CIVIL AVIATION

HC Deb 26 February 1948 vol 447 cc2137-261

3.46 p.m.

Mr. Lennox-Boyd (Mid-Bedford)

I think the Committee will agree that it 4 about time we had a Debate in this House on the subject of civil aviation. We have had a great deal of information in the last few months bearing on that supremely important theme. We had the Select Committee on Estimates, which reported last October and produced what would, at any other time, have passed for astonishing revelations. That was fairly quickly followed by the Tudor Report, which is worthy of a Debate in itself. The Tudor Report has now been followed by the reports of the three monopoly Corporations set up under the Government's nationalisation Act.

I would say, in regard to those reports, that we on this side agree that they are very fairly and fully presented, and carry out the undertaking given that they would be produced according to the best business practice. We feel that a public discussion is urgent, but I should not like it to go out to the people who work for the Corporations, or for charter companies, more particularly people in outlying districts, that when we attack the administration as such, we are attacking them, or are unmindful of the herculean efforts many of them are making in circumstances of great difficulty to maintain British prestige in the air. We attack the system which they are called upon to administer, but not the work they are doing. We believe this system is an impossible system, and until the Government and the country recognise that, we shall have no prosperity for Britain in the air.

The various reports to which I have drawn attention give a very gloomy picture. How different the situation is from the gay way in which the Socialist Government entered into nationalisation of civil aviation in August, 1946? We are now faced, commercially, with a situation which, in a private concern, would be little short of bankruptcy. There are rumours that, in order to get out of their difficulties, the Government are considering amalgamating at least two of the Corporations. That is a solution which might please some theorists, but it would, we believe, enormously add to our competitive difficulties. We are in the parlous situation that British civil aviation is one of the very few commercial undertakings where increased business means increased loss. It is ironical, as was pointed out a day or two ago, that if everybody who travelled last year by B.O.A.C. had been paid £50 not to travel, financially the country would be far better off.

In addition to these reports, there are a number of other incidents which have added, I think, to the national disquietude. There are resignations and dismissals in the Corporations and in the Department which do not augur very well for the united effort that we had been promised. It is a little time ago, certainly, since General Critchley left B.O.A.C., as director-general, prophesying that if the present methods were continued we should speedily become a third class air Power. Through his own charter company, he is now in a position to offer to fly on certain routes without subsidies which are costing the taxpayer many thousands of pounds. Not long after his resignation, the permanent Secretary of the Department left. Then came the resignation, after less than one month, of General Hastead, director of aerodromes. That was quickly followed by the dismissal of the chief executive of British South-American Airways, and his parting lament that It is becoming increasingly difficult for an airline expert to be held responsible for the results he achieves. Very shortly after that, came the less heralded, but equally important and significant, resignation of Air Vice-Marshal Sir Conrad Collier, as Controller-General of technical services at the Ministry of Civil Aviation.

These things require a probe, and not least now that we have a nationalised public service. We are also facing the lamentable story of financial loss, disclosed in two of the Corporations' accounts, showing a loss to the taxpayer this year, after less than a year's working, of some £10 million, and the picture is made very little better by the small profit made by British South-American Airways which, curiously enough, is almost exactly equal to the sum spent by the Minister of Civil Aviation on his own flight to the Far East. Wings for peace are proving much more expensive in money, and are attracting much less support from skilful and resourceful people, than seemed likely when they were first conceived in the uncompetitive and unrealistic world of Socialist theory.

We believe that losses of this kind are bound to continue. We hope there will be ups—and certainly we believe there will be ups and downs. Temporary economies may be achieved by dispensing with large numbers of the members of the different staffs and here, might I say, when staff are engaged in genuine research work of high priority, we on this side would never encourage the Corporations or the Government to live for the present and to forget long-term research. There may be economies made by methods of this kind, but until there is a radical alteration in policy we do not believe that British civil aviation can be profitable.

The approach of the Opposition is that we do not believe that State air monopolies will work and we are under an undertaking to restore a wide measure of freedom to the air when the chance comes about. The system in the United States of America of a Civil Aeronautics Board and Civil Aeronautics Administration has given a wide measure of ordered freedom and, I think, it is rather significant that the recently published report of President Truman of the President's Air Commission expressly retains the Civil Aeronautics Board for the granting or denying of air routes. There is another rather curious thing about that Report. One thing cited against the plan known as the Swinton Plan three years ago by the Socialist Party was that it involved cooperation with Government Corporations of railway and shipping interests and it was said against that proposal that the Civil Aeronautics Board do not allow—which is perfectly true—surface operators in America to operate airlines. That is one aspect of the work of the Civil Aeronautics Board which comes in for censure in the President's recent report and one aspect in which a change is recommended.

We have no desire to be ungenerous to the Corporations or to the Ministry, once the initial policy error was made, but we feel it should be pointed out that the Corporations and the Ministry, together, have had it pretty much their own way in the last year. The Minister expressly reserved to himself by the Aviation Act the power of specific direction, when we tried to get him to limit his authority to general direction. He reserved the power of specific direction to the Corporations and he cannot now wash his hands of the matter. The Corporations lave had these monopolistic powers. They have been working in a sellers' market in the air which will pass away.

Mr. Ivor Thomas (Keighley)

For the sake of accuracy, I would like to draw the hon. Gentleman's attention to Clause 4 of the Civil Aviation Act, which now states that the Minister may, after consultation with any of the three Corporations, give to that Corporation directions of a general character. It was amended.

Mr. Lennox-Boyd

I think the hon. Member will find in a later Clause that the Corporation are given specific direction, and the power was reserved in certain circumstances, but if I am proved wrong the hon. Gentleman will have his chance later on. In addition, as I say, the Corporations were working in a sellers' market and they have also been able to prevent any competitive services which may threaten their livelihood, as witness the quite extraordinary story of what happened recently in West Africa. In Nigeria and West Africa a charter company offered to run a regular schedule service as agents for the Corporation without a subsidy, and to bring back from the West Coast of Africa to this country the many officials and others whose work is made tolerable by speedy communications with home. The Government of Nigeria wanted the service, the local people wanted it badly, and the charter company were prepared to operate it without a subsidy. Their offer was turned down, and instead the Corporation are now running that particular service at a loss, disclosed in another place, of £9,500 a week.

Therefore, the Corporations and the Minister, between them, have had very considerable, if not complete, power. Nor can the Government say that everybody is losing in the air and that civil aviation in present world conditions cannot be a paying business. It is only two months ago, I think, that it would have been the 21st birthday of Imperial Airways, which, though frequently criticised throughout its life, at least had to contend with equally great difficulties and contrived to pay annual dividends despite those difficulties. If we can go from a larger Corporation to something much smaller, I hope this House will not pass by without a thought, the fate of small companies like Jersey Airways which, when it was compulsorily acquired in 1946, was paying a dividend of 6 per cent., and was carrying twice as many passengers as it had ever carried in the highest pre-war year.

Mr. Beswick (Uxbridge)

Although it was paying dividends, would the hon. Gentleman also say what was the amount of subsidy this company was receiving?

Mr. Lennox-Boyd

Of course, they had a subsidy, as everybody knows, but I think the Chancellor of the Exchequer, if he were asked whether he preferred the old financial arrangements with Imperial Airways or the present one with the Corporations, would not be in any doubt as to what to say.

We shall no doubt hear, also, of the situation in the United States of America where it is said the loss last year was some £6 million. But this loss was very largely on their internal operations and was, after all, not borne by the American taxpayer. It was a loss that fell on the investors and the operators. Shrewd operators and angry investors can be pretty well relied upon to remedy that state of affairs in the near future. We shall hear, no doubt, also of lines in the British Dominions. In Australia and Canada the loss on the Government air lines is certainly not passing unchallenged and is not being accepted by critical people as being inevitable. The loss last year in nine months by Trans-Australia Airlines of £500,000 has been described in Australia as incredible, and the loss by Trans-Canadian, another Government line evoked this recent comment, that the high costs of Government air monopolies are stern facts that cannot be dismissed in an annual report.

As for other European lines, there are one or two companies which are very profitable indeed. K.L.M. is a perfect illustration of a blend of private enterprise and public authority. The Government have a 51 per cent. interest in the Dutch Line of K.L.M., but, according to the directors, there is no Government interference on policy. Last year they paid interest on their loan, they made a profit, they declared a dividend of 4 per cent.; and yet they started under every sort of difficulty. When Holland was liberated the whole of their civil air forces had either been scrapped or destroyed. They had only two routes running, one to which we were very glad to give a home, from England to Portugal, and another in the West Indies. Apart from that, they had to start from scratch. Yet last year they made their enterprise pay. Let us go now to the neighbouring country of Belgium. The Sabena Line, by which many hon. Members must have travelled, has also the same blend of private enterprise and public control. The Government have a voting interest of 51 per cent. in the Sabena Line. The public put up 50 per cent. of the capital and the two Governments of the Belgian Congo and of Belgium put up the other 50 per cent. Last year they paid the interest on their loan, and I have reason to think they have made a substantial profit

Yet we in this country are asked to believe that a nation like ours, with the best pilots, the best manufacturers, and the most crying Imperial need for air communications, must settle down for years under forced losses. We believe that the cause is to be found in the set up, and that until the set-up is remedied those losses will never be seriously reduced. Here we have in this country three Corporations and, superimposed over them, a vast and growing Ministry now employing some 4,000 people and, we are told, about to employ a great many more. I would refer the Committee to the Select Committee on Estimates which has reported on the size of the Ministry of Civil Aviation. In August, 1939, there were 273 people running the civil air side of the Air Ministry. In May, 1947, the number in the Ministry of Civil Aviation was 4,950, and the Select Committee add: It is estimated that the implementation of the aerodrome programme will involve an increase of establishment to 6,900, and that this will be followed later by a further increase to about 11,000. The result, therefore, of taking over aerodromes which individuals and municipalities frequently administer admirably, will be an increase of establishment to 11,000, every penny of the cost of which, in the long run, is borne by civil aviation. In addition, large numbers of people are engaged in the right hon. Gentleman's own Department, the Ministry of Supply, in the aircraft business. It has been calculated that in the last two or three years nearly 40,000 people have found State employment in the Corporations and in the Ministries concerned, and that the money spent totals some £50 million. The frankness with which the Minister spoke in another place and of the terms in which the Corporations' reports are couched, is no adequate answer.

What are we going to do? We on this side have said that we believe in freedom in the air and the right of some independent body to license operators, including Government operators, if they make out a case that they can run a line proficiently and safely. That is our long-term policy, and to it this country will most certainly one day come. But our most immediate task is to get out of the situation of near chaos in which we find ourselves today. The prime responsibility for this situation rests on those people who nationalised the industry, and now on the Ministry of Civil Aviation itself. In a field where the Government could provide the lead, and where a lead is necessary, they have never provided that lead. I need give only one illustration, although every hon. Member probably knows of it—the hold up over the Tudor I that has been so bad for the firm, so bad for the B.O.A.C., and so bad for our international prestige. It has produced the most admirable report by Sir Christopher Courtney. There is one passage in the report which I would like to quote in this connection: In default of mutual understanding and co-operation between constructor and operator, the delays could have been reduced if all concerned with the project had been impressed with a sense of urgency by some co-ordinating authority. The co-ordinating authority should have been the Ministry of Civil Aviation. If they do not co-ordinate, what are they there for?

I believe the Committee and the country must re-examine the need for a Ministry of Civil Aviation altogether, with the empire building that goes on to turn it into a first-class Department of State—which is almost inevitable in our present bureaucratic set-up. It was born, as we all know, of the frustration that many of us felt at what we regarded as the Air Ministry's stranglehold over civil aviation. It has become an irony that the new Ministry is now itself one of the heaviest possible handicaps under which aviation suffers. They are certainly very busy. There is no doubt about that. Only a few weeks ago we read of the new appointments of regional officers all over the country. No explanation has ever been given why these officers are necessary. The only probable explanation is that other Departments have them and that it is important that the Ministry of Civil Aviation should be as important provincially as any other Department.

They set up not long ago the National Civil Aviation Consultative Council, and people who attend it say it is better than a pantomime and is a complete burlesque. From this vast body innumerable committees are now emerging—the committee on collecting passengers from the London Airport, which has now discovered that the best way to do it is by bus; the committee on "crashability," which has produced a report that I very much wish could be placed in the Library of the House—it is certainly very brief and to the point; a committee on certification, although, as we already have an Air Registration Board, that should have been enough; a committee on licences; a committee on accidents. It is said that the Ministry of Civil Aviation has more Departmental committees than any other Government Office in Whitehall, and many of us know that the intervention of committees in the field of policy can be absolutely disastrous.

Mr. Geoffrey Cooper (Middlesbrough, West)

Does the hon. Gentleman think that this is not related at all to the responsibility of one of his own colleagues in the Coalition Government, which was responsible for setting up the Ministry?

Mr. Lennox-Boyd

We were all agreeable to setting up the Ministry, but it was to have been a small Ministry. It was said at the time that it had no great territorial ambitions. It was to have been a small, compact Ministry of people who really knew their jobs. Though I cannot speak for the noble Lord who was the first Minister, I am quite certain that his intention was that it should be a small, compact Ministry of people who knew their jobs, and that it would not attempt to vie with the other great Departments of State. As I have said, it has more Departmental committees than any other Government Department, if rumour be true.

Of course, their role is felt in the sphere of the ordering of aircraft, and I now come to a matter which touches all the Corporations deeply, but none more than B.O.A.C. I refer to the vexed question who should order the aircraft. We are told that the machinery has been improved; but it still is not the responsibility of the operator to order his own planes. British European Airways say in their report that spare parts for their fleet are ordered by the Ministry of Supply without quotations for the Corporation's requirements being asked for or given. The Tudor report said that one of the reasons for the tragic delay in producing the Tudor I was that B.O.A.C., not being themselves the buyers of the aircraft, were thus not directly responsible for the cost in time and money of every, modification that they put forward. I think I know enough about it to appreciate that the matter is not all that simple, and cannot be dismissed by a few generalisations. Nevertheless, the Government have had a long time to consider this, and they have a number of Departments to do the considering.

Some machinery must be devised to establish direct contact and responsibility between the user and the manufacturer, at the same time getting over the very great difficulties of paying for development charges, and the fears of some manufacturers that if a Department does not order the planes it is not safe to go ahead with collecting materials until a final and firm order for the finished plane has been given. Something must be done, and I hope that the Minister who replies will be in a position to tell us what the Goverment are doing.

Next in importance to the machinery for ordering the planes comes the question what planes should be ordered. Here we come up against the quite proper complaint of B.O.A.C., that they have had an uneconomic fleet to administer. I believe that no chosen instrument of any Government, without authority from the Government for each specific purpose, has ever been allowed to buy outside this country. I do not condemn the Government for attempting to persuade the Corporations to fly British types. In this matter it would be ungenerous not to give a word of praise to British South American Airways for the way in which they have persistently proclaimed their faith in British types. I hope that this fact will not be submerged in the rather undignified and public squabble now going on. I believe that sort of incident to be inseparable from nationalised undertakings. I do not want to say very much about that particular incident, because the matter is sub judice. Now, of course, the former chief executive of British South American Airways speaks for a party which voted for nationalisation. Since he left his job under rather dramatic circumstances—as people often do under those conditions—he may be saying some things that he will regret.

Many disturbing stories are about on such matters as training. One cannot ignore the fact that the proportion spent on training by British South American Airways is only 2 per cent. of their total, while British European Airways spent 18 per cent., and B.O.A.C. 5 per cent. As I say, this is a matter which I imagine is now under consideration. None the less, they deserve a word of praise for having flown British, though we should also remember that they got their Lancastrians for £2,000 a year, while experts calculated that a commercial rent would have been £10,000; and the price they paid for their Yorks has never yet been disclosed.

It has been said also that other methods of getting aircraft than by coming to the home manufacturers should be open to the Corporations. One suggestion which has been made is that the Corporations should get the manufacturers in this country to make in Great Britain, under licence, proved United States types. However, anybody who knows about that would agree that the time involved in such a process would gain us nothing. We ought to be in a position—and would be, given good leadership—to pro vide our own equal and superior aircraft within the same period of time. Another suggestion which has been made, on which I hope the Minister will give us some information, is that we should take up gratefully the Canadair offer for leasing D.C. 4 M's built in Montreal, and powered by Rolls-Royce Merlin engines. We should like to know the Government's view about that proposition.

My own personal view, for what it is worth, is that we must never lose sight of the fact that the industry matters very much in this country, in peace and in war. In fairness to the industry, we should remember that the Corporations with the Minister are now monopolists. They not only settle between them—who actually does nobody knows—what is bought, but also, through that very fact of being monopolists, they have power to settle what the industry makes, which it may want to sell later on, or at the same time, to foreign operators. The Government, through their home monopoly, really have complete control over the activities of the British industry.

Last year we lost £10 million on the two Corporations; whereas in the same period we sold £24 million of British aeroplanes, engines and spares to foreign markets. De Havilland's now have on their order book £9¼ million worth of orders. The aircraft industry in this country has already reached the target set for it by the Government for the middle of this year. We ought to remember that, because the monopoly buyers have the power to settle what the industry makes, and an industry which last year succeeded in exporting twice the total losses on the Government Corporations is worth considering. In this regard, I hope that the Corporations will also remember—and we have the illustration of the Viking aeroplanes to remind us—what happens when a monopolist changes his mind. I hope also they will remember—here the story of Aer Lingus would be relevant were I to develop it, but I shall not—what happens when British aeroplanes are scrapped by a company for which we bear half the losses but have only one-third representation on the board. The true reason for that scrapping—which has nothing whatever to do with the excellent performance of the Viking aircraft—will, I hope, be published far and wide by the British directors of that board. We want information about all those things from the Minister when he replies.

There are one or two specific questions on types which I should like to address to him at this stage, because I understand he is to speak immediately after me. Have the Corporations now settled with him and the Ministry of Civil Aviation what they want for the next five years? Have they got a long-term picture of their requirements? What is happening about the Brabazon I and the Saunders-Roe flying boat; and, if they are taken into service by the Corporations against their wishes, will the Government pay the losses of their operation? What is the present position about the Tudor I, the Hermes, and the new Bristol venture, the M.R.E.? Also, what has happened to the Stratocruisers, the delay in which provides us with an illustration of the fact that the only delays in the world are not in British aircraft manufacture.

Finally, is the Minister confident that in about four years' time—a little less or a little more—we can equal American planes on the Trans-Atlantic route; and that meanwhile we can hold our own? Assuredly, he would have the united support of this House to tell Senator Brewster in the United States that we are most certainly not throwing up the sponge in British aircraft construction. Incidentally, I should like to know what is the British Parliamentary Commission into production, about which Senator Brewster spoke in America last week?

Even if the Corporations are given the planes they want, they will still be called upon to do uneconomic and uncommercial things. The need to show the British flag not least in Europe, is urgent; the need to provide advance defence arrangements for ourselves and our friends, and to keep Empire communications open, throw upon the Corporations obligations which are not commercial, and it would be very ungenerous to attack them for expenses incurred in tasks which are not commercial.

In our view, it would be a good idea for the Ministry and the Corporations to look again into the system of accountancy of the Corporations, and to see that the routes flown are divided up into commercial routes and political routes, that is routes which have nothing to do with a paying air service. We could then concentrate our criticisms on the conduct of commercial routes, and they could be ruthlessly judged by the ordinary yardstick of industry. If that were done, one of the chief complaints of many people in the Corporations would be removed.

There are one or two smaller points which emerge from the reports of these Corporations. The first is the question of the fuel tax. B.E.A.C. state that in a full year's running they would pay £100,000 in fuel tax. If they operate outside the county, in Europe or the Channel Islands, they get an 85 per cent. rebate. Even allowing for that, the net cost of the fuel tax is £100,000 in a full year. This tax on aviation spirit has been condemned by far-sighted people. It has been condemned by the Cadman Committee, and more recently by the Parliamentary Select Committee. Incidentally, 70 per cent. of the fuel tax is paid by manufacturers in connection with bench work and trials. It would be a tremendous fillip to the industry, and it would also stimulate exports, if the fuel tax could be altered.

The next point relates to landing fees. Here we are really in a Socialist bureaucratic paradise. B.E.A.C. say that they pay £200,000 in a full year for landing fees on aerodromes owned by the Ministry of Civil Aviation, and yet these fees have to appear in their accounts. The Select Committee on Estimates stated that on internal air routes in England between 40 per cent. and 93 per cent. of the estimated revenues goes in landing fees, as against 22½ per cent. abroad. This is largely the reason why so many of the home routes, which bring all sorts of facilities within the reach of our people, have been lately scrapped. We hold to our view that there will be no real solution until there is a radical change in policy. As we have the best people in the world to plan air lines and to run them, there is no excuse for maintaining the rigid and inelastic system of Socialist theory, which is utterly incapable of matching up to the problems that lie ahead. Unless this system is broken, there will be no air recovery, and this is not the least of the reasons why I hope for a change of the present administration.

4.23 p.m.

The Minister of Supply (Mr. G. R. Strauss)

The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) asked a number of questions and made a number of criticisms about the present organisation of civil aviation. Many of the questions were detailed questions, and they can more conveniently be dealt with by the Parliamentary Secretary when he replies to the Debate. I will deal in the main with some of the major problems which the hon. Member raised. He was very critical of the whole set-up of civil aviation in this country. The main burden of his speech was that it would be very much better if civil aviation were not nationalised, but were run under a system of private enterprise. I hope he will agree that there is one exception to the contention he put forward, and that is that if he had had his way, the House would have been deprived of the very interesting speech the hon. Member has just made. If this industry were not nationalised, however inefficient or inadequate it might be under private industry, and however damaging might be the deeds of omission or commission to the public interest, the House would be deprived of an opportunity to discuss the matter or to take any action to put it right. Fortunately, the Government and the Minister of Civil Aviation are able to benefit from the wealth of experience on civil aviation matters which exists in all parts of the House. The Minister welcomes any suggestions and criticisms which may be put forward by hon. Members, as I am sure do the various boards of the Corporations.

Before I deal with the main activities, successes and difficulties of the various Corporations, I should like to reply to some of the specific questions put by the hon. Member for Mid-Bedford. He asked whether the Government had finally settled their plans, and whether they knew exactly what were likely to be their requirements over the next five years. The future programming of planes for the Corporations is under constant review. We have now reached a stage where we believe that we shall be able to take a number of major decisions within a very short time. When those decisions are made, we shall know much more firmly than we do at the moment exactly what planes we shall be flying in five years' time. The hon. Member asked particularly whether our planes at that time will be equal to those of the United States in efficiency and economy. It is very difficult to prophesy with certainty in the case of this industry, because until planes have been developed and finally tested and are being flown, it would be rash to give any categorical answer as to whether a certain plane will or will not prove a success.

I am, however, prepared to say this. We believe that among a number of important planes being developed at the moment there will be one, and we hope more than one, which will prove to be equal or superior to those flown or those being developed in any other country of the world. That is our hope and our belief, but beyond that I am not prepared to go.

Air-Commodore Harvey (Macclesfield)

Which one is that?

Mr. Strauss

I am not prepared to say which one, for the very reasons I gave just now, that until these various planes have gone through their various stages of production, we are unable to say which will prove the best, or which will justify further development.

Air-Commodore Harvey

Is the Minister aware that it is generally known in the industry to which plane he is referring? As it is perfectly well known, why not state which plane it is? It is the De Havilland 106.

Mr. Strauss

The hon. and gallant Member has jumped to a conclusion which I would not accept. That is certainly a plane which we hope will be a very striking success, but there are others. I am not going to mention which ones because no one knows at this stage which planes will prove to be the most successful. The hon. Member for Mid-Bedford asked what the attitude of the Government would be to the purchase of the Canadair planes. As the hon. Member will appreciate, that is very largely a dollar problem, because the purchase of these planes would entail an expenditure of a substantial number of dollars. Whether it is desirable to embark upon this very heavy dollar expenditure at the moment would, I should have thought, be very doubtful. It is a matter which will lie very largely within the discretion of the Chancellor of the Exchequer.

Mr. Crawley (Buckingham)

Can my right hon. Friend say whether it is true that in the suggestions made for the purchase of Canadair planes the Canadian Government made it plain that they would not expect spot payment but payment out of dollar proceeds earned by the use of the machines; and would not that make a very great difference in the attitude of the Government towards this purchase?

Mr. Strauss

That may be so, but in the end that would mean a dollar liability which the Government are very anxious to avoid.

Mr. Lennox-Boyd

The right hon. Gentleman says that it depends on the Chancellor of the Exchequer. Does that not infer that this proposition is being put to the Treasury? Surely, that is the only inference, because the Chancellor of the Exchequer does not come out with a decision on that if he is not asked.

Mr. Strauss

No, I do not think that is the inference. I know that the proposal has been made, but whether it has gone so far as being put as a proposition to the Chancellor of the Exchequer or not, I am not able to say.

The hon. Member asked me whether I could say anything about the procedure for the ordering of aircraft. I would like to make this comment about his statement on that matter. It seemed to me when he was dealing with that problem that his speech was more balanced than when he was dealing with most of the other matters which he mentioned. I think that arose from the fact that he had considerable personal experience in the Ministry of Aircraft Production about that problem. I fully endorse his statement that this is not a simple problem. It is in fact an exceedingly difficult problem to take account of all the different considerations which the interested parties have in the ordering procedure. My right hon. and noble Friend announced, when he was dealing with this matter in another place, that the Government were not fully satisfied that the present ordering procedure was the best. In order to make sure whether the present system was good, and to find out whether improvements could be made, they intended to consult certain business and administrative people, and to seek their views on this matter. They are proceeding to do that.

The Committee may be interested to know the names of those whose advice the Government are seeking on this matter. They are: Mr. Hanbury-Williams, Chairman of Courtauld's; Sir Rowland Smith, Managing Director of Fords; and Mr. George Wansbrough, Chairman of Reyrolle, who was a member of the Tudor Committee of Inquiry. It would be quite wrong for me to make any statement about the Government's view on ordering procedure until we have had the advice of those gentlemen, and when we get it, we will inform the House of the Government's policy on the matter, though we will not publish any representations which these gentlemen may make to the Government.

I want to say a few words on one other matter which I understood was going to be raised, and which probably will be raised later in the Debate. It has aroused interest in some quarters. That is the grounding of the Tudor IV. It has been suggested that this action was unnecessary, and that it meant that the Ministry or somebody had suspicions that this plane was not fully airworthy. Briefly, I wish to say that the grounding ordered by the Minister was in harmony with the policy of the B.S.A.A.; but neither the Minister, the Air Registration Board, the B.S.A.A. nor anybody else has the slightest evidence at the moment that there is anything wrong with this plane. As a proper matter of precaution, however, and to satisfy everyone concerned, including the travelling public, it was thought desirable that there should be the fullest possible engineering inquiry into this plane. That inquiry is now taking place. It is being carried out by the Aeronautical Inspection Section of my Department. The Air Registration Board is represented, and there are also present as observers during the course of the investigation representatives of the B.S.A.A., B.O.A.C., A.V. Roe and Rolls-Royce.

