CIVIL AVIATION

HC Deb 02 November 1956 vol 558 cc1772-847

11.49 a.m.

The Minister of Transport and Civil Aviation (Mr. Harold Watkinson)

I beg to move, That this House, in reviewing the progress of Civil Aviation, takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March, 1956. Mr. Speaker, I know that some hon. Members of this House must find it difficult at this stage to take their minds away from other events but it is, I think, a support to the dignity of this House that we should go on with the business set down for this day.

It is my duty to report to the House a great many happenings in this wide, and not unimportant, field of civil aviation. Although it is only ten months since the House last discussed the work of the Corporations, and civil aviation in general, a great deal has happened, as all hon. and right hon. Members know, and I think it is right, despite other matters in the world, that the House should now have an opportunity of examining, as it is our duty to do, the wide picture which we now have to consider. I will be as brief as I can, because I know that there are other hon. Members wanting to speak, and our time, of course, has already been much curtailed. Therefore, I will confine my remarks to three main points.

The first point is the international aspect of aviation. Aviation is a growing business, as we all know, in which nothing ever stays the same for very long. Its growth is best expressed by saying that in the last eight years the passenger miles flown on world scheduled services have more than trebled. In 1955 they reached no fewer than 39,000 million passenger miles. The important thing, I think, is that this traffic has been generated by the industry itself. It is not something that has been taken away from ships, rail, or road, but something which has grown out of the industry, and we look forward now to cheaper services in the high density services that are to come in 1958, on the North Atlantic, for example. This expansion must obviously continue—I think at possibly an increasing rate.

One word of warning I must add. Although the picture may be one of expansion, the margin of revenue over operating costs is very small indeed. Indeed, in some cases it is only about 1 per cent., without making adequate provision for the ever-increasing cost of replacement not only of aircraft but of other equipment. I do not think, therefore, that there is any cause for this House to be complacent about the future, from the financial point of view, although we may be slightly dazzled by the prospects of expansion.

I think that that is the way in which we should look at the international scene. It is sometimes said, of course, that aviation is too international, but I do not see how else we can manage this kind of business which is always concerned with flying over frontiers, I think it is right that we should play our full part in the International Civil Aviation Organisation. As the House knows, that Organisation is now looking into the problems which will arise when these new, high-speed jet transports become available.

I think it is also right that we should play our part in I.A.T.A. Although this body is sometimes criticised for having control of fares. I do not think that it is a bad thing to have a forum in which those matters may be discussed, bearing in mind that final decisions must still be referred to Governments. As the House knows, this year's annual general meeting of I.A.T.A. was held in Edinburgh, and was presided over by Lord Douglas.

In this expanding world of the air, Great Britain must try not only to maintain her share of traffic but to improve it. That is a job for British civil aviation as a whole, and I think that every company, every corporation, every unit in it has its full part to play as the expansion goes forward. The House might be interested in the comparative picture for 1955. The total number of passengers carried by all B.I.A.T.A. airlines during 1955 increased by 17 per cent. ; those carried by B.O.A.C. increased by 21 per cent., and by B.E.A., by 18 per cent. Again, therefore, it is a picture of progress.

Mr. A. E. Hunter (Feltham)

What date was that?

Mr. Watkinson

That is for the last complete year—1955.

To sum up that part of the picture, it can, I think, fairly be described as one of great progress, but not necessarily entirely balanced by a great financial stability to match that progress.

I shall not trouble the House, of course, with a detailed analysis of the Corporations' Reports, because I am sure that hon. Members who are interested in these matters have studied them for themselves. Nevertheless I wish to draw attention to one or two points.

A study of the B.E.A. Report for 1955–56, in page 18, shows how well it has maintained its position in regard to its European competitors. B.E.A. now carries no less than 56 per cent. of the total traffic between the United Kingdom and Europe. The results of the B.O.A.C. were not so good, for very understandable reasons, and although it did increase its total of passenger traffic, its relative position, particularly of the North Atlantic, fell away, due of course, to the delay of the Britannia and the continuing effects of the loss of the Comet.

The independents, too, have been playing their full part. Their total traffic increased by nearly 100 per cent. over the previous year on Scheduled services, on which they are now responsible for 9 per cent. of the total U.K. traffic. In this expanding world, therefore, they are finding their niche, which is what the Government wishes them to do. I think that their limited opportunities—and I am sure that the House understands that they are limited opportunities—have paid off. Perhaps the best example is the vehicle ferry service, which, last year, carried over 50,000 cars. Before I leave this section, I might mention another interesting point. I refer to a new piece of enterprise, the combined air-coach services which have been so popular, to the Continent.

Before I leave the international sphere, I would like to say just one word about B.E.A. services to Russia, because I have not had an opportunity to mention this in the House since the resumption after the Recess. At the beginning of June we invited the Soviet authorities to send a delegation to London to resume the discussions, started in Moscow last November, to try to get a through air service between London and Moscow. The Soviet authorities accepted the invitation, but they have suggested that, before the talks were resumed, permission should be obtained for Aeroflot to overfly Western Germany.

In other words, they made it a condition that they could not undertake to come here unless Aeroflot had rights to fly over Western Germany. Under the Bonn Convention, of course, the three Western Powers continue to control the overflying rights in the Federal Republic, and we have been in consultation with the Governments of France and the United States ; and, of course, the Government of the Federal Republic, because we have no wish to take decisions without fully consulting them.

That has taken some time. When I was in Western Germany about ten days ago, I took the opportunity of raising this matter with my German colleague, the Minister of Transport, and we had a frank discussion on the issues. I hope that we shall now make some progress in settling this difference. It is difficult, particularly as Lufthansa itself wishes to expand in various directions. Therefore, although we wish to reach a conclusion, I cannot promise the House a quick or an early one.

The last thing I should like to say about the international field is that, whatever may be our views in this House about affairs in the Middle East, it is right that I, as the responsible Minister, should pay a tribute to what both the Corporations and the independent operators have done with their aircraft, when asked to do so, in taking out civilians, in ferrying stores or in carrying troops. They have carried out an immense task over the last two months, and I think that they have done it supremely well.

I now come to the national picture. Again, I do not propose to deal with the details of the Reports of the two Corporations, but to pick out one or two facts which are of interest. The scale of their operations is, I think, best expressed in the odd figure called capacity ton miles. B.O.A.C. increased its capacity ton miles by 21 per cent. to 260 million. In the case of B.E.A., the increase was 27 per cent. to a figure of 124 million. B.O.A.C. carried more than 385,000 passengers, while B.E.A. carryings—of course, on a much shorter haul—topped the 2 million mark for the first time. I may say that its passenger load factor is practically 70 per cent., which is not a bad load factor, even in a competitive world.

The other thing which interests me is that the productivity per staff member has greatly increased. In B.O.A.C., output per employee increased by 14 per cent., and in B.E.A. by 20 per cent. Therefore, flowing from this, was a reduction in costs per capacity ton mile, B.O.A.C. costs coming down from 39.9d. to 38d., and B.E.A. from 41.7d. to 40.5d. Both Corporations showed a profit, although B.O.A.C.'s was only just a profit, being an overall net of £118,000—and, I am sorry to say, rather less than was at one time forecast. B.E.A. had a final surplus of over £600,000. In both cases those are final figures after paying interest on capital, which is, I think, the right and proper figure—the net at the end, and not some arbitrary figure drawn somewhere in the middle. Both Corporations, of course, have paid off their accumulated deficits. I think that I can say that this is a record of sound commercial progress towards the ambition which the Government and certainly I have to make these Corporations as efficient and businesslike in their operations as possible.

One thing which I should mention and warn the House about, and it was discussed in the debate last year, is the writing off of aircraft. I am worried about the obsolescence of aircraft. They become obsolete long before they are worn out, but once they are obsolete they are, in this competitive world, of very little use. I have asked both Chairmen to apply a stricter standard of amortisation for their aircraft. I hope that we shall have a common practice in this matter and that it will shortly be agreed by both Corporations.

My next important point concerns equipment. Whatever view one takes of the future, it must be conditioned by the availability of aircraft. One has only to look at the past history of B.O.A.C. to see how its progress has been altered, sometimes impeded, sometimes advanced, according to whether it has had the right aircraft at the moment. Of course, equally, there has been a great improvement in B.E.A.'s fortunes in pinning its faith to the Viscount. I do not think that it would be wrong to say that it is probably the view of every Member of this House here at the moment that if we are to maintain our position in the air we always have to be switching, almost overnight, to better and more competitive types of aircraft.

It was with this in mind that when I took over this Ministry—it seems a long time ago, but I think it was on 22nd December—I immediately asked both Chairmen for a shopping list. I asked them to tell me the aircraft they had on order, the aircraft which they hoped to order, and generally try to assess their position. I wanted them to look into the mid-sixties because I think one has to look as far ahead as that in this competitive business when thinking of new types of aircraft.

B.E.A. did not find this a very difficult question to answer. I think that the House knows that the Corporation has on order 24 Vickers Viscount V802s, of which deliveries are now commencing, 14 V806s and options for seven V810s and 12 V840s. The Corporation has also ordered 20 Vickers Vanguard V951s, which is a much bigger turbo-prop aircraft. So the Corporation's position looks reasonably sure, but that is not the end. I know that the Corporation is most anxiously looking into the future to see if that is enough to secure its operation, or whether it should be now thinking about some new aircraft. If the Corporation comes forward with new proposals I shall welcome them.

