AIR NAVIGATION (FINANCIAL PROVISIONS) BILL.

HC Deb 18 May 1938 vol 336 cc427-92

Order for Second Reading read.

3.50 p.m.

The Secretary of State for Air (Sir Kingsley Wood)

I beg to move, "That the Bill be now read a Second time."

This Bill is to implement some of the recommendations of the recent Committee of Inquiry into Civil Aviation which was presided over by Lord Cadman. The Bill provides for an increase in the aggregate sum that is provided by the State for the development of civil air transport, and its general effect is to increase from £1,500,000 to £3,000,000 the maximum sums which may be paid in any financial year under agreements for subsidising air transport made by the Secretary of State for Air. I hope that in this way we may be able to begin a fresh chapter in the history of civil aviation. It is a sequel to many others written by our predecessors, many of them distinguished in this new field, from whose work undoubtedly we are obtaining many benefits to-day. I think most hon. Members who are acquainted with this subject will agree with me when I say that there have been undoubtedly many difficulties in the past and that the work of the pioneers had slow beginnings and many setbacks. I would suggest that, perhaps, the original idea of civil aviation was that it was to fly by itself, but the fact remains that everywhere and by all countries civil aviation is subsidised to-day, and I do not think there is any doubt, whatever method we may have in mind for dealing with it, that more money is needed if this country is to occupy its proper position in relation to this important matter.

Undoubtedly the wishes expressed by this House are fulfilled. The additional financial assistance to be given on the routes outside Europe will be approximately £1,000,000, and the greater part of this sum will be concentrated on Empire routes. The emphasis that we are thus making on the linking up of the centre to a vast and scattered Empire needs no justification. We desire particularly to make a general improvement on the Empire services by speeding up the provision of additional services and, I hope, improved aircraft, in conjunction with companies of the Dominions, by extra services to Canada, and by the development of the Australia—New Zealand services. I may say that we have been discussing this matter with the respective Governments, and we hope to take it further in discussion with the Australian Ministers and with the representatives of the New Zealand Government. There are also the trans-Pacific project and the West Indies and other connecting services with the Empire, and also the local services in the island itself. Another object to which this money is to be devoted—and again I hope this is one which will secure general agreement—is the necessity, in the interests of British civil aviation and our national prestige, that a first-class service should be established between London and the principal capitals of Europe, and we propose to devote some £400,000 to these services. Daily British services are already in operation to Paris, Brussels, Copenhagen, and Stockholm, with a daily summer service to Basle, and Rome is already served by the Empire route, but it is now planned to establish daily services additionally to Berlin, Amsterdam, Prague, Vienna, Budapest, Oslo, and Lisbon, and to establish an all-the-year-round service to Switzerland. By these means few of the capitals of Europe will thus be outside the projected network, and I hope we shall be able to extend that even further still.

I need hardly tell the House that, in order to accomplish these matters which I have mentioned, we shall have to enter into a number of commercial and international agreements, and this must obviously take time, but it is the desire of the Government that British aircraft shall be utilised 100 per cent. for this purpose, as indeed on every route flown by British operators. I may say in that connection that it is well that the House should know that British aircraft are not yet fully available for these purposes. I would like to tell the House of a promising type of medium-size, all-metal air liner which is now under construction and which we hope will be on the market in the early part of next year. The question of financial assistance in the development of this machine is now being considered in order to enable it to be brought forward and marketed at the very earliest oppor- tunity and at a good competitive price. The Ministry have also, after consulting the two main subsidised companies, invited definite proposals from constructors for a heavy machine capable, for example, of carrying 10 passengers for 1,800 miles and suitable for direct flights to such places as Berlin, Copenhagen, and Lisbon. There is further under consideration a landplane to succeed in due course to the "Albatross" for longdistance flights such as the North and South Atlantic or to Alexandria.

I would also like to say a word about the inland services, in which I was very much interested when I was at the Post Office. We propose to devote some £100,000 to the inland services, and we hope thus to help those companies which are suffering losses to establish themselves on a sound commercial footing and to enable all of them to press on with their services with even greater enterprise. The Government have therefore decided, in view of the special circumstances of the moment and with particular reference to the Defence situation, that a sum not exceeding £100,000 in the first year, and diminishing progressively in the subsequent four years, shall be earmarked out of the increased subsidy limit of £3,000,000 for the purpose of subsidising internal air lines. I want to make it clear that this assistance will be given on the clear understanding that the companies should endeavour to establish themselves on a paying basis before the end of the period, and that no further assistance of this kind can be looked for after that date. All companies actually operating the internal services at the present date will be eligible for consideration, subject to their entering into suitable agreements under the Air Navigation Act. They themselves, for instance, accept as a liability the appointment of Government directors and of a maximum subsidy for each individual company. The amounts of such subsidies will depend on such conditions as the number of approved British aircraft employed and the efficiency of services operated on routes licensed by the licensing authority and approved for subsidy by the Air Ministry, having regard to the commercial possibilities of such routes. It will also be provided that so far as practicable 75 per cent. of the pilots employed shall be enrolled in the Air Force Reserve under arrangements similar to those made under other subsidy agreements.

Mr. Stephen

Does that mean that there will be a direct service in future from London to Glasgow?

Sir K. Wood

I will make inquiries as to that. Clause 2 gives power to the Secretary of State for Air to pay out of public funds the salaries and expenses of the licensing authority of air transport and commercial flying under the Air Navigation Act of 1936, and Sub-section (2) corrects an omission from Section 5 of that Act, and provides that the licence fees received by the licensing authority shall be paid into the Exchequer. That, briefly, is a statement of the objects and aims of the Bill. I need hardly say more than a word or two upon-the Amendment which has been placed on the Paper by hon. Members opposite. The Amendment calls for some measure of nationalisation: In view of the national and international importance of civil aviation, the transport by air of passengers and goods should be made a State service. I am always interested in the projects of hon. Members opposite, but I always like to see what they do when they themselves have the responsibility. It is very interesting to note that in fact, so far from nationalisation being attempted in those far-off days, the first agreement with Imperial Airways was made by Lord Thomson, Secretary of State for Air in the Socialist administration of that time. It is also interesting to observe that so far did hon. Members opposite fall from grace when again they were in office that the old subsidy, paid annually, was fixed by legislation in 1930 under the second Socialist administration at a figure of £1,000,000. So I commend perhaps rather more what that have done in practice than what they are advocating in theory this afternoon. At any rate I express the hope that in ways I have indicated this afternoon we shall do what I think is so necessary in the interest of this country, and that is to improve the position of civil aviation so that it may be in all respects as worthy of this country as is our Mercantile Marine to-day.

4.5 p.m.

Mr. Montague

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof: in view of the national and international importance of civil aviation, the transport by air of passengers and goods should be made a State service, and this House, therefore, cannot assent to the Second Reading of a Bill which increases the already heavy subsidy to inefficient private enterprise. The case for the policy laid down in the Amendment is divided into two parts: First, a consideration of the need of the industry that we are discussing; and, secondly, the principle itself of subsidising enterprises otherwise left to private ownership. Regarding the industry itself, in the very circumstances of the case that industry is a monopoly. It has been recognised as a monopoly from the beginning, because of the inevitable development of aviation and the nature of the industry; and the foundation of Imperial Airways, to which the Minister referred, was a result of that recognition. I do not intend to follow the right hon. Gentleman's remarks about Labour Governments. It is perfectly true that in 1924 we carried out what had already been begun as a result of the Handley Committee, and when in 1930 it was a question of carrying on civil aviation efficiently without any opportunity of nationalising that industry, we had other things to do and not much opportunity of doing what we wanted in the circumstances, and we did increase the subsidy. But that is not an argument for increasing the subsidy now to £3,000,000.

The monopolistic character of the industry is borne out by the draft Order in Council which will be discussed in due course. Let me refer to it in order to emphasise the point that I am making. The case for nationalisation rests upon the inherent monopoly of civil aviation. The draft Order says: In exercising their discretion to grant or to refuse a licence, and their discretion to attach conditions to any licence, the licensing authority shall have regard to the coordination and development of air services generally, with the object of ensuring the most effective service to the public while avoiding uneconomic overlapping, and generally to the interests of the public. In particular the licensing authority shall have regard to the following matters: The existence of other air services in the area, the possibilities of air transport in that area, the degree of efficiency and regularity of the air services, continuity, regularity of operation, frequency, punctuality, reasonableness of charges and the type of aircraft proposed to be used. Then the licensing authority, in attaching conditions to its licences, has to make reference to the places between which passengers and goods are to be carried, intermediate landings, the observance of a schedule of services, the maximum fares, and so forth.

So I think it can be agreed that the industry of civil transport is recognised by the Government as a virtual monopoly. But air monopoly or transport monopoly is rather different from any other kind of monopoly, even a monopoly of land. There can be no private property in the medium used; there are no fences in space. The medium is universal, without the definition that coastlines make of the seas. Therefore, it is necessarily subject to control, and, as the Minister said in his speech, that is a question involving international order, navigation laws and other considerations which belong to the respective States and to the aggregate of world States, and it is also bound up with military and defensive considerations. We subsidise shipping companies but there is no monopoly on the high seas: the high seas are open to all who desire to sail upon them. We talk about the "freedom of the seas" and boast about maintaining it. But there can be no freedom of the air in any comparable sense.

Commercial aviation is by its very nature monopolistic, and it would be, however much subsidies might be divided up. I want to make that point clear, and incidentally to remark that the avalanche of criticism of Air Ministry subsidies and so forth that usually comes from hon. Members on the other side of the House is notably absent. I imagine that hon. Members are satisfied with the £100,000 that they are getting for distribution to internal air line companies. But there may be air routes and zones divided up; they may be marked off and the monopoly shared by separate concerns without altering the fact. I stress that point, because I want to make it plain that it is not our case that one or two companies get public money while others are left out. They all of them share the spoils. I do not know how many are going to do so; the number will still be objectionable, the monopoly will still exist and it will still be a private monopoly. The discrimination strengthens our case for public ownership and supports our claim that where monopoly is the essence of the service itself it should not be subsidised while it is in private hands. Government aid to firms operating for profit is illogical and contrary to public interest.

So far the argument has been independent of the general case for public ownership. One form of debating tactics is to anticipate objections. I shall employ that form because from the proceedings of this House, as well as from many other sources, it is possible not only to excavate arguments against public ownership brought out in discussions from time to time, and to deal with them in the sure and certain knowledge that they will be repeated, but also to recover and resurrect useful items of evidence, such for instance as the following quotation from a speech made in this House: So long as railways are in private hands they might be used for immediate profit. In the hands of the State, however, it might be wise or expedient to run them at a loss if they develop industry or place the trader in close contact with his market and stimulate development. We cannot organise the great questions of land settlement, new industries and the extension of production unless the State has control of the means of transportation. The speaker was talking, not about war conditions, but of reconstruction after the War. It was the right hon. Member for Epping (Mr. Churchill) who used those words. That quotation from a speech, certainly made a good number of years ago, is relevant and brings out one inconsistency of our opponents, in so far that when it is required to argue that public enterprise does not pay, the expediency mentioned, namely the development of industry irrespective of accountancy profit and loss, is entirely ignored, but when the issue is such as the present one under discussion, then industrial development becomes important and the State has not only to make up deficiencies by acknowledged and direct subsidy, but the principle is accepted without any question whatever.

It is rather interesting to note that that kind of argument is used by our opponents. When it is done in the Socialist way—the question of making up losses—they talk about loss, and the experiment is accounted a failure, but if it is done in the Capitalist way it is the encouragement of imperial communications or new industries or what not. An example of that kind of argument was the Canadian Merchant Air Service to the West Indies. In order to keep the West Indian Islands from falling into what was called "the economic orbit of the United States," the service was run by the Canadian Government unremuneratively, and deliberately so. It was an indirect subsidy designed explicitly in the interests of Canadian trade. Tories in Canada and in this country would not hesitate to ascribe the technical loss to the failure of Socialism while they supported subsidies at home. Another example is that of the subsidies to the McBrayne Steamship Company which was running so-called uneconomic services to the Western Isles of Scotland. Numerous examples of this method of controversy are available. In connection with Canadian shipping in general, the "Manchester Guardian" said that it saved exporters from the Dominions from the extortion of foreign ocean freight rates to an extent that outweighed the deficit by millions.

In the case of Australian shipping, Mr. Bruce, the Prime Minister of Australia. sold the Commonwealth Line to a private, company. He said that it seemed to him that it had more than justified itself and had been of inestimable benefit to the country. He gave an illustration. The State was carrying Australian wheat to London at £10 per ton, while British shipowners asked £13 and foreign owners up to £15. Producers had saved £2,000,000 a year by the operation of the line against the £500,000 deficit. The shipping companies got to work, however, mendacious propaganda proved effective, and Mr. Bruce was compelled to sell the Commonwealth Line to Lord Kylsant.

Major Procter

Was it not a fact that the Australian ships were sold because the trade union workers simply bled the Government?

Mr. Montague

The steamship workers were paid on the same terms as British steamship workers. The terms were settled by international agreement. Mr. Bruce himself admitted that the line had been used in the way of an indirect subsidy to the advantage of Australian business. It was the shipping combine that compelled Mr. Bruce to sell this line to Lord Kylsant. We know what happened afterwards. Tories come down to this House and talked about the failure of Socialism. The money that was supposed to be paid was not paid in full, and the Australian Government had to realise upon their securities, while farmers, graziers and importers paid up and the conditions of the workers were left to the tender mercies of general world conditions.

The Amendment that I am moving has been described by the Press as a Socialist Amendment. As a matter of fact, hon. Members on the other side, not to mention the Press, really know very little about Socialism. I am prepared to accept the term, although it is not quite correct. This form of collectivisation is not Socialism; it is a stage towards Socialism, and that is why I say hon. Members do not usually know much about the subject when they talk about the failure or otherwise of Socialism. Socialism now has nothing to do with the question of profit or loss. Socialism is the organisation of the means of providing services co-operatively. What the community needs it provides. There is profit with bad service and loss with good service under Capitalism, but under Socialism the words "profit and loss" mean nothing in reference to services and transactions both ends of which are joined up in co-operative production and consumption. Hon. Members might regard this is an abstract point in connection with this Bill, but I refer to it because that argument is accepted in the very Bill under discussion.