Mr. Frank Byers (Dorset, Northern)

Is the right hon. Gentleman suggesting that all these bodies, including the Air Registration Board, B.S.A.A., and the makers, agree with the grounding of the Tudor?

Mr. Strauss

I do not think that the makers were asked. The responsibility was largely that of the Minister, and was in conformity with the views of the Board and B.S.A.A.

Sir Peter Macdonald (Isle of Wight)

Has this plane had a certificate of airworthiness, and has that certificate been withdrawn? Who is to be responsible for ungrounding this machine now that the Minister of his own volition has grounded it?

Mr. Strauss

The certificate of airworthiness has not been withdrawn from the plane.

Sir P. Macdonald

Then, what right had the Minister to ground the plane?

Mr. Strauss

The Minister acts on his general responsibility, and he has the legal power, if he so desires, to withdraw the certificate of airworthiness. He did not do so, but asked that this engineering inquiry should be made. That view coincides with the view of the Board and of B.S.A.A.

Sir P. Macdonald

Surely, that casts a reflection on every certificate of airworthiness issued by the Board in the future, and completely discredits the whole of that organisation?

Mr. Leslie Hale (Oldham)

What is the position of the Courtney Committee on the Tudor IV? I understood from the Interim Report that they were considering the Tudor IV. Are they considering it concurrently with this other committee?

Mr. Strauss

I do not think that this action undermines the value of the certificate of airworthiness. The action of the Minister was a wise precaution under the circumstances. In reply to the hon. Member for Oldham (Mr. Hale), the Courtney Committee was asked to inquire into the Tudors I and II. The Tudor I report has been published. The report on the Tudor II has not yet been received, as the investigation has not been finished, but we hope to receive the report in a few weeks.

Mr. Hale

I do not want the Minister to think that I am putting points of criticism, because I am not; I am only asking for information. The terms of reference were to inquire into the development and production of Tudor aircraft for the British Airways Corporations and to report. I understand from the middle paragraph that In view of the circumstances which gave rise to the inquiry, we have thought it right to concentrate in the first place on the development and production of the Tudor I type, and, accordingly this report deals exclusively with that aircraft. We hope to submit a further report at an early date dealing with the other marks

Mr. Strauss

My understanding is that the inquiry is concerned primarily with the Tudors I and II. The Tudor IV is an adaptation of the Tudor I. I say that subject to correction, when I look the matter up.

I would like to deal with the various problems and difficulties which have faced the three Corporations and the reasons why they have required in the past, and will require in the next year, a substantial amount of money from the Government in the way of subsidy. I think that the best way of dealing with that is to consider the individual problems of the three Corporations. I will show why these Corporations have been forced, through reasons very largely beyond their control, to run at a loss. I think that everyone will agree that these reasons would apply to any organisation, whether private or public, which had to run under present conditions. B.O.A.C., for unavoidable reasons arising from the fact that they had to develop at the end of the war, have had to operate with a large number of uneconomic aircraft. There has been general agreement that it was right that the Corporations should fly British Aircraft on their various routes, notwithstanding the losses that would inevitably be involved. It was, for example, generally appreciated that substantial losses would be involved as a result of the Corporations having to use uneconomic aeroplanes, rather than buying aeroplanes from America. Such planes might be economic but their purchase would defeat the main policy and purpose on which everyone was agreed.

When the hon. Member for Mid-Bedford says that K.L.M. made a profit while our Corporations have not, it is only right to state that one of the reasons—and in a moment I will give several others—is that K.L.M. are not limited in this way, and are able to make use of the more economic American aircraft, and this has made a substantial difference. It follows that when we are able in a few years time to produce our own types of up-to-date aircraft, and this process inevitably takes years, as the hon. Member knows, we have every reason to believe that such losses, as have arisen from the fact that we are forced to use a whole variety of different aircraft, nearly all of them unsuitable for the purpose, will pass away, and the various Corporations will be able to show good financial results.

Another reason why the accounts of these Corporations show a loss—this again would apply to any organisation, nationalised or private—is that a substantial sum of money, amounting to something like over £1 million, has been paid in training the crews to enable them to operate civil aircraft after the different experience, which most of them had, in operating military aircraft. That figure of about £1 million has been written off in one year—the year in which the accounts were published. Probably a private firm would not have written it off in one year, but would have spread it over five or six years.

Air-Commodore Harvey

Is the right hon. Gentleman aware that 89 pilots were written off and yesterday were dismissed?

Mr. Strauss

That is another problem. I will deal with that point in a moment. The full amount of the training of these crews amounting to £ million was written off in that one year. Another difficulty with which we are concerned is that the Corporations because of postwar conditions have to maintain a large number of different bases. The additional cost which falls on B.O.A.C. as a result of their running flying boats is £1 million a year. This is required for the maintenance of bases and their facilities, and it is a substantial burden. Moreover, the Committee should be aware of the fact that the bases in this country are even now, and will be for some time to come, inadequate to deal with the situation in Great Britain. When we are able to transfer to this country the maintenance of the Boeings and the Constellations from the other side of the Atlantic, we will not be able to carry out that maintenance at the London Airport or at the chief operating bases, but will have to carry it out at Filton, which is tiresome and expensive. These are heavy expenses which inevitably fall on the Corporations, and again would fall on any other organisation carrying out these services.

The Committee probably know that the Corporations have to carry out in the national interest very important but often uneconomic services in the Middle East and in various parts of the Colonies as well as in certain foreign countries. In the Middle East alone these services cost £600,000 in the year for which the accounts have just been published. These services are necessary in the national interest, but they place a serious burden on the Corporations. Many of them will continue to be a serious burden on B.O.A.C. so that not only in the coming year but in future years B.O.A.C. may have to operate at a loss.

When we come to B.E.A.C., many of the same factors apply, but they have the even greater difficulty of being only two years old. They have had to face all the difficulties of the post-war situation. They have had to develop on an extensive scale and create an efficient and effective organisation at the same time. I believe they have done exceedingly well. Now they are faced with the difficulty that there is a semi-ban on travel in Europe. They have lost a large part of the traffic they rightly and legitimately expected to have, and this means they have to reduce, maybe temporarily, some of their staff. I am sure no one would suggest that the staff should be kept on doing nothing. Every effort is being made to see that, as far as possible, such staff, as become redundant, are absorbed in other similar occupations where their experience and knowledge can be of value.

Mr. Harold Macmillan (Bromley)

What happens to the staff?

Mr. Strauss

An attempt is being made to absorb them elsewhere in other flying organisations or to secure them similar work where they may be of use. It is the hope of the Corporation that they will succeed in placing most of these men.

Sir P. Macdonald

In foreign airlines?

Mr. Strauss

In other airlines. There again, we must consider the financial loss which falls on B.E.A.C. in running airlines in Great Britain. It is accepted by everybody that it is vital on social grounds that many parts of Great Britain should be linked by air. I am thinking in particular of the surrounding islands being connected by air with the mainland. It is difficult to maintain these services. It is a burden which B.E.A.C. have to carry and will have to carry in the future. While they have been developing in the way which I have indicated and in the way which hon. Members know, they have had a difficult task indeed in trying to create a single efficient organisation out of the various companies which the Corporation have taken over.

A word about B.S.A.A. When they started their operations, they were in the fortunate position of having a monopoly of that route. There was very little competition. That was one of the reasons why they were able to show a profit. Now I am afraid the competition is intense, so much so that I am advised that it is doubtful whether any operator on that route will be able to make a profit. Because of that competition it is unlikely, whatever efforts are put forward by B.S.A.A., that they will be able to show the same monetary success as they were able to show for the year for which the accounts have been published. B.S.A.A. have undertaken extensive developments, including new routes in the Caribbean Sea, which have been quite costly. This was all done in the national interest, and, of course, these new routes cannot be immediately remunerative.

The hon. Member for Mid-Bedford was quite right in drawing attention to the fact that they got a certain, though not very material, advantage in being able to get their Lancastrians at a very cheap hire rate of £2,000. He said he would like to know what they were paying for the Yorks. I will give him that information. They are paying £8,500.

Mr. Lennox-Boyd

What did B.O.A.C. pay for their Yorks?

Mr. Strauss

I am afraid I am not able to say at this moment.

Mr. Lennox-Boyd

My information is that they paid £45,000, which seems strange if B.S.A.A. paid only £8,000.

Mr. Strauss

The hon. Gentleman is mistaken. Anyhow that answer can be given to him later. The hire figure for B.S.A.A. was £8,500, and I am sure the hire figure for B.O.A.C. could not be in the neighbourhood of £45,000.

Mr. Lennox-Boyd

I thought the right hon. Gentleman said "higher."

Mr. Strauss

No, "hire" in the sense of rent. Moreover, the B.S.A.A. have had the advantage that they have been operating an organisation with a very limited number of routes, and through a small hard-driven organisation. Now that they have taken on further routes, it will be impossible for them to operate with the same staff. They will have to increase it and, of course, with their added responsibilities, their expenses will increase.

I want to say a word about the ground facilities to which reference was made in the accounts of the Ministry of Civil Avia- tion. The need for good ground facilities is obvious. Indeed, it is plainly of vital importance to safety and regularity of flying. In this respect I hope all Members, including the hon. Member for Mid-Bedford who did not deal with this aspect, will agree that the ground facilities which have been organised by the Ministry in this country at any rate, have been very good in spite of great difficulties such as shortage of labour and materials. London Airport now has magnificent runways. It has comprehensive equipment and navigational aids, which I am told are unsurpassed in any airport in the world. Moreover, the way in which Northolt, which has equally fine equipment, has been transformed from its wartime condition to that required for peacetime purposes has been highly praiseworthy.

Speaking as one who has travelled a good deal by air in this and other countries, I think I shall be expressing the views of everyone who has experienced the smooth and efficient way in which passengers are handled at the terminals in this country, when I say how exceedingly good the facilities are. In my view, they are far better than the facilities and arrangements—I cannot say in every other country in the world, because I have not flown in every other country, but certainly in most countries. Admittedly the buildings themselves are still inadequate, but they are mostly temporary. I am thinking of London Airport and Northolt. Nevertheless, a passenger is treated as a human being in those sheds when he has to pass through the Customs and comply with all the various regulations. There is a friendly and courteous spirit everywhere and the arrangements are simple, but adequate. The human and genial way in which passengers are treated when they depart or when they arrive is admirable, and the Ministry ought to be congratulated on the way in which they have organised those terminals.

The main case of the hon. Gentleman who has attacked the Corporations all along the line is that the taxpayer has been forced to pay out very considerable sums by way of subsidy, part of which would be unnecessary if there were another form of organisation and if the air services were not nationalised. He implied that if they were under private enterprise the subsidy, or part of it, might have been avoided. My first comment on his contention is that during the last 10 years all governments have agreed that a subsidy is essential during the development stages of civil aviation, and they have either provided substantial subsidies themselves or, in the legislation which they have put before the House, have provided for the payment of substantial subsidies. Therefore, there must be general agreement among all parties that heavy subsidies for civil aviation are inevitable, and that it is not the fault of the Corporations which run these airlines that these subsidies have to be paid.

Mr. Douglas Marshall (Bodmin)

When the shipping companies started to form South American Airlines, did they require a subsidy?

Mr. Strauss

I do not know whether they required subsidies, but when hon. Members put the case that some of these charter companies can work at a profit, they must bear in mind that the charter companies are free to charge what fees they like for passengers, that they need not run a regular service, and that they usually do not. They wait until an aeroplane is nearly full before they fly it.

Sir P. Macdonald

They are not allowed to run regular services.

Mr. Strauss

They have that advantage. They do not have to run a regular service, all the year round whether the weather is good or bad. They are free to make what charges they like for the passengers or the loads they carry. That set-up is entirely different from a regular service such as has to be run by the Corporations.

In his general charge the hon. Member provided no evidence whatsoever to show that private enterprise would have run the organisations better or more efficiently. He has not provided that evidence, because there is no such evidence; and, in the absence of evidence, he has based his arguments not on facts but on ideological prejudice, and nothing else. So far as there is any evidence, I suggest it goes in the opposite direction. In this connection I think it is relevant and interesting to compare our experience with that of the United States. I would ask the Committee to consider for a moment what is happening in the United States, bearing in mind that the conditions there are ideal for civil aviation. The people are airminded. There are large centres of population conveniently placed from the point of view of air operation, and, moreover, the airlines in America did not suffer the handicaps from which we suffered, in that there was no stop in their development during the war. The Americans were developing new planes the whole time, and they have the most economic and up-to-date aircraft in which to carry their passengers. They have every conceivable advantage. In addition, it is a land where private enterprise is enthroned, and the airlines are run entirely on a private enterprise basis.

I would like the Committee to consider a few facts. During 1947 the losses of those airlines amounted to 37 million dollars. That is in respect of the operating lines. What about the aircraft industry? From a very factual review which has recently come to hand, an estimate was made—and it is probably correct, because the writer of the article has shown that he has gone into this matter very carefully—that in 1946 the loss of the aircraft industry in the United States was approximately 80 million dollars and that in 1947 it was approximately 70 million dollars; whereas, in this country, broadly speaking, with some exceptions it is true, the aircraft industry has been doing reasonably well.

Mr. Rankin (Glasgow, Tradeston)

Would my right hon. Friend point out that in addition to the loss of 37 million dollars, the airlines had a subsidy over and above that?

Mr. Strauss

I was just coming to that point. The Committee should bear in mind that there is a substantial subsidy already being paid to the airlines in America for carrying mail, whereas the Government of this country pay the various airlines the economic amount for the carrying of mail, which is calculated and agreed. The fee paid by the United States Government to the airlines for carrying mail is substantially higher, and that, of course, is an enormous advantage to the American airlines.

The following facts are exceedingly interesting. The President of the United States has recently asked for a committee to investigate the whole situation of aviation, military and non-military, in the United States. The report which was recently presented to him has been published. In that report, among many other recommendations these appear: subsidies should continue to be paid to operators in the form of air-mail payments; a Government department of civil aviation should be set up and should be responsible for initiating broad domestic and foreign aviation policy, and within that department an aircraft development corporation should be set up with the authority to pay all or any of the development costs of non-military aircraft, components, navigational aids and safety appliances as may be necessary in the national interest, and which could not be developed by private enterprise.

Mr. Lennox-Boyd

Will the right hon. Gentleman read on a little? I have a copy of that document here, and it says that the Civil Aeronautics Board should continue to be an independent agency within the Department for granting or denying air routes. That is what we are asking for, too.

Mr. Strauss

Yes, within the new Government Department which is to be set up.

Mr. Lennox-Boyd

Independent.

Mr. Strauss

Broadly speaking, the principles recommended in this report are similar, in essence, to the policy we are seeking to pursue here. I would point out that it is not the Ministry of Civil Aviation which dictates to the Corporations which routes they are to fly, except when it is a matter of national interest. Management and organisation are left to the independent decision of the Corporations.

Every major transport industry, whether railway or shipping, certainly in this country and, I think, in the world, has incurred, in its early stages of development, heavy capital expenditure and substantial losses, and has suffered teething troubles in the effort to secure ultimate rewards. The civil aviation industry is today having to go through some of the difficulties that other transport industries in the country have had to go through in the past. I have no doubt that the civil aviation industry will reap its reward when British civil aviation is able to produce—as it will, before long— modern aeroplanes, when there will be fewer types flown, when the organisation is fully developed, and conditions are stabilised.

Next, I must deny the accusation that because the airlines are nationalised they are inefficient. On the contrary, I maintain that, in view of their youth and the peculiar difficulties they have had to face during their period of formation and development, their progress towards exceedingly high standards of efficiency has been truly remarkable. That process has been hastened by the effective public criticism which has been levelled at the Corporations or the Ministry from time to time, in Parliament and elsewhere, thanks to the fact that they are nationalised and, broadly speaking, are subject to Parliamentary control. I claim, further, that all the initiative, drive, imagination and leadership which hon. Members opposite pretend are to be found only in private enterprise have characterised the work of these Corporations to an outstanding degree.

My personal view is that if there is any effective criticism which can be made against the Corporations it is that there has been too much initiative. They have been too anxious to develop quickly, and make a success of their work. Throughout, these high qualities, initiative and drive have inspired the Corporations, which have been fully responsive to the national interests and the national requirements. Finally, I say that the Corporations are overcoming with speed and thoroughness the operational difficulties imposed upon them by postwar conditions. Their achievements, regarded as a whole, have been magnificent and I am sure the country will be grateful to all concerned—leaders, aircrews, engineers, ground and office staffs—who have contributed to such fine results in this new and enterprising public service.

Sir Ralph Glyn (Abingdon)

Does the right hon. Gentleman propose to reply to the point about Colonial development—whether there was any action by the Corporation to prevent a local Colonial service functioning in West Africa?

Mr. Strauss

My hon. Friend the Parliamentary Secretary will deal with that point later in the Debate.

5.5 p.m.

Air-Commodore Harvey (Macclesfield)

We have listened with interest to the Minister of Supply, but I must say that I am very disappointed with his speech. I think it is most unfortunate that we were not told more about the ordering of aircraft, because, to a large extent, the whole of this Debate hinges upon this matter. However, I accept the fact that a business committee is to sit, and I hope that everything will be done to speed up their work and that the House will be told in the near future what the situation will be. The Minister referred to losses, and I would like to remind him that 18 months ago there was no indication that any losses would be made at all; indeed, the Lord President of the Council, in January, 1946, in a jovial manner, wound up a Debate on Civil Aviation by saying that great things would happen in civil aviation when it was nationalised. Alas, two years later the Government are now apologising, through the Ministry of Supply, for enormous losses.

I would like to declare my interest in the charter business—as I have always done in these Debates—and to tell the Minister, who said that charter companies waited to fill up their aircraft, that under Section 23 of the Act they are not allowed to fill up; they are only allowed to charter to one charterer. If they were allowed to wait to fill up, the tasks of charter companies would be much more simple.

Mr. Rankin

Would the hon. and gallant Gentleman—

Air-Commodore Harvey

No, I am just beginning my speech; the hon. Gentleman will probably get his chance to speak later. I would now like to deal with the British European Airways Corporation. I agree with my hon. Friend the Member for Mid-Bedford (Mr. Lennox-Boyd) in what he said about the accounts. They are well presented, and I believe the Government have kept their word in putting them forward in commercial form. I only wish they could have told a better story; then, all of us would have been much happier. I feel sorry that B.E.A.C. have had to accept a loss of £26,000 for the cancellation of priority seats. Even if it is only a paper transaction, I believe that the Department concerned should accept the loss. I see no reason why the Corporation should have to show that loss in their balance sheet.

Now I come to the question of the J.U.52 aeroplanes, 25 of which were taken over for the Corporation to operate on internal services in the North of Britain. We do not know what they cost, but in answer to a Question we learned that £12,000 was spent on reconditioning each aircraft. They were in service for only a matter of months, when they were put on the scrap heap. It was a sheer waste of money, and the decision to employ them should not have been taken. If the Minister had gone a little further, he could have bought Dakota aircraft, which he could have reconditioned at the same cost and obtained his spares in India and elsewhere. I would like to endorse what my hon. Friend the Member for Mid-Bedford said about the petrol tax. It is most unjust, and I believe there should be some alleviation of this tax. I agree that it is unfortunate that the Ambassador was not ordered before. It is generally recognised that the Ambassador is probably the best twin-engined aircraft in the world. It is most unfortunate that this aircraft was not ordered 12 to 18 months ago. Had that been done, we should probably have had orders from many companies overseas. As it is, the Americans have taken many orders from Switzerland, China and elsewhere.

We have been told nothing about the Miles "Marathon." I know that the Miles Company is, unfortunately, in difficulties, but I have heard that they will continue their activities, and will produce this aircraft. The Corporation and the Ministry of Supply, however, have invariably waited until a good aeroplane has appeared. They have not made up their minds what they want. They left Airspeeds to develop the Ambassador, and Airspeeds had to spend months on proving to the Ministry that it was the right aircraft. It would have been better for the Ministry to have seen that at the beginning.

The cost of administering the divisional side of B.E.A.C. is £377,000, which is on the high side, and the cost of head office is £181,000. That ought to be cut. The Minister could not say what loss there may be in the future. We expect a loss, but we hope there will he a large decrease.

I frequently used to fly over to Ring-way in a Dakota in going to my constituency. I am sorry to say that that service has been cancelled. I have no doubt that petrol tax and high landing charges have had something to do with it. I have frequently been the only passenger travelling from Ringway to Manchester, in a 38-seater bus. If the Minister calls that the way to run a business, then he ought to start again. There is a radio on the aeroplane. A message could be sent to say there is only one passenger going through to Manchester, and then they could put on a Hillman Minx instead of a 38-seater bus. That illustrates the way in which the Corporation have been squandering money.

The British European Corporation run a good service, so far as flying is concerned. There is nothing to touch them in the world. The service is reliable and courteous. I give the crews and the organisation full credit, which they rightly deserve. In fact, what I have said goes for all the Corporations. So far as British South American Airways are concerned, I cannot accept the figure of £32,000 as a real profit. The Minister has admitted that they paid only £2,000 a year rental for their Lancastrians and £8,500 for their Yorks. If the Minister has any more Lancastrians that he wants to rent out at £2,000 a year, I am ready to do a deal with him in that connection. The same is true of the Yorks. It is, therefore, not accurate to say that the Corporation have made a profit of £32,000. Had they obtained their aircraft at a commercial figure, they would have been in a very different position.

The Air Vice-Marshal Bennett business is a misfortune. My only criticism is that something should have been done last November when the aircraft which landed at Bermuda had less than 100 gallons of petrol. That was the time when the Minister of Civil Aviation should have taken the decision which he took two weeks ago. The Minister of Civil Aviation must accept his full share of responsibility for dealing with the matter in the last three months. I believe he should have taken action much earlier than he did.

The flying of the B.O.A.C. is of a very high order indeed. They have a very creditable record of safety and the mileage figures are certainly most impressive. I do not accept the suggestion that the total losses are due to unsuitable aircraft. I would take the instance of the York service to India. We know that the permissible all-up weight of the York was 72,000 lb. which is much too high. It was reduced to 68,000 lb., which is the present figure, and was agreed to by the Air Registration Board. The Corporation, for some reason best known to themselves, decided to operate the service to India with an all-up weight of 65,000 lb. I have calculated that if that 3,000 lb. payload had not been sacrificed, it would have made a difference of approximately £1,000,000 a year in revenue.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren)

The strengthening of the under-carriage has made a very considerable difference.

Air-Commodore Harvey

I accept that point, but nevertheless, South American Airways, Skyways and other companies have been operating at 68,000 lb. I am inclined to think that the reduction of 3,000 lb. in the payload is due to a decision by somebody within the Corporation. Either they are wrong or the A.R.B. are wrong. This is a matter which ought to be settled right away so that the operators may know exactly where they stand.

We have heard about K.L.M.'s profit. In addition to making a profit of £78,000, they have contributed £60,000 to the Dutch Inland Revenue. It has not been done simply by having American aircraft, but because they have serviced their Constellation aircraft in the open during the winter. At Schipol Aerodrome their aircraft have been serviced, and I wish that the Corporation could have improvised their accommodation as the Dutch have done this winter, and saved money by servicing not only their own aircraft but the aeroplanes of other people. The Irish Constellations have flown there every so often for servicing. Many of the Corporation's staff are at Dorval in Canada where they service their Constellations, and they probably want to stay there for a year or two until things are rather better at home. We hope that some of these matters will be tackled right away.

I would like to give the Committee an instance of bad administration. It is of a trip home which I made from India last November. There were four of us in a York, and when we arrived at Lydda we were told that there would be a delay of some three hours owing to technical trouble. Another York followed up, with seven passengers. It was the day before the opening of Parliament. I went to see the manager of the Corporation and asked him, "Can you transfer the four of us to that second aeroplane?" His answer was that it would be very difficult to do so as it would mean a lot of paper work. We actually stayed there, not for three hours, but for 16 hours, and we had to have accommodation which probably cost £16. It meant great delay and inconvenience for everybody. The Corporation must get their staff thinking in terms of making money. It does not follow that because they are making a loss they have to go on doing so and adding to it. They must instil into their employees the idea that they must economise wherever it is possible to do so.

There are far too many buildings under the B.O.A.C. I believe that the figure two months ago was 21 around London and one of them was not in use at all. There are ways in which they can bring about great economies in moving their staff into the new building on the Great West Road as soon as possible. They must economise in every possible way in the matter of accommodation. Another point is that not enough men are promoted within the Corporation. Far too many people are brought in from outside. They go on to the Board and are placed in the higher executive posts. I cannot for the life of me see why Lord Burghley and Lord Rothschild are on the Board of the B.O.A.C. What qualifications have they? I am sorry to have to mention their names, but it is far better to be quite frank about the matter. They have no qualifications whatever for serving on this Board. There are men within the Corporation who would be well suited and who have great experience of their profession. They would do very much better in running the business.

I would now refer briefly to the method of ordering aeroplanes. I recognise the difficulties because now we have to think again about our defences. I am concerned at the fact that, while the aircraft industry made last year the profits to which the Minister referred, the next year or two will not tell the same happy story. The industry is in for a very rough time indeed. Nevertheless, more could be achieved if operators dealt directly with constructors. It must be so. We cannot imagine the ships of the Merchant Service and Navy being built through the Ministry of Supply. It just would not work. I have heard the story—and I do not know whether or not it is true—that at one time the Corporations had to get permission from the Ministry of Supply before they could go into factories where the aircraft were being built. If that was so, it was deplorable.

When Treasury sanction has been given to purchase aircraft, the operators must deal direct with the constructors and the closest relationship must be brought about, except where airworthiness requirements are concerned. In fact, the operator must be responsible for all matters relating to the ordering of aircraft. We have had very serious difficulties with ordering of aircraft, and in regard to delivery dates, which have constantly been retarded. We have constantly had explanations and descriptions of what we were going to get in five years' time. What is going to be done between now and the next five years? The Halton aircraft have already cost more than £500,000. To have tried to operate Halton two years after the war in competition with Skymasters and in competition with French and Belgian machines was a waste of the taxpayers' money. It should not have been undertaken. I now refer to the Brabazon I, in connection with which something like £6 million or £7 million have been spent. Whether or not it is likely to be a success, I do not know, but it is important that we should know what is to be the future of the aircraft, and of the Saunders Roe Flying boat as well.

The aircraft industry did a superb job of work during the war, but through no fault of their own they lack experience of building large civil aircraft. It is not possible to begin suddenly in a matter of months to design aircraft and to expect to fly them in three years' time without having to meet a lot of trouble. The experience of American constructors has shown that it takes from 15 to 20 years to go from the D.C.1. to the D.C.6. Many things based on knowledge and experience have to be done in connection with the construction of new types of large civil aircraft.