B.O.A.C was faced with much greater difficulties. I understand those difficulties, as I think every hon. Member here does. The Corporation had, and still have, a formidable list of aircraft on order—15 Bristol Britannia 102s, of which deliveries were started—but we all know the difficulty—seven 302 long-range; 11 312 long-range, one Comet Mark II for development flying only, and 19 Mark IV, which, I am now glad to say, are coming along very well, 10 Douglas DC7Cs of which there has been the first delivery, and 14 Vickers Viscount 700s for the Corporation's associate companies.

The difficulty is that unfortunately none of these is at the moment in route service. There has been some controversy about whether the Corporation should (have taken a chance on the Britannia. I think that it was quite right not to do so. I think that to try to put a new aircraft into service which is perfectly safe to fly—there is no difficulty about that—but a new aircraft which would be rushed and have the difficulties which I will explain in a moment, would have been wrong, particularly as I am sure that when we can get over the peculiar icing problem which affects this aircraft at high altitude and in some kinds of weather we have a world-beating aircraft. I think that it would have been very wrong, and I entirely support the Corporation in its decision to try to put this right before it brings the aircraft into full route service.

Perhaps the House would like to know a little more than they did a year ago about the Britannia problem. It is called "flame-out," which means that at certain altitudes—and this is a new problem because it is dry ice and not wet ice—this dry ice breaks up into enormous lumps in the air intake of the engine and this big mass of ice extinguishes the flame in one or more and sometimes all the combustion chambers. This is usually found only above 16,000 ft. ; it is a very grave and difficult problem.

We have put all this to my right hon. Friend the Minister of Supply and there is to be a combined operation on this aircraft. Bristols have co-operated fully and so has the Corporation and every kind of research organisation that can be used, like R.A.E. and other bodies, has been turned over to this. We have two aircraft in Africa carrying out many different modifications to try and speed up the solution to the problem, and the National Gas Turbine Establishment is also collaborating. I think that there is no expert in this field at the moment in this country who is not playing some part in trying to get this problem solved.

Two Britannia aircraft at present in Uganda are trying some of the remedies proposed and, although I think that it is unwise in this field ever to be optimistic because usually one is found to be wrong, I should tell the House that two of the modifications which we are trying appear to be promising, and these are two which are relatively simple to apply. If they happen to be the answer, it will not take long to put that trouble right. I do not think blame attaches to anyone for this. It cannot be found in ground conditions. We have tried and we cannot reproduce it on the ground and can only produce it when flying this aircraft over 16,000 ft. in certain cloud conditions, particularly monsoon conditions.

This is an example of how rapidly the situation can change and of something new always coming upon one. For example, twelve months ago I read very carefully the debate in this House, and I thought then that most of the experts appeared to be reasonably sure that the aircraft which I have mentioned of B.E.A. and B.O.A.C. could maintain their competitive position on all routes until the mid-sixties. That was the belief, I think, of the Corporations and of everybody else ; but it was wrong.

Again I think that no blame attaches to anyone for the fact that it was wrong, because what we did not know at that time was the enormous steps forward that Boeings particularly were taking in the United States. They had been able to sell or supply over a hundred tankers to the United States Air Force to be used as flying tankers and this built up literally hundreds of hours of flying experience on what was actually a disguised—I do not mean that in any unpleasant sense—passenger jet aircraft. Those tankers are basically the Boeings now ordered by B.O.A.C. They have built up an enormous volume of flying experience and have put this aircraft forward in time two or three years more than anyone expected twelve months ago.

Anyway, even if there are different views on that, the hard fact is that by the spring of this year, most of B.O.A.C.'s competitors had placed large orders either for the Boeing 707 or the DC8. There were 200 aircraft on order from those companies in the spring and 80 were for B.O.A.C.'s competitors on the North Atlantic. That was the position we faced when I asked the chairman of B.O.A.C. to consider this problem as a matter of great urgency.

As a result, he set up, as the House knows, an aircraft requirements committee on which, I am glad to say, some of his captains as well as his technical people sat, so that it was representative of all sections of the Corporation. It was set up to try to assess the position as it stood when we realised that all B.O.A.C.'s competitors had committed themselves to one or other of these aircraft.

The committee had two tasks. It had to try to assess the position and see what the British aircraft industry could do to meet it, and to look at the two kinds of routes, the North Atlantic route and the rest of the world routes. As soon as the committee reported on the North Atlantic, it was obvious that there was a gap which, despite all that I or anybody else might want to do, the British aircraft industry could not bridge except by doing one thing—and this is not sufficiently clearly understood.

We could, of course, have bridged the gap by building a nut-and-bolt copy of the Boeing or Douglas, because that was what was wanted for the particular purpose. If we had done that, two things would have stemmed from it. The aircraft would have been far later in delivery, probably two years later, one to two years later anyway, than the delivery which was offered to B.O.A.C., because the first offer of delivery is for the autumn of 1959. Secondly, the biggest order that B.O.A.C. could have placed would have been for 15 aircraft.

There is not an aircraft manufacturer in the country who is prepared to put down a production line to supply 15 aircraft. The inquiries which were made seemed clearly to show that, because all other major airlines had formally committed themselves to either Boeing or Douglas aircraft, there would be no export possibilities for that type of aircraft.

We were, therefore, faced with the awkward decision that to fly British in that respect would cost us an immense sum of money in putting down an aircraft which we knew we could not sell, except for this one initial order. In those circumstances, it was sensible and logical to buy an American airframe and put the Conway engine in it. That is what B.O.A.C. has done. As a result, Rolls-Royce has managed to sell Conway engines to other users of this aircraft and may hope to do more business in that respect. On the whole, it was the best compromise and it will not be an unsatisfactory compromise. From the strictly monetary point of view, in the continuing life of the aircraft, much of the expense of engine spares and replacements will be for a British and not an American engine.

That was the first part of the story. The second part was that the aircraft requirements committee of B.O.A.C. then examined the rest of the world. It found that the Boeing and Douglas aircraft were not suitable for many other routes, although even there, the position is changing, because the promised Conway engine develops about 17,000 lb. thrust, far greater than when the engine was first developed, and the more thrust, the better the runway performance gets, and the less problems there are about the lengthening of runways, and so on—although one is still left with the problem of the kind of noise which an aircraft with these engines will make as it takes off.

The B.O.A.C. committee decided that what was wanted—and the Corporation is in a position to place a substantial order for it—was an aircraft which would be a little faster than the Boeings and which would have as much range as the Boeings—in other words, that it could do the Atlantic non-stop in either direction, but give a better performance, have a better take-off, and more flexibility of operation while carrying perhaps 120 passengers as against the 150 to 170 of the Boeing.

That is the background to the DH 118. As I announced a week ago, in agreeing to B.O.A.C.'s purchase of 15 707s as a stop-gap operation, the Government have told the Corporation quite firmly that it cannot be repeated. I also announced that B.O.A.C. had provided the De Havilland Aircraft Company with a clear and detailed specification of what was wanted with this flexible aircraft for the rest of its world routes. The Corporation and the company are now in close negotiation to try to translate those requirements into an aircraft. It will be not only sufficiently flexible to suit the Corporation's routes, but will have great possibilities in the markets of the world and be an aircraft which will fly the North Atlantic and be used on the North Atlantic.

I am sorry to have been so long in dealing with this topic, but this has been the first chance that I have had of giving the House the background of the aircraft position, which is so important. I do not propose to add my voice to those who are always so willing to criticise the British aircraft industry.

Mr. John Rankin (Glasgow, Govan)

Why not?

Mr. Watkinson

The hon. Member can do so if he wishes.

Mr. Rankin

There always seems to be an inference in what the Minister says that we have no right to criticise the British aircraft industry.

Mr. Watkinson

Not at all. I was about to say that criticism is good for everybody. I could not agree more, and I was about to say that any industry which wants to make progress makes mistakes, because if one does not make mistakes, one does not make progress. I would rather have mistakes and make progress.

Mr. Ian Mikardo (Reading)

It depends how many.

Mr. Watkinson

That is the balance. If one's progress is better than the mistakes, one is all right. That is what the British aircraft industry has done. It is exporting £100 million worth of aircraft a year, not all of them civil, of course. The order book for the Viscount today is 350 aircraft, which is making it the most successful aircraft in the world. I think that the Vanguard will build again on the experience gained with the Viscount, and I do not think that we shall be disappointed with the Britannia, as soon as we can get it over its teething troubles. It will then be a very great aircraft and will fulfil a very important purpose in the next period in air development.

We all know about the Comet IV and the DH118. With helicopters, there is the new Rotodyne to come. There are Herons and Doves and Heralds which are very interesting new aircraft, and the Prestwick Pioneer about which the hon. Member for Govan (Mr. Rankin) will know. I do not think that we should say that the British aircraft industry is not doing a very good job. Of course, it must be criticised and of course it will make mistakes but, as the hon. Member for Reading (Mr. Mikardo) has said, its progress is much more than its mistakes.

Mr. Mikardo

I did not.

Mr. Watkinson

I did.

Mr. Mikardo

I do not want to be quoted as associating myself with that view.

Mr. Watkinson

I am sure that when the hon. Member winds up he will have every opportunity of saying what he thinks. I have said what I think, and I have supported it with a good deal of evidence.

