Aerospace industry 'must have pounds 1bn injection'

THE GOVERNMENT must fund a pounds 1bn expansion of Britain's aerospace research budget over the next decade or see the industry go into long-term decline, a cross-party committee of MPs was told yesterday, writes Michael Harrison.

The warning came from Roy McNulty, president of Shorts, the Belfast aerospace company. He said that government R&D spending on aerospace needed to increase from the present pounds 25m a year to pounds 100m within five years, with industry making an equal contribution.

Giving evidence to the Commons' Trade and Industry Select Committee, Mr McNulty said that if government support was not significantly enhanced, Britain would fall a long way down the aerospace league over the next 10 to 15 years.

In separate written evidence, Shorts criticised the Department of Trade and Industry, saying: 'Whether in launch aid, in the absence of a national technology strategy, in R&D funding or in marketing support (it) fails to measure up to the best provided elsewhere for our competitors.'

Meanwhile, a row is set to break out next week between Europe and the US over civil aircraft subsidies for Airbus Industrie and its US rivals, Boeing and McDonnell Douglas.

Michel Dechelotte, director of international planning at Airbus, told MPs that Europe had evidence that the US was breaching the terms of an agreement to limit aid to manufacturers.

Under the agreement, direct launch aid must be limited to 33 per cent of a the cost of a new aircraft, while indirect aid in the form of R&D funding must not exceed 4 per cent of a manufacturer's turnover.

Evidence that the US is breaching the 4 per cent ceiling is expected to be presented by EC trade officials when they meet US officials in Brussels next week to review the agreement.