HC Deb 14 May 1948 vol 450 cc2482-97

2.30 p.m.

Mr. Berwick (Uxbridge)

On 26th February we had a Debate on Civil Aviation. During that Debate, of back benchers who spoke eight criticised the type of aircraft which our Corporations had to fly. One hon. Member said that unless we fly aircraft as good as our competitors we are bound to lose money. Another complained of the obsolescent and even military aircraft which civil airlines had to use. The hon. Member for Worcester (Mr. Ward), who wound up the Debate for the Opposition, spoke of "hopelessly inadequate" aircraft. But despite this, the only assurance we have had either from the Minister of Supply or the Parliamentary Secretary to the Ministry of Civil Aviation on this point of new aircraft, was: … a 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."—[OFFICIAL REPORT, 26th February, 1948; Vol. 447, c. 2156.] Therefore, I feel that we are justified this afternoon in raising the question of the types of aircraft which the Corporations, especially B.O.A.C. will have to operate during the next five or six years.

The case is briefly this: first, there are too many different types of aircraft; second, most are not competitive and some are grossly uneconomic; third, on present information we are in danger of drifting on with demoralising six-figure losses for the next five or six years; fourth, the decision of the Cabinet to buy British, although understandable and laudable at the time it was made, has not acted as a stimulant to the British aircraft manufacturers, but has with one or so worthy exceptions, been more of a soporific; fifth, I hope to show, and I know that my hon. Friend the Member for Buckingham (Mr. Crawley) will show, that we can break out of this present position if a decision is given at a high enough level to enable the Corporation to go in for some reasonable aircraft within this interim period of the next five or six years.

I want to speak about the different types of aircraft with which the Corporation have to contend. If two types of aircraft are operated instead of one, I wonder whether it is realised by the House, or especially by the Treasury, just how costs mount up, how the amount of spares increase, how the storage space for them increases, and how the number of storekeepers is increased in order to keep the stores. Ground engineering staffs tend to be increased, and in any case they have to spend time getting the necessary qualifications for the new types of aircraft. Aircrews have to receive training and experience on the new types. On this last factor alone, I might mention that to fly a four-engined aircraft around the circuit on training costs something round £90 an hour. But it is not a question of B.O.A.C. having two types instead of one. I find that they have Dakotas, Haltons, Liberators, Lancasters, Yorks, Constellations, Hydes, Plymouths and Solents. In addition they either have bought or hope to buy or have had foisted upon them eight more different types, making in all something like 180 machines of 17 different types. I ask the House to consider the immense wastage which inevitably is involved.

Some of these aircraft, even if every passenger seat is taken every time the machine flies, cannot hope to collect sufficient revenue simply to pay for the cost of the petrol, oil and handling charges en route. We had one example of a converted military type flying to West Africa —the Halton—which cost £9,000 for a single trip simply to fly the machine. Even if the aircraft was full, the revenue from passengers was only £1,800. For a round trip, even allowing something for mail, the loss was about £13,000 apart from overheads which were mounting up at home.

To take another example, the B.O.A.C. are now flying down to Johannesburg a British aircraft. The pay load for the longest hop is about 3,000 kilos. That means that it requires one horse-power to carry each half kilo of pay load. The South Africans fly an American machine along the same route. The pay load of that machine for the same hop is about 4,000 kilos. That works out at one horse-power per kilo. As the cost to operate each horse-power is roughly the same, that means that the B.O.A.C. have a 100 per cent. extra cost when they carry the same load. In addition there are all the extra overheads which follow from flying uneconomic machines. Moreover, that is assuming that both aircraft carry maximum payloads, whereas in fact what is happening, according to my information, is that of about 400 passengers within a given time originating from Johannesburg the British aircraft attracted seven passengers. Quite naturally, all the rest prefer to fly in the more modern and more comfortable machines.

Such a position is clearly intolerable. We could probably continue for another few months if new and economic British machines would then be available. If we could see these British machines coming along within the next six months or so, that would be some encouragement. But it is impossible to say this. Of the British machines in view, from British factories, we have the M.R.E. 170. In the estimate of some people that is a little inferior in some respects to the Constellation. In the opinion of the manufacturers it is a little superior, and probably there will be improvements as the machine is developed. In any case, that machine is irrelevant to the argument which I am making, because it will not be available for at least another five or six years.