I support what was said by my hon. Friend the Member for Mid-Bedford about the Canadair types. If we can get them on terms which will not commit the Government to spending dollars but on hire purchase, that would be the right thing to do for the immediate future. Further, if it is thought that the Constellation will remain in service for the next eight years—which it probably will with modification, because types will not change so often as in the past—ought we not to get a licence today to construct the Constellation in a British factory with British engines? It may take two or three years before they come off the line, but I am told that the Americans would he glad to come into some such arrangement. We should then get experience in building these airframes and enable the design staffs to look ahead and concentrate on the future. The Government should seriously consider taking these Canadairs as an interim measure. I do not suggest that if we do that the Tudor should be dropped. Everything should he done to get the Tudor into the air, with mail or freight or anything in order to get the aeroplane flying, until it is well tested and can then be used on the Empire routes. It is infinitely better than the existing fleet of aircraft.

Unless we fly aircraft as good as competitors, we are bound to lose money. We have been told that Air India, a new company, will operate from Bombay to London in 20 hours. It is quite impossible to compete with that sort of thing. I would stress to the Minister of Supply and the Parliamentary Secretary to the Ministry of Civil Aviation the importance of close liaison with the Air Ministry when ordering new types of aeroplanes. It should be worked out in great detail with the technical experts at the Air Ministry to see whether there is some matter which is common to both civil aviation and the Royal Air Force whereby the development costs could be spread between the two services. The Americans have done that. For example, they found that the wing of a civil type would do for a military transport aircraft. There must be the closest liaison between the two Ministries in that respect.

When I was in India, I took part in the evacuation of the refugees between Pakistan and India. That was the biggest civil air evacuation in history. I am only sorry that the Americans were not told a little more about that air operation. We were rendering a great service to humanity and to our friends in India. It was a case of the Corporations and the charter companies working together, and they did work together. My own company, with two aeroplanes, carried 15,000 people in a matter of weeks. We had 69 up one day in an aircraft built for 21. There was not a single fatality or any technical trouble at all. I would like to take this opportunity of paying my tribute to Air-Commodore Brackley of B.O.A.C., who was in charge of that evacuation. He showed leadership and overcame the difficulties with the Governments of India and Pakistan. I should like to see Air-Commodore Brackley taking far more responsibility in his own Corporation. He has been in the industry the whole of his adult life, and knows what he is talking about.

Will the Minister do something about the flying clubs? We know that they are in a very poor way and are losing money, and unless something is done they will have to go out of existence. They made a contribution before the war in providing pilots for the Service and the A.T.A. I know the Treasury will not give them what the Whitney Straight Committee are asking for, but they should be given a token grant to keep them going. The international situation does not look any too good. If we let the clubs have £50,000 to £80,000 for this summer, we can keep them alive and review the situation later on.

I want, in conclusion, to refer to the Corporations as a whole. I believe that in the main they are doing good work, and provided we can overhaul the boards of directors and get more people from the Corporations coming up and sharing the responsibility, they will increase their ability. I have great confidence in Mr. Whitney Straight, who is with the Corporation. He is a man with experience and a go-getter, and I believe there is a great future for him, but he must be more drastic in dealing with matters such as pruning the Corporations. Not now; the time to tackle the job of reductions was last August when the Government hinted that there would probably be an economic crisis.

When the Government nationalised the air lines some 18 months ago, we were led to believe that all would be well in civil aviation. I am not complaining unduly, but I re-read the speech of the hon. Member for Keighley (Mr. Ivor Thomas) the other day. Of course, it was not entirely his fault; he was perhaps misled to some extent by his advisers. Nevertheless, he painted a very rosy picture of the situation as it would be after the Government had nationalised civil aviation, indicating that the Labour Government would be able to go all over the world and show the flag. It was a grave miscalculation, for they completely under-estimated the difficulties of operating aeroplanes. I beg the Government to review the situation from now onwards and to see where they really stand in this matter. It is no advertisement at the moment for British aircraft overseas. I beg the Government to review the situation and to leave party politics aside for the moment. Let them get the best out of civil aviation; it is there for the asking.

5.26 p.m.

Mr. Ivor Thomas (Keighley)

I am sure that I shall speak for the whole Committee, Mr. Beaumont, when I welcome you back to the Chair after your long illness. You have filled the post of Deputy-Chairman of Ways and Means with distinction, and we hope that you will soon be restored to complete health.

The hon. and gallant Member for Macclesfield (Air-Commodore Harvey) has spoken from a background of great experience and has made many practical suggestions. I particularly welcome the fact that he has treated this as a practical problem and has not played party politics with it. The temptation was, I am afraid, too great for the hon. Gentleman the Member for Mid-Bedford (Mr. Lennox-Boyd). I can hardly blame him for exercising to the full those great debating gifts which I know he possesses. Yet he was fundamentally wrong in his analysis of the position. Before I attempt to answer him, I must say that in my view civil aviation is of the utmost importance for the prestige of a Socialist Government, and particularly for a Socialist Government which insisted on completely nationalising the industry against the advice of some who would have permitted a minority holding by private interests.

There is this difference between civil aviation and the other nationalised undertakings. The others are almost entirely monopolies and non-competitive. The Minister of Fuel and Power can slap a few shillings on to the price of coal—or the National Coal Board can—if he sees the figures turning red, but civil aviation is highly competitive, with both the air lines of other countries and other forms of transport. It is subject to a financial test which is swift, inexorable and easily "understanded of the people." It is the misfortune of the Minister of Civil Aviation that he can, therefore, be challenged in a way in which the other Ministers responsible for socialised industries cannot.

It may seem at first that, judged by that test, nationalised civil aviation has not been conspicuously successful. That was the argument of the hon. Member for Mid-Bedford. The losses are certainly formidable and, in my opinion, greater than ought to have been incurred or need have been incurred, and I hope that, along the lines of the hon. and gallant Member for Macclesfield, I shall be able to prove this statement. Our expectations when the three Corporations were set up were that B.S.A.A.C. would, in the jargon we used, "break even," that B.E.A.C. would make a substantial surplus, and that B.O.A.C. would continue to need subsidies measured in millions for some time to come. We thought we made generous provision in asking for a subsidy of £10 million. It was regarded as a maximum. To hon. and right hon. Members opposite, I must say that never, at any stage in the passage of the Civil Aviation Act, did they move or vote for a reduction in that sum. Indeed, they voted against the whole Section, which, had they been successful, would have had the effect of not putting any limit on the subsidies that could have been paid.

Sir Wavell Wakefield (St. Marylebone)

Is it not a fact that continually in Committee we asked how this amount was estimated, and that no satisfactory answer was given, or any details of how the great loss which was envisaged would be met?

Mr. Thomas

No, Sir. My answer to that question was that this was a maximum figure which I hoped would not be reached, that we did not wish continually to amend the Act, and were providing for all contingencies. In my view, the loss need not have been so great, and I hope to show now that it could have been much smaller.

No ideological deductions can be drawn from these figures, for the plain fact is that while two of the nationalised undertakings made a loss, a nationalised undertaking also made a surplus. One of the most useful things we can do in this Debate is to ask why one of the Corporations made a surplus while the other two made losses. I wish to make two preliminary observations before entering upon that analysis. First, the policy of having three Corporations has abundantly justified itself. The main argument was that, at a time when all aeronautical ideas were in a state of flux, we needed to ensure that there should be a chance of operating different techniques, and we wanted to be able to measure the performance of one undertaking against another. That policy has fully justified itself, and in this "Socialist emulation"—if I may so call it—we have achieved something which is far more valuable than any economies which could be made by merging the boards. If the three Corporations were rolled into one, owing to the much greater size of the resultant body the expenses would almost inevitably be much greater than they are at present.

The second preliminary observation I wish to make arises out of the fact that British South American Airways have lately been the subject of much controversy, unfortunately for the whole of British Civil Aviation. The relations between the Minister and Air Vice-Marshal Bennett over the past six months had probably become such that their continued association could not go on: one or the other had to go, and, human nature being what it is, we can hardly blame the Minister for taking the view that it had to be "the other." I cannot question the decision, but I hope that the great services rendered by Air Vice-Marshal Bennett to British Civil Aviation will not be forgotten in this controversy. I thought that my right hon. Friend the Minister of Supply did less than justice to the magnificent achievement of B.S.A.A. in their early days. He said their success was due largely to the fact that they were first on the route. But I ask myself: Why were they first on the route? The answer is: Because they had men of initiative who took their chances and did not wait for things to be handed to them on a silver platter.

Sir W. Wakefield

Private enterprise?

Mr. Thomas

Not at all. I am dealing with a nationalised undertaking. There are men on the boards of the other two Corporations who have just as keen a personal belief in private enterprise as Air Vice-Marshal Bennett. My only concern is whether or not they are doing their best to make a success of their Corporations. B.S.A.A. were first on the route because those men had initiative. I remember a meeting over which I, in the absence abroad of the Minister, had to preside on I think, 21st December, 1945. It then became known to me that the Air Ministry were willing to relinquish London Airport, and I said to those assembled at that meeting: "Can you take it over on 1st January?" The Ministry officials agreed. I knew that Air Vice-Marshal Bennett wanted to have a proving flight to South America, and I asked him if he could start on that date from the London Airport. He replied "Yes," and said that he would take a proving flight from London to South America about 10 days hence, with Christmas intervening. That was the sort of spirit which got B.S.A.A. first on the route. It would be a very poor thing indeed if there were no place in nationalised civil aviation for such a spirit of initiative. Air Vice-Marshal Bennett was always full of zeal, and I suppose we can say that he remained so to the end, and was, in fact, "fired with zeal."

If the parting had to come there were different ways in which it might have taken place. The genius of our British character has evolved scores of different ways of delicately kicking persons upstairs. If Air Vice-Marshal Bennett had any complaint against the Minister, I should say it might be put in this form: It may have been right to dissemble your love, But why did you kick me downstairs? —and not only kick him downstairs, but rub his nose in the dirt when he got there. To my mind, the most unfortunate feature of the whole business is that an impression has been given to the world that something is very wrong with one of the airline Corporations, and it will take a very long time for B.S.A.A. to live down that imputation.

Mr. Roland Robinson (Blackpool, South)

Is it not a fact that Air Vice-Marshal Bennett was sacked by his own board of directors and not by the Ministry of Civil Aviation?

Mr. Thomas

In the limited time available to me, I am afraid I must deal only with realities.

I turn now to a comparison of the accounts. B.O.A.C. have attributed their loss to the fact that they are required to use uneconomical British aircraft. I think that argument is knocked on the head by tae fact that B.S.A.A. used only Yorks and Lancastrians. Incidentally, B.O.A.C. could have had as many Lancastrians as they wanted on the same terms as B.S.A.A. With regard to the price offered for them, if the argument of B.O.A.C. is correct, that the Lancastrian is uneconomical, then presumably the commercial price is simply the breakdown value, and is probably much less than the £2,000 a year paid for them.

Mr. George Ward (Worcester)

I hope the hon. Member will not overlook the fact that B.S.A.A. have only two types to operate, whereas B.O.A.C. have something like nine types.

Mr. Thomas

Quite so, but that again is because B.S.A.A. were filled with a good commercial sense. They could have had more types if they wished; and equally B.O.A.C. could have had as many Yorks and Lancastrians as they were willing to use, and could have scrapped other types if they were so minded. The only point I make now is that the argument that British aircraft were uneconomical is not valid, because they were operated at a profit by B.S.A.A. I shall now analyse why that was so. I am not passing any judgment on the mode of operation, but simply indulging in a little arithmetic. I hope the House will bear with me if I venture to give a few figures as a result of my calculations.

To my way of thinking, the financial position can best be put in this form. For every ton that B.O.A.C. carried for one mile, they earned 6s. 0d. and spent 9s. 9d., so they made a loss of 3s. 9d. for every ton carried for one mile. B.E.A., for every ton carried for one mile earned 75. 6d. and spent 20S. 6d., which means a loss of 13s. for every ton carried for one mile. B.S.A.A., for every ton carried for one mile earned 5s. 4d. and spent 5s. 2d., so they gained 2d. for every ton carried for one mile. It is this looking after the pence and letting the pounds take care of themselves which helps to explain the financial success of B.S.A.A. It will be noticed that there is not such a great difference between the earnings per load-ton-mile, but the differences between the expenditures for each load-ton-mile are startling.

How do they arise? One test is the ratio of staff to aircraft. It is a very crude test, but it is good enough to begin with. According to my calculations on 31st March, 1947, for every aircraft in their fleet B.O.A.C. had 139 staff, B.E.A. had 64 staff—I have omitted the V class machines as being out of service and communication aircraft — and B.S.A.A. had 49 staff. It would be expected that the smallest Corporation would have the largest number of staff to aircraft, but in fact the position is the reverse; and moreover B.S.A.A. were using large four-engined aircraft throughout. An interesting comparison which I take from the Select Committee's Report, for rather different dates, shows the administrative staff of B.O.A.C. to be 39, of B.E.A. 37, and B.S.A.A. only 16 to each aircraft.

If these are thought to be too crude tests let me turn to what I think will he regarded as a real criterion and that is the productivity of each member of the staff measured by the capacity-ton-miles to each employed person in the period 1st August, 1946, to 31st March, 1947. In this period of eight months, each person employed by B.O.A.C. turned out 1,666 capacity-ton-miles, in B.E.A. 1,208, and in B.S.A.A. 9,039. In other words, each person employed by B.S.A.A. was about seven-and-a-half times as productive as one in B.E.A., and about five-and-a-half times as productive as one in B.O.A.C.

Utilisation of aircraft is another very useful test. The figures are not complete enough to work out the analysis in full, but I reckon that B.E.A. Dakotas were used for less than four hours a day, Avro XIXs for less than one-and-a-half hours a day, Dominies for less than one hour and Jupiters for less than three quarters of an hour. It is impossible to make aircraft pay unless they are in use for about eight hours a day. When on the ground they are earning nothing but costing money, and more attention should be paid to the question of utilisation.

I now wish to turn to an analysis of the percentages of revenue which go to the various items. Hon. Members will notice that the revenue is returned under seven items, and of these passenger fares and mail are much the largest. They account in the case of B.O.A.C. for 56.0 per cent. and 29.0 per cent. respectively, in the case of B.S.A.A. for 56.8 per cent, and 28.2 per cent. in B.E.A., 68.5 per cent. and 14.6 per cent. respectively. There is a virtual identity between the figures for B.O.A.C. and B.S.A.A. which shows that their percentages are probably what we should normally expect.

I wish to ask some questions of my hon. Friend the Parliamentary Secretary, who is to reply to the Debate. If we want to put our airlines into a sound position, we must both increase revenue and decrease expenditure. My first question is this. Are not the internationally agreed passenger fares too low today? Why should air travel on many routes be the only commodity that is cheaper than it was before the war? The air rate to New York from London now is £81, whereas the sea rate, first-class, is £91. I do not think these fares can be justified. Our operators through the I.A.T.A. machinery ought to try to reach agreement on fares which bear some closer relation to the cost of carriage; and as nearly all operators are in the same position, I think there would be general agreement that fares ought to be raised.

Similarly, are not the present mail rates too low? It is true that the ratio of comparative rates for the carriage of mail and passengers is three and a half to one on the North Atlantic and two to one on the Empire routes, and so on. But, although we may subsidise passengers, is there any reason to subsidise mails? It would be useful to have figures to show the payments made by the Post Office to the Corporations for the carriage of mails and the receipts of the Post Office from senders of airmail letters. If it is the case that the Post Office is making a handsome thing out of this business, the benefit should be passed on to the Corporations; we ought not to be subsidising the Post Office through the airlines. If it is the case that the Post Office is not making a handsome thing out of this, we ought to consider whether the cost of airmail letters should not be increased. I am inclined to think that we ought to tackle the matter along both lines. These rates must, of course, be determined internationally and I welcome the policy of the Ministry that I.A.T.A. should be encouraged to extend its operations to mail rates as well as to passenger fares.

I should be grateful, taking up a point made by my right hon. Friend the Minister of Supply, if we could have some authentic information about what the United States pays indirectly in the way of subsidies through the carriage of mails. I have a feeling that the internationally agreed rate of six gold francs per tonne-kilometre on the North Atlantic is not in fact being observed owing to these payments made to United States companies. My rough calculations show that if B.O.A.C. received the same rates as I believe Pan-American Airways receive, they would get an extra £2 million a year in revenue.

The proportion of mail to total revenue is 29.0 per cent. in the case of B.O.A.C. and 28.4 per cent. in the case of B.S.A.A., but it is only 14.6 per cent. in the case of B.E.A. Is the Post Office using B.E.A. sufficiently for the carriage of mails? Whereas diplomatic freight is 5.7 per cent. of the total revenue in the case of B.O.A.C., and 3.6 per cent. in the case of B.E.A., it is only 0.4 per cent. in the case of B.S.A.A. Why is that so? Are Foreign Office and Colonial Office bags normally sent to South and Central America and the West Indies by B.S.A.A., and if not, why not? Are other countries using B.S.A.A., or has there been some "ganging up" against B.S.A.A.? Whereas in B.S.A.A. commercial freight provided 11.4 per cent. of the total revenue, in B.E.A. it furnished only 5.7 per cent., and in B.O.A.C. only 4.7 per cent. Are the great potentialities of commercial freight as a revenue earner being fully realised? Will special attention be given to the question of cargo services being run by the Corporations without passengers? Cargo can be carried in aircraft which do not come up to the exacting standards required for the carriage of passengers, and in weather in which passengers could not be flown; and cargo never grumbles.

More revenue could have been earned, we are told in one of the reports, if it had not been for unused priority seats. I agree with the hon. and gallant Member for Macclesfield on this question of priorities. Indeed, I go further and say that the priority system ought to have been abolished long ago.

Mr. Stokes (Ipswich)

Hear, hear.

Mr. Thomas

At a time when load factors are falling—and this is one of the most significant factors in the situation—there is no valid reason for keeping the priority system. When I was at the Ministry, and chairman of the priority board, it was my intention to abolish it on 1st January, 1947. Circumstances contrived to make it impossible for me to do so. I think there is no case at all for keeping the priority system.

Turning to the expenditure side, I notice that expenditure is returned under 11 different items, and I wish to pay my tribute to the Ministry for the very good form in which the accounts are presented. The first point I notice is that of these 11 items two do not figure in the accounts of B.S.A.A.C. One is "Divisional Administration." Is divisional administration really necessary? Apparently it was not necessary in B.S.A.A.C. It is a great source of expenditure in the other two Corporations. No doubt, the Minister will be able to tell me that in fact the divisions are being abolished in B.E.A.C. Are similar steps being taken in B.O.A.C.? It may not be possible in that large Corporation, but I am inclined to think that it could be done, and that the stations could be run directly from head office. The second item which does not appear in the accounts of B.S.A.A.C. is "Charters." That Corporation has done all its own flying. Can we be assured that B.O.A.C. and B.E.A.C. will, in future, do the same and not have to pay large sums for charters?

I notice also that in the B.S.A.A.C. accounts "Flying Operations" figures as the chief item of expense. In B.S.A.A.C. they accounted for 25.4 per cent. of the total expenditure, in B.O.A.C. for 17.1 per cent. and in B.E.A.C. for only 12.1 per cent. It should not be forgotten that the primary duty of an airline Corporation is to fly. This reflection is confirmed by a broader analysis I have made, from which it may be seen that aircraft charges and operational expenses were 61.7 per cent. of the expenditure in the case of B.S.A.A.C., 55.6 per cent. in the case of B.O.A.C. and only 37.3 per cent. in the case of B.E.A.C., whereas administration and organisation accounted for 30.2 per cent. of the expenditure in the case of 13.O.A.C., 32.9 per cent. in the case of B.E.A.C. and only 22.9 per cent. in the case of B.S.A.A.C. It is the same problem as in the war, to keep the chair-borne troops to the minimum.

I wish to ask a few questions on expenditure, and firstly, a very general question on aircraft maintenance. I ask my hon. Friend to do his best to ensure that aircraft designers pay great attention, in designing their aircraft, to reducing the cost of maintenance as much as possible. I have already mentioned in general the question of administrative costs. I should now like in particular to ask for a review of the costs at stations, which for every 100 kg. traffic handled vary greatly, from £1.95 to £14.3. More especially I wish to mention the question of marine bases. The Minister of Supply has mentioned the cost of £1 million which B.O.A.C. has incurred through its marine bases. Why should that Corporation be expected to pay for marine bases overseas? It does not pay for land aerodromes. Why should it pay for flying-boat bases? There may be some expenditure, as on land aerodromes, which it is proper for it to bear, but the greater part of this expenditure should be borne either by the oversea Government concerned, or, where the oversea Government cannot or will not pay the whole cost, by United Kingdom funds. It should not be borne by the airline Corporation, and it gives a wrong picture.

Technical training is another big item. The hon. Member for Mid-Bedford noted that technical training accounts for only a small percentage—1.8 per cent.—of the expenditure of B.S.A.A.C., 5.5 per cent. of that of B.O.A.C., and 17.9 per cent. of the expenditure of B.E.A.C. These startling variations call for some explanation. I think that a good deal of it is really capital expenditure. In reply to the hon. Gentleman opposite, I would point out that much of the cost of training in B.S.A.A.C. is not shown as "technical training" but as "flying operations," because that is part of the difference in technique. In B.S.A.A.C. the policy is to train aircrew on the routes as much as possible.

I now pass to "Passenger Service," which covers such items as meals in restaurants and aircraft, accommodation during night stops at hotels and rest-houses, transport and stewards' pay and allowances. Can this be justified in the present state of the Corporations' finances? Ought not the passenger to pay his own fare from the town to the aerodrome, as he does in America? We have copied so many things from America. Why can we not copy this? Should the Corporation's responsibility not begin until the passenger gets to the aerodrome, and should he not pay for his own meals in an aircraft, as we pay for our own meals in a train?

Hon. Members

He does.

Mr. Follick (Loughborough)

I have travelled on the services of eight different companies in the last seven weeks and not one passenger paid for his own meals.

Mr. Thomas

I think hon. Gentlemen are referring to the fact that this change has been introduced in B.E.A.C. Could it not be done generally? It should be done by international agreement. These items have a bearing on the fares charged, and can be a way of undermining agreements on fares if we get competition in this matter. If Air France, for example, gives passengers bottles of champagne and B.O.A.C. has to reply with battles of Haig, it will make a great deal of difference to the fares. Having now practically turned the deficit of B.O.A.C. into a surplus. I must do something for B.E.A.C. I should like to support the plea that they should get a proper drawback on the aviation fuel consumed in this country.

Turning to the surplus and deficiency account, I am personally concerned by one item, the redemption of airways stock. This arises at present only in the case of B.O.A.C., but in future it will arise in the case of all three Corporations. B.O.A.C. had to make provision amounting to £301,389 for this purpose in 1946–47. The Minister in another place has drawn attention to this matter. I think his argument is valid. The Corporations are required to make provision for obsolescence of their equipment—their aircraft, for example, are written off over a period of four to five years—and they have also to make provision for the redemption of that stock. That is paying twice over, and is an unnecessarily rigorous provision.

I am bound to recall the assurance I gave in Standing Committee upstairs on 19th June, 1946, to the hon. Member for St. Marylebone (Sir W. Wakefield) who moved an Amendment which would have had the effect of including both these items among the items properly chargeable to revenue account by the Corporations. In asking him not to press the Amendment, to which he agreed, I gave an assurance that these items would, in fact, appear in the accounts. I am quite sure that what both of us had in mind was that the Corporations should follow normal commercial practice, neither more nor less, and I am also sure that neither of us envisaged that the present situation would arise. I invite the hon. Member, or someone else who can speak on behalf of his party, to join with me in saying that as far as we are concerned we shall be content if the matter can be left to the Ministry with the approval of the Treasury, on the understanding that what we wanted was that the normal commercial practice be followed.

Mr. Lennox-Boyd

While I am not in a position to do as the hon. Member suggests, I consider that, in fact, there was an assurance given under a misunderstanding. Many of us feel that it would not happen in any ordinary commercial undertaking. I query, however, the statement by the Minister in another place about using a subsidy to redeem stock as being puritanical.

Mr. Thomas

I am very grateful indeed to the hon. Gentleman. I am sure that if this is followed up, the Ministry and the Corporations will also be glad.

May I mention what I may call my King Charles' head? I shall not be very long with it. I think that the salaries in the socialised industries should not exceed a basic maximum of £5,000 a year. If they were brought down to that figure, it would have a tonic effect upon the whole corporation. The sum involved would be small in itself, but high salaries at the top do have the effect of putting up the salary range throughout the whole industry.

Let me deal with a few general aspects before leaving expenditure. Would it not have been very much better if, in 1946, the Government had permitted the building of sufficient hangars at the London airports to accommodate all British services? Was it not a case of penny wise, pound foolish, as the scattered nature of the bases used has been a major item of expense? I join with other hon. Members who have condemned the present system of ordering aircraft. I cannot now present the argument, but the opinion I have formed, after a close acquaintance with this system, is that the Ministry of Supply should continue to make itself responsible for the development of prototypes, especially those which are very expensive and of great national interest, but that in the ordering of production aircraft the Corporations should be brought into direct contractural relationship with the firms. Only in that way shall we be able to get the Corporations to make firm decisions on aircraft and also get the aircraft firms to give firm quotations for delivery dates and specifications, with penalties for non-fulfilment.

There is a great deal of criticism about civil aviation at the present time and a number of wild remedies are being proposed. Some hon. Gentlemen opposite desire to abolish the Ministry of Civil Aviation. Others wish to turn the three Corporations into one. Some wish to restore private enterprise to this field. I think that the foundations of British civil aviation were, in fact, well and truly laid in 1946, but, even if I did not so believe, I should say that this is not the time to make these sweeping changes. What civil aviation needs more than anything else at the present time is peace. This very delicate plant of civil aviation has been pulled up about a hundred times since 1918, and it, really ought to be left now to develop. Let us give it a fair chance, and treat civil aviation, not as politics, but as air commerce.

6.4 p.m.

Lieut.-Colonel Sir Walter Smiles (Down)

The first point I wish to raise is with regard to the B.E.A. and the continuance of the service between Liverpool, Manchester and London. It is a service by which I have often travelled, and it has been made use of in the past by a great many manufacturers in Belfast. They have crossed by air to Liverpool or Manchester, and afterwards have travelled on by that air service to London. Sometimes on the return air journey from London they have been able to make a business call in Manchester or Liverpool. The discontinuance of that service will be most inconvenient. I do not think that I will raise any political point or speak about the profit motive, but I would appeal to the Parliamentary Secretary not to be "dog in the manger" about this Liverpool and Manchester-London service. If B.E.A. are not able to run this service at a profit themselves, then an opportunity should be given to some air charter company to have a try. I do not say that they will be able to run it with the large Dakotas that were used before, but they should be able to continue the service with a much smaller plane, such as the Dove.

