The economy the defence industries

Rising costs of research and development also had implications for the shape of the defence industries. The Cabinet's Economic Policy Committee had been assured in 1952 by the Ministry of Supply that Britain had a remarkable technical lead over competitors in aircraft manufacture and that there was enormous potential for the industry.84 The industry was the third largest in the world and was highly concentrated. In 1955, the top six firms: Vickers-Armstrong, Hawker Sid-deley, Rolls-Royce, Bristol, English Electric and de Havilland, accounted for 80-90 per cent of output. On the other hand, some of these firms maintained more than one design team. Smaller firms, like Boulton Paul and Saunders-Roe, were kept going with research contracts. The industry benefited from considerable expenditure by the Ministry of Supply on research and development, which almost matched what firms spent themselves, but the money was spread round too many projects.85 The trouble was that Britain was trying to carry out fundamental research on such things as delta wings and at the same time produce the whole range of military and civil aircraft required for the RAF, the FAA and the nationalised airlines, BEA and BOAC. Yet, as the 1961 Defence White Paper pointed out, the United States and the Soviet Union each spent on research and development alone larger sums than the entire British defence budget.86 The consequences were lengthy delays in development of aircraft and guided missiles. The navy's Sea Slug SAM first flew in 1950 but did not complete its development trials until 1961. In 1960 the Public Accounts Committee strongly criticised the Sea Slug programme, noting that it was costing more than twice earlier estimates and commenting that delays in its entry into service were 'inexcusable'.87

By January 1956 the Secretary of State for Air, Birch, believed that amalgamations of firms were needed to prevent growing competition for a limited number of skilled technicians. The Minister of Supply, Reginald Maudling, disagreed, on the grounds that amalgamating firms would not increase the number of technicians. He was at one with Birch

84 Economic Policy Committee minutes, 29 May 1952, CAB 134/842, TNA.

85 Edgerton, England and the Aeroplane, pp. 90-2, 96.

86 Report on Defence (Cmnd 1288), PP 1960-61, xxiv. 463, para. 29.

87 Eric Grove, 'The Royal Navy and the guided missile', in Harding (ed.), Royal Navy 1930-2000, pp. 193-212, at pp. 195-9.

on the need for a greater concentration of effort, but argued that the remedy lay in reducing the number of projects, as it was in the development phase, not during production, that delays occurred. A number of projects were dropped and Eden asked the Minister of Defence, Sir Walter Monckton, to undertake an internal inquiry into the supply of military aircraft.88 In September the steering committee of officials appointed by Monckton from the ministries of Air, Defence and Supply had produced a first report that identified a number of problems, mainly in procurement procedures. It was noted that a major project now took something like ten years from inception to completion, but planning of the research and development programme was virtually on a year-to-year basis. The officials recommended that the programme should be on the basis of a ten-year forecast of requirements and resources. It was recognised that changes in defence policy or strategy would continue to lead to cancellation of some projects, but it would be impossible to complete projects on time unless the total programme was related to the supply of scientists and engineers. The shortage of skilled technicians was acute and could not be expected to disappear for many years to come. The major problem in the relationship between the government and the industry was reported to be inadequate competition between firms. Whereas in the United States there was real competition because there were sufficient resources for more than one type of aircraft or guided missile to be developed for a given role, in Britain resources were so limited that normally competition did not extend beyond the design study stage.89 The idea of inviting foreign firms to tender for contracts for British requirements does not seem to have occurred to the officials.

The 1957 Defence White Paper made clear that there would be fewer research and development projects and production orders for military aircraft in future. In July 1957 a 'background' paper was circulated to the Cabinet listing a number of well-known aircraft firms where workers were likely to be made redundant as a result. It was expected that over the next four or five years the numbers employed in the manufacture of airframes, aero-engines and related equipment, excluding electrical equipment, would fall by about 100,000 to about 150,000, or what had been the level before the Korean War.90 The programmes for guided

88 'Aircraft programme', Gen 514/1st meeting, 23 Jan. 1956, Gen 514/2nd meeting, 31 May 1956, PREM 11/1712, TNA.

89 'First report to ministers by Steering Committee on Aircraft Supply', 20 Sep. 1956, DEFE 7/1128, TNA.

