I agree with that. I think it will earn a great deal more in the future. In the high risk business we are now in with aerospace work it is essential that public investment should be safeguarded and that there should be public accountability. I recognise the hon. Member's constituency interest in this and I know some of the concerns nearest to his heart. I think he would agree that much of the public money which has gone into the aerospace industry over the past decade has not been fruitfully used but has been wasted. In this House we have never had proper accountability until long after the event.
It is no good some Select Committee deliberating upon these things years after the money has been spent. We need to know what is happening and to have accountability at the time of the expenditure, when the risks have been taken. Of course there will be risks, and I hope that there will be profits accruing from them. But this should be within the context of public ownership.
I give two small examples from the publicly-owned Rolls-Royce company, which is my particular concern, as an illustration of this point. The company is engaged upon a wide range of production and innovation. It is engaged not merely in the massive project which led to the financial crisis of 1970–71, but in a whole range of collaborative ventures often overlooked when we consider the rôle of this public company within the general aerospace picture.
I take just one small example which is relevant by way of comparison with other matters which have been raised by some of my right hon. and hon. Friends recently, namely the small, short-haul airliner being built in collaboration with the Dutch company, Fokker. In view of the fears that have been expressed in the House over the future of the Hawker Siddeley 146, it is worth recollecting that the number of British components in the Fokker aircraft is almost as considerable as those which would have been in the proposed HS146, although I hope that the 146 will still be built.
It is worth considering that we have here a public company putting about 41 per cent. of its expenditure into this aircraft, the F28, while the privately-owned company, from which we have heard a great deal through the pronouncements of Sir Arnold Hall during the election, has now withdrawn from its commitment. It had a great deal of public assistance in the early stages of its commitment to build the HS146.
There should be a publicly-owned company for the aerospace industry. It should be based upon BAC and should certainly include all of the aerospace parts of Hawker Siddeley. Sir Arnold Hall would probably not quarrel too much with the contention that during the period of his control over Hawker Siddeley it has diversified pretty successfully out of aerospace. It has not actually been expanding its aerospace interests. It has been moving into other things. It is part of that removal from the, to my mind, vital aerospace side of our exporting industries which is in part at the back of all that has happened with the HS146.
I believe that the wholly owned public company such as Rolls-Royce is now an answer in the context of public ownership. In the remarkably lucid maiden speech by my hon. Friend the Member for Lincoln (Miss Jackson) we heard the contention that the publicly-owned company, unlike the privately-owned company, does not have the need at every turn to placate its shareholders, to consider the short-term profits over the long-term investment. When the hon. Member for Henley began prating from the Opposition Front Bench about a failure to invest one would have thought that that failure had begun on 1st March this year.
That failure is deep-seated and profound It is the major malaise of the whole of private industry in the country. That is nowhere more true than in aerospace. In Rolls-Royce we have a com- pany which is now deriving its investment from the left and right pockets of the taxpayer. The major investment programme which is now being undertaken by it, the RB211 engine in its stretched form, the-524, is partly funded by the profits of Rolls-Royce, which are based upon the taxpayers' investment, since it was the taxpayers' money which floated Rolls-Royce 1971. It was also floated, in equal ratio, by direct Government grant, by Government loan, to get this project moving.
Much to my regret just before the election, and not entirely coincidentally, the Financial Times ran a major story to the effect that the Labour Government were withdrawing from their commitment to the pre-production financing of the-524 engine. My right hon. Friend the Secretary of State for Industry was put under considerable pressure then. It is fair to say that the Boeing Company, reading this article, and believing it—and I have reason to think that a major part of the story was perhaps leaked from within the aerospace industry—had to ask the Government whether the project was going ahead and receiving the backing of the British Government. The fact is that it was. It is perhaps a sign of the times that the Government funding of the-524 engine depended upon a firm order from Saudi Arabia, Saudia Airways. The minute we received that firm order, the Government contribution by way of the launching loan was paid over. My constituents and I welcome that, as do all the people who came to talk to the Secretary of State. They know that that is happening within the context of a responsible public industry.
When Opposition Members say, "What about all these profits, and what about the collapse of this great industry if it were taken into public ownership?"—I say that at the cutting edge of innovation, export and risk-taking is a publicly-owned industry which is doing precisely that.
I make a special plea to my right hon. Friend the Secretary of State for Industry. I believe that a large part of the future of the British aerospace industry lies in the development of the whole family of engines built upon the RB211. We have seen an extension of this in the -524 which has been developed with 48,000 lb thrust for Lockheed and will be developed up to 50,000 lb thrust for Boeing and Lockheed if that development is approachable. I have every reason to believe that it will be. It will be the work horse of the world's airlines in the 1980s and 1990s. My right hon. Friend should vary the conditions which have been placed by the British Government upon additional funding for the collaborative project with Boeing, because the fitting of that engine to the Boeing 747 aircraft would give the engine a much wider range and a much greater acceptability to the world's airlines than is possible if it is included only in the Lockheed TriStar, successful though that has been.
I know my right hon. Friend's enthusiasm for the RB211 project and I know that he has been with it and supported it from the start. As the Boeing Company already has a conditional order from British Airways for a certain number of 747 aircraft, we should be able to say to the Boeing Company, as we said to Lockheed, that one order is enough.
As I understand the financing of the project, about £80 million is required for this development, about £55 million of which will be required for Lockheed in any event and a further £10 million to get the engine up to the 50,000 lb thrust that Lockheed as well as Boeing requires. We are, therefore, talking of less than one-third of the total amount which will be specifically earmarked for the funding of a conversion for the Boeing 747. As the Government will be putting up half that money directly through the taxpayer and from the Chancellor of the Exchequer I believe that it will be money well spent.
If there is to be a future for this great enterprise not merely in the next decade but for the rest of the century it has to be achieved within the context of responsible public ownership. During the election I was constantly seeing large Renault motor cars driving people to the polls in the Conservative interest which had plastered all over the back window "No to Nationalisation". There is a similar ambivalence about the Conservative Party's attitude not only in this debate but also towards Rolls-Royce which the Conservative Government had perforce to nationalise in 1971. I believe that the industry can go forward into an immensely profitable area of exports and into a sustained field of further innovation, as a publicly-owned enterprise which will belie as the years go on all the absurd, cheap sneers about public ownership which we have heard in this debate.