a point of some importance. The aircraft industry is a very high wage industry and large amounts of money spent on these projects must come back in taxation. It strikes me as rather ironical—the Minister of Aviation, who is an economist, may share my surprise over this—that the Chancellor should have announced the cut in the TSR2 in the same speech in which he talked about the importance of restricting overseas investment. The reason he advanced, the main reason, for restricting overseas investment was the proceeds of overseas investment were taxed by foreigners and the money did not come to the Revenue. In this case the right hon. Gentleman is authorising a massive investment overseas on which he will get no revenue and no dividends. I think that a point which might be looked at.

A lot of the argument about the wisdom of buying overseas seems to me to involve a lot of careless thought. On the same argument our whole agricultural policy would go overboard. The computer policy recently announced would go overboard, and so would the coal policy. I was interested to see that the Minister of Power declined combat with my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who took him to task on that subject yesterday.

While on the issue of redeployment, I would say that we shall get a brain drain to some extent which will injure the balance of payments in so far as people transfer to rival industries. You will also get a skill drain within the country. In my constituency skilled men will be going out of aviation, in one case to a very good firm, Leylands, who make motor buses and lorries for export as well as home consumption. And there is the Bond mini-car factory which makes a three-wheeled car. I have seen that in the constituency of the Under-Secretary of State at Wednesfield they hope to get people in the trapping industry. They make all sorts of traps there—bear traps and mouse traps. This is a reverse of what happened to cotton.

From the cotton industry people went to more advanced technology. Here they will be taken out of advanced technology to go into less advanced technology. This will in the long run do damage to the economy. You are gambling as a result of redeployment that you will earn very large sums of additional exports. You will have to earn something like £600 million more over the next five to ten years to pay for the aircraft you are buying from abroad. Will you really get such a great increase in exports?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I have listened to the right hon. Gentleman's use of the word, "you" and it seems to be getting personal. In this case "you" is the Chair.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

Yes, I was addressing you, Sir, individually. I was asking you, Sir, as the Deputy-Speaker of this House, whether you do not see the matter arising in this way. I hope, Sir, that I was in order in doing that because the crux of the matter, as I would like to put it to you, is that if you dismantle the industry now, and you are dismantling it—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I thought that the hon. Gentleman's defence of himself was most ingenious. But he has now saddled the Chair with dismantling the aircraft industry.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I stand corrected, Sir.

The fact is that the Government are dismantling the industry. Nine of the greatest design teams, in engines, airframes and electronics, have become redundant. Only the Concord is left of the new projects. There is still no evidence of any firm new projects to replace the cancellations.

The right hon. Gentleman says that in a few weeks he hopes to announce an agreement with the French. Perhaps his right hon. Friend will tell us something about this. When I was negotiating the early stages of this agreement with the French Government last year, the projects were not very big and we did not think that they would take up a great deal of the strength of the industry.

The design teams are going and the production teams will follow. This is, of course, the policy which the right hon. Gentleman wishes to pursue. But it has desperate implications. We have been spending between £300 million and £400 million a year on the aircraft industry. If we are to remain major operators of civil or military aircraft, we shall have to go on spending something like this sum over the years. We may need fewer aircraft, but they are likely to grow more expensive with advances in technology.

If the industry is dismantled, we shall have to spend an increasing proportion of the money abroad and lose valuable exports which we are getting at the present time. What is more, the quality of our design work will fall. You cannot maintain the highest standards of aircraft and aero-engine design unless your designers are swimming in a big pool, unless there is a wide range of activities from which they can gain experience and which will give them the necessary scope. I think it necessary to look at the Government's decision in the context of the programme which we were pursuing. We had a full programme to meet nearly all our civil and military ends—

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

May I ask the right hon. Gentleman, from his experience of being for several years in the job which I now hold, whether he is satisfied, looking back, that the country really got full value for money out of an aircraft industry which, in relation to our population, is 1½ times the size of the American aircraft industry, and whether he feels that everything was right with matters as he left them?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

Anyone who said that everything is right with any situation would be intolerably complacent, but I think that the industry was very strong.

I should like to turn to another side of the right hon. Gentleman's statistics. The American industry amounts to about 2 million people. We are hoping, and I hope that the right hon. Gentleman—

Photo of Mr Julian Amery Mr Julian Amery , Preston North

It is considerably more than that if you take the engine and electronics people as well as airframes. We are only a little more than 10 per cent. of it. If we as Europe, are going to compete with the Americans, if we are to build a European industry which can stand up to the massive onslaught of American competition, it is going to be a pretty formidable task. The whole of the European industry taken together is less than 500,000 strong and we represent more than half of that amount. Our plan as my right hon. Friend was explaining was that when the family of aircraft that we had under development was completed we should go into Europe for the next generation of aircraft. If we dismantle the industry before we go into Europe, we shall have nothing with which to get into Europe and no nucleus around which the Euro- pean industry can be built. Believe me, we are facing a tremendous task in competing with the Americans at all, even collectively with Europe, but it can just be done. It cannot be done if we dismantle the industry here first.

I find it difficult to discover what the Government really mean about Europe and where they stand on this issue. They talk of Europe, but they buy American. They talk of standing up to American competition, but they proceed to dismantle the industry. They talk of enlarging the market, but they contract the source of supply. I cannot discover where these European aircraft will fit into their programme. There are two French aircraft under discussion and the right hon. Gentleman talked about two German aircraft. Where do they fit in? What is the operational requirement to which they correspond? What is their relation to the 1127 and the Phantom? What is the time scale in which we are going to see them? Is all this reality or is it a smokescreen to camouflage the sell-out of the British industry to the United States?

Tonight the Prime Minister leaves for Washington, with a visit to New York first. I understand that on Thursday he will be lunching with the President. I think the right hon. Gentleman deserves a good lunch for the help he has given to the American industry. He deserves also a welcoming dinner from the hon. Gentlemen opposite who sit below the Gangway and constitute the Left-wing It is a strange alliance between the Left-wing of the party and American big business to knock out the British industry. Our view is that we need to maintain a strong British aircraft industry until we can establish a lasting partnership with our partners in Europe. The Government talk as if they agreed with this view, but if they cannot stand up to pressure from their American creditors and from their own Left-wing, they had better make way for people who can.

6.0 p.m.

Photo of Mr John Cronin Mr John Cronin , Loughborough

I admire the courage of the right hon. Member for Preston, North (Mr. J. Amery) in coming again into a discussion of aviation. My recollection is that, when he was responsible for aviation affairs, every few weeks—with rather limited success—he defended a fresh scandal at the Dispatch Box. I recall the Ferranti affair, the B.O.A.C. crisis, and numerous other occasions when he certainly did no credit to the office he held.

I think that the right hon. Gentleman's courage becomes foolhardy when he criticises the present Government, because he was the person who should have made the decision when he was in office, long before the election. The right hon. Member, and his predecessor, the right hon. Member for Monmouth (Mr. Thorneycroft), took no useful decisions through the whole of the last three years of government as far as the aviation industry was concerned.

I should like to accept the verdict of a person who was in constant contact with the right hon. Gentleman. I refer to the chairman of Hawker Siddeley, the biggest aviation factory in the whole business. He said, on 20th February: The Conservatives would not make up their minds about anything. They just waffled. That represents exactly the contribution made by the right hon. Gentleman when he was in office.

I think that this occasion is in some ways a sad one. The TSR2 was obviously a triumph of British technology and it is a sad occasion that we have to cancel it. It was the view of the Labour Party before the election that we did not intend to cancel it, provided that it could do the job for which it was intended and provided that it was economic. Obviously, we have had to have second thoughts, because, until the Labour Government took office, nobody on this side of the House knew what the total cost was, or what would be the economic situation which we were to inherit from right hon. Gentlemen opposite. That came as a complete surprise. Nevertheless, this is a sad decision. I think that I should be very happy to accept the verdict in a headline in a paper which is far from being Left-wing, the Financial Times. The headline was, "A sad but right decision." I think that this is definitely a right decision.

We ought to examine the TSR2 from two aspects. One is the economic rôle and one is the military rôle. We heard from the right hon. Member for Bedford (Mr. Soames) a lot of talk about the desirability of aircraft having short takeoff and landing capabilities. He drew a picture of our embarrassment in a war in the East if we were not equipped with such aircraft. He spoke as though the TSR2 were the only aircraft with short take-off and landing capabilities. These capabilities are certainly obtainable in the TFX, the F111, they are certainly obtainable in the Phantom—particularly if it is powered by Rolls-Royce engines, which make it more efficient—and they are even obtainable in the Hercules if it is fitted with an apparatus which blows air downwards and gives it more short take-off capability. I would suggest that the right hon. Member for Bedford completely misled the House in saying that there was any possibility of deterioration in the efficiency of the R.A.F. from the point of view of the short take-off lift capabilities.

The right hon. Member for Preston, North made play of our dependence on the United States. This is also a two-way process, because the United States is, to some extent, dependent on us as far as aircraft are concerned. The right hon. Gentleman knows perfectly well that 95 per cent. of United States military aircraft are fitted with the Martin Baker ejection seat. If we ceased to supply that seat to the Americans, they could not produce any aircraft fitted with a capable ejection seat for a year, and they would be powerless for that time. I think that he is taking a somewhat lugubrious view of our dependence on the United States and such dangers as it might produce.

I should like to examine the purpose for which the TSR2 was built. One purpose, of course, is the nuclear interdiction rôle, the purpose of planting nuclear weapons on targets. I do not think that there is any hon. Member who believes now that nuclear weapons would be used in a limited war. I am sure that we must have abandoned at least that conception. Certainly, from the point of view of the nuclear interdiction, and even from that of a strategic nuclear rôle, the TSR2 is completely obsolete compared with the modern missiles which are available, such as the Polaris missiles.

I agree that the TSR2 is probably the best reconnaissance aircraft available. There is no doubt about it, but it is best only to a marginal extent. I think that after the F111 is fitted with the TSR2's radar dome, as my right hon. Friend the Secretary of State for Defence said it would be, nothing will be lost from the point of view of reconnaissance.

One comes then to the question of the conventional strike rôle, in other words, the attacking of communications, airfields, rail junctions, bridges and bottlenecks of communications—such as mountain passes, forests and concentrations of troops—with conventional bombers. I would suggest that all these rôles, the whole of the conventional strike rôle, could be easily taken over by aircraft such as the Phantom and the Buccaneer and performed with equal efficiency. I would suggest that there is no prospect of any appreciable impairment of the efficiency of the R.A.F. in the future in the cancellation of the TSR2.

I think that there is an actual advantage, in this respect. If we had ordered the TSR2 it would have had to be ordered in very large numbers, 150 or 100 to be ordered economically. If one ordered 50 TSR2s, the cost would escalate to about £10 million each or perhaps more. By cancelling this, we have left ourselves with the option of having a much smaller number of strike reconnaissance aircraft to do the job just as well and to allow firm military resources to be deployed by the R.A.F.

I turn now to the economic aspects of the TSR2 cancellation. I think that both the right hon. Member for Preston, North and the right hon. Member for Bedford have been excessively melancholic about the effects on the aircraft industry. It is time that hon. Gentlemen on that side of the House had a sense of proportion about this. The total number of people employed on the TSR2 represents less than 10 per cent. of the total labour force of the aircraft industry. [An hon. Member: "At this stage."] At this stage.

It seems to me unreasonable that the right hon. Member for Preston, North should talk about the aviation industry being dismantled by the present Government, dismantled by causing redundancies among less than 20,000 workers out of a total labour force of 268,000. I suggest that that is the language of exaggeration. Obviously, the whole TSR2 project has to be considered in the light of our economic difficulties, which have persisted ever since the war. We have been able to keep solvent as a country only by repeated bouts of deflation. This has weakened our industrial power.

Last year we inherited from the previous Government the incredible balance of payments deficit of £745 million, which would have been £800 million had we not been able to escape paying interest on the capital of the American loan. These economic difficulties can be overcome only by increased production, at competitive prices, of goods for export. It is urgent that all our resources are deployed and that any project is considered at least partially in that light.

A lot has been said about the contribution which the TSR2 and other projects make to industry by technological fallout, but I suggest that this argument has been greatly overstated, for when we consider countries like Germany and Japan nobody can possibly question their technological expertise, although neither of those countries have aircraft industries worth talking about. Thus, the argument of technological fall-out is a very limited one indeed.

I suggest to hon. Gentlemen opposite that the cancellation of the TSR2 will free immense numbers of skilled workers and make them available to be deployed on productive resources for the export market. There is a great shortage of labour in most industries of a technological nature. I hope that hon. Gentlemen opposite will bear in mind that a large proportion of the workers in the aviation industry—workers employed on the TSR2, the Hawker Siddeley 681 and the P1154—are not aircraft engineers, but are merely skilled men employed on aircraft work. They could use their skills as easily in other industries, deploying their resources in other ways.

Photo of Mr John Wells Mr John Wells , Maidstone

The hon. Gentleman made a point a short while ago about the United States being dependent on us for the Martin Baker ejection seat. Is he seriously likening a relatively unsophisticated item of that sort with the highly-sophisticated electronic equipment on which the people he is now mentioning are employed? Is he aware that a comparison between a relatively simple piece of equipment like an ejection seat and highly technological manpower is not a realistic one?

Is he further aware that the workers about whom he is now speaking are highly skilled technologically, are devoted to the aircraft industry and that many of them would, I believe, rather emigrate to the United States or elsewhere, and so be able to follow the trades requiring their impressive skills, than—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. This intervention is becoming a speech.

Photo of Mr John Cronin Mr John Cronin , Loughborough

That intervention came rather like a delayed action bomb, because I referred to the ejection seat about 10 minutes ago. I am not suggesting that the Martin Baker ejection seat is something which the United States Air Force could never do without. What I am saying is that it could do without it, but that it would turn that country's production in this connection into chaos.

I was speaking about the labour force. It will, as a result of the TSR2 and other cancellations, be released to the extent of about one-third of the force employed on electronics. And, heaven knows, the electronics industry is desperately short of skilled workers. There are myriads of uses to which the skills of these worker could be put. I see nothing but advantage to the country's economy in electronics workers being freed to go to other industries where they could make an important contribution to our exports drive.

Photo of Sir Douglas Dodds-Parker Sir Douglas Dodds-Parker , Cheltenham

Has the hon. Gentleman any proposals for the few top design teams on whom the whole of this industry depends and who depend on the continuation of top aircraft production projects in this country?

Photo of Mr John Cronin Mr John Cronin , Loughborough

That is an extremely useful question. Unless action is taken I agree that there will be some redundancy among the design teams. This is something which the Minister will have to take energetic action to prevent. If super-projects are undertaken, particularly in co-operation with the French, there will be work for most of the design teams. I suggest, however, that it is obvious that engineers who are operating lathes, drills, metal cutting machines, and so on, could equally use their skills, and certainly very profitably so, in other industries, to the advantage of our exports.

Photo of Mrs Anne Kerr Mrs Anne Kerr , Rochester and Chatham

Would my hon. Friend not agree that as far as possible we should bring jobs to the men rather than uproot men and their families and take them to the jobs?

Photo of Mr John Cronin Mr John Cronin , Loughborough

I am always prepared to accept such a contention. However, I suggest that keeping large quantities of skilled labour tied up making a project which makes no contribution to our balance of payments difficulties is something which we cannot tolerate in our present economic situation.

The aviation industry is theoretically an industry which could make a very large contribution to our exports, for it uses the minimum of materials and the maximum of skill. However, at present it is not using that skill to advantage. Aero-space exports in 1959 were worth £150 million. They have now shrunk to about 100 million and I suggest that this indicates that something appears to be wrong. This view is perhaps reinforced when we see that although the British aviation industry employs 268,000 men, it produces roughly the same amount of exports, about £100 million worth, as the French aviation industry, which employs only 90,000 men.

It is clear that the British aviation industry is not making its contribution to the export market which it should. It exports 2½ per cent. of the national exports, while it employs 10 per cent. of the nation's scientists and technologists. This imbalance must be corrected and I suggest that the industry must to some extent be contracted. There is nothing appalling about such a contraction, although it will obviously cause some temporary hardship to some workers. That hardship could be reduced to the minimum if the workers concerned were given the maximum help—as I am sure they will be—to obtain other jobs, which are waiting for them immediately in other industries, and if they are given reasonable redundancy payments.

Photo of Mr John Cronin Mr John Cronin , Loughborough

Yes. I accept the use of the word "generous" here. I accept that correction. I am glad that my hon. Friend used the word.

I suggest that there is a big future in changing the character of the industry, making it smaller and directed much more towards the export market. Hon. Gentleman opposite might be interested to know that in a survey recently made in America it was found that the aviation industry there, in spite of its enormous home market, would have to be contracted by about 30 per cent. in the near future. How can we, with any sense of realism, maintain an aviation industry at the same very high level as it is at present when the United States, with that country's tremendous advantages, cannot maintain its present industry? Therefore, certainly a small amount of contraction is essential and, as I have explained, the hardship involved can be of a minimal nature.

If our economy is to go ahead as we all desire there must be much more mobility of labour. If the present Government baulked at taking such a decision, then I do not believe that they could claim to be worthy of consideration as a Government who take a serious view of the country's future. I suggest that the Government are making a courageous and effective decision which will greatly help the nation's economy in future. It is a courageous decision and I am sure that the majority of people recognise it as such. I trust, therefore, that the result of the Division tonight will also recognise it.

6.19 p.m.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

I am very grateful to have the opportunity to speak on behalf of another of the constituencies—unfortunately, there are several of them—which are seriously affected by the cancellation we are discussing, and my constituency may be much more seriously affected than others by the after-results in the years ahead.

I have had, by means of correspondence and conversations, the strongest evidence of the indignation that has been caused both by the manner in which the decision was announced and the basis upon which it has been sought to be justified. Many of my constituents, employed in the industry and not, have pressed me to make the strongest protest against what has been done and the way in which it has been done.

I intend to do so, but I think that my first duty is to refer to one part of the speech of the Secretary of State for Defence with which I can agree. Our concern today must be to insist on the Government giving proper attention to those who will suffer from this tragic event—for a tragic event it is. It is quite as bad as scrapping a great ship that is under construction—taking it out to sea and sinking it. One can imagine the feelings of the men, the keen and skilful craftsmen, engaged in such work.

