Orders of the Day — Aerospace

Part of the debate – in the House of Commons at 7:53 pm on 24th February 1983.

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Photo of Mr Tom McNally Mr Tom McNally , Stockport South 7:53 pm, 24th February 1983

The Government have rightly emphasised in recent years the importance of high technology industries as the way ahead for this country. It has been argued time and again that unless we move up market and compete at the highest ranges of technology there is no future for us as an industrial country. That is why I make no apology for bringing before the House the question of the British aerospace industry. I adopt a certain regional slant in what I argue because it would be impossible, within the terms of an Adjournment debate, to cover all aspects of British aerospace. If those connected with a particular company or a particular section of the industry feel, on reading this debate, that they have been neglected, it is not neglect on my part but necessity in terms of the time available to me.

It is important to say that we expect all Government Departments dealing with the British aerospace industry, and especially the Department of Industry as the main sponsoring Department, to give some idea of where it wants the industry to go and how the Government can best help it in that direction. The successful aerospace industries of the world have had a good and healthy working relationship with their Governments.

The reason for the regional bias in my speech is that the north-west has a concentration of aerospace industries—British Aerospace itself at Woodford and Chadderton, near my constituency, at Chorley and at Preston. Although I may concentrate on their problems, I hope that the Minister accepts that I am talking from a regional background but with a suspicion that some of the problems I raise may not be untypical in other parts of British Aerospace. I shall obviously concentrate on the British Aerospace company, although, if the Minister wishes to comment on a favourite hobby horse of mine, the relationships between British Aerospace and Rolls-Royce, or on Rolls-Royce policies in terms of international co-operation and development, the House would, I am sure, be interested.

I am always left with the suspicion that if the Japanese had two companies of such international repute as British Aerospace and Rolls-Royce, they would row in the same direction with a greater vigour than sometimes seems to be the case in respect of those two companies.

One factor that British Aerospace does not have to search for is international confidence. Whatever we may debate in the House about the merits and demerits of the Falklands conflict, there is no doubt that British Aerospace products and British Aerospace workers performed magnificently during that crisis. British Aerospace factories provided a round-the-clock modification and support service for aircraft and defence systems engaged in the south Atlantic. I take particular pride in the work done at British Aerospace, Woodford. A local paper rightly called those involved the unsung heroes of the Falklands crisis. The Harrier proved itself a superb and versatile aircraft in hostile conditions, as did the Rapier, Sea Wolf, Sea Dart and other missiles, as well as the Nimrod, Vulcan and Victor aircraft. We were only in that position because Governments of both parties had had the wisdom and foresight to back earlier developments by British Aerospace. It is important that, in the midst of a world recession, the Government should keep their nerve in respect of an industry that cannot operate year to year and that has to have the time span and the perspective of five to 10 years' planning ahead.

Aerospace is an industry that is extremely vulnerable to the loss of skill and design capability. Short-term decisions which might appeal to the Treasury on grounds of financial expediency could put in danger our prospects of being able to maintain our world standing in both military and civil aircraft. That market is enormous.

On the civil side, market analysis up to the year 2000 identifies about 2,300 aircraft in the 150-seater airbus category, about 1,600 in the BAe 146 type feedliner, and between 4,500 and 5,000 in the commuter jet and turboprop market, such as the HS748, the HS125 and the Jetstream. British Aerospace is to be congratulated on ensuring that it has the product range in all these markets throughout the period.

I want to mention, in particular, the success of the airbus. Too often talk of international co-operation remains just that—politicians' rhetoric. Airbus has turned rhetoric into reality. It was not long ago that the pundits were predicting that the United States would have a total monopoly of the world wide-body market, yet today, even in recession, Airbus Industrie has kept its grip on about 50 per cent. of the market, supplying no fewer than 43 airlines. That success affects not only British Aerospace itself, but a multitude of suppliers, who benefit from the new machine tools being installed and the new equipment being commissioned.

It is therefore necessary to express concern about the Government's intentions on the A320. I know that the hon. Member for Stockport, North (Mr. Bennett) asked a question a couple of weeks ago about this matter. This is just one of a number of projects that I shall list this evening which the Government have somewhere in the machine, but at the end of which are British Aerospace workers and a design team who want a clear idea where they are going.

I suspect that the hon. Member for Welwyn and Hatfield (Mr. Murphy) may wish to intervene on the subject of the BAC146. There is an early-day motion about the Far East tour that was recently undertaken by the 146. The tour covered 58,000 miles, and some 20 countries. I understand that the visit involved 98 demonstration flights and contact with 31 airlines. In my capacity as a member of the Select Committee on Industry and Trade, I have often heard criticism of the sales effort of British industry abroad. That criticism cannot be levelled at British Aerospace in trying to get the message over about the 146. I would draw the attention of any airlines considering buying it to what the chairman of Dan Air said: Dan Air has chosen the BAC146 because of its unrivalled economy, efficiency and quietness. I was pleased to see in the Financial Times that Dan Air has today announced the first two scheduled routes on which it will operate the BAC146.

