Aerospace Industry

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 25th March 1999.

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Photo of Mr John Wilkinson Mr John Wilkinson Conservative, Ruislip - Northwood 12:00 am, 25th March 1999

When he last met representatives of the aerospace manufacturers in the UK to discuss a national strategy for the industry. [77034]

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

I and my officials regularly meet senior representatives of the United Kingdom aerospace and defence industry to discuss matters of strategic importance. My last meeting with them was prior to the Madrid meeting of European Industry Ministers in January.

Photo of Mr John Wilkinson Mr John Wilkinson Conservative, Ruislip - Northwood

Is the Minister aware that British Aerospace is to make a provision of no less than £25 million for last year against losses incurred by the Airbus consortium amounting to a total of £125 million in its discounting war to obtain market share against Boeing? Will he assure the House that, before there is any question of launch aid from Her Majesty's Government to Airbus Industries for the A3XX ultra large jumbo replacement, the Government will insist that Airbus Industries is turned from a groupement d'intérêt économique into a limited company with transparency that will show value for money and value for investment?

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

We cannot give the hon. Gentleman an absolute assurance because we cannot control what other countries and other companies do, but his point is valid. When we examine any application for launch aid, we shall take into consideration the need to have open markets in the Airbus industry in Europe as a whole.

Photo of David Borrow David Borrow Labour, South Ribble

I am pleased that the Government are seeking to develop a strategy for the aerospace industry, which is much needed. I urge the Minister, when consulting the industry, to ensure that organisations representing smaller companies, such as the Consortium of Lancashire Aerospace, are included in the consultation process. Will he also ensure that representatives of local communities that are dependent on the industry, and trade unions that represent those who work in the industry, are included in the development of a strategy?

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

I thank my hon. Friend for his comments. He champions the industry in his area, and the Consortium of Lancashire Aerospace does a good job. The aerospace and defence industries, including the supply chain, support some 500,000 people. We are keen that everyone involved in the whole structure of the industry is consulted and participates in the conversations to take the industry forward to a prosperous future.

Photo of Mr David Chidgey Mr David Chidgey Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Foreign and Commonwealth Affairs)

In the Minister's discussions with the industry, was he made aware of its concern about the appalling record of investment in research and development in this country, which is the lowest of our competing nations? Was he also made aware that British Aerospace firms are being persuaded to move their research and development and their production facilities overseas, as they are attracted by better investment support? Will he give a commitment to improve the record for the funding of research and development in this country? Will he start by announcing that he will keep the civil aviation research and development programme in place unchanged—or, better still, improved?

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

I am not sure that I accept the premise of the hon. Gentleman's questions. We are supporting, or have supported, research and development either through launch aid, investment or in previous CARAD programmes. Decisions on the allocation of all Department of Trade and Industry budgets, including the CARAD programme, will be announced at the end of this month when the Department publishes its expenditure plans. I hope that the hon. Gentleman is encouraged by that.

Photo of John Smith John Smith Labour, Vale of Glamorgan

Is my hon. Friend aware of the recent announcement of an investment at British Airways maintenance centre in Rhoose in my constituency, which will make it the only deep maintenance aerospace facility that can service Boeing's heavy 777 aircraft and make it a world leader? Is he also aware that south Wales now has one of the most advanced aerospace sectors in the country, which contributes almost £800 million a year to the local economy? The future success of the south Wales economy depends on continued investment in those areas.

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

My hon. Friend also champions the industry, and emphasises the link with the whole economy. We must not underestimate or undervalue that link. In the meetings and constructive dialogue that we have with the Society of British Aerospace Companies, which is the trade association for aerospace, we intend to work in partnership with the companies to ensure that our aerospace industry has a long and successful future.

Photo of Jeffrey M. Donaldson Jeffrey M. Donaldson Shadow Spokesperson (Trade and Industry)

The Minister will be aware of the importance of the aerospace industry to the economy of Northern Ireland, and in particular the employment provided by Shorts in Belfast. At present, Shorts, in partnership with Raytheon and other UK companies, is making a bid for the new, advanced, stand-off radar system in the United Kingdom. Does the DTI have a role in the decision-making process on the awarding of that new project for an advance, stand-off radar system? Will the Minister tell us when a decision is expected as to who will be awarded that project?

Photo of John Battle John Battle Minister of State (Science, Energy and Industry), Department of Trade and Industry

The Department of Trade and Industry has a role, but, because a defence contract is involved, the final decision will be made by the Ministry of Defence. Our role is to represent the industry, and, having been consulted, to spell out the impact of the decision, whether that is positive or negative. I had the pleasure of visiting Shorts not long ago, and I believe that the excellence of its work will be taken into account when the decision is made.