On such a route, the B.E.A. having actually discontinued to operate, it would he only fair to allow such an air charter company to run on a scheduled service, with the tickets interchangeable, perhaps, on the Manchester, Belfast and Liverpool service. This is not a new idea. It has operated in the past over the years with the railways and the steamer companies. The steamers from Liverpool to Belfast were always run by Coast Line Steamers, and not by the L.M.S., but passengers could buy a ticket to go from Belfast to Liverpool on the Coast Line Steamer, and afterwards travel by railway to London, or elsewhere. This idea, therefore, is not completely new, but I think it might be initiated to improve the comfort of air-minded passengers travelling from Manchester and Liverpool to London.

The Minister of Civil Aviation has said in the past that he would put an umbrella over the air charter companies, but it is a very small umbrella that he has put up. It is almost microscopic. It must be remembered that these British air charter companies visit many airfields overseas which are never touched by our regular services. They should be given help, because they bring prestige to this country, and they show the flag in exactly the same way as the Navy used to show it. The record of the air charter services has been an excellent one. As far as I can remember, there have been no fatal accidents, except in a Channel Island charter plane, during the past year. They have a very hard row to hoe. I believe these air charter companies have actually paid more landing fees on the various aerodromes in this country than the scheduled services.

I have no complaint about B.E.A., but I have noticed that when travelling abroad one seems to get more service if one is a passenger on an air charter company than if one travels on the B.O.A.C. I remember last year owing to bad weather, we had to land at Paris off the B.O.A.C. plane from India. At the same time a plane belonging to General Critchley's company landed at Le Bourget. The B.O.A.C. passengers were herded into a corner as if they were prisoners bound for the Bastille, whereas General Critchley's company's passengers were treated as if they were all Madame Du Barrys. I do not know whether the wheels were greased or not.

I fly nearly twice a week in Dakotas and they are very comfortable, and I could wish that they were British, and not American. I have heard about the Ambassador planes, and I sincerely hope that we are going to see them on the routes very soon. I have only one small complaint about some planes, especially the one in which I crossed last Monday evening. There were no reading lamps, and passengers had to sit in the dark. I believe that the 18-seater Dakotas have no reading lights, but only the larger ones. I suggest that these planes should be fitted with reading lamps over the passenger seats when they come in for overhaul. It would not cost a great deal of money to put in such lamps.

I do not think that time is lost in the air. I think that the air time is very good indeed. Time is generally lost from the moment the passengers land at the aerodrome until the bus actually leaves the aerodrome to convey them to their destination. I have encountered that, both at Nutt's Corner, in Northern Ireland, and in Northolt. There is no doubt that we do get service from the B.E.A. In fact, on the Manchester route it used to be said that passengers were lucky when they stepped from the aircraft if they did not get killed, because there was such a rush of people to look after them that it was like a Rugby scrum. If they managed to avoid two or three forwards, they were certain to be caught by the fly half. But the attention that one gets from the various employees is splendid. Indeed, one of the young girls at Nutt's Corner aerodrome won the second prize in a beauty competition the other day. When one is held up for an hour or so, because of a technical fault or the weather there is no harm in having beautiful scenery to admire.

I would like to discuss the position of flying clubs. When we lose £10 million or £11 million a year, it would not be a bad investment to allow £100,000 for the assistance of flying clubs. The weekend pilots who used to be spoken of with a sneer, did their bit magnificently in winning the battle of Britain. I know that in the past many rich men subscribed to provide aerodromes and to support the flying clubs; but there are very few rich men left now. Lord Londonderry, in Northern Ireland, has done a great deal for the Ulster Flying Club. Indeed, it would not be in existence but for his help. It took five years, from 1934, to develop the eight-gun Hurricane which won the battle of Britain. I believe that the next battle of Britain will be won in the air. Wherever we economise, it should not be in the air or in the task of making people airminded. Money spent on flying clubs would be money well invested. Another point is that when our pilots get old and are unable to take the air any more, they should be given a chance to do other work. When a man reaches 45 or 50, I understand that his life as a pilot is considered at an end. Why not give these men the chance to take good jobs in administration on the ground? There is no reason why a man who has been clever enough to pilot an aeroplane should not be a good business man and an efficient administrator. I hope that when the Parliamentary Secretary replies to the Debate he will tell us that he intends to give these people the chance of a career when their flying days are over. Let there be a marshal's baton in every pilot's knapsack. Give a fellow the chance to rise from office boy to the very top.

Another point I wish to make concerns the aircraft industry and the necessity to maintain a proper liaison from the time the machines are ordered until they are in use in the air. Whenever the Royal Navy orders any ship, be it a battleship, aircraft carrier or destroyer, they keep at least one or two naval officers in constant liaison to see that the work is being done to their wishes. Even when a civilian firm orders a new tanker, a liner or a tramp steamer, they have a man who remains constantly in touch with the shipbuilders. I suggest that it would save a lot to time and trouble later if a proper liaison was kept between the people who operate the aeroplanes and the workers in the factories in which they are made.

6.14 p.m.

Mr. Beswick (Uxbridge)

I hope the hon. and gallant Member for Down (Sir W. Smiles) will forgive me if I do not follow him in the points he has made. I am not very familiar with the position in Northern Ireland, although I am sure that some of the comments he made will receive approval from the hon. and gallant Member for Derby (Group-Captain Wilcock). I agree with much in what I thought was the reasonable speech made by the hon. and gallant Member for Macclesfield (Air-Commodore Harvey). I thought that some of the points he made were extremely good. I wish that I could say the same for the speech of the hon. Member for Mid-Bedford (Mr. Lennox-Boyd). It seemed to me that his political vituperations were in inverse proportion to his practical experience of these matters in recent years. I thought that he was a little ungenerous in some of the remarks he made about the national Corporations. He spoke about them having everything their own way, about them being a monopoly, and said that he saw no reason why they should not have got on with the job in what he called a "sellers' market."

When he said that, I thought of one matter in which they had not a monopoly. I thought of the experience of British European Airways who opened up in a big way in my constituency at Northolt Airport. There, at any rate, they had not a monopoly of houses. I am very conscious of the acute difficulties they had when they first tried to start their services from Northolt. About 2,800 additional people came into the neighbourhood where the local authority already have 3,000 people on their waiting list for houses. The inevitable result was that many of the workers were separated from their families. At the start many of them were billeted in huts. They had to work in unheated hangers, with inadequate canteen facilities and so on. These were the men who maintained the aircraft and flew them with a nil accident record in the period under review. The comments of the hon. Member for Mid-Bedford were a little ungenerous when he talked about them having everything their own way.

The hon. Member for Mid-Bedford also referred to the question of losses. With what seems to be the typical intellectual bankruptcy of some of the Tories, whom we often hear in this Committee, he claimed that these losses prove that the nationalisation of civil aviation has failed. In the same way, hon. Members opposite said that the nationalisation of coal mines failed because of the fuel crisis at the beginning of last year. The only difference between nationalisation now and private enterprise before the war, is that now the deficit is called a "loss" whereas before it was described as a "subsidy." I was surprised that the hon. Member for Mid-Bedford mentioned the dividends paid out by Imperial Airways before the war. In direct subsidies alone the taxpayer paid to these private airline companies before the war £383,000 in 1936–37; £500,000 in 1937–38; and £1,250,000 in 1938–39. At the same time Imperial Airways, as the hon. Member for Mid-Bedford said, were paying dividends of seven, eight, and nine per cent, to their shareholders.

Mr. Lennox-Boyd

My information is that no dividends like that were paid. I may be wrong. The highest figures I have show that the dividend was seven per cent, in 1937–1938; and the other figures were six, plus a bonus, five and three.

Mr. Beswick

My figures are seven, eight, and nine per cent. in the final year. There is a difference of 1 per cent. I am prepared to compromise, though I think that the hon. Gentleman will find that my figures are correct. He then mentioned the fact that in the United States, that land of free enterprise, they did things in a different way. Yes, they certainly did some things in a different way. They did not make losses—at least, they did not until last year—and they did not get subsidies. What they got is defined by President Truman's Commission as "need payments." A "need payment" is defined by the report of the President's Commission as the amount of money … necessary to close the gap between the non-mail revenues and expenses … and to leave something over as a profit. Any company operating under those conditions certainly ought to make a profit. In point of fact, although they got their disguised subsidies on mail receipts during the last year, nevertheless as other hon. Members have pointed out, they made a net loss of 22 million dollars. That was under freedom. As one American newspaper pointed out, although they like freedom they do not like the freedom to go broke. Consequently, they asked President Truman to look into the matter.

President Truman appointed a Commission which has now made recommendations, and these recommendations include further "need payments." Apart from the development costs of the aircraft manufacturers, they suggest 190 million dollars for air traffic control, landing aids and so on, and an additional airmail subsidy which, according to the estimates of the United States Post Office, if these recommendations are accepted, amounts to 96 million dollars. That is for airmail subsidies alone. A cool 96 million dollars, whatever we call it—whether it is "need payment," subsidy or loss—does seem to me to put into the shade our own British losses of £10 million sterling. It is quite absurd to talk about any private company or public enterprise making a profit out of this business, because, somewhere along the line from design to operation of the aircraft, there are very big subsidies indeed. What we in this Committee would like to do is not so much to argue the case of nationalisation or private enterprise, because that has been settled, but to consider how we can prune down any unnecessary expenditure of the taxpayers' money.

The first proposal I would make is that the Government should set up a small committee to consider the whole field of aviation from research and design, the manufacture of aircraft, to the testing and certification, as well as the actual operation with which we are primarily concerned today. I am convinced that, although in any given field one may find the Public Accounts Committee being satisfied that the money is being spent economically, there is a good deal of overlapping as between one sector and another. If we had before us today the total amount of the British taxpayers' money spent on aviation, this £10 million incurred by the airline operating Corporations would be found to be extremely small by comparison. If there is to be any saving made, it is my view that that saving could more easily be made by some other sector than that of the operation of the airlines.

Take, for example, the question of the work going on at Bristol at the present time. I gather that there is as much money being spent on one airline hangar there as would pay for 1,000 permanent houses even at the present inflated house building costs. The House recently spent a whole day in what I considered an unfortunate Debate on the amount of money that should be provided for the Heir Presumptive. The cost of those hangar doors alone would have paid the amount of money in question for the next 25 years. I, therefore, consider that we might very well look into the whole field of aviation. I would like to go into the question of the procurement of aircraft, and I hope that we shall get another opportunity of debating that aspect of the matter, but, as so many hon. Members wish to speak, I will not go into it today.

May I, however, say something about the structure of the airline Corporations? There is some talk now of the Government setting up one big Corporation. In my view, it is a profound mistake simply to talk about that at this time, and I hope the Parliamentary Secretary, when he replies to this Debate tonight, will take the opportunity to deny that it is contemplated, because it can only create uncertainty and unsettlement among the many people concerned. Hon. Members will remember that, when the Civil Aviation Bill first came forward, some of us put forward the suggestion that there should be one Air Transport Authority, independent of the Ministry, in much the same way as the British Transport Commission, independent of the Ministry of Transport, has since been set up, and under which authority there would be a number of Corporations or Executives, in the same way as there are the different Executives under the general supervision of the British Transport Commission. I am certain that that would have been the better arrangement. Nevertheless, I do not think that the present is the right time to go back on that position. What we need now is time for these Corporations to settle down, and already on their own account they are beginning to learn from some of the mistakes that have been made.

One other suggestion which I would put forward also concerns a matter for Ministerial decision. There should be some evening-up of responsibility between B.O.A.C. and B.S.A.A. I think the latter should be given responsibility for all the African routes, with the exception of the route to Cairo, which would belong to B.O.A.C. as part of the Far Eastern and Empire routes. There seems also to be a case for taking over the North Atlantic route and giving it to the Corporation now responsible for the South Atlantic crossing. That suggestion, if adopted, would leave B.O.A.C. more manageable. But, nevertheless, although it would have that effect, I still think that the necessary internal reorganisation of B.O.A.C. is probably too big a job for the directors of that Corporation.

It seems to me that, between the members of the Corporation and those more directly responsible for operating the airlines, there is too big a layer of administrative fat which prevents the directors getting to grips with the problem. The advice they receive from the senior members is bound to be prejudiced advice. There is bound to be a certain amount of vested interest. There appears to me to be a case for bringing in some outside body or independent people to assist in the internal reorganisation of B.O.A.C., for, quite clearly, considerable economies could be effected. In saying that, I am not minimising the improvements recently made as a result of the change of membership of the Corporation made a month or two ago.

There is yet another thing which must be settled by Ministerial decision, and that is the question of aircraft types. It seems to me quite impossible for an airline Corporation to break anywhere near even, if they have to operate a hotchpotch of aircraft types most of which are uneconomic. If for reasons of high policy, it is considered—and the policy should be laid down as soon as possible—that they should be called upon to operate uneconomic types, then there should be some offsetting allowance in the balance-sheet. After that, they should be expected to come out with level accounts. It seems to me quite absurd deliberately to entail a £1 million loss on any given route by operating uneconomical services, and then expect to find the kind of small economies in the internal day-to-day administration for which the hon. and gallant Member for Macclesfield rightly called. It is very difficult, for example, to dismiss a superfluous employee probably earning L500 a year, if the senior member of the department knows that, no matter how many people he sacks, he will still run this particular route at a loss of probably £ million per annum, which is apparently inevitable if some of the uneconomic types are continued.

There is one further point which requires re-examination by the Corporations, and that is the question of the joint development by the three Corporations of certain common services. Take the question of training. The B.O.A.C. Report shows an expenditure on training of rather more than £ million in the year—an absolutely fantastic figure, which involved a great deal of waste, as I know, because some of it was spent upon me. As the Committee knows, an airways training organisation was set up which was designed to conduct joint training for B.O.A.C. and B.E.A.C. I believe this concern took aver in March last year. At that time, as the result of a hangover from the past, the costs admittedly were excessive. But, in September, changes were made in the organisation, and it was being put on a proper footing. By October of the same year, B.O.A.C. were pulling out, and setting up a separate training organisation of their own. That seems to need investigation. We all know why B.S.A.A. did not go into the organisation in the first place, but why B.O.A.C., who were prepared to pay 50 per cent. of the cost, should go to the expense of setting up a separate organisation at this stage, is a matter which, as I say, ought to be re-examined. I think there would be a great future for a civil air school or university in this country to which our own air crews and engineers could go, and there is no reason why we should not also attract a good many trainees and students from overseas.

I now wish to say a word about the relationship existing between Parliament, including the other place, and the Corporations. I noticed that my right hon. Friend the Minister of Supply, who opened the Debate from this side, said he thought that a great many of the improvements made were a result of criticisms or suggestions which had come from the House. That may well be, but, at the same time, it seems to me that we have all been responsible for a good deal of political pinpricking, which cannot have had any really beneficial or encouraging effect on the members of the Corporations responsible for the day-to-day work. For my own part, I apologise in so far as I have been responsible. I hope that, in the future, a good deal more use will be made, both of the joint panels and the National joint Committee of the industry, and also of the Advisory Council. There is such a wealth of experience and technical skill within the industry that I hope the Joint Council and the local panels will be used to the full, in order to enable the men and women employed in the industry to play a full part in developing it.

I wish to say a word about the contribution made by the British Airlines Pilots' Association. I am sure the Parliamentary Secretary will join with me when I say that their advice on the different committees, on which they have sat quite voluntarily, has been invaluable. Indeed, in this industry, where there is a continual development, and where new techniques are being used almost week by week, it is essential to have the people who are in day-to-day touch with the business of the industry at the top on such committees and advisory councils. There have been complaints about the strength of our teams which have in the past gone to international conferences. It may well be that, from the British Airlines Pilots' Association, or from the appropriate engineers' union, we should be able to get people who could play a very valuable part in helping to develop the international rules of flying. Finally, I believe that there is such a lot of enthusiasm and skill in the aviation industry that, if we can only give it a little time in which to express itself, I am sure we shall have much better reports to consider in the future.

6.34 p.m.

Sir Basil Neven-Spence (Orkney and Shetland)

I think that the comments made by the hon. Member for Uxbridge (Mr. Beswick) on the speech of my hon. Friend the Member for Mid-Bedford (Mr. Lennox-Boyd), who opened the Debate, were entirely uncalled for. My hon. Friend is very well-informed on this subject and he delivered an interesting speech. He delivered broadside after broadside of well-merited criticism, and I could see shot after shot hitting the Minister and the Parliamentary Secretary. I await the reply of whatever Minister is going to wind up this Debate, because no one has yet refuted what my hon. Friend said.

I see that the Minister is now back in the Chamber, and as there is no one on his side to congratulate him, I think I ought to do so on his having made the best of what was obviously a very bad job. It is becoming clearer and clearer that "Great Expectations," a novel in three volumes by the Socialist planners, has now been withdrawn from circulation and replaced by "Bleak House," a true tale in two volumes, published by B.O.A.C. and B.E.A.C. I am concerned more particularly with the report of B.E.A.C. which makes very gloomy reading indeed. A great deal of it is devoted to the enormous loss incurred during the period of expansion and development. Everyone must have realised that some losses would be incurred in the post-war period in developing these services; such losses are commonly incurred in any enterprise in its early stages. The Corporation certainly began its existence at a time when there were obviously going to be great difficulties in respect of the supply both of aircraft and of spare parts for such aircraft as they had to make do with in the meantime.

That raises the question whether the Government, knowing all this, did not act foolishly and improvidently in interfering with the commercial airline operators when they did, particularly in the case of the internal airlines which had been carefully developed in the years before the war by men who knew what they were doing. Among other things, those men understood the need for cutting their coat according to their cloth. These internal air services had to compete with the railway companies and, in some cases, with sea transport also. More than that, they had to compete with each other, and to satisfy the public demand for a regular and adequate service, with due regard to safety, at a price which the public were prepared to pay. They did all those things. It cannot be said that, so far, the B.E.A. have done the same, although, as far as safety is concerned, I must hand it to them, because the service has been run with that object in the forefront. It is right that it should be the primary consideration.

As regards the services, all I can say is that the people in the North and West of Scotland do not consider that the services today are as good as they were before the war. With regard to fares, the overwhelming opinion is that they are too high to make the services workable at all. On page 7, the report says: The general level of fares did not keep pace with the rising scale of costs of airline operations. I can well believe that. In fact, the plans of these Corporations outran the practical possibilities, as plans so often do. But, even if the plans had not been so visionary and grandiose as they were, the B.E.A. would still have had to face rising costs. Assuming that costs are to be kept at the lowest figure compatible with an adequate service, and, above all, with safety, there is only one way in which rising costs can be overcome; that is by increasing the traffic, and encouraging the public to make increasing use of the services.

The other day, I came from Aberdeen to London in a 21-seater aircraft, in which I was the sole passenger. I must say that I had a twinge of conscience as to whether I ought not to send a cheque to the Chancellor of the Exchequer. Fortunately, I slept on it that night. My native caution got the better of me, and I did not see why I should make a sacrifice in the matter. Does it not occur to the B.E.A.C., in running these internal airlines, that it would be far better in a 20-seater aircraft to have 20 passengers at £10 each, than perhaps to have four pasengers at £25 each. There must be some point where the thing can be balanced; it will never pay unless the aircraft are properly filled, and they will not be filled if fares are going to be far too high. On page 10 the report says that the immediate aim is to eliminate operations which hold out no hope of financial success. That prompts the question of why B.E.A.C. ever embarked on operations which held out no hope of financial success. Any experienced commercial airline operator could have told them that the services which are being abandoned now had no greater hope of commercial success two years ago than they have today.

Previous references I have seen to Cinderella services fill me with apprehension about the future of internal airlines, particularly those serving Orkney and Shetland, the Western Isles, and the West Coast of Scotland. On reading page 11 of the report we find that internal air routes will be confined to those which are likely to prove an economic success, or are provided to meet a special public requirement. I have always held the view that there was an overwhelming case for developing the internal air services to the remoter parts of the country which did not have the benefit of fast rail services, or possibly any rail services at all, or were dependent on steamer services. I think the development of these services was right and necessary on social grounds, and it would have been justifiable in the early stages to have helped their development with some assistance from the Exchequer—not that it was ever given.

My hon. Friend the Member for Mid-Bedford (Mr. Lennox-Boyd) referred to the sum of £100,000 which the Corporation is now groaning about having to pay in petrol taxation. It is a heavy burden, no doubt, but I would point out that many times in the past I have pressed that the tax should be taken off altogether, to help the internal airlines in the pioneer days. I never received any response at all.

Mr. Lindgren

I am sure the hon. Member does not wish to be unfair, but will he not agree that Scottish Aviation, Scottish Airways, Allied Airways, and A.A.J.C. received subsidies on the Scottish services they ran before the war?

Sir B. Neven-Spence

I have no knowledge of any subsidy received by Scottish Airways, and I should be very interested to hear of it. It is the first I have heard of it. I have every sympathy with B.E.A.C. in wishing to be relieved of this burden of £100,000, and I should look with great interest to see if the Government are going to give this bastard brat of State monopoly what they refuse to give to the legitimate children of commercial enterprise. It is only, at best, a bookkeeping entry so far as the Government are concerned.

I am not staking any claim for the maintenance of those internal air services to remote parts of the country on the ground of special requirement, although I think that claim is still valid. My claim for the retention of these services is on other grounds altogether—that they were being operated commercially on a successful financial basis up to the time when they were taken over. I can see no difference in the circumstances between 1945 and 1947 to warrant a change-over from an annual profit of £8,000 to a loss which appears to be in the nature of £600,000 a year. These staggering losses—and others are coming to light in other undertakings—are an indication of what people in this country are going to have to pay for this will-of-the-wisp State enterprise—bastard or legitimate—instead of sticking to ordinary business methods in running these undertakings. I make no claim to be an expert on the subject.

Mr. Willis (Edinburgh, North)

Is the hon. Member suggesting that the services now running from the North of Scotland to London should be stopped—the one serving his own constituency? They were not run before the war.

Sir B. Neven-Spence

I am not suggesting that at all. I am talking about services which are of vital interest to my constituents—the Shetland service to Aberdeen, and the Orkney one to Inverness and to the West.

Mr. Lindgren

I am sure the hon. Member wants to be perfectly fair. We only came in on the service of the Aberdeen to the Shetlands because private enterprise fell and went out. We had to come in at a day's notice.

Sir B. Neven-Spence

Private enterprise did not fade out. The services in that part of the country were being run at a profit up to the time the war broke out, and during the war they were run by those companies for the Government. They were running profitably the whole of the time, and certainly through the war. There is not the slightest doubt about that, and I am not prepared to give in about it. Here is an example for the hon. Member for North Edinburgh (Mr. Willis). Before the war in Orkney we had an air service operated by Scottish Airways three days a week round the island, which was of enormous benefit to the people. It gave them a better mail service than they had ever had before.

Mr. McAdam (Salford, North)

Is it not a fact that the company was subsidised as a result of carrying airmails on behalf of His Majesty's Post Office?

Sir B. Neven-Spence

I am not talking about the Western Isles at the moment. So far as the air services to Orkney and Shetland were concerned, no subsidy was given whatever. The mails have always been carried on what was considered to be a commercial basis, and I always thought the Post Office made a very hard bargain. I tried to get higher prices and to get them to pay a decent rate over the air routes. That seemed to me to be one quite legitimate way of encouraging those very worthy enterprises.

Mr. Willis

The hon. Member has not yet answered the question I put. There was no service from Orkney and Shetland to London before the war; is he now asking that the present services should be taken off because they are not at present economic?

Sir B. Neven-Spence

I have not said one word about that. My point is that the service was running perfectly successfully in the North and West of Scotland before the war, and now there is some danger of its being withdrawn altogether. I have been interrupted so much that I did not finish answering the hon. Member for North Edinburgh. We had this thrice-weekly service round the islands in Orkney running quite successfully before the war. We have not been able to get it re-established since the war, and I can assure him that if Scottish Airways were still there we would have had this service back within a month or two of the end of the war.

It seems to me that one thing stands out: one thing I have noticed, although I have no official information. It seems to take, under the present set-up, about three times the number of staff to operate the concern that it used to take before the war, when everything was as efficient as the present organisation. There is another point. For years we had this service run by Rapides. We knew perfectly well, years ago, that these planes were too small for the job and that the service was expanding, and it was generally considered that something like a 10-seater would be required. We could, however, have carried on. They were all taken away, however, and we received these J.U. 52's, to which the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) referred, and Dakotas. They are too big for the job, and they are bound to lose money. Why could we not have been left with the planes we knew, and were prepared to put up with until some modern 10-seaters came along, which are the planes wanted for that job? There is also the question of fares, and that is a very critical one. Indeed, the whole service will be killed unless they are brought down to prices people can afford to pay.

I was very much surprised when I picked up the "Daily Telegraph" on Monday, 23rd February, and found a report in it that three men were to be axed. They are three people well known in Scottish aviation circles. These three men are Mr. W. Cumming, Captain E. E. Fresson, O.B.E. and Captain Barclay. They were to be axed on the ground of redundancy. By whom was this redundancy created? There was no redundancy in these internal air lines before the war. In those days they were working without such a great number of personnel and were run efficiently. They created these organisations. It is monstrous that, if the Corporations, having themselves created redundancy, then proceed to kick out men who have spent their lives in building up these air lines; there is nothing else for them to go to owing to what has been done to civil aviation in the country. These men, who are reaching middle age, cannot find a living in any other branch of aviation. No decent, reputable firm in private industry would dream of treating its old servants in this way.

The following day, according to a statement made by Sir Patrick Dolland, Chairman of the Scottish Advisory Council, which appears to do everything except give advice, and whose advice, even if it is given, is never taken—indeed, I do not know which end of the country it lives, but I suspect it is somewhere round Northolt—Sir Patrick Dolland said he had been informed that the notices to these three men had not been sent out. Why on earth does Sir Patrick Dolland put out a statement like that, disturbing these people in their jobs? How can they be expected to run their business efficiently if they are having this cold war directed at them all the time? I hope that when the Parliamentary Secretary replies he will be able to reassure these people. Captain Barclay, for instance, has built up the highly valued ambulance service in the West of Scotland, and has been responsible for saving probably 800 lives during the years this service has been running. He knows the job from A to Z, far better than anyone else in the country, and has landed planes in extraordinarily difficult places, so that sick people could be taken away to hospital to be operated upon. It is scandalous that he should be cast out of his job in this way. [HON. MEMBERS: "That is nationalisation."] I have said enough, I think, to express my point perfectly clearly, and I hope it has gone home.

6.54 p.m.

