§ The Minister of Civil Aviation (Mr. Alan Lennox-Boyd)I rise with your permission and that of the House to make a statement on the civil air transport policy of Her Majesty's Government.
The House will realise that most of the preliminary work which enables me to do this has been done by my predecessor, my right hon. Friend the Member for Renfrew, West (Mr. Maclay).
It is the policy of Her Majesty's Government, as has been stated, to combine the activities of the Airways Corporations and the independent companies in the way which will best serve the interests of British civil aviation and of all users of their services.
We recognise that the Airways Corporations have established themselves well in the international field. We shall do all we can to encourage this. They are important earners of foreign currency. They are up against intensive competition from foreign air lines, and we are determined that the competitive strength of the Corporations to operate both first and second or tourist class services on their present established networks will not be impaired.
On the other hand, we seek to improve the position of the independent companies, which with few exceptions lack long-term security and opportunities of expansion. They cannot establish their position if they cannot plan firmly ahead. We therefore intend to give them more scope and security, while, at the same time, not increasing the cost of civil aviation to the taxpayer.
We have therefore decided that the development of new overseas scheduled services shall be open to the Corporations and independent companies alike. Applications will be made to the Air Transport Advisory Council, which will administer a procedure on licensing lines. Associate agreements for new routes will normally be granted for seven-year periods with extension to 10 years in special cases. This should give private firms sufficient security for capital outlay and expansion.
In particular, we have hopes of independent companies developing the all-freight market, which is a growing field with great possibilities. There are also opportunities for special types of service 1153 such as seasonal inclusive tours and services at cheap fares not directly competitive with the Corporations to places within the Colonial Empire.
Charter operations are in the main the domain of the independent operator. The Corporations will keep the right to engage in charter work in those cases where they have special facilities. They will not, however, maintain aircraft specifically for charter work.
United Kingdom internal services present a special problem. Their cost to the taxpayer is considerable. We are still examining the best way of dealing with this. At the same time we are considering how best to meet the needs of Scotland. The Channel Islands and the Isle of Man also present their special problems. In the meantime, British European Airways will continue to operate their existing network. Internal services additional to those of British European Airways will be made available to private operators for long-term periods.
The Air Transport Advisory Council will be ready to receive during this summer applications not involving subsidy for these and for new overseas services in time for the policy to take effect in 1953. The companies will continue to operate scheduled services as associates of the Corporations, but under a modified form of agreement. Terms and conditions of service must be not less favourable than those reached through the machinery of the National Joint Council for Civil Air Transport.
Under this policy, which has been framed after consultation with the many interests affected, the public and private sectors of the industry can both make their best contributions to the development of British civil aviation.
§ Mr. LindgrenMay I ask the right hon. Gentleman three questions? Is it not a fact that the granting of additional powers to the Air Transport Advisory Council virtually means that we are taking away from the Minister and from Parliament the control of the development of civil aviation in this country, and is that in accordance with the generally conceived policy of the Government?
The second point concerns B.O.A.C. and B.E.A. Is it not a fact that they are now coming "out of the red" and 1154 are making a profit? As they are at present engaged in the development of new and revolutionary types of aircraft is this the time to create uncertainty by bringing confusion into the position through interpolating the charter companies, who will offer the Corporations competition?
The third point concerns the availability of aircraft. While the right hon. Gentleman extended the usual courtesy of providing me, beforehand, with a copy of his statement, I think he will agree that it was difficult to take it in in the short time available. Is it not a fact that the success or failure of the new policy of the Government will depend upon the availability of aircraft to charter companies? Do I understand that the availability of aircraft to the charter companies has not been discussed and is not involved in this policy?
§ Mr. Lennox-BoydI shall try briefly to answer those three points. If I answered them at length it would develop into a debate.
In the first case, this in no sense abandons the responsibility of Her Majesty's Government for the development of civil aviation as a whole, but it does appear to Her Majesty's Government to be best that the allocation of new services to those best qualified to run them, whether public or private enterprise, should be left to an independent authority. That is our intention so to do.