There are two other points which I want briefly to mention. The first concerns crew fatigue. Hon. Members know the difficulties about that and know that we have been trying to produce regulations for flight-time limitations. We have had considerable discussions with B.A.L.P.A. and other organisations to try to get them right. I promised the unions that we would try again, and we did. It has not proved possible to reach agreement with all the interested parties on every possible detail, and I do not think that I ever shall.

Further delay would not be justified, so I hope to lay the new regulations before the House quite soon. Frankly, the regulations will be experimental and I and my colleague the Joint Parliamentary Secretary are perfectly prepared to examine them again and receive representations about them. However, we must make a start, and the only way we can do that is to lay some kind of regulations.

I want to say a word about control. This is a very topical matter. I will not comment on the speeches made at the Guild of Air Traffic Control Officers' conference, except to say that I think the speakers were very wise in going beyond what they have today in this business. In envisaging a situation which has not yet arisen they were performing a very proper duty. We must try to do the same thing. That is why one of my predecessors asked Sir Frederick Bowhill to prepare the report on "Review of Procedures governing flight in controlled air space in the United Kingdom". It has been recently produced and presented to us. The Secretary of State for Air and myself have said that we intend to implement its findings as quickly as we can.

I have no doubt that other hon. Members probably know more about this than I do, but I have been to London Airport and have had the opportunity to examine for myself many of these control systems. I have examined G.C.A. and seen an I.L.S. approach to London Airport. If any hon. Members are interested, I should be only too happy to make arrangements for them to see this work. It is quite fascinating. What so impressed me was the immense responsibility and burden which rests on the men and women working this control apparatus. They do remarkably well, sometimes in very difficult conditions.

Whatever we may say about the necessity for improvement—and we must always improve—I should like to pay my tribute to the men and women at our airports, who never refuse an aircraft, always try to get it down and do a very difficult and very responsible—

Mr. Rankin

And very exhausting.

Mr. Watkinson

I am looking into the question of exhaustion, but I believe that the hours of duty are not excessive, although I shall always be willing to look at representations on that subject because these people must be fresh on their job ; I quite accept that.

The revenue from airports is increasing, and I want to say a word about the fascinating progress which London Airport is making. Landing fees and passenger service charges are up by 11 per cent., rents by 50 per cent., revenue from advertising by 250 per cent., revenue from the catering concession by 50 per cent. and revenue from shops by 75 per cent. As for the public, we are almost reaching the point where we cannot cope with them on a fine weekend in the summer, as I think some hon. Members know.

Mr. F. A. Burden (Gillingham)

May I ask a question about the revenue from the shops and restaurants? Is the figure which has been given a true representation of an increase in trade or is it due to an increase in the new buildings and the number of shops and restaurants?

Mr. Watkinson

That is a perfectly fair question and the answer is that it is both. We are expanding all the time. If my hon. Friend is interested I can try to give him the individual figures, although I cannot give them to him now. He will find that, quite apart from the opening of new shops, the business is going up rapidly.

Mr. Burden

May I ask a supplementary question? Are the shops and restaurants let on the basis of a fixed rent or does the Corporation draw a proportion of the increase in trade which may be done by these establishments?

Mr. Watkinson

I am told that it is both fixed rent and rent-plus, but I will ask the Parliamentary Secretary to answer that point later.

Mr. Rankin

I understand that letting is subject to the highest bidder.

Mr. Watkinson

Yes. No concessions are ever accepted on terms other than the highest bidder getting the concession. I will ask my hon. Friend to deal with the details about the shops when he winds up the debate.

It is an interesting example of how much more air-minded this country is getting when we realise that the revenue from the public enclosure in London Airport is about 350 per cent. up on the previous year, although I agree that there are new buildings. That is a good sign, and it is fascinating to go to London Airport and see young boys and girls enjoying the sight of aircraft taking off and landing. We hope that they may be the pilots and the aircrew of the future.

I think I could best sum up civil aviation, as I see it, as "A bit less glamour"—I am not sure that that is a bad thing—and "Much more application", which is what we all want. It is in very good heart. I think that the spirit in the Corporations has improved during the year and that consultation has been closer. I think that B.O.A.C., particularly, now feels that it has a future—and no airline which does not think it has a future will ever get very far.

I will end by saying that it is a report which I can make to the House with pride, as far as I am responsible not only for the Corporations but for the whole sphere of aircraft. I think that we in the House know what our objective is. Those of us on both sides of the House who take a very deep interest in the matter want to make our civil air lines as dominant and as efficient in the air of the world as we are on the seas of the world. If we achieve that, although perhaps we shall not ourselves see it, our children might be very glad of the efforts and the sacrifice put into this new and challenging industry.

12.26 p.m.

Mr. Frank Beswick (Uxbridge)

I share the opinion of the Minister that it was with some difficulty that we turned to discuss this Motion, and I sympathise with him in the number of attempts which he made to "take off" in moving it. I also venture to think that if we are to have a debate today it is probably with some relief, Mr. Speaker, that you see us turning to civil aviation.

I have a special interest in this industry, which I have declared before. I am sure that all of us in the House look forward to the day when we can turn again to the problems of this industry against a somewhat brighter background than that which is now so much in our thoughts.

When we last discussed civil aviation, ten months ago, I pointed out that under Conservative auspices we had had three Ministers in charge of civil aviation and three looking after aircraft supply, all in the space of four years. Within five hours of that remark we were told that the Minister of Transport and Civil Aviation of the day had got the sack and that the present Minister had taken over. I cannot think that these constant changes have been good for the industry.

Nevertheless, we take this opportunity—rather belated, but it is the first debate on the subject which we have had since—to welcome the right hon. Gentleman to his office. I think he has made mistakes since he has taken over and I will refer to, at any rate, two of them, but I am sure that the House appreciates his unfailing courtesy and general good humour, and I hope that the next change will be when there is a complete change of Government which, as things are now going, looks as though it will not be very far away.

Within the Corporations whose Reports we are discussing there have also been changes. The top level of B.O.A.C., we have been told, has been radically changed. Perhaps I may be allowed to pay a tribute to those who have departed from the Corporation—Sir Miles Thomas and Whitney Straight—for the part which they have played. They were two spectacular and dramatic figures in many ways, and their flight through this sphere was most fascinating to watch. I am sure we wish them well in the new positions which they have taken up.

At the time, we criticised the new appointments which the Minister made. I think they constitute the first of his two mistakes. The administrative pattern which he imposed upon the Corporation was, I think, indefensible, and after the strong criticisms made by the board of directors he himself realised that he was making a mistake by bringing in two people from outside. The compromise with which he eventually found himself landed meant an administrative pattern, with three people there instead of two.

Mr. Watkinson

I must correct the hon. Gentleman on one point of fact. I did not raise this point today, because I thought we had argued it enough in the House, but I must say that in this case I never changed my organisational pattern of the Corporation. I was determined to have the three people whom I eventually had. I did not alter my decision at any time. I appointed them and I never changed my mind.

Mr. Beswick

I do not propose to be diverted from what I was going to say, but, if necessary, I could give some details of the story and of the board meeting which was held, and of the meeting with the Minister and the appointment of Mr. Basil Smallpeice as Chief Executive.

What I was going to say was that it was only fair to point out that experience has shown that the arrangement has worked out much better than we feared, and that, I think, is due to the good sense of the personalities involved rather than to the right hon. Gentleman's own conception of administrative patterns. Incidentally, I understand that Sir George Cribbett is now in hospital, and I am sure that all of us in the House would hope for his speedy recovery.

The one appointment which was not criticised was that of Mr. Smallpeice to the post of Chief Executive. That was because he had earned a reputation and commended respect as the result of service within the Corporation. It represented promotion, a word which had almost come to be forgotten in the Corporation. It has been good to see that immediately below the level of Chief Executive there have since been other promotions from the ranks, especially of the flying crew. I hope that this trend will continue.

I have said before that, in addition to individual promotion upwards, there should, in my view, be a greater devolution of responsibility downwards upon the flying staff. In particular, the fleet and flight captains and the captains of aircraft could and should be entrusted with greater responsibility in matters of organisation and discipline. Provided there is a proper relation and contact throughout to the top, I am sure that this would do much to boost morale and efficiency. The better morale, to which the right hon. Gentleman has rightly referred, flows in part from the fact that this sort of thing has already been applied.

On the engineering side, I am very glad to learn that the chief engineer, has been restored to complete fitness. I think it appropriate to consider the burden now being added to the shoulders of the chief engineer. These new types of aircraft now coming into service and the unfortunate diversity of types are going to mean an immense strain upon the engineering side of the Corporation. I hope it is the intention of the Corporation to give the necessary encouragement, support and added strength to that branch of its activities.

Like the right hon. Gentleman, I do not want to go into details of the financial results. It is gratifying that the Corporation was able to show a surplus. It certainly has had its difficulties. There are two questions of financial detail which I should like to put to the Minister, because I think that they have a significance in relation to the £117,000 margin of surplus which we are considering.

The first question relates to the sum of £354,000 apparently set to the credit of the Corporation before it struck its financial balance. It is said in the Report that this was previously held against "unused flight coupons." I must say that it seems a nice little sum to pull down one's sleeve, and I think that we might be told more about it. I wonder whether it is just one of those tricks of accountancy of which I, for one, am a little suspicious.