Mr. Follick (Loughborough)

I listened very carefully to the hon. Member for Keighley (Mr. Ivor Thomas) and to the eulogies he paid to Air Vice-Marshal Bennett. I cannot in any way agree with anything that he said in that direction. I have just returned from a 20,000 miles journey to the Caribbean Sea. I have been in 12 different republics, and I have found that throughout those Republics, Air Vice-Marshal Bennett is blamed for a lot of the troubles from which B.S.A.A. are suffering.

I was on the Star Tiger only two voyages before its disappearance when crossing the Atlantic. My journey was one long series of mishaps. We were supposed to have started on Christmas Day, but we were told there was engine trouble and that we should start on the following day. On the 26th we were informed that the engine trouble had not been overcome and that a new engine was being fitted. On the 27th we had to wait two hours after starting time before we could take off, and, after being out for only 1½ hours, we had to return because of engine trouble. As hon. Members can imagine, the state of mind of the passengers was far from happy on account of these continuous disturbances. Even when we got to Lisbon there was further engine trouble. At Santa Maria, in the Azores, we had to remain overnight, and as we should be waiting a long time and did not know exactly when we should be taking off, a couple of us went to have a look at the aircraft. We found that the fuselage had been stripped; we were told that the air conditioning was not working, and that attempts were being made to repair it. Finally, we took off again and were making for Bermuda but, an account of strong head-winds, we could not make Bermuda so had to go on up to Gandar, which is 1,025 miles north of New York. At that time New York was experiencing its most bitter winter for 27 years, and, as Gandar is 1,025 miles north-east of New York, it will be understood how cold was that journey northward.

Sir William Darling (Edinburgh, South)

It was cold here, too.

Mr. Follick

The heating on the plane was not working and we had to suffer the intense cold of that journey on the Star Tiger. It was one mishap after another, one bad condition after another, and the person in charge—the Chief Executive of B.S.A.A.—was Air Vice-Marshal Bennett, so that, surely, he is primarily responsible for such troubles as these. I have no doubt that, when it disappeared, this machine had some of these troubles. That is a slight relation of the mishaps of this aeroplane on one journey, but in Nassau I was told by people at the hotel that on a previous journey, the same aircraft had been held up for five days. I cannot, of course, prove that, but I did hear it from passengers.

It has been stated in favour of Air Vice-Marshal Bennett that his Corporation made a profit whilst the other two Corporations made losses. But there are losses which are profitable and there are profits which are unprofitable. This profit made by the B.S.A.A., under Air Vice-Marshal Bennett, was certainly an unprofitable profit. It was made at the expense of the staff, the administration and safety. There were two stewardesses on board, and the head one told me that she received £4 10s. a week. I have heard since that it was £5 a week. The difference of 10s. may have been for Income Tax, but whatever it was, she stated she received £4 10s. per week, and she was the senior of the two. She was grumbling very much at such a small salary, and I think any person would grumble at it. For £4 10s. a week she had to know languages, first-aid, have a knowledge of cooking and some book-keeping, she had to serve drinks and meals, and attend to the passports, fill in forms, make out receipts and, on top of that, attend to 36 passengers. When we were night fly- ing, the stewardesses were up practically the whole night, and this was done on £4 10s. a week. Those are the sort of conditions which I call unprofitable profit, for you are making your profit at the expense of your staff.

Mr. Byers

Has the hon. Member checked those figures with the British South American Airways? Is it not a fact that the starting salary is £250 rising to £400, as against £300 starting salary at B.O.A.C. which I think goes up to £375?

Mr. Follick

I said it might have been £5 a week, but I will give the hon. Gentleman the figures paid to stewardesses by Pan-American—£11 10s. a week.

Sir Wavell Wakefield (St. Marylebone)

That is private enterprise.

Lieut.-Colonel Walter Elliot (Scottish Universities)

Give us some more of those figures.

Mr. Follick

If hon. Gentlemen opposite will allow me to continue, I will go on with my speech. Stewardesses of B.S.A.A. have to find their own uniforms and shoes and they need two sets of uniforms for tropical countries and cold ones. In Pan-American Airways these extra things are given to them. The women were suffering from extreme fright right through this journey; in fact one of the ladies passed out and had to have oxygen. Furthermore, one of the stewardesses said to me that she was afraid every time she did the journey on that plane. Her name was Miss Nicholls. I understand now that she has perished. It is not a laughing matter for £4 10s. a week.

During the journey I had the pleasure of a talk with the captain—Captain Reece. I have heard it said that I sent for Captain Reece. That is an unabashed lie; I did no such thing. Captain Reece, like all good captains on trips by 'plane, passed down the aisle and had a word with the passengers. As he came near me, he said he thought I had complaints to make about the trip. I said I had many complaints, and I invited him to sit down beside me as there was an empty place. He did so, and in our talk he mentioned that on the Bermuda line the captains do not get the bonus they get on the Gandar Line; that is to say, B.O.A.C. pay their captains on long distances £300 a year annual bonus. He said that the Bermuda trip is a harder and a longer trip, and they do not get it. Hon. Members will see where a profit can be unprofitable.

This is not a question of nationalisation or private enterprise, because there is no line in any part of America which has a better reputation than B.O.A.C. B.O.A.C. stands as high as Pan-American, as high as K.L.M. That is not the case with B.S.A.A. Captain Reece also explained to me that between London and Gandar there are five weatherships, but between the Azores and Bermuda there are no weatherships at all—another way of saving at the expense of safety.

Mr. Ivor Thomas

Whom does my hon. Friend blame for that fact?

Mr. Follick

The Chief Executive of B.S.A.A. Naturally, I blame Air Vice-Marshal Bennett.

Mr. Thomas

Surely my hon. Friend must know that is the responsibility of the International Civil Aviation Organisation?

Mr. Follick

As the hon. Member has been Parliamentary Secretary to the Ministry of Civil Aviation, I will not argue with him about it.

Mr. Byers

May I ask the hon. Member to withdraw his accusation? And if his other accusations are in line with it, I hope the country will take note of what he has said.

Mr. Follick

I do not know what I have to withdraw. I am making statements about declarations made to me.

Mr. Byers

Is the hon. Member suggesting that the Chief Executive of an air line is responsible for how many weather-ships there are? If so, may I ask him whether Pan-American or B.O.A.C. are responsible for the weatherships in the Atlantic?

Mr. Follick

I am not a technician, I am a layman, who has travelled by air to a great extent. It may interest the hon. Gentleman to know that as far back as 1910 I paid for a passage by air—a very short one of only five minutes, but I went up. Perhaps that was before he was born?

Mr. Byers

It was, five years.

Lieut.-Colonel Elliot

The hon. Member has made a very serious statement and has failed either to substantiate or withdraw it. He must do one or the other.

Mr. Follick

If I made a mistake, I withdraw willingly, but I would like to know what mistake I have made.

Mr. Byers

The hon. Member made a direct accusation that the lack of weatherships on the journey from the Azores to Bermuda was the responsibility of the Chief Executive of British South American Airways which, within the knowledge of every hon. Member of this House, is totally untrue.

Mr. Follick

If it is untrue, and if the Chief Executive of B.S.A.A. was not responsible, naturally I withdraw. I made the statement that I am not a technician. I do not know who is responsible, but I do know that Captain Reece told me there were no weatherships there.

Mr. Ivor Thomas

rose—

Mr. Follick

Let me continue. Hon. Members have all had a go.

Mr. Beswick

On a point of Order. The hon. Member is reporting private conversations. May I ask him whether he has the approval of this air line captain to make them?

Mr. Follick

Yes, I asked Captain Reece. I said I might be using the statements he was making later in the House, and he said I could do so.

Mr. Ivor Thomas

rose—

Mr. Follick

I cannot give way any more. The hon. Member had a long time when he was speaking. The importance of these weatherships may be gauged by the fact that all the 69 passengers of the "Bermuda Sky Queen" were rescued by the weathership "Bibb" on 14th October, 1947, and safely landed in Boston on the 19th October. I spoke to one of the survivors in Maracaibo, who told me that, without those weatherships, probably every passenger would have perished. If there had been similar weatherships—and I will not say that Air Vice-Marshal Bennett was responsible—on this route, then probably the passengers from "Star Tiger" might have been rescued as well, so it is just as well that we should take this into account, no matter who is responsible, and understand that such things are necessary in air travel.

I should also like to say something about B.S.A.A. passenger charges. The B.S.A.A. charges from Central America to Europe are very much higher than Pan-American Airways or K.L.M. In some cases they are as much as £25 higher. When I was in the British Club in Mexico City, I spoke to a Mr. Cockburn. He chose to go by an American company, because the return trip was £60 cheaper than the B.S.A.A. charge. I spoke to the manager of B.S.A.A. in Caracas, and he told me that four passengers who were going by B.S.A.A. to Copenhagen chose to go by K.L.M. when they heard that the difference in the fares was nearly £100. I do not know if Air Vice-Marshal Bennett is responsible for that, but it is something to do with B.S.A.A., and if B.S.A.A. want to compete with other companies, it is no good charging fares in excess of other countries. When Mr. Cockburn spoke to the manager of B.S.A.A. in Mexico about this difference of £60, he told him that they were going to put cinemas in the B.S.A.A. planes. The cinemas had not been put into the planes, but the £60 was still being charged. I do not know whether Air Vice-Marshal Bennett is responsible for these things, but I repeat that he was the chief executive officer.

Mr. Lindgren

I shall not have an opportunity to reply to every point raised in this Debate, but I should not like my hon. Friend's statements to go completely unchallenged, because they are completely false.

Mr. Follick

Mr. L. F. Martin in Mexico—

Mr. Beswick

Did the hon. Member go to the trouble of finding out whether there was not an international agreement in regard to the fares on these routes?

Mr. Follick

I can only say that that statement was made to me by the manager of B.S.A.A. who knows what he is talking about.

Mr. Emrys Roberts (Merioneth)

That is more than the hon. Member does.

Mr. Follick

We are talking about very tragic circumstances.

Earl Winterton (Horsham)

The Parliamentary Secretary has just said that the hon. Member has not spoken the truth. That is rather a serious charge for a Minister to bring against a Member of his own party. The hon. Member has not attempted to repudiate the very proper intervention which was made.

Mr. Follick

I admit that the noble Lord is right. If I said something wrong, it is quite right that the Minister should correct me, no matter to which party I belong. There was a case of a young girl by the name of Anna Williams. She was 14 years of age, and had to go from London to Mexico. The plane was delayed seven days, but no notification was given to her parents about what had happened to her. I spoke to Anna Williams when I was in Mexico, and she explained how they were delayed three times at various stages on the route. These are all the details I can give about B.S.A.A. I should not like to say, in view of the opposition there has been, that these statements are absolutely 100 per cent. correct. [HON. MEMBERS: "Hear, hear."] They are statements which have been made to me, and I have quoted the names of the people who have made them. In addition to what I have said, I would point out that the cousins of the hon. Member for Oxford (Mr. Hogg) were on the plane with me. I spoke to him last night by telephone, and he told me that he had received a letter from his cousins quoting very serious circumstances on the trip. The hon. Member for Rugby (Mr. W. J. Brown) has also received a letter from passengers who went to Nassau. They also state that the circumstances of the voyage were indeed disastrous. I am not only giving my own words, but we have them substantiated by a Member of the Opposition and by an Independent Member.

For all these reasons, I cannot agree with the eulogies which have been handed out by the hon. Member for Keighley (Mr. Ivor Thomas) to Air Vice-Marshal Bennett. If he was not responsible for these things, and if he could not give safety for his passengers—and weatherships mean safety—he could have resigned rather than continue under such conditions. After all, it is not a profit to grind down wages and bonuses to show a profit. I say that it is really not worth while to praise Air Vice-Marshal Bennett.

Mr. Ivor Thomas

The hon. Member has made most serious charges. Is he prepared to repeat these charges outside the House, where he is not protected by privilege?

Mr. Follick

I have made these charges, and they can be read in HANSARD.

7.19 p.m.

Mr. Frank Byers (Dorset, Northern)

I had no intention of intervening in this Debate at any great length, but for the speech made by the hon. Member for Loughborough (Mr. Follick). I hope that the country will realise the amount of feeling which was generated by his speech. The one thing the House of Commons stands for above all else is fair play and lack of misrepresentation. I am exceedingly grateful to the Parliamentary Secretary for the courageous intervention he made. Up to that moment I thought that a remark I overheard might be true, namely, that this was good stuff for the North Croydon by-election.

Mr. Follick

When I landed on Monday last, f did not know anything about the North Croydon by-election. I immediately went to the Speaker's office to put down this Question for an Adjournment Debate. I did not even know there was to be this Debate. If the hon. Member cares to go along to the Speaker's office, he will see that last Monday I put down this subject for an Adjournment Debate.

Mr. Byers

It appears that the hon. Member was as well informed about the by-election as he was about his facts. I doubt whether anyone can help him further. It seems to me to be a shocking thing that an hon. Member can get up in the House of Commons and make accusations of the most disgraceful type, without any attempt, on his own showing, to check their accuracy, and that he can blacken a man's character by holding him responsible for the lack of weatherships, when even reference to the House of Commons Library will show that no executive was responsible for the number of these ships.

Mr. Follick

I admitted that I did not know who was responsible for the weather-ships. I admit it again. I do not know who is responsible for the weatherships; but I say that the weatherships are good for safety.

Mr. Byers

That proves my point. The hon. Gentleman—he will see it in HANSARD tomorrow—has no right to throw out an accusation against a Chief Executive for failure to provide weather-ships, if he has not taken the trouble to find out who is the responsible authority. I, personally, consider that is scandalous behaviour.

Mr. Follick

On a point of Order. Did I not withdraw that statement, and did I not say that I did not know who was responsible for the weatherships? I again repeat that weatherships are good for safety.

Mr. Byers

Further to the point of Order. May I ask the hon. Gentleman if he will withdraw the other accusations which he made on the same lines?

Mr. Ward

I raised certain questions in the House a week ago regarding the safety of B.S.A.A., but I would like to associate myself with the remarks just made by the hon. Member for North Dorset (Mr. Byers), and dissociate myself completely from any remarks made by the hon. Member for Loughborough (Mr. Follick).

The Temporary Chairman (Mr. Butcher)

I thought the hon. Member was rising on a point of Order. The hon. Member for Loughborough (Mr. Follick) has had an opportunity of withdrawing. Whether he chooses to take that opportunity is not a matter for the Chair. It is purely his own concern. That does not raise a point of Order.

Mr. Byers

I will not pursue that point. The hon. Gentleman made another accusation which has nothing to do with party politics, but it may have very serious repercussions for British civil aviation throughout the world, namely, that B.S.A.A. were charging higher rates than they are permitted to charge under the international agreement. This is a much more important matter, and I hope the Minister will deny that statement, because if it gets into the American Press and elsewhere the hon. Gentleman's irresponsible attitude will start something from which this country will suffer.

Mr. Follick

I did not say that. I said that was a statement made to me.

Mr. Byers

I am not anxious to detain the Committee. All I am saying is that I think the hon. Gentleman's whole speech amounted to Parliamentary tittle-tattle and was a disgraceful performance—I should say the most disgraceful performance I have ever heard in the House. I hope he will have the courage to repeat outside where he will not be covered by Privilege the remarks he made in the Committee; but I do not believe that he will. I do not propose to say any more on that matter.

I want to say a few words about civil aviation in general. I do not think that anyone can face with complacency the situation that exists in civil aviation today. While we have financial losses and administrative machinery which appears to be extremely clumsy and uneconomic, let us not forget that we have—and this is one of the reasons I dislike the remarks that have been made—in British civil aviation some first-class pilots, aircrews, and maintenance staff. I have flown a good deal about the world, in war and in peace, and I believe that they are better than those that any other nation has produced. I do not believe it is the people who are wrong; I believe it is the system that is wrong. I agree with other hon. Members who have asked the Minister to resist the suggestion that there should be only one Corporation. I suggest that is the wrong way to approach this matter. To find out what is wrong with the system at the moment is not so difficult as it may appear at first sight, because we have had a spate of inquiries and reports on this matter.

I would like to add my few words to what has been said about the ordering of aircraft. I believe this is one of the most important factors which can, and should, be put right straight away. One of the reports—I think it was the British South American Airways report, and there were similar words in the report of the Select Committee on Estimates—said that the present system of ordering aircraft through the Ministry of Supply is entirely contrary to the interests of the Corporations, for it imposes a third party between the user and the manufacturer, causing delays and misunderstandings; it takes control from the Corporations and it leaves them with responsibility; it adds to the cost of aircraft, as the manufacturer's price is loaded with departmental overheads; again, under the present system the Corporations have no control over prices, are subject to the Ministry of Supply for priority of deliveries, and subject to very considerable interference so to design.

I was glad to hear the Minister of Supply say that a committee had been appointed. I suggest that is a matter of great urgency. I have a feeling that in the Ministry of Supply and in the Ministry of Civil Aviation people have got into the habit of thinking that because we cannot do very much in three to five years, it does not matter whether we do anything in the next three months. If we can get this system right quickly, I believe it will have a very great effect on British civil aviation and the possibility of its competing. This matter is not peculiar to civil aviation. The interposing of the Ministry of Supply as an organisation between a Government Department and manufacturers is common to many different parts of industry. It is overloading private enterprise in other fields with similar heavy Departmental overhead costs. I am glad to see that a committee has been appointed so far as civil aviation is concerned.

The present system of ordering aircraft is a clumsy system, and I suggest that the Minister of Supply or the Minister of Civil Aviation must accept the responsibility for giving the drive, leadership and enterprise required to get things working. The Courtney Committee's report was a pretty sad reflection on either the Minister of Supply at the time, or the Minister of Civil Aviation at the time, or on both, because there was an opportunity for someone to come in and cut the red tape—for someone to say, "Come along, we are going to get moving on this." Apparently, so far as the Courtney Committee's report sets out those things, there was not that desire for effective leadership. Although people could have taken the leadership, no one bothered to do so. I hope that will be put right now, and that someone will take a grip of this problem, and, until the system is changed, see that things are driven through. It is not just luck that British South American Airways made a profit, nor do I believe what the hon. Member for Loughborough said about the unprofitable nature of the profits. I have checked the facts. I discovered that a stewardess in B.S.A.A. starts at £250 a year and rises to £400 a year.

Mr. Follick

I said that she was receiving £4 10s. a week, which might have been £5 on account of the difference in Income Tax.

Mr. Byers

I suggest that a comparison with Pan-American Airways is absurd. One might as well say that a domestic servant gets £2 a week in this country and £8 in America.

Mr. Follick

Four pounds ten shillings or £5 is ridiculously low for such service.

Mr. Byers

I would not deny that for a moment, but I doubt whether that is correct. I think that it is in line with the rest of the statements of the hon. Gentleman. I suggest that before he makes a statement like that, he should check it.

Mr. Rankin

On a point of Order. Is this a private argument or can anybody join in?

The Temporary Chairman

I was about to say that the hon. Member for North Dorset (Mr. Byers) should be allowed to continue with his speech without interruption.

Mr. Byers

I will try to keep off the hon. Member for Loughborough. I want to put this to the Minister: I suggest that it was not luck that British South American Airways operated at a profit. The spirit behind that concern was one which should be welcomed in British civil aviation. There may be specific points of criticism, but the general spirit typified by this concern has been favourably commented upon by practically all quarters of the Press in every quarter of the country until just recently. "The Economist" said in regard to opportunities: Indeed, in its short career it seems to have missed few. Its drive and initiative in pressing the Tudor IV's into service, for example, received favourable comment from the Courtney Committee, and, in a different sphere of activity, the announcement that some scheme is being considered to foster amongst the staff a sense of"—

Mr. Follick

rose—

Mr. Byers

I did not start this one.

Mr. Follick

It is perfectly true that the staff are very loyal.

Mr. Byers

I hope the hon. Member will not make any more interjections like that, because it is extremely embarrassing to my veracity if I am supported by him. "The Economist" further stated: In a different sphere of activity, the announcement that some scheme is being considered to foster amongst the staff a sense of responsibility and partnership like that provided by incentive bonus schemes in industry is very interesting. That is why I dislike this mud-slinging coming from the hon. Member for Loughborough. There must be a place in British civil aviation for a Corporation which has got that spirit. I am sure that B.O.A.C. and B.E.A.C. will agree with that. That is the spirit we want to create.

I am not going to say much about B.O.A.C. and B.E.A.C. I agree that this question of landing charges and the petrol tax ought to be looked into. I can see the tremendous difficulties B.O.A.C. is working under through having uneconomic types of aircraft. I am not qualified to make a comparison between the Corporations, but I believe that what we have to do is to make sure that we are getting the spirit of enterprise within the Corporations. It is unfortunate that the Chief Executive should be sacked from that Corporation which showed the maximum amount of enterprise, for we do not want to put it out that in British civil aviation only "yes" men must apply for a job. There must be places in those Corporations for a chap who can show drive, initiative and enterprise. If we do not want to accommodate such people in our civil aviation, there is something wrong with that civil aviation.

I should like to say a word about private enterprise. We on these benches have always held the view that there should be a nationalised civil aviation scheme, and we supported the Government when they introduced the Bill setting up these Corporations. However, there should be a place for private enterprise competing with it, and we have always held that view, too. B.O.A.C. and B.E.A.C. are operating on certain routes which are completely uneconomic. The more persons we get travelling on them, the greater the loss. Is that not an argument for saying that, if a private company comes along and says "We will run it for profit," the Government should say with dignity, "Right; do it for us"? I do not see why there should be any rigidity about this. Because we have uneconomic types of aircraft we may be carrying tremendous overheads and so on. If a company comes along and says, "We will do the job for you at our own risk," I feel we ought to be prepared to say to them, "More power to your elbow. Come along and do it." I believe that is the spirit which we want to see in British civil aviation.

7.35 p.m.

Group-Captain Wilcock (Derby)

I am sure hon. Members are glad that we have got back to a discussion on civil aviation. We do not want to compare Corporations one with another, and it is known in this House and everywhere in this country that any British airline is as good as any other in the world, be it American or anything else. In the few moments at my disposal I do not intend to criticise in detail the losses of the Corporations, large as they may be, because no one who is connected with the operation of aircraft—and I freely reveal my close association as an operator—can expect the Corporations to run at other than a loss because of obsolescent and sometimes military aircraft, and because they have to run on routes which are not business propositions but have to be kept open in the public interest.

I do not think it is quite fair to point to the charter companies as examples—and I say this against myself—because the charter companies have certain advantages. We can decline business if it does not look profitable, but the Corporations must carry on with their scheduled services. We have heard Members say in the House that on an aircraft capable of carrying 20 people, there was only one passenger. That route has to be kept open, and, therefore, the aircraft was run at a loss. I am very sorry that my hon. Friend the Member for Loughborough (Mr. Follick) introduced this question of the technical difficulties that were experienced by certain aircraft, particularly the Tudor. As hon. Members know, it is easy to arrive at a wrong conclusion through a small delay or what one might call a small failure. That does not mean that the aircraft is unsafe or inefficient. It is the reverse. It is for safety that the aircraft is grounded. The hon. Member for Loughborough drew the wrong conclusion from that. I should like to put it on record that what he concluded is not the case at all.

The work of the three Corporations to my mind has been magnificent and those who have compared them unfavourably with foreign operators do so purely from prejudice. Still, there is ground for criticism. They have been extravagant in certain directions and there has been duplication and, in fact, triplication. When we were discussing the Civil Aviation Bill in the House in 1946 I felt that with three Corporations there was a great danger of having very large overheads and duplication of manpower and money. I do not feel that we can blame the Corporations for that. We shall have to blame ourselves. We must blame the Government, for one of the underlying principles of the scheme at the time was to create competition between the Corporations and so measure their efficiency by comparison. We would do well to recognise that in that we were making a mistake. We do not want competition between the British Overseas Airways Corporation, the British European Airways Corporation and the British South American Airways Corporation. One would not buy a ticket on British European Airways to go to South Africa because they do not go to South Africa, nor buy a ticket on British South American Airways to go to Europe. What we want is competition between British airlines and foreign airlines. There is no need for a competition between ourselves as Corporations.

I feel that the present organisation shows a weakness. As far as training, publicity, catering and buying are concerned, I see no reason why there should not be a centralised authority. It has been mentioned by hon. Members today that eventually there is to be one Corporation. The logical solution is rather one central authority over all three Corporations. I believe that this is right for now, although I am beginning to think that in principle one Corporation might be the right thing. However, we ought not to disturb civil aviation more than necessary at the moment. I am sure we all wish to keep politics out of aviation and give it a chance. That sentiment has been expressed before today, and I subscribe to it.

Civil aviation at the moment is sick, and it is just as well for us to recognise it. My view is that the trouble in civil aviation is right at the very top. There is too much decentralisation. We have the Ministry of Civil Aviation, the Minis- try of Supply, the Air Registration Board, Corporations and I do not know what else. There is no single co-ordinating authority, and until there is we shall not have efficiency. The present aircraft situation is a direct result of that state of affairs. It is a direct result of having no central planning and executive body. The same thing is responsible for the lack of confidence among charter operators whose future is so very uncertain, among aero clubs and in the aircraft industry itself.

In fact, in all directions there is great anxiety which can be removed only by the powers of co-ordination being vested in one Minister. He should be the Minister of Civil Aviation. That must be his job, and these responsibilities should be put fairly and squarely on his shoulders. My suggestion is that the Government should now investigate the whole position, not only in relation to the ordering of aircraft—that is a very valuable part, but only one part—but they should investigate the structure of civil aviation and ascertain whether it would not be right and proper to centralise and co-ordinate these matters under one Minister now, at once.

I would like to mention the question of finance in civil aviation. Development and reconstruction are a very costly business. Strange as it may seem, the wartime aerodrome is not much good for civil aviation. It is usually in the wrong place, the buildings are of a war-time type, they are built on the dispersal plan in case of bombing, and, therefore, they are costly to maintain, and so on. All these things are expensive to rectify, and unfortunately there is not enough money allocated to put them right. In exactly the same way, there are not enough funds available for proper safety devices to be installed and for adequate meteorological services to be instituted.

So far as the Corporations are concerned, it must be recognised, as has already been said—there are so many aspects of civil aviation on which we all agree—that certain routes will not and cannot pay. If they are to be operated, in the public interest we must accept the loss; losses must not be met with surprise and with rather artificial indignation such as was expressed by the hon. Member for Mid-Bedford (Mr. Lennox-Boyd). The services of the three Corporations should be co-ordinated, particularly training. My hon. Friend the Member for Uxbridge (Mr. Beswick) was right when he spoke about the two training establishments, one for B.O.A.C. and one for B.E.A.C. That is quite unnecessary, because there is no black magic in training; it could be done at one establishment.

