Aerospace Products

Oral Answers to Questions — Trade and Industry – in the House of Commons am 12:00 am ar 23 Ionawr 1991.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mr Michael Colvin Mr Michael Colvin , Romsey and Waterside 12:00, 23 Ionawr 1991

To ask the Secretary of State for Trade and Industry what was the value of exports of aerospace products to the United States of America for the last full year for which figures are available.

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

Aerospace products are included in a number of trade classifications. It is estimated, however, that the value of aerospace exports to the USA in 1989 was about £.1·5 billion.

Photo of Mr Michael Colvin Mr Michael Colvin , Romsey and Waterside

Those exports far exceed imports, which shows the value of the aerospace industry to this country's balance of payments. Is my hon. Friend aware that aerospace products are usually priced in dollars, that the value of the pound against the dollar is currently unrealistically high and locked into the exchange rate mechanism, and that British aerospace companies therefore have the alternative either of selling products at a loss or of exporting manufacturing jobs? Is he aware that tens of thousands of jobs are at stake to dollar countries, such as the United States of America and Canada? The German Government have a Government-funded insurance scheme to cover exchange rate contingencies. Will my hon. Friend undertake to investigate that scheme and consider introducing a similar scheme in this country?

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

I join my hon. Friend in paying tribute to an industry which in the past decade of Conservative government has doubled both productivity and turnover in real terms. In addition, it has trebled its exports—an achievement to which we should all pay tribute. As my hon. Friend will know, the dollar weakness affects all other currencies, not just the pound sterling. He referred to a particular German scheme. We are very keen that our industries should be able to compete on a level playing field, although that is perhaps not quite the right metaphor for the aerospace industry. My hon. Friend may be aware that there are doubts about whether the scheme to which he referred is permissible under GATT rules and I understand that it is the subject of a formal complaint to the GATT subsidies code panel.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Everyone hopes that hostilities in the Gulf will end quickly. Will the Minister therefore confirm that the long-term viability of the aerospace industry depends on the development of civil projects and that we should not depend on military expenditure solely, to the exclusion of virtually all other projects in the United Kingdom? Will the Minister express a sympathetic view to any approaches from the industry to support civilian ventures in the same way and to the same massive extent as the Government pours money into military ventures?

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

I assure the hon. Member that we by no means depend on military aviation. We have had a number of notable successes in civil aviation. For example, GEC was awarded a contract to supply fly-by-wire systems for the Boeing 707; Rolls-Royce is taking a market share in the United States. The United States airline, America West, has signed an agreement with Airbus Industrie for the purchase of A320s. The civil aerospace industry is doing extremely well and I hope that it will continue to do so.