What are these subsidies but another way of saying that it does not matter whether the industry pays or not if the industry is necessary? When an argument against Socialism is required loss is called the failure of Socialism, but here is an industry which does not pay and it calls upon the Government for subsidies. That is all right as long as the subsidies are paid to private concerns in the interest of private profit. According to this Measure it is considered just as economic to cover costs partly by taxation if the commodity supplied is one in general use, or the development is one of common advantage as to fix price rates at this and that level. If the capital value of social economies already established were estimated, the result would fall not far short of one-third of the total capital worth of this country. On the other hand, if there is no general advantage, by what right is the nation called upon to subsidise any enterprise whatever? Let us admit that flying is a new industry that ought to be encouraged and developed to the common advantage. That must be the point, since I think it must be obvious that it cannot be a question of general use. We cannot all go flying, and, as a matter of fact, very few people do actually fly.

I said once before in reference to the Maybury Committee's report that when that report said that a certain project supplied the needs of 14,000,000 of our population, it was talking unadulterated nonsense. It does not supply the needs of 1,400 of our population. I have never seen the public advantage of providing flying facilities at public expense to business men engaged in a competition among themselves and for purposes of that competition. The position is different with regard to foreign trade. We either get it or we do not, but all internal trade is within the country. We are going to spend out of the increased subsidy in one year £100,000 for the development of internal lines. I would like the Minister to tell us why. What particular advantage is there in developing internal lines —I mean to the public? There is plenty of advantage to shareholders and people with special interests in flying, but, from the public point of view, what advantage is there?

Mr. Grant-Ferris

Nonsense.

Mr. Montague

The hon. Member will have an opportunity of showing why it is nonsense. I am asking what special advantage there is to the industry of flying in giving subsidies to private companies. If that argument is nonsense, I should be pleased to know why. I do not know how much in the long run the internal lines are to be subsidised, or what arrangements are to be made under the contract with Imperial Airways, but there is much less reason for subsidising internal lines than there is for subsidising Imperal or foreign lines. If it is a question of ultimate military importance, I suggest it should be put upon the proper Vote so that we may know where we stand upon that issue. In any event, we take our stand on the principle that what is good enough for subsidisation is good enough for ownership. The suggestion is sure to be made—and I can see the Under-Secretary getting ready to make it, because I remember his attitude towards the Government upon the question of the Air Ministry muddle—that there is inconsistency in demanding the public ownership of civil aviation when we have been the foremost in criticism of Government administration and condemnatory of Air Ministry muddle, in which the hon. and gallant Member has joined us.

Apart from the question whether there has been muddle as a result of outside interference controlled from a distance— muddle as a result of meddle—there is the consideration that there is nothing like the fierce light of criticism focussed in this House able to be directed to private enterprise. We do not propose a rigid departmentalism. As servants of the State occupying, with as much distinction and honour as generals, admirals and air marshals, positions of comparable authority, there is no reason why efficient leaders of productive industry and, as in this case, operative transport, should not have responsibility and opportunities of initiative expanded and not contracted. It is too widely assumed that public ownership is necessarily bound up with red tape and circumlocution. I am inclined to think that most business firms of any magnitude are as much locked up in routine as any Government Department. The Assistant Postmaster-General will agree with that. The argument that inefficiency in ordinary business—and there is plenty of it—concerns only shareholders who risk their money simply will not hold water. Inefficiency in industry leads to increased industry costs, injured trade, unemployment and sometimes commercial panic. If the Tite Barnacles encumber the administrative ground, still they must be swept away, as they have been in many Socialist corporations up and down the country. The idea that representative organisation is bound to be incompetent in the nature of things cannot be accepted. The late Lord Melchett said in this Chamber on one occasion: I do contend that it is unreasonable to lay down the general principle that it is impossible for any great department, welt-equipped, well-staffed and well-managed, to do its work with as great intelligence as private contractors. When he was asked why he did not hand over his own business to a Government Department, he said that he would if he were put at the head of it. That reply is significant of the fact that it is not true Socialism of which intelligent people are afraid, from that angle, at any rate; it is the false notion that business is to be taken out of the hands of people qualified to conduct it and turned over to elected incapables. We do not propose to do that, at any rate, with air transport. When comparisons are drawn to show whether public ownership, or public control, is a failure or not, they must not be fallacious ones. Like must be compared with like. Inconveniences are put up with normally in one country that would not be tolerated in another. Promptitude is not always regarded as a virtue. I have recently had some experiences of that abroad. Public services, like any other services, must naturally conform to the ordinary tenour of a people's way. On the other hand, we are not without impressive support for our contention that, on the whole, public service is at least as good as private service, and in many cases superior.

Mr. Grant-Ferris

On a point of Order. Is it in accordance with the traditions of this House that hon. Members should read every word of their speeches?

Mr. Speaker

I do not think the hon. Member is doing more than other hon. Members do.

Mr. Montague

In any case, the allegation is not true. The interruption is an indication of the pressure of the argument. One thing which I desire to do is to keep to the point I am making. Messrs. Selfridge and Company said a year or two ago: We have had experience both in America and upon the Continent of systems controlled both privately and by the State, and without the slightest hesitation do we award the palm for all round satisfactoriness to the telephones of London. A London newspaper said: If we apply the great and abiding test of the functioning of its utility services New York will not stand comparison with London. Its telephones are the last word in antiquity and inconvenience. I have pointed out that collectivism has made extraordinary strides in this country. The principle is well established. May I be allowed to say, further, for it is of significant importance, that the collectivism of the type advocated in this Amendment is the constitutional approach to Socialism proper, which is as inevitable as anything in this world. I am no supporter of any other approach, but the people who are the strength and core of the working class of this country are well aware of the fact that what economic progress has been made for them has been made through public services and inroads upon private exploitation. In this new industry of commercial aviation, which is not as yet encrusted with accumulated privileges and interests to the same extent as other industries—it is an amazing thing, for example, that one person can sell half of an important city like Cardiff—we have a useful opportunity, and I stress the word "useful," of adding to the collectivist structure. Subsidies are not in themselves unsocialistic, because they can be regarded as a co-operative charge, just as municipal undertakings of a so-called unremunerative type are, and just as this Measure I is subsidising private concerns of an un-remunerative character; but subsidies to private companies without effective control, without ownership, without tangible interests, even, have no relation to proper democracy and no reasonable relation to constitutional practice.

4.35 p.m.

Sir Hugh Seely

I should like, first, to congratulate the new Secretary of State and the Under-Secretary upon their appointments. From every point of view there could be no two persons better fitted for those posts. The Secretary of State is well equipped for dealing with industry in many ways, and the Under-Secretary I certainly congratulate upon his knowledge and upon the interest he has taken, especially, in civil aviation. They are, however, both new Ministers, and therefore it is rather difficult for us to put many questions to them or to expect them to say very much to-day. This Bill is the outcome of the Cadman report; its explanatory memorandum makes that clear; but we feel strongly that the Cadman Committee, whose report was one of the most expeditiously produced which we have ever had, cannot have gone fully into the whole subject, and we do expect that the new Ministers will really examine the whole question of civil aviation and not be content to be tied by the Cadman report. Many results have come from it and I should like to ask a question regarding Newcastle Allied Airways, an air line which has done a service in the past, especially in the matter of its Scandinavian contract. I understand the difficulty which it now has in getting a subsidy arises from the fact that it is not specifically mentioned in the Cadman report.

I hope that when the Under-Secretary replies he will tell us that the Government are not bound by the Cadman report and that they will go into the whole question of civil aviation in this country and see that we really do get what we need, which is more co-ordination and greater opportunities for new lines to expand. We ought not to leave civil aviation tied to the old lines which have received subsidies in the past. Hon. and right hon. Members above the Gangway on this side are keen on the subject of Socialism, and I have great sympathy with them in their view that when public money is given to private enterprise there ought to be some control over how that money is spent. It is a practice from which we are departing in too many instances, and this case is one of the most blatant. I admit that agriculture has received enormous subsidies, but agriculture is an enormous industry, and it cannot be said that it is in the hands of a few individual profit-making concerns; but this new industry is starting almost on subsidy lines and although I am not saying that it has not some rights in that respect it has very small right to continue as a private industry in a capitalist country unless it can justify itself up to the hilt as a private industry.

There is a great danger of the vested interests in Imperial Airways and various other companies which happened to "get in on the ground floor," if you like to put it that way, being able to push out any new undertakings which come along. We cannot defend private enterprise unless new undertakings come into it and the public are given a proper service. I do not agree with the Amendment for two reasons. In the first place, I do not agree with subsidies, and, secondly, I do not agree with the idea of State control over a new industry which is to provide a public service. It may come to it later, when, perhaps, the industry has grown up; but we do not want it to become a vested interest owing to its subsidies and to run the risk of not securing that progress which we expect to get under private enterprise. We do not want Ministers to be bound entirely by the Cadman report, but to regard the Cadman report as a warning of what the public feels regarding the way that private enterprise is running these air lines, depending in many cases upon subsidies and not making the progress for which we have a right to look.

4.41 p.m.

Lieut.-Colonel Moore-Brabazon

I should very much like to associate myself with the congratulations which have been offered to my right hon. Friend the new Secretary of State for Air. We have seen him grow up from an Under-Secretary and become a Cabinet Minister, and go on up the scale until now he is in the air. This is a great ascension, and I hope that he will not end in the heaven which is at the end of the passage, but long remain with us in this House to look after this most important side of our national work. I wish, also, to offer my very sincere congratulations to the Under-Secretary, because he has shown himself extremely knowledgeable on this subject, and has always leavened his criticism of the Government and their policy with good temper and great knowledge, and I am glad to see that the old tradition of English life is being maintained and that those who criticise have now got to do the job themselves.

We are speaking, really, to an Amendment moved so very ably, I thought, by the hon. Member for West Islington (Mr. Montague). One can divide the extreme Socialists from the extreme reactionary Tory on this question of nationalisation. There is a big gulf between the nationalisation of children and the running of the Army by private enterprise. I got into considerable trouble with my own party by coming down on the side of the State over the question of electricity. I was very badly received when the grid was put up, but that was one of those lovely compromises such as we see in this country between private enterprise and nationalisation, which is of the essence of the English character, and I believe that something along those lines is going to happen here and be an example to other countries.

On the particular point before us I have no special bias one way or the other, but I would only point out that we are still in a very early stage of the development of civil aviation." If it were a question of taking over something which was well established, there would be much more justice in my hon. Friend's argument, but before civil aviation can come to depend upon itself it has a tremendous lot to learn, such as how to produce itself cheaply and how to run cheaply, and I believe that its development will best come about under the fire of the competition which is the feature of private enterprise, until at last will come the timely when it can be made to pay of itself. it is also to be noted that in its development it will not be building up something physical which the State will eventually have to buy out at vast outlay. There will be no great tracts of land to buy, because the aerodromes belong to the nation; certainly there will be the organisation; but what we are doing, really is creating a perishable article, because machines do not last very long. Although I am not in favour of the nationalisation of aerial transport at present, that industry is one of those borderline cases which in a dozen or so years the State might be justified in taking over.

I should very much like to make a plea, which I have made before in this House and shall go on making, for the development of the technical side of civil aviation. We are in the difficulty that if you try to produce industrially something for civil aviation you have a very limited market, whereas if you produce something for the military side you have an enormous market. That is what is happening with regard to the compression-ignition engine. If you were to spend £200,000 or £300,000 developing an engine of that type there would be a very small market for it, because it would interest only the civil operators, but if you developed a new petrol engine you could sell it galore. We have to lag behind in the things which are important to a successful civil aviation. How are we to get over that difficulty? Can my hon. and gallant Friend assure me that what was recommended by the Cadman Report will be implemented and that some of the money that we are voting now for the general advancement for civil aviation will be used in experimenting and in developing engines of this kind?

Nothing is more important to civil aviation than the question of freedom from fire. You have only to see, as I have done so many times, my friends struggling to get out through the flames of a crashed machine. It is no use saying that it is only the burning of a corpse. This fluid which flashes into fire is too dangerous. It may be necessary for the military side, but it is not necessary for the civil side, and the position remains what it is, only because there has been no commercial incentive to produce this engine. If this country can show imagination—we are doing so by granting this big sum of money for civil aviation—and can develop a successful compression-ignition engine, English civil aviation, run by Diesel engines—if that is to be the future engine for civil aviation—will be supreme throughout the world. It will be ahead of everybody in the world and will be patronised by everybody because it will be safer than any other line. That is a development to which I hope my hon. and gallant Friend will give some attention in his speech to-day. Here we are, taxpayers, and we want to see the money we spend produce a civil aviation that shall be the best and safest in the modern world. These little bits of England that visit the far corners of the earth must be technically unrivalled. I hope that we shall have an answer from my hon. and gallant Friend on this point.

4.48 p.m.

Mr. Garro Jones

I should like to associate myself with what was said by the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) about making the controversy of State control or private enterprise into an ideological issue transfused with political prejudice. It ought to be regarded as an issue of practical politics and common sense, and it is on that ground that we advocate the increasing nationalisation and State ownership of these industries. Both the hon. and gallant Member and the hon. Member for Berwick-on-Tweed (Sir H. Seely) were a little out of fine in what they said about State control over a new enterprise. Within the last few years there has been an outstanding example of successful development of a new sphere of Governmental activity about which even less was known at the time it came under State control than is known to-day about the aeroplane. I refer to broadcasting. I do not think any Member of this House would be prepared to allow broadcasting to revert to the competition of private enterprise. It is frequently stated that people will not give of their best if they are working for the State, but that is a fallacy which even those who speak it do not believe. I have here a quotation from something I was reading the other day by Lord Baldwin: The highest form of human altruism has been inspired by patriotism. Not only among soldiers and sailors, but scholars, engineers and business men, service of their country has been the deepest motive of their work. That sentiment does not fit in very well with the argument that has been used against the development of social ownership and control. I agree with the hon. and gallant Gentleman for Wallasey that if hon. Members had paid close attention to what was said by my hon. Friend on the Front Bench they would have found much to remove misconceptions from their minds.