I shall say a brief word about military development. Again, we see the paradox that, although the industry believes that it behaved marvellously and performed excellently in the Falklands, within the industry there is the need to see a clear way ahead. It is what the Society of British Aerospace Companies has called a release from the annual saga of cash limits associated with the defence budget". I realise that some of these questions about the defence budget and the military aide do not come specifically within the Minister's terms of reference, but I come back to what I said at the beginning of my speech. It is no use the Ministry of Defence having one view, the Department of Agriculture having another view, and the Department of Industry having a third view. I hope that, as a representative of the lead Department, the Minister will bang heads together in Whitehall to ensure that such an important industry is not left in the air about important decisions.

The Minister will know that our rivals are using defence procurement, in particular, to underpin high technology industry. I have referred to the Society of British Aerospace Companies, and it may seem strange coming from that source, but in its 1981–82 annual report it drew attention to the French Government's eighth national plan and the importance that that plan attached to research and technological development. The report says: The publication of such a plan … gives added weight to the Society's submission to the Prime Minister that a similar plan should be evolved for the British Aerospace industry. I hope that the Minister will comment on that, and give his Department's general approach to research and development.

I hope that the Minister will give the Government's attitude to the development of two projects on the military side: the agile combat aircraft and the air-launched anti-radar missile—ALARM. Many people at home and abroad are looking at the Government's attitude to those projects as an acid test of their commitment to support aerospace as the cost-effective spearhead of advanced technology. A positive decision on the ACA would have an immediate effect on the employment opportunities and prospects in the aerospace industries. As many as 40,000 jobs have been mentioned, right through to the early 1990s. Being at the forefront of high technology, this scheme involves employing over 6,000 graduates and training nearly 2,500 apprentices.

A failure to proceed with the ALARM project would, I am told, put in danger at least 800 jobs immediately at Lostock near Chorley, but, more important, a failure to proceed with a system that has already demonstrated considerable advantages over its American rival would cut off the British industry from participation in a market which will provide substantial employment over a 20-year span. From the point of view of the opportunities offered by investment and the needs of the industry, we are talking of spans of five, 10 and 20 years.

Without being too ideological on the matter, aerospace is an industry that needs a political consensus in this House, and least needs to be turned into a political football. It needs across-the-floor agreement on its future. It is encouraging that that has happened over the past few weeks in the lobbying of Ministers. There have been all-party motions, and delegations, although often separated into party groups, have been singing the same song in unison to Ministers. Whatever the next few months may bring politically, I hope the aerospace industry will feel that we are trying to develop in this House a consensus that will give the industry five, 10 and 15 years in which to plan. Early decisions and a commitment by the Government are necessary.

I emphasise again that I do not plead simply on behalf of one big manufacturer. I know from my own constituency of Stockport that if British Aerospace is doing well, it is feeding many smaller companies and industries. A recent report in the Financial Times suggested that if the ALARM project went ahead, no fewer than 500 British companies, many of them in the highest level of high technology, would be involved in the project. Failure to proceed with ALARM and ACA would leave the field open to our prime competitors. In such circum-stances, the industry would rapidly and irrevocably be reduced to the status of subcontractors.

I argue, both on the civil and military sides, that in the 1990s we shall have to purchase a whole range of replacement aircraft and weapons systems. The question before the Government and the country at the moment is whether in the 1990s, as is the case today, British Aerospace will have the product range to enable the Government of the day to buy British, or whether, because of tardiness, miscalculation or over-caution now, we shall have to buy American or Franco-German in the 1990s.

I understand that, under the rules of the House, I could speak for another two hours, but that is a temptation that I shall resist. However, before I sit down I should like to narrow my remarks to some points that affect my constituency where the same arguments pertain. There are decisions which only the Government can take but where the delay is putting uncertainty into the factories and could ultimately cause redundancies and the break-up of teams of skilled workers. The first is the decision that is being awaited from the Ministry of Agriculture, Fisheries and Food on the Coastguarder. I do not know whether the Minister has ever been to British Aerospace, Woodford, but it is well worth a visit if only to see the 748 line.

Without a doubt that has been the most versatile and dependable aircraft produced. The old Dakota is the nearest to it in aeroplane history. It is a war horse that has performed dependably all over the world and it is amazing that, because of the skill and ingenuity of the workforce at Woodford, it has not become a museum piece but has found new roles as technologies improve and as what can be tacked inside an aircraft has grown smaller. With the introduction of new technologies it has been found to be the ideal maritime reconnaissance plane for medium and small maritime powers.

At the moment Britain uses the Nimrod. Frankly, that is a little like hiring a Rolls-Royce for panda car duties. The Nimrod is an excellent aircraft and I can understand that the Ministry of Defence rather likes the £9 million that it takes out of the Ministry of Agriculture, Fisheries and Food budget for that reconnaissance work and I can also understand that there is some training element in such work, but, as the present flurry with Denmark over fishing demonstrated, our fishery protection service needs its own air surveillance capability, which can be provided by the Coastguarder.