The question of the handling of passengers raises in my mind the vexed question of Heathrow. We have heard from the Minister of Supply how good Heathrow is, and how perfect are its traffic arrangements. I do not subscribe to that view. I think that the facilities for the handling of the passengers are far from satisfactory at Heathrow, which is our great capital air terminus. In addition, there is considerable chaos at the centre in London where passengers are received and sent off. I wish to make a suggestion for the serious consideration of the Parliamentary Secretary. We should now press for a central building in London where passengers can be handled. I would like to suggest that the Victoria and Albert Museum should be used for that purpose. It is in a very good position; I do not know what it houses at the moment, but it is not very well patronised. The time has come when we should use this large, handsome and useful building which is in exactly the right position for a more useful purpose.

Air-Commodore Harvey

What about Transport House?

Group-Captain Wilcock

I now wish to say a word or two about the aircraft position, because that is the most difficult question which the Corporations have to face. I do not propose to explore the matter in detail, because it has been very well covered today. His Majesty's Government must come to an immediate decision on aircraft. Those of us who are concerned with aircraft operation are convinced that eventually British aircraft will be the best to operate in the world, although they are not so at the moment. They are not profitable to operate today.

Therefore, the Government have two things to do. They must decide which are the best British aircraft, and give proper, firm orders for them; and they must also decide on a short-term policy of what to use today. What we must do today is buy, I am afraid, American or Canadian aircraft. We know that the D.C.4 — the Skymaster — with Merlin engines has been offered by the Canadians, and it is a very good aircraft. It has been offered on certain terms, and perhaps the Government can afford to take it. I do not think it is as good as the American D.C.4, because it has not got the same performance. I may be wrong, but I understand that Can-Air is owned mainly by American capital, so that I cannot see that we should gain very much by buying the Canadian type in preference to the more effective American type. We should probably get the same conditions by buying the American type. I may be wrong, but I think that is so. There is also the possibility that the Corporations could obtain Skymasters in this country today. In fact, I know that D.C.4s have been offered that are now in this country, which would avoid dollar expenditure. I do not know what the Government are going to do about it, and perhaps the Minister will tell us in his reply.

We are left with the problem of the Tudor, and I wish to make one suggestion. If the Air Registration Board are prepared to issue a licence for this aircraft, as I believe they are—I do not know whether it is a provisional licence or not—then I suggest it be used as a freighter. It is time somebody made up his mind about this aircraft. It would not require much in modification to make it suitable for freight, and it might be a very wise move. I presume they have been bought and paid for by the Government. Yet there they sit, 60 or 70 of them, deteriorating. I am aware that only one licence is issued covering both freight and passenger carrying, but I believe that by arrangement the aircraft could be used for carrying freight and loaned to the charter companies on generous terms. This would help the economic drive. There are very valuable aircraft deteriorating, and I put forward that suggestion for the consideration of the Government. It is at least a contribution to the general confusion on this matter.

In mentioning the charter companies, I suggest that the policy of charter work should be revised. I have always been against the Corporations undertaking charter work, and I have said so publicly many times. That is the right and proper sphere for the individualist, whether it be an individual company or an individual person. The charter companies have done a lot for the Corporations in the last two years. It must also be said that great assistance has been given to the charter companies by the Corporations and by the Minister, but there are two very disturbing factors. There is no security at all for charter operators; I am speaking of the smaller ones in particular. They are doing their best, and they are going through a difficult time, and there is no security. A Corporation has the right at any moment to start a charter service on exactly the same route used by a charter operator. The Corporations could well keep out of that sphere of operation altogether.

Air-Commodore Harvey

Does the hon. and gallant Gentleman remember that during the Committee stage of the Civil Aviation Bill the then Parliamentary Secretary assured us that the Corporations would not go in for charter work—which has not been the case?

Group-Captain Wilcock

I think the hon. and gallant Gentleman is quite right, but I think it would be fair to say that the Corporations have not entered into charter work in a big way. I do not believe they have embarrassed the charter companies, but these companies fear that the Corporations may find that they will have to branch out into charter work if they cannot make their regular scheduled services pay. I must agree with what has been said about landing fees. They are extremely heavy. If a Dakota goes from here to Egypt, and lands once and returns, £230 has to be paid out for landing fees and handling passengers. If it is a four-engined aircraft the amount is £330. Such fees are crippling to the operator, and I am sure that the Minister has no wish to cripple operators. These things do not seem to be known, and are making conditions very difficult for the charter companies.

I would like to say a word or two about air clubs, a subject in which I am personally interested. In this matter, we are in a very sad plight indeed. There are not many air clubs in the country—I think it is about 30, and the Whitney Straight Committee said we ought to have 100. Air clubs can hardly exist as things are today. They are a real asset to this country. It is not a question of dollars; it is a question of sterling. We ought to encourage people to buy small British light aircraft. It also helps the aircraft industry. We should give the air clubs a subsidy, and also take off the tax on petrol. It would help to keep them alive over a difficult period.

I ask the Government to consider the whole question of civil aviation in an entirely new light, not as another means of transport, but possibly as a solution in part to our economic problems. As yet, we have not begun to use the air for the carriage of freight, and the markets of the world are within but a few hours of this island. As the Minister and the Chancellor of the Exchequer know, goods in transit is money laying idle. By air, we can move goods quickly, and I wish the Government would give a lead and encouragement to manufacturers of goods and distributors in this matter. In my view, civil aviation must be the backbone of our national defence. Civil aviation is something in which we, as a highly technical and engineering people, excel. We are territorially well placed, on the edge of Europe, and the nearest land to the Americas, and we have many advantages.

I appeal to the Government to be bold and unafraid. It is not the Minister, or the Parliamentary Secretary, or the Corporations who are failing; it is the Cabinet, who are not sufficiently recognising the importance of aviation. £100 million would be the right amount to allocate to civil aviation today. If that were done, we could train more personnel and extend our routes. This money would be used in our own country and in the Colonies. The question of dollars does not arise. I hope that the Government, who have already introduced great Measures, will take the opportunity of putting this country in the van of civil aviation—I nearly said "civilisation," but if I had done so I do not think I should have been far wrong, as civil aviation, in my view, is the answer to many problems of civilisation. We must see to it that British civil aviation occupies as important a place as merchant shipping did in the last century.

7.55 p.m.

Mr. Roland Robinson (Blackpool, South)

I have listened with great care to all the speeches which have been made so far today, and I have especially enjoyed the reasoned contribution which has just been made by the hon. and gallant Member for Derby (Group-Captain Wilcock) following, as it did, so soon after the heat engendered by the hon. Member for Loughborough (Mr. Follick). I do not propose to go into the charges against Air Vice-Marshal Bennett in any way whatsoever, except to say that from the way they were delivered it seemed to me that the charges were made with a sense of complete irresponsibility. It was obvious that the hon. Member for Loughborough had no support on any side of the Committee for the manner in which he made those charges. I would protest at one thing he did, when he tried to associate the hon. Member for Rugby (Mr. W. J. Brown) and my hon. Friend the Member for Oxford (Mr. Hogg) with himself in making those charges. It may be that the same tittle-tattle which had been heard by the hon. Member was also made to the hon. Member for Rugby and my hon. Friend the Member for Oxford, but instead of coming here and, without careful investigation, repeating them, they stayed away from the Debate and thereby saw fit not to repeat what had been said to them.

I listened with a great deal of interest to the hon. Member for Keighley (Mr. Ivor Thomas), who was Parliamentary Secretary to the Ministry of Civil Aviation at the birth of the three nationalised Corporations. We cannot but have [...] great deal of sympathy with the hon. Member in his position. As he pointed out, at the time of the birth he had great hopes of the three children who would be coming into the world of civil aviation. It is now clear that, as they are growing up, the hon. Member is much more disappointed than he ever thought he would have been, and I felt that he would have liked to apply, if he could, the birch rod to the whole lot. His charges and criticisms were very wide, and I do not intend to follow him in detail. It was, perhaps, fortunate that the Chancellor of the Exchequer was not here to hear the hon. Member say that it would be wise to raise fares, as I understand that it is the policy of the Government now to stabilise and control prices in all directions and spheres.

The hon. Member pointed out that, in his opinion, the carrying of the flag of civil air lines was creating prestige for the Socialist Government. On this side of the Committee we believe as do many people in the country that the Government have no prestige at all; so far as we approach the question of civil aviation we consider prestige solely from the point of view of the nation and British civil aviation. That is why, in our criticisms from this side, we are doing our best to help to put right a number of mistakes which have been made, and show how improvements can be made. We wish the greatest success to the three Corporations. All who come into contact with them appreciate the courtesy of their staffs, and I myself would like to pay a high tribute to the energy and efficiency of their ground crews and air crews. I agreed with the Minister of Supply when he spoke of the efficiency of the work of B.O.A.C. at Heathrow. When I have gone through there I have met with speed and efficiency not only from the officers of the Corporations, but from the Customs, health and immigration services as well. I have heard many favourable criticisms about this from foreigners coming into this country.

The B.O.A.C. medical services too are good. Recently, I had to go to India and it was necessary to have various inoculations and vaccinations. Some of the vaccines which have to be used are not easily available to the ordinary medical practitioner, who may take 24 to 48 hours to get them. But B.O.A.C. are providing this service. I am sure that many Members do not realise that anyone travelling abroad can go to the Corporation and get all his medical requirements easily, speedily, and efficiently fulfilled by an excellent doctor and a charming nurse at 10s. 6d. a stab. That is a very useful ancillary activity engaged in by the Corporation.

We want to support these Corporations. I feel that during the past two years it has not been as easy as it could have been for people to fly. That position arises out of the priority system, which has been protested against vigorously by the B.E.A.C. That Corporation has complained that the system involved them in the loss of some £26,000. I do not know whether the Minister realises that it is common ground that if one wants to travel to certain parts of the world from London it is much easier to go by American or some other foreign airlines because seats have been held in the British planes on priority reservations. The Minister should try to help the Corporation by sweeping away this system, which is now a meaningless restriction since people can get their seats with other companies.

The general question which we have to consider is how the job has been done during the past few years. We agree with the necessity of using British aircraft and with the wisdom of showing the flag. We have to ask ourselves whether the price of the development of British civil aviation is as low as it could have been, compatibly with the needs of the nation and with the general efficiency of the Corporations. The hon. Member for Keighley said that when the Government introduced the Civil Aviation Bill he hoped that the losses would be far less than £10 million, instead of which the losses have exceeded that figure. We hoped that that figure was an upper limit which would never be reached. We certainly did not think it was a target which the Minister could exceed if he wished to do so.

This idea of targets seems attractive to the Government. There was a target in coal, in order to achieve which the Government made the year to consist of 53 weeks. Much ingenuity was used in this matter, but luck has been on the side of the Government in civil aviation. The reports do not cover the full year's operations of all three Corporations, for the Government have been spared the losses of some four months on British European Airways. We want to save more of the losses by increasing the efficiency of our air lines. I have read carefully the reports of all three Corporations, and the Courtney report as well, and one point seemed abundantly clear in them. It is that the greatest help which could be given to the Corporations is to allow them to buy their own aircraft and their own spares.

We have heard in this House a good many times from Ministers of nationalised industries, except in this one case, that they must be free to manage their own concerns. The Coal Board looks after the buying of the equipment for the coal mines. The gas, electricity and railway industries are also to do their own buying and will be free of many of the shackles which the Ministry of Supply imposes upon civil aviation. Why cannot we allow the same freedom to civil aviation as to other nationalised industries? Why cannot the Ministry of Supply have only the same moderate influence in civil aviation as they have in the other industrial corporations?

Wing-Commander Millington (Chelmsford)

Is not the hon. Member aware of the function of the Ministry of Supply, particularly in relation to the buying of mining equipment for the coal industry?

Mr. Robinson

I am aware of the function of the Ministry of Supply, but the burden of my argument was that the operations of that Ministry should be cut down so as to let the practical men who are doing the actual work look after their own interests. I am aware that the Ministry of Supply, for various reasons of national importance, carry out a certain amount of co-ordination which is very helpful, but I say that they have far too large a finger in the pie in regard to civil aviation. In this matter I am not giving only my own views. From reading the reports it is obvious to me that that is also the unanimous opinion of all three Corporations. Because we have that trouble, the Minister's predecessor set up a committee to examine the matter. Again, from reading the report and studying the recommendations it is obvious that many of the difficulties could have been obviated if responsibility had been on the Corporation as buyers and on the aircraft manufacturers as sellers of planes and spares. It is also clear from the Courtney report that if there had been two parties on the Tudor negotiations, each of them reasonable and with full responsibility in its own sphere, the job would have been done much more easily.

It is the unanimous view of all Corporations, and it is not in any way a party view. Lord Kershaw, one of the Socialist appointees to the Board, has made the very same point in a speech. If the Minister of Civil Aviation will not listen to us on this point I hope that he will at least listen to the plea of his own friends and supporters who are intimately involved in the industry. The opinion seems to be unanimous. In face of that, the Government tell us that they have decided to call into consultation a few men of wide business and administrative experience to assist them in reviewing the position. The names of these people were withheld until today, and now the Minister of Supply tells us who the big three are. I was interested to learn that one of the names was that of Mr. George Wansbrough. Why do the Government have to put him on to a committee to find out how he feels about matters? His views are in the Courtney report, which he signed. They make it clear that one of the reasons for the trouble and the delay has been the intervention of the Ministry of Supply. Why do the Government have to ask him a second time?

It is clear that the Minister of Supply does not appreciate what I am saying, but although he is not looking in my direction I am sure that there is a better response in the heart and head of the Parliamentary Secretary to the Ministry of Civil Aviation. In view of the unanimity of opinion, do we have to have still one more committee of three? Are the Government searching for some "Yes-men" to tell them to go on, and to give them the soft and soothing balm of acquiesence in what they have done? Or have they chosen these people as three wise men to find a formula in order to save the Government's face and to enable them to get out of the difficulty before they break the backs of the taxpayers and the hearts of the people who are working in civil aviation?

The Ministry of Supply have not been successful. The system, after three years of peace, is not giving us what we want in civil aviation. We are very little nearer to the solution than we were a long time ago. We have had the complaints of the B.O.A C. about the multiplicity of aircraft types. They have nine different types of aircraft among their 175 planes. They have made it plain that, for efficiency and economical operation, an airline needs to standardise and fly aircraft of not more than two or three main types. I agree with that opinion, and it should be very strongly stressed in this Committee.

I am sure that the general public, and perhaps even many Members of this Committee, do not realise the tremendous costs which are involved in having a great diversity of types of aeroplanes. It involves the multiple training of air and ground crews, an immense cost in conversion courses for the crews and larger administration maintenance staffs. My hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey) referred to the costly decision to use the J.U.52's. I do not know who was responsible for that decision but it seems to show a great lack of foresight by someone who was sitting in his office and saying, "We have 25 planes which we have captured from the Germans. Let us go ahead and use them." That decision took no account of the uneconomical running of the aircraft, of the training of crews, or the costs of conversion, as well as of the trouble of getting spares. Sometimes something which seems to be a bargain turns out at first to cost much more than one imagines.

There is obviously a gap in producing the aircraft we need. I would like the Minister to give some further consideration to the question of taking the D.C. 4M aircraft from Canada. It is a partially British proposition. It has an American airframe put together in Canada and uses Rolls-Royce Merlin engine. Though we may not be able to carry an all-British aircraft all over the world, we can show people the finest engines in the world and demonstrate how well they can work in other airframes. That may stimulate the export of our aircraft engines.

I was a little surprised at the rather careless way in which the Minister treated the matter when answering questions by the hon. Member for Mid-Bedford (Mr. Lennox-Boyd). He brought in as his defence that it was a matter which would involve dollars. It is a question of "pay as you earn." At least one-sixth of the cost is covered by the engine and we would not be immediately out of pocket in dollars. He was asked whether the matter had been put to the Chancellor of the Exchequer. When a proposition like that is on the cards, it ought to be reviewed by the Treasury because it might be a practical possibility. The Minister of Supply said that he had read about the matter in the papers and could not say. This question of the use of these aircraft is of far more interest than the mere subject of a passing conversation over the Minister's breakfast table.

The hon. Member for Uxbridge (Mr. Beswick) raised the subject of the standardisation of training. It seems to me, as it seemed to him, that in their training the three Corporations must have a tremendous amount in common. I had hoped, as he had, that in airways training at Aldermaston we would have the three Corporations pooling their facilities in order to provide training at an economical cost to all. We found that B.S.A.A.C. were not there. I believe they ought to be. They ought to join in in the common training with the other Corporations. It was a matter of further regret when we heard that B.O.A.C. instead of working together in partnership with B.E.A.C. had pulled out so as to do their own training. Everyone who comes away from that school makes the administrative cost of the school very much higher for those who remain. If B.O.A.C. left because it was a bit expensive, they may save just a little, but at the same time they are putting a tremendous amount more expense on B.E.A.C.

It may be that the training cost £1 million, but the proper training of our aircrews is recognised to be an expensive matter and it is necessary in the interests of the general safety of the public. It may be that during the period in question the training cost more than it would have done otherwise owing to the tremendous influx of pilots into the Corporations. We should ask ourselves whether the Corporations expanded too rapidly. It has been said that they recently fired 86 of their pilots. Perhaps the Parliamentary Secretary will consider that question when he replies. I see no objection to the whole amount being put in the one year because fresh sums will be spent on training in each of the succeeding years, even though they may not be as high as the sum of £ million for the year in question.

I reinforce my hon. Friends in their protest against the continued imposition of the duty on the petrol used in civil aviation. It is entirely unnecessary. If the Ministers concerned had the interests of their industry at heart, they would stand up to the Chancellor, fight for their industry and beat him down till they got it. The Chancellor would not lose very much money. We have heard that in his view there is a very good cash surplus on the Budget. The Exchequer could afford to make the small sacrifice involved. On the one hand the Government are accepting the money in petrol duty from B.E.A.C. and on the other they are paying money back to meet the deficit which has piled up.

As to general operation, it would help a great deal if we could get ourselves more in the frame of mind that our long distance trunk routes across the world from this country to, say, India should be treated as express routes and that the journey should be done with longer and quicker hops. As an example, let us take the flight between London and Karachi in Pakistan. That flight is made by Pan-American Airways with the landing in Karachi as the third stop. B.O.A.C. have their landing in Karachi as the sixth stop and take eight hours longer to do the same journey. I cannot see why it should be necessary for B.O.A.C. to make stops at stations like Bordeaux on the way out. We are running a main trunk airline across the world and in order to compete with other countries we must be as speedy and as efficient as they are.

I recommend a little more co-ordination in the home routes. I do not want to make local points, but before the war there was a service between London and Blackpool which I used. After the war the Fees Office told me that the service between London and Blackpool had been reopened. I was astonished when I had a look at it. I discovered that one flew to Manchester and then found that the connecting plane to Blackpool had left 10 minutes earlier and that one had to wait over-night for one's connection. It was therefore an utterly impossible journey taking something like 24 hours instead of the two hours in which it should have been done in the normal way.

Questions have been raised about personnel. We should give the Corporations all the personnel they want to do the job properly, but a certain amount of cutting down should be done. I saw one example. It is only a small one, but these faults probably occur all along the line. I was in Karachi about two weeks ago. B.O.A.C. have a dozen or 14 planes a week passing through that station. They maintain an office out at the airport, which is right and proper. They also have a very good office in the town opposite the Palace Hotel. That office may be a little bigger than the traffic warrants, but it is a first-class advertisement and a very good show window. Across the road from that office they maintain another one in the Palace hotel. Why should they require two offices when passengers could quite easily walk across the road from their first office and have their baggage checked or do whatever they wanted to do?

We support the policy of showing the flag, but I do not think that it is vitally necessary for the flag to be shown by one of the Corporations in preference to any other British operator. I cannot see any sense in what was done in West Africa where, in order to prevent a British private company showing the flag, we pushed them out and put in an uneconomic service which has a loss of some £10,000 a week. Another example is in connection with the projected service to Northern Ireland. Why cannot we allow an air charter company to run a scheduled service there, provided they do not compete with the Corporation and take the cream of the business? It is within the power of the Corporation to shut out any private companies whenever they wish to do so. We wish the Corporations well and will assist them to improve their position and help the Government with advice in order to make the Corporations operate more efficiently.

8.20 p.m.

Mr. Frederick Willey (Sunderland)

I have endeavoured to catch your eye, Mr. Beaumont, with some trepidation because I am not an expert, I have no tendentious travel tales and, as I am going to Croydon tomorrow night, I have no desire to fight the Croydon by-election in this Committee. In fact I intervene only because I was privileged to be a member of the Select Committee which reported on civil aviation last August, and there are one or two points to which I think I can profitably call the attention of this Committee.

The thing that strikes the impartial, inexpert observer before anything else is that we cannot deal with civil aviation in isolation; we cannot disregard the fact that the aircraft industry was concentrated entirely upon war purposes during the war; that this country has repeated difficulties in coming to a finalised programme regarding capital reconstruction; and that we have the recurrent dollar crisis before us. However, even making allowance for those facts, I should remind the Committee that the first of the conclusions of the Select Committee was that both the Ministry of Civil Aviation and the Corporations were hampered by the Government's delay in announcing their decisions on the purchase of aircraft and aerodrome development. There was a good deal of pressure from all quarters to obtain these decisions from the Government, and there seems to have been an almost equal reluctance to provide decisions.

In fact, the Government decision not to proceed with the purchase of American aircraft was not taken until 24th April, although it is obvious to any inquirer into the history of civil aviation over the past 12 months that an unequivocal decision to "Fly British" taken much earlier might have helped to avoid some of the troubles that were experienced. I think we are entitled to hear from the Front Bench why that decision was not taken more expeditiously. Unless we have an adequate explanation, at least the suspicious amongst us might feel that it was lost in the labyrinth of committees, which seems to make an effective decision on matters of civil aviation extremely difficult. Again, the Government's decision on airfields was not taken until well into the summer—not until 9th July—and even then no indication whatever was given of any order of priorities of development. As they confirm in their annual report, B.E.A.C. were particularly prejudiced.

I would like to touch upon two other conclusions of the Select Committee which have been referred to already but which also particularly embarrass and prejudice B.E.A.C. In the first place, the Select Committee called attention to the recommendation made by the Cadman Committee in 1938, which suggested that the heavy burden of petrol taxation upon civil aviation should be re-examined. Owing to the higher-powered engines there is no true comparison between civil aviation and motor transport. However, as has already been pointed out, there is no drawback on internal services and only 85 per cent. of the tax is refundable on continental services. I have no particularly dogmatic view about this question, but it is quite clear from the annual report of B.E.A.C. that they are hopeful that a favourable decision may be given. It would be to the advantage of the Corporation if the Government announced forthwith what action they propose to take on this, whether the question is being re-examined, or whether the Corporation can hopefully look forward to a reconsideration.

Again, while I appreciate the natural desire of my hon. Friend the Parliamentary Secretary to make the airports self-supporting—and he is only succeeding to the extent of 50 per cent. at the moment—I feel also, as the Committee reported, that there should be some revision of landing fees. I would not go as far as the hon. Member for Mid-Bedford (Mr. Lennox-Boyd), but, as the Select Committee's Report said, where the landing fees form such a high proportion of the total operating costs as to deter services on routes well suited to air transport, then those landing fees should be revised.

In other words, where air transport is or should become a necessary amenity, the cost should not be made prohibitive by the landing fees. Does the Minister intend to revise the landing scales? Are we to have some measure of flexibility regarding these scales? If not, we may as well accept the position that for short-haul, internal routes, air transport will prove absolutely uneconomic. We must make a decision. In some cases it may well be said that the air service is a luxury and that there are, in present difficult times, adequate alternative forms of transport. However, where the transport is a social and necessary amenity, we should get a relaxation of the present landing fees.

I want to turn to the vital question of aircraft construction and development, which has been dealt with frequently during the Debate. Some things are crystal clear. The first is that the Ministry of Supply have been playing a most useful and essential part in the development of aircraft. I do not think anyone has made any constructive proposal which militates against that conclusion. It is absolutely necessary that the Ministry of Supply should continue to play its present part, particularly regarding fundamental research. Secondly, at the stage of aircraft development which we have reached, it is quite clear that some of these development costs are clearly irrecoverable. There will be cases of prototypes which are unsuccessful. The Ministry of Supply will have to bear the burden of that cost but, even apart from that, it is quite apparent today that, in some instances of development, the development costs themselves will be so tremendous that they cannot be fully loaded on to the sale of planes to the Corporations or to other purchasers.

This means that we are in the position of conducting a national experiment at the country's expense, and we must get a clear-cut policy decision as to how far this country is prepared to go in paying for this national experiment. Having taken that decision—it surprises me that this has not been done already—that experiment must have absolute priority because the aircraft constructor has always before him the frightening prospect of early obsolescence. We must do everything we can, if we accept this as a national experiment in the country's interest, to ensure that the experiment shall be carried through as expeditiously as possible.

The third thing which emerges is that, from the very nature of aircraft development, it follows that we create a monopoly. These development costs are so high, so specialised that, when a successful prototype is produced, generally the production is the monopoly of the firm which was entrusted with the development work. This is a very serious matter, and a factor which must have the attention of the Government. Indeed we must get an early decision upon it.

A final point on aircraft construction of topical interest, but one which is of less importance, is the question of the technical staff available to the Corporations. The Select Committee reported: Your Committee … were impressed with the need for close co-operation between the Corporations and the constructors in the exchange of information and in the provision to the constructors of as much operational information as possible. It was suggested by the Society of British Aircraft Constructors Ltd., that at present the Corporations are not able to supply the technical information required. For all practical purposes, that conclusion is confirmed by the Courtney Report. In their 13th conclusion, it is stated that: B.O.A.C. failed, however, to steer a middle course between technical perfection and speedy production. This was principally due to inadequate control over their technical staff. Whatever the reasons, whether control of the technical staff or the technical staff themselves, this is a major contribution to the difficulties and delay of aircraft development. It is a matter which should be capable of attention and remedy, and I hope that when the Parliamentary Secretary replies he will say what definite steps have been taken, either to improve the calibre of the technical staff employed by the Corporations, or, alternatively, to deal with the point raised by the Courtney Committee that there must be adequate control over the technical staff—in other words, better qualified executive staff. This seems an inevitable conclusion.

Mr. Cooper

Does the hon. Member realise that the heads of the technical staff, in the case of B.O.A.C., are in one case a barrister and in the other case a test pilot?

Mr. Willey

I am obliged to my hon. Friend for his information. On the question of ordering, Members will realise this is a vital question, which has had the attention of the Departments and the Treasury for some time. I am alarmed to learn that another Committee has been set up to deal with this matter. I would like to know when that decision was taken, and when it is expected that a report will be received. It is common knowledge that the question has had the attention of the Departments for some considerable time.

