BRITISH AND BUST
There has been a lot of noise and fury signifying nothing very much about the collapse of Rolls-Royce and the subse- quent actions of the Government. It is clear to us all that insofar as a direct and clear defence need exists certain parts of the Rolls-Royce industrial undertaking must be kept going, but not necessarily under the Rolls-Royce name and not necessarily conducted by Rolls-Royce management. Mr Enoch Powell was quite correct in his assertion that the end of Rolls-Royce as we have grown accustomed to it is in no sense the end of the manu- facturing and designing and inventive skills of the men employed by the firm. No doubt the bankruptcy of Rolls-Royce disappoints many. This has been a famous firm whose name over the years has become associated in the popular mind at home and overseas with a particular quality of production and excellence of engineering. Its public repute has derived in part from its conservatively designed motor cars and in part from its aero engines, often of an advanced engineering nature. But there is no need to get carried away by its collapse into the realms of fantasy and talk as if this country has suffered some kind of major defeat. There have been realms of fantasy, and people have been carried away into them: the executives at Rolls-Royce who entered into a disas- trously foolish contract with Lockheeds, the astonishingly naive Mr Wedgwood Benn who backed Rolls-Royce in its fol- lies, and — fools after the event — the ordinary people who thought that disaster was a triumph and who put their faith, labour and money into the service of a badly run commercial enterprise.
We very nearly did suffer a major defeat, however; and that we did not, we must thank the Cabinet, whose nerve seems to have held very well. The temp- tation to say 'we must not allow this great firm, this symbol of British skill, this vital part of Anglo-American technical coop- eration, this essential ingredient in the defence forces of many countries, this in- disputable national asset, etc., etc., to col- lapse' must have been great. It would have been comparatively easy, in political terms, to. inject a few score more millions into the firm — the public may well have cheered, or if it did not go so far as that, would as like as not have put up with its money being thus squandered. The tax- payer has become, over the consensus years, punch-drunk on such matters. But such an injection of public money, whether popular or put up with, could not have been other than an economic defeat and also, in this case, a subsidy to the United States and to Lockheeds.
The squeals that have come from the other side of the Atlantic are welcome noises, and noises that we have not heard for a long time. They are welcome because they indicate that a British government is prepared to put its economic interest above that of its closest friend. It is non- sense to suggest that this country has some- how been lacking in 'commercial rectitude' because the Government allowed Rolls- Royce to go bankrupt before committing further public money to its support. Neither commercial nor political obliga- tions existed to compel a British govern- ment to bail out a British company in order to allow that company to continue supplying goods at a crippling loss to an American company which had itself im- posed what proved to be excessively one- rous commercial terms upon the British company in the first instance. Mr Barber's statement to the House of Commons on the nature of the discussions between the British government and the United States government and the Lockheed Corpora- tion sounded most welcome. The Chancel- lor rightly said, 'I must emphasise that the Government has no liability in respect of the contract between Lockheed and Rolls- Royce, and if the [RI3-211 aero engine] project is to continue there must be an entirely new arrangement.'
At the same time Mr Powell rightly argued that 'if it was the case that air forces, aviation industries and airlines throtighout the world were looking for- ward to the production of Rolls-Royce, then: 'The greater the demand, the more compelling the demand, the more sure it is that private industry could make the best use of these assets. I am not too afraid to see any good money put into. British industry, wherever it comes from. . . [We] are told that these assets are going to be managed by the state... by those who will have no personal responsi- bility whether they succeed or fail, until they can be restored to a profitable con- dition, when they may once again be re- stored to private enterprise. I must say this is a most extraordinary proposition to come from a Conservative government, that state ownership is the natural instru- ment and the chosen method of restoring unprofitability to profitability.' It is too soon to know precisely how much of the Rolls-Royce business will end up in the hands of the state; but it is to be hoped that the force of these arguments will see to it that as little as possible remains for long in such hands.
Defence needs may require that specific parts of Rolls-Royce be preserved intact, and a strong case can be made for taking such parts into public ownership and keeping them (pace Mr Powell) there, much like an ordnance factory or a re- search establishment, like a Windscale or a Porton Down or an Aldermaston. And for technical reasons it may be necessary to nationalise more than this minimum for the time being in order to sort out what bits and pieces of the once-great industrial empire must become nationalised to pre- serve our defence interests.
This said, there is no other reason to preserve Rolls-Royce, whether under na- tionalisation or not. and whether under its present name or not. In particular, there is no good reason for this country (or any other) to produce subsidised aero-engines, or aircraft, come to that. The way in which the entire aircraft industry here and over- seas — aero-engines, airframe manufac- turers, the makers of bits and pieces and navigation systems and so forth, and air- lines — has somehow seen to it that it receives vast sums of governmental aid, over and under the counter, is both re- markable and disgraceful.
When the matter is seen in a true per- spective, it is seen clearly that taxpayers are subsidising a small and a rich section of the public very considerably indeed: they are subsidising those who choose to travel by air, and more particularly, those who choose to travel as fast as possible by air. Seen thus, the Concorde extravaganza is far more remarkable and far more d is- graceful than any bailing-out of Rolls- Royce could ever have been or become.
What- is more, the non-flying majority is not only subsidising the rich flying minor- ity with its cash. It is also putting up with the very great nuisance created by that rich, flying minority. Seldom can a major- ity have been more strenuously taxed to benefit a minority and at the same time to deafen and to pgi,s0fLAW1f,o,
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