Where Governments have power of life and death over an industry—as Governments today have over the aircraft industries of most countries, in view of the vital importance of the military aspect—any Government must accept a very special responsibility when they exercise that power of life and death. I believe that the whole House will agree that the Government ought to accept this responsibility quite fully in this case, and should give the problems of the individual constituencies a very sympathetic consideration. I also hope that the Government will allow those hon. Members who represent those constituencies to take part in discussions and consultations, if these can be helpful, and make suggestions for the alleviation of the suffering.

The Chertsey division is sometimes regarded as simply a suburban constituency. It is nothing of the kind. We send at least 5,000 workers every day across the Southern Railway to the B.A.C. Vickers factory, and the other factories alongside it which make constituent component parts, as they do also in my constituency itself. That is by no means all. There are the many small traders who supply these thousands of men and their families with the goods that they need, and the prosperity of this industry is, therefore, of vital importance to them.

The fact is that Vickers has for many years been the premier industry in northwest Surrey, and the most important provider of employment in that area. As our excellent local newspaper the Surrey Herald well said recently: The problem ahead of our area is of such formidable magnitude that no rapid assessment of it is possible. I was, therefore, very sorry to hear the hon. Member for Loughborough (Mr. Cronin) make such a very cold-blooded and unsympathetic assessment of that problem. The hon. Gentleman is not now present—[HON. MEMBERS: "Where is he?"]—but he spoke in the coldest possible way, and used the word "only" in relation to the several thousands of people affected by the decision. I should have thought that "only" was not the word to use in connection with this very grave problem.

It is not only a question of the immediate redundancy, though that is bad enough. I have no figures, and I should not like to alarm anyone, but we must realise that even in one constituency the numbers may run into several thousands at once and, in the long term, a factory like that at Weybridge might well have to be closed altogether. One can see what the repercussions of that would be for the whole locality. It is very easy to talk glibly about redeployment into other and more important fields, but that cannot be done overnight. I read in a newspaper the other day an article that appeared to suggest that one could close down an aircraft factory on Friday evening and open it up for the manufacture of machine tools on Monday morning. I should have thought that anyone who said that or thought that should have something very serious done to his head.

My first complaint on behalf of those concerned, therefore, is the lighthearted way in which members of the Government, and their numerous public relations apologists—and they are numerous nowadays, both inside and outside Whitehall—have tried to play down the consequences of the decision. That process of playing down has been enormously assisted by last week's quite unworthy political trick, which gave the Government a period of a week's parliamentary silence. They no doubt hoped that with a week's delay the Press would find some news more interesting than this, and so not pay so much attention to this item. I believe that they made a mistake there; and that we will find that the public take the matter very much more seriously than the Government do. I therefore most sincerely hope that we can all agree on insisting that in this matter a heavy responsibility lies on the Government.

On a longer view, we must all be concerned, and we are all concerned, with the future of the industry. The effect of cancelling the TSR2 cannot be confined to its immediate impact. As my right hon. Friend the Member for Preston, North (Mr. J. Amery) pointed out, it might well render almost futile the deliberations of the Plowden Committee—perhaps that is what it was intended to do—by creating a fait accompli in the shape of an emaciated, dispirited aircraft industry, much easier to knock over.

If the country wants to continue, as I believe it does, to have any aircraft industry—I add, any Air Force—it had better say so now very loudly and clearly, and serve notice on the Labour Government of what it intends to do to them if they persist in allowing these great national assets to be destroyed.

I do not believe that the present Government want either of those two things. They are certainly going the best possible way about it to produce and ensure the eclipse of both. This is no afterthought; a number of us have been saying this for months past. We simply did not believe that the Government intended to give the R.A.F. either the TSR2 or the TFX. I know no more about it than anyone in this House, but I am entitled to form my views as much as anyone is. It looks to me, and I believe to many other people, as if the Royal Air Force chiefs have been led up the garden.

It is quite a clever scheme, but of course, the Prime Minister is a very clever man. First, he tells the Royal Air Force, "You cannot have the TSR2. That is clearly understood, but I know you are a hungry animal, so here is another bone for you. It is nearly as good; it is called the TFX." What was the poor dog to say? Of course he said, and the Press duly announced, that the R.A.F. chiefs accepted the TFX. That was used as a basis for saying that the R.A.F. chiefs prefer the TFX.

We on this side of the House believe that the R.A.F. will not get that either. We have some circumstantial evidence for that. Mr. "Ted" Hill was interviewed when coming away from a meeting. He is a fairly well-informed man. He said that it might be possible that this dollar expenditure would not be necessary after all. So the poor dog gets none. The Prime Minister can in due course put on a very fine Mother Hubbard attitude in which, when the time comes, he would probably blame the wicked Americans for jacking up the price.

Although he can claim to have penetrated a very successful confidence trick, I wonder whether he realises what foreign countries will think of what he has done. I shall tell the House what was said to me on this subject during last week-end by a very intelligent and extremely substantial foreign observer. He said, "We cannot understand how the British Government can square the TSR2 decision with the new and very sound Labour policy which was developed by the Foreign Secretary in the House of Commons the other day. The Foreign Secretary seemed to be saying quite clearly that Britain intends to be really strong east of Suez." Of course, the gentleman was speaking for himself, but he is a well-informed man and many people know that that was exactly the rôle for which the TSR2 was designed.

It is quite clear that the nuclear capacity, as the Prime Minister himself said, was a bonus, but, of course, it was no doubt one reason—and a very important reason—why it should be possible to cancel it in favour of the American aircraft. He would be able to say to his Left-wing, "I have done something for you. I have scrapped that nuclear plane, whatever the result for the Royal Air Force or anyone else." "Now", said my friend from abroad, "it appears that Britain is to scrap not only the TSR2, but the whole military requirement. If that is so, I think that you ought to realise that your friends and allies abroad, and others who are not your friends or allies, will conclude that the British Government are only bluffing."

I believe that there is grave reason to fear that the Government are bluffing over our defences. After all, why should the leopard change his spots, the leopard in this case being the Prime Minister? When I came here in 1950 the present Prime Minister was busily engaged with Mr. Aneurin Bevan and the so-called "Heinz Group"—because there were 57 of them—sabotaging the then Labour Government's defence policy. When the Labour Defence Estimates for 1951 appeared, both right hon. Gentlemen resigned. It is an interesting coincidence that at the same time there was a proposal by the then Labour Government to put a charge on National Health teeth and spectacles. That provides a rather remarkable parallel, because the Prime Minister then said that social security must come before national security.

That is "where we came in" with a vengeance. The vengeance is the personal vengeance of the present Prime Minister. He is able to say, "Now I have the power to do what I wanted to do then." Many of us will remember his saying during the General Election, "We have to go back to 1951. We have been on the wrong road ever since and have to start again." Some people thought that he was talking about the time when the Conservative Government came in, but I suggest that he was talking of the time when he was turned out by his own party.

The right hon. Gentleman says, "Now I can do what I always wanted to do." Fortunately, the present Prime Minister, Mr. Aneurin Bevan and their friends failed to destroy our defences as they intended to do at that time. They wanted the defences scrapped for all practical purposes. Thanks to the courage—let us face it and acknowledge it—and patriotism of Mr. Attlee, Mr. Morrison and Mr. Gaitskell, they were prevented from doing this. If they had not been, the whole of the American alliance, S.E.A.T.O. and all these things, the whole atmosphere, would have been altered.

As it was, the Labour Government maintained the same line and there was a very common view on policy—

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

I am sorry but, as there are so many hon. Members who want to speak in this debate, I cannot give way.

There was continuity and, in 1952, when the Conservative Party's Defence Estimates were produced both the present Prime Minister and Mr. Aneurin Bevan voted against them. They thereby opposed the relatively agreed foreign policy—at any rate in relation to the broad principles of defence.

So why should we expect the present Prime Minister to be a champion of our defences? Surely he is much more interested in saying, "I told you so and I am now in a position to tell you so." That, of course, is the reason why the decision announced a week ago was greeted with howls of joy from below the Gangway. My constituents have told me that they read in the newspapers and heard on the radio about that disgraceful episode. It was a horrible thing, which is rather well described in a phrase coined a month or two ago by one of the political commentators, as "Feeding time at the Labour zoo." Here were the hungry animals who were able to take in—not digest, but chew—a decision that they really thought was a good one, irrespective of its human consequences.

The other day I heard a description of the TSR2 cancellation in racing parlance. I am sorry that the Paymaster-General is not here, because I know that he thoroughly appreciates this sort of thing. It was said that there was a problem of naming a horse. The House will know that this is always an interesting and difficult problem. The parents proposed had rather unusual names: it was by a well-known stallion, "Periwig" out of "Spite". I think that the name given was rather a good one—"Uncle Sam's Joy". That is what is the result of this operation.

With regard to the question of cost, one fact should be mentioned, because there was a mis-statement of a serious character. It was suggested that we had lost the Australian order for the TSR2 because of the cost. The fact of the matter is—I have this on good authority—that the cost was not the decisive element. The decisive element was the view in Australia that the Labour Government would cancel the TSR2. This is another example proving that the country has not been done very much good by the Labour Government.

Finally, I come to the method adopted of announcing this decision. This is the responsibility of the Leader of the House. I am sure that the Leader of the House knows only too well what his duty to the House is, but I believe that during the last few weeks he has not been allowed to perform it. I am sure that everyone in the House knows that the Leader of the House is not a paid Minister as such. His duty, first and foremost, is to the House. This matter is well described in "Todd's Parliamentary Government", a well-known book. One of the most important duties of the Leader of the House is that he should direct the Government Chief Whip in facilitating by mutual understanding the conduct of public business. The Leader of the House appears to have taken no part whatever in this announcement the other day, and I hope that he did not, because I believe that he is above that kind of thing. But he should be allowed to take part in these matters and advise upon them. Mr. Gladstone said of the Leader of the House, "He is the man who is there to help the House of Commons through all its difficulty". The Leader of the House was apparently not allowed to take part in this matter. The same thing happened with regard to the terrible episode which occurred when my hon. Friend the Member for Abingdon (Mr. Neave) had a Private Member's Bill for Second Reading on a recent Friday. I believe that the Leader of the House was short-circuited then. The matter was dealt with in such a way that he had no opportunity of exercising his elementary duty of protecting the rights of private Members.

I believe that there may be people who do not appreciate that that is his duty. It is necessary to remind the House of the statement which was made—[HON. MEMBERS: "Oh."] Hon. Members who do not like this have probably never heard the statement. I have heard it referred to by two former Leaders of the House—Lord Butler and Lord Chuter-Ede. This is what was said by Mr. Disraeli to Lord Palmerston in regard to the Leader of the House: It is not merely as the Chief Minister of the Crown that he sits on that bench—it is not merely to pass measures which he deems necessary for the welfare of the country—not merely to attend to the interests of his party that he sits there. He occupies a post second only in dignity and honour to that of Chief Minister of the Crown. I acknowledge that the Leader of the House performed his duties today in arranging that we had an opportunity to deal with this debate properly and were not delayed by other matters. I believe that the Leader of the House has been prevented from performing his duties in other cases, and I am sure that the House would wish to express its opinion with regard to that.

6.46 p.m.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

The right hon. and learned Member for Chertsey (Sir L. Heald) does not often take part in defence debates. I think that that may be as well. His observations about the resignations of Aneurin Bevan and my right hon. Friend the Prime Minister, many years ago, were interesting. I disagreed with Aneurin Bevan and my right hon. Friend at the time, although events proved them to have been overwhelmingly right. They said that our then defence programme was far beyond our capacity. Within a year the Tory Government of which the right hon. and learned Gentleman was a member cut that defence programme by more than twice the amount that Aneurin Bevan had asked for.

The right hon. and learned Gentleman also dealt with the tragedy of redundancy. We have seen the Tory Party cut the dockyards by very nearly one-half. There was no moan then. We have seen what happened with the closing of the Royal Ordnance Factory, Woolwich. There was no moan then. We had the announcement of what the National Coal Board was doing to protect redundancies. There was then a scream of indignation from hon. Members opposite. Now, the party which had 13 years to bring in a Bill to provide compensation for redundancy, but did not do so, is awash with crocodile tears.

I turn to the subject of the debate. I want at once to say how much I enjoyed the speech of my right hon. Friend the Minister of Defence. I enjoyed it very nearly as much as I disliked the last one that he made on the subject of defence. It must be realised that what we are concerned with is a matter of defence. Defence is the question. Defence is the purpose of weapons. We do not and should not, although we very often run the risk of doing so, provide ourselves with weapons to support our armaments industry. The lobby which has been put up here provides a very good case for nationalising this industry. This is an industry which serves the Armed Forces as to 75 per cent. of its capacity, leaving 25 per cent.—a mere by-product—for civil aviation

I am not at all happy at a state of affairs such as this, in which the nation owns no segment of that industry. When it comes to the Army we have the Royal Ordnance factories. This enables us to test the tender figures which we receive. We have the Royal dockyards for the Navy and, again, this enables us to test the prices put to us, but with the Royal Air Force we have nothing and we are Ferrantified.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

The hon. and learned Gentleman forgets that the Government own 75 per cent. of Short Bros. and Harland, at Belfast.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

It is true that the Government are the major shareholders there, but they are not using that firm as my right hon. Friend and his predecessors have used the Royal Ordnance factories and the naval dockyards. We certainly ought to do so. It is highly important that there should be at least a section of an industry serving the Government to this degree which the Government can use, as a yard stick to test tenders and proposals coming from private firms.

I do not believe that there is a rôle for a British aircraft industry to produce major aircraft developments. There is a large rôle for production on licence and we can develop and produce smaller planes, helicopters, hovercraft and things of that sort, but I believe that our experience here shows that we cannot compete with the Americans in the really major developments when development costs run into hundreds of millions of pounds. Here, with the TSR2, over five years we have been spending £125 million on development and we have been behind schedule all the time. The Americans can spend £350 million on development in 17 months. This simply means that the Americans can start three years behind us and end up two years in front of us. It is simply a question of capacity. I do not believe that we shall cure that absence of capacity for this type of major development by aligning ourselves with the French.

I believe that the Concord is a damnosa hereditas from which we cannot escape. It is one of the follies of the right hon. Member for Preston, North (Mr. Amery). We have to go ahead with it and we shall do our best, but my own view is that we shall have just the same experience and find the Americans, starting later, coming in with newer developments. In the case of the TSR2, they have come in with the folding wing. In the case of the Concord, other things will happen and we shall find that they have developed a newer plane in a shorter time.

I now turn to the defence rôle which seems to me to be the essence of this quarrel. The TSR2 was designed as the successor to the Canberra, which, in its turn, was the successor to the Mosquito. Its design cost is ten times as much as that of the Canberra and a hundred times that of the Mosquito. The original conception was that the replacement for the Mosquito should cost a hundred times as much as the Mosquito, but it has turned out to cost as much as 200 Mosquitoes. This gives a conception of what is happening here. And the plane was required for a rôle within a tactical doctrine which has now been abandoned.

The tactical doctrine was the defence of Europe by the use of tactical atomic weapons. The conception back in 1959, when this replacement was required, was a defence held right back almost to the Rhine, the enemy being allowed to advance to a point where the axis of his thrust became identifiable and then he was struck with nuclear weapons which would destroy his advance. It was for that rôle that the TSR2 was primarily required.

I say this in some slight disagreement with my right hon. Friend the Canberras were there to play a part in that rôle. They were bombed-up with their nuclear bombs, ready to take that rôle. The TSR2 was to take over this all-vital rôle within that doctrine of defence, and an aeroplane two hundred times the cost of a Mosquito was justified only by a power two hundred times as great; in other words, by a nuclear strike plane and nothing but a nuclear strike plane. Other rôles—reconnaissance and rocket strikes—can be done with very much cheaper and simpler planes than that. It was only the nuclear rôle within this doctrine of defence which justified the TSR2.

Now that doctrine is gone. It went as soon as advance defence was adopted about 1961. As soon as one's idea became to meet one's enemy and become involved with him right at the frontier one was bound to make one's concentrations far too vulnerable to use the tactical nuclear weapon. At that point of the conception of the battlefield, use of the tactical nuclear weapon, the defence of Germany by nuclears, to be used in Germany, was abandoned largely for the political reason that the Germans did not fancy a defence to be fought by nuclear means on German territory. I said at the time that justification for this aeroplane went and that we ought to have cancelled it. We should have cancelled it at least three years ago.

For what other rôles do we require this sort of plane east of Suez? Again, reverting a little to what I said in the defence debate, I believe that we have no British interest there.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Hendon North

Does not the hon. and learned Gentleman agree that half our oil supplies come from the Persian Gulf, and that this is of some interest to Britain?

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

I do not accept that for one moment. It is a complete delusion that it is worth while trying to defend by arms one's sources of materials. Whoever got the oil of the Middle East would be only too anxious to sell it. If the Communists got the oil in the Middle East, they would sell it a great deal more cheaply than it is now sold because the oil would not be maintained at Mexican Gulf prices, where production costs are about twice as great as they are in Arabia and Persia.

I have for years tried to elicit an answer as to whether or not the additional price which we pay for our oil is more or less than the profits which we draw from the oilfields. I strongly suspect that the additonal price is greater, because otherwise I should, I think, have got the figures from the oil companies which I have so far not succeeded in getting.

The same applies to tin and rubber in Malaya. The idea that one can seriously defend one's sources of raw materials throughout the world by one's military capacity is a total delusion. Our concern there is as a member of the Western Alliance. We are not concerned with saving oil, with deciding who supplies us with oil, with who sells rubber to us or who does not. We are there trying to keep the peace of the world. That is our only excuse and justification for being there. We are in Malaysia to meet flagrant aggression. In Kuwait, we moved in very effectively to prevent an instance of unjustified aggression. Our purpose in these places is as peacekeeper. But this is something which we should not do alone.

At one point my right hon. Friend said something—this was really the only line in his speech to which I took slight exception—about not being able to take military action on our own without certain weapons. I very much hope that we are not in a position to take military action on our own in these distant fields. This is exactly a line of thinking which we ought not to have. These are alliance matters.