Then we have the Tudor. I will say little about that. Unfortunately, too much has been said about it by too many people already, and a lot of ill feeling has been engendered. I might be allowed to remark that it was a gallant attempt. If the Tudor aircraft had come into service, say, two years ago, then we could have contemplated operating it for the next year or so. To look forward to bringing this aircraft into operation on a large scale for the first time in the next year or two seems to me, to say the least, most discouraging from the point of view of the operator. I do not think that there are many people in this House who would not agree with me that this aircraft should be scrapped and that we should cut our losses. The hon. Member for Worcester, who dealt with this point in the Debate in February, pointed out that to operate the machine over the next five years would cost approximately ten times the original purchase cost. It is possible to argue that in the long run it would be cheaper if we cut our losses.

Then we have another machine, the Hermes. It is doubtful whether this aircraft will be in operation within four years. Its performance is uncertain. It is unlikely that it will even equal in performance an aircraft which we were able to buy in the world market this week. Moreover, there will be a lot of snags to be worked out. It requires a special fuel. It is necessary to use 15o octane fuel, which may not be available. If it is available, we would have to have separate supplies all the way down the line.

The hon. Member for Buckingham hopes to make some detailed constructive suggestion. I wish to emphasise only one practical alternative suggestion which I put forward to the Ministry several weeks ago and which, to some extent, has been adopted this week. B.O.A.C. already have six Constellations in service, and this week, thanks to Treasury permission, they have been able to buy five more from Ireland. We have already set aside 12 million dollars for the purchase of six Strato-cruisers. Delivery is already late. There still will be the usual teething troubles. I want to ask the Parliamentary Secretary if it is not possible to switch this order and for the same outlay we could get eight or nine Constellations in addition to the appropriate spares. That would give us 20 economic aircraft of the same type immediately. We should have the nucleus of a real fleet. According to the estimates given to me, B.O.A.C. could operate the present ser- vices efficiently and economically with between 40 and 50 of this type of aircraft against its present collection of between £60 and 18o machines.

Against this argument, we shall hear that we should lose prestige if we do hot fly British. I ask the House to consider what prestige will be lost if we continue plying for hire down the air routes of the world with out-of-date machines and with no passengers. Let us consider The Dominions aspect. I am a Commonwealth man, and I have always wanted to ice economic integration of the British Commonwealth. In particular, as a functional job done together, I visualise the operation of British Commonwealth Airways. All the way from New Zealand, Australia, India, the Middle East to the United Kingdom, and across the North Atlantic we could proudly fly the same flag. That idea has had to wait, but we did fix up close parallel agreements with South Africa and Australia. Unless we can fly similar or comparable aircraft to these countries, these agreements are bound to break down, and between the sister countries and ourselves there w ill be a widening and wasteful breach.

Finally, I want to say that, before toe war, the Ministry of Civil Aviation was set up because there was a feeling that Civil Aviation was not getting a fair share of the country's resources. During and since the war, there has been a good deal of evidence to show that the operating side of the industry is still not getting a fair deal. As regards the manufacture's, I would say that they should devote their energies, not to the interim stop-gap type of aircraft, but that they should concentrate upon developing and providing really worth-while new aircraft to take over in five or seven years' time. Let us give them all the facilities they want for developing really good engines, flying intensively in special machines for several thousand hours, getting rid of all the snags and teething troubles so that they can produce in three or four years' time first-rate engines that will sell all over the world and which will be guaranteed trouble free for civil purposes. I think we should try concentrating upon our civil airlines. Give them priority for a change. I want to see this country carrying by air the world and his wife and all their goods, We have built up a splendid service so far with inadequate tools. I am confident that, if a proper decision is made and the Corporation is given reasonable aircraft, we shall find that this country would indeed gain absolute supremacy on the air routes of the world.

2.44 p.m.

