HC Deb 15 March 1949 vol 462 cc1923-7
The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren)

The decision which I announced in this House on 1st March that the Tudor IV aircraft should not continue to be used for carrying passengers raises very serious problems for British South American Airways. That Corporation had five Tudor IV's in use and were looking forward to operating a fleet of 19 by the late summer. Without the Tudor IV's they have only Yorks, which are not competitive with modern aircraft.

To find the means of keeping the British South American Airways routes in operation, the obvious course was to turn to British Overseas Airways Corporation. Since British Overseas Airways Corporation also operate long-range aircraft and their routes to some extent overlap or converge with those of British South American Airways, a complete merger, in addition to achieving the maximum economy and efficiency in other directions, should enable the main services of both Corporations to be organised with the minimum number of aircraft. The Government have therefore decided to recommend to Parliament a complete merger of the two Corporations. The boards of both Corporations agree that this is the right course.

The amalgamation will not mean that the smaller Corporation will simply be swallowed up by the larger.

Sir Peter Macdonald

Is it in Order for a Minister to make a statement on a subject on which there is a Question on the Order Paper for tomorrow, without permission of the House?

Mr. Speaker

Yes, the Minister can make a statement whenever he chooses and a Question does not preclude him from making a statement.

Mr. Lindgren

My noble Friend considers that British South American Airways during their short existence have exhibited certain qualities which must on no account be lost. They have developed a most valuable team spirit and collective loyalty of their own. The two Corporations will be brought together in a way which secures that the experience of British South American Airways will be used to the full.

Any staff redundancies resulting from the merger will be shared fairly between the two Corporations and in accordance with National Joint Council procedure. On the other hand, redundancies arising from the internal reorganisation of British Overseas Airways Corporation which is now in progress will be restricted in effect to British Overseas Airways Corporation personnel.

My noble Friend intends that, under the Chairman of British Overseas Airways Corporation—Sir Harold Hartley and, after the end of June, Sir Miles Thomas—the present Chairman of British South American Airways, Mr. Booth, and the present Chief Executive of British Overseas Airways Corporation, Mr. Whitney Straight, shall become equal joint Deputy Chairmen.

The necessary legislation to bring this amalgamation into effect will be laid before Parliament as soon as possible. Meanwhile, to help in securing the best utilisation of the available aircraft along the two Corporations' routes, my noble Friend is immediately appointing the Chairman of British South American Airways to be a member of the board of British Overseas Airways Corporation. Proposals for dealing with the deficiency in the combined fleets of the Corporations are still under consideration.

I appreciate that the House will wish to examine thoroughly the implications of what I have just said and the Bill required to give effect to the proposed amalgamation. I hope, however, that I may be permitted today to express my noble Friend's conviction that in embarking on this course we are not merely making a virtue of necessity, but taking a step which should enable the staffs of both Corporations to do even better work than in the past and which should prove of lasting benefit to British civil aviation.

Mr. Stanley

May I first congratulate the hon. Gentleman on, at all events, using this extraordinary procedure in order to facilitate the passage of a Bill which is to come in the future, rather than in trying to prevent the passage of a Bill which has already been started? May I ask him two questions with regard to his statement? First, as I remember the matter, during the passage of the original Measure the existence of the three Corporations was stressed by the Government as being most important because it was said that it was only by having three Corporations there could be proper competition. What has happened to that viewpoint now that one Corporation has gone and the other, we understand, is "on the slide"? Secondly, in view of the fact that there are now to be two Deputy-Chairmen, is there any intention of appointing a new Chief Executive to this amalgamated Corporation?

Mr. Lindgren

In reply to the right hon. Gentleman's first point, if he will look again at the Second Reading Debate of 6th May, 1946, he will note that the Lord President of the Council then said that there was no particular virtue in three Corporations, and that if that number proved to be too many or too few modifications would be made.

Mr. Stanley

Are we then to understand that although it may be possible to reduce the number from three to two, it would not be right to reduce from three to one?

Mr. Lindgren

Not at the present time. The two types of operation are totally different. In reply to the right hon. Gentleman's second question, administrative functions will be attached to both Deputy-Chairmen, it being intended that one shall be on the commercial side and the other on the operational side.

Mr. George Ward

Does not the Parliamentary Secretary agree that the ability of B.O.A.C. suddenly to take on responsibility for the South American route with its existing flight of aircraft, in addition to its own commitments, indicate that B.O.A.C. has previously been over-established in aircraft and therefore in man-power?

Mr. Lindgren

No, Sir, that inference cannot be drawn.

Mr. Geoffrey Cooper

Is it intended to pursue research and investigation into the causes of the disasters to the Tudor aircraft, so that there is not a permanent reflection on aircraft constructors in this country vis-à-vis constructors in other parts of the world? Secondly, does my hon. Friend consider a purely temporary matter such as the unsuitability of certain aircraft for the time being, to be a sufficient reason for a permanent alteration in the set-up of these Corporations? Thirdly, does my hon. Friend recall the statement of the Lord President of the Council that it would be some protection for the worker to have three Corporations in that they would have some alternative source of employment? Is it intended to depart from that very important principle?

Mr. Lindgren

The answer to the first question is, "Yes, Sir." So far as the aircraft position is concerned, in the light. of the aircraft which are now available-and which are to come forward in the near future, it is considered to be more economical to combine the two Corporations and combine their operations. As to my hon. Friend's third question, the trade unions have already been consulted on the general principle, and they have expressed their agreement. In the detailed application of the principles of the merger they will be consulted in the day-to-day implementation of the procedure.

Mr. Edgar Granville

As the point has presumably been carefully investigated by the hon. Gentleman's Department and by the Corporations, can he say what savings in overhead and administrative expenses will be effected, and can he give us an estimate of the number of staff who will become redundant? Further, will this scheme retain some sort of yardstick of technical competition between the two routes?

Mr. Lindgren

I cannot today give an answer to the first part of that question, but no doubt that can be done when the Bill receives its Second Reading. As to the hon. Member's last point, the technical side of both Corporations will be merged and worked together in the light of their past experience.

Air-Commodore Harvey

May I say first, that I do not disagree with the statement of the Parliamentary Secretary? He referred to a committee which I understood him to say was concerned with new equipment. Before the new equipment to enable the North and South Atlantic routes to be operated is ordered, will the hon. Gentleman let the House have an opportunity of discussing the matter before a large amount of dollars is spent?

Mr. Lindgren

Responsibility for the Business of the House is not mine. The Lord President of the Council is sitting here, and will no doubt take note of what the hon. and gallant Member has said

Sir P. Macdonald

May we take it that any commitment entered into by British South American Airways with regard to future aircraft will not be thrown over by the new Corporation?

Mr. Lindgren

That commitment is in regard to the S.R.45. That is one which will be taken over by the new Corporation.

Mr. Granville

The Parliamentary Secretary has said nothing about my second question about staff who will become redundant under the scheme.

Mr. Lindgren

I cannot do so now, but I shall do so on Second Reading.