My second question is about the loss of 360,000 shown by the subsidiary, British West Indian Airways. Two or three years ago I called attention to the fact that public money was being spent there for an inadequate return. It seemed, indeed, that B.O.A.C. could much more readily put money into that Colony than could the Colonial Office. The losses were subsequently brought down to £11,000 for 1954–55, but they have since jumped right back to more than £360,000. I think that we are entitled to have more information given to us either in the Report or, of course, in the Minister's speech on this point.

The other company, the Bahama Airways, also has a considerable loss to show of £46,000 which, considering the smallness of its operations, seems to me incredibly large. I should like the Parliamentary Secretary to tell us later whether this money is being spent as part of a deliberate policy in financing the tourist interest, or what is the situation. I hope the hon. Gentleman will not simply say that it has arisen as a result of re-equipment, because other companies have had much bigger problems of re-equipment than have faced these two small bodies and have not shown deficits of anything like this order.

Of the activities of the Corporation as a whole, two of the most significant figures—and the right hon. Gentleman has referred to them—are those of the 32 per cent. increase in passengers carried and the 20 per cent. increase in passenger revenue. These increases really reflect the utmost credit on those members of the Corporation's staff who have had to make do, mend and borrow aircraft to keep the services going with a very high standard of safety and efficiency.

Nor am I forgetting the sales side of the organisation. It is bad enough when one has to contend with competitors without having to take on the aircraft industry as well. So far, the Corporation has met the challenge. I shall return to the question of equipment and the burden placed on the British air transport industry by some sections of the aircraft construction industry, and I want to emphasise "some sections".

The Minister spoke about progress being greater than the mistakes. But the fact of the matter is that the progress, in the main, has been made by certain firms and the mistakes by others. I think that both the right hon. Gentlemen today and the Minister of Supply on other occasions have made a mistake by lumping the industry together as one whole and putting upon it, in his case, praise and, he thought, in my case blame. However, I shall have something more to say about that later.

I want to say something about the rate of expansion of traffic. To some extent, of course, the Corporation has been limited by the failure of some of the aircraft delivered and by the delay in the delivery of others. At the same time, I think we have to accept the fact that air transport as a whole in the world is now expanding much more rapidly than is that of our own Corporations. Quite clearly, B.O.A.C. is not maintaining its proper share. In some areas of the world we are getting no share at all. Time and time again we hear the cry from those who have just returned from the South American Continent, "Why have we no British services to South America?" Other services are expanding there. Even the Germans, who must have had as much leeway to make up in the matter of equipment as B.O.A.C., are now operating into South America.

I must say that I have often wondered whether we ought not to have made an effort to get the Princess flying boats into the air and seen them flying down to Rio. I still have the instinct that that machine, or a development of it, would have done marvellously well both over the North and South Atlantic Oceans.

There is similar criticism of B.O.A.C. contraction from other parts of the world. Colleagues of ours in this House had to fly on a deputation to Teheran. They went by a non-British airline simply because there was not a B.O.A.C. service. Only last week I had a letter from Abadan to say that B.O.A.C. were closing their office there even though other airlines were expanding their activities and going out for a bigger share of the increasing trade that, at any rate until this last week, was available in that part of the world.

I wonder whether this contraction, although, of course, primarily a matter for the commercial judgment of the Corporation, is not also a question of assistance or encouragement from the Government. I say that advisedly, because in previous years I have had to call the attention of the House to detailed examples of how the Minister's predecessors have taken active steps to restrict the Corporation's developments.

Let me say at once that I have no evidence at all to show that the present Minister has ever directed the Corporation's chairmen or attempted in other ways to persuade them into a line of action against the possible interests of the Corporation. I say that because I believe it to be true. Equally, I believe it to be true that his predecessors did follow such a course of action. Nevertheless, there must still be this feeling that while the Government of the day had tried to make room for the development of privately-financed air companies at the expense of the Corporation there was no point at all in the Corporation trying to go into fresh fields.

The question of B.O.A.C. freight is a case in point. There is no doubt that B.O.A.C. should be earning more money by carrying more freight. But one can understand the reluctance to make the necessary effort when twice the Government have told them that freight ought to be left to the private operator. One result of the decision taken by the right hon. Gentleman's predecessors is that B.O.A.C., so far as I can see, is now helping to collect freight to be carried across the North Atlantic by Seaboard and Western, an American concern.

Then there is the matter of the Australian freight service. The activities of the shipping interests in this connection are, I think, fairly well known. Before the right hon. Gentleman assumed office the corridors of this House were worn smooth by the tread of representatives of shipping companies coming to see Ministers of the Crown. Some of their expectations were not realised, but what happened to their application to run a freight service to Australia? We should be told something about that. I understand from Australia that a company in this country was given the right, or a licence, to operate an all-freight service in competition with B.O.A.C. to Perth. From there it would have been taken over by an Australian company. That permit was not put into operation, because the Australian Government, so I am given to understand—I should be glad to have a correction from the Parliamentary Secretary—refused to allow another operator to come into Australia.

This seems to be a strange way of going about these things. I should be against it in any case, but surely this is a matter on which there should have been some proper negotiation, for a start, with the Australian Government. Should not they have been consulted first, or is the Parliamentary Secretary proposing to tell us that this is a matter which went through the routine procedure of the Air Transport Advisory Council? If so, it seems to me to be another reason why the licensing of new services should be taken back into the Department and put properly under the responsibility of the Minister.

Turning to the Report of B.E.A., I should like to take the chance of adding my congratulations to it upon reaching its tenth birthday. It is ten years of growth, and, as the record shows, of solid achievement, in which I think all concerned may take a proper pride. In B.E.A., too, there have been changes, and while paying tribute to the work of Mr. Peter Masefield, I should like also to welcome the new Chief Executive, Mr. Millward, whose appointment again is an example of this new and welcome policy of promotion from within.

On the basis of the good work done the way ahead for B.E.A. seems to be one of consolidation ; of further steady improvements in efficiency, in reduction of costs and the improvement of aircraft utilisation, which, I am bound to add, in the case of the Viscount seems to be very good already. I wish Lord Douglas and all those who serve under him well in the efforts they are making to these ends.

There are two other comments I wish to make about the B.E.A. Report. They concern the pattern of services. As the right hon. Gentleman says, B.E.A. has done well in any comparison with other European operators. It has increased its share of the total Continental traffic. It has succeeded in bringing down the cost of air travel when all around there are rising prices. The Corporation has contended with problems of short haul and seasonal traffic with a commercial flexibility which immediately rebuts any criticism that a nationalised undertaking must be slow, over-rigid and unimaginative when it comes to competitive commerce. No one who looks at its ingenious fare structure with off-peak, out-of-season, mid-week, night and tourist services, can fail to appreciate that it has a liveliness and an ingenuity comparable with any other commercial organisation.

In the argument about two Corporations or one, I have always favoured the proposition that two national Corporations were better than one. Nevertheless, I have always said that, although a second Corporation—in this case, B.E.A.—could better specialise in the problems of the short-haul operation, it was necessary for it to be able to mix in with the high-cost short routes one or two longer runs at lower cost. For that reason, I took a special interest in the extension of B.E.A. activites to the Eastern Mediterranean. It is for the same reason that I am particularly sorry that the agreement for a Moscow service—for which I understood Lord Douglas had completed negotiations—has not yet materialised.

The difficulty was, as I understand—and it still seems to be from what was said by the right hon. Gentleman—one which has been erected, not by any civil aviation consideration, but by our own Foreign Office. I must say that in this matter, as in certain other matters, the judgment of the diplomats in the Foreign Office seems to be sadly lacking. I hope that the right hon. Gentleman, as Minister responsible for these matters, will make an additional effort to see that we can get this service for B.E.A. to Moscow through Berlin.

Apart from the possible extensions into Eastern Europe, air transport costs on the Continent can be brought down, as the Minister said, only by assuring high load factors on bigger aircraft. Some hon. Members will have read an interesting book which was published recently, entitled, "The Economics of European Air Transport." The author argues that costs on the domestic services within the United States are about half of those operating in Europe, and he maintains that is, in part, due to the fact that in America—the land of free enterprise—it is very difficult indeed to get a licence to operate a new route. There is a careful concentration upon chosen airlines, and the lower fares result from this concentration of traffic being carried by large aircraft with high load factors.

I wonder whether the Minister is now taking sufficient notice of the development of European routes and the pattern of civil aviation generally. One reason why I doubt that is because he has really contracted out this responsibility to the Air Transport Advisory Council. I know that this body was set up by the Labour Government, but in those days its job was completely different. It was supposed to consider the complaints of the traveller. I understand that, last year, one complaint was submitted to that body. It is now undertaking a completely different operation and virtually it has responsibility for planning civil aviation domestically, and certainly over the Continent of Europe.

I know very well that the members of that Council perform their duties with care and with great diligence. I know that the Chairman of the Council, especially, has rendered great service to the body over many years. But I still say that there must be some doubts whether an ad hoc body of that kind should be entrusted with a directive so far-reaching in its effects.

I notice that B.E.A. make two criticisms of the Council, and suggest that the Colonial services and the inclusive tours are now, in their cumulative effect, making some inroads into the revenue of the Corporation. I hope that the Parliamentary Secretary will tell us whether he has considered the two criticisms which the Corporation has felt compelled to make and whether he feels that the policy followed by the Air Transport Advisory Council can be justified.