We are told that we require a particular type of highly-sophisticated aircraft because the Russians may supply the Indonesians or the Middle Eastern nations with highly-sophisticated weapons. Quite frankly, I do not take this very seriously. I believe that the best way to disarm a relatively uneducated and not technologically developed country is to supply it with highly-sophisticated weapons. That is what disarms people. One need only think of the successes of the Chinese against the Americans and Chiang kai-Shek, the Chinese in Korea, and the Russians themselves against the Germans. Each time a relatively primitive nation succeeds, it does so using very simple weapons. Give such a nation a sophisticated weapon and its whole balance goes wrong.

How many trained technical men does our own Air Force require to put an aircraft into the air?—about 600 or 700. Our own Air Force requires that number of trained men to put each aircraft, excluding trainers, into the air. That is the kind of support required just to fly the planes. None of these other air forces has 600 or 700 men of that quality all told, let alone that number per aircraft. To use highly-sophisticated weapons requires a technological background of which nations of this kind are quite in- capable. They just could not use them. We have seen what happened to the Egyptians, in their campaigns against Israel, and the disasters suffered by the Arab nations in trying to use sophisticated weapons. They were successful as Bedouins led by Lawrence of Arabia, but they run into disaster with modern weapons.

If we require this kind of support, let the Americans provide it. This is not a British interest. It is not an interest in which we are acting independently. We are acting for a common cause within our great alliance, and, if the most unlikely requirement for this kind of aircraft arises, there is an ally with a surplusage of such things. Therefore, from our independent point of view, either east of Suez or in the Mediterranean, I can see no justification for either of these aircraft. They are not something which we require.

Today, we are a European Power. That is all we are. We were a great sea Power because we are an island nation, but even back in 1940 the air battle settled the control of the Channel. We are no longer an imperial Power. We are just part of Europe, a contributor to the defence of Europe. This is a matter for the Western Alliance, a matter for N.A.T.O. We shall have to revive and strengthen the N.A.T.O. concept.

I have not the slightest objection to the main military aircraft for the alliance being provided by the Americans. After all, they are giving us the prodigious service of their nuclear shield, and they are the only people who can do it credibly. Geography and our vulnerability make it impossible for us to be credible in a nuclear sense. Only the Americans can do it. They are giving us this great service, and they have the right to lead the alliance. If supplying these military aircraft, with their great defence costs, eases, that is not something which I should wish to deny them.

Our rôle is to support the N.A.T.O. Alliance and to fulfil our rôle in it, to be a European Power, and to realise that the other far-flung commitments are something to which we contribute only as part of an alliance, something in which we desire no independent rôle and for which we ought not to have an independent capacity.

7.9 p.m.

Photo of Mr Claude Lancaster Mr Claude Lancaster , South Fylde

In the ordinary course of events, I should hesitate to take part in a discussion on a matter so technical and complex as the one under review this afternoon, and I do so only for the reason that I have a very real constituency interest in it. If I do not follow the hon. and learned Member for Northampton (Mr. Paget) in his wide-ranging speech, that is the reason. Why the hon. and learned Gentleman should have stepped below the Gangway to make that speech I am a little uncertain, but I think that we all enjoyed listening to him.

I cannot claim to know very much about aviation although I have taken part in two long inquiries into civil aviation. And I have little or no claim to any great knowledge of military aviation. In my constituency, however, the English Electric Company operates at Warton; I have an assembly factory at Salmesbury and between 4,000 and 5,000 men are employed in my constituency and at the English Electric works in Preston. Moreover, the design and research effort of the company is centred at Warton.

During the war, Warton was an American bomber station. After the war, English Electric set up its research and design department there and for 20 years that team of experts has been working together. I have watched their growth and their development as a team with great interest and admiration. Their first great success was the Canberra bomber which is now being made under lience in the United States and is taking part in activities in Vietnam. They went on to the Lightning, which, I believe, has given great satisfaction in operation with the R.A.F.

The team then moved on from the sub sonic to the supersonic in the creation of the TSR2. I believe that they are the most experienced team in the world in supersonic work. They changed from subsonic to supersonic without a hitch and up to date have had no failures. It is a very remarkable record.

In saying all this I do not want to ignore the interests of the 4,000 or 5,000 men on the shop floors who are also facing redundancy. No doubt a great many of these men will find other employment without much difficulty, although one cannot ignore the dislocation of their lives, of their families and their homes, which is a very severe thing.

Nevertheless, the situation of the design team is much more serious. If these men are dispersed they will never come together again. We shall lose something which the country can ill afford to lose. It is all very well hon. Members saying that we cannot afford this, that or the other. Can we afford to have the sort of men who do the work in this design team scattered to the four winds? They will not find jobs in the aviation industry other than by going to the Commonwealth or the United States. They will be dispersed and, having been dispersed, will not come together again. Therein lies the tragedy.

The most unsatisfactory aspect of last Tuesday was the relish with which so many hon. Members opposite cheered the announcement of the cancellation of the TSR2. Little can they have realised what lay behind that decision. These men in the design team are dedicated. They have put their hearts and souls and lives into something and they will not recover from this. If nothing is found meanwhile for their services, they cannot be held together.

I say the head of the concern on Saturday morning, when we had a long talk. He said that discipline in the team was first class, but that unless something came along within a short while he could not hold the men together; they would disperse and once that happened they would be lost forever.

I do not want to make a long speech. I want just to devote myself to this one aspect. I hope that, even at this last moment, the Government have plans whereby we can hold together the design team and all its ability and experience—a team consisting of about 1,200 men, each one a great expert but no greater that the team of which he is part. I hope that something will be done either in collaboration with Western European airlines or in some other direction. To see them disperse at this moment would be a loss that it would be difficult for us to recover from.

That is not the only aspect. The same concern, B.A.C., which has been engaged in making the TSR2 is at this moment trying to sell the BAC111 in America. That firm asks, "Can you imagine the situation of our salesmen over there at the moment?" "The Americans, who are very tough negotiators, are saying to their airlines, "What is the use of buying from Britain when her aviation industry is being sold down the river? What is the situation of our salesmen trying to sell the BAC111 under these circumstances? It is utterly frustrating."

This is the eleventh hour and I do not imagine that there is a great deal that can be done now. But I hope that, even at this late moment, the Government will recognise that in dispersing this team of research experts they are striking a blow at this country from which it will take many years to recover and that time is running out fast.

7.16 p.m.

Photo of Mr Peter Mahon Mr Peter Mahon , Preston South

Ingrained deeply in the recent debates has been the inevitability of far-reaching changes in the aircraft industry. It is a sad reflection that were not the economic plight of the country so apparent the industry would not have commanded the soul-searching attention rendered to it in recent months. In the cut and thrust of an industrial crisis, circumvention must not be allowed for too long. It is at best a dishonourable display and for far too long circumvention has been the sop thrown to the industry.

A bold decision has been made. The die is cast and it is now the responsibility of the Government to unfold, on behalf of the industry, new and braver concepts, aware of the needs of the industry and mindful also of the urgent stimulants our economy requires. To achieve a happier landing means that it is incumbent upon us to reflect deeply on the life blood of industry—men—for here is the crux of the point of differentiation.

No one has forfeited the right, particularly when employment is at stake, to an honest exposition of hard facts. If fundamental changes are indeed necessary, I regard it as a fundamental need to impart some knowledge to the Member of Parliament for the constituency which is vitally affected rather than abandon him to "The slings and arrows of outrageous fortune". This the Prime Minister properly did—but only after I had sent him a telegram. I was sent for, and I did not appear before the Prime Minister in sackcloth and ashes. As I informed him at the time, I put my best suit on. He imparted his opinions sincerely and realistically. He said that it was an agonising decision to have to take and that he had lost sleep over it—and that this was an unusual happening for him.

I suggested that we could perhaps give ourselves extra breathing space by deciding to produce fewer planes—say 75 or even 50. Here again he patiently explained to me that if the number were reduced the cost would escalate from £6 million per plane for 140 to £6 million per plane for 75 and to an even higher cost per plane for 50 planes. I believed him then and I believe him now. In fact, the authenticity of his submission has been vouched for by the manufacturers. If they could have maintained production by reducing costs they would have been very happy to do so. The plain truth is that costs have militated against the TSR2 and if persisted in it would have seriously retarded the economic recovery of the country.

With all the sincerity of which I am capable, I believe that the test of statesmanship has not been in cancelling the TSR2. The test is to come, and it is embodied in the challenge of the future—how best can we maintain our resources of manpower and technological "know-how" in order to keep the British aircraft industry in being on a basis not-too-financially crippling to the nation?

The eventuality which will strike fear in the mind and heart of any worker from Preston, Weybridge or anywhere else, be he skilled, unskilled or semiskilled, is unemployment. Heaven knows that it can be devastating enough to lose a job. If a man has not got a job, he has nothing else, and dignity is gone. With the loss of a job a man can lose what to him is the priceless utility of skill. He cannot be compensated for this by severance pay, mobility schemes or even retraining. Even worse, he can lose the wherewithal to enable him to discharge his obligations to his family. In addition, the upheaval and dislocation of family life will reap embitterment. Anyone with the slightest conception of the lives of ordinary people knows this to be true.

This dire change in the lives of workers, consistent as it is with retrenchment or recession in a particular industry, must never be secondary to any economic machinations. Nor is it true to say, unless we intend to live in cloud-cuckoo-land, that we have not been troubled when miners, railwaymen and cotton operatives have been rendered unemployed. To say it represents a travesty of the truth. Redundancy, whenever and wherever and however it rears its ugly head, has been the bane of people's lives.

When, in the manner in which this crisis was approached, it seemed that the interest of the workers engaged in the industry was not number one priority, then Preston, where there are 12,500 aircraft workers, became a seething cauldron of rumour and discontent. I will not suppose for one moment that I am more concerned about the consequences of redundancy than are other hon. and right hon. Gentlemen. Suffice it to say that in my industrial baptism on the Liverpool docks I have known unemployment, and I know that it is a cutting experience for any man to undergo.

Being a new Member of Parliament in the pot-boiling environment which has surrounded us during the past four months is not all beer and skittles, but Members of Parliament are not chosen for their beer and their skittles ability. The vast throngs of aircraft workers which flowed into London were not here for beer and skittles. Feeling ran high. I was proud to lead the deputation to the Minister of Aviation. They presented their case with tremendous impact and honest argument. They moved the heart of London and impressed the Minister of Aviation with their lucid presentation of their case. No deputation could have achieved more. [HON. MEMBERS: "They achieved nothing."] I was proud at that time to be standing shoulder to shoulder with my constituents and not to be in Saudi Arabia.

I have represented the feelings of workers, and their feelings only. This is the only way I know, and this, indeed, is what comes naturally to me. If some people think that there is in me a want of statesmanship, I trust and pray that in this Administration, with whom so many momentous decisions rest, there is no want of statesmanship. In Preston we have awaited with bated breath a prudent adjudication.

The decision has been made with the interests of the whole nation in mind. Let it not be forgotten that the people of Preston are a loyal and industrious section of Britain, too. Many hon. Members have received the stunning lists of highly qualified engineers and technicians expressing their mortification at the possible loss to the country of a large part of the aircraft industry and the sacrifice of so much scientific and technological "know-how" and ability. To me industry means the people who are in it. I will make one promise, and I know that I am not alone in this. I will contend, and contend fiercely, against unemployment and the loss of technological skill. Coming out of any fracas the worse for wear will not deter me providing that I can still live with my conscience.

I know that Ministers are ever willing to receive advice, and if we are willing to be fair we will recognise that they have had a harrowing time in reaching a decision. A popular decision is very easy to make, but an unpalatable decision needs courage. I trust that I shall be believed when I say that I have a respect for the American nation, many of whose people are my friends, many of them my own kith and kin.

Having said that, may I advise my right hon. Friends to take the sting out of the TSR2 decision by stating categorically that it will not be replaced by American planes? To the British aircraft worker this is the unkindest cut of all, and we will not be forgiven for it. To take an option on an American plane which does not exist is unthinkable. To be brutally frank—and I take it that that is why we are in Parliament—this is a momentous problem which it was not possible to swamp by thoughts of coppers on smokes and beer. Associating it with the Budget was, in my humble opinion, a tactical error and I sincerely trust that Liverpool does not make a tactical error of this proportion when it is at Wembley in a few weeks' time.

I should like to refer to a proverbial event in my constituency, the time-honoured ceremony of the Preston Guild which, over 800 years, has portrayed the crafts, skills and industry of the people of this fine old Lancashire town. For dignified people to be thrown repeatedly into the maelstrom of industrial change is one thing, but to make them the victims of redundancy is another. This is not a new phenomenon. The names Skybolt, Blue Streak and Blue Water come to mind.

My constituents have by no means outlived the dislocation in their lives endured largely as a result of the recession in the cotton industry. For them dignity was lost as their industrial endeavours were discontinued. Bitterness still exists, as the right hon. Member for Preston, North (Mr. J. Amery) will agree. Incidentally, I hope that after this afternoon he will be distinguished as the right hon. Member for Preston, North and not the right hon. Member for Preston. I think that I ought to feel adamant about that. Bitterness still exists as men and women, many of them reaching the end of their working lives, recognise that the possibility of rehabilitation is remote.

The cancellation of the TSR2 will not be a nine-day wonder. Only indefatigable efforts will revive the aircraft industry. It must not be forgotten that the succession of still-born projects has bred an intense frustration. Thousands of men's lives and future prospects are deeply involved in these large projects. When cancellation comes, there is often personal loss and the frustration which comes from the feeling that the hard work of years and of inborn skills has been wasted. Too often the lessons of the Light Brigade have been forgotten and again someone has blundered.

Why in heaven's name do we continue to go wrong? It is the task of the Government—and I am sure that, given time, we will aspire to it—to define our rôles in such a way that they enlist the heart and will of the people. The cost to the nation of ill-conceived plans and ineptitude in the aircraft industry, with at least a dozen Ministers of Aviation in almost as many years, has been astronomical. A new approach is long overdue. The economic inheritance bequeathed to the Government has dictated the need for a re-appraisal.

Because of this issue and only because of this issue and despite the fact that there are 1001 soul-searing issues in my constituency, I have been challenged to give up my seat by a gentleman with a majority of 14 votes, one of the greatest cliff hangers in the country. One must be ever ready to give an account of one's stewardship and I am quite reconciled to the fact that when the time comes—

Photo of Sir Rolf Williams Sir Rolf Williams , Exeter

You will be out on your ear.

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

—the right hon. Member for Preston, North will have to talk about other things besides the TSR2. It would perhaps allay the sadness of workers if they could be told how much work will come to Preston following on the Anglo-French liaison. Perhaps my right hon. Friend the Minister of Aviation can enlighten us about that aspect of the matter.

If it is within the province of a back bench Member to offer a word of advice, I would say, "Maintain the British aircraft industry". Let us not burn our boats or our planes. If we foresake the skills and endeavours of our own people in this sphere, the day will undoubtedly come when we will regret it.

The right hon. Member for Preston, North said that the Prime Minister had performed a trick and that the trick had worked. He really is harking back to the days of the inarticulate masses if he is naïve enough to believe that this is so. It is some trick which reduced a 4,500 majority to 14. He was almost beaten on his merits and it was not to his taste. It is about time that he got it out of his system and settled down to hard work within the constituency. There was no trick in Preston, North. There was certainly no trick in Preston, South, where the election was fought on domestic issues and on the promises of the respective parties—or at least on the policy of the Labour Party. The policy of the Conservative Party, as always, was non-existent. It is significant that the former Member for Preston, South has issued no challenge. It was in Preston, North that the issue of the TSR2 was debated, and it was in Preston, North that the right hon. Gentleman almost lost his seat.

I was informed today that I was responsible for the issue of a leaflet, and because I objected to being told that this was so I was accused of being politically naïve. I accept the soft impeachment, despite the fact that I had a lot of political experience before coming here, but I am not politically dishonest. I would ask the right hon. Gentleman, who has had time to reflect, to accept that his statement contains a glaring inaccuracy. I did not issue this leaflet.

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

I am not accountable for the leaflet. I am not even expected to say who did issue the leaflet. It is not my responsibility. I did not issue the leaflet. I did not cause it to be issued. [Interruption.] Listen carefully, because I am trying to let hon. Members opposite down gently. I say in all honesty that I fervently believe that in the next few days some people will be eating humble pie about this, and it is as well, in view of what has been said today, to set the record right.

I did not issue the leaflet. I did not cause the leaflet to be issued. The person who issued it was not my agent. A lot of misrepresentation on this score was directed against me personally by the right hon. Gentleman this afternoon. He based a large part of his case on the issue of the leaflet. The fact is that an injustice has been done, and I must receive advice.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

Perhaps the hon. Gentleman would clear up this point. I accept what he says to the effect that neither he nor his agent issued the leaflet. But would he say whether the cost of distributing it in his constituency was charged against his election expenses?

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

I was brought up by an old-fashioned Irish mother who always told me that if I told a lie I would go in the big burning fire. I must in answer to the hon. Gentleman say that I cannot tell at this point—I will find this out for him; I will let him know the answer—whether the expense was shared or borne by one constituency.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

I accept the hon. Gentleman's statement that it was not he who issued the leaflet. I can only tell him that naturally I believed that it was him at the time that I spoke. I understand that it was issued by the Labour Party in his constituency and therefore, not unnaturally, I thought that he was responsible for it.

Photo of Mr Simon Mahon Mr Simon Mahon , Bootle

I accept the right hon. Gentleman's statement.

7.44 p.m.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I do not wish to take up all the points which the hon. Member for Preston, South (Mr. Peter Mahon) raised, but I should like to refer to the question of the timing of the announcement of the cancellation of the TSR2.

I do not agree with all the criticisms which have been made about this matter. I believe that the explanation given by the Secretary of State for Defence this afternoon was entirely satisfactory and that probably most of the indignation expressed at the time by the Tory Party on this score was wholly synthetic, bearing in mind the figures which were quoted in the opening speech this afternoon.