90 'Defence programme', memorandum by the Minister of Supply, 28 June 1957, C (57) 155, CAB 129/88; Brook to Prime Minister 'Defence programme', 8 July 1957, PREM 11/1773, TNA.

weapon development were not expected to absorb much of the redundant labour: in 1957 about 2,000 people were employed upon such work and the total was not expected to rise above about 10,000.91 Macmillan had wanted to set up a Cabinet committee on the future of the aircraft industry, but he was advised by Brook in May 1957 that a detailed inquiry would have to deal with the efficiency of the industry and would require more time than ministers could give. On the other hand, an outside inquiry was likely to undermine public confidence, and Brook suggested that the work be given to officials. 'We should need to mask the fact that the enquiry was concerned with efficiency', he added. This could be done by framing their terms of reference along the lines of: 'the effects of the new defence policy on the future of the aircraft industry'. Some ministers, nevertheless, wanted an outside inquiry, and the Chancellor of the Exchequer, Thorneycroft, was asked to consider what the scope and nature of the inquiry should be. Thorneycroft took the view that an outside inquiry might lead to some embarrassing disclosures about the poor return for the large sums of public money spent in the civil as well as the military fields, and the outcome was a working party of senior officials from the Air Ministry, the Board of Trade, the Ministry of Supply, the Ministry of Transport and Civil Aviation, and the Treasury, with a Treasury chairman, Sir Thomas Padmore.92 The working party reported in April 1958 in favour of continuing government support for research and development for both military and civil aircraft, on condition that the industry reorganised itself to meet the changed conditions with which it was now faced.93

Meanwhile the Permanent Secretary of the Ministry of Supply, Sir Cyril Musgrave, had told the heads of the major aircraft manufacturers at a meeting in September 1957 that only one major military project had survived the Sandys White Paper, a multi-purpose aircraft to replace the Canberra (the future TSR-2), and that the design contract would not be placed with any one firm, but with a consortium. He advised them that there was unlikely to be a need for more than three airframe firms for military requirements in future and that the government hoped that the industry would rationalise itself through amalgamations. Sandys, who became minister of aviation in October 1959, aimed at two airframe groups and two aero-engine groups. The outcome of much wheeling

91 Aircraft Industry Working Party, AI (WP) 1st meeting, 20 Sep. 1957, DEFE 7/1128, TNA.

92 Brook to Prime Minister, 14 May 1957, and Thorneycroft to Prime Minister, 31 July 1957, PREM 11/2214, TNA.

93 'Future of the aircraft industry: aeronautical research and development', EA (58) 32, 24 Apr. 1958, CAB 134/1679, TNA.

and dealing was that by the early 1960s most of the thirteen firms that had produced military aircraft in the 1950s had been absorbed into Hawker Siddeley or a new firm, British Aircraft Corporation (BAC), and all helicopter work had been put into Westland Aircraft. Westland had come to dominate the British helicopter market by acquiring in-house expertise through licensed production of American Sikorsky designs, which had proved to be superior to government-sponsored indigenous projects. Aero-engine work was concentrated in two firms: Bristol Siddeley and Rolls-Royce.94 Employment in the industry had not fallen since 1957. In 1965 Hawker Siddeley employed 123,000 workers, making it the second largest manufacturing firm in the United Kingdom, and BAC employed 42,000. After Rolls-Royce took over Bristol Siddeley in 1966 it employed 88,000 workers. In comparison, total employment in the French aircraft industry was 85,000.95

The Labour government also undertook a major inquiry into the aircraft industry by a committee chaired by Lord Plowden, who had been chief executive of the Ministry of Aircraft Production during the war. Plowden reported in 1965 that a reduction in the size of the industry was desirable as it received far more government support than any other, and he recommended collaboration with European countries in order to be able to compete with American firms.96 An American study in 1968 noted that the British aircraft industry was characterised by lower labour productivity and higher costs than in the United States, but doubted whether collaborative projects would reduce overall costs, citing the already expensive Concorde project as evidence. Abetter alternative might be for a slimmed-down, cost-conscious British industry to concentrate on a limited range of projects which had been chosen on economic grounds, including export prospects. Some types would have to be imported but the fact that the option of domestic production existed would strengthen the hand of British negotiators dealing with foreign firms.97

The decision to terminate the development of fighter projects in 1957 was bitterly resented in the aircraft industry. Hawker Siddeley was able to secure official support for a revolutionary, if subsonic, VTOL

94 Charles Gardner, British Aircraft Corporation (London: B. T. Batsford 1981), pp. 17-19, 23-8; Matthew Uttley, Westland and the British Helicopter Industry, 1945-1960 (London: Frank Cass, 2001).

95 Edgerton, England and the Aeroplane, pp. 96-7; R. de Narbonne, 'French challenge', Royal Air Force Flying Review, 18 (May 1963), 15.

