HC Deb 23 January 1953 vol 510 cc629-40

Motion made, and Question proposed. "That this House do now adjourn."—[Mr. Heath.]

4.8 p.m.

Air Commodore A. V. Harvey (Macclesfield)

The subject I want to raise this afternoon relates to a quite small airline operating in an outpost of the Commonwealth in the West Indies known as Caribbean International Airways. This is a small airline started some four and a half years ago by an ex-Air Force officer named Wing Commander Owen Roberts. Like many others after the war, he went into the flying business on his own account. He saw the possibility of operating an air service between these remote islands, that is to say, between Jamaica and the Cayman Islands.

At that time there was no airfield in the Cayman Islands and the wing commander had to operate an amphibian, landing on the sea, confronted with all the technical problems of taking the passengers and freight off by boat and getting them ashore. Against all those difficulties he succeeded in the four and a half years in rendering to the Cayman Islanders a very useful service.

The very existence of this company is now threatened through the British West Indian Airways, a wholly-owned subsidiary of British Overseas Airways, who intend to invade this route and will undoubtedly capture most of the traffic. This is being done regardless of the effort and money expended by Wing Commander Roberts's company, and there has been very little negotiation on the part of B.O.A.C. to come to terms by agreement. All they offered him was a ticket agency to sell British West Indian Airways tickets, which, as I see it, was little short of an insult. It goes much further than that, because Caribbean International Airways installed a radio beacon on Grand Cayman and a radio station. I am told on very good authority that in the period they have been operating they have flown 208 services out of a possible 213, and that during the last 11 months they have not missed a single operation.

Wing Commander Roberts went into this business just at the time when the Government of the day here were calling for colonial development. Our great Empire and Commonwealth was built by men like Wing Commander Roberts, who put their money, efforts and energies into small businesses which have since grown. He has carried 7,000 passengers, on what I might call a hazardous operation, without the loss of a single life or injury to any of his passengers. That is a record of which any operator, with all the necessary financial backing available, could be proud. He also earned a considerable amount of United States dollars, when this country wanted hard currency, by operating from the Grand Caymans to Tampa in Florida.

On this last point. I would say that while this is not definitely a scheduled service, it could be, and the Americans have signed a joint agreement with the Tampa-Grand Cayman service, but it has as yet to be signed by the British Government. Although there have been several months' delay—I expect for good reasons—I hope that the Government will look into this matter and see that the agreement is signed at an early date.

The Cayman Islands lie about 280 miles west of Jamaica. They have 6,000 inhabitants who, before aviation came to these islands, had to go by small boats, or schooners, with a very irregular service, to America and the adjacent islands. They became in a short space of time extremely air-minded, and as often happens when people have few communications and flying comes in, they took to it very quickly. There again, we have to thank this small company for educating the people to fly. Wing Commander Roberts spent a lot of money in getting business from the United States, by propaganda and other means, and now there is quite a prosperous tourist industry being built up in Grand Cayman and the other small islands. As a result of these efforts, two modern hotels and a number of houses have been built at Grand Cayman, and there is a good possibility of it becoming a considerable tourist centre in the British Empire.

The Caribbean International Airways Company, quite naturally, requested the Jamaican Government to grant them a licence to operate. I think that is right. I have always contended in this House, since the passing and during the passage of the Civil Aviation Act, 1946, that all companies, whether charter or scheduled, should be licensed. We do not want people, perhaps irresponsible, coming along with a pilot's licence without proper facilities to operate their services, I think that it was wrong that a licence was not given. I understand that it could not be given because the Jamaican Government had not acquired the necessary powers to issue licences, but I believe that that matter is now under consideration, and I hope this will be remedied in the near future.

In a few weeks' time, a landing strip will have been completed at Grand Cayman, at considerable expense, both to the islanders and the Jamaican Government. The Corporation did not look into the question of flying amphibious machines to this island, but waited until the airfield was built and now say, "We will come in and operate" and thus take the cream off the service which should, I think, belong to the pioneer who instigated the service.

Let us look at the record of B.W.I.A. In the years 1950–51 they lost £287,000, and in the following year £94,000. I think that if we were given the real figures it might have been more, because some of the services are being operated by B.O.A.C. with aircraft of the West Indies Company. In Jamaica, a local bus service receives a subsidy; so does a local shipping company. The Caribbean International Airways will have no real subsidy at all, but they have had— and I must be frank with my right hon. Friend—assistance in the form of loans. These loans amount to a total of only £10,000, of which, I am informed, something like £3,300 has been repaid. That is not a great deal. I am quite certain that had this service been in the hands of a nationalised industry—who, no doubt, would have gone into it in a much bigger way—it would have cost the home Government or local Government considerably more.