Mr. Crawley (Buckingham)

My hon. Friend has raised a very important subject and has given us a good many details regarding the types of aircraft which the Corporations have to fly. Before adding to his constructive suggestions, I would like to reconsider the general position. It is about a year ago since in this House, we all agreed that the Corporations would have to fly British and that they should use what we knew to be uneconomical types for that purpose. I want to emphasise that this was an agreed decision of both sides of the House, and that we realised that it would run the Corporations into a considerable deficit. Nevertheless, since then the deficit has been very much larger than any of us anticipated, and, on the information which we now get, it appears as if that deficit will continue to be very much larger than either the Corporations or the Ministry expected.

On that ground alone, therefore, there is a real need to reconsider the whole question of flying British and what it means. I admit that as in every other part of our economy, the question of saving dollars is of vital importance, and compared with the 25 or 50 million dollars which we might have to spend if we flew entirely American, the expenditure of ten million pounds a year would not be very important from a financial view. But there are at least three other considerations, which I think outweigh to a very large extent the financial point of view, and one which alters it fundamentally.

They are, first, the morale of the employees of the Corporations; secondly, the extent to which the British aircraft industry is taking advantage of the opportunities given by the policy to "fly British"; and, thirdly, any new developments which have arisen since we took that decision last year and which fundamentally alter the circumstances. On the question of morale, I do not need to advertise how important it is that the spirit of the people working for the Corporations should be enthusiastic, and, as the criterion of success of any economic venture for so many has always been profit, and it is laid down in the Civil Aviation Act that these Corporations shall try to operate on commercial principles, it is quite obvious that, when year after year, these Corporations have to declare very large losses, the people operating them have become depressed and very sensitive to criticism both from here and from other parts of the world. I think that would be fairly easily bearable if the present difficulties were widely known and the Corporations had that unanimous support of the country, but both the Opposition and the newspapers have made the maximum political capital out of the losses which these Corporations have sustained, and have added greatly to their difficulties; and that in spite of the fact that the Opposition were committed to these losses in principle. It is really the third point, the fact that there have been new developments since last year, which affords the most urgent grounds for reconsidering our decision.

As the Minister knows, B.O.A.C., in conjunction with the Canada Air Company, put forward a scheme known as "Plan K," by which operations on all Empire routes should be taken over from existing types by aircraft known as the Canadair. This is a Canadian version of the Constellation with Rolls-Royce rather than American engines, thereby both giving the opportunity to advertise our best engines and also saving some expenditure of dollars. The point about this proposition is not that it is entirely new, because it is not. There was a rather similar plan by which Constellation aircraft were to be flown with another type of British engine, but that was turned down because of the expenditure involved.

The new factor in this Canadair proposition is that, instead of demanding spot dollars for the Canadair, the Canadian company are agreeable to being paid as dollars are earned; in other words, they are prepared to be paid out of annual earnings. The immediate question, therefore, is this: is there any prospect, if these aircraft were used in place of British interim types, that dollars would, in fact, be earned? The answer is that, according to the estimates which the Corporations had put forward—and I have confirmed today that these estimates are borne out by current figures and current traffic receipts—the Corporations could not only earn dollars to pay for the Canadair for the next five years, but would actually make a profit of about 4,500,000 dollars.

The point I want to make, therefore, is that whereas previously the prospect of flying American or Canadian aircraft involved expenditure of dollars, this proposition does not immediately involve expenditure of dollars but gives a prospect of earning up to four or five million dollars which otherwise we should not have the chance of earning. This proposition therefore makes a very great difference to the whole question whether, during this interim period before we can get modern aircraft, we are to continue to fly British.

When we gave our vote last year, I am sure that the thing that predominated in our minds was that we had at all costs to save dollars. Had we known then that it might be possible, without any immediate expenditure of dollars, to buy these economic types and to pay for them out of earnings, the attitude of many of us would have been more searching and critical. Further, on the estimates of the Corporation we should not merely, with the help of these aircraft be able to earn dollars but the overall balance sheet of the company would show a handsome profit in sterling as well from 1950 onwards. For, of course, these aircraft, being a type already in considerable production, would come into service much quicker than any of our new interim types.