I think that it was said that out of 30 important cancellations which took place in the lifetime of the last Government only six were announced in the first place to the House and that the rest were dealt with by an announcement in the Recess, or through a statement to the Press, or in some other way. A particular example which comes to mind is Blue Water. I can remember distinctly that the announcement about that was made just after we rose for the Recess.

We should like to be quite certain about the position concerning the discussion between the Minister and the right hon. Member for Bedford (Mr. Soames), who is now leaving the Chamber. If he did put it to the right hon. Gentleman that this announcement would be made during the Budget debate and no objection was taken, I cannot see what the Tory Party is grumbling about.

Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South

Would not the hon. Gentleman agree that this cancellation, being the culmination of three successive cancellations, which has dealt almost a death blow to the aircraft industry, is in a different category from the other matters to which he has referred?

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

This cancellation is more important in financial terms than many of the others, but I dare say that if we were to add up the 24 cancellations which were made by the Tory Government without an announcement being made to the House they would come to a lot more than the £125 million which has been spent on the TSR2. [An HON. MEMBER: "The hon. Gentleman does not know that."]

The hon. Gentleman says that I do not know that. He is the one who is complaining about the decision to announce this cancellation in the Budget debate. Therefore, I should have thought that he would come to the House primed with the relevant figures.

The timing of the announcement is the most trivial part of the debate, and I want to deal with it as quickly as possible. It was suggested by the Minister that my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) would make a speech in the Budget debate and that that was how he calculated that his announcement would begin at seven o'clock. I have checked on this with my right hon. Friend. He had no intention of speaking on the first day of the Budget debate. He has never spoken on Budget day—at least going back as far as 1956—and the Minister had no reason for assuming that he would make a speech in this year's Budget debate. He did not consult my right hon. Friend, and I do not see why my right hon. Friend should have made a speech just to facilitate the timing of a Government announcement.

On the last occasion that we debated the affairs of the aircraft industry we were concerned with the cancellation of the P1154 and the HS681 and their replacement by two American aircraft—the Phantom and the Lockheed Hercules. In the case of the Lockheed Hercules we considered that the new and much less sophisticated military requirement could very easily have been met by the British aircraft industry, for example, by developing a more powerful version of the Rolls-Royce Tyne engine and thereby improving the performance of the Short Belfast.

Secondly, at that time my hon. Friends and I were concerned about the announcement made by the Minister of co-operation with the United States in the field of advanced lightweight V.T.O.L. engines. We felt that there was a danger that this arrangement would be of very much greater benefit to the United States than to the British aircraft industry since Rolls-Royce has for some time led the world by a wide margin in this branch of aero-engine technology. We should be giving something to the Americans and there was no indication that we would get corresponding advantages in return.

Thirdly, we felt that insufficient attention was being given to the possibility of co-operating on new aircraft projects with our friends in Europe, and particularly with the French. I quite agree with what the Secretary of State for Defence said, namely, that the day of national self-sufficiency in aviation is past. Since that debate we have had the visit of M. Jacquet. We have had the announcement that five different fields of co-operation are under examination by the British and French Governments—the strike-trainer, the variable geometry project, airborne early warning radar, military helicopters and the subsonic air bus. I was delighted to hear the Minister say that the first two of these were likely to result in a firm arrangement within a few weeks. I look forward very much to hearing the announcement about that. These projects are in addition to those on which we are already co-operating with the French and with our other partners in N.A.T.O.

We still feel, however, that Government thinking has not gone far enough on this matter and that if we are really serious about long-term collaboration with the Europeans, not only will we need more permanent machinery for arriving at common operational requirements, but, as the experience of N.A.T.O. shows, there has to be an irrevocable commitment to whatever designs are arrived at jointly. In the past, it has happened in N.A.T.O. that a certain country has won a design competition and then the separate countries have gone their own way and patronised their own national aircraft industries. That is why we have not been able to secure much more extensive co-operation within Europe.

Finally, in the earlier debate it seemed to us that there had been totally inadequate discussion of the changes in the rôles which our forces would be expected to undertake in the immediate future when the aircraft then being cancelled might have come into service. In the defence debate of 4th March, my hon. and learned Friend the Member for Montgomery (Mr. Hooson) exposed the folly of trying to maintain some kind of nuclear umbrella single-handed over all our allies east of Suez. He pointed out that our economic position would be seriously undermined if we insisted upon maintaining these large military commitments over one-quarter of the globe when our principal competitors on the Continent of Europe had no such obligations. It seems to me that this wide rôle east of Suez to some extent determined the requirement for an aircraft of the TSR2 type.

Both the right hon. Member for Bedford and the Secretary of State for Defence referred to this matter in their speeches. The right hon. Member for Bedford postulated a situation in which we might be involved in a localised war in the Far East in the 1970s. He illustrated the various operational requirements that would arise and which, he said, would need aircraft of the P1154, HS681 and TSR2 type. Referring to our rôle outside Europe, the Minister said today that if hon. Members think of our problems outside Europe at the present time, they will realise that it is the knowledge that we could, if necessary, strike successfully at the enemy's main bases which is the best guarantee against the dangerous escalation of a local conflict into major war". I agree very much with what was said by the hon. and learned Member for Northampton (Mr. Paget) on this subject, that the sooner we get away from this idea of having a general military commitment over a vast section of the Middle and Far East, the better it will be for this country both economically and militarily. We must decide that we are members of an alliance and that we cannot maintain those commitments single-handed as we have tried to do in the past.

Similarly, and here again I agree with the hon. and learned Member for Northampton, we must give up pretending that we are in the same league as the United States and the Soviet Union when it comes to developing whole families of sophisticated new weapons. Nobody in this country seriously believes today that we should develop our own intercontinental ballistic missile, not even those members of the Tory Party who beat the nuclear drum hardest during the General Election campaign. The reason is simply that they know that such a policy would impose unacceptable burdens of taxation upon our people. These, therefore, are the reasons why we have no alternative but to cancel the TSR2 and, at the same time, take every possible step to mitigate the difficulties which this decision will create for the workers of the British Aircraft Corporation and of Bristol Siddeley engines.

It follows from what I have been saying about our military posture that there should be no question whatever of purchasing the F111A instead. If we did so, there would be no scaling down in our defence commitments and I doubt very much whether the saving would be of the order that the Minister of Defence has alleged.

We are very unlikely to get the Mark 2 aircraft at a lower price than the Australians paid for the Mark 1, even bearing in mind that the Secretary of State for Defence said that the airframe and engine would be the same, the only difference between the two marks being in the avionics package. The Mark 2 is not likely to be any cheaper. We know how much the Australians paid for the Mark 1. That figure has been quoted. In the last debate, I did some calculations in which I worked out that the saving was nearer £200 million than £300 million if we were to have the 150 aircraft that were originally contemplated. Certainly, we do not have enough figures. We have only the bare result of the calculations given to us at the end. The Minister should give us the details of the calculations from which this saving is arrived at.

When I asked the Minister, on 9th February, what the cancellation charges on TSR2 would be, he said: I should in any case not be willing to disclose figures from which cancellation charges might be deduced as they are a matter for negotiation with the contractors."—[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 64.] Ministers can always give excuses for refusing to divulge figures to the House, but when it suits them, as it does in this case, they have to tell us that the cost will not exceed, I think, £70 million. Therefore, why should we not have the whole calculation set out, preferably in the form of a White Paper, so that we can study it at leasure? This dribbling out of figures from which we all have to do our own calculation is not the most satsfactory way of getting the confidence of the House and of the country in a decision of this importance.

I am glad to note from the speech of the Secretary of State for Defence in the Budget debate that on certain hypotheses about long-term commitments it might even be possible to reshape our defences in such a way as to dispense altogether with this type of aircraft. When the Minister of Aviation appeared on "Gallery" the other day, in answer to a question whether the F111 would ever really be bought, he said: I think there is a very good chance that we may not need to do so. That was what we said in our Amendment: that the decision to cancel the TSR2 was acceptable only on the assumption that we would not replace it by an American aircraft. We shall certainly resist any proposal to do so. Many of the rôles which the TSR2 would have undertaken can be fulfilled in other ways.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

I agree largely with what the hon. Member has said, but I have this point in mind. We are committed to N.A.T.O. to the extent of an air group. It might be necessary, for standardisation and re-equipment of N.A.T.O., to include this aeroplane, and in those circumstances I think we would be justified in getting it, but not otherwise.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

I do not know whether there is any prospect of the French or the Germans agreeing to buy the F111. Certainly, there would be no point in our committing ourselves to the purchase of this aircraft for the N.A.T.O. rôle unless our partners in Europe were to do the same. As far as I know, there is no intention on their part of purchasing the F111.

I should like to ask the Minister of Aviation a question concerning the use of the Phantom and the Buccaneer in some of the rôles intended for the TSR2. The Secretary of State for Defence said that the Phantom would be very restricted in range and could not operate more than 900 miles from its home base. I want to know whether in giving that figure he had in mind the American plane or the Spey-engined version which we hope the Royal Air Force will get finally.

Also in this connection, I asked the Minister, again on 9th February, what discussions he had had with the British aircraft industry and with McDonnell Aircraft about building or assembling the Phantom aircraft under licence in the United Kingdom, and he said that they were examining the possibility of having British firms supply materials, components, sub-assemblies, and further items of equipment, together with the possibility of assembly in this country. I should like to know how far he has got with those discussions, because now is the time when we should seek to provide as much work as possible for the British aircraft industry to compensate for the loss of these TSR2 contracts. If we can do this in some way in connection with the purchase of Phantoms, I am sure that it will be helpful in mitigating the effects of the cancellation.

The B.A.C. and Bristol Siddeley will face serious difficulties as a result of losing their most important military orders and the Government must do everything possible to help the companies as well as the workers employed in them. For example, I think that the Minister should consider whether it is desirable to build the nine pre-production TSR2 aircraft to be used as flying test beds for the Olympus engine which is likely to be fitted in the Concord, and perhaps also for the inertial navigational system which will go into the Concord airliner. He should examine how far the design staff at present engaged on the TSR2, numbering about 2,000 people, can be redeployed on to this proposed strike-trainer and the development of variable geometry in co-operation with the French.

On the production side, as opposed to the design side, it may be that the build-up of orders for the BAC111 and the possibility, which seems brighter now than it did a few months ago, of further orders for the VC10 will enable serious dislocation to be avoided. Can the right hon. Gentleman tell us anything about further developments on the VC10, and indeed on the Trident, of which reports have been noticed in the Press in the last few weeks? It seems to me that in that way we can provide both the B.A.C. and Hawker Siddeley with continuing programmes which will keep their shop floor people occupied until the co-operation projects with our friends in Europe come on to the shop floor.

I do not believe that Bristol Siddeley will find itself in quite such a difficult position, because I am told that it will be receiving substantial orders for Spey engines, due to the production facilities at Rolls-Royce not being extensive enough for the numbers that will be required. I should like that to be confirmed.

It must be a terrible blow for the workers in the B.A.C. and Bristol Siddeley to find that these years of endeavour have been wasted. They are having to pay for the extravagant decisions taken by politicians a long time ago, and I can well understand the bitterness and frustration which they must be feeling. But every country has experienced the cancellation of important aircraft projects from time to time, even though, in proportion to the resources of Britain, the TSR2 was probably one of the most expensive of all time.

It would be only too easy to cast all the blame for what has happened on the previous Tory Administration, but I do not think that that will help us to avoid making the same mistakes in future. The lesson that we have to learn is that unless there is informed discussion of military policies and a realistic assessment of the cost of alternative weapon systems, we shall go on falling into this sort of trap again and again.

The Government must "come clean" with the House and with the country in future, and not continue to run up nine-figure bills for any project without the most stringent public examination and justification of need.

8.5 p.m.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

The hon. Member for Orpington (Mr. Lubbock) chided the Minister on not providing forward figures, but it was the experience of those of us who examined Sebastian de Ferranti last year in the Committee of Public Accounts that whatever else may have been learnt by subsequent experience on Bloodhound, it became clear to the Members of that Committee that until we were three-quarters of the way through the pro- duction line of a missile or any sophisticated equipment it was extremely hard to determine costs, and as an engineer I think that the hon. Member for Orpington does not do too well to chide the Minister on this particular score.

I represent a comparatively small number of highly skilled men who have been contributing to the electronics sector of the TSR2, working either in Edinburgh or in Dalkeith. Many of them know that I have been, and am, wholeheartedly behind the Government's decision to cancel the very project which has not only been the source of their bread and butter, but in which they have had—and I admit this freely—a legitimate professional pride, and when the hon. and gallant Member for South Fylde (Col. Lancaster) referred to them as dedicated men I echoed that feeling.

Although my views are well known, I have had no abuse, and there has been no great tizzy of recrimination. On the contrary, those to whom I have spoken have shown an impressive breadth of vision which does them credit, but those in Scotland who are working on the TSR2 are asking some pertinent questions. They want to know soon about the Buccaneer, because if we are to have what I think we must admit is a poor man's version of the TSR2, we must know before the design teams begin to disperse themselves. My right hon. Friend must realise that the time unit here is not months but weeks, and that if he wants to prevent the disintegration of design teams he must act soon.

Already Scotland-based skilled men are looking for jobs in the South where once they have been able to find a home they will have a great variety of jobs. I think we may take it that they will not trot back 400 miles to Scotland which does not offer the variety of jobs which the south of England does. A man moving from Scotland to this industry has a limited choice, and if for some reason his face does not fit in the first firm to which he goes he may not have the alternative employment which he may expect after he has gone to all the trouble of uprooting himself from his home.

Then there is the question of the Phantom. If Britain is to have Phantoms, is there any reason why we should not insist on having British fire-control equipment and British forward-looking radar equipment in the planes that we buy? In our capacity as purchasers, do not we hold the whip hand, and cannot we impose our will to have installed our fire-equipment and forward-looking radar? That is, of course, if we want the Phantom at all.

Suggestions have been made that by installing British equipment in the Phantoms there will be an unacceptable delay in the Phasing of R.A.F. equipment, but my information is that co-operation between Elliotts and G.E.C., Marconi and Ferranti would involve no delay, that British quality in the sophisticated equipment is at least as good as the American, and that the British price is substantially favourable in this kind of labour-intensive product.

Scotland's position is that the cancellation of the TSR2 is a serious blow to the growing electronics complex around Edinburgh. Some redundancy seems inevitable. It is nothing like what Scottish miners went through in the late 1950s. But should the Government make up their mind soon to go ahead either with the Buccaneer or the Phantom—containing British-made intestines—Scottish jobs would be safe, allowing that some who were declared redundant were absorbed elsewhere in Scotland.

If, however, the Government reject both the Buccaneer and the Phantom we must face the prospect in east Scotland of at least 1,000 unemployed—this in a part of the country where there are few of the 25,000 vacancies for engineers to which the Minister referred. Again, it is all very well to talk about there being five vacancies for every one draughtsman, but that is true only of certain parts of the country—the English Midlands and the South-East. Draughtsmen do not find it so simple to get jobs in the North and in Scotland.

So much for the Scottish position. From time to time a politician finds that he has things to say which may not be at all popular with a large number of his constituents. I am obliged to state bluntly that if the military need for the Buccaneer is in doubt and the need for Phantom is in doubt I shall not lift my little finger on behalf of those in central Scotland, even if it means much needed skilled work for my constituents and for those around me. The question whether we have the Buccaneer or the Phantom is in no way related to job-giving. This argument should take place on the military criterion, and on the military criterion alone.

The right hon. Member for Bedford (Mr. Soames) said, in effect, that it was necessary to have armaments to keep up with technical progress. That is a modern variation of the old argument that we need to build dreadnoughts to keep jobs. The right hon. Gentleman put forward the view that by cancelling military orders we were "pulling the carpet from under the feet of the aircraft industry." He spoke as if it were taken for granted that in order to have a modern aircraft industry we—like the United States—had to have up to 80 per cent. of military orders. This point of view was stated most succinctly by the right hon. Gentleman in his television interview with my right hon. Friend. He then said: Every aircraft industry must depend on its military orders. It is from there that come all the evolutions that go into civil aircraft. The cancellation of military orders takes away the life-blood of the industry. He went on to talk about the effect of the cancellation of military orders on the technological race.

It is a sombre fact that as the twentieth century rolls on more and more science-based developments have evolved from armaments. The right hon. Gentleman is, tragically, historically accurate when he says that armaments have been the life-blood of industry at the frontiers of knowledge, but the fact that he is historically right casts a pretty damning reflection on contemporary capitalism.

Is the Tory Motion really saying that an armaments drive is an essential condition for developing modern science-based industries? Is that really the argument? One of the reasons why I became a Socialist was my belief that in a Socialist set-up at least one had a chance of creating conditions in which technical progress could be freed from the armaments race. It should be one of the ambitions of this Administration in Britain to show the world that great industries can flourish at the frontiers of knowledge independent of massive military spending. In this spirit, and with due modesty, I offer my right hon. Friends a programme which I believe to be realistic.

In the first place, will they make an early and definite decision on the need for the Buccaneer or the Phantom in relation to our military commitments? I am not convinced that there is any such military necessity. Secondly, will they recognise that the F111 has no realistic operational use for the United Kingdom? Although the initial procurement will undoubtedly be subsidised, we shall be stung hard—and I am not anti-American—when it comes to spares and test gear. The sooner this option is clearly rejected the better.

Will my right hon. Friends also recognise that licensing agreements are at best a partial answer? The thinking here is done back in the United States. No lasting benefit accrues to British industry. It really is a case of their having the brains and our having the brawn. This does not get us very far.

I now come to my positive suggestions. Can we switch some of the expertise and enthusiasm which we are currently devoting to the TSR2 to other projects? Let me give two specific examples. Can we make a great effort in initial inertial navigation and micro-circuit digital computers, which tell us where we are in space without ground aids? These clearly become very important not only in the Phantom but in regard to supersonic airliners, such as the Concord. Inertial navigation will forecast with such accuracy that it will make it possible—if all aircraft are fitted with it—for separations on the North Atlantic route to be significantly cut down and can almost certainly make it possible for the crews of transoceanic airliners to be cut down in number from four to three, and this would be a great saving during the current acute shortage of pilots.

