§ 6.15 p.m.
§ The Minister of Transport and Civil Aviation (Mr. Alan Lennox-Boyd)
I beg to move, "That the Bill be now read a Second time."
The purpose of the Bill, hon. Members will know, is three fold. The first purpose is to increase the borrowing powers of the British Overseas Airways Corporation and of the British European Airways Corporation. The second purpose is to make provision for pensions for members of the Boards of the two Corporations. The third is to place the Corporations on the same basis as other nationalised industries in respect of protection under the Limitation Act, 1939.
I do not think the field of controversy in this Bill is very wide, but it does raise a number of important points. I will do my best, though briefly, to sketch the purpose of the Bill, and my hon. Friend the Joint Parliamentary Secretary will, I hope, wind up the debate and deal with points that may have been raised.
In regard to the first purpose—increasing the borrowing powers of the two Corporations—some hon. Members may wonder why it is necessary to increase the borrowing powers before the Corporations have actually reached the figures already allotted to them. B.E.A.C. are approaching their ceiling of £20 million, their present borrowings being in the region of £16 million. B.O.A.C., with a limit of £60 million, have present borrowings of £40 million, but they have also placed orders, and will have to place orders before long, for further aircraft which will carry them beyond their authorised limit. It is the view of the Government, and I think it would be the view of any Government, that these two Corporations ought not to place orders, the honouring of which would mean their exceeding their borrowing powers.
We have to remember that they have to place orders long before the aircraft are delivered, and have naturally also to pay not only initial deposits but payments during the process of construction, to help the manufacturers to produce the required aircraft. It is our belief that this 1000 proposal should cover the capital requirements of the two Corporations until 1960. I am not, of course, suggesting that they will spend all this money before then, but they may well enter into orders with the aircraft manufacturers which will carry them, after that date, into a situation where it may be necessary for further borrowing powers to be conceded.
I do not think the House will be in any doubt as to why this increase is necessary. Since the original limits were laid down there has been a very great expansion of air traffic. In the six years since 1947–48, the Corporations' scheduled traffic has nearly trebled, and, with the growth of tourist class flights, there is every likelihood of a continuing increase of 15 to 20 per cent. every year.
The second reason this allowance is necessary is the very heavy cost of modern aircraft. I think the House ought to bear in mind the advantage to our air Corporations, and to others as well, of being, as far as possible, equipped with the finest aircraft in the world. We have lately had the most vivid illustrations of how it has helped the Corporations to re-equip with modern types in the North Atlantic services, with their great potentialities. The share of that traffic that B.O.A.C. now enjoy has grown really quite remarkably. In 1947 it was 18 per cent., and last year and this year it is 42 per cent., of all the North Atlantic traffic to and from this country. That is in part due to the quality of the aeroplanes that they can command.
In the field of B.E.A.C., I gave the House figures a week or two ago, to show how, in Switzerland and Scandinavia, the proportion of traffic they enjoyed changed wonderfully for the better when they were able to re-equip themselves with Viscounts in place of their previous 'planes.
§ Mr. Lennox-Boyd
There are many reasons that I could suggest for the success that they have had, but that is about the last one that I should put forward. I have not ignored the general stimulus which has gone into the aviation industry from the Government's policy of new competition. We cannot ignore these lessons, and the Corporations are 1001 making plans to re-equip themselves with Comets II and III, Britannias, and new Super Viscounts. I might add, as has been said before, that we ought never to forget that in their working out of these types, the Corporations have rendered a signal service to British exports.
The position at the moment is this. B.O.A.C., as I said, have got present borrowings of some £40 million. Of this, £33 million represents Airways Stock and £7½ million temporary loans. For the forthcoming period 1953–54 to 1955–56–57 they estimate that their capital expenditure will increase by nearly £63 million. Of this, £57 million will be for fixed assets, some £6 million in advances and loans to their subsidiaries and associated companies, redemption of stock or general operational development. There will, of course, be a partial offset by accruing obsolescent reserves. No one, I hope, will blame the Corporations or the Government if these figures are in part conjectural, because it is difficult to be certain of costs ahead. Specific commitments may vary from year to year and the phasing of their expenditure may vary also. Indeed, the obsolescence figures on the credit side are affected by the speed of delivery of the new types.
Of this £57 million for their fixed assets, 80 per cent.—that is £46½ million—should be spent on aircraft, aircraft engines and spares. As I pointed out, they will have to make deposits or progress payments on various types which will not be delivered before 1960, but for which, of course, they will require authority to borrow now.
In the case of B.E.A.C., they have borrowed some £16 million of the £20 million that they are authorised to borrow, and all of these borrowings are in Airways Stock. Over the same period as B.O.A.C—that is, 1953–54 to 1955–56–57—they estimate that their additional capital requirements will be some £14 million, and £11 million of this will be on aircraft or progress payments for aircraft. Up to now they have generally been devoting about 75 per cent. of the expenditure on their fixed assets to aircraft and aircraft engines and spares, but it looks as if in the forthcoming period that proportion will rise to some 80 per cent.
B.E.A.C. have got orders for aircraft at the moment standing at something 1002 like £19 million, which will rise in the period ahead to some £29 million, made necessary by their re-equipment with Super Viscounts, Viscount replacements, the 20 advanced helicopters for which they want borrowing powers, and the re-engining of their Elizabethans. I think—in fact, I am sure—that these requests will stand the closest examination, and my hon. Friend the Joint Parliamentary Secretary will later be prepared to answer any detailed points, but I believe that we are here meeting in the proper way the inevitable needs of the Corporations, which will be reflected in largely increased earnings and in still greater British prestige.
§ Group Captain C. A. B. Wilcock (Derby, North)
Will the Minister elucidate one small point? He spoke of progress payments being made, and said that part of this money is for that purpose. Is he referring to progress payments on aircraft which are now standardised and in service, or for aircraft which are still in the trial stage?
§ Mr. Lennox-Boyd
They are for aircraft which are not yet in service and for which the Corporations have given an order. They have made an initial payment—10 per cent., or whatever it may be, and in some cases more—which they put down at once. Then they put down progress payments which continue throughout the period of the construction of the aircraft, and I believe in most cases they are completed before the aircraft actually flies; with the result that the Corporations—and this creates even more difficulties for independent operators who have not the same resources on which to call as the Corporations have—will have paid for the aeroplanes before they have actually flown. We have to take account of that. We have to look ahead, even though they have not exhausted the amount they have to borrow.
§ Mr. Lennox-Boyd
The manufacturers have their problems, too. I have been anxious to see whether any alleviation in this field is possible, and whether any more could be done to ease the position of the operators, but this is a matter which can best be left to negotiation 1003 between the operators and the manufacturers. I am satisfied that there have been difficulties in this field for the manufacturers themselves, who have their orders to place to enable them to meet orders on, no doubt, similar lines.
§ Air Commodore A. V. Harvey (Macclesfield)
My right hon. Friend might like to know that foreign operators who order British aircraft follow a similar system of making progress payments.
§ Mr. Lennox-Boyd
No one is entitled to speak with more authority than my hon. and gallant friend the Member for Macclesfield (Air Commodore Harvey), who knows this subject not only from an operating angle but from the manufacturing angle as well.
§ Mr. Popplewell
The Minister referred to the re-engining of existing aircraft. Does the same principle of progress payments apply?
§ Mr. Lennox-Boyd
I should hesitate to give a snap answer, but my impression is that there would be progress payments made in a matter of that kind. After all, all the 'planes are not re-engined at the same time, and I take it that there would be current payments made throughout the period in which re-engining takes place. It is a heavy charge, but it does not apply to anything like the same extent as in the case of the capital costs of new aircraft.
§ Mr. Popplewell
Would those payments be made in the same way as for aircraft—that is, before the new engines are delivered?
§ Mr. Lennox-Boyd
I will look into that point. This applies at the moment only to the re-engining of the Elizabethans. My hon. Friend the Joint Parliamentary Secretary will deal with that point when he winds up the debate.