In one respect B.E.A. has been singularly favoured. It has been able to lead Europe and, indeed, the world in the operation of the turbine propeller aircraft. B.E.A. has helped in the development of the Viscount. Equally it is true to say that the Viscount aircraft has helped in the development of the Corporation. It must strike us all what a pity and a tragedy it is that B.O.A.C. has not been served and partnered by a British aircraft constructor, as Vickers have partnered and served B.E.A. It has not been for want of State money. I doubt whether there has been a case in history where so much public money has been poured into one industry for so little return.

We are entitled, indeed, it is our duty, to probe into this, and we shall not be deflected by the sort of personal attack or criticism which the Minister of Supply saw fit to make upon me earlier this week. Since he couched his reply in personal terms, I venture to tell him this. I was praising the aircraft industry in this House long before he ever got into it, and, from the way we are now going, I shall be praising the industry long after he has left the House.

We are discussing civil aircraft today, but on another occasion I shall want to know something about the Hunter aircraft. When the Hunter story is told in full, it may well constitute the biggest public scandal of them all. I would only say this at the moment. I hope that the Government's madness in foreign affairs does not lead our lads to fly in Hunters in combat against the MIG 17s.

I have always taken the line that there was a necessary function to be performed in this country by the Ministry of Supply and I have always argued in favour of that Department, but in the light of what has happened in the last year I am becoming much less certain. Let us look at what has happened in the light of the past year. Last December, we discussed the right hon. Gentleman's decision to cancel the V.1000 contract and with that cancellation went the VC.7, the civil version of the V.1000. Many hon. Members on both sides of the House criticised that decision. We said that it seemed to be giving up the attempt to fill the need of B.O.A.C. for a long-range jet aircraft capable of flying the Atlantic non-stop.

It is quite wrong to say, as the right hon. Gentleman said, that no one felt that the requirements of the Corporation could be met without purchases of American aircraft if the V.1000 was cancelled. He was warned time after time, inside this House and outside, that if we cancelled the V.1000 it would be absolutely essential for the Corporation eventually to buy American jet aircraft. That has been said clearly, and it was said ten months ago.

Air Commodore A. V. Harvey (Macclesfield)

While I do not disagree with what the hon. Gentleman is saying on this point, I think he would have to agree that it would be useless to order an aeroplane—I spoke for the VC.7 on the Adjournment—if B.O.A.C. did not want it.

Mr. Beswick

I am coming to that point in a moment. What were we told, not by the hon. and gallant Gentleman but from the Front Bench opposite? On 20th December, the Parliamentary Secretary said : B.O.A.C.'s future plans, therefore, are based on a combination of the different marks of the Britannia and the Comet IV. The Britannia will be flying on the Empire routes and on the North Atlantic. … Later, in the same column, he reiterated his confidence as follows : The Corporation believes that with these two types it will be able to compete with foreign operators for many years to come. …"—[OFFICIAL REPORT, 20th December, 1955 ; Vol. 547, c. 1880.] Those who warned that that cancellation of the V.1000 must mean the purchase of American jets have been proved correct. We are now spending £44 million, £35 million of it in dollars on Boeing aircraft. This is a complete reversal of Government policy that has taken place within ten months.

Let me say at once that I am not arguing against this decision to buy the Boeing 707. But it is no good saying that this business of the tanker, and so on, has come up in the last ten months. I quoted in my speech last year the development which had taken place in the Boeing aircraft with the flying tankers. All the facts were known ten months ago and, indeed, before. But I am not arguing now against the proposal to buy the Boeing 707 ; I think it is inevitable and that it was made inevitable by the policy announced by the Minister of Supply, last December. I am emphasising the differences between what he has now told us and what was said ten months ago, because I think we have to decide for ourselves what reliance and value we can place upon future decisions of the same right hon. Gentleman.

Let us look at another somersault which the Government have made. Let us look at some other words which the Minister of Supply uttered in this House. He said on the same date, justifying again his V.1000 cancellation : … it "— that is, the V.1000— was not likely to possess any significant competitive advantage in time of performance over the American aircraft. … Again, in the next column, he said : In considering our policy for the future we must remember that in order to sell in competition with the United States in the world market we must produce something significantly better than that which the United States offers."—[OFFICIAL REPORT, 20th December. 1955; Vol. 547, cc. 1933–4.] That was only ten months ago. But what were we told a week ago? I have the record in front of me. The wording was a little different from the wording in the right hon. Gentleman's speech as far as the D.H. 118 is concerned. We were told on 24th October that B.O.A.C. is now discussing with the de Havilland Aircraft Company a new aircraft which, we understand, will be delivered in about 1962, and, although a satisfactory specification has not yet ben agreed, we were told that : B.O.A.C. will place an order. This is very different from what has been said before. The Minister is now saying that B.O.A.C. will place an order. Are we to understand that there is a new policy here? I think there is a new policy. In the light of what the Government have said and done, I cannot believe that B.O.A.C. now wants to buy another aircraft of this kind.

Mr. Watkinson

I do not want to interrupt the hon. Gentleman—how we interpret the facts is our business—but I must put this matter right. The fact is that this aircraft committee, as the hon. Gentleman very fairly said, had no directions from me, no pressure from me, and no instructions from me ; it has come up with these two different requirements entirely as a result of its researches.

Mr. Beswick

Perhaps the right hon. Gentleman will allow me to complete what I have to say, because I am going to put some other questions to him. I am not really criticising him, because in this matter I think he is being run by the right hon. Gentleman who sits next to him, the Minister of Supply. The Minister of Supply is running this business, not the Minister of Transport and Civil Aviation.

Let us look at the matter in rather more detail. Ten months ago, this champion of the industry, with all the information he had, told us that the British industry could not produce a long-range jet aircraft which was suitable for the Corporation's requirements that we could expect to sell abroad unless it was significantly better than American machines. That is what he said, and he was supposed to have all the information at his disposal ten months ago.

The possibilities have not been profoundly changed in the last ten months. The hon. and gallant Member for Macclesfield (Air Commodore Harvey) is here, and I see all around me other hon. Gentlemen who know quite a lot about this industry. The same people are in the industry ; the same possibilities as regards engines remain as they were ten months ago. There has been no significant new "gimmick" thought up by the industry.

Ten months ago we were told it could not be done, that the British industry could not do it. Now we are told that B.O.A.C. is to buy this unspecified aircraft. I repeat, I am sorry but I just cannot persuade myself that the right hon. Gentleman is absolutely right in what he says. I do not believe that B.O.A.C. now voluntarily wishes to buy this particular machine.

Let us have a look at the kind of machine about which we were told. It is to have Conway engines, the same engines which were to appear in the V.1000. We are told that the Conway can now produce rather more power. Ten months ago we told the right hon. Gentleman that the Conway would be developed and could produce more power for the Vickers 1000.

When it was said that the V.1000 was getting a little heavy that very fact was mentioned ; indeed, I think the hon. and gallant Member for Macclesfield made this point in his Adjournment debate speech, saying that although the weight of the V.1000 had gone up somewhat, nevertheless the power which would be available from the Conway engines would go up even more and the aircraft could, therefore, be successful. Most of those considerations about operating from shorter runways applied ten months ago equally as they do today.

Ten months ago we were told that the Corporation was not interested in this machine—and this is the point the hon. and gallant Member for Macclesfield is making—and, therefore, it could not be expected that foreign operators would buy it.

There is, however, a vital difference today, and I am trying to find out exactly what it is. This new machine to be made by the de Havilland Company is financed in its development by the Minister of Supply—or perhaps he will advise me differently. Unless he tells me otherwise, I am under the impression that this new machine will be financed out of public money.

The Minister of Supply (Mr. R. Maudling)

I cannot quite understand why the hon. Gentleman is making so much mystery of this. It has always been made quite clear by B.O.A.C. that the Corporation was interested in aircraft with Trans-atlantic performance plus more flexible performance than is given by the large American jets. That is the specification dating back for many months, and such an airraft is now being discussed. I cannot yet see that anything which he has so far said throws any doubt on the quotations he earlier made from my words and those of the Parliamentary Secretary.

Mr. Burden

This is very important. May this not also be due to the fact that during those ten months the requirements committee has been set up by the Corporation, on which are sitting aircraft captains? This is one of the things about which the Minister was complaining, that, in fact, the Corporation was not coming forward with its requirements and giving the British aircraft industry an opportunity of creating the planes to compete with the Americans.

Mr. Beswick

The hon. Member is absolutely right. The decisions of the Minister of Transport and Civil Aviation are absolutely justifiable. I think he took action swiftly and properly to have this committee set up within the Corporation.

We are now talking, however, about orders given not by the Minister of Transport and Civil Aviation but by another right hon. Gentleman, who attacks us when we ask him questions about the aircraft industry and who is, on the one hand, himself responsible for cancelling the contract for the V.1000 and, on the other, is apparently responsible for giving another contract to another company for a similar sort of aircraft operating, roughly, at the same kind of range and weight and using the same engines. Whatever variation or changes in take-off performance, and so on, there may be in this new aircraft, such changes could have been forthcoming in the V.1000.

The net result of all this is that we are now starting on this British machine, with British Conway engines, eighteen months after work was stopped on the other.

Mr. Watkinson

I am sorry to interrupt again, but it is very important to have this right, not only from the point of view of past history—which, I think, is not very interesting—but from the point of view of the future. The fact is—and I now speak as a customer, as it were, and say this in fairness to the Ministry of Supply and my right hon. Friend—that, as we all know, B.O.A.C. said it did not want it. I know that is on record and I really need not say it again. This aircraft, the DH 118, has nothing at all like the kind of aircraft specification of the V.1000, nothing ; and it has got to perform quite a different function. That is why I think it will sell ; if it were the same it would not sell.