I was really astonished at the introduction given by the Secretary of State for Air to the proposals of the Bill, new as he is to his office. He spoke for only a few minutes, he said practically nothing about the Cadman Report, he gave us merely a rough outline of the Clauses of the Bill and he concluded by making a debating point against this party, alleging that we had not carried out the policy advocated in our Amendment when we were in office. That is the kind of point which is always made when the Conservative Government are introducing proposals of this kind. In other words, in the short time in which the Labour party held office they did not reverse the whole direction of our industrial machine. I regard that rather as a compliment. If we had attempted in such a short space of time to nationalise every sphere of activity that came under our legislative attention, or to impose our programme upon it, we should soon have landed the country into that disaster which is so often foretold by hon. Members opposite. They base their prophecy on the kind of argument which the new Secretary of State for Air gave us in the House this afternoon.

Although there has been a nominal departure from the principle under which Imperial Airways was made the chosen instrument by the Government for the development of civil aviation, it is only a nominal departure, because the monopoly has really been broken down in respect of only a few internal air lines where the development of civil aviation is immeasurably more difficult than upon the longer trans-oceanic and oversea routes. It is true that one other company has been associated with Imperial Airways and has been in receipt of the same subsidy, and it can be taken for certain that before many years, if not many months, have passed, those two companies will be one. I would remind the House of the state of this so-called chosen instrument when the Government took it over. In 1924, Imperial Airways was first formed for a sum of £50,000 in cash and £100,000 in shares. Shortly afterwards, on the strength of a subsidy promised by the Government, the company made a public issue of £500,000. The prospectus at that time made an estimate of profits, not of £50,000 or £60,000, but with that precision which generally lends verisimilitude to prospectuses, made an estimate of profit of £53,000. As a matter of fact, in the first year the company suffered a loss of about £15,000.

From that time the capital remained the same until a short time ago, when there was a large issue of capital. Today we find, looking back over the financial history of this concern, that it has been made the subject of considerable financial manipulation and speculation; that its shares have fluctuated in price between is. and 63s.; that the dividends have not been maintained on any continuous policy, having gone up one year, down the next and up the next, culminating last year in the payment by this subsidised company, which has never earned a profit without a subsidy, of a dividend of 7 per cent., and a bonus of 2 per cent. on what is practically a gilt-edged security. Notice that during the history of this company, the Government purchased the assets which went to form the company for £50,000 cash and £100,000 in shares, and that at various times since that date the Government's broker could have stepped into the market and purchased the whole concern, allowing for a small depreciation, for a sum of £20,000 or £30,000. For a prolonged period that sum would have purchased the whole of the assets of the chosen instrument of the development of civil aviation. Much has happened since those years 1924–27.

Having trespassed on the patience of the House in going back upon that historical account, let me come to the actual purpose of the Bill. Up to date, the company have had no less a sum than approximately £5,000,000 in direct financial subsidy from the State, but that is not the whole story Nothing is ever said about the indirect subsidy; it is always skated over. I am going to remind hon. Members of something which is very pertinent to our Amendment and to the Bill about the measure of assistance received in addition to the £5,000,000 subsidy. It has gone to the shareholders—anonymous shareholders for the most part. A large proportion of the shares is held in the names of nominees. The company get the free use of aerodromes and ground equipment. They get the benefit of an extremely expensive research into aerodynamics, apart from the contributions they receive towards the development of new types of aeroplanes. Survey flights are carried out for them at Government expense. They now receive petrol free of tax. How lightly this fact has been passed over. The other day I was looking at the total number of ton-miles, set out in one of the many vehicles of propaganda put out by this concern. I find that they did a total of over 5,000,000 ton-miles in 1937. I am not able to tell the House how much petrol is used per ton-mile, or whether all the petrol, or what proportion of it, was purchased in this country and otherwise would have paid tax, but it would be very interesting to know how much this relief from taxation has cost the Exchequer. I put down a question to the Chancellor of the Exchequer to-day to be answered by written answer, but, as is usual, I have not received the answer on time. No doubt I shall receive it to-morrow.

A meteorological organisation is placed at the disposal of this concern. Diplomatic facilities are given to them in every part of the world in which they operate. They receive special grants for the modernising of their fleet and £900,000 from the Postmaster-General for the carriage of the mails. We are therefore really discussing not simply an increase of £1,500,000 to £3,000,000, which is the ostensible subject before us, but a principle under which this concern will receive, in direct cash subsidies for 15 years, no less than £46,000,000 between itself and British Airways, and £100,000, which is to be devoted to the small internal air lines. If to that figure you add the value, on any moderate basis of computation, of the indirect subsidy which they receive, I think a very good case could be made out, and one which it would be very difficult to deny, that the total cost to the Exchequer of civil aviation, directed for the most part through the treasury of this private company—this privately owned public company—would be a sum of not less than £61,000,000. That is the estimate which I make, and I think it would be extremely difficult to make a lower one.

Therefore, it is fair to say that the Government are grouting into this commercial organisation all this material to strengthen it and make it an extremely valuable concern, with no provision for return if ever the company should be placed on a prosperous basis. There was a time when the Government did have a provision that, if ever the company was able to earn a profit, some of that profit should be returned by way of returned subsidy. But the advantages which the Government used to have they made haste to throw away, as, for example, when they abolished the obligation on the part of the company to return the subsidy in return for the payment to them of £25,000 in deferred shares, which have never been fructified with dividends and, I think, never will.

The Bill which the House is now asked to pass confirms and expands that policy of developing civil aviation in this way, and the Amendment for which we are contending expresses strong opposition to that policy. We recognise, of course, as much as hon. Members in any part of the House, the national importance of civil aviation, but we say even more emphatically, perhaps, than hon. Members opposite, that its development is a State responsibility. In fact, I think that we on this side of the House have been as active in spurring the Government to greater efforts, with the exception of one extremely valuable contribution, which clinched the matter, made by the hon. Member who sits below the Gangway. He has been associated with us for years, as well as the Under-Secretary, in pressing for more active development, and, therefore nothing that we say must be taken as indicating any under-estimate of the vital importance to the State of this concern. Our objections can be briefly stated, and I would like to add them to what has been said so fully and so well by my hon. Friend. We think that for a vital Imperial service, whose importance to the State it is unnecessary to recite, to be left under the control of a body of men whose breadth of vision has been calibrated in the Cadman Report, is wrong. In the second place, we think that the policy of heaping financial and other benefits on private shareholders, disclosed or anonymous, as many of them are, and building up for them, with no provision for or prospect of repayment, a commercial structure which has already largely appreciated in capital value and which has been made a medium for financial exploitation, is wrong. In fact, I think that "wrong" would not be the right word. We think it a wicked policy, almost amounting to dishonesty.

In the light of the facts, I should have supposed that the House would have been entitled to some more adequate explanation by the Secretary of State for Air as to why the Government intends to persist in this policy. Why is it necessary, while increasing the provision for civil aviation, to increase at the same time the benefits to the shareholders of this concern? We have had two or three masters of logical exposition holding the office of Under-Secretary of State for Air, but I am not aware that any one of them has ever given us a full justification for this policy. That provides the new Under-Secretary with a magnificent opportunity, with the opportunity, if I may say so, that he has been asking for for so long, the opportunity that he has been thinking about, dreaming about. Now he has it at his feet, and he will be able to give us a full explanation of why it is necessary, when the Government are developing civil aviation, that they should at the same time develop the private account of Imperial Airways and the private accounts of anonymous shareholders of that company. The first thing that the Under-Secretary will have to state is that Imperial Airways is a shining example of efficiency in the realm of private enterprise. I myself think that we shall have to sit here a very long time if we wait until the hon. and gallant Gentleman has made out a case for that. But I am going to promise him that, if he will get up and make that assertion, I will present him with a little prize. I will present him with a bound copy of the Cadman Report if he will only get up and say without qualification that he considers that Imperial Airways is a shining example of the efficiency of private enterprise.

Even if private enterprise itself is a beneficent thing, it would be difficult to prove that Imperial Airways is a good example of private enterprise. It is supposed to be the profit-making motive that confers all these advantages, and it would be very foolish to deny that the profit-making motive is a tremendous force in industry. Of course, the desire to make a large amount of money is a force which it would be foolish to under-estimate in any sphere of activity. But our contention, and it is a valid one, is that it is largely the desire to remove the very evil which it: causes, namely, the insecurity which attends modern commercial and private life, which in its turn is the spur to people to act in that way without regard to the public interest. As far as the management of Imperial Airways are concerned, I am not aware that any one of them has any financial interest in the concern beyond his own salary, and surely he is just as likely to work well for a salary coming direct from the national Exchequer as when it comes from the national Exchequer indirectly in the form of a subsidy. It might be said that, if the management have no direct profit-making motive, the shareholders would apply the pressure, and, if there were any inefficiency on the part of the management, the shareholders would visit upon them some condign sanctions for their inefficiency. I am not aware, however, that the shareholders have ever uttered any sort of criticism of the management of Imperial Airways. It has been left to the politicians, and to those whom the politicians have appointed to investigate the operations of the management, to make as devastating a criticism as was ever made upon a public or private concern in the history of this House in its relation with industry. The truth of the matter is that the shareholders are concerned, not, as is so often suggested, with the efficiency of the organisation, but with the profit that it pays them, and, so long as they get their dividends, it is nothing to them whether the public interest is being served or not. The profit-making motive may occasionally, as a by-product, result in public good, but the profit-making motive and the public good are by no means the same thing. Indeed, some of the most prominent among profit- making organisations to-day are working in direct opposition to the well-being of the State, and have been characterised by all sides and all parties as anti-social— for example, the pools.

There is a further danger involved in this system of profit obtained by way of subsidy. Where profits depend upon the payment of subsidies, the whole force which would otherwise be harnessed to make the concern into an efficient one is harnessed to the operations of whitewashing and wirepulling in order to ensure that the subsidy will be paid. It is impossible to deny that that is what is happening in the case of Imperial Airways. An enormous amount of their time has been spent in political propaganda, in national propaganda, in wirepulling, and in white-washing their concern in order to make sure that criticism will not prevent the subsidy from being paid. I have been watching the advertisements which they put out—most ridiculous advertisements if they are intended to bring trade to the concern; and may I say in passing that a considerable proportion of the advertisements of Imperial Airways have been, strangely enough, put on the financial pages of newspapers. That is difficult to understand; perhaps the hon. and gallant Gentleman will be able to explain it. Here is another advertisement—in the "Daily Mail":

" Speed.

The New Empire Flying Boats.

Imperial Airways' new Empire Flying Boats are the fastest flying boats in the world. The top speed is 200 miles an hour. The standard of comfort is higher than that of any other air line in the world."

There is nothing about the timetable, nothing about the service; just a sort of general propaganda to establish the general good name of Imperial Airways, and to intercept criticism of the subsidy which is being received by them. I also find that some of these advertisements are put into newspapers with a provincial circulation, and, if I know anything about their advertising agents, they must have been fully aware that these advertisements, which were put out at great expense, would not pull anything in the shape of an immediate return.

A considerable proportion of the time of the management of this company has been spent in that kind of activity. I must give the House one further indication, at any rate, of this type of propaganda. There is a journal called the "Aeroplane," from which I quote sometimes, and which, on 26th February, 1936, issued a most severe criticism of this subsidy system. I will not read it now to the House, but there it is. Immediately the Imperial Airways gentlemen got on its track, and used all the forces which they have on their side, such as aircraft manufacturers and so on, and a week or two later an article was published in the "Aeroplane," ostensibly an editorial, vehemently repudiating the whole of the previous article which was also an editorial. This was reprinted and circulated to the public all over the country by Imperial Airways, not only praising themselves, but praising the Government's policy. Referring to the advantages of private capital over Government capital, it says that: Instead of putting up the money themselves, the Government are much cleverer, and get the public to lend the whole of the money that it pays for Empire air mail services, with no guarantee of interest or dividend, and the public takes the risk. I should be very happy to accept the amount of risk that there is in this concern, for which we are providing sums amounting to about £50,000,000 in the next 15 years. The strange fact is that not long after the publication of this article, which was obviously intended merely to placate this concern, the "Aeroplane" returned to their true views. Only last November they wrote: The market price depends entirely on the fact that the shareholders are going to get your money and ours, and that is morally and ethically wrong, besides being anti-social and just silly. If the dividend were cut to 4 per cent. the shares would go down to something like their true value and there would be no gambling in them. And at the same time the big financiers who have put money into the concern would get a fair return for it.

Then, this newspaper goes on: The money of the public should not be spent in paying outrageous interest to professional financiers. In spite of what was said in the Cadman Report, we had the Secretary of State for Air coming to us with these proposals and saying nothing about restricting the amount of dividend to be paid to this company. The time spent by the managers of this concern in replying to that sort of criticism must be very great. Why they chose this paper to follow up I do not know, because nearly every paper in the country has criticised them at one time or another. Here is a paper which has been the champion of all forms of private enterprise, the "Evening Standard," which said: In these circumstances, can it be said that a speculative risk exists justifying a 9 per cent. dividend? That would be preposterous. And, if there is no such risk, on what grounds can such a dividend be paid? On no ground tolerable to the public conscience. To that charge, which is made universally through the country and from every political quarter, no answer has been made by the Government of the day. The companies know that what happened was that these shareholders who are supposed to apply the spur of efficiency to the managers of their concerns, at about the same time as the Cadman Committee was investigating the widespread extent of their maladministration, awarded themselves enormous increases of fees, amounting to about £12,000 per annum in, the aggregate; and, to balance this, they reduced the amount of pay hitherto given to the pilots, despite the fact that the pilots are responsible for every valid claim that Imperial Airways can make to efficiency on their lines. That is a point in regard to which the Under-Secretary has an opportunity to distinguish himself.

