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Aviation History
1958
1958 - 0744.PDF
760 FLIGHT, 6 June 1958 The Aircraft Industry Debate LAST week Flight summarized the aircraft industry debatewhich took place in the House of Commons on May 22.J Lasting 6$ hours, it was the most comprehensive Parlia- mentary discussion of the aircraft industry for two-and-a-halfyears. Points from speeches are given more fully hereunder; and for quick reference selected items, not in chronological sequence,are grouped together under specific headings. Research. MR. GEORGE BROWN (Lab., Belper): "Not only was the[Minister's statement on research and development] excessively vague . . . but the Minister succeeded in substantially concealing fromthe House that he was virtually offering the industry nothing at all. The Minister's statement goes less, far than any of us at the time thought. . .he managed to make it in a way which has aroused a great deal of criticism and irritation in the industry . . ." "The statement is a firm statement. It says that the responsibilityfor the cost of this research will be passed over to the industry in the future . . . Does the statement mean what it says, or does it not?" MR. AUBREY JONES (Minister of Supply): "I am sorry that the righthon. Gentleman takes a poor view of it, but I think it was the decision which essentially the industry wanted. I will leave it at that." MR. WILLIAM SHEPHERD (Con., Cheadle): "One must realize that ina large concern research and development staff constitutes 20 per cent of the total staff employed. It amounts to at least 33 J per cent of theweekly wage bill. If a firm, with the best intentions—but in my view unsoundly—tries to amalgamate and keep two research and develop-ment staffs going, it will be on the road to disaster . . ." MAJ. E. A. H. LEGG-BOURKE (Con., Isle of Ely): "Who is his [theMinister of Supply's] master? It is the Treasury. Every time it is the Treasury. It is the Treasury that caused the cut in defence expendituresome time ago. It is the Treasury that brought about the position where we could not afford short-term and long-term activities. It was theTreasury that said it was not prepared to cut the social budget by more than a certain amount and that, therefore, the money must comefrom the defence budget. It is the Treasury that has said that it is more important to put more money to old-age pensions than to putit into research." MR. FRANK BESWICK (Lab., Uxbridge): "What does the Ministermean by his statement [that the industry will progressively assume financial liability for research] . . ? Does he mean that, in the courseof time, he will present them with a bill for the cost of the research? Is it to be on a repayment basis . . . What exactly does that statementmean?" "There is no impression of a long-term policy. The feeling I haveis one of an ad hoc or piecemeal approach to the whole business. There is one thing that is absolutely certain ... It is that we cannot haveprofitable and sustained research on a cap-in-hand basis. If [firms] have to go to the Treasury on each project and have to try to explain topeople who may be very clever on financial matters but absolutely ignorant about aircraft, then we shall not only frustrate the individualresearch officers concerned but will not give the nation the results we want.""There is another reason why I think we cannot 'carry out basic research of this kind on a temporary and piecemeal basis. We musthave a long-term budget for research. There must be a certain amount of basic research going on the whole time, quite irrespective of themonth-to-month or even year-by-year scrutiny of the Treasury." Current British Civil Aircraft. SIR ARTHUR VERE HARVEY (Con.,Macclesfield): "Had this [the Wright Turbo-Compound engine which, according to Aviation Week 'is the target of mounting criticism from air-lines and engineering officials'] been a British engine such as the Britannia's, which has given a certain amount of trouble, we shouldnever have heard the end of it. Every newspaper would have reported every single engine failure." "America is able to offer enormously long-term credits compared withours, because their Government make it possible to do so. Have Her Majesty's Government thought about this? Has the Minister anyideas about it? Does he realize that something must be done . . . ?" "Is my right hon. Friend aware that this matter [credit competition]has been known now for at least a year? While the Government are examining the matter, good business is being lost. Will he give theHouse some assurance that the matter will be dealt with expeditiously in order to put the British industry on an equal footing with itscompetitors?" MR. AUBREY JONES : "I am prepared to concede immediately that thisis the most important question facing the industry. I think there are probably two sides to it. There is, first of all, the length of time forwhich the Export Credit Guarantees Department extends its insurance. In this country, the maximum period for the insurance is five years, but Iunderstand that the American companies receive from the Export-Import Bank insurance extending over seven years. This is a subject currentlybeing examined, and I am not in a position to announce any conclusion. It is being examined as sympathetically as possible, subject to twoinevitable limitations. Clearly, the Export Credits Guarantees Depart- ment is required by statute to pay its way, and must be inhibited to someextent by certain international agreements. However, the subject is being looked at.""The difficulty is not so much the terms offered by the Export Credits Guarantees Department, but the greater financial strength of Americancompanies vis-a-vis the British companies. This is something we have to look at, and again we have to recognize that the Government can makebut a limited contribution to strengthening an individual company . . . That is something which the company must perform itself." MR. WILLIAM SHEPHERD : "I heard the other day about what was happening to the