MPs call for pounds 1bn aerospace funding: Irreversible damage unless more cash is provided, Government warned

A CROSS-PARTY committee of MPs yesterday challenged the Government to demonstrate its new-found commitment to manufacturing industry by pumping an extra pounds 1bn into the aerospace sector over the next decade.

The Commons trade and industry select committee warned that unless there was more funding for research and a national strategic plan for the key civil and military technologies needed for the next century the sector could suffer 'irreversible damage'.

In a highly critical report the MPs also called on ministers to ease the rules governing launch aid schemes and spell out its policy towards the aerospace sector much more clearly.

Launching the report, Richard Caborn, the committee chairman, said the aerospace industry was 'not a lame duck asking for rescue but an area of technological strength seeking the chance to compete on something like equal terms'.

Heading the MPs' 19 recommendations is a call for the Department of Trade and Industry to implement the national strategic technology acquisition plan drawn up by its own advisory committee. According to industry estimates, this would require extra DTI funding of pounds 90m-pounds 100m a year for the next 10 years compared with a figure of less than pounds 20m earmarked for each of the next three years.

If ministers agreed, industry would match government funding allowing research into key technologies such as advanced wing design, cockpit systems and new composite engine materials.

'This is not a good time to be calling for increased government spending but the sums involved . . . are not massive in public expenditure terms and are small in relation to the industry's turnover and contribution to the balance of payments,' says the report.

'Moreover, the extra expenditure falls squarely within one of the Government's priority areas - the revival of manufacturing industry.'

The Society of British Aerospace Companies said it welcomed the announcement by the industry minister, Tim Sainsbury, that he would adopt the priorities set out in the advisory committee's technology plan as DTI policy. But his statement made no mention of whether the Government would increase funding.

Although the aerospace industry has been one of Britain's most successful, contributing pounds 2.5bn to the balance of payments last year, the MPs said the Government lacked a coherent approach to it.

At the same time the launch aid scheme, under which pounds 1.22bn has been paid in refundable loans to seven aircraft and aero-engine projects since 1979, has now become a net earner of income for the Government with receipts exceeding expenditure by pounds 26.7m last financial year.

The MPs say the Government should consider deferring repayments to ease company cash flow problems, providing guarantees rather than cash and adopting a more positive attitude towards launch aid applications from equipment suppliers.