HC Deb 12 March 1930 vol 236 cc1430-40

Motion made, and Question proposed, That a Supplementary sum, not exceeding £760,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1930, for the cost of the Air Services not provided for in the Air Estimates of the year.

The UNDER-SECRETARY of STATE for AIR (Mr. Montague)

In asking the Committee to pass this Supplementary Estimate of £760,000, I should like to explain to hon. Members the main factors which render it necessary. The first important factor to which I should like to refer is the failure of the Indian Appropriation-in-Aid to materialise upon the expected, or at least the desired, basis. This has been for many years a disputed subject. Without going into unnecessary historical detail, I may state the position in a few sentences. Pay, maintenance, and equipment of the Air Force in India come upon the Indian Military Budget, but there are certain home effective charges which involve Air Estimates. Those home effective charges are charges raised by the Air Ministry against the Government of India. As there are no training establishments in India, these charges are intended to cover a proportionate amount of our expenditure on recruiting and training. Provision for this receipt is taken in Vote 1, Subhead H.

8.0 p.m.

To understand the matter thoroughly it is necessary to refer to the period directly following the War. Some arrangement had then to be made provisionally. It was assumed that training a highly technical force such as that of the Air would be a more costly process than in the case of the Army, but there were no really satisfactory data. War experience itself, under the largely empirical conditions prevailing during the War, could afford no sound comparison for the building of a peace-time force. Accordingly, a provisional "capitation rate" had to be found, and it was necessarily highly conjectural. A rate of £50 per man was agreed upon experimentally, and that rate has been paid by India ever since. It was an interim rate, and in the nature of an advance payment pending final settlement. As a matter of fact, this amount turned out to be totally inadequate, and, when sufficient data had been obtained, the Air Ministry had perforce to put forward a claim for a considerably larger capitation rate—a sum of £80 per man instead of £50.

This higher claim for the training of personnel is still under discussion. It has neither been admitted nor rejected by the Government of India, and certainly it has not been paid. The matter has been involved with, and to some extent delayed by, other claims made by the Army—much larger claims of a similar character—and so the Government have not felt able to carry the matter further at the moment. It is now evident that for the year 1929 payment will again be made at the rate of £50 without arrears, and as, in March of last year, the Estimates budgeted for payment at the rate of £80 plus arrears for three years (the Government of India having undertaken to pay arrears from then when the matter had been finally settled), there is the necessity for this part of the Supplementary Estimate. There is a loss of receipts of £244,000, with a corresponding reduction in spending power. The plain fact of the matter is that, although the claim has been in no sense abandoned, it is necessary in the circumstances to ask the Committee to sanction that part of the Supplementary Estimate which falls under the heading of Appropriations-in-Aid from this source.

The next main factor necessitating this Supplementary Estimate is the overhead deduction known as the "Super-cut," to discount possible under-spending on Votes 3 and 4. This was assumed to be a matter of reasonable expectation for the purposes of the original Estimate in March of last year, and it was put down at no less a sum than £650,000. That figure has been shown to be excessive. Experience has shown that the amount which should have been allowed to represent delays in the fulfilment of contracts should not have been put at more than one-quarter of the figure mentioned. I am not attributing any blame in estimating in this particular matter. It is the object of the "super-cut" to discount the probability that a number of the liabilities for which provision has been taken will fail to mature during the financial year.

On a large programme of works and technical equipment there are bound to be difficulties, and in all sorts of ways those difficulties will impose limitations upon the expenditure. For example, inclement weather may hold up the development of works, or delays in delivery, modifications of designs and so forth may hold up the provision of equipment. This year it has been found possible to adhere to the actual programme more closely than could have been anticipated, and the result is that the "super-cuts" on these Votes have not been realised. In consequence there has been a limitation of spending power, and this part of the Supplementary Estimate is necessary for that reason. I would like to say that it is possible that in preceding years, under the pressure of the demand for economy, the "super-cuts" have been rather drastic, with the result that it has happened, as it was bound to happen sooner or later, that when the element of optimism in estimating coincides with the element of luck in performance, the "super-cut" is bound to fail. So far as this part of the Supplementary Estimate is concerned, it is a matter of restoration to the actually ascertained position, and it is forced upon us by events. I should like, however, to make it quite clear that in this, as in that part of the Estimate which deals with the Indian Appropriations-in-Aid, there is no question of any new policy; there is no question even of unanticipated expenditure except so far as time is concerned. Therefore, I feel sure that the Committee will agree to this part of the Vote.