It is well known that the sales effort of British Aerospace is partly restricted by the fact that when it demonstrates the aircraft abroad the first question it is asked is whether Britain, as a maritime power, operates the Coastguarder. It weakens the sales drive to say that the Government have been considering the matter since 1981.

I understand that British Aerospace is trying to sell the 748 to Egyptair with the possibility of follow-up sales of the Coastguarder to the Egyptian air force—a classic package which has been stalled because the Overseas Development Administration is unsure about aid and trade provisions and because the Export Credits Guarantee Department is being over-cautious about insurance cover. I hope that if this matter has not been cleared up already it will be soon. At the same time, apparently, Fokker and the Dutch have come forward with a generous aid and insurance package. It is the old problem—do we play cricket and let others play karate? There is the market and the opportunity but we have an over-cautious approach to making a sale. Will the Minister consider whether other Departments have the drive and purpose that his has for giving our high technology industries a fair chance?

Another area in which we need real drive from other Departments to give British Aerospace's initiative a helping hand is the imaginative development of the 748—the advanced turboprop. The fuel price escalation has made the advanced turboprop, as against the medium size jet, a possible market winner. As hon. Members will know, the Under-Secretary of State for Trade reported to the House last Monday that discussions with our European partners to obtain the liberalisation of European regional routes had again failed. Being the doughty fighter that he is, the Under-Secretary promised that he would go back into battle, albeit next June. If he were to succeed and we were to achieve a relaxation of European air routes and stop the over-concentration on capital-to-capital flights, it would not only be to the advantage of regional airports such as Manchester international; it would also mean that the European market would require 60 to 70-seater passenger aircraft. I congratulate British Aerospace on its initiative, because if that market became available the ATP would certainly be the right aircraft to exploit it.

Finally, I ask the Minister about the future of the Nimrod programme, which I know that his colleagues are pondering. Again, we need an early decision. It is a two-stage decision. First, Woodford could well use the maintenance and refurbishment work which is at present being carried out—not altogether effectively because Woodford's help is occasionally needed—by the Royal Air Force. Would it not be better to have a return-to-works programme for the Nimrod which is at present in service in the RAF? I know that Ministers are considering that, because the right hon. Member for Manchester, Openshaw (Mr. Morris) led a delegation to the Minister of State on 2 February. However, we have nearly reached the end of February and the workers of Woodford would like to know what sense of urgency there is in the review that was promised to the right hon. Member for Openshaw and, most importantly, when they can expect a decision.

How far have discussions gone on the reopening of the Nimrod line? I do not think there is any doubt that, in both its maritime and its early warning role, the Nimrod was a great success. I understand that within the RAF, after the experience in the Falklands and elsewhere, there is a strong pressure for more Nimrods to be ordered. In addition, there are signs that there are Governments in the world who, if the Nimrod line were again working, would consider purchasing them. That is a worthwhile project and the amount of investment that it would need compared with some earlier projects is relatively small. I urge the Minister to ask his colleagues to put their thinking caps on. There should be an early decision on the return-to-works programme and a hard look at whether there is more life in the Nimrod programme.

I realise that I have covered a number of Departments for which the Minister has no direct responsibility, but I remind him that he is a Minister in the Department of Industry and that it is his responsibility to maintain an effective British aerospace industry. Our rivals, competitors and collaborators have shown that the key to success is a close working relationship between the industry and the Government. An alarmingly large number of decisions about the British aircraft industry are sitting in the pending trays of various Ministers. With regard to the future of the aerospace industry in the north-west, we need to know about the agile combat aircraft, the ALARM system, airbus, Nimrod and the Coastguarder. That is quite a shopping list, but it shows how much is caught up in the Whitehall machine. The logjams need releasing so that aerospace can start to plan ahead. Prevarication will not help us survive in a high technology world. Literally thousands of jobs are at stake. The spin-off into supply industries is enormous.

The question is not whether the Government will need those aircraft and systems—they will need them—but whether the aerospace industry will be in a shape to compete for the orders in the 1990s and beyond. It is that commitment, not just in words but in deeds and announcements, to the high technology industries of tomorrow that I seek from the Minister. Decisions now could avoid a crisis in the aerospace industry. Delay will make it inevitable. For the north-west in particular delay would perhaps be a mortal blow to our hopes of industrial recovery led by the high technology industries.

I realise that the Minister will not be able to give me firm replies on all the points that I have raised, but I emphasise that he and his Department must accept the responsibility to knock heads together in Whitehall and to get over the message to the Treasury and other Departments that aerospace needs a long-term perspective and a close working relationship with the Government, and needs to know where it is going and how far it has the support of the Government and the House in an endeavour that is crucial to this country's economic and industrial survival.