While I very much regret being able to agree in some measure with the hon. Member for Mid-Bedford, and while appreciating the pride of my hon. Friend the Parliamentary Secretary that his Ministry is recognised as a first-class Department of State, I am nevertheless a little alarmed—I speak quite personally, and do not in any way commit the other Members of the Select Committee—at the development taking place at the Ministry of Civil Aviation. I need not repeat the figures given by the hon. Gentleman, but I would point out that the headquarters staff of the Ministry stands at 1,450 and that its prospective establishment is 2,250. Under the Ministry of Civil Aviation Act, 1945, it is true that the Ministry was made responsible for the design and development of aircraft, but it is apparent today that the Ministry of Supply are responsible for the technical development and research of aircraft. It is equally true that the Corporations must be granted a good deal of independence and initiative in dealing with the operation of aircraft.

This leaves relatively little to the Ministry of Civil Aviation. Two major tasks remain with it. One is the organisation of the airfields. I do not think that demands a considerable volume of administrative personnel at headquarters. The second remaining task is the essential one of coordination. Again, to be carried out effectively, I do not believe that calls for a large administration. It calls for a compact, competent administrative set-up. For these reasons, in spite of the fact that this was a matter which was dealt with by the House so recently, the Government should take the responsibility of reviewing the development that has taken place of the Ministry of Civil Aviation and should decide one of two things. It should decide either that the Ministry should continue to play its part of co-ordination and shape its administration accordingly, or alternatively assign to the Ministry a minor role and say that the main task, as the major responsibility for the development of aircraft lies with the Ministry of Supply, is the complete co-ordination of all forms of transport.

I am sure this is an argument which appeals to my right hon. Friend the Minister of Supply. I am equally sure that the Parliamentary Secretary would be just as happy in the Ministry of Transport as in the Ministry of Civil Aviation. We should take one of these two decisions. We should either recognise the major function of the Ministry as being a co-ordinating one, and ensure that the Ministry has a compact highly qualified expert staff, capable of effecting such co-ordination or, alternatively, say that as far as co-ordination goes the major objective is the overall co-ordination of all transport, and consider the possibility—I put it no higher—of a closer co-ordination by making all forms of transport the responsibility of the same Ministry.

Air-Commodore Harvey

The hon. Member referred to the development cost of aircraft which could not be borne by the firms. Many firms—for example, Airspeeds—are already carrying on the development of their own aircraft. Surely, they should have the benefit from the sale of their aircraft both at home and overseas?

Mr. Willey

I was not endeavouring to generalise, but was pointing out that in some instances the development costs are so high that, owing to the factor of obsolescence, the return of those development costs is not only not foreseeable, but is not even within the most optimistic estimates.

8.37 p.m.

Sir Wavell Wakefield (St. Marylebone)

The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) made reference to the ordering procedure, and the Minister of Supply followed the reference with an announcement of an advisory committee which was being set up to go into the whole question of ordering. There is no doubt that the losses to which he made reference are due—and we all know the reasons—to the Corporations not having the correct aircraft. That was due, of course, to the war, but if in the future their operations are to be carried out by aircraft without loss, it is of the utmost importance that the operators and manufacturers from the very beginning of the development of an aircraft should be allowed to get together without too much interference from the right hon. Gentleman's Department, or by the Minister of Civil Aviation.

If an aircraft is to be put into service right from the beginning, operators' needs must be asked for and stated and there must be the closest possible co-operation between the manufacturer and the operator. In this connection, I hope that in the development of future commercial aircraft there will be only one overriding consideration, that these aircraft are to be made for commercial operations and that military requirements will not be allowed to creep in.

It may well be that in order to obtain economic operation, the development cost of aircraft in the future may have to be borne by Defence Services even though it is a purely commercial aircraft. That policy will probably have to be followed, as it is in America. Some of the cost of this development, perhaps all of it, will have to be borne not by the operators, but by the Government as some kind of national provision to maintain the aircraft industry for political and strategic purposes. If such a contribution is made to development costs, I hope that there will be no question, if that cost is met by the Defence Services, of military considerations having to be taken into account in the development of aircraft intended purely for com- mercial purposes. There must be many uses in Air Transport Command for commercial aircraft should such development be made.

I welcome the setting up of an advisory committee to go into this whole question because I believe that the future of our aircraft industry and our whole position in the world of civil aviation depends in no small measure on this question of ordering procedure and the closest possible collaboration between operator and manufacturer. That is of the utmost importance.

The Minister of Supply gave various reasons for the losses which were incurred by the Corporations. He pointed out that heavy losses were incurred in the training of aircrew. It is important that aircrew should be trained properly for the safe operation of aircraft, but I wonder whether a considerable economy could not be made in the training of aircrew? I believe that the objective desired could be attained without so much expense being incurred. I have not time to deploy my argument on that point but I hope that the question will be looked into. The Minister then pointed out that this was a charge, but surely private companies which are operating also have to meet this charge, or at any rate have to ensure that pilots and aircrews who operate their aircraft are up to standard. I do not consider that to be quite a fair argument or a fair excuse for the losses incurred.

The Minister's next point was about the base maintenance costs of B.O.A.C. It does not seem to me to be right that an operating company should have to be responsible for the charges of all these bases which are needed throughout the world. Other speakers have referred to this point, and I want to reinforce what has been said. B.O.A.C. ought to be charged a fair rental for the use of these various bases, and the Colonial Governments or the United Kingdom Government should be responsible for their upkeep. That cost should be charged to strategical or political considerations. If we are to get a true picture of the efficiency of the commercial operation of B.O.A.C. or any of our other Corporations, surely there must be a differentiation made between their costs and the costs of upkeep of such things as these bases, where they are needed for strategical or political purposes.

The Minister of Supply said that heavy subsidies would be necessary to operate commercial aircraft. He went on to say there was no evidence that private enterprise would be more successful, and that to consider that would be so was just political prejudice. We have evidence that private enterprise was prepared to operate a service from West Africa to the United Kingdom which the taxpayer is now paying £500,000 a year to operate. In view of all the teething and development troubles of which the Minister made great play in his excuses for the losses, why, instead of rushing ahead in such expensive development, did they not let private enterprise operate this service?

Again, in the Far East a service was being run profitably by private enterprise in Hong Kong. That profitable enterprise was stopped by the Director of Civil Aviation at Singapore on instructions from over here. It was stopped in order that the State monopoly of B.O.A.C. should be allowed to operate at a cost to the taxpayer of this country. It is all wrong that that should happen. A British private company was prepared and had made arrangements to operate from Hong Kong. B.O.A.C. forms another private company there, and does not do the job which private enterprise would have done profitably.

For several months no service was run in the Far East by the company that had been formed by B.O.A.C. at Hong Kong. I believe it is now running. What the loss is I do not know, but foreign interests—American airlines and others—are delighted that British private enterprise should be squeezed out of the Far East. There is a great opportunity there for air travel. The Chinese are becoming very air-minded. There is a splendid opportunity, but our State monopoly and the Ministry of Civil Aviation, instead of encouraging British private enterprise to develop aviation activities in the Far East, have shut it down, stopped it absolutely from carrying out the important task of flying the British air flag in the Far East.

It is a disgraceful thing that a nationalised State monopoly should shut down British operators who were willing to risk money, and, we hope, make profits and earn foreign currency in other countries. I repeat that it is disgraceful that this sort of thing should take place, especially when B.O.A.C. has so much on its plate. Why not let private operators go ahead in this part of the world? Then we shall see that private enterprise can, on a fair competitive and comparative basis, make a profit Where perhaps a State line operates at a loss.

The question of the pay load of the York was raised by the hon. and gallant Member for Macclesfield (Air-Commodore Harvey). Why is it that the B.E.A.C. does not operate the York at the full pay load, and loses something like £1,000,000 for the taxpayer? During Question time, a few weeks ago, when I raised the matter, the Parliamentary Secretary to the Minister of Civil Aviation gave the impression that, whereas private enterprise might operate the York at a full pay load, the State considers safety first, and would operate it only at some 5,000 lb. under the full operation load. That seemed to suggest that the Air Registration Board, which permits that pay load, has permitted something which is not safe, and also that private enterprise is doing something wrong, and not right. The real case is that there is a loss of about £1,000,000 to the British taxpayer, because the nationalised monopoly corporation does not operate these aircraft to the full limit allowed by the very State organisation set up to ensure that a safe maximum limit is imposed.

I think it is quite clear that these big losses which the State has incurred through the operation of these nationalised monopolies need not have been incurred if there had been proper management in their operation. I would draw attention to the fact—mentioned by other hon. Members—that where State air lines are unable, or unwilling, to run scheduled services, opportunity ought to be granted to private operators to operate such services. The Cardiff—Weston-super-Mare service is not now operated. Why not? Private enterprise did it at a profit. The Liverpool air line is being shut down because it does not pay. The air line to the Isle of Man is also being lessened. If State monopoly organisations, because of huge overheads or incompetence in operation, cannot run these lines properly, let private enterprise be given the opportunity to tender for running these various services.

We were told that the whole purpose of the unifying of the internal services in this country with Europe was because private operators would skim the cream off certain routes, and leave only the unpayable ones to the Corporation. It seems that when the nationalised State monopolies run these routes the cream becomes skimmed milk. Let the private operators operate these creamy lines, which the State cannot do, and let them make a profit instead of a loss for the taxpayer.

I hope that the Parliamentary Secretary will do something about flying clubs. If this country is to maintain the proud position it has held ever since flying was started, it is essential that it should be made easier for young people to fly. The facilities required for flying clubs are not great. The little help that is required could easily be given. I do beg of the Parliamentary Secretary and his Ministry to bring all the pressure possible to give the small amount of help that the flying clubs ought to receive if aviation in this country is to be continued in the future as it has been in the past.

8.52 p.m.

Squadron-Leader Kinghorn (Great Yarmouth)

The hon. Member for St. Marylebone (Sir W. Wakefield) has given me my cue. I wish to say a word on behalf of the flying clubs of this country. I appeal to the Minister to change his mind about the decision which he made the other day, when he turned down the flying clubs, and said that, owing to the economic situation, he cannot at present carry out the recommendations presented to him by the committee on which I sat, along with the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) and the hon. Member for West Leicester (Mr. Janner). Shortly after the Minister came into office, he appointed this advisory committee on private flying. I ask every Member who is interested in flying in this country, and all who are interested in our prestige as a flying nation, to read the report of that committee. We came to the conclusion that, at the present time, this country is at an historical turning point in our conquest of the air. As we showed throughout the war, by means of the R.A.F.—the finest weapon of war ever forged by man—our nation can take to the air as in days gone by, in the time of Alfred the Great, it conquered the sea. We should show future generations that the destiny of this country lies in the air as it once lay on the sea.

At the moment there are 57 flying clubs in this country. The war years revealed how valuable they were in forging for us the personnel who were available during the war years. If we examine the facts, we find that there were, in the Fleet Air Arm, the A.T.A., and in Bomber and Fighter Command of the R.A.F., thousands of people who would not have flown before the last war started but for the help of Government subsidies to institutions like the Civil Air Guard. But for this, those people would not have flown at all, and would not have been ready in 1939 to be taken into our great flying forces.

We know that the R.A.F. has different ideas in these days. My feeling is that the R.A.F. is producing a galaxy of people who will prove to be our modern "Blimps" if we do not keep a tight control on them from this Chamber. Many men who have never had experience in other Services are coming to the top ranks in the Air Force. They have lived in the one Service throughout their Service life. There is a vast difference between the old, great leaders of the R.A.F., who had enough imagination and vision to leave the Royal Engineers or the Navy to experiment with bits of aircraft tied together with string and sealing wax, before 1914, and the type of men who are approaching the top today. The old spirit has gone.

That is shown by their attitude to this report. They say that it is not necessary for defence to have these flying clubs. We believe that it is necessary. We believe not only that it is necessary for defence, but that it is necessary if we are to carry on as a great nation in the world. If we are to develop our Empire—as we must, whether we like it or not, in order to get out of our economic difficulties—the connections between the various parts of the Empire obviously must be maintained by air. We suggest that the training of our people should begin at the very earliest age. During the war, we were told that children were automatically drawing pictures of aircraft as they sat at their desks in the schools. When we had a report of the Ministry of Education before us last year, we discovered that that had stopped, because the children no longer see in the skies the large numbers of aircraft which they saw during the war years. The children would see these large numbers of aircraft if we could set up a big series of flying clubs around the country. That could be done more easily in this country than in any other country in the world.

We all know that our country was like a floating aerodrome during the war. The aerodromes which we used are still there. When I went, with others, to examine a map to discover how many places with 100,000 inhabitants had aerodromes near them, we found that we could cover every town in the country of that size and provide a redundant aerodrome for its flying club. That would be in addition to the 57 clubs which are struggling along now. As the months go by, and if the flying clubs get no subsidies, I believe that we shall find that they will disappear. If we are to follow out our destiny, we must bring up our people with a feeling of air-mindedness. In order to maintain communications with our Imperial possessions, we must make the best use of travel by air. We must give financial help, or some other kind of aid, in order to keep the flag flying.

8.58 p.m.

Mr. George Ward (Worcester)

May I start by paying tribute to the three Corporations for the way in which they have presented their first reports? No one can complain that those reports are not sufficiently detailed, though I agree with my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) that, if possible, in future the Corporations should show the cost of operating the purely political routes separately from the cost of operating the commercial routes. That would give a much clearer picture. However, no one can complain that these reports do not give a clear, informative and completely frank account of the operations during the year. Nor have the Corporations been afraid to point out, where they felt it necessary to do so, the disadvantages, and indeed the handicaps, which the present system of State ownership imposes upon them.

I think it is fair to say, nevertheless, that the substantial losses which are shown by two of the Corporations have come as a considerable shock to the general public, who had no idea that such a large deficit was expected. For that reason, I think this Debate will be read with great interest in the country. The taxpayer, who has to foot the bill for these losses, will certainly expect us to probe very carefully into the various reasons given for them, and I think we can say that, during this Debate, there has been a very careful probe. The taxpayers will also seek from the Government some assurance that every possible step is being taken to make the Corporations self-supporting as quickly as possible. The Minister of Civil Aviation said recently that these losses were not unpredicted, and that the figure of £7 million mentioned in the Civil Aviation Act was not a shot in the dark. If that is so, the Government certainly did not go out of their way to make that point clear at the time, either inside the House or outside.

I must, however, give credit to the hon. Member for Keighley (Mr. Ivor Thomas), who has now returned to the Chamber, because, during the Debate on the proposals for nationalising the airlines in January, 1946, the hon. Member said: We have to plan far ahead, but we must learn from the example of Thales, who, while looking at the stars, fell into a well."—[OFFICIAL REPORT, 24th January, 1946; vol. 418, c. 325.] But £10 million is some well. I am not going to claim that even free enterprise, given the same set of circumstances and trying to do as much as the Corporations have tried to do with the tools they had—a collection of hopelessly inadequate aircraft—at their disposal could have made a profit.

I am certainly not going to claim that B.O.A.C. and B.E.A. could have avoided showing a loss. I do not think it is fair to compare B.S.A.A. with the other two Corporations, because their problems were quite different. They had a fleet of 16 aircraft of only two types, as against 175 aircraft of nine different types in the case of B.O.A.C. and 119 aircraft of five different types in the case of B.E.A. It has already been pointed out that their Lancastrians were leased from the Government at a nominal rental of £2,000 a year, and that they had nothing like the same number of maintenance bases and stations. Indeed, I think it would have been extraordinary if B.S.A.A. had not shown a profit. We do claim, however, that neither B.O.A.C. nor B.E.A. need have shown such large losses if they had received greater cooperation, more assistance and less interference from the Government. Their reports are full of examples to prove that, and most of them have already been mentioned in this Debate, but perhaps the Committee will allow me to summarise them again.

First, in the B.E.A. report, on page 7, we find that they complain about the rates for the carriage of mail on the internal services, that they were uneconomic and ought to be at least as remunerative as those for the Continental services. One would expect that the Minister of Civil Aviation would have known about that months ago, and would not have waited until the report appeared. We would have expected the Minister to go to the Postmaster-General and say, "What can we do about this?" I hope the Parliamentary Secretary will tell us whether, in fact, any discussions have taken place between his Ministry and the Postmaster-General on the question of the mail rates on the internal routes.

Then on page 9 of the report, we have the rather sordid little story about Dorland House, in which it is stated that repeated pressure to have the property derequisitioned met with only limited success, and that the Corporation had been obliged to reconstruct their plans and secure additional accommodation, all of which added to their operational costs. There is absolutely no excuse for that. It shows a complete lack of co-operation between Government Departments. It seems that B.E.A. have been allowed to lose money unnecessarily owing to muddleheadedness and red tape on the part of Government Departments. I hope the Parliamentary Secretary will be able to give us an assurance that that nonsense will now stop, and that this matter has been settled.

On page 11, we find complaints about the fare structure of the internal services, the high landing fees, and the payment of full Excise Duty, without rebate, on fuel and oil. All those things have already been mentioned, and we very much look forward to what the Parliamentary Secretary will say about them. Later in the report, B.E.A. go on to say that, as regards landing fees, "prolonged discussions" have been taking place. But why prolonged discussions? Either the Government have got to help these Corporations all they can, or they can hold prolonged discussions and dither about, while the Corporations lose money.

Then, on page 15, we find them complaining about the loss of £26,000, due to the priority system. The Minister of Civil Aviation said recently in another place that where there was a cancellation of seats in inadequate time, the Government Department bore the cost. If that is so, how does he account for this loss of £26,000 appearing in the accounts of the Corporation?

I wish to refer next to a matter which has been the subject of almost every speech made in this Debate, and therefore no summary would be complete without it. It is that all the Corporations are unanimous in saying that they are severely handicapped, both financially and operationally, by having no control over the ordering of their aircraft, their engines, or even their spare parts. Indeed, British South American Airways make it the first condition of the success of their future operations that they shall be given that control. When this matter was raised the other day in another place, the Minister gave as his reason—and the Minister of Supply earlier this afternoon gave the same reason—that the Government were responsible for the development of new types of aircraft. That point has never been in dispute; as far as I know, no one has ever suggested that the operators or the manufacturers should bear the considerable financial burden of the research and development of new aircraft.

But what we do say is that there is absolutely no reason at all why the Government should interfere with design, as the Corporations say they do, or why, once the prototype has been built, further developments of the same aircraft to special requirements of individual operators should not be a matter directly between the user and the manufacturer. And it seems to be too ridiculous for words that the Corporations should not be allowed to order their own spare parts direct from the suppliers. One can hardly wonder that money has been wasted when the Corporations have been forced to hold large stocks of spare parts for which they have very little use, and are kept, perhaps, in short supply of those spare parts for which they have a great demand. They are the only people who can tell what they want and how much of it they want.

However, now that a Committee of business men has been set up to examine this matter, we shall await their decision with great interest. I feel quite confident that their business experience—I am glad they are business men—will tell them that the present system, as it stands at the moment, is quite intolerable from every point of view. I submit that all these points which I have mentioned in a very brief summary are matters in which the Government could, and should, have given a far greater degree of assistance and encouragement to the Corporations. I am not saying that any of these things by itself is a major cause of these large losses, but taken altogether they did make a considerable difference, and I hope the Government will take energetic steps to see that these difficulties are ironed out as quickly as possible.

British Overseas Airways make the point in their report that administrative economy will not by itself solve the Corporation's financial problem, and I think hon. Members on both sides of the House will wholeheartedly agree with that point. But I am also very glad to see that B.O.A.C. say that actual expenditure is being vigorously attacked in detail. Although the number of people employed on the ground to keep one aircraft in the air may not be a fair yardstick, it is unfortunately the only yardstick which the general public understand; they do not understand the much more technical, if more accurate, yardstick of capacity ton-miles. I think the Corporation's publicity department should take much more trouble to point out to the general public that they use the wrong yardstick, if it is a fact that their administration cannot be pruned. But I will not accept that it cannot; I believe that it can, and I hope everything is being done to prune the administration of the Corporation as drastically as possible.

Having done my best to defend the Corporations, and expressed my belief that they have been severely hampered by the Government in one way or another, I want to make one slight criticism of B.E.A.C. before I turn to another point. In their report B.E.A.C. say that they found the aircraft they had to charter from the charter companies uneconomic and in several cases the regularity and other features of the charter companies were unsatisfactory. It is all very well to make a statement like that, but I think they should have substantiated it. The charter companies have done a magnificent job, and tributes have been paid to them from both sides of the House. I hope the Parliamentary Secretary, when he winds up, will be able to explain what that paragraph means, and why they found charter companies unsatisfactory and irregular.

I turn to the other question, which is exercising the public mind—what of the future? What prospects are there that these large losses can be considerably reduced in the next few years? In their report, B.O.A.C. say: There is only one conclusion. Heavy deficits will inevitably continue until the Corporation has the aircraft and facilities to make it financially self-supporting in a highly competitive international business. I do not think anyone will argue about that conclusion. But are we going just to sit back and accept complete inevitability? So far as facilities are concerned, those, of course, must to a very great extent be subject to international negotiation and agreement, but what about aircraft? The whole thing hinges on aircraft.

As a long-term policy, no one will quarrel with the Government's intention to fly British. But let us pause for a moment and try to get a rough idea—and it must necessarily be a rough idea—of the enormous costs involved in the blind, dogmatic adherence to this as an interim policy. Perhaps I may be forgiven for taking as an example the over-discussed Tudor aircraft. I believe there are about 20 Tudor I's in existence, and 50 Tudor II's on order. Assuming that the final cost of the Tudor I, with all the latest modifications incorporated, will be in the neighbourhood of £150,000, the bill for 20 will be £3,000,000. The Tudor II is a much bigger aircraft, and it is reasonable to assume that its cost will be something like £200,000, making a total of £10 million for the Tudor II's, or £13 million for both aircraft. That £13 million, which is quite enough in itself, may prove to be a fraction of the cost of operating these aircraft.

In the United States, where they work these things out very carefully, it is estimated that if the life of a modern airliner is taken as five years, the cost of 'operating that airliner over the five years is approximately 10 times its original cost. Therefore, the operating cost of an airliner is far more important than the initial cost, even though the initial cost is tremendous. It is now generally agreed that the Tudor I can never be economically operated. I believe that they are now being turned into Tudor IVs at even more expense. It is not by any means certain that the Tudor IVs will be an economic aircraft, and no one has yet decided how on earth we can use the Tudor Ifs at all. Looking further ahead, there is the giant Saunders Roe flying boat, which is presumably to be used on the Empire routes as well as for the Atlantic. But one has only to turn to page 14 of the B.O.A.C. report to find these words: The indirect operating costs of the flying-boat services are particularly high. B.O.A.C. is the only major user of flying boats, and has had to provide its own marine air ports, whereas aerodromes and aerodrome facilities are normally provided by the Government concerned on payment of a landing fee. This situation involves the Corporation in the abnormal expense of providing marine craft, moorings and essential services and the duplication of staffs at stations where the Corporation also use land airports. Moreover, the provision of accommodation for passengers at night stops on the flying-boat services is costly and the night stops reduce the utilisation of the aircraft. While the flying-boat services are popular with the public because of their comfort, their use involves provision of marine airports and accommodation at a cost to the Corporation of roughly £1,150,000 per annum. In view of that statement, are we satisfied that this big flying boat will ever be an economic proposition? From that report, one would think the answer must be "No." Then there is the huge Brabazon I, which is costing millions of pounds to produce. We are told that it can operate only on three or four airfields in the world. It can be used only on the Atlantic route, for which we already have the Boeing Stratocruisers on order. Are we sure the Brabazon I is ever going to be an economic proposition, and that it will not be too big?

I believe there are two very bright spots on the far distant horizon. These are the D.H.106, which people tell me is going to be a first-class aircraft, and the Bristol 175. But neither of these is likely to be in service until 1955, and they are bound to have a lot of teething troubles. The D.H.106 is a pure jet long-range airliner, and no one need tell me that we will not have considerable trouble with it when it is first put into service, however good it may be. Meanwhile, there seems to be no well-tried "bread-and-butter" aeroplane for the Empire routes. That is what is so greatly needed. We must have a "bread-and-butter" aeroplane. There appears to be nothing in view that can be economically operated, either in the immediate future or even in the far-distant future. But it is with the immediate future that I am primarily concerned at the moment.

I beg the Government not to be too dogmatic on this policy of "Fly British" as a short-term policy, although we should entirely agree with that as a long-term policy. We have been offered the Canadair aircraft with a Rolls Royce engine—to which reference has already been made—by the Canadians on exceptionally favourable terms, the dollar expenditure being met out of earnings on the aircraft in service. The aircraft could be put into service almost at once. That would tide us over the next few years, and allow our aircraft industry to concentrate on producing a really good aircraft for the future. I believe that far from knocking the heart out of the British aircraft industry, they might, in fact, welcome the opportunity to clear the decks of all these endless modifications of makeshift aircraft, and let them get down to designing something really modern and good.

With regard to getting experience, I believe it to be a fallacy to say that we shall get experience by operating makeshift aircraft. I believe that the only good experience to be got is by operating the latest types of aircraft, whether English, Canadian or whatever they may be. I beg the Government not to close their mind to this. The Minister of Supply this afternoon did not seem to know whether the Canadair was being considered or not by anybody. He tried to brush it off on to the Treasury, and then said, "I do not suppose the Treasury will even consider it." When someone asked, "Is it being considered?" he did not seem to know. If we brush it aside as lightly as that, we are involving ourselves in this tremendous cost which I have tried to indicate.

These are all facts which the Government must face. We cannot go on muddling through and making these colossally expensive mistakes. The Minister of Supply has said that our aviation requirements were constantly under review. What does that mean? What it means is that from time to time another committee is set up to examine only one aspect of the problem. They report, and, later on, another committee is set up, and they report. But that is not setting about this thing in the proper way. I am inclined to agree with the hon. Member for Uxbridge (Mr. Beswick) that what we want is to sweep aside all these little minor committees and have set up a really powerful commission that will examine and report on the whole problem. The terns of reference of the President's Commission which recently reported in America, are well worth noting. I will read them. The Air Policy Commission should study among other pertinent aspects of the problem such questions as the current and future needs of American aviation, including commercial air transportation and the utilisation of aircraft by the Armed Services; the nature, type and extent of aircraft and air transportation industries that are desirable or essential to our national security and welfare; methods of encouraging needed developments in the aviation and transportation industry; and improved organisation and procedures of the Government that will assist in handling aviation matters efficiently and in the public interest. Is not that exactly what we need? I recommend the Government to get down to this thing on a proper basis and try to find five or six first-class men of wide experience, sound judgment and independent thought, put them on to the study of these problems as a full-time job, and let their conclusions be published so that all can see exactly what are the prospects in the future and what will be the cost to the taxpayer. He has the right to know. He is interested and wants to know. Until the Government do this we on this side of the Committee will not be satisfied that they are tackling the problem of civil aviation in a determined and far-sighted way. We shall divide the Committee tonight, because we are not satisfied that under the present system British civil aviation can uphold the prestige and tradition that were built up for it by the prewar operators, and hold its own against fierce international competition.