My second example concerns computeraided design. Here I must declare an interest in Midlothian and in thinking of the new Ferranti project at Dalkeith, where they will have no direct TSR2 redundancies but will certainly suffer from the machine tool cancellations due to aircraft redundancies. The computer-aided design, based on an investigation which is going on at the National Engineering Laboratory at East Kilbride, will make it possible for projects to go straight from the design drawing board to the actual machine tool. The significance of this is that it will speed up the whole process of modernisation to which we are committed.

In the 1970s we shall have to deal with speeds measured in nano-seconds. A nano-second is to a second as a second is to thirty years. It is a sliver of time so thin that it is too difficult for the human imagination to grasp. The computers of tomorrow will respond to handwriting, to images, and even to spoken comments. The computers of tomorrow will communicate tirelessly with each other over any distance. They will recognise a face, a voice or a symbol amongst tens of thousands. By processes very much like logic computers will have the power to learn from experience, which is more than some human beings and some nations can do. In the electronic future it will be possible, for example, to maintain a complete medical profile of any person from birth onwards. The record, begun at birth, will be constantly brought up to date in a central community or regional computer for instant access by a doctor or a hospital as required. Because so many factors will have been tabulated in advance examination and diagnosis will be easier, more comprehensive and revealing than by any of the traditional methods. This points in the direction of a science-based industry which in my view would be far more fruitful than spending expertise on the TSR2 programme.

To become a little more earthy for a moment, we might turn to my right hon. Friend the Minister of Labour to ask what he intends in the way of retraining and to ask particularly what he proposes to do to retrain highly skilled men to become computer programmers because the shortage of programmers is the limiting factor in the computer revolution. At the moment the situation is that whereas the United States has 120 computers per million of the working population and France has 56, we have only 28. When the right hon. Member for Bedford suggested to my right hon. Friend that perhaps some follow-up should be done for those declared redundant, I completely agreed and thought it a good suggestion from the Opposition Front Bench. We should like to hear from the Minister about what he proposes to do. If it could be shown that those declared redundant in relation to the TSR2 project go into worth-while occupations such as computer-aided design and inertia navigational diagnosis we shall have done something for the future.

This debate also concerns the Minister of Education, and I wish to ask what he proposes to do for the retraining of men declared redundant who could become teachers. This applies less in the schools than in the technical colleges. If we believe that the subjects of lasers and semi-conductors can be taught in technical colleges at a lower level than ever before, here is a golden opportunity to do something about it. I do not say that those working on the TSR2 are experts on lasers and semi-conductors, but they are the sort of people who could be retrained. This is where the future of British industry lies as much as in the making of airframes.

As was said by my right hon. Friend the Minister of Aviation, our future lies also in co-operating with other countries. We have the example of British-French co-operation over the Concord, and that has our wholehearted support. Perhaps we might hear a little about British-German co-operation. I should have thought that the best sphere of co-operation would be that of vertical take-off flight, and particularly—though this was not mentioned by the Minister—in E.L.D.O., where the Germans have great expertise and where co-operation would be helpful. Let us be enthusiastic about British-American co-operation. If anything in this debate surprised me it was some of the vitriolic remarks about the Americans from hon. Members opposite. Are the Americans our friends or not? On this side of the House they certainly are, but when I heard the remarks of the hon. Member for Macclesfield (Sir A. V. Harvey) in his intervention I wonder how anti-American one could get. As the Minister said, there is here a great opportunity for co-operation in relation to aircraft engines.

Nothing was said about a form of co-operation which might prove still more basically fruitful, and, quite unashamedly, I wish to say something about British-Russian co-operation. If we are to achieve a lasting peace, one way to do it is to initiate positive co-operation when we have not a crisis on our hands. It should be done in a time of comparative quiet. It is then that the initiative should be taken. It is difficult to solve problems in the middle of a crisis. The time to do so is either before or after the crisis.

I have had the good fortune to go to both the European High-Energy Nuclear Physics Centre at Geneva and the Russian equivalent at Dubna. Here is a specific example of the way in which co-operation on a great scale would be welcomed in relation to high energy physics. I respectfully suggest that particle physics is just as fruitful a source of knowledge as anything to do with the aircraft industry. When there is talk about the development of science-based industries, it is in this field as much as in the aircraft field that we should direct our enthusiasm.

Another example of potential British-Russian co-operation would be joint projects, using our knowledge in microcircuit electronic devices, and Russian expertise in semi-conductors. When I had the good fortune to be a member of a science delegation to the Soviet Union last March, Peter Kapitza who spent many of his best years in Cambridge thought that after 50 years of knowledge of both the Soviet Union and our own country positive co-operation in respect of computers and semi-conductors was one of the best avenues to a firm peace. Those of us who were guests of the Royal Society when the Soviet academicians came to this country as guests of the Royal Society felt that they were sincere in wanting far more co-operation in their sphere than we had had before, after conversations with Mr. Keldysh and his colleagues.

It may be argued that I am being naive and that scientists all over the world want co-operation with one another. I do not think that a feeling for co-operation is limited to pure scientists. When I was fortunate enough to take part in a conference with hard-headed Soviet politicians, Deputy-Premier Rudnev and Mr. Guishiani, they said they would like far more positive co-operation. Their qualification was that we were not to partake in what they would call "industrial spying". If it took place, so-called "industrial spying", it has been a two-sided matter in the past, and the Russians know it as well as we do. If any guarantee is wanted that Russian attitudes have changed, it is to be found in the extremely significant announcement that, for the first time since the Bolshevic Revolution, they have actually signed the Paris Convention on Patents. I would say that this would have been inconceivable in the 1950s. Things have really changed. If they are prepared to sign a convention on patents, their attitude towards co-operation with the West is very different from anything which has gone before. So I urge on the Government a positive action in this respect and not simply a negative look at the problem of this or that weapons system.

Again, I shall be very brief, but I wish to talk about the Middle East. I asked myself if there are any circumstances in which I would be prepared, on behalf of my constituents, to support a TSR2 attacking Cairo and Alexandria. The answer was a flat no. If one takes this position, one comes back to the criticism of the Government in the Opposition Motion linking the frontiers of knowledge and the developing industries with armaments. I suggest that it is relevant in the debate to say that if we are to offer to our younger generation things which are technologically exciting, it should not be the TSR2 but co-operation on the great post-Aswan projects such as the pumping to ground level of the parallel Nile, irrigation of Quattara Depression and on all that arises out of the projects which Nasser has for desalinisation of water. This is where the future lies, not in a discussion of weapons systems. Sometimes I think that many of us politicians have blinkers on when we look at the Middle Eastern problems.

It is possible to be naive, of course. One can be told that 50,000 Egyptians are massing in South Arabia, but this does not affect the problem of the TSR2. If we are talking about industry on the frontiers of knowledge, it is more useful to talk in terms of joint projects with those who might be inconvenient to us but who, if we co-operate with them, might take a changed military attitude towards us.

My guess is that the answer may come back from the Government Front Bench, "The speech of the hon. Member for West Lothian (Mr. Dalyell) is outside our Department." In my view, there has been far too much departmental compartmentalisation of thought in the British Civil Service. Too often, the excuse has been given that something should go to someone else's Department. It is about time that the Ministry of Overseas Development, the Foreign Office, the Department of Defence and the Ministry of Education got together and thought out what Middle Eastern policy should be in spheres other than weapons systems. These may be critical words, but I think that it should be done and done quickly.

In conclusion, I would say that perhaps we can deny that part of the Opposition Motion which talks about grave effects on the science-based industries of the TSR2 cancellation in present circumstances, but certainly it need not be true if the Government follow the kind of initiatives which I have tried to outline. It has been the purpose of my speech to bring positive initiatives to their attention. Then we may say with a clear conscience that the decisions which we make promote a forward-looking science-based industry in Britain.

8.32 p.m.

Photo of Captain John Litchfield Captain John Litchfield , Chelsea

I must start by expressing surprise and regret that no senior Minister has been present for a considerable part of the debate. The debate is about one of the most important decisions in the defence world for many years. It will certainly have very far-reaching implications for the British aircraft industry and for the Royal Air Force. It may well, in the future, come to be seen as a point of departure for a new concept of strategic policy, and I should have liked to have heard more from the Secretary of State for Defence on this aspect.

Many great interests and many lesser individuals will be hurt by this decision. This debate and speeches from both sides of the House have shown the sympathy which we all feel for these people. But sympathy is not enough. As one of my hon. Friends pointed out in a very moving speech on behalf of his constituents, we hope to hear more from the Government about how they will meet this human problem, quite apart from the industrial interests affected.

No Government, not even the present Government, could, in my judgment, contemplate taking a decision so obviously unpopular and difficult as this one if they did not feel convinced that it was right. I give the Secretary of State a good mark on this account. I chalk up one good mark on this score. But I must immediately take it away and, indeed, subtract several more marks for the exceptional ineptitude of the Government's handling of the announcement last week. I regret that the right hon. Gentleman was entirely unrepentant today.

The Leader of the House gave the show away in his business statement, last Thursday, when he gave this censure debate today as the excuse for bringing the House back a day earlier after the Easter Recess. Had the Government assumed that a statement wrapped up in a speech on the Budget statement would satisfy the House? Did they really hope to get away with it without any debate at all? This smells of Government by edict.

And there are dark rumours that the right hon. Gentleman the Paymaster-General was behind this operation, as he has been behind one or two others. It certainly appears to be part of a pattern which has been set by the Paymaster-General since he became the Government's drill sergeant.

First, we had no debate on the attempt of my hon. Friend to bring in a Bill to help the very old over their pensions. They got no pensions. Now the Government have sought to deny us the opportunity to question them immediately on their decision on the TSR2. No questions, and no TSR2. And not since the days of Molotov have there been so many negatives in one afternoon as we heard from the Paymaster-General when he answered Questions last Wednesday. Whatever else he may be, he is a "Master of Negation".

I do not recall that in the last Parliament the present Paymaster-General was often at a loss for words. Now he seldom speaks and, when he does, his answers are brief. I wondered whether perhaps some words which I have discovered written by Thomas Moore might explain his current brevity: As bees, on flowers alighting, cease their hum,So, settling upon places, Whigs grow dumb. Now, it is one thing to cancel the TSR2 project altogether, but it is quite another to take an option on an American aircraft as a substitute. I could understand the Government's argument on purely defence factors; the argument that, for example, we do not need this type of aircraft at all, which is a debatable point, and I will come to it later. Even allowing for the significant saving of money—what the true saving will be is debatable and difficult to calculate—it does not seem to make any kind of sense to abandon the TSR2 and then opt for the F111 at such huge cost in dollar exchange. Surely this would give us the worst of both worlds. I simply do not follow the right hon. Gentleman's arguments here.

There is another, I think more important, point which the House should consider. The right hon. Gentleman has told us on several occasions that he has set in train a radical and comprehensive review of defence policy in every spere. He was right to have done that and I do not disagree with him on this issue. But is this the moment, when this massive review is still in progress and when the right hon. Gentleman is, presumably, unaware of what conclusions will be arrived at as a result of it, to take a decision so radical as this; to cancel the TSR2 at this juncture?

It is not as if the project had just been started. It is not as though there were any very obvious reasons why the decision, if he is not to wait for the defence review to be concluded, should not have been taken last October or November—or December. We know that it is costing £1 million a week—that is accepted—but we are not here dealing with a few millions of pounds, but with hundreds of millions of pounds, and, moreover, with a very important element in our defences. I should have thought that it would have been prudent and sensible for the Government at least to have waited until they knew what was to come out of this great defence review, because that is the factor on which the merits of this decision turn.

The right hon. Gentleman, now that he is Secretary of State for Defence, and with his knowledge of the Services, will know what "Appreciating the Situation" means. I have no doubt that he will also understand what "Situating the Appreciation" means, and I hope that he has not been guilty of that. I see right hon. Gentlemen opposite looking a little confused over the expression "Situating the Appreciation"; it means that one first decides what one will do and then finds reasons for doing it afterwards. I am sure that the right hon. Gentleman will know what I am getting at there.

The right hon. Gentleman has said that this defence review will not be completed for six months or more—perhaps much longer. If that is so, I can only say that he should inject a little more urgency into his organisation. I cannot believe that it is necessary to wait all this time before he knows what this review will give birth to. His predecessor, Sir Winston Churchill, would not have accepted a delay of six or eight months before being told the answer, however massive and comprehensive the review. The right hon. Gentleman's argument would have been much more convincing had he been able to tell the House that the decision was based on the conclusions of the review that is now in progress.

I now come to the very much more difficult side of the argument relating to the merits of the decision itself. I must say that with the little information that has been disclosed to the House by this Government or by the last Government, I find it most difficult to form a personal judgment. Just look at the story of this aircraft. The TSR2 was originally envisaged as a highly-sophisticated tactical strike reconnaissance weapon which could be produced at a fraction of the ultimate cost—that is to say, something under £100 million—and would have a good export potential. Later, we were told that it had also a nuclear capability—but by then, of course, our money had gone on Polaris. If the expectations of the TSR2 had been fulfilled—and they have never been proved in full yet—I have not the slightest doubt that it would have been the most advanced weapons system in the world, and a most valuable asset to the country.

What, I feel some doubt about, and I say it in all honesty, is whether, in the tactical rôle, a cost of £5 million or £6 million per aircraft, can be justified. In my judgment, it could be justified, and would be justified—almost any expense would be justified—if the weapon were really vital—and I use the word "vital" advisedly—to our defences. I am not satisfied about that yet, I do not know whether the right hon. Gentleman is—there is doubt—but, for the nuclear rôle, we have Polaris, and I do not regard any substitute for that or any addition to that as more than a bonus in the strategic rôle.

There is another point on which I hope the right hon. Gentleman may be able to give us some information to strengthen his case. At the present rate of progress in weapons systems development, for how long can the invulnerability of an aircraft such as TSR2 or F111 be relied on to survive? When we get into these enormously costly projects, which absorb such a high proportion of the national scientific and defence effort, it is right to look very hard not only at the cost itself, but at the effect of this effort on other defence requirements and at the relative importance of all those great projects in the overall national defence effort.

I accept everything that has been said from this side of the House about the effects of cancellation on the aircraft industry and possibly on the Royal Air Force, but one has to make up one's mind whether, when one is arguing either for the cancellation or against the cancellation, it is on defence grounds or on economic grounds. The figures which we were given this afternoon are startling. I quite see the force of these arguments on the support of the British aircraft industry, but I do not think it is a sustainable argument to say that one must indulge in projects of this magnitude in order to keep an industry in business. Where defence projects are concerned, the industry exists to support the Services, not the other way round. Nor do I think it sustainable to argue that particular weapons or weapons systems for any Service should be introduced to keep a particular Service, or arm of a Service, in business.

As my right hon. Friend the Member for Bedford (Mr. Soames) said in opening the debate, we have had no opportunity of getting information since the right hon. Gentleman's statement, for it was wrapped up in a speech on the Budget which we could not question at the time. If the right hon. Gentleman had made his statement at an appropriate time when he could be immediately questioned, and if his decision to cancel the TSR2 had not been made a nonsense by the option on the F111—if he had been able to tell the House that the decision had been based on the massive defence review and its conclusions—I should have felt, in all honesty, bound to support the decision.

The right hon. Gentleman may conceivably have done the right thing—we shall see how his case develops in future months—but he has done it in the wrong way. For this reason, and because of all the evasions which have been thrust upon us, I feel bound to support the Motion of censure on the Government in the names of my right hon. Friends.

8.49 p.m.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

A rumour appears to have been circulating that I shall vote for the Motion. Let me say here and now that, having given this careful consideration, I shall vote against the Motion. On the basis of the facts given by my right hon. Friend the Secretary of State for Defence, the case for the cancelling of the TSR2 is unanswerable. In fact the cancelling of the TRS2 is absolutely essential. I shall, therefore, vote against the Motion.

I want to make it clear that, although I am not opposed to the cancellation of the TSR2, I am opposed to the scrapping of the TSR2 in favour of an American substitute which we are not even sure of. It must be remembered that it will cost many American dollars before we pay for it. I believe that the Phantoms and the C130s already ordered will involve us in a cost of about £230 million. If the F111A is added to that, it will put up the bill to £700 million, all to be found in American dollars. Serious consideration must be given to this.

Quite apart from that, I want to issue a solemn warning to my right hon. Friend and to the Government not to repeat the unhappy experience of Canada in the late 1950s. I know something about it, because it happened during the 14 years when I was a Canadian citizen. The Canadian Avro Arrow supersonic interceptor was a magnificent aircraft. It was very fast. It could travel, in the 1950s, at twice the speed of sound. Two or three of them had been completed and they flew successfully at about 1,200 miles per hour, which, in the late 1950s, was something. They climbed at supersonic speeds. About 300 million dollars—that is, about £100 million—had been spent on the development of this aircraft by September, 1958. The average cost per unit for 100 of them was about £7 million to £8 million, including weapons and spare parts. It was very successful indeed.

In February, 1959, Mr. Diefenbaker went to America. He had conversations with top people in Washington. After those conversations, he telegraphed Ottawa and cancelled the whole of the Avro project, which involved the instant dismissal of about 14,000 men. I believe that Mr. Diefenbaker was lured by the Americans who convinced him that their Bomarc missile was the thing he really wanted. That was a ground-to-air missile, and it was to have nuclear warheads, provided by the United States Government. The whole of the AvroArrow project was therefore scrapped in favour of the Bomarc missile.

The Bomarc missile turned out to be unsatisfactory. First, it was not ready in time. Secondly, it did not solve the Canadians' problems as they thought it would. At that stage they could not go back to the Avro Arrow, because it had all been dismantled and the men had dispersed. They had to have something, however. So they took the Lockheed CF104. It was built by Canadair, under licence. Canadair is a subsidiary of General Dynamics of America. All the money therefore flowed into America and, I may add, the CF104 was not a patch on the Avro Arrow.

I ask my right hon. Friend the Secretary of State for Defence to beware of being lured in this case into sacrificing perhaps a less attractive substance for a very much more attractive shadow, with the possible dire consequences which Canada experienced in the late 1950s. I want to emphasise that I am not anti-American, but I do not want Great Britain to be in pawn to the United States. Nor do I want to advance one step along the road towards our country's becoming the 51st State of the Union. I therefore ask that my right hon. Friend and the Government should give this their most earnest consideration before taking any step in the direction of the purchase of the American F111A, or any other American aircraft.