The questions which I would like to ask the Minister are these: first, what answer has been given either by his Ministry to the Corporations or by other Ministries to his Ministry or by anyone else with authority on this matter, about the proposal to use Canadian aircraft. Secondly, if no answer has been given and the scheme is still being considered, where it is hanging fire? This scheme has now been awaiting decision—if it is awaiting it—since October of last year. Thirdly, I would ask whether the right lion. Gentleman and his noble Friend are supporting this proposal arid whether they are impressing on their colleagues in the Government and the Cabinet the advantages which, according to the estimates of the Corporation, do exist. In other words, I would like to know where the Ministry of Civil Aviation stand in this matter.

Fourthly, I should like to know if the Ministry or the Treasury have any doubts about the estimates the Corporations have put up and whether we may know what the doubts are so that we may begin to be able to form some rather nearer criticism of the proposal itself. I think that it is only fair to the Corporations and to the public that these questions should be answered now. We have been waiting for many months and there has been a good deal of publicity about last year's loss and the probable loss which the Aviation Corporations are likely to incur this year. I think that depression in the Corporations is increasing and yet they all know that there is this proposition put forward, which does not incur the immediate expenditure of dollars, which would enable them to pull through economically and eventually to earn dollars. I think there is a general uneasiness that the interest of civil airlines may be being sacrificed unnecessarily to the alleged interest of the British aircraft industry.

That brings me to my final point. Even if it is admitted, as I hope and believe that it may be, that the Corporations' estimate about the earning of Canadair aircraft are correct, it is still possible that their proposal will be turned down on the grounds that it is reversing the policy of "Fly British." I think that with this new alternative proposal we have very carefully to reconsider what this policy of "Fly British" really means. I have the greatest confidence in British designers and engineers and I firmly believe that we shall be able to produce in the next five or six years an aircraft which will be a world beater. I am sure that that is what everyone hopes for in this House and in the country. I would always vote for and support all measures to spend money on research, even for the building of the most expensive prototypes, in order that the British aircraft industry should have the chance of beating the world in producing the very best civil aircraft.

But when I voted for "Fly British" I had not in mind that I was going to subsidise indefinitely aircraft firms to continue to produce, and so far as I know in many cases to protect, aircraft which are in fact obsolete before they come off the drawing board; because that is superficially what the position looks like in many cases now. If one goes through the list of some of the aircraft which have been mentioned we have no knowledge that the firms which make them have any more modern or experimental aircraft in view. We know that the De Havilland Aircraft Company has. We also know that the Brabazon and Saunders Roe are experimental types, but they were embarked upon at the instigation of the Government and not at the instigation of the aircraft industry and the firms concerned.

I think that we have nearly reached a point where we ought to have a public inquiry as to whether the Minister is satisfied that the "Fly British" policy as at present carried out is being used by the British aircraft industry to carry out real experimental work so that we can get in the future—in the next five or ten years—not aircraft five years out of date when they first begin to fly, but aircraft that really can, when they come on the runways, compete with anything that America can produce. I am sure that when I and my hon. Friends on this side voted for "Fly British," it was that progressive determination to produce new aircraft that we had in mind, and it is that which we want to support.

I want to raise one final matter to illustrate why I am disturbed about the British aircraft industry. I am not going to speak about the D.H. 106 which we all know is our greatest hope in the aircraft industry at the moment. There is another little company which is producing an aircraft which will I hope fly this June, which is made almost entirely from magnesium alloy. One cannot say anything with certainty about what the performance of that aircraft will be until it has got in the air and done its tests.

The point which I want to make is that magnesium alloy was developed to such an extent during the war and with such effect that one would have expected the major aircraft companies to have taken a very great interest in this matter long before now. I speak naturally as a layman and only have this information from experts whom I have consulted; but as far as I am aware although this idea was put up to their companies and although I believe, in fact, that a development contract for at least tail planes has been given by the Ministry of Supply to one company, that company, so far as I know, has not yet produced a single tail plane. I do not know if the major aircraft companies have seriously considered this matter. The facts are that magnesium is about 35 to 4o per cent. lighter than aluminium. In many cases it is stronger and far easier to handle. This little company making this aircraft and carrying out the ordinary tests through which aircraft go has found that it is as strong as and in many cases gives a better performance than aluminium.

A metal which is 35 per cent. lighter than aluminium, and which is just as strong and more manageable, is of such vital importance that surely aircraft firms should be interested at least in experimenting with it, especially when those experiments need not cost a great deal of money. Yet these experiments have been left to one small group of men without a factory of their own, who have been supported by enterprising people in the Ministry of Supply who have helped them to get other material and so on. We must wish them every success when their aircraft takes the air in June.