The second question asked by the hon. Gentleman referred to the question of the profit or loss of the existing Corporations. We are as anxious as anybody else to see that they make a profit, and the fact that B.O.A.C. is now doing so is a matter of the utmost satisfaction. My statement is designed so as to express the thanks of the Government and the people to the Corporations. B.E.A. have made very heavy losses on the internal services, and I know that many people associated with them would be glad to see whether these internal services could not be run on profitable lines.
On the third point, the availability of aircraft is of the utmost importance, and one of the reasons why we are now giving private companies long-term security is to enable them to raise the capital to get the aircraft required.
Mr. McNeilWill the right hon. Gentleman assure us that in these discussions the present level of the services to the Scottish Islands and the less populous parts of Scotland will not be lessened in any effort to create more profitable operations than exist at present? Should not the present level of service be maintained?
§ Mr. Lennox-BoydI have been at pains to make it quite clear that no decision is announced today to the House about the internal B.E.A. services, but I should like the right hon. Gentleman and other Scotsmen to know that future Scottish internal services are of the utmost concern to us, and that no change will be made which will not give Scotland the same or better services than those which she has today.
§ Mr. PerkinsWill my right hon. Friend enter into discussions with the appropriate trade unions to ensure that any pilots transferred from either B.O.A.C. or B.E.A. will take with them their pension rights?
§ Mr. Lennox-BoydI will certainly enter into discussions. I have been at pains, in the short time I have been Minister, to consult trade unions on the National Joint Council on the proposed changes. I will at every stage endeavour to carry trade unions along with any decision the Government may make.
§ Mr. WoodburnThe right hon. Gentleman says that these services will be run without subsidy. Does that mean that they will not have the Post Office contracts? Have private enterprisers taken up the offers already made by the Corporation to give them services and have they operated the services already given to them?
§ Mr. Lennox-BoydI have been most careful, and I specifically did not refer to the future internal services of the B.E.A. It may well be that nobody, whether by public or private organisation, can operate certain Scottish air services without subsidy. That question must be left open for future discussion. I can assure the right hon. Gentleman that the future of Scotland and the need for the best service is very present to my mind. In regard to the other services, I am examining as a matter of 1156 urgency the question of Post Office contracts. From early experience in these matters I realise the importance that they have in this field.
§ Lieut.-Colonel ElliotWhen does my right hon. Friend expect to be able to make a statement on the result of the examination now going on as to the internal services, and particularly the Scottish services?
§ Mr. Lennox-BoydI was very anxious to make a statement on the very limited field in which we were able to make a decision, in order that private operators and others should have confidence as to the future. I can assure my right hon. and gallant Friend that we shall do all we can to come to early decisions in the other field, the importance of which we fully recognise. Meanwhile, B.E.A.'s internal network will continue undisturbed.
§ Lieut.-Colonel ElliotWould it be possible to make a statement before August?
§ Mr. Lennox-BoydI must, I think, have some reserve in that matter.
§ Mr. GrimondWhen the right hon. Gentleman is considering the future of the Scottish services will he bear in mind that the crying need is for new types of aircraft, particularly helicopters? Secondly, can he say whether the future of his own Ministry is under consideration and, in particular, its relationship to B.E.A., both as regards aerodromes in this country and the development of new aircraft?
§ Mr. Lennox-BoydIn regard to the second point, I am endeavouring as best I can to discharge the dual duty imposed upon me. In regard to the future of the helicopter service, it is our intention that in any contract entered into through the proposed new licensing agency the helicopter service shall not be included in that contract, so that there will be full freedom to develop helicopter services whether by national or private enterprise, as seems best in the light of modern knowledge and of the needs of the country.
Air Commodore HarveyWhen my right hon. Friend arrived at this decision, did he take into account the subsidiary companies of the Corporations operating 1157 in the Commonwealth, which are consistently losing money? Would it not be better for the Corporations to concentrate on their main trunk routes against foreign competition and hand over those companies to other operators? Second, is my right hon. Friend aware that unless high priority is given to manufacture in civil aviation no aircraft will be available during the bulk of the seven years which he has mentioned?