Finally, we have heard a great deal about a European industry. Why not a Commonwealth industry? Why do not we have a Commonwealth conference to co-ordinate and unify plans for the aircraft industry throughout the Commonwealth? This may not have been canvassed before, but I suggest that it offers great opportunities and opens up wide vistas. I ask my right hon. Friend to consider it very seriously indeed.

8.56 p.m.

Photo of Mr William Robson-Brown Mr William Robson-Brown , Esher

I entirely endorse everything that the hon. Member for Watford (Mr. Raphael Tuck) has said. He has been talking the kind of language which I and many of my hon. Friends understand. At this late hour, I do not intend to take a single moment to talk of defence problems, or anything of that kind. I want to get to the core of the question as it affects my constituency. I believe that my interests lie not in a complicated discussion of defence problems, but in trying to state the problems of my constituents as rapidly as I can in the short time available to me at the end of a long debate, much of which has been wasted unnecessarily in disputation.

The whole of the Government Front Bench have pledged themselves to the proposition that we need an expanding aircraft industry and that it is essential to our economy. Let us back our sentiments with positive action. The whole House wants to see our aircraft industry carrying British prestige on the commercial sky routes of the world. I address myself, in particular, to the Minister of Aviation, who, I know, is as much interested and concerned in these matters as I am.

We have lost the TSR2 in Weybridge, but we must not lose the VC10 or the BAC111. Without the support of the TSR2, in overheads, the British Aircraft Corporation cannot support for long unaided the VC10 or the Super VC10, or the developments which come from them and which are certainly attractive to this country. Already, great damage has been done to the sale prospects of these spleen- did aircraft. I call on the Government now to satisfy the airlines of the world that Her Majesty's Government are behind the VC10 and the BAC111. Unless they do that, and take positive steps within weeks, not months, no more orders will flow for either aircraft, and not only will the TSR2 project at Weybridge go, but the whole of that plant will gradually and inexorably close down and, by 1968, be for sale.

I have no doubt that the British Aircraft Corporation, in its plans for the development of a two-tier multi-passenger type of VC10, will be in advance of everything that is wanted, but the Corporation cannot stand alone on the Concord. It is absurb and ridiculous to imagine or contemplate it. I therefore put to the Government the propositions that they must stand behind the VC10 and the BAC111 and spell out a coherent programme for the future. They must do this in such a way that every firm which has already placed orders will be confident that it will receive them. Firms prepared to place orders—and there are many of them throughout the world—will know not only that the British Aircraft Corporation will execute the orders, but that Her Majesty's Government are a partner in the deal. If the Government fail to do this, they will have driven the VC10 clear out of the skies.

We should be co-operating not only with the French, but with the Belgians, Italians, Dutch and Germans and we should create one big consortium in civil and military spheres. I believe that we should also address ourselves to the United States, particularly in the matter of commercial aircraft. The American nation is great and understanding. I do not for the moment believe that it wants to drive our aircraft industry into the ground. It has the possibility, within the next few days, of showing and proving this in a most positive way.

I urge the Minister of Aviation to give support to Dr. Barnes Wallis, in whom we have a British aviation genius of a kind never known in this country before. [Interruption.] Do hon. Members opposite want to denigrate Barnes Wallis? [HON. MEMBERS: "No, but the Tory Government did."] We must be laying the foundation of a real European technology in air and space. I am thinking about these things as they are tonight. Let us not forget them.

We have had enough amputations in the aircraft industry. Let us now bandage up some of its wounds. Otherwise, it will bleed away. The House will forgive me if I make absolutely plain my deep concern in fighting for the staff and workers in my constituency. Whatever may be said about finding alternative jobs all over the country for them, things will not be easy for the men of Weybridge. There are no other industries in or around Weybridge or in the County of Surrey to which they can go. They will have to leave their homes. Families will be split up. They will have to go all over the country, even if the work can be provided for them.

A very special and singular situation confronts Weybridge, and I beg the Minister of Aviation to treat it in a special and singular way. I want him to link up with B.A.C. I want the Government to stand behind the company, behind the VC10 and the BAC111. The men and the staff there would support them. They know that cuts have to be accepted, but they do not want to see their plant and all it stands for wither away, with no alternative employment for them in the area, and men, many of whom have devoted a quarter of a century to their work in the drawing office and design teams, not able to find alternative work worthy of their skill, knowledge and experience.

My appeal to the Minister is straight and it is positive. Will he, please, come and see me personally and the other Members of Parliament for the area, the trade union officials and the management. Let us together see what we can do to save the British Aircraft Corporation's future, the VC10, the BAC111 and the life of Weybridge itself.

9.2 p.m.

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

The speech of my hon. Friend the Member for Esher (Sir W. Robson Brown) was one of a series from my hon. Friends who represent constituencies in which the TSR2 or parts of it are manufactured. The Minister and the whole House will have been impressed by the sincerity of his appeal and those of my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) and my right hon. Friend the Member for Preston, North (Mr. J. Amery).

When he replies, the Minister of Aviation will, I am sure, try to tell us what the Government's intention is for the future of the aviation industry. It would be futile to deny that there is real concern in the areas where the TSR2 was not merely a means of livelihood but an object of the greatest pride, something which people felt they could devote their lives to with a reasonable hope of seeing a worthwhile aircraft flying in the skies with R.A.F. roundels on it.

The Motion is divided into three parts. One part—I do not want to spend very much time on this, but I must say something about it—deals with the method by which the Government announced the cancellation of the TSR2 project to the House. The Secretary of State for Defence brushed off the attack by my right hon. Friend the Member for Bedford (Mr. Soames) on these lines with a kind of counter-attack which, it seemed to me, did less than justice to the gravity of the Parliamentary tactics which the Government employed. I cannot see for the moment why the Secretary of State should not at least be willing to admit and to express some mild contrition to the House—we do not ask for more—for what was a serious piece of discourtesy to the House, and, indeed, worse than discourtesy, what looked like a deliberate attempt to prevent the House from questioning him about the statement.

I do not think that hon. Members opposite can have thought this thing out very much. I am not speaking now of all the newer Members, but there are hon. Members opposite who have been in the House a long time and know that the whole esprit de corps that makes the House work is dependent upon certain conventions being observed and upon Government treating Oppositions and private Members with reasonable courtesy and consideration.

The fact is that not only was a method devised which would make is impossible for Members to question the right hon. Gentleman about his statement, which would have been the normal process, but, secondly—and perhaps more important—the fact that the statement was made during the Budget debate made it out of order even for the Defence Secretary himself to discuss more than quite a limited number of aspects of the cancellation.

Finally, it was made even naughtier by the fact that, after it had been deliberately leaked to the Press and stated by the Chancellor of the Exchequer that the Defence Secretary would get up at 7 o'clock, he got up at twenty minutes past 6. I am glad that the right hon. Gentleman has now joined us. I am sure that he will not be in doubt as to what I have been saying about what happened on 6th April. [Interruption.] Hon. Members may not like this, but Oppositions do not like being treated with tricksiness of this kind.

The Defence Secretary spent a considerable part of his speech today discussing why it was that the Government found the cost comparison between the TSR2 and its possible substitute conclusive for cancellation. He said clearly that the TSR2 was in this respect quite different in the Government's minds from the cancellation of the HS681 transport and the P1154 fighter. The main reason which they gave for cancellation of these two earlier projects was that they would not be in service early enough for the R.A.F. to be adequately armed. Now, as we understand it, the one suggested substitute for the TSR2 is likely to be in service in a form which is comparable slightly later rather than earlier than the TSR2 would have been. Therefore, the whole justification for the cancellation is based on cost. I do not think that I am misrepresenting the right hon. Gentleman in saying that. But when he got on to the question of cost he became less and less clear, more and more diffuse and more and more contradictory.

There are one or two of the things which the right hon. Gentleman said about costs to which I want to direct the attention of the Minister of Aviation, who is to reply to the debate. First, there was the example of the Australian purchase of the TFX. The Secretary of State for Defence said that he understood from members of the Australian Government tha the sole reason why they did not buy the TSR2 was that it was uncompetitive in cost and that the cost of the TSR2 was too high. This, I am bound to say, is quite contrary to the information which we had. I do not know whether the right hon. Gentleman asked these Australian Ministers what was the price at which they had been offered the TSR2. My understanding is that they were offered it as a price of £2·1 million per plane, and that they accepted this as being perfectly competitive. It was not because the cost was too high that the Australians did not buy the TSR2. They did not buy it—and they admit this in conversation—because they were convinced that if a Labour Government were returned to power they would cancel it—and that is exactly what they have done, which shows that the Australians are pretty shrewd judges.

The right hon. Gentleman went on to give some quite ridiculous illustrations of costs. He said, for example, that if one bought 50 TSR2s the cost would be more than £10 million per aeroplane. Who ever suggested during the development of the TSR2 that an order for 50 aircraft should be placed? He might just as well have said—and I am a little surprised that he did not say it—that if they had bought one aeroplane it would have cost £750 million. That would have been about as sensible as his observation that 50 would have cost £10 million each.

He said that the Government would have defaulted on their duty if they had not insisted on asking for a fixed price from the British Aircraft Corporation for the TSR2 and if they had not refused an open-ended commitment for the taxpayer. He knows quite well that no aircraft company in the world would quote for an aircraft of this kind on terms such as that. It simply is not on, and it is not the way in which complicated aircraft projects, breaking new ground not only in aerodynamics but in electronics, have ever been developed anywhere. The plain fact is that the right hon. Gentleman and his hon. Friends had decided to cancel this aircraft. They went through the motions of facing B.A.C. with an ultimatum, well knowing that there was not the slightest chance that it could possibly be accepted.

The Secretary of State for Defence said that the Government were carrying out a long review of their defence commitments and resources. He suggested that if the previous Government had done the same the situation would now be rather better. Of course, the previous Government, and all Governments, have always carried out continuing reviews of their future defence commitments. But the difference between the previous Government and this Government is that the previous Government did not cancel viable aircraft projects before they knew what the demand for aircraft was going to be.

I turn to the question of cost, on which the right hon. Gentleman dwelt, I am bound to say, rather confusingly for some time. I hope that the Minister of Aviation will come a little cleaner and, if possible, completely clean on the question of the comparative cost of the TSR2 and the TFX. We can get a little way on the figures which we have been given, but we cannot get an honest and clear comparison which will enable the House to judge how good is the Government's case on grounds of cost. Surely since they now say specifically that this is the one reason why they are cancelling it, we are entitled to know how good the case it. Surely that is not asking too much.

The answer which we are given when we ask about the costs of the TFX Mark 2, if such an aircraft is ever developed, or if we ask at what cost per aircraft the option has been arranged, we are told that it is not the practice to divulge the costs of aircraft being purchased by Her Majesty's Government. But they are perfectly willing to bandy cost estimates of British aircraft, of the TSR2. There is no hesitation in giving us all the development costs, the projected costs and putting the most unfavourable possible construction on them. Yet when we ask for a comparative cost for the American substitute, we are unable to get anything at all, except what the right hon. Gentleman states to be the difference between the total projects, and he does not say on what basis the total is calculated.

It may not even be argued that he was justified in giving all the estimates for the TSR2 because the TSR2 has been cancelled, because if he is to argue that he has to explain why the Prime Minister gave exactly the same cost estimate figures for the TSR2 in a speech in the House on 2nd February—unless the truth is that the decision to cancel the TSR2 had already been taken on 2nd February. It may be that the Prime Minister was then already speaking of the dead, but that the Government did not have the courage to admit it.

If we read the statement of the Secretary of State for Defence during the Budget debate on 6th April, in columns 319 and 331 of the OFFICIAL REPORT, what we get is the estimate that in total the TSR2 will cost £750 million for a full programme, including production, and I assume that that is production of 150 aircraft. We also find that he stated that a full programme of F111As, including the TSR2 cancellation charges, would cost approximately £300 million less than the full TSR2 programme. This suggests that the full cost of 150 F111As would be £450 million, give or take £10 million or so. Since he has gone so far as to give us this subtraction sum, which gives us some sort of figure for the F111A of around £450 million, surely we are at least entitled to know on what basis the figures are calculated and how fair the comparison is. For example, is it not a fact that the £750 million includes the £125 million which has already been spent on development?

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

So I understood the right hon. Gentleman. Why does he go on comparing the figure of £750 million with a figure of £300 million less? If he is saying that the figure from which he is deducting £300 million is not £750 million but £625 million, he is giving a total figure for 150 TFX Mark 2s of £325 million, which is not the figure which Mr. McNamara has been suggesting. Even so, supposing that there is a difference of £300 million, we want to be quite sure that this is true.

I will give the right hon. Gentleman another question to which we should like an answer. The £750 million quoted for the TSR2 does, and indeed must, include all the expenses for Royal Air Force training and introduction costs. Does the figure for the TFX include those? If it does not, this is a very considerable difference between the two figures.

Let us assume that it does. Will the Minister of Aviation, when he replies to the debate, do what nobody on the Government side has yet done—given us some estimate of the comparative net costs to the Government of these alternative projects? So far there has been no attempt to calculate the kick-back to the Treasury from developing and manufacturing an aircraft wholly in this country and buying an aircraft wholly from abroad which involves no recoupment in taxation or wages or in general economic prosperity to this country. This is not very difficult. It is true that the Chancellor of the Exchequer has made it a little more difficult by not telling us what the Corporation Tax will be at the appropriate time. But we can calculate the figure on the basis of a Corporation Tax of 40 per cent. I should be very much surprised if on a net basis the calculation was not favourable to the TSR2 rather than to the TFX. Hon. Members opposite shake their heads. The Government should tell us the figures. Otherwise, how can we possibly know the answer?

Another point in the Secretary of State's speech on which we should like an answer concerns the reconnaissance capability of the TSR2 and the TFX. We understood the right hon. Gentleman to say that it was hoped that the TSR2 reconnaissance equipment pod might be fitted to the TFX. He did not mention any other possible way in which an allweather reconnaissance capability could be mounted.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I thought that the hon. Gentleman would prefer this way, using British equipment designed for the TSR2.

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

Other than the TFX. The right hon. Gentleman has not grasped my point. He did not suggest any other way in which an all-weather reconnaissance capability could be mounted for the R.A.F. other than by either the TSR2 or the TFX carrying the TSR2 equipment. Is that right? I gather that the right hon. Gentleman mentioned no other alternative.

Presumably the Secretary of State does not propose to leave the R.A.F. without any reconnaissance capability, because he said how important it was. Does this mean that he has decided to buy the TFX? Or is he, having cancelled the TSR2, leaving the R.A.F. without an adequate reconnaissance capability? [HON. MEMBERS: "Answer."]

Let us assume that the decision has not yet been taken. What we have a right to know is how this possible alternative is to be mounted. As I understand it, the TSR2 reconnaissance equipment has yet to be tested in the third TSR2 aircraft. There is, therefore, a considerable amount of research and development work to be done. Although the great majority of the avionics of the TSR2 are already tested, this is one lot which has still to be tested in flight, I think. Surely it is not very much to ask a Government which look like leaving the R.A.F. with a pretty considerable gap in its capabilities that the TSR2 aircraft should be kept in flight to test this reconnaissance equipment until the Government make up their mind about whether they will buy the TFX for which they may need this British equipment. Otherwise how does it get tested?

Another very good reason why the Government should do this is that they might succeed in selling it to the Americans for their own TFX. Has it occurred to them that this might be a good idea?

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

My hon. Friend says "What a hope". The whole tale of the Government has been about interdependence. Unless they admit that this is a farce, they must surely, sometimes, have some hope of selling something to the Americans. At least, let them keep this equipment under test and keep at least one TSR2 aircraft in testing flight before they have to take the decision whether to buy the TFX or whether to leave us without any capability of this kind.

We hope, finally, that the Minister of Aviation will tell us something a little more constructive about the future of the aircraft industry. We have a situation in which out of the four most advanced aircraft projects in this country, only one is left—and that, incidentally, is the only one which in the Brown Paper was suggested for cancellation. The other three which were not mentioned have all been cancelled.

The Government have set up a Committee to tell them what shall be the future structure and rôle of our aircraft industry, having knocked the props completely out from under the aircraft industry before the Committee has reported. They have done all this in flat contradiction of a pledge which was given to the aircraft workers during the election.

The House listened with sympathy to the speech of the hon. Member for Preston, South (Mr. Peter Mahon), who had clearly been left in a difficult position. The House and the country, who would like to know just how much credence can be given to Labour promises in any subsequent election, are surely entitled to know the answer to the question: Who authorised these promises? This is not asking too much.

When a pamphlet is circulated during an election stating, in terms, Labour will not cancel the TSR2". is it so unreasonable that we and the electors should ask the Government who authorised the issue of that pamphlet? We accept the statement by the hon. Member for Preston, South that he did not issue it and that it was not issued by his agent. Let us be told. Was it a bit of private enterprise by Mr. Clive Jenkins and A.S.S.E.T., or was it authorised by somebody in Transport House or in the Government?

When a pamphlet is headed Harold Wilson tells TSR2 workers—

Photo of Mr Peter Mahon Mr Peter Mahon , Preston South

On a point of order. If I deny that the leaflet was issued by me or that I had any responsibility for its issue, is it incumbent upon me to say who issued it—[HON. MEMBERS: "Yes."]—when, in fact, I do not know who issued it?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

No point of order arises, but I am sure that the hon. Member may rest quietly knowing that the hon. Member for Stratford-on-Avon (Mr. Maude) has not alleged anything of the kind.

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

Let me reassure the hon. Member for Preston, South that we accept that it is not his responsibility. We are simply trying to find out whose responsibility it is. We are not asking the hon. Member; we are asking the Government. This is surely not unreasonable.

Photo of Mr Angus Maude Mr Angus Maude , Stratford-on-Avon

I cannot give way. I was kept a little late and I have only one minute more. I do not want to hold up the Minister.