There are just one or two other matters to which I desire to refer. Hon. Members will notice that the Estimate is confined to Votes 1, 3, and 4, upon which the deficiencies I have mentioned occur, and Vote 8. The remaining Votes are not taken into account, because any variations anticipated are trifling. Vote 8 is included because it shows a saving of £39,000. That, of course, will be utilised to reduce the larger money grant which otherwise would be necessary. The surplus on Vote 3 under Subhead A is almost entirely accounted for by the fact that it has been decided to postpone the formation of two flights of the Fleet Air Arm. This decision also meant a corresponding decrease in Appropriations-in-Aid under that head from the Admiralty. The exact amount is £228,0.00. Hence the decrease in Appropriations-in-Aid under Subhead P. The two factors, however, exactly balance, and make no difference whatever in the total of the Supplementary Estimate. Of the total deficit on Subhead L of Vote 3, £40,000 is due to the rise of 2¼d. per gallon in the price of petrol at home, and the deficit of £90,000 on Subhead M of this Vote is due to payments in respect of three large claims falling unexpectedly upon this year's Votes. I think I have explained the main variations of interest, and I will, of course, answer any questions that may be put, but I would like again to stress the fact that in the main burden of the Supplementary Estimate there is no question whatever of new policy, and there is no question of new commitment; it is entirely owing to the non-receipt of the total Appropriations-in-Aid from India and to the fact that events have shown that the "super-cut" was excessive and has not been realised.

I hope that by this explanation I have made the reasons for this Estimate clear to the Committee.


I have no reason to complain of the way in which the Under-Secretary of State for Air has explained the position to the Committee. Indeed, he has given a very clear exposition of the reasons which have necessitated this Supplementary Estimate. He is quite right in saying that it is due to two causes, and two causes alone—in the first place, to the fact that the Indian contribution to the capitation grant has been less than we expected a year ago, and, secondly, to the fact that there has not been as much under-spending as we expected there would be when the Estimates were actually made up. Let me add this one observation to what the hon. Gentleman has said about the Indian contribution. It is a question that has been discussed between the two Governments for a good many years, and I had hoped, when we drew up the Estimates last year, that as the case of the Air Ministry was so reasonable and just, the justification for the greater demand would be so obvious that the Government of India would have agreed to the higher capitation grant.

So far as I know, there has never been any question that the grant that India is paying to-day is a good deal less than it should be. If there were no British Air Force in India, and the Government of India had to form their own Air Force, they would be paying a much higher amount per head than the actual amount which in recent years they have been paying to the Air Ministry in respect of the Air Force. I hoped a year ago that, as our demand was so reasonable, we should have received this extra amount during the last 12 months, and I am very sorry that the Government of India has not agreed to it. Let me only add that I hope that there will be a settlement very soon, and that one of the outcomes of the inquiries that are now going on into the relations between the two Governments will be to set up some sort of body which can settle these questions quickly. We shall then be spared the necessity for Supplementary Estimates of this kind, and I am quite certain that the relations between the two Governments will be much better as a result of some early settlement of these claims, which at present make those relations more difficult than they should be.

There is one observation that I should like to add to what the Under-Secretary said on the question of under-spending. The Air Ministry is a new Department, the aircraft industry was a new industry, and, in the early days of the history both of the Department and of the industry, it was very difficult to estimate exactly what the expenditure would be for the year. It is very difficult, to take a single instance, to say how long it will take to produce some new type of machine, or some new type of engine. I am glad to think that year by year that state of affairs is improving. I well remember that in 1922 the under-spending on the Air Ministry Vote was no less than £2,000,000, and, in order to bring the expenditure into closer relation with the Estimate, we have adopted in recent years the principle of what is called the "super-cut," namely, an allowance for under-spending. Year by year we made this "super-cut," and until this year we have not needed a Supplementary Estimate; but I own, looking back 12 months to the time when I introduced the Estimates upon which this is a Supplementary Estimate, I was very much afraid that a Supplementary Estimate would be needed, and, indeed, in my speech I warned the House that the "super-cut" was so great, that we had cut the Estimates so fine, that very probably a Supplementary Estimate would be needed in the course of the ensuing 12 months. Therefore, I am not surprised that the Under-Secretary has come to the Committee now to ask for a Supplementary Estimate. He has explained the position, and, so far as I know, there is no criticism that anyone on this side of the Committee would wish to make of his explanation. Accordingly, my advice to my hon. Friends, in view of the position that he has stated and of the observations that I have made, would be that we should let this Estimate go through without undue delay or unnecessary criticism.


While I gladly congratulate the hon. Gentleman on having been able to make certain savings, I am anxious to ascertain exactly why there has been a saving on civil aviation subsidies. I hope it has not been done by starving the development of light aeroplane clubs, because there are a number of towns, including Wolverhampton, which are anxious to start them, and I hope the Ministry has not been holding back money unnecessarily which might have been used for the development of these clubs. It may have had something to do with Imperial Airways not earning all the subsidy that was expected, but my chief anxiety is to urge the hon. Gentleman to spend more, and to blame him for not having spent more, if it could have been spent on the development of light aeroplane clubs.

Captain BOURNE

I should like to thank the hon. Gentleman for the very clear explanation he has given about Appropriations-in-Aid under Subhead H of Vote 1. This question first came up in the Estimates Committee three years ago, and we were told there was a hope that a settlement would be arrived at before long. We pressed the matter on the Air Ministry and the Treasury and they both agreed that it should be taken up. I was very much afraid, when I first saw the Estimate, that a settlement had in fact been arrived at with the Indian Government on terms that were not favourable to the British taxpayer. I am delighted to hear that the reason why the Estimate has not been realised is really that the old difficulties have not been superseded. I sincerely hope the Air Ministry will stand to their ground and will try to get £80 per officer and man out of the Indian Government and that a settlement will be reached in the course of the next year.

