Aviation

Part of the debate – in the House of Commons at 12:00 am on 21 November 1966.

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Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park 12:00, 21 November 1966

I was not questioning the sophistication of the TSP.2. If the hon. Gentleman looks at the note of dissent by Mr. Aubrey Jones to the Plowden Report, which was commended as stating Opposition policy, he will see that Mr. Jones begins by saying that, in his view, the Government landed the industry with an over-ambitious programme.

I do not propose to go over the ground again today, except to say that all the gloomy prognostications of the Opposition about total disaster and massive redundancies in the industry proved to be without foundation. In September, 1964, manpower was 269,000; in August last, it was 256,000—a drop of 13,000.

Before hon. Members opposite are tempted to follow the right hon. Gentleman's bad example and to try to make political capital out of this situation, I would suggest that they reflect on the difference in the situation of the aircraft industry in 1951 as compared with 1964. The dominance of American industry and the declining British share of world aircraft sales took place in these years. Incidentally, the industry's profits on captial employed were 22·8 per cent. in 1951 as compared with 6·3 per cent. in 1964. I acknowledge my debt to an Aims of Industry publication for drawing my attention to these figures.

The development of all the most successful of post-war British military aircraft—the Hunter, the Canberra, the Javelin and V-bombers—started under the Labour Government, as did the Comet and the world-beating Viscount in the civil field. This was how we left the industry in 1951, poised for successful expansion.

The picture in 1964 was very different. Three major military projects were being developed at a totally disproportionate cost, far too late and with no prospects at all of export sales. I suggest, therefore, that hon. Members opposite are in no position to criticise us for taking time to reach the right answers to what are generally understood to be complex and difficult problems. When the right hon. Gentleman talks about these matters, he talks about a rigorous and selective examination. But when we do just this, it becomes a matter of delay and uncertainty.

The Financial Times on 8th November, for example, stated: What is clear from the U.K. industry's standpoint is that while there may be some apparent delay by the Government in settling these major projects this stems from a genuine desire to see that the best decisions are taken and that nothing is started that ultimately proves to be either a flop or a waste of resources. The vigour and determination with which Britain is pressing the 'VG' case proves this. While it may at some future time be smaller than it is today, there is little doubt that the long-term future for the aerospace industry is far from being as bleak as some might suppose. It is a pity that hon. Members opposite did not follow the principles about which they talk today when they were in office.

Nor is it true that the Government have been guilty of undue delay in dealing with the recommendations of the Plowden Committee. The Committee made 24 detailed recommendations, many of which involved discussions with industry before final conclusions could be reached. Of these, 16 recommendations have been wholly accepted, six more have been accepted in principle, and only two have been rejected.

However, it is the section of the Plowden Report concerning the relationship between Government and industry which has aroused the greatest public interest and which, I imagine, will occupy a good deal of today's debate. The Committee recommended that the Government should review the future of the Ministry of Aviation, and my right hon. Friend the Prime Minister has this afternoon announced the outcome of this review. I can understand the feelings of those who would like to continue a separate Ministry for all aviation matters, but I have no doubt that the new arrangements are better calculated to serve both the interests of industry and the interests of the nation. And for those who accept the principle but criticise the timing, I would say, after 11 months as Minister, that I am convinced that there is never a wholly convenient time for such a change.

Responsibilities for all aspects of civil aviation have already been transferred to my right hon. Friend the President of the Board of Trade. The remaining functions of my Department are to be transferred to the Ministry of Technology, which was set up in 1964 to co-ordinate and develop research and development programmes on the civil side for the whole of industry. It must surely be right that the aircraft or aerospace industry should be a major part of this Ministry because of the contribution it makes to advanced technology beyond the confines of its own field. It is already established that much of the scientific advance made in aviation has fundamental application for other industries too. Equally, aviation has profited from technological progress in other fields. Much remains to be done to achieve the maximum industrial application of knowledge derived from aeronautical and defence research, and the transfer of the research establishments to my right hon. Friend the Minister of Technology and the placing of the aircraft industry with the sponsorship for engineering and electronics should greatly facilitate the fruitful interchange of technical information.

As my right hon. Friend has explained, there has been a thorough examination of the case for separating military procurement from the other functions of my Ministry. It is extremely difficult to separate civil from military research in, for example, engines, and impossible to draw a rigid line of demarcation between research and development or development and production—the seamless robe of research development and production as it is called. There is much force in this analogy, and equally I am convinced of the indivisibility of advanced technology and that it is detrimental to industry and the nation alike to seek to isolate or fragment one part from another. I hope, therefore, that the proposals made by my right hon. Friend will commend themselves to the House.

At this point I should refer to the very constructive proposals put forward by the Member for Mitcham in the Plowden debate and to which he again referred today to improve the Government organisation and procedures in dealing with very complex and advanced technological projects. I welcome his non-partisan approach. As he recognises, these questions have occupied successive Governments. Progress has been made, but, as he suggests, radical rethinking may be required not only on the part of Government, but also by this House before we reach the right answers.

I can assure him that project directors have been appointed with a supporting team for all major projects. For example, the new Director General of the Concord programme is a chief scientific officer. This method of management is still evolving and it will be possible to make further improvements in the light of experience. In the same way the joint control of Anglo-French projects is also improving.

The right hon. Gentleman also raised the question of getting more effective incentive contracts. But in negotiating any fixed price or other incentive type of contract, the first essential is to have a precise specification and it is rarely possible to have such a specification at the outset of development. The extent to which the specification can be defined also affects the reliability of the development cost estimates. A group of my senior officials who have been studying this problem expect to report shortly, and I shall consider whether the report should be published.

We have also discussed with the S.B.A.C. the setting-up of a committee to examine the efficiency and performance of the industry, and I hope that it will be possible to get this examination under way fairly soon.