Mr. Beswick

I am sure the right hon. Gentleman is being perfectly straightforward and giving us the information as he sees it, but we also have our interests and our knowledge. What can be done inside the industry is fairly well known. We know what engines are available to fit into the airframe, and we know what the possibilities of the airframes are. We know of the developments within the last ten months.

I simply say that there are no possibilities of making this aircraft any better than the possibilities open to another company eighteen months ago. The net result of the decisions taken, not by the Minister of Transport and Civil Aviation but by the Minister of Supply, is that in this country work in this type of aircraft has been set back eighteen months. That is all I am saying.

Mr. Maudling

rose—

Mr. Beswick

There is this additional point, if I may make it, that within those eighteen months almost every major operator in the world has committed himself to the DC8 or the Boeing 707.

Mr. Maudling

As the hon. Gentleman keeps referring to speeches made by me, may I say that the only decision which the Government made in the case of the VC7 and the V.1000 was that we were not prepared to support from public funds an aircraft for whose development the British Corporations had no requirement. That was true at the time and remains true today.

Mr. Keswick

But the Corporation has the same requirement now as it had then. There is nothing at all changed as betwen now and then. The difference is that the Ministry of Supply is now prepared to finance the construction of an aircraft whereas it would not finance the construction of an aircraft a year ago. Moreover, this aircraft which is now being constructed, we are told—though its specifications are not even settled yet—has far less chance of getting a sale in the markets of the world because all the other operators have in the meantime made their commitments ahead.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo)

As the hon. Gentleman has quoted words of mine in making an announcement about the V.1000, will he allow me to tell him what the difference is, so that we can, perhaps, then leave it? As I said in my announcement—there are no words to eat at all—it was the Corporation which decided that it had no use for the V.1000. It was not the Government who said they should not have it ; it was the Corporation. The difference now is that it is the Corporation which has decided to buy these new aircraft, and, there being the belief that they will have a foreign sale also, surely there is nothing wrong in anything which either of my right hon. Friends has said or done.

Mr. Beswick

B.O.A.C. may have decided—and the Parliamentary Secretary has given me the answer to my question. I asked whether the Corporation had made the decision voluntarily. I am still not sure to what extent the decision which the Parliamentary Secretary now says has been made has been influenced by Government policy. The Minister of Supply said that I am making a mystery here, but what I am trying to do is to elucidate the mystery. I want to know to what extent there has been a change in Government policy, and to what extent the Corporation is, virtually, being directed to buy aircraft which it would not have otherwise considered.

As for sales in the rest of the world, I hope that whatever is made will sell, because it is quite likely that we, rather than the right hon. Gentlemen opposite, will have some responsibility for these matters afterwards—the time-scale is of that order. I hope that the aircraft will sell, but I again say that, due to the Government's change of policy, there is far less chance of that now, because all the world's major operators are now committed. We are entitled to probe this in order to form an opinion on what is happening.

I have tried very hard to understand why the Ministry of Supply should have switched about like this. I can offer myself only one explanation, and it may be the wrong one. That explanation is this. The Ministry of Supply conceives itself to be a planning and co-ordinating body for the aircraft industry. I believe that the Minister makes a mistake when he talks about the industry being one whole. In point of fact, it is a number of uncoordinated private companies. Some of them are good, some less good ; some are successful, some less successful.

We have one firm, and I have mentioned it before—although I have no particular interest in or brief for it—the Vickers Company. I have been glad to praise that company, because it has done so well for the British flag all over the world. It has been a successful company. I can only think that the Ministry of Supply says, "It is doing very well on its own ; it is selling its machines. It does not need assistance. We must try to find assistance for the less successful ones." That is not planning ; it is merely propping up. I think that we should do better to build on success rather than to buy some new aircraft out of a less successful company.

I should like to ask some more questions about the Britannia. It is eight or nine years since I asked in this House about the M.R.E. 175, which was the then description of the Britannia project. Since then, the Ministry of Supply has spent, on the Minister's own figures, £11½ million on the Proteus engine which is to power the Britannia. As a matter of interest, that is about the same amount as was spent on the abortive Bristol Brabazon—very large sums of money, both of them.

On Monday, the Minister of Supply told us that the delay over the Britannia had not caused the purchase of American aircraft. He was wrong again ; he does not know everything. The D.C.7Cs. which are now being delivered were, as a matter of fact, bought as a re-insurance against trouble with the Britannia. The fact is that we argued that out, and were told that the reason for our buying American aircraft was to re-insure against possible delay or failure of the Britannia. Therefore, the doubts about the Britannia have resulted in the expenditure of American dollars—which is not the impression the Minister gave us. And, of course, the Britannia is still not in service.

I take no delight in repeating this. As the Minister says, the flames in the engines are likely to go out in certain circumstances. The Minister says it is a perfectly safe aircraft. I must say that it sounds a little odd to the man outside, when each of the four engines of an aircraft can go out, one after another, to be told that that is a perfectly safe machine. What about the certificate of airworthiness of this aircraft? I understand that some restrictions have been placed upon it, but the Minister is responsible for the A.R.B. and for ensuring that the standards in this respect are high standards. I do not think that we shall be preserving those high standards if it is decided that this aircraft, with all its troubles, should be holding a full certificate of airworthiness.

Another question is this. B.O.A.C. has spent a lot of money on this machine ; hundreds of thousands of pounds have been spent on training and publicity, and on the problems attendant on the introduction of a new machine, I understand that it has now been necessary to scrap the whole of the organisation which had been set up for putting the Britannia into service. What kind of compensation is the Corporation to get? How much, in fact, has it cost the Corporation, and to what extent can it recover those losses from the aircraft concern?

Thirdly, the Minister said that almost every knowledgeable man in the country was now applying himself to the problem of the Proteus engine. How much is that to cost, and who is to pay for it? Who is to pay for all the research that is now going on into the problem? Next, has there been any new guaranteed delivery date? The Corporation has to produce its schedules and its time-tables. It has to look ahead in these matters. Can it now depend upon a given date? Has that date been given, and do any guarantees back up that date?

I seem to have gone on for longer than I had intended, though there are some other matters about which I should have liked to ask. I appreciate the steps which the Minister has taken as far as his flight-time limitations are concerned, and I know that, at the time, everyone appreciated the way he called back these regulations to look at them again. I am interested to hear that they will soon be laid before the House.

There is another small point. I called attention last year to the inadequacy of surface transport to London Airport. As the Member of Parliament through whose constituency this road runs, I have asked the Minister of Transport and Civil Aviation if the Bath Road could be widened to take a greater load of traffic. B.E.A.C.'s Report this year blames road traffic congestion as a frequent cause of late departures of aircraft. There seems no point in spending £12 million on research on engines so that we can go a little faster in the air if we are to lose on the roads the time which is saved.

We have become accustomed to statesmen popping from one Continent to another by aeroplane, but air transport, as the Minister has said, is now becoming used by people who really matter. No fewer than 46,000 people went on holiday this year on the inclusive tours alone. Many of those had not travelled before, but were newcomers to aviation. I am told that 50,000 people are expected to go to Paris next year on the ingenious coach-air service at fares down to a new low level. The Minister said that 50,000 cars were transported over the Channel by air. A fortnight ago I met a group of teachers who had been to Rotterdam for a couple of days to see the Rembrandt Exhibition.

This sort of thing is all quite new. This would have been inconceivable a year or two ago. This is aviation as it should be used—to enrich the experience of human beings. For the time being, the Government have diverted some of our efforts into an unfortunate adventure in Egypt, and the uses of aviation are at this time being perverted. I hope that we shall soon get back to the business of building up British civil aviation. It is in that spirit that I have put these questions to the Minister today.

1.20 p.m.

Air Commodore A. V. Harvey (Macclesfield)

Like the hon. Member for Uxbridge (Mr. Beswick), I should like to declare my interest in this industry. I think it is fairly well known to the House. I agree with most of what the hon. Member said in his speech, and I should like to follow him in respect of one or two of the things he said.

Personally, I think it would be wrong to put the Air Transport Advisory Council back under the sole control of a Minister. Many of these things ought to be taken away from Ministers. The A.T.A.C. represents the industry and also, I believe, the trade unions concerned, and I think that it should be allowed to work on methods comparable with the American methods, which the hon. Member praised, in allocating routes and resources. I think that the organisation ought to be improved in that direction.

I do not want to go into personalities, but my observations in recent months lead me to think that morale in B.O.A.C. since the change is higher, and that there is a much better atmosphere within the Corporation. I will leave it at that. I think there has been a great improvement in recent months.

The hon. Member referred to responsibility, and there is a tremendous responsibility today in the operation and building of aircraft, and especially on certain individuals. The hon. Member referred in particular to the engineers. I have wondered for some time whether both Corporations could not do with men of the calibre of Sir Arnold Hall and Sir William Farren, who could assist in the evaluation of forward-looking programmes—men of great scientific knowledge. Such men are required today, men of calibre who could go over to America, for instance, and evaluate aircraft such as the Boeing 707 and the Douglas DC8. That is a tremendous task today for even well-trained engineers.