Rear-Admiral SUETER

While congratulating the Under-Secretary on his clear statement, I should like to ask one question with regard the surplus of £250,000 on Sub-head A of Vote 3. Is that entirely due to the postponement of the two flights of the Fleet Air Arm? Is not the underspending on construction largely due to not taking orders earlier in the financial year? I hope the hon. Gentleman will look into it and next year will place his orders as early as possible, as it is very unfair on the industry to pile them all up at the end of the year. I quite agree with what the hon. Member below me said about the savings on civil aviation. I should have thought, in the backward state of civil aviation, that we should want to develop it all over the Empire and that it would be almost impossible to save £39,000. That ought to be looked into very carefully. Everyone is shouting for money to go on with civil aviation and to develop it all over the Empire, and here we are saving £39,000. With regard to postponing the two flights of the Fleet Air Arm, has the hon. Gentleman looked into the question of the American Fleet Air Arm? I understand they are developing it very rapidly while we are postponing ours.


I was surprised that no statement was made in regard to the two flights that have taken place of R.100 and R.101. I should have thought that would have been one of the principal points in the hon. Gentleman's statement. I notice that in page 6 of the Report we are told a great number of very interesting things without an explanation of them. For instance, we are informed that the actual weight that the two ships were to lift has not been lifted, and we are told on page 7 that the lift has been sacrificed in order to incorporate other experimental features. I should have thought, as they were saving money, with all this work still to do in investigation, some of it might have been spent in that, because it seems to me if the lift of the airships has been sacrificed, we ought to have been told whether or not they are going to be able to lift the weight originally estimated and that additional improvements will take place. There are so many things yet that require investigation, that you cannot afford to have any savings in a matter like this. We are told about unexpected difficulties in the development of the engines of the airships.


On a point of Order. Is the hon. Gentleman reading from the statement of the Secretary of State?


The hon. Member is not reading from the Supplementary Estimate which relates to this Estimate.


I will leave that. Might I ask if there is anything in regard to the two airships that I cannot discuss?


I cannot see any trace in the Estimates of any money spent for that purpose, so that it is out of order.


I want to know why the money was not spent.


The hon. Member is fully entitled to ask why the money was not spent.


I want to know why we have no explanation in regard to the removal of a certain engine from one of these airships, and I should like to know what it cost to take it out and to have these repairs done, and whether it was the responsibility of the maker of the engine. I do not want to press the point further. I will wait until the main Estimate comes on. But I am giving an indication now of the line I will take on that occasion. We are bound to know exactly a whole lot of things that are still under a veil so far as these two airships are concerned.


The statement of the late Secretary of State in reference to the super-cut really bears out the reference I made in my opening speech to the fact that there was no question at all of attributing blame for underestimating, or anything of the kind. I quite appreciate the point the right hon. Baronet put. The question of placing orders earlier in the year was raised. That matter has been raised in a number of Debates upon Air Estimates in the past. I appreciate the value of placing orders as early as possible from the standpoint of the employment of labour as well as the expenditure of money in endeavouring to make an even flow of expenditure and of orders. But I think that the hon. Member will realise that in the case of a highly technical service where a great amount of the work and development of that service is highly experimental there are more difficulties in the way than there might otherwise be. The reason why there are some opportunities for criticism upon this particular point is that it is not always possible to see a year ahead exactly what the technical position of equipment in the Air Force is likely to be, but I can assure the hon. Member that every endeavour is made to secure an even distribution of orders throughout the year.

With regard to the question of saving on airship development there is a surplus of £39,000 due to the postponement of overseas flights. The question of the programme for the flights of R100 and R101, I shall be able to deal with in extenso next Tuesday. The postponement of those flights has resulted in a saving of £70,000, which is offset by increased expenditure on R101 to the extent of £31,000. Therefore, instead of there being a decrease there is an increase in the expenditure upon the airship, but as far as this complete Subhead is concerned the surplus is £39,000.

There is only one other point to which I have to refer and that is the Surplus of £13,000 under Vote 8 Subhead F: "Civil Aviation Subsidies." A sum of £5,000 was included in the original Estimate for preliminary expenses in connection with the projected service to South Africa, which has not been spent. I have to say in reference to that, that it was a covering amount necessary because of the difficulty of knowing precisely what amount would really be required during the year for a projected service of that kind. The remainder of the surplus is due to decreased subsidy to Imperial Airways on the London to India route, which depends on the number of completed journeys, not being fully earned owing to accidents, which hon. Members will remember as unfortunate features of last year. I was asked whether saving represents any reduction of assistance in respect of light aeroplane clubs. That is not the case. If the hon. Member will read the statement of the Secretary of State, he will see that there is no intention whatever of letting light aeroplane clubs down so far as the Estimates for 1930 are concerned. I hope that by these few remarks I have answered adequately the points raised, and that we may now have the Vote.

Question put, and agreed to.

Resolutions to be reported To-morrow; Committee to sit again To-morrow.


Resolutions reported: