The crisis in Britain's aerospace industry resulting from the recession and terrorist attacks dominated trade and industry questions on Thursday.

Trade and Industry minister Patricia Hewitt described the announcement of 1900 redundancies by Rolls Royce as "an appalling shock".

"We are already of course putting in place measures to help those workers affected by redundancy but I think it is too early to assess the full impact," she told the Commons.

She pointed to government subsidies worth £1 billion given to Airbus and Rolls Royce and the awarding of the US fighter plane contract to Lockheed that would bring £22 billion to the UK over the next 10 years. The industry's downturn, she believed would be a short one.

Hewitt promised Lib Dem trade spokesman Vincent Cable that she would investigate the problem of British money given to the aero-industry subsidising Italian sub-contractors.

The traditional issue of red tape was raised by Conservative trade spokesman John Whittingdale which brought the standard robust response from the minister.

"I know very well when members of the Opposition talk about over-regulation they mean measures to give better protection for workers such as the minimum wage which they opposed."

She then pointed out a report by consultants Arthur Anderson had concluded Britain was the best place in the world to start and grow a business.

Conservative backbencher Julie Kirkbride and Labour MP Martin O'Neill raised the issue of the EU end of life vehicle directive which they believed would cause major damage to the UK car industry.

Kirkbridge said it would bankrupt the MG Rover company and O'Neill said the UK car industry was a specialist sector unlike the rest of the EU. Talk of a level playing field was dangerous, he warned.

"I can assure the honourable lady there is no intention of putting UK business at a competitive disadvantage," Hewitt replied. Car companies, such as Toyota agreed with the environmental benefits of the directive, the minister claimed.