The hon. Member referred to the losses of the associate companies. From my experience of this industry it does not take long to lose £46,000. No doubt there is a good reason for them, but I should like to hear an explanation of them, particularly of those in the West Indies, where the losses were over £300,000.

I should like to see greater attempts made, at any rate by B.E.A., to provide increased freight services. It is not enough to put a little freight in a hold of a Viscount. I should like the Corporation to fly aircraft to carry bigger freight loads, and specialised freights, and by night. At the same time there ought to be at London Airport better facilities for passing foreign freight through, on much the same lines as has been done at Schipol international airport in Holland.

I have have little to say in criticism of the Corporations' accounts. Certainly B.E.A. has done extremely well. There is no question about it. It has a sure winner in the Viscount, but it must be given credit for having picked it, and also for assisting to a great extent in developing the Viscount for the foreign market, by using it itself.

B.O.A.C. has not been so fortunate. In the older days B.E.A. had all the same difficulties as B.O.A.C. is finding today. My impression is that over the years B.O.A.C. has wanted to have a bit of everything that was ever made by anybody. It wanted flying boats. It changed its mind and did not want flying boats. I should like to know what is being done with those flying boats. There are probably today engines which have been developed which would fit the Saunder-Roe boats. If so, let us make good use of them, for trooping or anything else, for they have been developed with the taxpayers' money. I should like to see them developed on the Atlantic route.

I do not wish to allocate blame, but I think the mistake made by B.O.A.C. was to go from piston engines flying at 18,000 or 20,000 ft. to pure jets flying at 40,000 ft. It was too big a jump. It would have been better to have kept to a turbo-prop aircraft at 27,000 or 28,000 ft. It could thus have gained experience of the difficulties of pressurisation, etc., and then in later years it could have transferred to pure jets such as the Comet.

Regarding the Britannia, I have studied the problem, and I have kept in contact with those building that aeroplane. It is not an airframe problem, but an engine one, and I believe, as my right hon. Friend said, that probably it only needs some little thing to put it right. None of us must lose heart about it. Even American operators show that they are interested in flying it.

From my own experience in helping with the Victor bomber I know that no sooner does one get over one problem than the scientists and engineers have to work all night and at the weekends to solve a problem which had not been foreseen or dreamed of by anybody and which suddenly arises. The Americans will have those troubles, too. Do not let us be depressed on that account. They have prototypes with performances which are still only on paper, prototypes which are not yet flying. Let us go ahead with and follow up our past successes.

The policy of successive Governments has been wrong. I am thinking back to the days when most of us here first came to the House, in 1945, when far too many development orders were placed, when there were too few prototypes, when wind-tunnel capacity was insufficient to do all the work required. There is not enough of it today, although it is improving. I believe that in the long run the operators and the Royal Air Force Transport Command have had the worst of all worlds.

The Comet II was put right, and it probably is a good aircraft today, but it is not really a good transport aircraft. It will carry light equipment and a certain number of passengers, but it has proved to be unsuitable for B.O.A.C. So it was passed on to Transport Command. I do not quarrel with that. I would rather that that happened, so that the R.A.F. should gain experience of jet aircraft, than that the aircraft should be thrown on the scrapheap.

How much wiser it would have been, however, if the Government of the day had brought the civil operators and the R.A.F. together to work out specifications for an aircraft which would be suitable to them all. It should have have been mainly a civil specification, because the R.A.F. always builds aircraft with thick floors, etc., which add to the weight, but we should have done well to have done what the Americans are doing with the Boeing 707. The thing to be done is to build a military aircraft and get it flying, and a civil adaptation can follow. It was a great mistake that we did not do that. That is past history, but I should like to see now more collaboration between the civil and military operators of aircraft. It is the only way in which we can develop to the best advantage. We are not a rich country, and we cannot afford to throw money away on development and in building prototypes which do not work.

I do not think it is any use slanging the industry. It has its faults, as any other industry has, and we all have our responsibility to make it better. I would say to the hon. Member for Reading (Mr. Mikardo) that in my own firm we are building an aeroplane without a penny assistance from the Government. We have spent about £2 million on it, and we are nothing like the biggest of firms. We have found it much more convenient to do that and to be on our own than to be tied up with the Ministry of Supply.

Mr. Mikardo

Does that mean that the hon. and gallant Member's firm is never going to take any more money from the Government, since he says that it is more convenient not to be tied up with the Ministry of Supply? How much money has it had from public funds?

Air Commodore Harvey

The hon. Member would, perhaps, have understood if he had listened to me without interrupting so hastily. He is very impatient this morning.

The fact is that a firm of the size of mine could not possibly enter a contract for development which runs into £15 million or £20 million without Government support, but within our means we are developing and building an aeroplane on our own account and on our own responsibility.

We have not got a London office, and our overheads are probably lower than those of any other firm in the industry. We think that we have very loyal people doing the job, and they have done it in almost record time. Had we been tied to the Ministry of Supply, with conferences about the mock-up of fuselage, etc., the prototype would have taken another one or two years before flying. I mention that only to show that it is not always desirable, from the point of view of getting on with the job, to be tied to the Ministry of Supply.

About four years ago the Chairman of B.O.A.C., then Sir Miles Thomas, said in his Annual Report that he was examining the civil version of the V bombers. That examination never really took place. I was not going to raise this matter until the hon. Member for Uxbridge raised it in connection with the DH118. I have an interest in the matter, and now that the hon. Member has raised it I feel that I should give the House my version of events as they took place within my own firm.

About three weeks ago we were asked by telephone by one of the most senior executives of the Corporation whether we would be interested in a project called the "Eastern" aeroplane. We said that we certainly were, because we had tried to get the Corporation interested in the civil Victor, on which a tremendous amount of public money had been spent in design and structural tests, and which is a very good aeroplane that will give a very good account of itself. Our chief designer and his team sat up throughout almost every night for a week. They made a route analysis and prepared something which made a profound impression on the Corporation. We were then told last week, just about the time when the Corporation's statement came out, "Thank you very much for what you are doing, but the business is not coming your way." Yet we had an appointment next morning with the Corporation's technical staff to continue our discussions.

I should like to know the real facts of what has happened. It is quite wrong to lead people up the garden path, to work and spend money on preparing a specification, if it is merely to give the appearance that other firms have tendered for a similar project and to make the whole transaction look better. I do not say that that was done, but that is the impression I received. I am glad to see that my right hon. Friend the Minister of Transport and Civil Aviation appears to be indicating dissent, but why were we told this before we had finished our technical talks with the Corporation? It strikes me as being a most unfair way of dealing with the matter. I hope that we shall have a clear explanation, because I am not in the least happy about it.

Mr. Watkinson

I know that one of the considerations was that this aircraft must not only be capable of the eastern routes and be very flexible but also be capable of flying the Atlantic non-stop in both directions.

Air Commodore Harvey

When we undertook this matter the Atlantic was not mentioned. This was to be an aeroplane capable of flying to Nairobi nonstop. That was the basis given to us. Something has slipped up somewhere. I am not complaining. We are very busy people. We have plenty on our plates.

Mr. Rankin

A competitive world.

Air Commodore Harvey

Yes, even in politics.

A fortnight ago I was trying to negotiate sales of aeroplanes in Portugal and Spain. There are two airlines operating in Spain—the national company, Iberia, and the civil company, Avcion Commercio, which started after the war with Bristol freighters and a few other aeroplanes. That company has a Government holding of 18 per cent. or 20 per cent. I had the impression that the Government instrument and the civil company were working well together, which shows what can be done with a nationalised company and an independent company.

I am concerned about our civil transport resources. Apart from the Comet, which is now going into the R.A.F., we have not got in the R.A.F. a civil four-engined transport which is pressurised.

Mr. Beswick

What about the Russian TU104?

Air Commodore Harvey

In the R.A.F. Transport Command there is not a single four-engined aircraft which is pressurised. No doubt the hon. Member will ask what we have done. Transport aircraft were ordered shortly before the Labour Government went out of office. The orders were cancelled and then were restored again. Even under the Government which I support, Transport Command—and this is not a military subject it is coupled with civil aircraft—should have been given a much higher priority, because if we want to reduce the strength of our National Service forces we must give them mobility. The hon. Member said that the transport was being used elsewhere. I doubt it. There is not much to be used. Only ten Britannias have been ordered for Transport Command—just one squadron.

When we had troops moved into the Middle East at the time of Abadan and more recently, they travelled by aircraft carrier, taking nine or ten days to reach the Eastern Mediterranean. I know that we cannot move heavy armour in aircraft, but we must have a good Transport Command because the future of the country depends a great deal on the success that we have in building and operating good aircraft, in knitting together our great Commonwealth, and in competing with the United States. I do not say that we can do everything, but there is a great deal that we can do.

We have a very high standard of technical education in Britain among our young men. The Americans have not, and if we can exploit that we can more than hold our own. I have been told by Americans that the average British youth entering apprenticeship is better educated than the American. We had proof of that during the war. Children who were evacuated to America and came back after three or four years were two years behind British children in education. We have something here which we must use to build our industry.

We sold £104 million worth of aircraft and spares overseas in 1956, and that trade can continue to grow. When a Viscount is sold in South America we go on selling engines and airframe spares for ten years. As to the development of more modern aeroplanes, when successive aircraft have been built operating costs have come down, but when we go beyond the Boeing or Douglas DC8 enormous losses will be made in operating supersonic civil aircraft. The cost of operating and maintaining them would put the fare structure beyond the reach of the fare-paying passengers, and the one thing that we want in civil aviation is to bring fares down within the reach of the mass of people who use other forms of transport.