Mr. Rankin

On a point of Order. In view of the fact that no Scottish Member has been fortunate enough to catch your eye, Mr. Beaumont—

Mr. Lennox-Boyd

That is quite untrue.

Mr. Rankin

On this side of the Committee, might I ask my hon. Friend if, in the course of his reply, he would make a reference and try to resolve—

The Deputy-Chairman (Mr. Beaumont)

That is not a point of Order.

9.27 p.m.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren)

Before I start to reply to the Debate, may I take advantage of the opportunity which this Debate affords to make a statement of some importance and interest to the Committee in connection with the loss of the Tudor IV, "Star Tiger," on a flight from the Azores to Bermuda on 30th January.

As the Committee will recall, I stated on 2nd February that an inspector of accidents had left for the Azores immediately after the loss of the aircraft in order to carry out a preliminary investigation. Concurrently my noble Friend announced that the inquiry into the accident would be held in public, leaving for future consideration, in the light of information bearing on the accident which might subsequently emerge, whether the inquiry should take the form of a normal investigation by the Chief Inspector of Accidents or the formal investigation under the court procedure for which the Air Navigation Regulations also provide.

The last occasion on which a formal court of investigation was held was the inquiry into the loss of the R.101, all subsequent accidents having been investigated by the Chief Inspector of Accidents; more recently as public investigations, in accordance with the announcement made by my noble Friend in another place on 24th October, 1946. My noble Friend has now concluded, in the circumstances of the disappearance of the "Star Tiger," that a formal court investigation would be more reassuring to the public. He has invited Lord Macmillan, a former Lord of Appeal in Ordinary, to hold a formal court investigation, and I am glad to inform the House that Lord Macmillan has agreed to do so. He will be assisted by assessors as may be necessary.

Turning to the Debate, I would first express appreciation on behalf of my noble Friend and myself of the general tenor of the Debate and the helpfulness which everyone has shown in regard to the furtherance of civil aviation in this country. I hope to deal with as many as possible of the points which have been raised. That will, of necessity, make the winding up speech disjointed, but if through lack of time I am unable to reach some points, I will, with the assistance of HANSARD tomorrow, send to individual hon. Members letters replying to them.

The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) made reference to the increase in the Ministry's staff. We do not do a great deal of good by overstating a case and by comparing the size of the Air Ministry section in prewar days and the Ministry of Civil Aviation today, saying that there has been an increase from a few hundred to 4,000. In prewar days there were only two State aerodromes, Heston and Croydon. Other aerodromes were pocket handkerchiefs, a couple of fields owned by municipalities or private flyers. In those days navigational aids were few and far between, and aircraft were small.

Since the war, with the development of aviation as a result of the war, there has been a tremendous development in aircraft. There are heavy aircraft, large aerodromes—State aerodromes—with long runways of great bearing strength, and with navigational aids which ensure safety and regularity. Every one of those aids requires manning for 24 hours a day and seven days a week if we are to get the full use of civil aviation. That all takes manpower. Do the Opposition say that we should not develop navigational aids and that we should not improve the standards of safety? We have since the war developed briefing services at every aerodrome which are available not only to our own operators, to our Corporations and to our charter companies, but also to every foreign operator who comes here. We have developed a meteorological service which, while it is not always perfect, is of tremendous aid to the aviator when he takes to the air. Do the Opposition say that we should cease to develop these very material factors in civil aviation? I am certain that they really do not mean that we should.

These staffs are not performing a strictly Civil Service function, but industrial, professional and technical functions within civil aviation, and they are not in any normal sense civil servants. I am delighted that from all sides of the Committee there has been appreciation of the work of the staffs of the three Corporations. They have had a very sticky job. They have had kicks from all round and have been doing their job in very difficult circumstances. Being the butt of the cheap daily Press with its misstatements, half-truths and sometimes, its statements, which appear generally to be deriding the efficiency of the staffs, makes it very difficult for them. They are to be complimented on the manner in which they have maintained their morale and their high standard of service in such very trying circumstances. I have therefore been delighted that all sides of the Committee have expressed their appreciation of the staffs of the Corporations. They really have done a first-class job.

Now what are the difficulties which the Corporations have to face? Reference has been made to losses; but, when one turns to agriculture, and my right hon. Friend the Minister of Agriculture gives assistance to farmers, it is called not a loss but a subsidy. This really is a subsidy. What has it been a subsidy to? Not simply to civil aviation but to the British aircraft industry, because this loss is, fundamentally, the result of operating uneconomic aircraft. Before we can make civil aviation a prosperous industry, we have to get right the basic factor with which it operates, namely the aircraft. At the moment with a large number of the aircraft in use we do not get back in fares the cost of wages and salaries, or the cost of fuel in the form of petrol and oil. If one starts by losing money on the actual operation of the aircraft, that is the place where one must first tackle the problem of overall economic operation, and therefore provide an economic aircraft, which at least gives a surplus of operating revenue in order later to deal with the problems of development.

So let us say openly that we have lost on civil aviation as a result of a deliberate policy of His Majesty's Government, a policy from which, until today, His Majesty's Opposition did not demur. When the then Minister of Supply made a statement in this House in regard to the Government's policy to "Fly British," there was no objection from any section of the House, and the first suggestion that we should purchase aircraft other -than British has been made today—

Mr. Lennox-Boyd

I am sorry to interrupt the hon. Gentleman, but what does he refer to? The only practical suggestion made other than buying British was to buy Canadair, and I hope we can still call Canadians fellow British subjects.

Mr. Lindgren

We can indeed call them British subjects; but, after all, the Canadair means dollar expenditure, at least on the air frame, though it might provide a market for the Rolls Royce engines with which it is powered. But it is a proposition; and now that it has been made and the general indication of the Committee being favourable to it, I will report to my noble Friend and no doubt he will call the attention of His Majesty's Government to the statements that have been made here. However, over and above the general question of uneconomic operation and the lack of suitable aircraft to operate, B.O.A.C. in particular, but also the smaller Corporations have suffered as an aftermath of the war from having to operate with dispersed maintenance bases. For economic operation one requires first an economic aircraft and, secondly, centralised maintenance with as little "dead flying" as possible. That has not been possible. It has not been the fault of the Corporations. It has not been the fault of His Majesty's Government. War, and all that war means, has prevented us from providing the centralised bases. We will do the best we can to get them as quickly as possible.

The hon. Member for Worcester (Mr. G. Ward), who wound up for the Opposition, referred to premises, particularly B.E.A.'s desire to have Dorland House. B.E.A. have been pressing for it to my knowledge for 18 months. [An HON. MEMBER: "Why have they not got it?"] Because It has been under requisition by another Government Department.

Mr. Ward

What do they use it for?

Mr. Lindgren

Half London is after Dorland House. If B.E.A. had gone in, there would at once have been criticism from some hon. Members, who would have been approached by persons complaining that a State corporation was getting in there when certain private industries were trying to get office accommodation. Private industry is suffering as badly as State enterprise from lack of industrial capacity and office accommodation. It is a universal symptom of after-war conditions.

B.O.A.C. have done a remarkable job, and why should we not then praise them? The change-over of B.O.A.C. from war to peacetime activity—the change of function and the change of load—has been a really remarkable achievement. The change was made without any fuss from carrying soldiers and munitions of war to the peacetime carriage of passengers and freight. In addition to that, routes had been maintained by the R.A.F. and Transport Command. Civil aviation owes a very great debt to Transport Command, and although much has been done by B.O.A.C. and B.E.A., it could not have been done but for the very happy co-operation and the example of Socialist enterprise between the Royal Air Force, Transport Command and the State airline, B.O.A.C. Over and above that very effective co-operation, the Royal Air Force were faced with the problems of demobilisation. Men in various sections of the R.A.F. were being retained, and their group numbers were delayed, because they were handling civil traffic along the Empire trunk routes. Naturally, they objected to doing a military job for a civil purpose. Hon. Members pressed various Ministers in regard to the release of these men. Therefore, to maintain the routes, B.O.A.C. had to take over a function which is not an operator's function, the maintenance of various routes and facilities throughout the Empire. They did it effectively and provided facilities for the whole of aviation.

Reference has been made to charter companies, about which I will speak later. But for B.O.A.C. and the trunk route facilities it provided, charter operators could not have operated throughout the world. Foreign airlines could not have come into many airports throughout the Empire. B.O.A.C. have been real Empire-builders in the sense of developing the great trunk routes, and making trade possible.

Air-Commodore Harvey

Will the hon. Gentleman admit that while those facilities have been given, the charter companies have had to pay very dearly for the services which they have received?

Mr. Lindgren

They have had to pay, it is true; but we must not forget that B.O.A.C. had to provide those facilities for seven days a week and 24 hours a day, as distinct from the occasional user, such as K.L.M., to whom reference has also been made. K.L.M. developed their services on the basis of paying a charge for services developed throughout the world by other people. They maintain no organisation along their trunk routes, and it is cheaper for them to pay for services they want than to provide them for themselves seven days a week, 24 hours a day throughout the year. These British facilities are there for everyone.

In addition, the Corporations have performed another very valuable service. In the operation of aircraft the payload which can be carried determines the economics. One factor affecting payload is the weight of petrol which is to be carried at take-off. Through B.S.A.A., and now through B.O.A.C., we have been undertaking flight-refuelling experiments which, I am certain, will make it possible for the general development of a higher payload at take-off with refuelling taking place actually in the air.

The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) referred to the amalgamation of all the Corporations into one. He did not advocate that: he only said that rumours were circulating to the effect that it was possible. May I dispel those rumours at once? The three Corporations were deliberately created by the Government, when the Civil Aviation Act was brought before the House, with the intention of creating a healthy spirit of rivalry—competition, if the Opposition like that word better—to give the three Corporations an opportunity to show comparisons; for one Corporation to make experiments while the others carried on with normal settled policies. Both B.E.A.C. and B.S.A.A.C. were born out of B.O.A.C. and, in the initial stages, it would have been easy for those two Corporations to have become operators of aircraft and to have left their services in a common pool with B.O.A.C. They have broken away and set up their own organisations, their own units.

It may lead, and in certain sections undoubtedly has led, to overstaffing and duplication, but there has always been co-ordination at the top by a committee of the three Chairmen, who have worked closely together. Now, as a result of experience, having seen what a complete breakaway meant, there is a trend towards closer co-operation, through the three chairmen's organisation at the top, in those services which can be used in common by the Corporations.

Mr. Lennox-Boyd

Including training?

Mr. Lindgren

Training is a vital factor; I will deal specially with Airways Training Ltd. later, a matter that was raised by the hon. Member for Uxbridge (Mr. Beswick).

I would here like to pay a tribute to the general work of the charter companies, some of which have assisted the Corporations very effectively indeed. The hon. Member for Worcester asked me to explain what B.E.A.C. meant by their references to charter operations in their report. I do not want to be drawn into a war with Scotland, but as a question has been asked it is only fair that it should be answered. B.E.A.C. were not completely satisfied with Scottish Aviation and certain services that company provided for them; and, because of irregularity, etc., they discontinued their charter. I was asked why it was that Skyways, for example, were prepared to run services for the Corporations without a subsidy. The answer is simply that Skyways, a private enterprise which is not concerned with national policy has bought foreign aircraft. Will the Opposition say that, whilst confining the three Corporations to a national policy of flying British, we should then charter companies who are buying and flying foreign aircraft? They can fly those aircraft without subsidy, because in fact—

Air-Commodore Harvey

Surely that is not quite accurate, because the Corporation have six Constellations and six Stratocruisers on order.

Mr. Lindgren

For one particular route. Skyways have bought Skymasters, and I do not blame them. After all Skyways are a commercial undertaking: they have to think of their shareholders. They have a very high standard of organisation and of service: the services they have rendered to the Corporation have been excellent. It is hardly fair for the hon. Member for Mid-Bedford to chide the Corporation for losing money, and quote companies who would run services without subsidies, when our Corporations are required to fly uneconomic aircraft.

Sir P. Macdonald

Skyways are operating the same aircraft as B.O.A.C. and other Corporations—Yorks, Lancasters and Dakotas.

Mr. Lindgren

They also have D.C/'s. They have had them for some time. The West African service which they offered to run for the Nigerian Government was in fact a Skymaster service—

Mr. Lennox-Boyd

Would the Parliamentary Secretary consider that the people In West Africa are now getting as good a service as if the offer had been accepted, and must we not consider the customer if we wish to make them pay?

Mr. Lindgren

I quite agree. It is one of the difficulties that B.O.A.C. are right up against. Australia and South Africa were quoted by the hon. Member for Mid-Bedford. The passenger, is, however, discriminating; if he has the choice of flying from Johannesburg to London in a Skymaster or a York the passenger is going to travel in the Skymaster and therefore the York service of B.O.A.C., due to the "Fly British" policy, is not having an adequate share of the pay load on offer. Another comparison was made with K.L.M. I do not wish to detract from the high standard of operations that K.L.M. offer along their routes, but to refer to the question of profit and loss, without, at the same time, analysing the accounts, or discovering whether they are on the same basis of accountancy as our Corporations, is not fair. The whole question of the K.L.M. mail rate is entirely different from that of our own Corporations. Again, in K.L.M. it is a question of purchase of space in each aircraft and not a question of the load factor carried. Whether or not one has indirect subsidies in relation to the profit, Is yet another very big factor.

The question was asked whether we would allow a reduction, or a rebate, in the fuel tax for the Corporations. I have to inform the Committee that, after consideration by the Government, it has been decided that such a rebate cannot be given. After all, it is a charge against the industry, and therefore the industry will have to carry it, in the same way as other industries have to carry the taxation imposed from time to time by this House. That is equally true with regard to landing fees. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite say, "Hear, hear." The provision of aerodromes and navigational aids is very costly and it costs this country nearly £5 million a year. The receipts, even from present landing fees, are only £500,000, so that within the confines of our own country there is a hidden subsidy of £4½ million a year.

The question whether an industry should or should not carry all its charges is a point for discussion. It would not be economic if we made it possible for an air transport industry to get away with charges which otherwise it ought to pay. Railways could have made much more profit than they did in the years before the war, if someone other than themselves had provided free of cost all their stations and signalling equipment, and they had been left to provide only the permanent way, the engines and the carriages. The provision of navigational aids, aerodromes and the rest, is and should be a charge against civil aviation.

The hon. and gallant Member for Macclesfield (Air-Commodore Harvey) spoke of the Ambassador. I have not time, unfortunately, to discuss this matter, beyond saying that the Corporations cannot be expected to develop every aircraft which comes on the market. Their aim as operators is to get as limited a range of types of aircraft into operation as possible, and to programme these aircraft so that they can be written off over a period of time and earn money while operating. When it is suggested that the Corporations should keep changing programmes of aircraft in order to develop new types, I would point out that that is not the function of airline operators.

I ought to make reference to the question raised by the hon. and gallant Member for Macclesfield about the dismissal of Air Vice-Marshal Bennett. He referred, as did others, to the "dismissal of Air Vice-Marshal Bennett by my noble Friend." I would like to make it perfectly clear—I thought that already it was clear—that the differences which arose were differences with Air Vice-Marshal Bennett's own Board, and that action was taken by that Board. The hon. and gallant Member said that this dismissal ought to have come earlier, that it ought to have happened back in November. That is an expression of his own view; but, in fact, one does not dismiss a Chief Executive on one instance of disagreement. One goes on from disagreement to disagreement until there comes a point, as the Chairman of B.S.A.A. said, when a decision had to be made whether they could carry on with him or whether they could not. They decided that they could not. It was purely a matter for the Board and not, I repeat, in any shape or form, a matter in which my noble Friend interfered.

I am afraid that I have dealt with only a few of the points raised. I have had less than half an hour in which to reply to a six-hour Debate. As I said earlier, I will reply by correspondence to hon. Members on points which I have not answered. In conclusion, I wish to say that I appreciate, with everyone in this Committee, the services which have been

rendered by the staffs of the three Corporations. As has been said, we have the best crews, groundstaffs, and the best of administrative, professional and technical staffs. Given the aircraft and the opportunity, we can have the finest airlines in the world.

Mr. Lennox-Boyd

I beg to move, "That Item Class VI, Vote 16, Ministry of Civil Aviation, be reduced by £100."

Question put.

The Committee divided: Ayes, 109; Noes, 201.

Division No. 90.]	AYES.	[9.59 p.m.
Agnew, Cmdr. P. G.	Grant, Lady	Prior-Palmer, Brig O.
Aitken, Hon. Max	Grimston, R. V.	Raikes, H. V.
Amory, D. Heathcoat	Hannon, Sir P. (Moseley)	Ramsay, Maj. S.
Assheton, Rt. Hon. R.	Harvey, Air-Comdre. A. V.	Roberts, H. (Handsworth)
Baldwin, A. E.	Haughton, S. G.	Robinson, Roland
Barlow, Sir [...].S	Headlam, Lieut.-Col. Rt. Hon. Sir C.	Ropner, Col. L.
Baxter, A. B.	Henderson, John (Cathcart)	Ross, Sir R. D. (Londonderry)
Beamish, Maj. T. V. H.	Hogg, Hon. Q.	Shepherd, W. S. (Bucklow)
Bennett, Sir P.	Hope, Lord J.	Smiles, Lt.-Col. Sir W.
Birch, Nigel	Jeffreys, General Sir G	Smith, E. P. (Ashford)
Boles, Lt.-Col. D. C. (Wells)	Joynson-Hicks, Hon. L W	Smithers, Sir, W.
Bowen, R.	Keeling, E. H.	Snadden, W. M.
Bower, N.	Lancaster, Col. C. G.	Stoddart-Scott, Col. M.
Buchan-Hepburn, P. G. T	Langford-Holt, J.	Strauss, H. G. (English Universities)
Bullock, Capt. M.	Law, Rt. Hon. R. K.	Studholme, H. G.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)	Legge-Bourke, Maj. E. A. H	Taylor, C. S. (Eastbourne)
Byers, Frank	Lennox-Boyd, A. T.	Taylor, Vice-Adm. E. A. (P'dd't'n, S.)
Carson, E.	Linstead, H. N.	Teeling, William
Challen, C.	Lloyd, Selwym (Wirral)	Thomas, J. P. L. (Hereford)
Channon, H.	Low, A. R. W.	Thorneycroft, G. E. P. (Monmouth)
Clifton-Browne, Lt.-Col. G.	McCorquodale, Rt. Hon. M. S.	Thorp, Brigadier, R. A. F.
Crosthwaite-Eyre, Col. O. E.	Macdonald, Sir P. (I. of Wight)	Touche, G. C.
Crowder, Capt. John E.	Macmillan, Rt. Hon. Harold (Bromley)	Turton, R. H.
Cuthbert, W. N.	Maitland, Comdr. J. W.	Vane, W. M. F.
Darling, Sir W. Y.	Manningham-Buller, R. E.	Wakefield, Sir W W
Davies, Rt. Hon. Clement (Montgomery)	Marshall, D. (Bodmin)	Walker-Smith, D.
Dower, Col. A. V. G. (Penrith)	Marshall, S. H. (Sutton)	Ward, Hon. G. R.
Dugdale, Maj. Sir T. (Richmond)	Maude, J. C.	Watt, Sir G. S. Harvie
Eccles, D. M.	Morrison, Maj. J. G. (Salisbury)	Wheatley, Colonel M. J. (Dorset, E.)
Eden, Rt. Hon. A.	Neven-Spence, Sir B.	White, J. B. (Canterbury)
Fleming, Sqn.-Ldr. E. L.	Nicholson, G.	Williams, Gerald (Tonbridge)
Foster, J. G. (Northwich)	Nield, B. (Chester)	Willoughby de Eresby, Lord
Fox, Sir G.	Noble, Comdr. A. H. P.	Winterton, Rt. Hon. Earl
Fraser, Sir I. (Lonsdale)	Odey, G. W.
Fyfe, Rt. Hon. Sir D. P. M	Orr-Ewing, I L.	TELLERS FOR THE AYES:
George, Maj. Rt. Hn. G. Lloyd (P'ke)	Osborne, C.	Major Conant add
George, Lady M. Lloyd (Anglesey)	Pitman, I. J.	Brigadier Mackeson.
Gomme-Duncan, Col. A.	Prescott, Stanley
NOES.
Adams, Richard (Balham)	Braddock, T. (Mitcham)	Crossman, R. H. S.
Alexander, Rt. Hon. A. V.	Bramall, E. A.	Daines, P.
Allen, Scholefield (Crewe)	Brook, D. (Halifax)	Davies, Edward (Burslem)
Anderson, F. (Whitehaven)	Brown, George (Belper)	Davies, Ernest (Enfield)
Ayles, W. H.	Brown, T. J. (Ince)	Davies, Haydn (St. Pancras, S.W.)
Ayrton Gould, Mrs. B.	Burden, T. W.	Deer, G.
Bacon, Miss A	Callaghan, James	Delargy, H. J.
Baird, J.	Castle, Mrs. B. A.	Dobbie, W.
Barton, C.	Chamberlain, R. A.	Dodds, N. N
Battley, J. R.	Champion, A. J.	Donovan, T.
Bechervaise, A. E.	Cobb, F. A.	Dugdale, J. (W. Bromwich)
Berry, H.	Cocks, F. S.	Ede, Rt. Hon. J. C.
Beswick, F.	Coldrick, W.	Edelman, M.
Binns, J.	Collindridge, F.	Edwards, N. (Caerphilly)
Blackburn, A. R.	Colman, Miss G. M.	Evans, S. N. (Wednesbury)
Blenkinsop, A.	Cook, T. F.	Farthing, W. J.
Blyton, W. R.	Corbet, Mrs. F. K. (Camb'well, N.W.)	Fernyhough, E.
Boardman, H.	Corlett, Dr. J.	Fletcher, E. G. M. (Islington, E.)
Bowden, Flg.-Offr. H. W.	Cove, W. G.	Follick, M.
Bowles, F. G. (Nuneaton)	Crawley, A.	Foot, M M.
Forman, J. C	McLeavy, F.	Shurmer, P.
Fraser, T. (Hamilton)	MacMillan, M. K. (Western Isles)	Simmons, C. J.
Ganley, Mrs. C. S.	McNeil, Rt. Hon. H.	Skeffington, A. M.
Gibbins, J.	Macpherson, T. (Romford)	Skinnard, F. W.
Gilzean, A.	Mann, Mrs. J.	Solley, L. J.
Glanville, J. E. (Consett)	Manning, C. (Camberwell, N.)	Soskice, Sir Frank
Grierson, E.	Manning, Mrs. L. (Epping)	Sparks, J. A.
Griffiths, D. (Rother Valley)	Mathers, Rt. Hon. George	Stamford, W.
Griffiths, Rt. Hon. J. (Llanelly)	Middleton, Mrs. L.	Steele, T.
Griffiths, W. D. (Moss Side)	Millington, Wing-Comdr. E. R.	Stewart, Michael (Fulham, E.)
Gunter, R. J.	Mitchison, G. R.	Strauss, Rt. Hon. G. R. (Lambeth, N)
Guy, W. H.	Moody, A. S.	Taylor, H. B. (Mansfield)
Haire, John E. (Wycombe)	Morley, R.	Taylor, R. J. (Morpeth)
Hamilton, Lieut.-Col. R	Morgan, Dr. H. B.	Taylor, Dr. S. (Barnet)
Hannan, W. (Maryhill)	Morrison, Rt. Hon. H. (Lewisham, E.)	Thomas, D. E. (Aberdare)
Hardy, E. A.	Moyle, A.	Thomas, Ivor (Keighley)
Hastings, Dr. Somerville	Nally, W.	Thomas, I. O. (Wrekin)
Henderson, Joseph (Ardwick)	Naylor, T. E.	Thomas, George (Cardiff)
Herbison, Miss M.	Neal, H. (Claycross)	Thorneycroft, Harry (Clayton)
Hewitson, Capt. M	Nichol, Mrs. M. E. (Bradford, N.)	Thurtle, Ernest
Hobson, C. R.	Nicholls, H. R. (Stratford)	Titterington, M. F.
Holman, P.	Noel-Baker, Rt. Hon. P. J. (Derby)	Tolley, L.
Holmes, H. E. (Hemsworth)	Oldfield, W. H.	Tomlinson, Rt. Hon. G
Hoy, J.	Orbach, M.	Turner-Samuels, M.
Hudson, J. H. (Ealing, W.)	Paling, Rt. Hon. Wilfred (Wentworth)	Vernon, Maj. W. F.
Hughes, Emrys (S. Ayr)	Paling, Will T. (Dewsbury)	Viant, S. P.
Hughes, Hector (Aberdeen, N.)	Parker, J.	Walker, G. H.
Hynd, H. (Hackney, C.)	Parkin, B. T.	Warbey, W. N.
Jeger, G. (Winchester)	Paton, Mrs. F. (Rushcliffe)	Webb, M. (Bradford, C.)
Jeger, Dr. S. W. (St. Pancras, S.E.)	Paton, J. (Norwich)	Wells, W. T. (Walsall)
Johnston, D. H.	Pearson, A.	Wheatley, John (Edinburgh, E.)
Jones, D. T. (Hartlepool)	Perrins, W.	Whiteley, Rt. Hon. W.
Jones, Elwyn (Plaistow)	Popplewell, E.	Wilcock, Group-Capt. C. A. B.
Jones, P. Asterley (Hitchin)	Porter, E. (Warrington)	Wilkes, L.
Keenan, W.	Porter, G. (Leeds)	Wilkins, W. A.
King, E. M.	Proctor, W. T.	Willey, F. T. (Sunderland)
Kinghorn, Sqn.-Ldr. E.	Pursey, Cmdr. H	Willey, O. G. (Cleveland)
	Randall, H. E.	Williams, Rt. Hon. T. (Don Valley)
Kinley, J.	Ranger, J.	Williams, W. R. (Heston)
Lee, F. (Hulme)	Rankin, J.	Willis, E.
Leslie, J. R.	Rees-Williams, D. R.	Wills, Mrs. E. A.
Lewis, A. W. J. (Upton)	Reid, T. (Swindon)	Wise, Major F. J.
Lindgren, G. S.	Richards, R.	Wyatt, W.
Lipton, Lt.-Col. M.	Robens, A.	Yates, V. F.
McAdam, W	Robertson, J. J. (Berwick)	Younger, Hon. Kenneth
McKay, J. (Wallsend)	Rogers, G. H. R.	Zilliacus, K.
Mackay, R. W. G. (Hull, N.W.)	Ross, William (Kilmarnock)
McKinlay, A. S.	Sharp, Granville	TELLERS FOR THE NOES:
		Mr. Snow and Mr. G. Wallace.

Question put, and agreed to.

Resolved: That a sum, not exceeding £698,574,000, he granted to His Majesty, on account, for or towards defraying the charges for the following Civil and Revenue Departments and for the Ministry of Defence for the year ending on the 31st day of March, 1949.

Resolution to be reported Tomorrow; Committee to sit again Tomorrow.