If that aircraft succeeds and produces revolutionary results in performance and payload we will want to know why, since the war, none of the major British aircraft industries thought it worth while to spend a few thousand pounds—perhaps £50,000 would have built an aircraft—to build a single machine to try out the revolutionary potentialities of this metal. There may be many other revolutionary types in preparation about which I know nothing, but I shall continue to investigate and get all the information I can. Certainly we have not heard of any such aircraft; had they existed I think we should have done so.

Unless such experimental types exist, then it would seem that the policy of "Fly British" is, in many cases, acting as an anodyne rather than as a stimulant. Unless the Minister can give us some more reassuring facts and figures I would urge strongly that the Canadair project be accepted and that the free winds of competition, from the whole world, be allowed to come into and stimulate this private enterprise industry to the efforts which are necessary to put this country ahead again in the production of civil aircraft.

3.3 p.m.

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

The latter part of the speech of my hon. Friend the Member for Buckingham (Mr. Crawley), whilst having a direct relationship to the subject, concerned aircraft manufacture. I am not tying to "pass the buck" in stating that governmental responsibility for the manufacture of aircraft is that of the Ministry of Supply. We have, however, had the advantage that the Minister of Supply was listening to part of my hon. Friend's speech; he asked me to apologise because he was unable to stay until the end. The responsibility of my noble Friend the Minister of Civil Aviation is for the flying of aircraft through the chosen instruments of the State, charter companies and other air operators. As far as the function of a transport operator within civil aviation is concerned, the whole of our energies is directed to securing the operation of services which will not only —in the words of air transport people— "break even," but will show a profit.

In an earlier Debate on the accounts of the Corporations I mentioned our difficulties. The hon. Member for Uxbridge (Mr. Beswick) has rightly called attention to the fact that the subsidies—or the losses as they have been called—of the Corporations are not subsidies to those Corporations alone. They are, in fact, subsidies to the British aircraft industry. Anyone going out into any form of transport must have, as a first requisite to success, a vehicle of transport which will show a profit over actual operating costs. When that profit has been achieved there will then be a margin for overheads and the like. At present the unfortunate feature, which I am afraid has not always been realised, is that even when an aircraft is full of passengers the fares do not meet the cost of the aircrew, petrol and oil, let alone allow for depreciation and overheads. It is the desire of Corporations and of my noble Friend to get equipment as quickly as possible to enable a profit to be made.

I ought to call attention to the fact that until the Debate in the House in February there was no ondication from either side that the "Fly-British" policy was in any way being questioned, or that there was any desire to depart from it. My hon. Friend the Member for Buckingham (Mr. Crawley) has mentioned what is known as "Project X." It seems to be known, both inside the House and within the industry generally, that these proposals have been made, but there was not a great deal of enthusiasm for that scheme, apart from its sponsors, until the early part of the year when the first enthusiasm was shown for a departure from the "Fly-British" policy. I ought to make it quite clear that aircraft operators have called the attention of my noble Friend to the effect of the Government's policy and the possible losses they will incur if they operate the services they are expected to operate. They have made proposals from time to time to bring their undertakings as near as possible on to a commercial basis, because no one likes being associated with an organisation which is continually operating at a loss, unless the loss is easily understood by the public at large. I am afraid that that has not been e case up to the present time, and while that is so there is bound to be some criticisms.

Mr. Stokes (Ipswich)

The speech by my hon. Friend the Member for Buckingham (Mr. Crawley) really calls for a reply from the Minister of Supply. Before our time runs out, are we to have any reply to the very serious statements which have been made?

Mr. Lindgren

The Minister of Supply was not notified that he was in any way concerned with this Debate. The subject of the Debate is the provision of aircraft for the Corporations and particular proposals in relation to them. I have already said that the full implications of what ha; been said will be drawn to the attention of the Minister.

Mr. Stokes

Does not the Ministry of Supply provide the aircraft?