When a pamphlet states: Harold Wilson tells TSR2 workers 'Your jobs are guaranteed under Labor'", do the Labour Party take no responsibility for this? Was it authorised by the Prime Minister, by the Secretary of State for Defence, by the hon. Member for Loughborough (Mr. Cronin) or by some official in Transport House? Surely, we ought to know this. Otherwise the electors of this country will have a pretty clear idea of how much faith they can have in any labour pledge in any constituency.

Let the Government not be shy about revealing the authority behind this pamphlet. All we want is for them to tell us who authorised it and then all we want is for him to resign. It is not much to ask, and we expect a little more honesty and a little more straightforwardness from right hon. Gentlemen like the Secretary of State for Defence, who was a pretty forthright spokesman before he was down-graded to play the penny whistle in McNamara's band.

Right hon. and hon. Gentlemen opposite cannot deny that the action which they have taken breaks a pledge clearly made to aircraft workers in Britain. They cannot deny that on the evidence and statements so far made the case on cost grounds for cancelling the TSR2 is not simply made at all, and they must come clean about this. They cannot deny that they have left the British aircraft industry shorn of its major projects and that the future is so obscure that they had better either give us a policy quickly or resign.

9.32 p.m.

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

In many ways this has been a quiet, and even constructive, debate, at least until the last few minutes of the speech of the hon. Member for Stratford-on-Avon (Mr. Maude), during which he was trespassing on my time. Despite the loss of two minutes, I should like to answer as many of the points as I can, and I hope that the debate will remain quite and constructive to the end.

The Opposition's case as deployed throughout the day seems to fall under three main heads. First, they say that we have killed an aircraft which was the glory of British aviation achievement. Secondly, that we have made a bad bargain with the United States. Thirdly, that by so doing we have fatally weakened the British aircraft industry and impaired its ability to form a basis for Anglo-French and wider European collaboration. [Interruption.] I hope that hon. Gentlemen opposite will let me try to answer the points which have been made which I think are worth answering.

Those are the three main points which have been developed during the day. I leave aside the point about the way in which the statement was made. [HON. MEMBERS: "Why?"] Because I thought that my right hon. Friend dealt completely and conclusively with that, and because I would have thought that if hon. Gentlemen opposite had their hearts in this Motion of censure they would want to debate the real issues of the aircraft industry.

I come to the first point, that we should never have axed the TSR2, because its very existence marked such an achievement, because it was the foremost of our "prize projects", as the right hon. Member for Monmouth (Mr. Thorneycroft) put it in a previous debate. Is this true? From one point of view, it is true. It was a fine technical achievement. It was an advanced aircraft. It handled well in flight, and it was a tribute to many of those who worked on it. There is nothing technically wrong with this or any other British aircraft.

But, to be a success, aircraft projects must be more than this. They must have controllable costs; they must fulfill the country's needs at a price that the country can afford; they must be broadly price competitive with comparable aircraft produced in other countries, and they must have the prospect of an overseas market commensurate with the resources tied up in their development. On all these four counts I regret to say that the TSR2 was not a prize project, but a prize albatross.

The spiralling cost figures have already been given by my right hon. Friend the Secretary of State for Defence. We were confronted with a development cost of £300 million—well over three times the original—and a production cost estimate which had more than doubled. The most important question that we had to ask ourselves was whether, in the matter of spiralling costs, we were at the end of the road. This was one of the major questions. [Interruption.] I am coming to the F111 in a moment. This was one of the major questions to which we applied ourselves between February and the Budget. With one aircraft flying and another nearly ready it looked as if we might be past the worst dangers of escalation. On the other hand, we were only 40 per cent. of the way through the development programme, let alone the production runs.

We thought that one of the best tests was the attitude of the firms themselves. We asked them for a fixed or maximum price. The hon. Member for Stratford-on-Avon complained strongly about this this evening. My right hon. Friend the Prime Minister announced that we were doing precisely this in February and there was not a word of complaint from anyone on the Opposition side. The firms tried very hard to give us a maximum price, but they could not do so. They had to say, "No". I say quite frankly that I do not blame them for this. They knew the hazards and they felt that they had to consider the position of their shareholders. But the implication of their not being able to offer such a price was clear.

They offered a target price. At this target price there would have been no profit, and for a limited stage beyond it they would have shared losses—up to a maximum of £9 million for B.A.C. and £2½ million for Bristol Siddeley Engines. After that the Government's liability remained complete and open-ended. Furthermore, the target price was £30 million more than the worst estimates on which we were working in January and February, and which we were then told were ludicrously high.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

Will the right hon. Gentleman tell us whether General Dynamics has given a firm price for the F111?

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

I will deal with that precise point when I come to the second aspect of my speech, which concerns the bargain with the Americans. I outlined the fact that I wanted to try to deal with the three main points, and it would be a great deal better if I were allowed to answer the points in some sort of logical sequence.

So much for the cost history of the project. I can summarise it by saying that at the quantity we would require we were left with the prospect of a cost of £6 million per aircraft—over a thousand times the cost of a Spitfire. [Interruption.] That is merely by way of comparison. The hon. and gallant Member for Chelsea (Captain Litchfield), who made a very considered speech, pointed out the great disadvantage of having a £6 million aircraft in a tactical rôle.

We were also faced with the position that if the full cost were to be recovered we could not have offered this aircraft abroad at a price remotely comparable with the F111. In those circumstances, and for other reasons, the overseas market was non-existent. That is an extremely important point. Even the home market was narrowly circumscribed. If we were to be committed to this vastly expensive plane it might at least have been made a common requirement for the Royal Air Force and the Navy—as the United States, with much less need, has tried to do and looks like succeeding in doing with the F111.

The TSR2 was a plane for the Royal Air Force, and the Royal Air Force alone. The export prospects were never bright. The Australians looked the most likely customers. They ceased to be so in late 1963. They opted for the Fl l 1 and they did so for four extremely hardheaded reasons which had nothing to do with the attitude of the Labour Party—[HON. MEMBERS: "Oh."] The right hon. Member for Preston, North (Mr. J. Amery), who always prefers to live in a world of hobgoblins than one of facts, said at that time that it was due to the attitude of the Labour Party. I am very surprised that the right hon. Member for Bedford (Mr. Soames) who, I think, has more respect for facts, could swallow that so completely as he has done.

Photo of Mr Hugh Fraser Mr Hugh Fraser , Stafford and Stone

As the Minister who went to Australia to try to negotiate this deal, may I say that the one question asked by every Australian was, "Is it true that the Labour Party will cancel this plan when it can?".

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

This point was not mentioned in the conversations which I had, well before the cancellation, with Australian Ministers. On the contrary, they gave some very hard-headed reasons, price, support arrangements, the longer ferry range, the lower costs of maintenance, and matters of that sort. These are what I meant by hard-headed reasons.

The loss of the Australian deal was a clear warning light for the TSR2. The right hon. Member for Preston, North, responded to it by accepting development cost increases immediately afterwards from £200 million to £260 million and suggested that they were acceptable because of the nuclear bonus which looked useful after Skybolt. From this stage onwards all traces of responsibility disappeared from the previous Government's approach to the TSR2. The nearer to the precipice they got the harder they ran, and they left it for us to avoid falling over. If this is the history of what right hon. Gentlemen opposite call a successful project, I tremble to think what one of their failures would be like.

Put in another way the decision to cancel is a matter of acute controversy between two parties, although, in my view, of less acute controversy in the country. I do not believe that there is any right hon. Gentleman on the Opposition Front Bench who, if he could have foreseen the whole story in 1958—the ever-mounting costs, the non-existent export prospects, the excessive dependence of the industry on this one plane, the crippling burden on the taxpayer—would nevertheless, have followed the same course. Therefore, do not let us have any talk about betraying a success. It was an inflated albatross with which we were bequeathed.

I turn now to the argument about a bad bargain with the Americans. We have taken an option—no more—on the F111. We have until next January to decide whether we need any and another 15 months after that to decide, if we need them, how many we need.

Hon. Members:

Sit down.

Photo of Mr Christopher Soames Mr Christopher Soames , Bedford

The Minister of Defence told us that the only way in which the Government could get reconnaissance capability for the R.A.F. was with the F111. Does this mean that he has made up his mind to order the F111?

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

My right hon. Friend said nothing of the sort. As I am now in the first sentence of that part of my speech which hon. Gentlemen opposite pressed me to mix up with the first part, surely they might like me to develop this a little, if they want to hear the answer.

There are no penalties if we place no order. There is no extra price if the numbers are substantially reduced. How firm is the price of the Mark I? We have a fixed maximum. We might pay less, but we could not pay more. That fixed maximum—

Mr. MacMaster:

What have sums got to do with it?

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

Because we need sums. I shall explain in a moment, if the hon. Member will listen.

Mr. MacMaster:

rose

Hon. Members:

Sit down.

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

That fixed maximum is 20 per cent. less than the price at which we did all our comparative calculations with the TSR2. [Interruption.] Hon. Members really must make up their minds whether they are saying that we are getting the planes too cheap or too dear. They cannot have it both ways. [An HON. MEMBER: "The Mark 2, not the Mark I."] I am now about to talk about the Mark 2, but unlike the hon. Member, I like to proceed in a logical direction, from the Mark I to the Mark 2.

We would need a quantity of Mark Is for training purposes if we decided to exercise the option. About the Mark 2, there is a little uncertainty, but it is limited and it is definable. The difference between the two marks is not one of engine or airframe, but only of avionics. The cost of the avionics is likely to be about 15 per cent. of the total. For this we have an estimated price which the United States Government will use their best endeavours to see is not exceeded. This, clearly, is not as good as the fixed maximum which we have for the Mark I, but I would put three points to the House.

The first is that, even if the estimate for the extra cost of the avionics were exceeded by 150 per cent., we would still be within the total cost figures on which we did our comparison. Secondly, in our discussions with the British contractors, we had to leave a roughly equal proportion for components and electronic equipment—15 per cent—completely open-ended, without even a target price. Thirdly, escalation is less likely with the American plane. That is because the run is so much longer and because, if R. and D. costs on the avionics did escalate, we should have to pay only less than 10 per cent. of the total, and not the whole amount, as is the case with the TSR2.

I do not want in the least to be unfair to the British industry—[HON. MEMBERS: "Oh."] Certainly not. Hon Members must realise that facing facts, even unpleasant facts, is not being unfair to an industry. It is a pity that some hon. Gentlemen opposite did not face some of these facts earlier.

The American plane will cost about the same—£350 million—to develop, but the American estimates were more realistic. They foresaw the rough total from the beginning. The Government of the party opposite foresaw nothing. They just put themselves on an escalator and allowed themselves to be carried blindly upward. The price arrangements with the Americans are, therefore, broadly satisfactory. On a full purchase, we should save at least £300 million after making full allowances for the TSR2 cancellation charges, on the one hand, and the lower running costs of the F111, on the other. Such uncertainty as there is in the comparison means that, because of our failure to get a maximum price for the TSR2, the saving would be more likely to turn out greater than less.

Therefore, if we were doing a straightforward switch from TSR2s to F111s, the change would be overwhelmingly justified on budgetary grounds. What about the dollar costs? They would, of course, be substantial, even though we should have a number of years in which to prepare for their impact. The balancing of budgetary saving against expenditure across the exchanges is never easy. The question at issue is the kind of protection which the home industry should receive from the Government. Let no one doubt how protective we would have had to be to keep the TSR2 going. Starting from scratch—and this is not allowing for the money already spent—we would have had to have had the equivalent of a tariff of 135 per cent. Even allowing for the money already spent, a tariff rate of 90 per cent. would have been necessary. Either figure makes the 15 per cent. surcharge, about which some hon. Gentlemen opposite got so excited, look fairly small stuff.

Even allowing for the dollar costs, therefore, there would be a strong case for a straight switch, but what makes the general case as overwhelming as the purely budgetary case is that we are not doing a straight switch. We are giving ourselves more time for thought as to what are the necessary minimum requirements of our defence programme and what are the possibilities of meeting them by a development of existing planes.

Hon. Members:

Sit down.

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

I must continue.

So long as we kept the TSR2 going we had to pay for this room for manœuvre at the rate of £1 million a week, £4 million a month, £50 million a year. We felt justified in paying for time at this rate so long as there were important facts about the two planes which we did not know. However, once we saw that we could not get a fixed price for the TSR2, and knew how high was the target price, we could justify no further postponement.

We knew that the TSR2 had become a plane we could not afford. If we can do without a plane of this sort altogether, or manage with only a very few, the savings will be immense. If we need a substantial number of F111s the savings will still be big. By the option we have taken we can keep these different possibilities open without paying for them at the rate of £1 million a week.

Had we gone on further with the TSR2, all the incentive would have been to keep a need for the plane, and to keep a need for a very substantial number. With no orders it would have been totally impossible to justify the money we have spent. With a small number the costs per plane would have risen towards £10 million.

We shall not leave the R.A.F. without the equipment it needs to discharge—[Interruption.] Hon. Gentlemen opposite who left the R.A.F. in the position it was in should not gibe at us—the rôles, not necessarily unchangeable, which the Government lay upon it.

But in defence matters the objective should always be to discharge a rôle as economically as possible. This objective should be a particularly compelling one for a British Government today and in the next few years. The purpose of many of our current rôles is not to defend this island, but to give us influence in the world, to make our foreign policy more effective. But nothing is more crucial to the effectiveness of our foreign policy than our national solvency, here at home. If we sacrifice that we shall achieve nothing by world-wide commitments.

While we were prisoners on the TSR2 escalator the pressures were against such an economical approach. With the F111 they will operate the other way. The fewer we can buy the bigger the budgetary saving, the smaller the dollar expenditure, the same the unit cost.

I turn to the third main charge, that we have weakened the British aircraft industry and thereby damaged the prospects of Anglo-French co-operation. On the latter part of this charge, it is not merely untrue but the reverse of the truth. We are now at a crucial planning stage for Anglo-French co-operation. We are very near to a firm agreement on the fixed-wing trainer, we are making good progress with our discussions on a joint versatile light variable geometry aircraft and we are hopeful of an arrangement on helicopters and on an airborne early warning plane.

Had the TSR2 continued in the programme it would have been quite impossible, with any sense of financial responsibility, to have made funds available for all these projects. When I hear hon. Gentlemen opposite complain that we did not continue with all three existing projects, as well as starting some new projects with the French—and the French showed no interest in any of the existing projects—I sometimes think that they must have taken leave of their financial senses. The budgetary commitments would have been quite impossible to sustain.

Will the cancellation damage the British aircraft industry? [HON. MEMBERS: "Yes."] In particular, will it damage us in the face of American competition? I do not under-estimate this, but it seems to me to be the most extraordinary proposition that the correct way to deal with American competition is to keep a vast quantity of men, money and skill tied up in a project which the country cannot afford and for which the export prospects are nil.

I turn to more detailed export consequences—to the effect which it is suggested the cancellation will have on the VC10 the BAC111 and the Concord. The main argument here is that the effect of cancellation on the allocation of overheads of B.A.C. will damage the price competitiveness of the planes, particularly the first two. That is not so. In negotiating compensation payments we will take into account the overhead problem for the next three years or so, by which date the firm will have had plenty of time to make its own adjustments.

Then there is the question of the Concord engine—the Olympus 593. This is not the same as the TSR2 engine, the Olympus 320, but it has something in common with it. However, the designs have diverged a great deal recently. Most of the basic engineering work on the 320 was complete, so that much of the Concord benefit that could be derived had already been derived from it, and the managing director of Bristol Siddeley Engines yesterday expressed complete confidence in his firm's ability to carry out the Concord project.

There is a wider point about the effect of the cancellation on the competitive future of the British aircraft industry. If we had not cancelled, everything in the industry would have gone on very much

as before; it would have remained very much the same size and the same shape, and it would have continued to nestle equally comfortably on the cushion of easy Government spending. And that pattern would have remained fairly fixed up to 1970. Confronted with this very big industry, with its voracious appetite for skill and money, with its export difficulties, with its output per man—which is only four-sevenths that of the French industry, although its labour force is three times as big—I did not believe it right to maintain that frozen pattern.

There must be some changes, of course, and these changes will mean difficulties—[HON. MEMBERS: "Resign."]—both for the firms and for their workers. As my right hon. Friend said this afternoon—[HON. MEMBERS: "Resign."]—20,000 jobs are involved—

Hon. Members:

Sit down.

Photo of Mr Roy Jenkins Mr Roy Jenkins , Birmingham Stechford

No. The right hon. Gentleman knows perfectly well that it is not usual to disclose such prices. If it were so, why did the Government of the party opposite not disclose anything about the price of the Phantom? We heard nothing about that.

Mr. Speaker, I ask the House to reject the Opposition's Motion. In putting it forward they are, I believe—[HON. MEMBERS: "Resign."]—far out of touch with most opinion in the country. Nearly every newspaper with any claim to independence—[Interruption.]—nearly every commentator with any expert knowledge, supports our decision. Some commentators say that it is a sad decision—so do I—but hardly anyone disputes that it is a right decision, and one which, if the previous Government had faced up to their responsibilities, ought to have been taken long ago.

Question put:

The House divided: Ayes 290, Noes 316.