§ Mr. Lennox-BoydI know the importance of these subsidiary companies in the Colonies, but other Governments are, of course, involved, apart from Her Majesty's Government in the United Kingdom. I know that my hon. and gallant Friend would not expect me to speak at this moment on behalf of the considerable number of Colonial Governments who are interested, but I assure him I shall not lose sight of the importance of what he has said. In regard to the need to give priority to civil aviation needs, that is part and parcel of the defence needs of the country as a whole. I assure my hon. and gallant Friend that I am ever conscious, and will be so, of the need for seeing that civil aviation interests are not subordinated unnecessarily to the wider interests of the nation as a whole.
§ Mr. Herbert MorrisonWill the right hon. Gentleman tell the House why, when British civil aviation services, which are public services, to the surprise of a good many of us, are showing real signs of paying their way, the Government have charged in for the purpose of messing up the whole situation and putting a spanner into the works almost with a view to preventing the public services being a success? I say nothing about the effect upon the employees of the undertakings, in which my hon. Friend the Member for Reading, South (Mr. Mikardo) has a direct interest of some importance.
Everybody expected in earlier years that the Air Corporations would be subsidy-carrying industries for a good time to come. When they are showing signs of paying their way, why do the Government want to come charging in with a view to jeopardising that situation, out of purely theoretical considerations?
Secondly—[HON. MEMBERS: "Speech."] You will have some more speeches about this matter before you are done. I would ask the Leader of the House whether, 1158 in view of this vital and important change of policy following upon the other transport changes of policy, I may presume that the Government will provide facilities for the House to debate this matter?
§ Mr. Lennox-BoydPerhaps I may answer, within the limited field which is my responsibility. The right hon. Gentleman referred to the Government barging in. If he takes the trouble and does me the credit of reading what I have said, he will see that there is no interference whatever in the existing network of the Corporations. It is our belief that in this field, as in the field of road transport, there is a very good opening for private enterprise to open up new opportunities for public service. [Interruption.] Perhaps the right hon. Gentleman, having asked me a question, will do me the courtesy of listening to my answer. I would remind him, when his hon. Friend talks about the Corporations being "out of the red" and making a profit, to consider that, despite the zeal of B.E.A. during the past year, their losses on the internal services to which I have referred more than exceeded their profits anywhere else. These amounted to a very considerable handicap, which many of B.E.A.'s best friends would like to see private enterprise try to solve.
§ Mr. MorrisonIs it because the internal services are financially difficult that the right hon. Gentleman is much less forthcoming about trying to get private enterprise there than he is with regard to the other field?
§ Mr. Lennox-BoydI will certainly answer that question. We are creating machinery, and we have every hope that there will be opportunities of service in this field. Meanwhile, we are anxious that in the new and expanding freight market and on other routes outside the existing network the race will go to the people who can give the best service to the public.
§ Several Hon. Members rose—
§ Mr. SpeakerOrder. There is no Question before the House. There was a question asked, and I do not know whether it is desired to give an answer to it.
§ Mr. MorrisonThere is the point about a debate which the Leader of the House ought to answer, if I may say so.
§ Mr. ProfumoWhy should he answer?
§ Mr. MorrisonDoes the hon. Gentleman think this is the House of Commons or the Hitler Reichstag? I asked for a reply about a debate, Mr. Speaker. Also, I should have thought that my hon. Friend, who represents the trade unions in this industry, should be permitted to put a question.
§ The Lord Privy Seal (Mr. Harry Crookshank)It can be considered through the usual channels before tomorrow, when the right hon. Gentleman can repeat his question when we discuss the business for when we return.
§ Several Hon. Members rose—
§ Mr. SpeakerOrder. There is no Question before the House and judging by the interchange of questions which has taken place, there is material here for a debate. It cannot take place now.