MPs defuse Hercules dispute

The Commons Defence Committee is proposing a compromise solution on the replacement for the RAF's Hercules transport aircraft which should defuse a Westland-style row.

In a report out yesterday it says the latest version of the US-built Lockheed Hercules, the C130-J, should be chosen for the first tranche of orders, but that the Government should retain the option to buy the European Future Large Aircraft (FLA) for the second tranche. If the proposals are accepted, Lockheed will be paid pounds 750m-900m for 30 C130-Js, the first order for the aircraft. Eighteen British contractors, including Dowty, Lucas and GEC, are expected to take 15 per cent of the work. Lockheed says worldwide sales of 400 would generate pounds 1.2bn and safeguard more than 3,000 jobs in Britain.

The select committee says that refurbishment of the 25 to 30-year-old fleet of 61 Hercules, which could give the Europeans time to produce their aircraft, is 'prima facie an unattractive option'.

British Aerospace has been pressing hard for refurbishment, arguing that a European solution would generate pounds 3bn to pounds 6bn for the UK's aerospace industry.

It told the committee that if the RAF bought C130-Js, 'Lockheed would seek to kill off FLA and to monopolise the military large aircraft market'.