I hope I can now pass to the second purpose of this Bill, though we will come back again to the borrowing part in the course of the debate if hon. Members wish. The second purpose is to make provision for pensions for members of the Boards of the Corporations. Here we are getting to a stage where the present Government are the heirs to the situation left by their predecessors. I recognise that this is a difficult matter, and I do not 1004 blame our predecessors for not having come to an absolutely final conclusion about it. I inherited this situation.
In the Coal Industry Nationalisation Act, 1946, the Transport Act, 1947, and the Gas Act, 1948, Ministers were given powers to make regulations to provide pensions for those people who had had pensions before, whether before their appointment to the boards they were employed in the industries or outside the industries. For some reason, the nationalisation Act creating the two air Corporations did not make that provision. I assume that it was because it was an experiment in nationalisation—the first of a series of Acts—but anyhow, this power was not given to the Minister, as it was given to me in my capacity as Minister of Transport and to my right hon. Friend the Minister of Fuel and Power in his capacity as the person responsible for the coal, gas and electricity industries. It seemed to me desirable, as we had to come to the House to ask for increased borrowing powers for the Corporations, to try to tidy up the situation which I believe is working unfairly to civil aviation.
If it is necessary to amend the law, I think I ought to complete the process and provide for possible contingencies. In asking for this enabling power, I ought also to ask for another enabling power, which exists in all other nationalised industries, and which enables pensions to be paid to Board members who have come from non-pensionable work, whether it is in aircraft service, service with the Corporations, or service outside. This is entirely an enabling power. The question whether we should use the power in this latter case is now under discussion.
I know that there are arguments against using the power, and I have heard them advanced. One argument might be that only a short period of service is in mind when one is appointing people to the Boards of these Corporations. Another is the need to maintain flexibility. But I must point out that in my endeavour to get the very best people on the Boards of these Corporations I suffer from a slight disadvantage—and my successors will suffer still more from it—by the absence of a power of this kind. So I would ask for the powers provided in this Bill in relation to pensions. All I am asking the House to do is to agree that the two 1005 Corporations should be placed broadly in the same position as are other nationalised industries.
If hon. Members will look at Clause 2 of the Bill, they will see a little more clearly what I mean. Section 21 of the Act of 1949 required the Minister to establish pension schemes relating to employees, and I am glad to say that that has been done. No one has been more helpful in this field than my hon. Friend the Member for Stroud and Thornbury (Mr. Perkins). It is now true to say that in all three grades the preparatory work is now over. I am glad that is so and that those schemes have been established.
This power to establish schemes, which in the 1949 Act was a requirement, applied to employees only, so I could not use it to give a pension to a man who joined the Board from within the Corporations unless he retained an executive job in the Corporation. If he did, under Section 21 of the 1949 Act he could qualify for a pension. But in nearly every case the sort of men one would have in mind would relinquish their work in an executive capacity as employees if they came on to the Boards of the Corporations. There are certainly two exceptions which I know of and, in so far as exceptions can be made under Section 21 of the 1949 Act, I have felt it necessary to ask Parliament to widen that power in the interest of equity on the Boards and in my desire to get the very best people to serve on them.
Clause 2 (1) deals with an ex-member of the staff who is no longer an employee but who goes on the Board. This would enable his job to be made pensionable either by carrying on an existing pension scheme, if he had been in one in his previous employment within the industry, or by other arrangements. This follows strictly what has been done in other nationalised industries. The Clause states that regulations made under Section 21 of the Act of 1949 may provide that service as a Board member shall be treated as if it were service as an employee who went on the Board. It would therefore apply to an ex-employee the right which an employee now gets.
That covers one group of possible recruits to these Boards. It still leaves uncovered the second group—those people who have been recruited for the 1006 Boards from pensionable or non-pensionable employment outside. Clause 2 (2) deals with these people, and it would enable pension arrangements to be made solely for those people who come from pensionable or non-pensionable employment outside. They can either carry on their existing pension scheme, or some new pension scheme can be applied which would give them a pension roughly equivalent to that of those already on the Board.
I felt it necessary to set this matter out in some detail. I know there is interest among hon. Members opposite who know these difficulties and remember their own problems when they were responsible for this field, and my hon. Friend will answer any questions which are raised on this aspect. All we ask for is an enabling power to put the Corporations in the same position as, I understand, that of all other nationalised industries today. I think it is not unreasonable that this industry, which is doing so much for our national standing, should have the same consideration as every other nationalised industry.
The third purpose of this Bill is to deal with the protection afforded to the Corporations by the Public Authorities Protection Act of 1893. The effect of this Bill is to withdraw from the two Corporations this protection, and also the protection of Section 21 of the Limitation Act of 1939. In future, the period during which the Corporations will be liable to actions of contract or tort when in discharge of their public duty will be set at three years and not, as now, at only one year. It will be three years, as in every other nationalised industry.
The amendment will apply only to causes of action arising after the passing of the Bill. I think that is quite reasonable, because both the Corporations and the public outside have lived under a general law in this field for some years, and it would be clearly inequitable to both to make an alteration which was retrospective. This rather curious position has arisen in this way: the corporations operate under the general law concerning the limitation of actions against public authorities. The law for persons or bodies not public authorities is defined in Section 2 of the Limitation Act, 1939, which provides that actions in contract or tort may be brought at any time up to six years.
1007 Under Section 21 of the 1939 Act, however, actions against any person or body in respect of any act done in execution of any public duty or authority, or in respect of any neglect or default in the execution of such duty, must be brought within one year. It has been held by legal decisions that the Corporations are public authorities for the purposes of this Section. This has meant that aggrieved persons have had to bring actions for contract or tort against the Corporations within one year. This is a singular situation in a nationalised industry. I think it is wrong that the Corporations should be in a privileged position in this respect, not only as against other enterprises but also as against all other nationalised or socialised industries—coal, transport, electricity and gas.
Under the Acts relating to all those undertakings, it was expressly provided that the two privilege Acts I have mentioned should not apply to these industries, and that the period of time for actions of contract or tort should be three years in all cases.
§ Mr. M. Turner-Samuels (Gloucester)
That was before the recommendation of Lord Justice Tucker's Committee, which definitely asserted that the protection to the nationalised bodies should not be more than that given to anybody else. The nationalised industries which receive that protection—the extension from one to three years—received it before Lord Justice Tucker's Committee made their recommendation.
§ Mr. Lennox-Boyd
The hon. and learned Gentleman is quite right. I did not want to burden the argument too much with the historical reasons for the differences. I expressly said at the start—what I said about borrowing applies equally to this—that I make no charge against our predecessors. These things have grown from circumstances at the time, but I think we would all agree that it is equitable now that the situation should be changed, particularly in the cases of personal injury, where there is difficulty particularly for people of limited legal facilities—people who do not know the hon. and learned Gentleman the Member for Gloucester (Mr. Turner-Samuels), for example—and who have to mobilise their finances in an attempt to bring their case within a year.
1008 Indeed, I believe my predecessors as Minister of Civil Aviation have been from time to time obliged to ask the Corporations to waive their legal right and to make some ex gratia payment in particularly hard cases. I think the tidier way, and a fairer way to the Corporations, who have their problems of insurance as well, is to make the same situation apply to them as applies to other nationalised industries.
That is the sum total of this Bill. I do not feel ashamed at introducing in this Bill something which is comparatively non-controversial, as this is. I hope this is a foretaste of some of my other tasks in transport and civil aviation
§ Mr. Lennox-Boyd
I commend the Bill with confidence to the House. As I have said, we shall gladly answer any questions that may arise.
§ Mr. G. R. Mitchison (Kettering)
May I ask the right hon. Gentleman one simple question about the borrowing powers of the Corporations? Although this may be the best and cheapest way of borrowing the money which the Corporations no doubt require, may we have an assurance from the Minister that if he gets this Bill he will not countenance or encourage the hire purchase of aeroplanes through Mr. Gibson Jarvie?
§ Mr. Lennox-Boyd
I think the hon. and learned Gentleman has, perhaps, come a little too soon to the debate. Because they have the power of the State behind them the Corporations have no need to take advantage of finance houses, but I am deeply conscious of the need to help the provision of machinery to help those independants who often have to compete with the Corporations and who have no such facilities. I would see nothing dishonourable in taking advantage of the facilities provided by the United Dominions Trust or any other body prepared, within the limits laid down by the Treasury, to help in this important national service.