96 Report of a Committee into the Aircraft Industry (Cmnd 2853), PP 1965-66, iv. 189, paras. 205, 208, 458 and 523.

97 Merton J. Peck, 'Science and technology', in Richard E. Caves and associates, Britain's Economic Prospects (Washington: Brookings Institution, 1968), pp. 448-84, at pp. 471-6.

ground-attack fighter, the P.1127, which first flew in 1960. The P.1127 was very nearly a victim of Labour's defence review in 1966: the Secretary of State for Defence, Healey, wished to cancel it, both on financial grounds and because he was doubtful about how often its VTOL characteristics would be required. The Cabinet Secretary, Trend, advised Wilson in January that there was no alternative to cancellation in favour of a projected conventional Anglo-French tactical support fighter, the Jaguar, if the review was to reach its financial target, but that a decision to contract out of technological advance would require 'very careful presentation'. Neither the RAF nor the Admiralty was willing to make sacrifices to accommodate the P.1127 in their equipment programmes, perhaps because of its cost, which, at constant prices, was two-and-a-half times that of the P.1 Lightning interceptor, which had entered service in 1961, and more than eight times that of the Hunter fighter-bomber, which the P.1127 was intended to replace. Nevertheless, the Ministry of Aviation fought hard throughout 1966, arguing that cancellation when Britain held a world lead in VTOL technology would destroy the aircraft industry's confidence in the government. Even the Treasury began to waver in its opposition to the project when it realised that American aircraft would have to be ordered to fill the gap before the Jaguar would be available, increasing dollar expenditure at a time when sterling was under pressure. The possibility of export earnings to offset development costs was also placed in the balance against cancellation, justifiably so since the P.1127 was later adopted by the US Marine Corps.98 In the event, the P.1127 was placed in production as the Harrier and began to replace the Hunter in the RAF from 1968 and entered service with the FAA in 1979, serving with distinction in the Falklands War in 1982. The success of the Harrier contrasted with the failure of contemporary French and German VTOL projects, the Dassault Mirage IIIV and the Entwicklungsring Siid VJ 101 X1, to reach production status. Despite all that had happened between 1957 and 1965 the British aerospace industry was still the third largest in the world in terms of capacity for undertaking research and development, and was able to take a leading role in collaborative projects with European partners in line with government policy.99

98 Trend to Prime Minister, 'Defence review', 18 Jan. 1966, PREM 13/800; Defence and Overseas Policy Committee minutes, 21 Jan., 22 Jan., 13 Feb. and 19 Dec. 1966, CAB 148/25; Cabinet conclusions, 22 Dec. 1966, CAB 128/41, TNA. Figures for costs of aircraft from Keith Hayward, The British Aircraft Industry (Manchester University Press, 1989), p. 6.

99 Humphrey Wynn, 'Intra-European collaboration', Royal Air Force Flying Review, 20 (June 1965), 13-20.

Warship builders suffered from a decline in naval orders, and the problems of the shipbuilding industry were compounded by competition from West Germany, Japan, the Netherlands and Sweden in export markets for merchant ships. Credit arrangements or subsidies in these countries encouraged investment in more modern techniques, but the Cabinet's Economic Policy Committee took the view in 1959 that subsidies would serve no purpose in Britain until management and trade unions could agree to measures to improve industrial relations and reduce costs in line with competitors.100 By the 1960s there was surplus shipbuilding capacity in the world, and a contraction in the British industry was inevitable. The Geddes Report noted in 1966 that research and development had been neglected, industrial relations were still poor and there were too many yards chasing too few customers.101 Fairfield, the firm that had built the last British cruiser, HMS Blake, ran out of funds in 1965 and the government took a 50 per cent stake in the company, Upper Clyde Shipbuilders (UCS), which absorbed Fairfield and most of the other warship builders on the Clyde. UCS did not prosper and was the scene of a famous work-in in 1970. Rationalisation also took place on the Tyne. Even so, the Royal Navy - still the third largest in the world - placed all its orders with British firms, ensuring that Britain's capacity to build warships was exceeded only by the United States and the Soviet Union.

The army's suppliers also suffered from a contraction of orders, but the Chieftain tank programme kept production lines going at Vickers' plant at Elswick and the royal ordnance factory at Leeds. Both of these concerns, plus Alvis, retained the capacity to design armoured fighting vehicles, despite the small size of the British army compared with armies of countries of similar populations. Vickers wisely diversified in the 1950s, but in the 1960s it was still a major producer of armaments.102 Given that defence expenditure at constant prices in 1969 was higher than in 1959 (see table 6.8), it is not surprising that the military-industrial complex was still large. However, the increasing cost of weapons systems, especially research and development, meant that fewer projects could be afforded and the defence industries had to be slimmed down in much the same way as the defence services themselves were.

100 Economic Policy Committee minutes, 4 Feb. and 8 July 1959, CAB 134/1681, TNA.

101 Shipbuilding Inquiry Committee 1965-66 Report (Cmnd 2937), PP 1965-66, vii. 45.

102 J.D. Scott, Vickers: A History (London: Weidenfeld and Nicolson, 1962), pp. 361-4, 368-71.

How To Have A Perfect Boating Experience

How To Have A Perfect Boating Experience

Lets start by identifying what exactly certain boats are. Sometimes the terminology can get lost on beginners, so well look at some of the most common boats and what theyre called. These boats are exactly what the name implies. They are meant to be used for fishing. Most fishing boats are powered by outboard motors, and many also have a trolling motor mounted on the bow. Bass boats can be made of aluminium or fibreglass.

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