HC Deb 09 May 1956 vol 552 cc1208-12
41. Mr. Hunter

asked the Minister of Transport and Civil Aviation the reasons for the appointment of Mr. Gerard d'Erlanger to the Chairmanship of the British Overseas Airways Corporation.

Mr. Watkinson

There is only one reason: that I think Mr. d'Erlanger is the best man for the job.

I reach this conclusion, because his wide experience of airline operations will be invaluable in reaching decisions which are urgently necessary on the future aircraft programme of the Corporation, and because his financial knowledge will be of great benefit to the Corporation at a very difficult time when continued profits are by no means assured.

Mr. Hunter

While I thank the Minister for his detailed reply, may I ask whether he is aware that this appointment has caused great unrest among the staff of B.O.A.C.? Thousands of the Corporation's employees live in my constituency and therefore I know them very intimately. Is the Minister aware that the staff of B.O.A.C. is very proud of the great success which it has made of this publicly-owned Corporation, and that the staff wishes it to expand to even greater successes? Will the Minister encourage and inspire the staff to make this the greatest airline corporation in the world?

Mr. Watkinson

I accept the hon. Member's point, but he ought to see some of his constituents and those who work on the airport again after the meeting which the Joint Industrial Council had with the top management of B.O.A.C. last Friday. He will find that that meeting was, on the whole, very friendly, because it devoted itself to one object only and that was the last point which the hon. Member made—how we can secure a better and still more prosperous future for the Corporation.

Mr. Nabarro

May I ask my right hon. Friend a question about the remuneration of the Chairman? Is it the fact that he is to receive no salary and an expenses allowance of £2,000 a year, and, in those circumstances, would my right hon. Friend give an assurance that—

Mr. Speaker

Order. I gather that the hon. Member is asking about remuneration. There is nothing in this Question about that.

Mr. Beswick

Apart altogether from the personal qualifications of Mr. d'Erlanger—I am not questioning them at all—is the Minister aware that there is great apprehension among the employees that these appointments and the pattern of the administration which he has established are intended to facilitate some change in the scope of the responsibilities of the Corporation and the hiving off, possibly, of some of its functions? Can the Minister give a quite unequivocal assurance that, whatever may be the criticisms about individuals, that change of policy is not intended?

Mr. Watkinson

I am very glad the hon. Gentleman has asked me that question. There is no intention, as the Chairman of the Corporation has already said in a written statement issued to every member of the staff, to merge the two Corporations, as has been suggested in some quarters, to denationalise them or to dismember them. I hope that I have made it quite plain, and I say it again for the hon. Gentleman's sake, that there is no intention to merge, to denationalise or to dismember the Corporations. Indeed, the whole purpose of the change in the top management is to enable more attention to be given, because there will be more people to do so, to the urgent problems upon which the whole commercial future of the Corporations now depends.

Mr. Russell

Could my right hon. Friend say what he meant by the phrase, "continued profits are by no means assured"?

Mr. Watkinson

I think it only fair to the Chairman and the Board of the Corporation to say that they face a position of great financial difficulty. Those of us in this House who study the finances of the Corporation know that, through no particular fault on the part of anybody—I am not apportioning the blame—the Corporation is entering a period of great financial difficulty. That is why I wanted to strengthen the top management so that there might be plenty of opportunity for individuals to give their attention to this matter.

Mr. G. R. Strauss

Will the right hon. Gentleman amplify the assurance which he gave to my hon. Friend, because it is felt that, as a result of this change of the Board, there may be some change of policy about private concerns taking further interest in some of the Corporation's present activities or the granting of licences for carrying freight which are not granted at the moment? Could the Minister give a further assurance that no change of policy whatsoever is indicated? [HON. MEMBERS: "Oh."] The right hon. Gentleman said that he had no intention "to dismember." I am asking him to give a further assurance that these appointments do not indicate any change of policy at all.

Mr. Watkinson

My position is perfectly plain. I have appointed to the Corporation the people who, I think, will best secure its profitable future. I also think—I say this quite frankly, and, I hope, without making any party political point—that the Corporation is more likely to make a profit if it is run by a businessman.

42. Mr. Hunter

asked the Minister of Transport and Civil Aviation the reasons given to him for the resignation of Lord Rennell from the Vice-Chairmanship of the British Overseas Airways Corporation.

Mr. Watkinson

Lord Rennell, who has since at his own request been reappointed as a part-time member of the Board of B.O.A.C., resigned because he considered that a part-time Deputy Chairman was not needed in the new organisation of the Board.

Mr. Hunter

I should like the Minister to clear up a point which puzzles me. Why did the right hon. Gentleman accept Lord Rennell's resignation and then reappoint him?

Mr. Watkinson

I do not know whether the hon. Gentleman has read the letters which passed between Lord Rennell and myself and which were published. He will find, I think, that they clearly explain the position. I would only add one point, that Lord Rennell asked me to be allowed to rejoin the Board, not as Deputy-Chairman, but as a Board member, because he felt—and I think every other member of the Board felt—that in this time, when difficult decisions are to be taken, it is better, on the whole, to put the future of B.O.A.C. before any of our private views.

Mr. Mikardo

Is the right hon. Gentleman aware that Lord Rennell is a director of a company called Air Finance Limited whose Chairman is Mr. d'Erlanger, the new Chairman of British Overseas Airways Corporation? Is that fact mixed up with this business, and does not the Minister think that this mix-up of these gentlemen's public and private responsibilities is getting a little too complicated?

Mr. Watkinson

What I do know is that the company which the hon. Gentleman has mentioned was responsible for selling Viscounts to Capitol Airlines in America, and, therefore, probably knows more about how to put British aircraft on the map than any other single organisation.

46. Mr. Beswick

asked the Minister of Transport and Civil Aviation if he will make a statement about the appointment of a chief executive for the British Overseas Airways Corporation.

Mr. Watkinson

It is for the Board of the Corporation to appoint its chief executive, and it has now appointed Mr. Basil Smallpeice in that capacity with the title of Managing Director. Mr. Smallpeice was appointed a full-time Board member by my predecessor on 30th September, 1953.

Mr. Beswick

I am sure that the whole House will welcome the appointment of Mr. Smallpeice, who is a man of great integrity of character. But the difficulty arises that while the Board has appointed Mr. Smallpeice as full-time chief executive, the Minister has appointed a full-time Deputy-Chairman. Can the right hon. Gentleman assure the House that there is a clear and understandable division of responsibility between the full-time Deputy-Chairman and the full-time chief executive?

Mr. Watkinson

I do not know whether the hon. Gentleman has read the allocation of duties, which again the new Chairman handed to each member of the staff, but that shows quite clearly that Mr. Smallpeice is in full executive command of the Corporation, as he should be as managing director, and has direct access to the Chairman. I wish to add that there is only one purpose for broadening the base of the top management. It is to try to solve these very difficult problems about which we have been talking this afternoon. I considered that we needed more people at the top to get these decisions made.

Mr. Beswick

But is the right hon. Gentleman aware that broadening the base might well mean a blurring of responsibility, and that that point must be borne in mind?

Mr. Watkinson

I agree, but it has also enabled a major promotion to be made from the ranks of B.O.A.C., about which I am delighted.

Mr. G. R. Strauss

Is the Minister aware that while our anxieties about the new appointments still remain, though we hope that they are unfounded, we shall do all we can to see that the new set-up is successful?