Division No. 89.]AYES10.0 p.m.
Agnew, Commander Sir PeterBaker, W. H. K.Berry, Hn. Anthony
Alison, Michael (Barkston Ash)Balniel, LordBiffen, John
Allan, Robert (Paddington, S.)Barber, Rt. Hn. AnthonyBiggs-Davison, John
Allason, James (Hemel Hempstead)Barlow, Sir JohnBingham, R. M.
Amery, Rt. Hn. JulianBatsford, BrianBirch, Rt. Hn. Nigel
Anstruther-Gray, Rt. Hn. Sir W.Beamish, Col. Sir TuftonBlack, Sir Cyril
Atkins, HumphreyBell, RonaldBlaker, Peter
Awdry, DanielBerkeley, HumphryBossom, Hn. Clive
Box, DonaldGriffiths, Eldon (Bury St. Edmunds)Monro, Hector
Boyd-Carpenter, Rt. Hn. J.Griffiths, Peter (Smethwick)More, Jasper
Boyle, Rt. Hn. Sir EdwardGurden, HaroldMorgan, W. G.
Braine, BernardHall, John (Wycombe)Morrison, Charles (Devizes)
Brewis, JohnHall-Davis, A. G. F.Mott-Radclyffe, Sir Charles
Brinton, Sir TattonHamilton, Marquess of (Fermanagh)Munro-Lucas-Tooth, Sir Hugh
Bromley-Davenport. Lt.-Col. Sir WalterHamilton, M. (Salisbury)Murton, Oscar
Brooke, Rt. Hn. HenryHarris, Frederic (Croydon, N. W.)Neave, Airey
Brown, Sir Edward (Bath)Harris, Reader (Heston)Nicholls, Sir Harmar
Bruce-Gardyne, J.Harrison, Brian (Maldon)Nicholson, Sir Godfrey
Bryan, PaulHarrison, Col. Sir Harwood (Eye)Noble, Rt. Hn. Michael
Buchanan-Smith, AlickHarvey, Sir Arthur Vere (Maccles'd)Nugent, Rt. Hn. Sir Richard
Buck, AntonyHarvey, John (Walthamstow, E.)Onslow, Cranley
Bullus, Sir EricHarvie Anderson, MissOrr, Capt. L. P. S.
Burden, F. A.Hastings, StephenOrr-Ewing, Sir Ian
Butcher, Sir HerbertHawkins, PaulOsborn, John (Hallam)
Buxton, R, C.Hay, JohnPage, John (Harrow, W.)
Campbell, GordonHeald, Rt. Hn. Sir LionelPage, R. Graham (Crosby)
Carlisle, MarkHeath, Rt. Hn. EdwardPearson, Sir Frank (Clitheroe)
Carr, Rt. Hn. RobertHendry, ForbesPeel, John
Cary, Sir RobertHiggins, Terence L.Percival, Ian
Channon, H. P. G.Hiley, JosephPeyton, John
Chataway, ChristopherHill, J. E. B. (S. Norfolk)Pickthorn, Rt. Hn. Sir Kenneth
Chichester-Clark, R.Hirst GeoffreyPike, Miss Mervyn
Clark, Henry (Antrim, N.)Hobson, Rt. Hn. Sir JohnPitt, Dame Edith
Clark, Wiliam (Nottingham, S.)Hogg, Rt. Hn. QuintinPounder, Rafton
Clarke, Brig. Terence (Portsmth, W.)Hopkins, AlanPowell, Rt. Hn. J- Enoch
Cole, NormanHordern, PeterPrice, David (Eastleigh)
Cooke, RobertHornby, RichardPrior, J. M. L.
Cooper, A. E.Hornsby-Smith, Rt. Hn. Dame P.Pym, Francis
Cooper-Key, Sir NeillHoward, Hn. G. R. (St. Ives)Quennell, Miss J. M.
Cordle, JohnHowe, Geoffrey (Bebington)Ramsden, Rt. Hn. James
Corfield, F. V.Hunt, John (Bromley)Rawlinson, Rt. Hn. Sir Peter
Costain, A. P.Hutchison, Michael ClarkRedmayne, Rt. Hn. Sir Martin
Cou tney, Cdr. AnthonyIremonger, T. L.Rees-Davies, W. R.
Craddock, Sir Beresford (Spelthorne)Irvine, Bryant Godman (Rye)Renton, Rt. Hn. Sir David
Crawley, AidanJenkin, Patrick (woodford)Ridley, Hn. Nicholas
Crosthwaite-Eyre, Col. Sir OliverJennings, J. C.Ridsdale Julian
Crowder, F. P.Johnson Smith, G.Roberts, Sir Peter (Heeley)
Cunningham, Sir KnoxJones, Arthur (Northants, S.)Robson Brown, Sir William
Curran, CharlesJopling, MichaelRodgers, Sir John (Sevenoaks)
Currie, G. B. H.Joseph, Rt. Hn. Sir KeithRoots, William
Dalkeith, Earl ofKaberry, Sir DonaldRoyle, Anthony
Dance, JamesKerby, Capt. HenryRussell, Sir Ronald
Davies, Dr. Wyndham (Perry Barr)Kerr, Sir Hamilton (Cambridge)St. John-Stevas, Norman
d'Avigdor-Goldsmid, Sir HenryKershaw, AnthonySandys, Rt. Hn. D.
Dean, PaulKilfedder, James A.Scott-Hopkins, James
Deedes, Rt. Hn. W. F.Kimball, MarcusSharples, Richard
Dodds-Parker, DouglasKing, Evelyn (Dorset, S.)Shepherd, William
Doughty, CharlesKirk, PeterSinclair, Sir George
Douglas-Home, Rt. Hn. Sir AlecKitson, TimothySmith, Dudley (Br'ntf'd & Chiswick)
Drayson, G. B.Lagden, GodfreySmyth, Rt. Hn. Brig. Sir John
du Cann, Rt. Hn. EdwardLambton, ViscountSoames, Rt. Hn. Christopher
Eden, Sir JohnLancaster, Col. C. G.Spearman, Sir Alexander
Elliot, Capt. Walter (Carshalton)Langford-Holt, Sir JohnSpeir, Sir Rupert
Elliott, R. W. (N'c'tle-upon-Tyne, N.)Legge-Bourke, Sir HarryStainton, Keith
Emery, PeterLitchfield, Capt. JohnStanley, Hn. Richard
Errington, Sir EricLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Stodart, Anthony
Farr, JohnLloyd, Ian (P'tsm'th, Langstone)Stoddart-Scott, Col. Sir Malcolm
Fell, AnthonyLloyd, Rt. Hn. Selwyn (Wirral)Studholme, Sir Henry
Fisher, NigelLongbottom, CharlesSummers, Sir Spencer
Fletcher-Cooke, Charles (Darwen)Longden, GilbertTalbot, John E.
Fletcher-Cooke, Sir John (S'pton)Loveys, Walter H.Taylor, Sir Charles (Eastbourne)
Forrest, GeorgeLucas, Sir JocelynTaylor, Edward M. (G'gow, Cathcart)
Foster, Sir JohnMcAdden, Sir StephenTaylor, Frank (Moss Side)
Fraser, Rt. Hn. Hugh (St'fford & Stone)Maclean, Sir FitzroyTeeling, Sir William
Fraser, Ian (Plymouth, Sutton)Macleod, Rt. Hn. IainTemple, John M.
Galbraith, Hn. T. G. D.McMaster, StanleyThatcher, Mrs. Margaret
Gammans, LadyMcNair-Wilson, PatrickThomas, Sir Leslie (Canterbury)
Gardner, EdwardMaginnis, John E.Thomas, Rt. Hn. Peter (Conway)
Gibson-Watt, DavidMaitland, Sir JohnThompson, Sir Richard (Croydon, S.)
Giles, Rear-Admiral MorganMarples, Rt. Hn. ErnestThorneycroft, Rt. Hn. Peter
Gilmour, Ian (Norfolk, Central)Marten, NeilTiley, Arthur (Bradford, W.)
Gilmour, Sir John (East Fife)Mathew, RobertTilney, John (Wavertree)
Glover, Sir DouglasMaude, AngusTweedsmuir, Lady
Glyn, Sir RichardMaudling, Rt. Hn. Reginaldvan Straubenzee, W. R.
Godber, Rt. Hn. J. B.Mawby, RayVickers, Dame Joan
Goodhart, PhilipMaxwell-Hyslop, R. J.Walder, David (High Peak)
Goodhew, VictorMaydon, Lt.-Cmdr. S. L. C.Walker, Peter (Worcester)
Gower, RaymondMeyer, Sir AnthonyWalker-Smith, Rt. Hn. Sir Derek
Grant, AnthonyMills, Peter (Torrington)Wall, Patrick
Grant-Ferris, R.Mills, Stratton (Belfast, N.)Walters, Dennis
Gresham-Cooke, R.Miscampbell, NormanWard, Dame Irene
Grieve, PercyMitchell, DavidWeatherill, Bernard
Webster, DavidWise, A. R.Yates, William (The Wrekin)
Wells, John (Maidstone)Wolrige-Gordon, PatrickYounger, Hn. George
Whitelaw, WilliamWood, Rt. Hn. Richard
Williams, Sir Rolf Dudley (Exeter)Woodhouse, Hn. ChristopherTELLERS FOR THE AYES:
Wills, Sir Gerald (Bridgwater)Woodnutt, MarkMr. McLaren and Mr. MacArthur.
Wilson, Geoffrey (Truro)Wylie, N. R.
NOES
Abse, LeoEvans, Albert (Islington, S. W.)Jones, T. w. (Merioneth)
Albu, AustenEvans, Ioan (Birmingham, Yardley)Kelley, Richard
Allaun, Frank (Salford, E.)Fernyhough, E.Kenyon, Clifford
Aldritt, WalterFinch, Harold (Bedwellty)Kerr, Mrs. Anne (R'ter & Chatham)
Allen, Scholefield (Crewe)Fitch, Alan (Wigan)Kerr, Dr. David (W'worth, Central)
Armstrong, ErnestFletcher, Sir Eric (Islington, E.)Lawson, George
Atkinson, NormanFletcher, Ted (Darlington)Leadbitter, Ted
Bacon, Miss AliceFletcher, Raymond (Ilkeston)Ledger, Ron
Bagier, Gordon A. T.Floud, BernardLee, Rt. Hn. Frederick (Newton)
Barnett, JoelFoot, Sir Dingle (Ipswich)Lee, Miss Jennie (Cannock)
Baxter, WilliamFoot, Michael (Ebbw Vale)Lever, Harold (Cheetham)
Beaney, AlanFord, BenLever, L. M. (Ardwick)
Bellenger, Rt. Hn. F. J.Fraser, Rt. Hn. Tom (Hamilton)Lewis, Arthur (West Ham, N.)
Bence, CyrilFreeson, ReginaldLewis, Ron (Carlisle)
Benn, Rt. Hn. Anthony WedgwoodGalpern, Sir MyerLipton, Marcus
Bennett, J. (Glasgow, Bridgeton)Garrett, W. E.Lomas, Kenneth
Bessell, PeterGarrow, A.Loughlin, Charles
Binns, JohnGeorge, Lady Megan LloydLubbock, Eric
Bishop, E. S.Ginsburg, DavidMabon, Dr. J. Dickson
Blackburn, F.Gourlay, HarryMcBride, Neil
Blenkinsop, ArthurGreenwood, Rt. Hn. AnthonyMcCann, J.
Boardman, H.Gregory, ArnoldMacColl, James
Boston, T. G.Gray, CharlesMacDermot, Niall
Bottomley, Rt. Hn. ArthurGriffiths, David (Rother Valley)McGuire, Michael
Bowden, Rt. Hn. H. W. (Leic S. W.)Griffiths, Rt. Hn. James (Llanelly)McInnes, James
Bowen, Roderic (Cardigan)McKay, Mrs. Margaret
Boyden, JamesGriffiths, Will (M' Chester Exchange)Mackenzie, Alasdair (Ross & Crom'ty)
Braddock, Mrs. E. M.Grimond, Rt. Hn. J.Mackenzie, Gregor (Rutherglen)
Bradley, TomGunter, Rt. Hn. R. J.Mackie, George Y. (C'ness & S'land)
Bray, Dr. JeremyHamilton, James (Bothwell)Mackie, John (Enfield, E.)
Brown, Rt. Hn. George (Belper)Hamilton, William (West Fife)McLeavy, Frank
Brown, Hugh D. (Glasgow, Provan)Hamling, William (Woolwich, W.)MacMillan, Malcolm
Brown, R. w. (Shoreditch & Fbury)Hannan, WilliamMacPherson, Malcolm
Buchan, Norman (Renfrewshire, W.)Harper, JosephMahon, Peter (Preston, S.)
Buchanan, RichardHarrison, Walter (Wakefield)Mahon, Simon (Bootle)
Butler, Herbert (Hackney, C.)Hart, Mrs. JudithMallalieu, E. L. (Brigg)
Butler, Mrs. Joyce (Wood Green)Hattersley, RoyMallalleu, J. P. W. (Huddersfield, E.)
Callaghan, Rt. Hn. JamesHayman, F. H.Manuel, Archie
Carmichael, NeilHazell, BertMapp, Charles
Carter-Jones, LewisHealey, Rt. Hn. DenisMarsh, Richard
Castle, Rt. Hn. BarbaraHeffer, Eric S.Mason, Roy
Chapman, DonaldHenderson, Rt. Hn. ArthurMaxwell, Robert
Coleman, DonaldHerbison, Rt. Hn. MargaretMayhew, Christopher
Conlan, BernardHill, J. (Midlothian)Mellish, Robert
Cousins, Rt. Hn. FrankHobden, Dennis (Brighton, K'town)Mendelson, J. J.
Craddock, George (Bradford, S.)Holman, PercyMikardo, Ian
Crawshaw, RichardHooson, H. E.Millan, Bruce
Cronin, JohnHorner, JohnMiller, Dr. M. S.
Crosland, AnthonyHoughton, Rt. Hn. DouglasMilne, Edward (Blyth)
Crossman, Rt. Hn. R. H. SHowarth, Harry (Wellingborough)Molloy, William
Cullen, Mrs. AliceHowarth, Robert L. (Bolton, E.)Monslow, Walter
Dalyell, TamHowell, Denis (Small Heath)Morris, Alfred (Wythenshawe)
Darling, GeorgeHowie, W.Morris, Charles (Openshaw)
Davies, G. Elfed (Rhondda, E.)Hoy, JamesMorris, John (Aberavon)
Davies. Harold (Leek)Hughes, Cledwyn (Anglesey)Mulley, Rt. Hn. Frederick(Sheffield Pk)
Davies, Ifor (Gower)Hughes, Emrys (S. Ayrshire)Murray, Albert
Davies, S. O. (Merthyr)Hughes, Hector (Aberdeen, N.)Neal, Harold
de Freitas, Sir GeoffreyHunter, Adam (Dunfermline)Newens, Stan
Delargy, HughHunter, A. E. (Feltham)Noel-Baker, Francis (Swindon)
Dell, EdmundHynd, H. (Accrington)Norwood, Christopher
Dempsey, JamesHynd, John (Attercliffe)Oakes, Gordon
Diamond, JohnIrvine, A. J. (Edge Hill)Ogden, Eric
Dodds, NormanJackson, ColinO'Malley, Brian
Doig, PeterJanner, Sir BarnetOram, Albert E. (E. Ham S.)
Donnelly, DesmondJay, Rt. Hn. DouglasOrbach, Maurice
Driberg, TomJeger, George (Goole)Orme, Stanley
Duffy, A. E. P.Jeger, Mrs Lena (H'b'n & St.P'cras, S.)Oswald, Thomas
Dunn, James A.Jenkins, Hugh (Putney)Owen, Will
Dunnett, JackJenkins, Rt. Hn. Roy (Stechford)Padley, Walter
Edelman, MauriceJohnson, Carol (Lewitham, S.)Page, Derek (King's Lynn)
Edwards, Rt. Hn. Ness (Caerphilly)Johnson, James (K'ston-on-Hull, W.)Paget, R. T.
Edwards, Robert (Bilston)Johnston, Russell (Inverness)Palmer, Arthur
English, MichaelJones, Dan (Burnley)Pannell, Rt. Hn. Charles
Ennals, DavidJones, Rt. Hn. Sir Elwyn (W. Ham, S.)Pargiter, G. A.
Ensor, DavidJones, J. Idwal (Wrexham)Park, Trevor (Derbyshire, S. E.)
Parker, JohnSilkin, John (Deptford)Tuck, Raphael
Parkin, B. T.Silkin, S. C. (Camberwell, Dulwich)Urwin, T. W.
Pavitt, LaurenceSilverman, Julius (Aston)Varley, Eric G.
Pearson, Arthur (Pontypridd)Silverman, Sydney (Nelson)Wainwright, Edwin
Peart, Rt. Hn. FredSkeffington, ArthurWalden, Brian (All Saints)
Pentland, NormanSlater, Mrs. Harrlet (Stoke, N.)Walker, Harold (Doncaster)
Perry, Ernest G.Slater, Joseph (Sedgefield)Wallace, George
Popplewell, ErnestSmall, WilliamWarbey, William
Prentice, R. E.Smith, Ellis (Stoke, S.)Watkins, Tudor
Price, J. T. (Westhoughton)Snow, JulianWeitzman, David
Probert, ArthurSolomons, HenryWells, William (Walsall, N.)
Pursey, Cmdr. HarrySoskice, Rt. Hn. Sir FrankWhite, Mrs. Eirene
Randall, HarrySpriggs, LeslieWhitlock, William
Rankin, JohnSteel, DavidWigg, Rt. Hn. George
Redhead, EdwardSteele, Thomas (Dunbartonshire, W.)Wilkins, W. A.
Rees, MerlynStewart, Rt. Hn. MichaelWilley, Rt. Hn. Frederick
Reynolds, G. W.Stonehouse, JohnWilliams, Alan (Swansea, W.)
Rhodes, GeoffreyStones, WilliamWilliams, Clifford
Richard, IvorStrauss, Rt. Hn. G. R. (Vauxhall)Williams, Mrs. Shirley (Hitchin)
Roberts, Albert (Normanton)Summerskill, Dr. ShirleyWilliams, W. T. (Warrington)
Roberts, Goronwy (Caernarvon)Swain, ThomasWillis, George (Edinburgh, E.)
Robertson, John (Paisley)Swingler, StephenWilson, Rt. Hn. Harold (Huyton)
Robinson, Rt. Hn. K. (St. Pancras, N.)Symonds, J. B.Wilson, William (Coventry, S.)
Rodgers, William (Stockton)Taverne, DickWinterbottom, R. E.
Rose, Paul B.Taylor, Bernard (Mansfield)Woof, Robert
Ross, Rt. Hn.WilliamThomas, George (Cardiff, W.)Wyatt, Woodrow
Rowland,ChristopherThomas, Iorwerth (Rhondda, W.)Yates, Victor (Ladywood)
Sheldon, RobertThomson, George (Dundee, E.)Zilliacus, K.
Shinwell, Rt. Hn. E.Thornton, Ernest
Shore, Peter (Stepney)Thorpe, JeremyTELLERS FOR THE NOES:
Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)Tinn, JamesMr. Sydney Irving and
Short, Mrs. Renee (W'hampton. N. E.)Tomney, FrankMr. George Rogers.