Although this company is not a magnificent example of private enterprise as it was understood 40 years ago, I think it is, in fact, a shining example of private enterprise as it is understood to-day, because private enterprise as understood to-day has three main functions. The first is that it must obstruct and restrict the enterprise of the State. In that particular, Imperial Airways has been extremely successful. Its second function is, by successful and highly skilled manipulation, to obtain large direct and indirect subsidies. In that function, too, Imperial Airways has been highly successful. The third is a more positive function of private enterprise to-day. In fact, it might be described as the consummation of private enterprise, the seal and crown of all its efforts: that is, to accept profits and distribute them to the shareholders. That has been done to the satisfaction of all belonging to the company. So, from all three points of view, Imperial Airways can claim to be a shining example of private enterprise.

That is why we on this side are convinced that this policy is an unsound one. Thinking persons know, and I believe in every part of the House will recognise, that this concern is being artificially fed, bolstered up and protected from the breath of all criticism only for one reason. It is part of the fight to maintain the credit of an obsolescent system in industry. It is part of the rearguard action that is being fought for the right to make profits irrespective of the welfare of the State. I would like to warn Conservative Ministers —though why I should do so I do not know—that they are using up the whole of their good will in the country, and any reputation for logic and common sense that they might have possessed. I, at any rate, would urge the Government to realise that if we are to obtain a place among the civil air lines of the world in accordance with our hopes and our position, we shall have to take this concern out of the hands of the small body of private individuals who manage it to-day and scale it up to be a truly Imperial enterprise, and free it from the stigma which exists, and which cannot be repudiated, that when the State applies benefits to this concern it is applying benefits to the private shareholders who own it. If we do that, I believe that the concern will develop on right lines and that, if the time ever comes when we are able to embark on a period of 10 or 20 years of assured peace, the British Commonwealth will then have air lines which will be worthy of the place they hold as a link in the Imperial system.

5.23 p.m.

Mr. Roland Robinson

I listened with very great interest to the speech of the hon. Member for North Aberdeen (Mr. Garro Jones). One fact emerged very clearly from it, and that was that my hon. and gallant Friend the new Under-Secretary of State for Air has in his hands at the present moment a very great opportunity. I join with all the other hon. Members who have spoken in extending congratulations and good wishes both to the Under-Secretary and to the Secretary of State for Air. I think we are fortunate in having as our Secretary of State for Air a member of the Cabinet who has had great administrative experience and has seen something of flying, and who will no doubt combine in an excellent manner with the Under-Secretary of State, who has had experience of flying and who in the past has always been a critic of inefficiency whenever it is connected with the Air Force or civil aviation.

I join in expressing the hope that they will not take the attitude of complacency which has often existed in connection with Air Ministry matters, and that they will not say, "In regard to civil aviation our hands are tied, we must accept the recommendations of the Cadman report and other reports." I hope they will not take the view that, because we have had reports in the past, everything is a closed book in the future. I hope my hon. and gallant Friend the Under-Secretary, when he replies, as I am sure he is bound to do, to the many congratulations that have been extended to him, will deal with the fact that the Cadman report did recommend the appointment of a Secretary of State for Air and two Under-Secretaries of State, one of them for civil aviation. We have now lost the Under-Secretary for Civil Aviation and we are back where we were. Perhaps my hon. and gallant Friend will tell us whether it is intended to appoint an additional Under-Secretary, or whether he will have the special interests of civil aviation at heart.

We are voting to-day an increased subsidy, which, as I understand, will be paid mainly to Imperial Airways and British Airways. I am quite certain that my hon. and gallant Friend will not say that Imperial Airways are a shining example of efficiency. He will not dare to say so, because he has been one of their critics. The point he may make is that, where things have been wrong in the past he will make it his own responsibility to see that they are put right and to bring Imperial Airways up to that standard which has been achieved by British Airways. I was flying in a British Airways plane a few days ago, and we passed in the air an Imperial Airways plane. The Imperial Airways plane was going so slowly that it appeared to be standing still. I hope the Under-Secretary will see that there is no standing-still in civil aviation while he is in his present post.

We know that money is to be paid to Imperial Airways and British Airways. Can the Under-Secretary say something of those other companies which, have undoubtedly spent a great deal of money and done a lot of pioneering work, without any reward at all? Are they to come into the picture at all? There is the Alp Air Line company, which goes to Switzerland. The Under-Secretary knows of the very good work which has been done by Allied Airways in inaugurating a service from here to Norway. There we have a British company chosen to run an exclusive service to Norway. Are they to go to the wall? Are we to say that they cannot have any subsidy, and that they are not in any way to come into the picture? It may be possible that the Government cannot subsidise them, but that in some way they may be amalgamated, or drawn into the picture, so that we may have a joint operating company.

We are going to have an extra subsidy. One of the suggestions of the Cadman Committee was that Imperial Airways should appoint a new, full-time chairman. The report was signed on 8th February, over three months ago, and so far we have had no indication that Imperial Airways is going to have a new and full-time chairman. Has the present chairman of Imperial Airways definitely undertaken to resign his position as soon as a new chairman can be found; and, assuming that he resigns his position, is he going to stay on the board in order to render what help he can, or is he going to stay out of the picture altogether? Another proposal was that there should be a joint operating company formed on the London-Paris service between British Airways and Imperial Airways. We have heard nothing about that. Now we are voting extra money which is going into the coffers of those two companies. Will the Under-Secretary say that, before that money is paid, he will insist on the two companies adopting all the recommendations of the Cadman Committee?

I was surprised that the hon. Member for West Islington (Mr. Montague) said he saw no reason to increase the subsidy in order to develop our internal air lines. He invited the Under-Secretary to reply, and to say what justification there was for it. There is every justification for it. If it is necessary for national prestige to run air lines all over the world, it is equally necessary to run them at home. If we are to operate air lines successfully we must make the people of this country air-minded, and it is hardly likely that our people will fly when they go abroad if they have not had the opportunity at first to fly at home. It is good to develop the internal air lines, because we are building up a very useful reserve of air pilots. The Secretary of State said that they were going to see that at least 75 per cent. of the air pilots of subsidised companies were members of the Air Force Reserve.

That is one of the most obvious necessities in building up a powerful Air Force in this country. We built up the Royal Navy largely with the backing of the Mercantile Marine, because there was always a body of seafaring men to man our ships. So it ought to be with the Royal Air Force. There ought to be a large body of qualified air pilots always ready to be called upon in times of emergency. If we can develop these air lines it will help to create that for which the Cadman report asks. It will build up the necessary reserves of aircraft and provide vital links with our imperial and continental services. I also hope that it will provide for some use of air ports which have been provided by local authorities in this country at very great expense.

I welcome this subsidy of £100,000. It is small, but it will be very helpful, and I should like the Under-Secretary in his reply to say how the subsidy is to be treated. Is it to be given to one operating company which will be licensed and given a monopoly under the licensing system which we are to discuss a little later this evening, or is it to be divided among all the people who are running air lines in this country which conform to the requirements laid down in accordance with the speech of the Under-Secretary of State? I feel sure that my hon. and gallant Friend will be able to give a satisfactory answer to these questions, and I believe that for the first time we are getting some real help for the internal air lines of this country which may give us the system of civil aviation in this country for which some of us have asked and which we have dreamed about for a long time.

5.33 p.m.

Colonel Ropner

I rise only for the purpose of asking the Under-Secretary of State whether, when he replies, he will make a clear and definite statement with regard to Government policy in connection with the subsidy for external air lines. The matter arises out of paragraph 36 of the Cadman report, and I will take the opportunity of reminding the House of what that committee said: If our national prestige is to be maintained, our external air services must be concentrated in a small number of well-founded and substantial organisations, rather than dissipated among a large number of competing companies of indifferent stability. Whatever our views may be with regard to the larger question of private enterprise and Socialism as raised by the hon. Gentleman opposite, those of us who support subsidies at all must agree with that paragraph of the Cadman report. I have been told within the last few days that there are at least some indications that it is the policy of the Air Ministry to limit subsidies for the maintenance of our external air services to one company. No one who knows anything about British Airways could say anything against that company. I believe it to be an excellent organisation in every way and extremely efficient, but I hope very much that this company will not in effect be given a monopoly in the maintenance of our external air services. We all agree that there should not be a large number of competing companies, but, surely, there ought to be more than one company. There are one or two other air companies which have for some years now maintained regular services to the Continent. They are sound financially, and efficient, their pilots are highly qualified, and their equipment is modern. In at least one case a regular service has been operated for four or five years. I would like the Under-Secretary when he replies to let me know whether it is not the fact that a very good case could be made out for subsidising such a company. I am of course referring to West Coast Airways. [Interruption.] I have found myself on more than one occasion speaking on behalf of air companies and perhaps I should say now that I have no sort of interest in any of these organisations. West Coast Airways have undoubtedly maintained a very efficient service to the Continent, and it is well entitled to be considered when subsidies are being given. Allied Airways is another similar company. Paragraph 37 of the Cadman report accentuated the necessity of limiting the number of competing companies. We consider that the same external route should not be operated by more than one British company, and that, as recommended by the Maybury Committee in the case of internal air services, some measure of restriction should be applied to avoid indiscriminate competition. I am not suggesting for a moment that the Air Ministry should keep two British companies running on the same route. British Airways maintain services, I understand, to Berlin and Hanover, to Paris, Amsterdam, Stockholm and Copenhagen, and I hope that they will be subsidised in respect of these services. There is no British service to Zurich, although a Swiss air line maintains a regular service between there and Croydon. There is no regular service at all run by any nation between this country and Luxemburg, and I understand that West Coast Air Services are prepared to operate along that route.

If no subsidy is to be given to these companies I hope at least that the Air Ministry will do nothing to handicap them in operating the services which they can maintain without a subsidy. It is necessary for any company desiring to maintain a service to a foreign airport to ask for the help of the Air Ministry. Applications for landing facilities have to be made to the foreign Government. The whole procedure under the International Convention has to be followed, and it is possible for the Air Ministry to prevent a British service being run to any foreign airport by any specified company. They have the power not only of denying the subsidy, which I think, should be given, but of making operations so difficult that, in fact, the company would probably have to close down. I shall be very sorry indeed if those companies which are to-day maintaining services have such handicaps put in their way by the Air Ministry. That is the only point I wish to raise. I very much hope that the Under-Secretary will be able to tell the House that it is not the policy of the Government to give a monopoly to one company, British Airways, when there are other financially sound and efficient companies. If a subsidy is to be given, they ought to receive a share of it.

5.40 p.m.

Major Procter

It was quite in keeping with the political ideology of the party opposite when the hon. Gentleman the Member for West Islington (Mr. Montague) swung this Debate round, by introducing a long dissertation on Socialism as applied to the Air Services. He cited many instances not only of State control, but of State ownership, one of which was Australian shipping, stating that Mr. Bruce had spoken of the advantages of the State owning those ships. If that were so, why did the Australian Government sell all her State-owned ships? State ownership of transport in other lands, after being tried has been given up on account of political jobbery and loss. America abandoned State ownership in shipping. If you take certain forms of socialised transport on the Continent, train services, for instance, there is no comparison with the English privately-owned system. The hon. Gentleman belongs to a party which is based upon a fundamental error. He believes in the public ownership of the present utility under discussion. Of course he does. His party started from the basis of public ownership of all means of production, distribution and exchange. It is the only reason for their existence as a separate party. This idea is put forward as a theory in almost every Debate, but when the Socialist party were in office they did not put forward one socialistic proposal.

The party to which I belong has never hesitated to use the State if it has been considered to be to the advantage of the country. We are not wedded, like the Socialist party to the principle that the State must own all means of production, distribution and exchange, with us it is a question of wisdom and expediency. [Interruption.] I am prepared to give way to the hon. Member for Ilkeston (Mr. Oliver), but I do not like him to punctuate my sentences. We on this side of the House believe that certain undertakings should be controlled by the State. But they are few in number and must possess certain characteristics. They have to be of the nature of a monopoly, such as the Post Office, or where it is essential to have unified control, as is the case in the Army and the Navy. But on the other hand there are many industries which, if the State were to control them, would end in disaster. To take civil aviation at this stage of its development out of the hands of those who by training and knowledge know how to run it, and put it into the paralysing hands of politicians would be a retrograde step.

The proper function of the Government is not to own or manage the air services but to make regulations in the interest of the safety of those who use those services. The National Government has made Transport regulations which act like traffic signals. They say, "Stop" and "Go," in the interests of the public, but they do not state the kind of car that one must drive or how much one is to pay for it. That is the difference between the two sides of the House on these questions. When hon. Members opposite bring forward Socialistic arguments, I reply that we shall resist Socialism wherever we find it, whether it is sought to be applied to civil aviation or in any other way Hon. Members always raise "the bogy of profits, but we say that the profit motive is a tremendous motive in industry, both to the employer and the employee. One of the reasons for the rise of the Co-operative movement is the fact that they make profit and offer a dividend. The reason why we try to kill Socialism wherever we see it is because we believe that Socialists, unknown to themselves, are working for tyranny. They may ultimately land us into a super-kind of Socialism, known as National Socialism, such as exists in Germany. That Socialism leads on to dictatorship. We say that you cannot practice your Socialism without tyranny.

The reason why Socialism either in air transport or any other industry cannot be carried out without tyranny is, that the Socialist policy makes the State the one master of everybody in the land. If you have one boss, you have a dictator, and if you have a dictator you have tyranny. Wherever we find dictatorship in the world to-day we find that it has been preceded either by the dread of Socialism, the practice of Socialism or the threat of Communism.

Mr. Deputy-Speaker(Sir Dennis Herbert)

The hon. and gallant Member is travelling away from the subject before the House.

Major Procter

In the early part of the Debate the hon. Member for Islington, West (Mr. Montague) went over a very wide field in dealing with the question of Socialism as applied to the air service. His Amendment specifically states "the State ownership of this service." However, I will leave that point. I hope that the Amendment will be resisted, because private enterprise has played a great part in the air services. Much of the development that has been done has been due to private enterprise. The risks have been borne by private enterprise, and to kill private enterprise in air services would stop the flow of invention and arrest progress in this industry.

Mr. Kirkwood

I suppose that is why the Navy is under private enterprise?