Lockheed Electra. I understand that the makers ofthis aircraft go round to operators and say 'If you take this aircraft, you can have it for two years on hire. At the end of the two years, youcan decide whether you want to buy it. If at the end of two years you want to buy it, you can set off the amount that you have paid for thetwo years' hire as a deposit against the aircraft and pay the balance over seven years.' If one were to try to sell, as Vickers are doing, an aircraftcompetitive with the Electra on ordinary straight five-year terms one would find those methods of selling, to say the least, rather discouraging.In view of the fact that almost every aircraft operating company in the world is almost stony broke and cannot find the money for the aircraftthat it has already acquired, these effective and attractive terms are a tremendous discouragement to our people ... I hope that my righthon. Friend will weigh in to the Chancellor and ensure that our manu- facturers are permitted to offer terms at least as satisfactory as thoseoffered by our American competitors." MR. FRANK BESWICK : "On the one hand, we have offended our NewZealand friends about this business of butter. On the other hand, the T.E.A.L. orders which de Havilland thought they had secured for theComet 4 seem likely to be lost because of action by the Australian Government. I hope the Minister of Supply will put it to the PrimeMinister, no lower, that something extra ought to be done before it is too late to have Commonwealth talks on this matter. And Common-wealth trade is not a one-way affair: there must be a two-way traffic in which we buy their products if they are to take our manufactured goods." Government Control of the Industry. SIR ARTHUR VERE HARVEY:"I therefore raise the question whether the right thing is not to have a Ministry of Aviation, which will be responsible for production, liaison,research and, also, operations." MR. AUBREY JONES : "Whilst I understand the right hon. Gentle-man's craving for some great centre of Government dealing with the whole of aviation, I honestly think that if he came seriously to examinethe question, he would find that it would not be practicable. Anyhow, [an] internal inquiry was set up and it is still not completed." "I am not a laissez fairist. I think that the proper answer here issomething between full Government authority and complete laissez jaire. What we need is a combination of impulse from above compellingthe assumption of responsibility on the part of the industry itself." MR. GEORGE BROWN: "In 1955, I suggested that we ought to havean inquiry. It is an old and cynical joke that whenever a politician cannot think up a good answer he suggests a commission ... Nevertheless,there are times when we must go outside the Government's machine, because the problem is much wider than any one Government Depart-ment can consider." "I suggest that [a] five-man committee ought to be set up veryurgently with a powerful, disinterested but well-informed and authorita- tive figure as the chairman ... I believe that in Lord Hives, if he isavailable, we have a man—I will not say that he is the only man— who would make a natural chairman of such a committee. He is a manof vast knowledge and of great drive, a very disinterested, forthright and straightforward man. I think that in him we have the naturalchairman for such a body . . ." MR. FRANK BESWICK : "There is a sound case for giving some Minister•—the Minister of Supply or someone else—not only responsibility but power over aviation policy and to have responsibility not only for themanufacturing of aircraft but airline operating as well. That idea goes into the general pool of ideas, and I trust that some thought will begiven to it in future." Contraction of the Aircraft Industry. MR. AUBREY JONES : "First, Ithink that an industry which is too dependent on public finance will lose even its most genuine friends, and I think that in fact the aircraft^industry was in danger of losing its friends. Secondly, I believe that ari" industry which is too dependent on public finance will always be reluctantto assume the responsibility of strengthening itself. Some strengthening of the aircraft industry must come from the assumption of responsibilityby the industry itself. "It has been common ground . . . that we wish to save the industry..If there is a difference between us it is that (Mr. Beswick) thinks salvation can come entirely from above, whereas I think some action is needed front-above but that some response is also necessary from below. The mem-, bers of this industry themselves must think long and they must thinklarge . . ." MR. WILLIAM SHEPHERD : "The fact is that the whole of the [world's]aircraft manufacturing industry, when added together, is a piece of non- sense ... At the moment 895 projects of some size are being putforward ... Of that 895, it is questionable whether more than a hundred", will ever see a reasonable level of production, and the great majoritywill never see any production at all." "This is not an industry. It is a wild, futile, nationalistic scramble byvarious nations, all saying, "We must outdo the other feliow. We cannot. ' be under him. If he does it, we must do it.' Hundreds of thousandsof millions of pounds of public money have been poured down the drain throughout the world in an attempt to produce aircraft which in-the main will never be produced." MR. FRANK BESWICK : "The Minister talked about handing outdevelopment projects to firms which were good and which did as he told them and got together. To whom will he hand out these hypo-thetical development projects in the future—-to Hawker Siddeley, to Bristol, or to the company in between? One of the difficulties aboutthis arrangement is that while we need concentration of units we are in danger of getting proliferation of companies. We have more committeesand more companies to deal with." MR. W. J. TAYLOR (Parliamentary Secretary to the Ministry of (Concluded at foot of page 762)
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