In 1951 a letter was received from the Jamaican Government undertaking that no encouragement would be given to compete against Caribbean Airways provided its services continued satisfactorily. It would be quite easy to say that a company which for the most part had only two aircraft and for a considerable time only one aircraft was down to its shoe-strings, but who in his senses would acquire additional equipment at considerable expense when he knows that in a matter of weeks a nationalised company will come in and cut his throat, probably by means of unfair competition, and capture the traffic? That is not good enough.

Wing Commander Roberts has the complete backing of the Cayman Islanders. They have passed a resolution giving him full backing. They want his service to continue and they have asked him to be the first person to set foot on the airfield. In fact, he is landing his amphibian on the new airfield, giving them the service that they want.

My information is that B.O.A.C., through its subsidiary company, does not particularly want to perform this service, but it has been rather encouraged to operate it. In support of that, I want to quote a letter from the Chairman of B.O.A.C. to Wing Commander Roberts, dated 6th May, 1952. It says: With regard to your more specific queries on the plans that B.W.I.A. entertain for operations to Grand Cayman, I know that the West Indian Company has been requested by the authorities concerned to open an air service as soon as the air strip is completed. B.W.I.A. intend to do so, but whether this will be achieved by December we cannot at present tell. It is obvious that the Government have been assisting Wing Commander Roberts to maintain his line operating on the sea until the airfield is completed. Then the nationalised industry comes in. I do not think that B.O.A.C. really wants to operate this service. What should be done is that Wing Commander Roberts should be given the opportunity to acquire the right equipment—he has the option on two Lodestar land planes which could be acquired in a matter of weeks—and, provided he satisfies the authorities that he has competent engineers, financial backing and business organisation behind him, he should be given a licence to operate for a sufficient time in which to amortize his aircraft. That is not an unreasonable request.

The matter even goes further than that. The Caribbean Company originally operated to Belize in British Honduras, and it recently asked that that licence should be regranted to it so that it could fly from Cayman to Honduras, but somehow there has been a hold-up. The local authorities at Belize now say that they want to inspect Wing Commander Roberts' facilities. Is this being done deliberately to assist the nationalised company, or is it genuine? I hope that, in all fairness, Wing Commander Roberts will get a square deal on this point. It seems to me that B.O.A.C. and B.W.I.A. are committing a calculated piracy. They have seen the traffic build up for a period of four and a half years and have said, "This is fine. We are losing money on these other routes; we will go in here and help ourselves a little."

These nationalised Corporations have their work cut out to look after their own affairs. Only this week we have seen from the balance sheet of British European Airways Corporation that its loss has been greater than ever, being nearly £1,500,000. Like other hon. Members, I want to see the Corporations prosper. The hon. Member for Uxbridge (Mr. Beswick), who was formerly the Parliamentary Secretary, may smile, but I have always taken the line that the nationalised Corporations have a big task and that we should not add to it at the present time. They have very severe competition to meet from the American and Dutch companies; they have their plate quite full without interfering with very small lines like this one.

The matter of the Caribbean International Airways Corporation should be considered in great detail by the Governor of Jamaica, and Wing Commander Roberts' company should be given time to acquire equipment and facilities and, if it does so, it should then be allowed a five-year licence. I do not think it is an unreasonable request. We want to encourage pioneers to go out into our Empire and carry out this type of service. But if they are strangled after they have made a success of it, then it will not benefit our position, because our whole future depends on such men as these, I hope the necessary assurance can be given.

4.20 p.m.

Mr. Frederick Gough (Horsham)

I am anxious to hear the reply of my right hon. Friend, and I shall keep the House for only one minute. When my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) told me about this case I must confess I was full of surprise and dismay. I was surprised, knowing many of the activities of B.O.A.C., that they should even countenance going in for competition with this pioneer. I was dismayed to hear they have now countenanced this, and unless some change of policy takes place they will go ahead.

My dismay is felt because I have always believed that the real danger of these nationalised corporations is in not realising their responsibilities vis-à-vis the independent operators. They have within their hands an immense amount of power and here is a typical example of how they can bulldoze their way through so completely that a man is deprived of his pioneering work, of his fortune and of everything that he has done. In this case this man has done a wonderful job of pioneering. That should be encouraged and not discouraged as apparently it is.

4.22 p.m.

The Minister of State for Colonial Affairs (Mr. Henry Hopkinson)

I have listened with great attention to the speech of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey), and I should like to assure him that his remarks about the affairs of Caribbean International Airways did not fall by any means on unsympathetic ears. In particular, I should like him and the House to know that the Colonial Office and the authorities in our Colonial Territories realise very well the importance of fostering the pioneering spirit in our Colonies, especially in the matter of air communication.