Major Procter

As an engineer the hon. Member must know that the developments in the engine-rooms have not been brought about by Government Departments but by private enterprise; by the skill and invention of private individuals in private firms. I should like to make a constructive proposal regarding internal air communications. I would ask the Under-Secretary —we are glad to see him here for the first time occupying a very honourable place on the Front Bench—whether he is quite satisfied that there is no interference with the air services by the railway companies. Will he say whether the Manchester airways service is interfered with by the railways? [HON. MEMBERS: "Why not? "] I do not want to take up further time by being led astray by interruptions. I should like to know why there is no direct British air communication between this country and Hungary and other countries in Middle Europe, which, since the Anschluss, are anxious about their parliamentary institutions and trade. If it were possible to make direct communications between this country and free people of Hungary, so that tourists and commercial representatives could be transported the intervening thousand milles, it would be a great gesture as showing our sympathy with that kindly and hospitable and liberty-loving people who have been denied an air force of their own under the Treaty of Trianon. It would be appreciated by and would show our great friendship and interest in their economic future. It would also help to prevent the spread of dictatorship ideas in Middle Europe.

5.52 p.m.

Mr. Pickthorn

I can hardly wish to continue the Debate, which really ceased about an hour and a quarter ago.

Mr. Gallacher

That is an insult. Withdraw it.

Mr. Pickthorn

The insult, if any, is from the benches opposite. I used the word "Debate" advisedly, because we really have had no contribution from the other side for a long time. We did have an argument about the socialisation of this service, but that was dropped some considerable time ago, and we have since been down to more or less brass tacks.

I wish to mention, briefly, three matters in connection with the use of the proposed subsidy. If subsidy there is to be, I should like to suggest that the Ministry should give attention to the three points which I have in mind. I suppose I am one of the comparatively few Members of this House who has had his breeches, if not his wings singed by what the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) described as unnecessarily dangerous fuels, and I should like to emphasise his request that the use of part of this subsidy for the development of safer fuels for use in civil machines should be considered.

There are two other questions for which I would ask consideration. The Minister in introducing the Bill referred to aviation in the British West Indies. I would suggest for very careful consideration whether that is not the most urgent of all possible lines where imperial aviation ought to be developed. There was an attempt made very soon after the War—[Interruption.] I am sorry that hon. Members opposite who did not speak publicly should now do so much private speaking.

Mr. Gallacher

On a point of Order. I should like to draw attention to the fact that it is not hon. Members on these benches who are disturbing the House; it is the Air Ministry.

Mr. Deputy-Speaker

The hon. Members should leave that to the Chair.

Mr. Pickthorn

An attempt was made very soon after the War to establish air lines in the West Indies, but it was dropped, because the Home Government considered that it was impossible to start any form of subsidisation at that time. If it had been possible to make aerial communications between the different islands practicable then, the whole history of the West Indies for the last 15 years might have been very different. One of the main difficulties in these Colonies is that each unit is too small to be an effective political and social unit, and that will continue to be so as long as communications are as bad as they are at the present time.

It may be, in the long run, that the most important of all transport lines will be the aerial transport lines from this country across the North Atlantic, and then across the South Pacific. In the development of American air communications it is perfectly clear that Pan-American Airways have immense advantages and have an immense start over us. It is almost equally clear that any attempt at anything in, the nature of direct competition would be probably ill-judged and almost certainly unsuccessful. There must be feeding branch-lines for the great trunk lines, and if we are to have our proper share in the traffic of the great main trunk lines, our business is to start now the provision of the feeding branch lines that will be necessary. In the West Indies and the Caribbean, that calls to be done most obviously, and is most obviously the urgent task of this country. Therefore, I would ask that particular attention should be given to West Indian possibilities in this connection.

The third matter with which I am concerned is that of internal communications. I disagree humbly from most hon. Members who have spoken to-day and in similar Debates in the past in not attaching as much importance as they do to internal air communications. I believe that the size of these islands and the climatic conditions make it impossible for internal communications ever to have the significance that is sometimes attributed to them. On the other hand, I wholeheartedly agree with what the Minister and the hon. Member for Blackpool (Mr. R. Robinson) said, that in the long run the Air Force can be of no use to us at all unless it stands in something like the same sort of proportion to the people not in it who know about the air, as the Naval Force has to the people not in it who know about ships. I do not know the proportion that that may be, but it is probably very much larger than the iceberg proportion of 10 tons of ice under the water to every ton of ice above the water. I do not know whether we shall ever get to the point of having 10 people flying for non-service as against one flying for service purposes, but unless we can get something like the proportion of four to one, no amount of sudden or even continued production of machines, or anything else, is in the long run going to give us the moral or the military position in the air which we ought to have, and without which we shall cease to be in any sense at all a first-rate Power.

I suppose it would not be in order to suggest that any portion of this money should be spent in subsidising what I might call flying for amusement rather than internal airways, but I hope that it is not out of order to suggest that the Ministry might consider very carefully whether, although it may seem uneconomic to fly for amusement, as against the transport of goods and of passengers, it would not be much more economical in this country to spend money in persuading this right sort of young men, indeed, any young men, but preferably the right sort of young men, to fly. I believe that money spent in that way would be infinitely more economical than most of the money likely to be spent on internal airways. It is for consideration of these three points that I respectfully ask the attention of the Ministry.

5.59 p.m.

Mr. Lyons

In discussing the question of the subsidy in relation to Imperial Airways I would remind hon. Members that it was following the report of the Hambling Committee in 1923 that the Government of the day decided to promote the amalgamation of the small existing companies into one central unit and to give to that unit the task of developing British air transport overseas. It was necessary to give some substantial financial help because neither then nor now could civil aviation "fly by itself." The nature of the organisation is well-known. In paragraph 44 of their report the Cadman Committee repeat: In the first place, we desire to make it clear that we do not recommend the creation of a Corporation or Company administered under Government control, but of a commercial organisation run entirely on business lines with a privileged position with regard to air transport subsidies, on terms and conditions to be defined later. This is taken from the Hambling Committee. Whatever criticism may be directed towards the European services of Imperial Airways let us remember that experience has shown, and the report of the Cadman Committee has emphasised, that the work of Imperial Airways in regard to Empire services, particularly in regard to flying boats which are without doubt in the van of modern aircraft, has been an achievement of which we may well be proud and which well justifies the subsidy and help given by the Government. The Cadman Committee referred to the exploitation of Empire air routes leading to the conception of an Empire air mail scheme and described this development as unique in the air services of the world. When criticism is levelled at this company for the slow flying of its Continental services, or when older types of aircraft put into operation on its Continental air routes are discussed, we should also remember the great performance which Imperial Airways has achieved under extreme difficulties in the Empire air routes, and I hope that the Under-Secretary—I want to join in the congratulations which have been showered upon him—when he replies will be able to say that the last acceleration made by Imperial Airways in the African and Indian services has been a complete success. They have to fly over different countries, over different frontiers, through different climates, towards and over the Equator, and the services of Imperial Airways throughout the Empire do, I think, show a record which we can discuss with pleasure, and upon which we can look back with great satisfaction. The hon. Member for Blackpool (Mr. R. Robinson) spoke of the slowness of the machines of Imperial Airways as compared with those of competing companies.

Mr. R. Robinson

It was in relation to the speed of British Airways machines. I was not comparing it with any foreign country.

Mr. Lyons

I am obliged. The hon. Member was comparing the speed of the machines of Imperial Airways with the speed of the machines of British Airways. It was said in the House only a week ago that not one single aircraft utilised by British Airways is of British manufacture. They may be faster machines, but they are foreign made. Imperial Airways have British-made machines, but they have been delayed year after year in the delivery which was promised of newer and more modem aircraft. They have concentrated, rightly, I think, on the success and efficiency and development of their Empire schemes rather than on their services to the Continent. I should like the Under-Secretary of State to tell us how it is proposed to apportion this subsidy. That Imperial Airways and civil aviation will get a much larger subsidy is all to the good. I have urged for an increase and I welcome it. The subsidy has been far too small, trivial in comparison with the much large subsidies given in other countries in relation to respective flying traffics and who have none of the difficulties with which we have to contend in this Empire service.

I would like more details as to how the subsidy is to be appropriated. Can the Under-Secretary say what is to be set aside to start immediately a regular service between Australia and New Zealand? Can he say—perhaps he cannot at this short notice, and in that case I shall readily understand his position— that when a subsidy is being expended in the joint-extension of our Empire services we make it a condition that there shall be some reciprocal arrangement with Pan-American Airways or other companies with whom we may cooperate? In a magazine called "American Aviation" of 15th October, 1935, reporting, I believe, the Western Aviation Planning Conference, it was stated that the Assistant Secretary of Commerce in Washington had said that British undertakings would never be granted permission to use the Hawaiian Islands as a stopping point for a Trans-Pacific route. If that is so, it would be a great obstacle in the way of any extension of these services there, and it might be useless to set aside a large subsidy for something which might not mature. I hope the hon. and gallant Member will tell us what the position is. It has been said that British air services have been artificially fed. The hon. Member for North Aberdeen (Mr. Garro Jones), in the course of his criticisms, said that Imperial Airways had throughout all its life been protected from criticism. They have not been protected from criticism in this House, because they have been under the most acute examination on many occasions.

Mr. Garro Jones

I said that they have been protected from criticism by the Government, who have spoken on their behalf. Of course, there is nothing to prevent hon. Members criticising.

Mr. Lyons

The very fact of the subsidy coming from public funds to Imperial Airways or to British Airways makes them always liable to criticism from hon. Members in all parts of the House. There is no shelter from that type of criticism, and there never has been. We heard from the Minister, to whom I should like to offer the warmest wishes for the success which we all hope will be his, that a sum of £100,000 is to be set aside to help and advance internal air lines in this country. I welcome that step, it is one which I have often suggested. It will do profound good to the home-flying of this country. I join issue with the hon. Member for Cambridge University (Mr. Pickthorn), who did not support our views in regard to internal air lines because of the small-ness of the country. I think it is a tragedy that the internal air lines which came into being in this country received no assistance from the State. One by one they have ceased to operate.

I hope we shall hear how this £100,000 is to be distributed. There is operating now an internal air line known as the Olley Air Service, who have had no State assistance and who are opposed on their routes by the railway air services which have State assistance. Various internal air lines have done much good work in cross country areas, but recently many have had to close down, and I hope the Minister will give us an indication that this £100,000 will be expended in developing routes over cross country areas where regular flying services can be developed with great advantage. The city of Leicester established a good airport. There was a regular service from Leicester to Norwich—two towns which are allied by trade and industry. It is notorious that the railway service between the two is archaic and thoroughly obsolete, and that the railway companies are offering no improvement. The air service between these two towns did good service, but after a time it ceased operating altogether. It was in existence when the former Secretary of State for Air came down to open the Leicester airport, but for a long time now there has been no regular service at all.

May I ask what help is to be given to municipal airports? Vast sums of money have been expended by ratepayers to establish municipal airports worthy of the respective cities. They were encouraged to do this by the Government. They obtained the ground organisation, or the skeleton of the ground organisation, but found that they were getting no support of any kind from the State. No air services are coming to these airports; they are lying there without animation at all, and a grievous position will arise in many towns, Leicester is one. The danger is that they will be abandoned by the corporations and that building areas will take the place of these airports to the national disadvantage. No airport or airfield should be left idle. I hope the help for which we are asking will be forthcoming.

There are several other questions I want to put. Can the Under-Secretary say whether any particular appropriation is going to be made to help the "pick-aback aircraft"—which is the composite "Short-Mayo" flying-boat? Were the tests recently made by this type of aircraft for Imperial Airways a success? Are the tests to be continued, and, if so, to what extent? Are we to have this type of aircraft available for long distance routes, and is there to be a direct and specialised appropriation of this subsidy for this kind of machine? It may be one of the biggest inventions of the day, and I hope we shall be told what steps are being taken to see that it has a proper share in the subsidy.

It is of great consequence that the air services of this country should expand. They have fought their way to success through great difficulties. The pioneering work which has been done by Imperial Airways will stand for all time as an overwhelming success. But I hope there will be no complacency. The schedules have been accelerated. Can they be accelerated more by some kind of night flying? What is to prevent night flying taking its proper place in these services? Are the rest-houses of Imperial Airways satisfactory and in keeping with the comfort and excellence of the journeys as a whole? Can we improve the flying-boat bases? Is there anything that can be done to make the journeys more inviting than they are now? I believe that the object of Imperial Airways is to cover the long distances safely and efficiently and in the shortest time, and that nothing will be spared by the company in seeking to achieve that end. I hope that there will be continued progress, so that the next few years will give results well comparable with the progress given by the last few years in the development and promotion of our great Empire air services.

6.16 p.m.

Mr. David Adams

I wish to tender cordial congratulations to the Secretary of State for Air and the Under-Secretary on their appointments. There is little doubt that in the course of time the Air Ministry will be the most important of all Ministries. In a war, it will control the master weapon which has changed the venue of battlefields, and outspanned continents and seas, and yet its development is still in its infancy. In peace time, civil aviation is a new factor in international relationships, and it is imperative that its development should be on proper lines that we may be linked effectively with all parts of the Empire. As has been stated in support of our Amendment, private enterprise in aviation has failed, except where national financial support has been afforded to it, and that in itself ought to be a justification for the assertion that it should be a socialised industry. Those who are opposed to socialised industry seem to be entirely oblivious of the socialised industries which exist both under Government control and under the municipalities. There is an increasing capital investment in municipal undertakings of a purely socialised character, and their number is increasing with considerable rapidity. Therefore, I feel that it is not necessary to argue in any great detail the Amendment which has been so effectively submitted to the House, and I shall await with great interest the arguments which the Minister has to advance against it.

In the absence of agreement in the House on the lines of the Amendment, of which one sees no hope to-day, I am gratified that a sum of £100,000 is to be set aside for internal air lines out of this new grant. The Government wisely stipulate that 75 per cent. of the pilots concerned should be available to the Royal Air Force. One of the objects of the Air Ministry ought to be to create a population air-minded. It should not be forgotten that only about 10 per cent. of the population have the opportunity of travelling by air, and that about 90 per cent. of our people remain to be made air-minded. Little use is being made of private aerodromes, municipal aerodromes and light aeroplane clubs. If it be desirable that the population should be air-minded and that there should be a continuous output of persons licensed to handle aeroplanes, the present system ought to be changed without further delay. We are neglecting a great source from which pilots might be drawn. The Royal Air Force training centres turn out a certain number of pilots, but that number would be infinitesimal in the event of war, in view of the demands that would be made on the Royal Air Force.

Consequently, the Government have encouraged, to a limited extent, light aeroplane clubs and municipal aerodromes to train pilots, and there is a grant of £25 for every licence which is obtained. That sum is considered to be sufficient to enable the clubs to train pilots. It is estimated that at the Royal Air Force training centres the cost is about £150 for every licence obtained. On the authority of the light aeroplane club in Newcastle-upon-Tyne, I suggest that the Government should spend a proportion of the £100,000 in increasing that subsidy to £40. There are 48 subsidised clubs in this country and about 24 un-subsidised ones. If the subsidy were increased to £40, these clubs would be prepared to train free of charge all and sundry who were capable of being trained as pilots, in their leisure time, in the evenings, on Saturday afternoons and Sundays, and thus a substantial proportion of the population could be trained by these clubs. At the present time, the Government restrict the amount paid to a club to £2,000 per annum; that restriction would have to be swept away if substantial numbers were to be trained on the lines I have suggested.

I have examined this matter with the heads of light aeroplane clubs; we see no defect in such a system and the Government would save a sum of about £100 per licence. Moreover, such results could be obtained without disturbing the ordinary occupations of the prospective pilots. If municipal aerodromes and light aeroplane clubs had that opportunity placed at their disposal —they have not got it now, because a light aeroplane club is compelled to make a charge of about 30s. per flying hour for the training of pilots—there would be a great increase in the number of pilots who would be available to the Royal Air Force in due course. I do not suggest that once a person had been trained as a pilot at a civil aerodrome and had obtained his A licence, he would necessarily be ready for the Royal Air Force. He would require only a small amount of additional training, or Royal Air Force instructors could be placed at the disposal of these clubs. If the Minister has not already considered this matter, I hope he will do so, and will give to the aeroplane clubs an opportunity of performing a real national service. At the present time the municipal aerodromes are not being utilised, for the services which used to come to them are no longer. At the Newcastle airport, internal air lines have been tried again and again, but have had to close down.

Mr. Lyons

Is there any regular service operating from the Newcastle airport to-day?

Mr. Adams

There is a service to Scotland and to London, and Allied Airways (Gandar Dower), Limited, have a service to Norway, but I gather that unless they can have some support from the Government, they will be bound to close down. They have put many thousands of pounds into the enterprise in the belief that there would be a profitable service both in goods and passengers between this country and Norway. The new proposals made by the Government will be of great value to the country if full advantage is taken of them. I would impress upon the Minister that there is a multitude of persons on the North-East Coast anxious to obtain pilots' certificates. One can see them in crowds around the aerodrome when there is flying. I hope the Minister will give this matter full consideration. As I have said, it would be possible to save nearly £100 per licence, by carrying out the proposal which I have indicated, and I believe that what I have suggested would be one of the simplest and most economical methods of creating an air-minded population in this country.

6.30 p.m.

Mr. Perkins

I wish to put four questions to the Under-Secretary, but before doing so, may I congratulate the Minister on the very bold, courageous step which he has taken? Within his first 24 hours at the Air Ministry, he has torn up a page of the Cadman report and the whole of the Maybury report. The Maybury report came down definitely against subsidising internal air lines, and in that view it was reinforced by the Cadman Committee. I am thankful that the Minister has had the courage to tear up both recommendations and is now giving a word of encouragement to internal aviation. I believe it will be welcomed by all air operators in this country and by those concerned with municipal aerodromes, because the one benefits the other. The first question which I wish to put to the Under-Secretary is with regard to the pilots. I understand that two Government directors of Imperial Airways interviewed certain disgruntled pilots a few weeks ago and reported to the Government that, in their view, certain of these pilots should be reinstated. Have any of those pilots yet been offered employment by any of the companies concerned?

My second question has reference to the suggested Whitley council. The Cadman report suggested, and the Government adopted the suggestion, that a Whitley council should be set up for all commercial pilots, and in particular for those of Imperial Airways. Have any steps been taken by Imperial Airways to set up such a council? My third question is about the pooling arrangements recommended by the Cadman Committee in respect of the London-Paris run. The Cadman report suggested that a new company should be formed of British Airways and Imperial Airways to pool the passenger traffic on the London-Paris run. Has any progress been made in that respect and are we likely to see the new company formed this summer? Finally, I should like to ask who exactly is to be eligible for this increase in subsidy? Is it to be limited, as in the past, to Imperial Airways and British Airways? Is it definitely restricted to those two companies, or are certain other companies which are already in being, or which may come into being in future, to be eligible for the subsidy if they fulfil certain conditions?

6.33 p.m.

Rear-Admiral Sir Murray Sueter

I wish to join with other hon. Members in con- gratulating the Minister. I hope he will achieve as great a success at the Air Ministry as he did at the Post Office. I also congratulate the Under-Secretary on having taken his place at that Box, and before he replies to-night I wish to ask him one or two questions. First, can he tell me when the Short-Mayo flying boat is likely to cross the Atlantic? I understand that that is the purpose for which she was designed. We ought to know whether that experiment will soon be undertaken. I would also ask how the North Atlantic services are getting on generally. The year is advancing, and so far nothing much seems to have been done. I would ask the Air Minister also to speed up, if he can, the provision of ^ the Southern Atlantic services. It is bad for our prestige in South America that we have no services running to the Argentine. We are paying more than £100,000 a year to get our air mails transported across the Southern Atlantic by German air lines. They carry millions of letters to the Argentine, and when the people there see the mails coming in regularly by those lines and no British aircraft at all coming in, the effect is to damage our prestige, as I know from letters which I have received.

I would also ask the Air Minister to look into the whole question of the West Indies air services, and to see whether we cannot put up something there against Pan-American Airways. It is nearly three years ago since I asked that this question should be looked into, but Pan-American Airways have got a footing there and that injures our prestige in the West Indies. There is also the question of the Pacific air line. I hope that we are working parallel with American Airways in developing the Pacific service. They had a disaster, I know, in the burning out of the Samoa clipper, and in that connection I hope that consideration will be given to the suggestion in the Cadman report that we should develop the Diesel engine for these long-distance air routes so as to make them as safe as possible for those who have to operate the services. The Air Minister said that we had been giving £100,000 for internal air lines. Does that include the Newcastle-Norway air line? The Minister referred to European air services, but I understand that the claim of the Newcastle-Norway air line has been turned down lately, and that no subsidy is to be given to it. I submit that that matter ought to be reconsidered. I hope the Minister will send for the correspondence with the Newcastle-Norway air lines company and see whether something cannot be done to help them. It would put them on a much better footing with the Norwegian people if they were a properly recognised company. They have been working this service for a great many years, and have, I understand, done more oversea flying than any other company except Imperial Airways.

I hope that attention will also be given to the question of Langstone Harbour. This matter has been under consideration for two or three years and there has been nothing but wrangling about it between the Air Ministry and the Portsmouth Corporation. I was told the other day that one of our big flying boats had to land at a port in France on arrival from India, because it was impossible to get into Southampton. It is unfair to ask the pilot to bring one of these big flying boats into Hythe, near Southampton. The space is very restricted and there are yachts anchored all around and the pilot has scarcely room to get off the water. When flying in one of these boats there a short time ago I was amazed that it was possible to get pilots to operate such boats in such conditions. It is not right that one of our big flying boats should be compelled to land in a French port because there is no suitable port in the south of England. Therefore, I ask the Minister to look into the Langstone Harbour question again. Whether he adopts the high level scheme or the low level scheme, it is time that something was done to provide these pilots with a safe harbour on their arrival from distant parts of the world.

6.39 p.m.

The Under-Secretary of State for Air (Captain Harold Balfour)

I claim the indulgence of the House on two grounds, first because of the ordeal which one has to go through in speaking from this Box for the first time, and, secondly, because of the number of comprehensive and technical questions which have been put to me in the course of this Debate. At the outset, I would like to thank hon. and right hon. Gentlemen for the kindness of the welcome which they have extended to me on taking over the duties of this office. I assure them that no one feels the re- sponsibility of the task which I have undertaken, or the humble character of the abilities which I bring to that task, more than I do myself. The hon. Member for West Islington (Mr. Montague), who opened the Debate, dealt largely with the question of Socialism against private enterprise. It is not for me to embark upon that argument, and I do not propose to do so this evening. In the first place, the Government have decided that private enterprise, controlled and limited by Statute, shall be the principle of the development of civil aviation during the period in which the present agreements are to run. Secondly, the proposals of this Bill are intended to implement the recommendations of the Cad-man Committee. That committee was asked for by Members in all parts of the House, and its recommendations have gained the support of hon. and right hon. Gentlemen opposite, just as of Members in other parties.

Mr. Montague

Does that mean that the hon. and gallant Gentleman proposes to ignore completely the Amendment on the Paper? It is a Socialist Amendment.

Captain Balfour

I am far from ignoring it, but I am trying to deal with it broadly and in a few sentences. Private enterprise controlled and limited by Statute represents the decided policy of the Government and it is not for me, a junior Minister, to controvert that policy. Further, this Bill, as I say, implements the Cadman report which has been welcomed in all parts of the House.

Mr. Garro Jones

I am sure the House wishes to give every indulgence to the hon. and gallant Member, but this is not a Bill dealing with the Cadman report. It is a Bill containing certain proposals which are set out in Clauses 1 and 2. The policy expressed in those Clauses has been impugned by our Amendment, and it is the duty of the hon. and gallant Gentleman to answer the arguments which we have put forward.

Captain Balfour

I could easily embark upon an argument about nationalisation as compared with private enterprise, but there are many points with which I wish to deal. Obviously, Government policy on the question of nationalisation or private enterprise is not going to be de- cided by what I say to-night. Actually, the policy of the Government has been to temper the strength of monopoly with a reasonable measure of competition, wherever there appears to be a sufficiency of traffic, and in the last two years that policy has been implemented by the selection of a second chosen instrument, namely, British Airways to work alongside, and to some extent in competition with. Imperial Airways.

I think the case for nationalisation depends on the view taken of the functions of Government. It may be said that Imperial Airways, which is, in essence, a public utility company, controlled by contracts with the Government, in consideration of the subsidies granted to it, is in a better position to function successfully in the commercial world than a Government Department under the present form of Constitutional control, by Treasury and Parliament. That was the view taken by the Hambling Committee in 1923, when it recommended, not the creation of a corporation or company administered under Government control, but a commercial organisation run on business lines with a privileged position in regard to air transport facilities. It is perhaps fair to suggest that the case for nationalising air services is no different, in nature or in strength, from the case for nationalising other transport services and the greater industries of the country, which is the policy of the party opposite. It is a policy which has not been accepted by the electorate and is opposed to that policy which His Majesty's Government, acting on the will of the people, have pursued. since we are talking on this question of nationalisation against private enterprise, there is just one other remark that I would make. Under the form of private enterprise, Imperial Airways and British Airways profits are controlled—I will come to the point of the hon. Member for North Aberdeen (Mr. Garro Jones) later. But any losses fall upon those who have been bold enough to venture into this new and developing field of transport, in the hope of some return in the future, which return, if it does come, will be limited by Statutes passed by this House. Did we have a policy of nationalisation, those losses would be borne by the general taxpayers, direct and indirect, rather than by the company's shareholders.

The hon. Member for West Islington objected to the proposal in this Bill to raise the subsidy from £1,500,000 to £3,000,000, but I would point out that that was in accordance with the recommendation of the Cadman Committee. The hon. Member objected to this Bill because of what he called discrimination in subsidies but you are bound to have discrimination in the granting of a subsidy because of the differing conditions under which air transport concerns are operating. You can, for instance, take a route where traffic is easy to obtain and where competition is comparatively limited, and certainly more favourable to aviation because of the discomforts of an unpleasant sea journey such as the service to the Channel Islands. Equally there may be a need for service between other points where the traffic to be carried is light, but the service may be imperative and, therefore, may have to command a subsidy to keep it going, and that is the reason for the discrimination which has to be exercised in the granting of a subsidy.

The hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) said he was not really quite sure whether he would come down on the side of private enterprise or on the side of nationalisation, but on balance I think he came down on the side of private enterprise.

Lieut.-Colonel Moore-Brabazon

Very decidedly.

Captain Balfour

But he did say that he did not know what would be his position in 20 years from now, and I think that is the case with all of us in this great adventure of aviation. None of us can tell what is going to be the situation in 20, 30, or 50 years' time. But we have to decide on a policy now, and the policy of the control of private enterprise, with profits limited by Statute, is, I am sure, the soundest course for us to follow at the present time. The hon. Member for Berwick-on-Tweed (Sir H. Seely), whom I would like to thank for his kind words about myself—

Lieut.-Colonel Moore-Brabazon

Will my hon. and gallant Friend just say a word in regard to Diesel engines?

Captain Balfour

I am coming to that. The hon. Member for Berwick asked whether we would give an undertaking that we would not be tied by the recommendations of the Cadman Committee, and said that he expected an examination by my right hon. Friend and myself of the problems of civil aviation. I think I can give the hon. Member that assurance right away. Already my right hon. Friend has started—and I am endeavouring so to do—to examine various problems, and in the course of my remarks I shall have to make reference to one or two steps which have already been taken in the comparatively short time during which we have been in the Department. The hon. Member asked a specific question in regard to Newcastle Airways. So far as I know, there is no such company as Newcastle Airways. There are North Eastern Airways and Allied Airways, and I am presuming that he meant Allied Airways. They will be eligible to apply for the subsidy in respect of their internal services in the same way as any other company now operating will be eligible to apply. My right hon. Friend gave the House the particular terms which govern the granting of this subsidy, and I will give those few sentences again. He said: All companies actually operating internal services at the present date will be eligible for consideration, subject to their entering into suitable agreements under the Air Navigation Act. The hon. Member then made the point that when we are spending public money, there should be some form of public control. It is just because of that fact that in this new proposal of subsidies for internal air lines, any company that is successful in its application has to accept the obligation of having a Government director on its board to meet the needs which the hon. Member thinks, and which we ourselves feel, to be necessary. I would like to turn now to the speech of my hon. and gallant Friend the Member for Wallasey and deal with the question of Diesel engines, which was also dealt with by my hon. and learned Friend the Member for Cambridge University (Mr. Pickthorn).

Mr. Pickthorn

Not learned.

Captain Balfour

Any representative of Cambridge University is, I am sure, learned. He asked if some of the money voted to-day will be available for technical research in respect of compression ignition engines. The particular sum which is being granted by Parliament under this Bill will not be available for compression ignition engine research, but there is a sum of money available under the Vote for civil aviation for this particular purpose. I thoroughly agree with him as to the need for pushing forward technical development and research to the uttermost, on the ground of safety. Nevertheless, we must not forget that the balancing factor at the present stage of technical development, as regards efficiency and power weight ratio is heavily in favour of the petrol engine. It is not much good having a compression ignition engined aeroplane if it is completely inefficient for its purpose as compared with one fitted with petrol engines. I do not say that that is so at the present time, but I am trying to make the point that there is the balancing factor, and only research and development will enable that factor to be redressed so that we can use non-inflammable compression ignition air engines in aircraft instead of the present petrol engines, which have to have so many safeguards against fire incorporated in their design.

Sir M. Sueter

Have not the Germans had considerable success with their compression Diesel engine?

Captain Balfour

I believe the Germans have had a certain amount of success, but there is no regular use on the German lines at present of compression ignition engines other than semi-experimental and development flights. There is no air line running constantly, day in and day out, with such engines. We must also remember that other countries, with other forms of national economy, can devote much larger sums of money, without any commercial considerations, to these problems, with which unfortunately we have to reckon partly in terms of money.

I want now to turn to the speech of the hon. Member for North Aberdeen. He gave a historical survey of the development of Imperial Airways, with varying accuracy as to some of his facts. He said that Imperial Airways was practically a gilt-edged security. On the other hand, we have had Members on all sides of the House saying that flying is very dangerous, and I do not think anybody investing their money in aircraft flying with danger would say that they were investing in a gilt-edged concern. I do not want to go over the history of the finance of Imperial Airways. Suffice it to say, in regard to dividend, that if you took one year, you could make it microscopic, but if you took the last year, you could make it comparatively high; but it has averaged 4½ per cent. over 13 years.

As regards indirect subsidies, about which the hon. Member asked me, I cannot give him figures as to what they are, but they have been taken into consideration when the financial arrangements have been made with the company which have resulted in that average dividend of 4½ per cent. The hon. Gentleman said that, of course, they were getting an indirect subsidy by not paying their fuel tax, but I would point out that ships fuelling on sea voyages and plying across the ocean get their fuel tax-free in the same way, and, I think, quite rightly, any aircraft leaving these shores should be able to buy their fuel at seaborne prices. Meteorological services are available not only for Imperial Airways, but for all commercial aviation, and mail payments, which he mentioned, by the Postmaster-General are for services rendered and are upon a scale that is not necessarily confined to Imperial Airways, but is given to all other air mail carriers. His total figure of subsidy, even if true, though I cannot accept it, would be still as bad, I think, under any form of Socialism, except that we should not have the position revealed so clearly that we should be able to criticise it in this House as is the case at present. [HON. MEMBERS: "Why not? "] Because the losses under a Socialist administration might be difficult to determine, and certainly they would not be exposed to the searchlight of frank criticism in this House. The hon. Member for North Aberdeen asked why the benefits of the shareholders in Imperial Airways should be increased for the development of civil aviation, but there is a dividend limitation in respect of Imperial Airways' shareholders, and, in fact, after 10 per cent. the Government participate as to 50 per cent. in the profits, so that I think the statement that there is no limit to the benefits to be enjoyed by the shareholders is scarcely commensurate with the facts of the situation.

The hon. Gentleman then went on to the question of pilots' pay, and here I would like to say that I am in entire sympathy with him and with other hon. Members of this House. Here we are building up a great new science, a great new commercial enterprise. We are building up a new career for a new body of men earning their living in this new profession of commercial aviation. One of my wishes is to see that commercial aviation shall become a career which will not only be confined to the active flying lives of these men, but which will be directed in such a way that when their active flying days are over, they will still be able to earn their living as useful members of the flying community, with an added wealth of knowledge and experience which they have obtained during their years of flying. I want to say that I shall use all my efforts to this end. There was a system a few years ago, broadly speaking, under which for every £100 that the pilot earned, perhaps £20 to £30 was paid in salary and the rest as payment for flying hours. The position is improved to such a degree that not 20 per cent. but probably 50 to 60 per cent. is basic pay and only the remainder represented in the payment for flying hours.

I cannot see any reason why in the future we should not get to the position where the pilot's pay should be broadly represented by something like 85 per cent. basic pay and some 15 per cent. payment on results. I think you must keep that principle of payment by results, because it is only natural that if two pilots are employed by a company, and one of them is flying and the other is not, the one who is flying might feel a sort of resentment if he was drawing the same pay as the one who was sitting on the ground, as it were. Therefore, I think you have to keep in some degree to the principle of payment by results, but I think the House will agree that we want to improve the lot of the pilots, so that theirs will be an honourable profession in which they can look forward to a lifetime of service.

Mr. Garro Jones

The hon. and gallant Gentleman said my speech was of varying accuracy with regard to facts. I cannot allow that to pass. In what respect did I depart from accuracy?

Captain Balfour

The hon. Member gave some figures with regard to direct and indirect subsidies which were not in accordance with the facts.

Mr. Garro Jones

They were an estimate.

Captain Balfour

You cannot base an argument upon an estimate. That is scarcely a fact. My hon. Friend the Member for Blackpool (Mr. R. Robinson) asked whether the Cadman report's recommendation for two Under-Secretaries was to be implemented or not. I regret that I can give no information upon that point. He also asked whether other air lines as well as British Airways and Imperial Airways were eligible for subsidy. I have already stated that all internal services can apply for a subsidy. My hon. Friend asked as regards a full-time chairman of Imperial Airways and said that though the Cadman Committee had made the recommendation three months ago, nothing had been done. He also asked, if the present chairman resigned, whether he would fade out altogether. As regards that, I cannot give any information. It is a matter for the company itself. As regards the first point, I can only tell him that when the company has found a man suitable for this highly responsible position no one is more anxious than the present chairman that he should be appointed whole-time chairman. My hon. Friend asked how the £100,000 was to be divided up. I can give him no information upon that point, as the matter is still under discussion, except that it will be divided up as fairly as possible, and in accordance with the broad principles that my right hon. Friend gave the House.

Mr. R. Robinson

What steps are being taken to form a joint operating company?

Captain Balfour

That is a very complicated and difficult matter, and it is now under consideration in the Department. I cannot give any information upon it at present. I think it will be some considerable time before the complicated arrangements can be completed and information can be given to the House. My hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner) asked for an assurance that no handicap will be put in the way of other companies by the Air Ministry, even if they cannot be given a subsidy, because they cannot comply with the terms that I have given to the House. No obstruction in any form will be placed by the Air Ministry in the way of efforts by anyone who tries to develop civil aviation. My hon. Friend the Member for Cambridge University (Mr. Pickthorn) and my hon. and gallant Friend the Member for Hertford (Sir M. Sueter) asked about the West Indies. My right hon. Friend is looking into the matter personally, and I shall give him such assistance as I can. We realise the very great strategic and commercial importance of obtaining a foothold for British civil aviation in that territory. I have been asked with regard to flying clubs, and my hon. Friend the Member for Cambridge University said that flying for amusement was a good thing if we could persuade young men to go into the air. Already the Air Ministry is doing a very considerable amount, both in the way of subsidies to flying clubs and also through the Royal Air Force Volunteer Reserve training, to give young men an opportunity of flying. I am authorised by my right hon. Friend to say that the position of flying clubs is going to be looked into in the light of their training value for defence purposes.

My hon. and learned Friend the Member for East Leicester (Mr. Lyons) asked about the African extension of Imperial Airways. I think undoubtedly, considering the great difficulties that exist in developing new routes and changing over from land to marine aircraft, there is no reason for the company to be in any way ashamed of the regularity and safety of their service. The limiting factor in developing civil aviation is often not the expenditure of money but the ability to build up your ground organisation, your radio and your meteorology, and training your crews to the high degree of scientific knowledge and practical experience which is essential if you are to have safe aviation. You can easily send a commercial aeroplane from one place to another, but you cannot say that you have developed an air route by so doing. It is only after a long period of hard work with the acquisition of scientific knowledge and practical experience with your experimental fleets, that you can say you have a commercial route. My hon. and learned Friend asked about the service from Australia to New Zealand. That matter is under review, and my right hon. Friend is shortly meeting the Ministers of the Dominions concerned in order to discuss the whole matter.

My hon. Friend mentioned the question of help to civil airports. While the Government decision, in accordance with the report of the Maybury Committee and endorsed in the Cadman report, must stand, that there is to be no direct financial assistance to civil airports as such, my right hon. Friend is looking into the question of the position of these aerodromes with a view to investigating their importance in relation to Defence and their use to the Royal Air Force with a view to seeing if, by the justification of their use for defence purposes, some form of assistance can be given. He asked about the Mayo composite aircraft. I can only say that the trials have been satisfactory so far, and it is hoped that they will cross the Atlantic in the present summer. Financial assistance was given at the outset and the experiment is being developed by those commercially interested and responsible for it.

My hon. Friend the Member for Stroud (Mr. Perkins) asked some questions regarding the pilots who were dismissed by Imperial Airways and referred to the question of a Whitley Council. A ballot is about to take place, under proper conditions of fairness, to see whether the pilots would prefer to be represented by a domestic committee or whether they would like to be represented by the Pilots' Association.

Mr. Montague

since there is a union in existence and 80 per cent. of all the pilots of the country are members of it, why should it be ignored and treated with contempt? Why should Imperial Airways want a ballot?

Captain Balfour

I do not think it has been treated with contempt. If 80 per cent. of the pilots are members of the association they will undoubtedly vote for their union and the result of the ballot is almost a foregone conclusion. I have been going into the question of the pilots who were dismissed, and I find that five were interviewed by the Government directors, who submitted a report to my right hon. Friend stating that the dismissals were justified, that the dismissals had no connection at all with membership of the Air Lines Pilots' Association, and that proper notice was given to the pilots. In two cases recommendations were made favourable to the pilots, in one case that the pilot should be reinstated, and in the other that he should get further employment—that, for instance, if a new joint service of British Airways and Imperial Airways were formed from London to Paris, he should be considered eligible for an appointment. [Interruption.] It would not be fair to give the names. As regards the recommendation for reinstatement, the matter was considered by the company, who do not feel able to carry it out on technical grounds. Their technical advisers, those responsible for seeing that the operations of the company are conducted with proper regard to safety, take the view that, with new types of aircraft coming along requiring a new technique, they want people with greater knowledge and experience. I have been talking to the chairman, who informs me that the board feel that they must adhere to the advice given them by their technical advisers, but they would be very willing in the first-mentioned case to assist the pilot in getting employment in any other capacity in any other company by giving him a good recommendation up to the limits of what they feel technically that they are able to do.

Mr. Montague

Why is it that the pilots concerned have not had their request for a fair inquiry into any allegations that can be made against them granted? Why should they be condemned in the dark and not be told what the trouble is?

Captain Balfour

I do not think it is fair to say they were condemned in the dark without any allegations being made against them. It has developed in the one case into a question of technical ability in relation to the technical needs of the company, and I submit that any hon. Member, if he were a director responsible for the running of the company and the safety of the passengers, he would be bound not to ignore the considered advice of the technical advisers, who have no considerations in mind except the safety for which they are responsible. As regards the case of the other pilot, the chairman of the company has given me the assurance that if and when a company is formed for the running of the London to Paris service, this pilot wishes to have some employment as a pilot in that concern, the fact that Imperial Airways are the major shareholders will not prejudice his application for employment.

Mr. Montague

; The Under-Secretary's statement has condemned them all.

Captain Balfour

I have done my best to answer the many points which hon. Members have raised. I shall read the Debate to-morrow, and if there are any outstanding questions needing a reply which I have not been able to cover in the compass of my remarks, I will get into direct touch with the hon. Members concerned. I would only conclude by saying that the hon. Member for North Aberdeen twitted me for being on this bench and saying that I was where I wanted to be. If I can continue an association with aviation after some 23 years active flying, and if by having been allowed to accept this office I can in any way contribute to the increased knowledge, safety and development of that service which has been closest to me both during and after the War, I am not the slightest bit ashamed of being twitted by the hon. Member.

Mr. Perkins

Can my hon. and gallant Friend say whether the external subsidy for running services from this country to foreign countries is definitely limited to British Airways and Imperial Airways?

Captain Balfour

Yes; I read the specific words of the announcement of my right hon. Friend. It has that effect.

Sir M. Sueter

Will the Under-Secretary say something about Langstone Harbour?

Captain Balfour

I agree that we have to get on with the job. My predecessor had arranged to go down to-morrow to Southampton, and while I am not able to go to-morrow because of other pressing considerations, I hope to go next week and go into this matter.

7.19 p.m.

Mr. Ede

The House will not be content to leave the question of these pilots in the position to which the hon. and gallnat Member has brought us, because it has been an almost complete restatement of the case with regard to them. During the past fortnight or so one had gathered that steps were now being taken by the Government directors, as a result of statements made in the House and of pressure exerted on the Government, to secure that these men would be reinstated in the company. Up to the present there had never been any suggestion that any of these men were not technically qualified to carry on their job. One understood that there had been internal differences in the company, between the company and its staff, on matters that appeared at one time to be not unassociated with their desire for collective representation in their negotiations with the company. The statement now made by the hon. and gallant Gentleman is that after the Government directors had interviewed five of these gentlemen they came to the conclusion that two might without disadvantage to the service be re-engaged, as far as they could see from their nontechnical position.

Captain Balfour

Only one.

Mr. Ede

I understood from a statement made a few days ago by the late Under-Secretary that the number they proposed for reinstatement was two.

