HC Deb 10 June 1942 vol 380 cc1033-5
6. Mr. Ness Edwards

asked the Secretary of State for Air whether the fixed annual payment of £51,500 made to the companies represented in the Associated Airways Joint Committee contained any profit element; and, if so, what rate of profit has been agreed to on the capital involved?

Sir A. Sinclair

As stated in paragraph 13 of the Comptroller and Auditor-General's Report on the Air Services Appropriation Account, 1940, the agreement with the companies provides that the remuneration payable to them from public funds shall be no more than sufficient to show, with other receipts, a margin over expenses equivalent to 4 per cent. of the written-down value of the assets employed in connection with the approved services. Accordingly, the companies can earn no more than 4 per cent. on the written-down value of their assets, and they may incur a loss.

Mr. Edwards

Would the right hon. Gentleman agree that it would be far better for the State to take over these companies and run them as State concerns, instead of subsidising private enterprise in this way?

7. Mr. Edwards

asked the Secretary of State for Air the names of the persons forming the Air Registration Board; the companies which they represent; and what justification exists in wartime for an annual subsidy of £8,000 to this private enterprise?

Sir A. Sinclair

As the reply is long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

The composition of the Air Registration Board is as follows:—

Co-opted Members.

Representatives of Aircraft Operators.

Representatives of Aircraft Manufacturers.

Representatives of Aircraft Insurers.

Members appointed by the Secretary of State for Air.

As regards the second part of the Question, the Members of the Board, as required by statute, represent different branches of the aviation industry and not the organisations to which individually they may happen to belong.

As regards the last part of the Question, the Air Registration Board is not a private enterprise. It was set up in February, 1937, in accordance with the provisions of Section 2 of the Air Navigation Act, 1936, to undertake such functions in connection with the design, construction and maintenance of civil aircraft as may be delegated to it by the Secretary of State. It is incorporated as a company trading not for profit, limited by guarantee and without share capital. Before the war, the Board received a measure of assistance from Air Votes to enable it to perform the functions delegated to it These functions continue in war-time, although on a reduced scale, and the assistance from public funds has been reduced accordingly.

8. Mr. Edwards

asked the Secretary of State for Air the name of the English company, referred to in paragraph 11 of the Auditor-General's Report on the Air Services Appropriation Account, which was given a contract on a cost plus 9 per cent. profit basis on the first £550,000, 6 per cent. on the next £50,000, and 5 per cent. on the next £200,000; and, as the contract has exceeded the original estimate of £700,000 by over £1,300,000, will he state the rate of profit agreed upon for this excess amount?

Sir A. Sinclair

The report in question will shortly be considered by the Public Accounts Committee. As the Committee will report to the House, it would, I think, be inappropriate for me to make any statement at present.

Mr. Edwards

Has not the Air Ministry some responsibility for letting a contract at £700,000 and then allowing it to run on to over £2,000,000, and even then not deciding the rate of profit for subsequent expenditure?

Sir A. Sinclair

Certainly I am responsible for those transactions. They will come under review by the Committee which the House has appointed for that purpose.