The full development of so many outlying island territories is obviously to a very great extent dependent on the air links that are established with the rest of the Commonwealth and of the world. On these sort of routes individual pioneers have important parts to play. Where that pioneering work has been done, often at the expense of private individuals, when the experience has been gained which enables regular, reliable and economic services to be established, it would clearly be quite wrong if the work of those pioneers were to be set at nought and their interests sacrificed to a semimonopoly such as B.W.I.A. But that is not the position here.

Let me say at the outset that I consider that Mr. Roberts, the founder of Caribbean International Airways, is just such a pioneer. He has earned the gratitude of the Cayman Islanders by his persistent efforts in the face of great difficulties to provide air services between the Cayman Islands and Kingston and other places over the past five years.

At the same time this matter has got to be seen in its proper perspective. The essential aim clearly must be to provide the Cayman Islands with efficient, reliable and economic air services for the purpose of developing the Island economy to the full and, as my hon. and gallant Friend said, to encourage the tourist traffic.

My hon. and gallant Friend discussed this matter with me in correspondence and orally on several occasions, and he will recall our last meeting on 24th November, when I received a deputation of Members of this House. While I was not aware of it at the time, a certain piquancy was given to that meeting by the fact that the leader of it was my hon. Friend the Member for Stratfordon-Avon (Mr. Profumo), who is the present Parliamentary Secretary to the Ministry of Civil Aviation, who had come hot-foot from 10, Downing Street, where he had just been informed of his appointment to his present office. I explained to my hon. Friends on that occasion the difficulty of giving any cut and dried assurances on the point which they raised, and which my hon. and gallant Friend has recapitulated this afternoon.

In order that the House may have a full picture, I must, however, go back a bit into the history of the air services to the Cayman Islands since the war.

Owing to the absence of an airfield or airstrip, and since the B.W.I.A., which of course was originally a local company, established in 1943 and which is now a subsidiary of B.O.A.C., did not wish, for commercial reasons, to use amphibian aircraft, it has been left to private air companies to provide the air services. Those companies, besides being weak financially, have operated under various technical difficulties which, in the case of the first two companies, led to their collapse.

It was then, in 1948, that Mr. Roberts came on the scene. He acquired the interests and liabilities of Cayman Island Airways and re-established it as "Caribbean International Airways." As I say, it is thanks to his persistence and to the support which he received from the Cayman Islanders, that the service has been maintained ever since, but it has not been done without grave difficulties, mainly of a financial nature. In fact, it can be said that the history of C.I.A. has been one of constantly recurring financial crises which the company have only been able to survive through the generous help of the Cayman authorities.

Mr. Roberts inherited a debt to the Cayman Islands Government of £3,600. He undertook to repay this on favourable terms given to him by the authorities. At the same time, the Government agreed to subsidise C.I.A. to the extent of £500 a year in consideration of the mail services and other services.

Mr. Charles Ian Orr-Ewing (Hendon, North)

My right hon. Friend has mentioned the mail services in connection with £500 a year. Is that above the internationally agreed rate, or the normal mail rate which is being paid?

Mr. Hopkinson

I could not answer that question without notice.

Air Commodore Harvey

The £500 subsidy was agreed, of course, with the original company. Wing Commander Roberts never actually received the money, which has been paid back to amortise the original loan.

Mr. Hopkinson

That is quite correct, and without interest. The interest has been waived.

The history of the company falls into two main periods. The first was when Mr. Roberts tried to raise additional capital to continue and to improve the services. In these aims over that period he had the fullest possible support of the Cayman Island authorities and of the Government of Jamaica. In addition to the subsidy to which I have referred, and which admittedly was balanced off by repayment of the debt, Mr. Roberts also had loans from the Cayman Island authorities and a seat guarantee of £4,990.

The authorities wanted this service to succeed and they naturally gave him all the help they could. They went as far as they possibly could in giving him assurances and active co-operation. It was only when, in 1951, in the face of C.I.A.'s recurrent financial difficulties and because, by that time, Mr. Roberts was operating only one obsolete aircraft which could not be replaced in the event of an accident, that the local authorities decided, with great reluctance, that C.I.A.'s services were not sufficiently reliable for their needs.

It was at that point that it was decided to construct an airstrip so that other operators should be able to serve the island with their land planes.

Air Commodore Harvey

I am sorry to interrupt my right hon. Friend again, but he has said that that was in 1951. I have here a letter dater 26th April, 1952, from the Governor to Wing Commander Roberts, which says: I am very glad that your people have been able to maintain a regular service with the Caymans and I very much hope that they can continue to do so. That was only in April last year. It does not tally.

Mr. Hopkinson

I shall be coming to that point in a minute. It was decided to construct this airstrip. That marks the beginning of the second period. During this second period Mr. Roberts really sought to do two things. In the first place, he sought to dispose of his assets to B.O.A.C. He had come to the conclusion that that was the best thing to do. This had obviously to be discussed with them, and with that object in view he came to this country in March last year to arrange either a merger with B.W.I.A. or an outright sale of the assets of his company.

Secondly, failing either of these alternatives, he asked for protection for C.I.A. on its existing routes and it was on that occasion that the letter written by the Governor, to which my hon. and gallant Friend has referred, was sent. The terms which he suggested for a merger or sale, into which I do not intend to enter, were rejected by B.O.A.C. as being extravagant. That is a matter within their commercial discretion and certainly not one in which Her Majesty's Government or the Jamaican Government could interfere. At the same time, to avoid giving any impression that they were trying to run Mr. Roberts out of business, B.O.A.C. made him an offer under which C.I.A. would become the selling and handling agents in Grand Cayman if and when B.W.I.A. were invited to operate there. It would have given Mr. Roberts a quite reasonable return for the pioneer work he had done on the route—

Air Commodore Harvey

I am sorry to interrupt, because I do not know if my hon. Friend has had experience of piloting aircraft. In my experience a ticket agency gets 5 per cent. for its efforts and the traffic in the Cayman Islands would not amount to much. The letter making that offer was sent by B.O.A.C. by surface mail and arrived four days after the debate on civil aviation in this House in October last year. I shall not go further, but will leave it to hon. Members to draw their own conclusions.

Mr. Hopkinson

I have an idea of the amount this would have brought in and it was not unreasonable. Furthermore, Mr. Roberts has had time to pursue the matter and has not done so, but has stuck to his original idea of an outright sale. Also it was made clear to him that it was not possible to give further protection from the possibility of competition on existing routes. My hon. and gallant Friend said that the Jamaican Government at that time had no power to do so, but even if they had, it is doubtful at that stage, and with the facilities which B.W.I.A. were able to offer, that the Jamaican Government would have done that. They had made clear their doubts to the company on more than one occasion as to the reliability of the service. The quotation which my hon. and gallant Friend gave in regard to the fact that the Government would support the company provided they continued to provide a satisfactory service, and would not give encouragement to any other line to operate, actually referred to the Tampa route which he mentioned earlier and not to the general service from Kingston to Cayman. I shall have a word to say about the Tampa route in a minute.

In August of last year the Governor told Mr. Roberts that his services, although admittedly regular, were not thought to be satisfactory. Meanwhile, Mr. Roberts managed to secure a further loan, very reluctantly given, from the Cayman Government to operate up to February this year when it is expected that the air strip will be functioning. I must make it clear that at the end of that period there is little prospect of any further financial assistance to C.I.A. from the local authorities. From that period the company must stand on its own feet. I understand that Mr. Roberts is trying to do this. He is trying to raise the money to buy Lockheed Loadstars with which he hopes to operate, and if he is successful in re-equipping the company with land planes and in providing their maintenance; if, in short, he is able to furnish the Cayman Islands with the satisfactory air service they require, he will continue to enjoy the support and co-operation of the Cayman authorities.

Discussions have been going on for some time with regard to the licensing regulations for Jamaica. Those regulations have now been approved with effect from 1st April this year. The Governor will then be able to set up an independent licensing authority to weigh the merits of any applicants for air services. Of course, I presume that C.I.A. will apply for such a licence. Whether, when they apply, the licence is given or not will depend on the reliability of the service they offer.

I cannot give any indication at this moment as to what the independent licensing authorities will do, but I am quite sure that when the time comes Mr. Roberts' claim for a licence will be most sympathetically considered. They may decide, in view of his pioneering services in the past, to give a licence to C.I.A. alone for a few months, in which to establish itself with its new aircraft. But it will be for them alone to decide, and I cannot go any further than that today. No doubt the past services of C.I.A. will be taken fully into account, but the main concern of the licensing authorities must be how the interest of the people of the islands can best be served.

In conclusion, I want to say one word about the Tampa route. That is a separate service in regard to which negotiations have been going on. There is to be an exchange of notes between the British and American Governments, separate from the Bermuda Agreement. That exchange of notes has not yet taken place, but that is not due to any delay on the part of Her Majesty's Government. What may occasion delay will be the decision of the Governor, which would have to be taken afterwards, as to whether he is prepared to nominate C.I.A. as a suitable company to operate that route on a schedule basis. That, again, will depend on the success of Mr. Roberts in getting these aircraft and in showing the Government of Jamaica that his company are able to operate the service in question.

Question put, and agreed to.

Adjourned accordingly at Twenty-Three Minutes to Five o'Clock.