Captain Balfour

The position was that the Government directors reported that the dismissals of the five pilots were justified, that they had nothing to do with the Air Line Pilots' Association, and that proper notice was given. In two cases they made recommendations favourable to the pilots. In the case of one, it was that he should be considered favourably for employment should a joint enterprise be formed on the London to Paris route; and I received an assurance from the chairman this morning that should such a vacancy occur and should that pilot apply, the fact that Imperial Airways were large participants in such a company would not prejudice his application. As regards the second pilot, the directors' recommendation was that he should be reinstated in the company. That matter has been gone into by the company, and on the advice of their technical operation members, who have a weighty responsibility for the safety of the passengers, the board felt they could not reinstate this pilot.

Mr. Ede

I am much obliged to the hon. and gallant Gentleman for putting the position so clearly. It seems to me now that the two men who were most favourably regarded by the Government directors are actually, after the hon. and gallant Gentleman's statement, in a worse position with regard to future employment than the other three. If I were going to fly on the London to Paris service when it is inaugurated I should have some qualms if I thought the company might employ a pilot who is not regarded as technically quite sound enough to fly on some other service.

Captain Balfour

In fairness to the pilots concerned let me explain that their technical ability is not qualitative. It is ability applicable to particular forms of knowledge. You can have the most experienced land-trained pilot and you could not fly behind that pilot on a flying boat with any feeling of safety. On the other hand, you could not fly behind the most experienced marine pilot on a land route with any feeling of safety. Technical ability is not necessarily a matter of degree, but of particular application.

Mr. Montague

; Is it not a fact that one of these two men is one of the few men in the world possessing marine and land certificates?

Captain Balfour

It would not be fair to hon. Members or to the pilots or to the company to reveal names. The hon. Member should not assume that the particular pilot he has in mind is one of the two of whom we are speaking.

Mr. Ede

In view of the interests that are involved I hope we shall be able to discuss this matter with some measure of calm. Nothing that the hon. and gallant Gentleman has said alters the view I had formed with regard to the position of these men. We ought to treat this matter as one that is outside party and the House ought to press for an inquiry into the circumstances that surrounded the original dismissals. The ground has now been entirely shifted from anything we have previously heard and the House ought to know exactly what was the cause of the dismissals and what the charges against these men were. They should be allowed to appear in front of such an inquiry and be represented by counsel so that this matter can be cleared up. We are now in the position that, after the House had been to a certain extent satisfied by the statement made by the late Under-Secretary, the recommendations of the Government directors have, whether for good reasons or bad, now been turned down by the board; and this company, which is very heavily subsidised by the State, has asserted—it may be rightly, but I very much question whether it is so—that it cannot carry out its policy with these men on the basis of the recommendations made by the people on the board who supposedly represent the Government.

Captain Balfour

If one accepts the hon. Member's thesis, it means that because this company is subsidised by the Government there is to be no control of the personnel by the board of directors. What he says is that the board cannot dismiss men without being liable to an inquiry or if there were some objections on the part of this House. You have to leave to the company a certain freedom such as is enjoyed by any normal enterprise as regards engagement and dismissal, provided it is not improperly done. In this case the Government directors say the dismissals were justified.

Mr. Ede

I feel I ought to apologise for so frequently interrupting the hon. and gallant Gentleman. I really do not think that that last remark of his was anything other than an attempt to get another speech in. What he has said does not alter my opinion. My belief is that where we make these heavy subsidies to private enterprise we ought to be assured that the conduct of the busi-

ness in relation to its employés is above suspicion. I hope that my hon. Friend the Member for West Islington (Mr. Montague) and others will continue to press, in view of the hon. and gallant Gentleman's statement, for a full inquiry into the facts and give these men an opportunity of hearing exactly what they are supposed to have done. All that we now know is that something has been done which, in the minds of the Government directors, justified their dismissal. What it was we do not know. It was not joining the Association. It may be something qualitative with regard to their technical efficiency, but not such as entirely to debar them from employment in this company or in some allied company. To expect the House to rest content with that statement after the months we have given to this subject is to expect far too much.

Mr. Leslie

What is the purpose of the ballot? Are the men not free to join the trade union? If they are free to join it, why is a ballot to be taken?

Captain Balfourrose—

Mr. Speaker

I must remind the House that we are not now in Committee.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 173; Noes, 108.

Division No. 212.]	AYES.	7.31 p.m.
Acland-Troyte, Lt.-Col. G. J.	Cranborne, Viscount	Cuinness, T. L. E. B.
Adams, S. V. T. (Leeds, W.)	Cross, R. H.	Hambro, A. V.
Agnew, Lieut.-Comdr. P. G.	Crowder, J. F. E.	Hannah, I. C.
Albary, Sir Irving	Cruddas, Col. B.	Hannon, Sir P. J. H.
Allen, Col. J. Sandeman (B'knhead)	Davies, C. (Montgomery)	Harbord, A.
Anderson, Sir A. Garrett (C. of Ldn.)	Denman, Hon. R. D.	Harris, Sir P. A.
Aske, Sir R. W.	Denville, Alfred	Haslam, Henry (Horncastle)
Balfour, Capt. H. H. (Isle of Thanet)	Dunglass, Lord	Haslam, Sir J. (Bolton)
Barclay-Harvey, Sir C. M.	Eastwood, J. F.	Hely-Hutchinson, M. R.
Beaumont, Hon. R. E. B. (Portsm'h)	Edmondson, Major Sir J.	Heneage, Lieut.-Colonel A. P.
Birchall, Sir J. D.	Ellis, Sir G.	Herbert, A. P. (Oxford U.)
Bower, Comdr. R. T.	Elliston, Capt. G. S.	Higgs, W. F.
Bracken, B.	Emrys-Evans, P. V.	Hope, Captain Hon, A. O. J.
Brown, Rt. Hon. E. (Leith)	Erskine-Hill, A. G.	Hopkinson, A.
Brown, Brig.-Gen. H, C. (Newbury)	Findlay, Sir E.	Hunter, T.
Burghley, Lord	Fleming, E. L.	Hutchinson, G. C.
Butler, R. A.	Foot, D. M.	Jones, L. (Swansea W.)
Campbell, Sir E. T.	Fox, Sir G. W. G.	Kerr, Colonel C. I. (Montrose)
Chapman, A. (Rutherglen)	Fremantle, Sir F. E.	Keyes, Admiral of the Fleet Sir R.
Clarke, Frank (Dartford)	Furness, S. N.	Lamb, Sir J. Q.
Clarke, Colonel R. S. (E. Grinstead)	Fyfe, D. P. M.	Lambert, Rt. Hon. G.
Clarry Sir Reginald	Gibson, Sir C. G. (Pudsey and Otley)	Leech, Sir J. W.
Cobb, Captain E. C. (Preston)	Gluckstein, L. H.	Leighton, Major B. E. P.
Colfox, Major W. P.	Gower, Sir R. V.	Levy, T.
Colville, Lt.-Col. Rt. Hon. D. J.	Graham, Captain A. C. (Wirral)	Lipson, D. L.
Cook, Sir T. R. A. M. (Norfolk, N.)	Grant-Ferris, R.	Llewellin, Colonel J. J.
Cooke, J. D. (Hammersmith, S.)	Gridley, Sir A. B.	Lloyd, G. W.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Griffith, F. Kingsley (M'ddl'sbro, W.)	Loftus, P. C.
Cooper, Rt. Hn. T. M. (E'nburgh, W.)	Guest, Hon. I. (Brecon and Radnor)	Lyons, A. M.
Cox, H. B. Trevor	Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)	Mabane, W. (Huddersfield)
McCorquodale, M. S.	Pickthorn, K. W. M.	Strauss, E. A. (Southwark, N.)
MacDonald, Sir Murdoch (Inverness)	Pownall, Lt.-Col. Sir Assheton	Strauss, H. G. (Norwich)
McEwen, Capt. J. H. F.	Procter. Major H. A.	Stuart, Hon. J. (Moray and Nairn)
McKie, J. H.	Ramsay, Captain A. H. M.	Sueter, Rear-Admiral Sir M. F.
Maclay, Hon. J. P.	Rathbone, J. R. (Bodmin)	Tasker, Sir R. I.
Macmillan, H. (Stockton-on-Tees)	Reid, J. S. C. (Hillhead)	Tate, Mavis C.
Macquisten, F. A.	Reid, W. Allan (Derby)	Thomson, Sir J. D. W,
Magnay, T.	Rickards, G. W. (Skipton)	Titchfield, Marquess of
Makins, Brig.-Gen. E.	Robinson, J. R. (Blackpool)	Tree, A. R. L. F.
Margesson, Capt. Rt. Hon. H. D. R.	Ropner, Colonel L.	Turton, R. H.
Maxwell, Hon. S. A.	Ross Taylor, W. (Woodbridge)	Walker-Smith, Sir J.
Mayhew, Lt.-Col. J.	Rowlands, G.	Ward, Lieut.-Col. Sir A. L. (Hull)
Mellor, Sir J. S. P. (Tamworth)	Royds, Admiral Sir P. M. R.	Ward, Irene M. B. (Wallsend)
Mills, Sir F. (Leyton, E.)	Russell, Sir Alexander	Wayland, Sir W. A.
Mills, Major J. D. (New Forest)	Russell, R. J. (Eddisbury)	Wedderburn, H. J. S.
Mitchell, H. (Brentford and Chiswick)	Russell, S. H. M. (Darwen)	Wickham, Lt.-Col. E. T. R.
Moore-Brabazon, Lt.-Col. J. T. C.	Salt, E. W.	Williams, H. G. (Croydon, S.)
Morris-Jones, Sir Henry	Seely, Sir H. M.	Willoughby de Eresby, Lord
Morrison, G. A. (Scottish Univ's.)	Shaw, Captain W. T. (Forfar)	Windsor-Clive, Lieut.-Colonel G.
Muirhead, Lt.-Col. A. J.	Shepperson, Sir E. W.	Winterton, Rt. Hon. Earl
Munro, P.	Simon, Rt. Hon. Sir J. A.	Withers, Sir J. J.
Neven-Spence, Major B. H. H.	Smiles, Lieut.-Colonel Sir W. D.	Wamersley, Sir W. J.
Nicholson, G. (Farnham)	Smith, Bracewell (Dulwich)	Wood, Rt. Hon. Sir Kingsley
Nicolson, Hon. H. G.	Smith, L. W. (Hallam)	Young, A. S. L. (Partick)
Owen, Major G.	Smith, Sir R. W. (Aberdeen)
Peake, O.	Somervell. Sir D. B. (Crewe)	TELLERS FOR THE AYES.—
Peat, C. U.	Somerville, A. A. (Windsor)	Captain Dugdale and Major Herbert.
Perkins, W. R. D.	Spears, Brigadier-General E. L.
Petherick, M.	Stanley, Rt. Hon. Oliver (W'm'l'd)
NOES.
Adams, D. (Consett)	Griffiths, J. (Llanelly)	Poole, C. C.
Adams, D. M. (Poplar, S.)	Groves, T. E.	Quibell. D. J. K.
Adamson, W. M.	Guest, Dr. L. H. (Islington, N.)	Richards, R. (Wrexham)
Alexander, Rt. Hon. A. V. (H'lsbr.)	Hall, G. H. (Aberdare)	Riley, B.
Ammon, C. G.	Hall, J. H. (Whitechapal)	Ritson, J.
Attlee, Rt. Hon. C. R.	Henderson, A. (Kingswinford)	Sexton. T. M.
Banfield, J. W.	Henderson, T. (Tradeston)	Shinwell, E.
Barr, J	Hills, A. (Pontefract)	Simpson, F. B.
Bellenger, F. J.	Hollins, A.	Smith, E. (Stoke)
Benn, Rt. Hon. W. W.	Hopkin, D.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Benson, G.	Jenkins, Sir W. (Neath)	Smith, T. (Normanton)
Bevan, A.	Jones, A. C. (Shipley)	Stephen, C.
Broad, F. A.	Jones, Morgan (Caerphilly)	Stewart, W. J. (H'ght'n-le-Sp'ng)
Bromfield, W.	Kelly, W. T.	Stokes, R. R.
Brown, C. (Mansfield)	Kirkwood, D.	Strauss, G. R. (Lambeth, N.)
Brown, Rt. Hon. J. (S. Ayrshire)	Lawson, J. J.	Summerskill, Edith
Buchanan, G.	Leach, W.	Taylor, R. J. (Morpeth)
Cape, T.	Lee, F.	Thorne, W.
Cocks, F. S.	Leonard, W.	Thurtle, E.
Cripps, Hon. Sir Stafford	Leslie, J. R.	Tinker, J. J.
Daggar, G.	Logan, D. G.	Tomlinson, G.
Davidson, J. J. (Maryhill)	Lunn, W.	Viant, S. P.
Davies, R. J. (Westhoughton)	Macdonald, G. (Ince)	Walkden, A. G.
Davies, S. O. (Merthyr)	McGhee, H. G.	Watkins, F. C.
Day, H.	MacLaren, A.	Watson, W. M[...]L.
Dobbie, W.	Maclean, N.	Wedgwood, Rt. Hon. J. C.
Dunn, E. (Rother Valley)	Marshall, F.	Welsh, J. C.
Ede, J. C.	Milner, Major J.	Westwood, J.
Edwards, Sir C. (Bedwellty)	Montague, F.	Whiteley, W. (Blaydon)
Fletcher, Lt.-Comdr. R. T. H.	Morrison, Rt. Hon. H. (Hackney, S.)	Williams, D. (Swansea, E.)
Gardner, B. W.	Muff, G.	Williams, E. J. (Ogmore)
Garro Jones, G. M.	Noel-Baker, P. J.	Williams, T. (Don Valley)
Gibson, R. (Greenock)	Oliver, G. H.	Wilson, C. H. (Attercliffe)
Graham, D. M. (Hamilton)	Paling, W.	Woods, G. S. (Finsbury)
Greenwood, Rt. Hon. A.	Parker, J.
Grenfell, D. R.	Pearson, A.	TELLERS FOR THE NOES.—
Griffiths, G A. (Hemsworth)	Pethick-Lawrence, Rt. Hon. F. W.	Mr. Charleton and Mr. John.

Question, "That this House do now adjourn," put, and agreed to.

Bill committed to a Committee of the Whole House for To-morrow.—[Captain Dugdale.]