§ 6.43 p.m.
§ Mr. F. Beswick (Uxbridge)
The Minister has introduced the Bill in a straightforward and businesslike way, and I do not see why the further consideration of it should not take place in 1009 the same spirit. The Bill contains three provisions. Taking Clause 3 first, the last one of which he made mention, I should say that that would not appear to be controversial at all. As far as it goes its effect in limiting the privilege so far enjoyed in law by the Corporations seems to be wholly good, and although at least one of my hon. and learned Friends seems to think it should go still farther, I do not suppose there will be any criticism of the direction it takes.
§ Clause 1 sets out to increase the borrowing power of the Corporations. I think it is worth while calling attention to the fact, which has already been mentioned by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), that here in this method of financing a young industry we have possibly the most efficient and economic method there is. I believe that the capital so far employed by B.O.A.C. costs less than 3 per cent. at the moment. I really do not wish to rouse any controversy tonight as to the relative merits of public and private enterprise, but I should like to take this opportunity of underlining this particular advantage of public enterprise.
§ When we have an industry which is considered essential to the State, and the State, as a matter of deliberate policy, says that the industry must be developed, obviously it is only fair that the reward to capital should be limited. The ordinary commercial risk element in this case has been extracted by the decision of the nation, and it seems to me proper, therefore, that the capital should receive some reward but that it should not include any element for risk.
§ Those interested in these matters may very well compare the reward paid to capital in relation to this essential public industry of air transport with the reward it is now proposed to pay, under the new Tory policy, to the owners of capital in the equally essential national industry of steel. To that section of the steel industry which is passing into private hands, although the management, the men, the general level of initiative and enterprise remain exactly the same, the reward to be paid to the capital is immediately to be approximately doubled. It seems to me unnecessary and foolish to adopt a policy of that kind.
§ On this side of the House, therefore, if more capital is required for the de- 1010 velopment of air transport, we believe that the right policy is the one which raises the capital as cheaply as possible. Moreover, it is good to think that in the future, when the benefits of present planning are more fully realised, they will then be available for distribution either to the workers—and in that category I include not only the men at the bench and in the cockpit of the aircraft, but also in the chief executive positions in the board room—the rewards will be available for distribution to them or to the consumers in the way of cheaper fares—
§ Mr. Beswick
—but not to the shareholders in the way of higher dividends. Ultimately, I would hope, the surpluses which may arise regularly each year will be ploughed back in part into the industry, and in this particular case the capital appreciation which will take place will again benefit the workers and consumers and the State as a whole, but not to those who simply lend the money.
§ Mr. Lennox-Boyd
I imagine that the hon. Gentleman is aware of the fact that the Corporations can raise money at this cheap rate because of the Treasury guarantee? If he is attempting to draw a distinction between those who can and those who cannot he must note and publicise the great difference between them.
§ Mr. Beswick
I am calling attention to that very fact. Here we have a Treasury guarantee to a public industry which enables the Corporation to raise money cheaply, and the benefits of that policy, of that guarantee, will, in this case, in no circumstances go to the private owners of capital. That I hold to be wholly fair.
There is some danger—and I admit that I give an argument away immediately, but in fairness, and I always hope to be fair—that in raising capital by this method there may not be quite the same discipline in the employment of the capital. Although the Minister has clearly examined the need for the two Corporations to raise extra money, and although he has stated in some detail the purposes for which the new capital is to be employed, nevertheless it would seem to me that at present the amount of capital employed in relation to turn-over is by no means ungenerous.
1011 B.O.A.C., for example, with a capital of less than £36 million has a total revenue of a little over £33 million, about £ for £ turn-over This is not a very high ratio, but when we turn to B.E.A.C. we find that the capital liability there, as the Minister said, is one of £16 million with a total revenue for last year, 1952 to 1953, of only a little over £13 million.
One must clearly examine this and ask whether the capital equipment they now have is being employed to the uttermost. It is difficult to make comparisons in this matter, although if we take the comparison of some other nationalised industries we find that the ratio of revenue to capital is considerably higher. I shall take two examples of other air transport companies, and even there the comparison is not, I am afraid, to the advantage of B.E.A.C. If we take K.L.M., with a registered capital of a little under £19 million, the total revenue is £24 million. That may be only pust a little better than B.O.A.C. but it is considerably better than B.E.A.C.
If we take Pan-American Airways, with a capital of just over £35 million, we find that the gross revenue for the year is rather more than £73 million. Clearly, there is a considerable difference which I think it may well be advantageous for the Minister to consider with rather more care.
§ Mr. C. I. Orr-Ewing
Would not the hon. Gentleman agree that one should also measure the newness of the aircraft which the various Corporations are using? If they are using aircraft bought in 1949 at very much cheaper rates than those for present aircraft, then their capital will appear to be very low compared with their revenue. In fact, B.E.A.C. have many newer aircraft for which they had to pay much higher prices.
§ Mr. Beswick
I can well see that at any one time, after the purchase of aircraft there may be a lag between the payment of the capital and the time when the revenues follow from the employment of the machines. I can see that, but I am putting what I think are very relevant figures to the Minister and suggesting to him that he should assure himself that the money so far spent, especially in the case of B.E.A.C., is on equipment which can earn the maximum revenues.
1012 Very little complaint can be made about B.O.A.C., but in the case of B.E.A.C. the Minister should look into the matter with some care. They are raising capital cheaply. It is possible for them to raise capital more easily than it is for other people. There is, therefore, a greater need to see that the capital is used advantageously.
Having said that, it is right that there should not be undue rewards to capital, especially if that makes possible higher remuneration to the personnel employed, I now pass to the Clause which gives power to the Minister to grant pensions to the Board members. As the Minister has said, this is a somewhat difficult question. There are arguments for and against the decision and the discussion of the matter has continued over a period of years. I am afraid that my memory must be at fault, because I was not aware that, as the Minister indicated, members of the Boards of other nationalised industries are now in receipt of pensions, or, at any rate, that the Minister has power to grant pensions.
§ Mr. Lennox-Boyd
The latter part of the hon. Gentleman's statement is correct; the enabling power is there. I did not say that these men were in receipt of pensions. I was trying to get the position standardised.
§ Mr. Beswick
I was not even aware that enabling powers existed in the case of the nationalised corporations, with the exception of the Air Corporations. If that is so, it was not a question of an oversight; a question of deliberate principle was involved. The original conception of membership of the Airways Boards was not that of a permanent position. The Ministers responsible for the Boards required some elasticity of movement. They required the opportunity to replace members. They wanted to be able to replace members of the Boards when necessary without having to consider whether they were breaking any commitments, implied or otherwise.
After all, it was not without proper consideration that the original appointments were made for a matter of only three or five years. It might well be that at the end of that time the Minister would wish to make a change. I think it would be wrong if any indication were given that, although the appointment was 1013 made initially for three or five years, it had prospects of 15 or 20 years' regular employment, to be followed by a pension. On the other hand, I can well see that if a member serves his organisation well and faithfully for the better part of a lifetime, then some pension recognition should be made, as most hon. Members will agree.
§ Air Commodore Harvey
Is the hon. Member referring to the full-time directorate or the part-time directorate, or both?
§ Mr. Beswick
I am coming to that.
As the Minister said, the position is further complicated by the appointment to the Boards of employees of the Corporations who, in their capacity as employees, now enjoy pension rights. Clearly, it would not be proper to punish them for their promotion. Again, we have yet another complication where the chairman of the Board also holds an executive position. It seems to me difficult to argue that his position as chairman should deprive him of pension rights as chief executive.
Perhaps we can leave this matter to the Committee stage and consider the problem a little more fully in the light of what the Minister said and in the light of further information, if he would be good enough to give it to us. Possibly I can then put some questions to the Minister, including that to which the hon. and gallant Member for Macclesfield (Air Commodore Harvey) referred. The Minister said that he wanted only the enabling power. I thought he would have had more clearly in his mind the purposes for which he intends to use these powers. He must have some idea, some sort of general principles, in his mind which will guide him in the use of these powers which he now seeks from the House.
§ Mr. Lennox-Boyd
When I used the phrase, "I only want the enabling power," I was dealing with the class of people who come from non-pensionable employment, whether inside or outside the Corporation. That is where I want the enabling power. In the other case, I think the situation has passed beyond the position where the enabling power is adequate.
§ Mr. Beswick
In that case, the Minister will be able to give the information which I want him to give.
Is it proposed to utilise this power to grant pensions as a general principle to be applied to all members of the Board or is the power to be used sparingly and in special cases? Secondly, will the House be informed of any pension arrangements before they are finally approved by the Minister? Will there be a minimum term of years to be laid down before any pension is payable? As the hon. and gallant Member for Macclesfield asked me, and as I ask the Minister, what is to be the position of the part-time Ministers?
§ Mr. Beswick
I am sorry; I meant, what is to be the position of the part-time members? This is quite an important question: will this be a contributory pension?
Again, what about the present salaries? The level of salaries already paid has been attacked very fiercely from time to time by hon. Members opposite because they maintain that they are too high. Of course, if pensions are to be granted, the effective scale of salary can be raised by several thousand pounds a year immediately, on the present rate of taxation. Are those pensions to be in addition to the present rate of salary?
These are all points on which the House is entitled to have enlightenment. On the basis of that information, I am sure we can come to the consideration of the Bill in Committee in the light of what we consider to be the best interests of air transport in this country, which interests, I am sure, hon. Members on both sides of the House wish equally to further.
§ 6.59 p.m.
§ Mr. Leslie Hale (Oldham, West)
The House had the good fortune to debate the Reports of the two Corporations only a few days ago, and it is one of the accidents of the House that we should find ourselves now considering a Bill which covers almost precisely the same ground, because in granting very substantial sums to the Corporations the Bill covers, in the enabling Clause, the whole ambit of their operations.
1015 There is some reason why some of us should want to question this matter of the Corporation again, and that is because of the somewhat unusual course which the debate took last time and certainly because of the very unusual nature of the reply which the Minister made at the conclusion of the debate.
My hon. Friend the Member for Preston, South (Mr. Shackleton) raised, for example, the question of the Tudor aeroplanes and the question whether they had a certificate of airworthiness and what was being done with them at the moment. I am quoting from memory, but I think correctly, when I say that the right hon. Gentleman replied to the effect that he would reply in a private note to my hon. Friend, giving him the information.
It is surely an almost unprecedented event in the debates of this House when the Minister in charge of a matter which directly concerns his office, and on which he ought to have all particulars in his mind, concludes a debate by saying that he will not give the required information to the 625 Members of the House but will send a billet-doux to the hon. Member who introduced the question in the course of his speech. I represent the constituency in which the Tudors were made, or at least on the immediate outskirts of which is the huge factory which makes the Tudors, and I should like to say one word about them. The Parliamentary Secretary seems to be making some gesture.
§ The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo)
The gesture was a shiver.
§ Mr. Hale
I am much obliged for that explanation. I can only hope that I am not breathing so fiercely as all that.
The Tudors have an unhappy and unfortunate history. The mystery of the disappearance of the Constellation in the Caribbean Sea is going to be added to the unsolved mysteries of the sea, in just the same way as the story of the "Marie Celeste." No one now will ever know what happened. In the story of the Berlin airlift, which demanded valour of the highest kind, and which was an airborne operation of a kind never attempted 1016 before, and one that was conducted with extraordinary success, the Tudor played an overwhelming part with very great distinction indeed. I can only say that in that connection the great firm of A. V. Roe made its greatest contribution. The Tudor was the civilian reproduction of the Lancasters and Manchesters which were a feature of their war-time production, and which played so great a part in the bombing effort during the war.
Arising out of that, I should like at some time in this debate to be told what is to happen in connection with the Avro Delta. That was designed as a military aircraft. [Interruption.] I am sorry if I am causing puzzlement to the Minister, or if I am not making myself heard, but it was well understood at the time that this military aircraft might be the prototype of a civilian plane. We have heard nothing about that since then. I am surprised that the Parliamentary Secretary should apparently express dissent when I am asking a simple question like that. What is going to happen when I come to the difficult ones?
I want to say one word about the Princess flying-boat. My hon. Friend the Member for Itchen (Mr. Morley), who always raises this matter with courage and great ability, referred to it in the course of the last debate on aviation. He could not get a satisfactory reply. I think that I am quoting the reply which was given perfectly fairly when I say that the right hon. Gentleman said that this was really a matter for the Ministry of Supply and not for him. In this House, in the last few weeks, we have had some startling innovations in procedure.
Questions are being shuffled from Minister to Minister at a rate which means that we shall have to install air delivery pipes for passing Parliamentary Questions from the Minister due to answer them to the Minister to whom they have been transferred. Questions which are put to the Under-Secretary of State for Commonwealth Relations are referred to the Minister of Supply, and Questions put to the Minister of Supply are referred to the Minister responsible for aircraft production, and so on. I should have thought that, if one thing is clear, it is that it is the duty of the Minister of Supply, in relation to aircraft, to superintend the production of aircraft, and the duty of the Minister of Transport 1017 and Civil Aviation to superintend the utilisation of aircraft.
Surely, the Princess flying-boat, having been produced, is a matter for the Minister of Civil Aviation, and we ought to have heard something about it in reply to my hon. Friend the Member for Itchen. We would be happy to hear something about it today. The Parliamentary Secretary, I hope, is aware that the Press have certainly been intimating that B.O.A.C. have suddenly taken a renewed interest in the Princess flying-boats, after having ignored them for a considerable time.
§ Mr. G. Lindgren (Wellingborough)
I am sure that my hon. Friend would not like that to go out as a correct statement of fact. It has certainly been the inference made in the Press, but B.O.A.C.'s interest in them has been over a period of a year, and the only difficulty was that they were not economic to operate, and the Corporation wanted some special financial arrangements if they operated them.
§ Mr. Hale
I hope that I am not being too critical when I say that when I quote something from the Press, I am not necessarily accepting that it is true. I am merely saying that it was in the Press. If it was in reputable papers, it may be a matter on which we ought to have information as to whether it is correct or not.
I think that I shall have some assent from both sides of the House in saying this. I personally deplore the decision to stop using flying-boats on a large scale in connection with air services to the Far East, the Dominion of Australia and the Union of South Africa. We are a maritime nation, most of our history is associated with events on the water, and we have unusual facilities for developing sea-going craft. I think that the most interesting and by far the most enjoyable flight I ever had was on a seaplane service with an unpronounceable name which starts with Q and no U, flying from Sydney Harbour, one of the most beautiful harbours in the world, at about 5,000 feet and looking down on the islands in the sunlight, on the craters of the volcanoes, and coming down at such romantic places as Rangoon, Singapore, Calcutta, Basra, Cairo, and Sicily and then on to Southampton. This journey in five days strikes me as the best way of 1018 travelling from Australia, and no inducement would persuade me to want to fly at 40,000 feet to get home a day or two sooner and by doing so miss all the beauty and joy of that particular flight.
After all, the Princess flying-boat, for some reason, seems to have had a raw deal. We were told that the explanation is that they were fitted with Proteus II or Proteus I at an early stage of development and were found to be underpowered, but that they would be capable of carrying 120 passengers and of going across the Atlantic if only they were fitted with the modern Proteus III. This is a very great challenge to our initiative and to the initiative of B.O.A.C., and I suggest that this is a matter which ought to come up for consideration.
I should like to make a few general remarks on the course of the recent debate. I do not believe that it is necessary for me to defend the action of every nationalised Corporation because I have an ideological belief in favour of nationalisation. I have never believed that it is necessary for Members opposite to defend every effort of private enterprise, for the same reason. Some of them do not. I wish that we could approach these debates on the lines that here are national Corporations, which, of course, are open to criticism, as is anything else; and personally I would say openly and frankly that I regret that Parliamentary Questions are not put about them in the same way as Questions about the Post Office, because I think it is a perfectly good thing that we should have the fullest information and chance of criticism.
I would say that, so far as I am personally concerned, my correspondence with the British Transport Commission has produced about the worst letters of my correspondence with any authority. They are the worst and most ineffective letters which I have received from any public body. I wish that something could be done about it. I am sorry that the former Parliamentary Secretary, with whom I and other hon. Members had an interview, is not here tonight. We all express our sympathy with him in the illness which has deprived us of his services on the Front Bench, in a career which, if it was not going to be meteoric, would have been at least popular and good-humoured. I congratulate him on 1019 the rapidity of his recovery which permitted him to go dashing about in a by-election last night.
In the last debate a few days ago, the hon. Member for St. Marylebone (Sir W. Wakefield) said something that was relevant and important but, in my view, completely inaccurate. He said that the real test of efficiency is the profit, and no one would doubt his sincerity in saying so. He went on to put the perfectly fair point that the Corporations ought to be credited with the amount of work that they do in developing aircraft and in developing routes, or, indeed, in flying uncommercial routes for purposes connected with the Government's desires to open up new routes or new territories.
If one applies the test of profit, that would be a sensible and perfectly proper proviso; but transport must be a service, and it ought to be regarded as one of the essential services of the community. I do not think the railways will do a real job until every worker has a free travel ticket for himself and his family to where he wants to go for his annual holiday. That sort of thing is part of the essential service that transport should give.
I want now to turn to Oldham. One thing which I have observed with regret—I say this with great respect—and which I have commented on before is an attempt at a sort of territorial blackmail of the Chair by saying, "No Welshman has been called on this subject," or "No Scotsman has been called on that subject." In the recent debate on civil aviation, five Scotsmen appealed on behalf of Prestwick and one Welshman appealed, very ably and brilliantly, on behalf of Valley. I agree with what the hon. Member said, because Valley is an important and first-class aerodrome.
But today I want, humbly and diffidently, to raise the voice of an Englishman who represents an English constituency, and to say that the great conurbation of Lancashire was not mentioned at all in that debate, except possibly by my hon. Friend the Member for Preston, South; that it has a population of five million people; that it makes a bigger contribution to our commercial activities than any other district; that the 1020 County of Lancashire alone has a population half as big again as that of the County of London, bigger than Scotland, and half as big again as Wales; and that B.E.A.C. are doing very little for Lancashire, and the time has come when we should have a look at Ringway Aerodrome.
The Minister talked today about the great proportion of the transatlantic traffic that we get. He said that our proportion has increased to 28 per cent. of that traffic.
§ Mr. Hale
What percentage of transatlantic traffic have we got from Manchester? I think I am right in saying that the answer is none per cent., because we do not run a single transatlantic service from Manchester, although Sabena Airlines are doing so. It is amazing that the opening up of this vast conurbation to transatlantic flights should be by a Belgian air company.
But that is not the main complaint as far as Lancashire is concerned. Everyone knows that one of the very great difficulties confronting British European Airways Corporation in their operations, particularly their internal operations in England, is the question of the time factor—the time that it takes to get from Waterloo to London Airport or from Ringway to Manchester. This results from what, I feel, are unnecessary delays in that respect, in a sort of passionate desire to look after the latecomer, which is all very well, but it does not happen on the railways.
If a person is not in time for his train, he misses it, and if a person is not in time for a bus to go to the airport, he should miss the bus. These things could be tightened up. The result is that it is not worth while flying from London to Manchester. An increasing number of people do it because we are getting air-minded, but there is nothing that is likely to induce the visitor from Manchester not to catch his 9.45 train from London Road station and be in Euston at 1.20. We are too much in the habit in the House of thinking in terms of central London. We forget the difficulties of travel to central London to get to the airport, or the difficulties of travel from the great towns of Lancashire to Manchester to take part in air services.
1021 I said that I would refer for a moment to Oldham. The Minister will observe that his noble Friend, Viscount Norwich, in a recent book, has referred to its people with great accuracy as the kindliest people on the face of the earth; and I have had reason in recent days to realise that they are also generous-hearted. But when they talk about transport facilities, they are apt to be a little critical. In this very great town of 120,000 population, only six miles from Manchester, we have the worst railway service in the world. It climbs hills, it stops in the most incredible places, and it usually stops from time to time half-way up the hill. The people do not travel now by rail, if they can avoid it, but by bus; but by bus we are coming up against the old problem of road congestion, which is making transport almost impossible.
§ Mr. Speaker
The hon. Member seems to be straying rather wide of civil aviation when he talks about railways and buses. I thought he was going to press the claim of Oldham for an airport.
§ Mr. Hale
I am doing that, although not for an airport; I want a place from which helicopters can fly to Ringway aerodrome. I am trying to deal seriously with the transport of the future. I am suggesting that the job of the Minister is to be planning the transport of the future and that he ought to be utilising the services of these two great Corporations in developing the transport of the future.
I suggest, with great gravity and seriousness, that our transport is getting worse instead of better, and that in the last two years no single constructive suggestion has been made by the Minister to deal with the whole transport problem. We are getting air-minded, and I suggest that the job of dealing with the future—10 years ahead, at any rate; and if we are dealing with 10 years ahead, we must start now—is the task of trying to relieve the congestion by providing the necessary encouragement and the necessary traffic in the air.
In the last debate, one of my hon. Friends raised the question of the helicopter. Everyone appreciates that there are substantial difficulties in connection with helicopters. The concluding paragraph on page 53 of the Report of the British European Airways Corporation 1022 refers to the very great expense of replacing the blades on some types of helicopters, and page 54 gives a figure of £40 an hour for replacements. That seems to me to be a stupendous figure. The Corporation add the hope that this expenditure will be reduced rapidly and that, as a result of experiments now taking place, this major difficulty will be overcome. I should be very glad indeed if we could have some assurance that progress has been made in that direction and that the difficulty has been overcome.
There again, when the Minister replied to close the debate, he referred entirely to two-engined helicopters. That is, of course, precisely the problem, and it is the matter on which the House ought to have information in trying to decide what is the best way of spending £30 or £40 million in dealing with and in planning the air transport of the future. I do not claim any special technical knowledge of this matter but I try to understand these problems.
As I understand it, the two-engined helicopter is absolutely essential to the carrying of considerable numbers of people, because of the great danger of an engine failure when landing, in which event the machine would drop plumb, and there must be the alternative engine to prevent such a possibility. Here again, what is worrying me is that the Government seem to be thinking in terms of transporting large numbers of people from the roof of Waterloo Station to London Airport. We have got to think in terms of the transportation of small numbers of people from the old towns of Lancashire.
§ Mr. Lennox-Boyd
The only experiments in transporting people have been from the City of Birmingham to London Airport and Northolt, and however much we talk about transporting people from London Airport to the centre of London, that does not deprive the great municipalities of trying it as well, because here in the biggest of all airports, London Airport, we are trying out a worth-while system which will be of advantage to all.
§ Mr. Hale
I am much obliged and we are watching that experiment with very great interest. The rotor station is close to Birmingham and I know it very well. But if the Minister will refer to page 53 of the Report he will find that only about 1023 1,070 hours of helicopter flying were done by B.E.A.C. in the course of their financial year. They have six machines, but they have been in the air for an average of only half an hour a day or rather less, and that seems an incredibly small amount for this kind of thing.
I think the Minister misunderstood the point I was trying to make. I am not suggesting the use of helicopters on large scale transport. What I am suggesting is that if we are going to look at the problem of Lancashire, it cannot be solved by merely applying the methods which apply to London. In Lancashire there is a wholly different problem.
§ Mr. Profumo
I should like to make one observation, because I am extremely interested in what the hon. Gentleman is saying. We have got to remember that if we are going to use the helicopter it is not a question of whether we are transporting large numbers or small numbers of people. What we have got to think of is whether the people can afford to fly in these machines. In considering Oldham's problem, we must try to arrange for a sufficient number of people to be carried in these 'planes to make it possible for fare-paying passengers to pay their way.
§ Mr. Hale
I am much obliged to the hon. Gentleman and grateful for what he has said. If I can get information on this matter my intervention for once will have served its purpose. There are all sorts of promises about heliodromes—an abominable word—being erected and all sorts of anticipations are stirred. It may be necessary to quieten some of these anticipations, but, as I understand it, the single-engined helicopter, with the stub wing, carrying a small number of passengers, is regarded as at least reasonably safe. The stub wing at least goes to offset some of the danger inherent in the single-engined helicopter, and which a two-engined type would avoid.
These are quite serious problems. It is a matter for which the Minister of Transport and Civil Aviation is responsible, and he should be responsible at a very early stage for calling a conference with his fellow Ministers concerned in this matter. This is something which must have a part in town planning; and in an effort to re-plan some of the old Lancashire towns they are now trying 1024 to produce the sort of plan which they hope will be in operation in 20 years' time. To do that they have to get the maximum possible information about the trend of air development. They may have to decide whether it is necessary to have an aerodrome at all, or whether a small helicopter station will be sufficient to meet the needs of the future. They have to be able to plan for this, and have to have their transport suitably fixed and suitably available.
It is very difficult in this Chamber now to convey, as I would wish to convey, the difficulties of Oldham which are perfectly clear in Oldham. There the whole of the building development is taking place miles outside the town. We have taken in the land for modern development, and the question now arises whether the transport needs should be centred miles away from the area of the present development.
There is one final observation I wish to make and I think it lights up the whole of this problem. It may not have escaped the notice of the Minister that Oldham Athletic are now in the Second Division of the Football League. That involves transport problems. A week last Saturday it was necessary to transport some 1,000 or so people to Leicester. The actual method of transport was this. The crowd mounted the train at Mumps Station, at the northern end of Oldham, and changed trains at Clegg Street Station in the middle of Oldham. They went on then to Guide Bridge, which is in the division of my hon. Friend the Member for Penistone (Mr. McGhee), and they had to change there again. From there they made their way to Sheffield and changed trains again. From Sheffield they went to Leicester without any further change.
Coming back they came through Manchester Central. They had to detrain there and walk across Manchester to another station some miles away, Manchester Victoria, where they caught the local train. [An HON. MEMBER: "What was the result?"] I do not know whether I should enter into that, but I would say that the walk was less happy than would have been the case in normal circumstances because there were no consoling features all the way.
That is the sort of problem with which we are faced and it is just no good think- 1025 ing in terms of Waterloo Station and London Airport when dealing with a matter like that. I suggest to the right hon. Gentleman that many people think quite sincerely—and I do not think it unreasonable—that in 10 years we shall be facing a whole new series of developments in the air, which may mean that much of our passenger transport is done by air, not merely between towns like London and Manchester, but also over those conurbations to which we should be able to travel quite easily. Therefore, the more information we can have the better, and the more information the municipalities can have the more reason we shall have for thinking that the money we are going to vote to these great Corporations is going to be spent in the common interest.
§ 7.28 p.m.
§ Mr. M. Turner-Samuels (Gloucester)
There is a matter of some importance in this Bill to which I think the attention of the House should be drawn. I refer to Clause 3 and the provision in the two subsections of that Clause. The Minister has already indicated that in the ordinary way the time within which action can be brought either on contract or on tort, for an injury or breach of duty or neglect, is six years. But with public authorities, including local authorities and bodies of that kind, the period is limited to one year by the Act of 1939.
The period was increased from six months under the Act of 1893, into which I have no intention of going, to one year, and when nationalisation of certain industries came along, and we had legislation on the matter, the period was extended there to three years. This, no doubt, places the Minister in some embarrassment. The House ought to take notice, in all fairness, that ordinary citizens, ordinary business people, commercial concerns and industrial undertakings, many of them very large, with as vast and varied a scope of activities as public authorities, are liable to action within a period of six years, whereas an authority such as we are considering in the Bill is only liable at present to an action within one year. Under the provisions of the Bill we are extending it to three years.
The objection I have to this provision in Clause 3 is that Lord Justice Tucker's Committee, in 1949, said that the distinction between the period in which an action could be brought against an 1026 ordinary person or an ordinary firm or an ordinary public body, and the period in which an action could be brought against a public authority, is an untenable distinction. The evidence before the committee proved conclusively that nobody wanted the distinction, or upheld the distinction, except those who benefited from it. Otherwise, every piece of evidence, without exception, was that this distinction was unfair and that it should be ended.
To make that position all the stronger, there was an important case in the Court of Appeal in July, and this distinction between these public bodies and ordinary people and business firms and undertakings came in for very strong criticism indeed. One of the Lord Justices reiterated most emphatically the manifest injustice which that position has involved in case after case. Whether the limitation is one year or three years is immaterial. The result is that legitimate claims for damages are barred. Often the reason why they are barred is that because of some inadvertence or ignorance on the part of the person who would be the claimant, or owing to difficult circumstances which sometimes inevitably arise, and owing, for the time being, to lack of evidence, and even in cases where negotiations are protracted because of the restricted period of limitation applying to these public authorities, the right to an action is lost and the legitimate claim for damages cannot be proceeded with.
Consequently, public authorities wriggle out of undeniable liability by an unreal and shabby defence on no ethical basis, and that shocks all sense of justice. I see that the Minister has the learned Attorney-General next to him and I ask them both to consider whether this cutting down of individual rights can be justified unless it is proved that considerable injustice would otherwise follow to those to whom that protection is given. In this case the injustice is actually the other way. The injustice is not on the public authority but on the person who is prevented from bringing his action within the normal period merely because the other party is a public authority and for no other reason or ground or merit whatsoever. As no doubt the Minister knows, and certainly the Attorney- 1027 General knows, in many cases in the courts the question of whether the one year limitation applies—and it will be the same as regards the three years' limitation—is a complicated one. The legal position is not at all certain and is calculated to involve litigants in complicated and costly litigation which may, as it has on many occasions, have to find its final conclusion in the House of Lords.
This question of whether the limitation is to apply or not involves also a legal nicety, namely, whether the injury or damage was done in the "performance" of a public duty or was merely "incidental" to it. That is a maze to a layman, an offence to common sense, and a bar to justice. There can be no doubt that the rights of people in this respect are being frittered away by such fine threads of legal distinction, and it cannot be justified.
Most public authorities, including local authorities and these two Air Corporations, are no more handicapped in bringing an action within a certain time than anybody else. There is no reason, and there is no evidence that the Tucker Committee received, which shows why a Corporation of this kind has any more difficulty than any ordinary person or ordinary business or public body; in fact, the evidence proved clearly that these Corporations are better placed, because they have much more and much better machinery for promptly reporting any accident and also for the purpose of investigation. As a result of the definite evidence on this point which the Tucker Committee received, the committee unanimously declared itself against the distinction existing at present, and it was also in opposition to the suggestion that any of these Corporations or the nationalised bodies should have applied to them a lesser term of limitation than the six years.
The nationalised bodies are subject in every other respect to the ordinary law. The only difference to which they are subjected is on the period of limitation. In answer to an intervention of mine the Minister said, "All I am seeking to do here is to bring these two Coroporations into line with what happens to the other nationalised bodies." That sounds a plausible excuse for what the Minister is doing, but it is no justification. At the 1028 time that provision was made in relation to the nationalised industries, the Tucker Committee had not sat and a conclusion had not been reached on evidence and on a thorough investigation of what properly ought to be done. What was done originally, before the Tucker Committee, with the three years was merely a temporary means of trying to make the position more just than it was at that time.
The Minister is, therefore, now in this ethical difficulty, that since then the Tucker Committee made its report in 1949, as long as four years ago. And the committee came out strongly against the imposition of a period of limitation on anybody—any public body or anybody else—shorter than the six years which applies ordinarily to everyone else. My chief objection to Clause 3 is that it runs absolutely counter to that. It must be wrong for one of Her Majesty's Ministers, for this House of Commons, and for Parliament, which appointed that Tucker Committee, now to do something counter to its deliberations which creates a further injustice and adds to the anomalies already in existence in this matter.
There is another point with which this Clause does not deal. I ask the Minister to consider it, because I do not think that it was in his mind when he talked about Clause 3. I refer to the question of a joint tortfeasor. To put it in layman's language, if two people are liable for the same neglect or for inflicting the same injury, and one is sued and held to be liable, then the other is ordinarily, by law, liable to make a contribution towards the damages recovered.
There is a gap in the law on that, and this Clause does nothing to correct it. If someone is sued who, along with the public authority, is jointly liable for some damage which has been sustained, the public authority can avoid paying any contribution if a year has passed—or, when this Bill becomes law, if the three-year period has gone. It can slide out of its responsibility as a joint contributor although the other party with whom it was jointly concerned has been held to be liable.
No one else in this country can do that in law, but the public authority can do it. The Court of Appeal, in July, said that the courts could not close this gap, but that they "hoped that Parliament would soon do it." The Attorney-General 1029 knows this. I have asked him one or two Questions recently about this matter and the last answer I got was when he said:… the Government recognise that there is much to be said for removing this distinction between public authorities and other defendants, but I cannot hold out any hope that it will be possible for the Government to introduce legislation at an early date."—[OFFICIAL REPORT, 9th November, 1953; Vol. 5.20, c. 13.]The only effect of this seems to be that the Attorney-General says that there is no time in which to put the matter right, but apparently the Government have time in which to complicate it further. If this Bill has caught the Attorney-General's law reforming zeal, as it seems to have done, he is doing what he is doing in the teeth of the criticism of the Court of Appeal and he is ignoring the recommendation of the Tucker Committee.
The Attorney-General must be completely insensitive to justice in this matter. This Measure does not correct the unjust distinction to which I have just referred; it repeats it. It reinforces the anomaly about which the Tucker Committee complained and about which the courts and everybody else have been complaining for years. This is being done four years after the Report of the Tucker Committee and against the Court of Appeal's recent expressed view that they hoped that Parliament would do something to correct the matter.
Has the Attorney-General consulted the Lord Chancellor on this question? Surely the Lord Chancellor has not advised the Attorney-General to ignore the Tucker Committee and the Court of Appeal—or has he? This is a Government Bill and the Lord Chancellor is an important personage in the Cabinet. I want to know whether the Lord Chancellor has permitted this Clause to go into the Bill in face of what has been said by the Tucker Committee and the Court of Appeal.
There can be no justification for making a public authority a law unto itself and for setting it above the law to which the rest of the community has to conform. These Airways Corporations are in business for profit. We hope that they will make large profits. What is more important is that every year the safety of tens of thousands of people is in their hands. Acts of default and 1030 neglect on their part may have the most dire consequences.
Why, in those circumstances, should they be privileged above other airlines which carry passengers? There is no justification for the limitation in Clause 3. It does not make the position any better to say that it was one year before and that now we are making it three years. That does not alter the fundamental fact that this is an anomaly and an injustice which nobody wants and which every responsible authority has said ought to be remedied. This Clause re-enshrines the anomaly in this Bill. I therefore propose to put down an Amendment in Committee which I hope will either modify it or get rid of it completely.
§ 7.47 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo)
I have been most interested in the debate because, although I might be slightly out of order if I answered some of the contributions, many most constructive suggestions have been made and it is clear that the Bill finds favour generally with the House.
The reason for Clause I has been clearly explained by my right hon. Friend. There is considerable urgency about passing this Measure, especially in view of the requirements of British European Airways. I wish to reinforce the point that, to preserve their competitive position and to allow for expansion, it is most essential that the Corporations should be able to purchase the improved and up-to-date versions of the aircraft which they themselves have pioneered and which now are showing such a lead in world aviation.
I want to stress the point about the cost of modern aircraft. The House should not be under any delusion. These costs have increased to an unprecedented extent, partially due to the rise in production costs, but also because a postwar airliner, through technical improvements, has grown in size and complexity. It is of the greatest importance to the nation as a whole that we should be able to maintain our position in world air transport, first, from the economic point of view; secondly, for defence reasons; and, thirdly, to foster aircraft exports which are now assuming such great importance.
1031 The point was made by two hon. Gentlemen in interventions during the speech of my right hon. Friend about the terms of payment required by manufacturers. We have looked into the question most carefully. We are satisfied that the manufacturers are giving the best terms that they can afford, bearing in mind the high cost of modern aircraft and also the high working capital which is required. As a point of interest, British manufacturers are not in isolation here. If one wants to buy an American aircraft one has to pay progress payments, and one would certainly have to pay the full cost before one could get delivery of the aircraft.
The hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) asked me whether the re-engining of aircraft would have to be paid for under progress payments and would also have to be paid in toto before delivery. I regret to tell the House that at present no contracts have been settled for re-engining and it is impossible for me to give a categorical answer, but I suggest that in re-engining, as in buying aircraft, it is reasonable to assume that the Corporations will have to pay the whole amount before delivery.
§ Mr. Beswick
Is the hon. Gentleman satisfied with the present arrangement under which almost the whole of the cost of development work after the aircraft leaves the manufacturers has to be borne by the operator? Is that fair?
§ Mr. Profumo
That is a new point, but the way the hon. Gentleman has put it is not entirely correct. The total cost is not borne by the operator. The cost is borne by Her Majesty's Government up to the time a certificate of airworthiness is issued. It is only after the certificate of airworthiness has been issued that the cost is borne by the operator. When that time comes, one must remember, as I told the House the other day in the debate on the Reports and Accounts of the Corporations, that, although they may have to bear a high cost of development, the Corporations get very great advantages indeed by being the first companies to fly these aircraft and having a lead over foreign airlines in the development of these modern aircraft.
I want to say a further word about the charges which the constructors of 1032 aircraft make. It would not be in the interests of the Corporations to ask for extended credit terms, because in the end it would cost more, and in the national interest it is better that the Corporations, who can raise money at gilt-edge rates, should pay for their aircraft when they are delivered. If they did not. the manufacturers would be all the less able than they are now to finance purchases by overseas buyers and, indeed, by independent companies in the United Kingdom. In any case, it would not really make any difference in the long run because the Corporations would still require the powers which we are seeking today to enable them to make their final purchases at whatever date they have to make them.
During the course of his most interesting speech, the hon. Member for Uxbridge (Mr. Beswick) gave the House a comparison between the working capital of the Corporations and that of foreign airlines. He made an extremely interesting point. I should like to comment on it, because it is not entirely fair to make the comparison in the way that he did, owing to the fact that at the end of the war, due to the "fly British" policy—a correct policy—which the Corporations adopted and which the then Government supported wholeheartedly, as we all did, foreign airlines, including American airlines, and, indeed, K.L.M., were able to buy modern American aircraft which had long life and a high disposal value.
At the same time, we in this country, owing to the "fly British" policy, had to make do in part with not altogether satisfactory aircraft, such as the Lancastrian, the York and the Tudor, and it is only now that we are finding ourselves in a position where we are buying, at rates cheaper than if we bought foreign aircraft, the most up-to-date aircraft produced in the world.
Therefore, if we are to make a comparison between the working capital of the foreign airlines and the working capital of the Corporations, it should be on the working capital on which the foreign airlines have been working up to the present time, and in our case we should look forward to what we can work on in the future, bearing in mind our modern aircraft which have a high disposal value and, ton for ton, will be more remunerative.
1033 It seemed to me, listening to the debate, that the greatest contention was over the question of the payment of pensions to Board members. Let me say straight away to the House that there is nothing new or strange in the powers which my right hon. Friend is seeking in Clause 2. Her Majesty's Government are only asking the House to agree that the Air Corporations should be placed in broadly the same position as are the other public boards. Whatever the hon. Member for Uxbridge may have thought, it is perfectly clear, and quite correct to say, that all other nationalised bodies have provisions for pensions to board members. It has always been so.
Clause 2 (2) closely follows, as my right hon. Friend has said, the provisions in Section 2 (6) of the Coal Industry Nationalisation Act, 1946, Section 1 (7) of the Transport Act, 1947, and Section 5 (6) of the Gas Act, 1948. Therefore, there have always been enabling powers to make arrangements for pensions for all Board members, except in the case of the nationalised airways.
It is intended under Clause 2 (2) to cover those Board members who do not come under Clause 2 (1); that is to say, those who are recruited from either pensionable or non-pensionable employment outside the industry. It is intended that the powers should be conferred by this subsection and used in accordance with general practice which prevails in relation to Board members who are not recruited from the staff of the concern in question.
