DTI snub for MPs on aid for aerospace

THE GOVERNMENT will today reject a report from the Commons Trade and Industry Select Committee calling on it to inject an extra pounds 1bn into the aerospace sector over the next decade.

In its response to the cross-party committee's recommendations, the Department of Trade and Industry refuses to give any guarantees that funding will rise from the planned level of less than pounds 20m a year.

The DTI also rejects the MPs' recommendation that Britain's hard-pressed aerospace and aero- engine companies be allowed to defer repayments of launch aid to ease cash-flow difficulties.

The committee's report, published in July, warned that unless the DTI increased research funding by pounds 90m- pounds 100m a year over the next decade the aerospace sector could suffer 'irreversible damage'.

But the plea appears to have fallen foul of a lack of ministerial support and an unusually tough public spending round.

The MPs also called on the Government to commit itself to a national technology acquisition plan covering research into key technologies such as advanced wing design, cockpit systems and composite engine materials.

They said that if the Government came up with the money industry would match it pound for pound.

The Government's reaction to the committee's findings has been eagerly awaited as a sign of its new- found commitment to manufacturing industry.

However, in its 11-page response the DTI only promises to 'continue to work closely with the industry on the definition of its needs and, within the constraints of firm public expenditure control, the extent to which it can contribute to meeting these'.

The department also sidesteps a recommendation that the Ministry of Defence be instructed to take the interests of the civil aerospace sector into account when allocating its pounds 3bn procurement budget. The response says merely that industrial considerations are one of number of factors normally addressed.

At the launch of its report, the committee's chairman, Richard Caborn, insisted that the aerospace industry was not a 'lame duck asking for a rescue'. Industry officials pointed out that it was one of Britain's most successful exporters, contributing pounds 2.5bn a year to the balance of payments.

The DTI appears to have used this as a means of arguing against the need for any increase in support.