CAB148-30-Defence and Oversea Policy Committee Meetings Relating to 1967 Disturbances-1967 — Page 217

SECRET

Page 217

In further discussion the Committee considered the lack of progress

during the past year in implementing the Government's decision on the amalgamation of the major airframe firms into a single group with a minority

shareholding; progress with this had been slow, partly because the firus

concerned had been unable to reach agreement on the valuation of their

assets; but a major factor was the uncertainty in the industry about the role which the Government had in mind for it in the years ahead. The wide

ranging examination which had been proposed of military aircraft requirements

and of the future shape of the industry should assist in clarifying the

situation, although doubts were expressed about the possibility of

obtaining any clear cut conclusions as a result of a further six months

study,

Summing up the discussion, THE PRIME MINISTER said the Committee were

agreed that the proposed project study for a British variable geometry

strike aircraft should be approved to cover a six months period at a cost

of £800000 and that this should be stated in the announcement that the Anglo-French V/G would not proceed in view of the inability of the French to finance their share of the project. It would be important, however, to

avoid any commitment in the statement to proceed to full development of

such aircraft or on the other hand any indication that we were considering the possibility that our aircraft programme might be such that there would be no future for the BAC design team at Warton, since this might mean

that it would disperse, thus removing the option to develop an advanced

aircraft either unilaterally or in collaboration with other countries.

It should however be made clear that we were examining fully the military and industrial consequences of the French decision. A wide ranging interdepartmental examination should be put in hand covering the military

requirement for combat aircraft beyond the mid-1970s, the advantages and

disadvantages of retaining a capability in this country to design, develop

and produce advanced military aircraft and the consequences for the

aircraft industry if this capability were not retained and the size, shape

and organisation of the aircraft industry that we should seek to maintain

in the light of these considerations, having regard to the interests of industry generally and of the economy as a whole. This examination should be completed by the end of October.

Page 217

The Committee

(1) Approved the placing of a project study for a British

variable geometry aircraft covering a period of six months at a cost of $80,000 789000

-4-

SECRET

Page 217

学