Those who already possess pension rights may continue to add to them or they may receive pension rights roughly equivalent to those enjoyed in staff pension schemes. Board members as ex-employees continuing in staff pension schemes will continue to be governed by the staff scheme as regards contributions. Other Board members will also make contributions. That is a point which the hon. Member for Uxbridge raised on the analogy of the staffs scheme. In their case, there will not be an actual pension fund, but provision will be made from the general resources of the Corporations.
It was the late Government which decided to make use of their enabling powers to give pensions to Board members coming from pensionable employments, but the Air Corporations Act does 1034 not contain these enabling powers in respect of Board members coming in with no pension rights, and the Clause has been inserted for that reason. We thought it wise when making these provisions to align the Air Corporations with all the other socialised industries and to provide for any contingencies. That is the whole story of the Clause.
The hon. Member for Uxbridge asked one or two questions about the Clause. I am only too glad to give the answers in so far as I am able. First of all, pensions certainly will be in addition to present salaries. Secondly, they will only be in respect of full-time members of the Board. Thirdly, as I have already told him, they will be contributory.
That brings us to the last Clause. The hon. and learned Member for Gloucester (Mr. Turner-Samuels) made a very interesting but rather abstruse speech about this.
§ Mr. Profumo
I was hoping that the hon. Gentleman would wait a little longer. He has been good enough to listen to a part of my speech in which he is not interested. I shall do my best to reply, so far as I am allowed, with Mr. Deputy-Speaker's permission, because certain parts of his speech seemed to me to be outside the scope of the debate.
§ Mr. Hale
On a point of order. Mr. Speaker was in the Chair from the start of my speech to the end. It is a very remarkable observation by the Parliamentary Secretary that I made points which were out of order and that he is not going to reply to them, not through any lack of deference to me but to correct an error made by Mr. Speaker in not restraining me from putting points to which he does not wish to reply.
Mr. Deputy-Speaker (Mr. Hopkin Morris)
That may be a point of argument, but it is not a point of order. I did not hear the hon. Gentleman's speech.
§ Mr. Profumo
I said that I thought I would be in danger of being out of order in replying. I did not say that the hon. Gentleman was in any way out of order as, indeed, he spoke with only one interruption from the Chair.
1035 I want to say a word about the speech of the hon. and learned Member for Gloucester, who seemed to give general support to the Bill. Her Majesty's Government recognise the general problem to which he referred, but I am sure the House will agree that we cannot deal with that one point and let all the others go by default. When this matter is dealt with it will be done as a whole. All we are seeking to do today is to clear up an anomaly in which the Air Corporations the placed as nationalised bodies.
When the Civil Aviation Act, 1946, which was the first post-war nationalisation Measure, was drafted, these points were inadvertently left out. There have been actions in the courts which clearly pointed to the need for a change in the protection afforded to the Corporation. We have thought it right to take the first opportunity of bringing the Air Corporations into line with other nationalised bodies. We can only deal in this Bill with the Air Corporations, and what we are doing does not run counter to the report of the Tucker Committee. We are going along the right lines, even if we are not able to go the whole way.
The hon. and learned Gentleman could not have meant one of the remarks which he made. He assumed that in trying to align the Corporations with other bodies we were taking a retrograde step. We are not. We are going in the direction in which the hon. and learned Gentleman wants to go, but we are only able in the Bill to do it in regard to the Air Corporations.
Now I come to the hon. Member for Oldham, West. Perhaps he will understand why I made the remark that I did just now. He started with some interesting remarks and made a very racy speech covering a great deal of ground. He talked about the civil type of the Avro-Delta. This is where I find myself in a difficulty in trying to comment. There is no provision in the present investment programme of either of the Corporations for the civil version of the Avro-Delta, and as this aircraft is at present entirely the responsibility of the Ministry of Supply I would be doubly wrong if I were to comment upon it; except to say that it is this sort of aircraft, which is being produced primarily for the Ministry of Supply, which, we hope, will benefit 1036 us as successors to the civil aircraft which are now traversing the world with such success.
§ Mr. Hale
We are not discussing the Estimates of the two Corporations today, I agree. We are discussing giving the Corporations a blank cheque for £35 million, which they are entitled to spend as they like under the terms of the Act. All ancillary services are covered—buses from aerodrome to aerodrome, cakes, buns and anything they care to spend money on.
§ Mr. Profumo
The hon. Gentleman is not quite right. It will be a great mistake to think that the Bill is a blank cheque and that the Corporations can go off and buy buns, put up canteens or buy more buses, without the very strictest control.
I say, for the hon. Gentleman's information, that all we are doing here is to make provision to increase the borrowing powers of the Corporations. When a Corporation wants to borrow money it has to come to my right hon. Friend the Chancellor of the Exchequer and get his permission before it can raise loans or enter into any extra commitments. So far as aircraft are concerned, there is extra supervision. In fact, it would not be surprising if the Corporations thought that they were being, if anything, over-fettered.
§ Mr. Hale
The Parliamentary Secretary is right. There are checks and counter checks and, of course, the Corporations cannot buy ice cream cornets with the money. All I was saying was that, in the Parliamentary sense, the Bill is a blank cheque. The rest of its provisions are administrative. They are there, they are necessary, and they are exercised. I am talking about the Parliamentary Secretary's right to answer the question which I put. In Parliamentary terms, the Bill is a blank cheque, and we are discussing the whole operations of the Corporations.
§ Mr. Profumo
If that is what the hon. Member meant when he spoke about a blank cheque, and if the hon. Gentleman is happy about that, so am I.
Another question concerned the Princess flying-boat. Here, again, I am in some difficulty, because there is no provision for the purchase of the Princess in 1037 the present investment programme of either of the Corporations. My right hon. Friend has made it clear that Her Majesty's Government have by no means lost interest in flying-boats. I think that is the point which the hon. Gentleman wanted cleared up.
I think there is broad agreement on all sides of the House that it would be totally wrong to ignore the flying-boat. There are these three Princesses in existence, and if either of the Corporations were to consider purchase of one or more of these flying-boats it would, presumably, be in place of some other aircraft. In those circumstances, there will be adequate provision in the powers which are sought under the Bill. I hope that that information will give the hon. Gentleman a certain amount of increased confidence.
The other point which he raised was about helicopters. I assure the hon. Gentleman, as I indeed assure the House—and my right hon. Friend has done so before me on previous occasions—that Her Majesty's Government are immensely interested in the future of the helicopter; but this is a matter which we must relate to the hard, brass tacks of commercial operation. It is not any good talking about rotor stations in the middle of cities, or of flying the people of Wales backwards and forwards unless we realise that, without very considerable subsidy by the Government, this will be impossible until helicopters become economic. It is to that end now that all Departments of Her Majesty's Government are bending their attention.
The hon. Gentleman said, "It is all very well, but the B.E.A.C. helicopters only spent a certain number of hours in the air last year." He must remember that that all took place under a subsidy which comes from the Exchequer and is granted by my right hon. Friend's Department in order to find out anything new about this aircraft. Quite clearly, we should be wasting public money if we were to go on flying helicopters around on the same routes after we had learned all the lessons which we think we have to learn. The next great step will be when the twin helicopter comes into production, which, I hope, will be in the near future. Then the hon. Gentleman will see more flying by helicopter. There is no lack of interest on the part 1038 of the B.E.A.C., Her Majesty's Government, or the people. We should all like to be able to make more considerable progress, and the hon. Gentleman might help.
§ Mr. Profumo
We do not regard single engines as satisfactory. The stub wing aircraft, which has two rotors, has two engines. We feel that it is not just a question of having one windmill which will hold you up in the air. We want an alternative engine which will operate both rotors or come into operation in the single rotor machine if something goes wrong with the engine. The existence of the stub wing is not sufficient. All possibilities are being explored.
I think the hon. Gentleman will find that as soon as we have managed to develop further the twin-rotor, we shall move towards the desire which he has expressed today. I was pleased that at the end of his speech, the hon. Gentleman said he was going to support the Money Resolution and the request to the Government to increase the borrowing powers. Therefore, ending on that note, I can with the utmost confidence commend this Bill to the House.
§ Question put, and agreed to.
§ Bill accordingly read a Second time.
§ Committed to a Committee of the whole House.—[Mr. Wills.]
§ Committee Tomorrow.