Mr. Lindgren

No, Sir. The aircraft are supplied in the first instance by British manufacturers, and then by other manufacturers. The point has been made in the Debate that British aircraft are not: available, whereas the aircraft of foreign manufacture are available and should be purchased; which is, therefore, a departure from the "Fly-British" policy. I can give an assurance that the proposals made in the recent Debate in this House, and the proposals made by the Corporations to the Minister, and through the Minister to his colleagues in the Government, are receiving very careful consideration. They are under urgent review and a decision will be taken as quickly as possible. It is necessary that such a decision should be reached quickly, so that the Corporations and everyone else will know where they stand.

I think I ought to correct an impression inadvertently made by my hon. Friend the Member for Uxbridge. At the moment, B.O.A.C. are flying six different types of land planes and three different types of flying boats. My hon. Friend included in his calculation other British types of aircraft which it was anticipated would come into service. If they had come into service it would have meant that some of the earlier types would have been withdrawn. We must recognise, however, that there has always been a multiplicity of types, which meant that it was impossible to run an economic service. To do this we must have, as soon as possible, a unified fleet, and centralised maintenance of that fleet. For the future there are the Tudors. The position of the Hermes shows the complications which arise in air transport. These aircraft were expected to come into service for the Far East. They were dependent on a certain aerodrome being made available to receive them, as they could not operate on the existing aerodrome at Hong Kong. Without that alternative aerodrome the Hermes would not be suitable for that route. My noble Friend is not responsible for aerodromes outside this country. We are, of course, consulted, and we have the right to make representations, but decisions about these overseas aerodromes are made by the Governments concerned.

Mr. William Teeling (Brighton)

Surely, the hon. Gentleman is not suggesting that he has nothing to do with Singapore, for instance.

Mr. Lindgren

We have something to do with it, but the ultimate responsibility is not with His Majesty's Government or with the Minister.

Mr. Teeling

Surely, it comes under the Colonial Office?

Mr. Lindgren

There is consultation, but many people who are willing that things should be provided for them—and this is true not only of air services—are not so willing to contribute themselves towards the cost. As for British aircraft, there is nothing really competitive until we come to the Comet or the M.R.E. in 1953–54. There has been the purchase of six Constellations from the Eire Government. This provides a good example of the effect which economic aircraft have on a service. These planes will be used in parallel operation with the Australian Government, on the Quantas service to Sydney. That service loses about £1 million a year. By the operation of these six Constellations the loss will be turned into a profit of approximately £100,000. I must refer to the using of Constellations on the North Atlantic route—

Mr. Beswick

Can my hon. Friend say anything about the suggestion to switch the order for Boeing stratocruisers and buy more Constellations?

Mr. Lindgren

I should like to finish dealing with the Constellations point, pass on to the Boeing and then close, because if was indicated that the Debate should finish at 3.15.

On the North Atlantic we have six Constellations in service, providing nine Atlantic crossings, six to New York and three to Montreal; they are doing four runs from New York to Bermuda, and three from Bermuda to Baltimore: eight and a half hours' utilisation per day, and 3,000 hours' utilisation per annum. I think I can rightly claim that with those aircraft we are securing the highest utilisation of any aircraft in the world. It shows what can be done with the right aircraft, the right facilities for maintenance, and the opportunity to act as a really efficient operator. Given the aircraft and the facilities we will do the rest of the job as well as and even better than the rest of the world.

A number of statements have been made about the Boeing, which I am not able to contradict. All I know is that the information provided for me shows that the Boeing has not at the moment got its certificate of airworthiness. If it gets its certificate, and is licensed for 140,000 lb. it will be a much more attractive proposition and a much more economical aircraft than the Constellation. If it only gets its certificate, for say 135,000 lb., it would be a less attractive proposition than the Constellation. Whether or not there could be a switch between Strato-cruisers and Constellations I could not answer. All I know is that I have seen the contract, and from its terms my opinion, for what it is worth— and perhaps I ought not to give it, because it is not worth very much—is that the terms of the contract prevent such a transfer.

The points which have been made today will be borne in mind by the Corporations and my noble Friend. They will be brought to the notice of the appropriate authorities in order that my noble Friend as Minister, and the Corporations with which he is associated, may better do the job for which they were brought into being; and have a real opportunity to do that job as effectively and efficiently as possible.