General Aler, President of K.L.M., the Royal Dutch Airlines has said : The already narrow profit margin is becoming smaller, … unless the trend is reversed it is felt generally that air fares will have to be raised in the future. At the same time, he declared that he was not satisfied with the jet equipment offered for 1960.

The comment is made that : The remarkable fact is that he has nevertheless felt obliged to order a substantial number of these very items of equipment. It is like the "New Look." He wants to keep in fashion and, if the aircraft comes off, wants the same as other lines. The commentator added : The moment one international operator placed an order, even though this may have been with mental reservations, for the monster jets of the DC8 and Boeing 707 category an astonishing stampede occurred among most other important airlines of the world. … Then he went on to say : The background against which these proposals must be considered is that to develop a large supersonic transport may take ten years, and may easily, if two prototypes are produced, cost in the neighbourhood of £50 million. That is his prediction and I think he is probably right. Finally he said : World air transport needs an aircraft with a better lift-drag prop which, at a quiet speed of 500 knots, could economically be operated at half present-day fares. Such an aircraft would bring air transport within the reach of at least ten times the number of people who could afford air transport today. I am sure that prediction is correct.

Do not let us delude ourselves that we have to go on developing new aircraft. Let us concentrate on safety, shorten the distances of take-off and landing, and apply ourselves to weights. But let us mark time, regardless of what the Americans do. After the Boeing, let us proceed with our own development.

I wish the De Havilland 118 project every success. I have no doubt that it will be a good aeroplane. After all, De Havilland's today have more experience of flying commercial jet aircraft than has any other company in the world and, as manufacturers, probably more than Boeing's, and the Comet was flown for thousands of hours.

In the time that my right hon. Friend has been at the Ministry of Transport and Civil Aviation he and his Joint Parliamentary Secretary, who is always obliging, have done great work in furthering the cause of British civil aviation. I contend that there will be a 100 per cent. expansion in air passengers over the next five or six years. We want to see a large civil merchant fleet appear, and that can be achieved only if we have the independent companies working alongside, and closely with, the Corporations. There is a living for both of them, and there is a lot of expansion to be done.

I hope that my right hon. Friend will concentrate on building up the Corporations and the independents, interweaving them to some extent, if necessary. Fortunately we keep aviation out of party politics because we want to see our aircraft operating and our manufacturing industry succeed. If we all take that line, Britain can more or less hold her own with America, and certainly with any other country in the world.

1.43 p.m.

Mr. Arthur Pearson (Pontypridd)

I found very interesting the opening speech of the Minister, with its broad picture of the activities of the two Corporations ; and the effective contribution of my hon. Friend the Member for Uxbridge (Mr. Beswick), with its constructive criticism and comment, was a very good speech indeed.

When the House takes note of the activities of the two Corporations and debates their Annual Reports, added witness is always forthcoming that the world of flying lies near to the heart of the pioneers in the construction and flying sections of the industry. Nothing can dismay them. Successes, setbacks and opportunities are all tempered with determination to win through. We love this quality of determination, and we feel that those who have been associated in a thousand and one ways with the work of the Corporations have provided us with much of which to be proud.

There have been many criticisms, and those who are more knowledgeable than I am about the facts will perhaps turn the searchlight on the weaknesses by voicing them. At the same time the keynote of the speech of the hon. and gallant Member for Macclesfield (Air Commodore Harvey) was that the prizes of outright success are so obviously high for this nation that the means for reaching the summit of achievement must be found.

The circumstances surrounding this debate today require us to jettison some of our material for it, and therefore I will confine myself to the passage in the B.O.A.C. Report about ancillary undertakings, referring particularly to the engine repair factory at Treforest. The accounts of this factory in the Report show that work has been done there amounting to over £2 million, resulting in a net profit of £40,000.

That factory is in my constituency, and both the employees and myself are concerned about its future prospects. It was a major concern of ours in 1954, when the scene darkened because of indecision as to whether or not jet aero engines were to be repaired and overhauled there. However, this last year brought a gleam of light for the future in the decision taken by British Overseas Airways to give to Treforest the task of repairing and overhauling the Proteus engine which powers the Britannia.

This final outcome of an unsettled period lifted our hearts and lightened our anxieties in South Wales, and I have no doubt that it will prove to have been a right decision. But the situation has changed again because the Britannia will not be in service this year, as planned, owing to the peculiar engine-icing difficulties. This temporary failure of the Britannia has meant the greater use of other aircraft. The Argonaut, which undertakes long-flying hours, has been coming in for repairs and overhaul in large numbers. This has contributed to keeping a fair work load at Treforest, but there is scope for more.

I ask, why limit the intake of jet engines only to the Proteus? Is there any reason why the Dart engine, which powers the increasing number of Viscounts, should not be overhauled at Treforest? This overhauling base has performed a valuable service for civil aviation by its magnificent work on aero engines, and the workers at that base are exceptionally keen to have the Dart engine brought into their factory. I support their laudable desire to the full. Why do not both Corporations make Treforest a centre for the overhaul of all publicly-owned aircraft engines? Wisdom would suggest that work should be placed where labour exists. Let us avoid the mistake of driving the repair work towards the already fully employed areas.

The failure of the Corporation to make it clear that its Dart engines will go to Treforest cannot be fully comprehended. I have received a letter upon this subject from the trade union side of the local joint panel. It states that in 1954 it was informed by the management that, because of the small number of Viscount aircraft owned by the British Overseas Airways Corporation and its subsidiaries and associates, it would be uneconomical to have the engines overhauled at Treforest unless British European Airways also sent its engines to Treforest. The letter said that the statement of the management was no longer valid, large numbers of Viscounts being on order for the Corporation and for the associated company, and each aircraft had four engines, which meant, with spares, 56 engines, and it could amount to a total of about 100. That shows the feelings of the employees, who have done a grand job of work.

The British European Airways Corporation declares that it intends to build its own engine overhaul base at London Airport. That is mentioned in the Report. Is it not wasteful to build up a base there while equal facilities can be made available much more cheaply in South Wales? The representatives of the workers at Treforest and the British European Airways Corporation employees at London Airport agree that it is sheer waste to proceed with the London Airport base project.

I suspect that the reply to me will be on the lines that it is for the Corporations themselves, on their own responsibility and in the light of their own commercial judgment, to make these decisions and that it is not for the Government to interfere. Nevertheless, I claim that it is for this House to give voice to a sincerely held view as to what is best calculated to further the discharge of the obligation of the Corporations. Hence I am speaking in this way. I do so in the hope that the notice of the Corporations may thereby be attracted.

I would emphasise that the work load at Treforest should be maintained at the maximum, with an intake of the Dart engines of at least the British Overseas Airways Corporation and its associated companies. It seems to me to be farcical that the two Corporations do not jointly channel their engine repair work to the experienced and successful establishment at Treforest. Labour, experience, achievement and purpose are there. I hope that the Corporations will make use of Treforest to the full.

1.54 p.m.

Dr. Reginald Bennett (Gosport and Fareham)

I am sure that I share with every other hon. Member a feeling of satisfaction, and even gratitude, at the harmony of our deliberations on this subject. They almost always are harmonious. I feel that the House will render its best service to civil aviation if it manages to keep them so, apart from the legitimate grounds of individual points of criticism.

I must apologise for not being able to follow the hon. Member for Pontypridd (Mr. Pearson) in discussing his problem, because my connection with Wales is even more tenuous than it was in past years. However, I have one or two points on which I should like to follow my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) and the hon. Member for Uxbridge (Mr. Beswick), both of whom mentioned, as did the Minister, the increasingly difficulty prospect before us in procuring and maintaining sales of future aircraft. This, I think, is largely due to the fact that aircraft are becoming bigger and bigger and outstripping the capacity of almost all known sources of funds.

I would begin by mentioning a point which I certainly keep vividly in mind. A very famous American said, so it is reported, on the occasion of the launching of a large ship, that America would always make fine ships, though she had not gained world leadership in the building of ships, an error which she would not make in regard to aircraft. We are entitled to interpret that as indicating that the American people are making a national effort to retain dominance in the world's civil aircraft market.

We can build good aircraft here, and operate them. There is plenty of evidence of that. I think that the Achilles' heel in the process now will be in selling them. We have done very well so far—nobody knows better than I do how well we have done—but as the size of aircraft increases the problem of finance will be more and more vividly before us. We have already reached the point when no Corporation and no company can buy new aircraft out of its own funds. This represents a terrible handicap for this country and its aircraft industry.

When money has to be raised for this purpose, our only organisation specifically directed to this object is the Air Finance Corporation. The interest on money raised from this Corporation is 6½ to 8½ per cent. and repayments are expected monthly or quarterly. I have here some examples from America which point to the nature of the competition which we have to face.

In America, the funds of the great insurance companies and banks are used. Eastern Air Lines obtained 90 million dollars from the Equitable Life Assurance Society at the rate of 3¾ per cent. with no payment due for ten years. United Air Lines obtained a 25-year credit of 120 million dollars from the Metropolitan, Prudential and Mutual Life Insurance Companies. American Airlines received a 75 million dollar credit from the Metropolitan Life Insurance Company, which is good for forty years. All these credits delay the initial repayments for ten years.

I know that no one is obliged to go to our Air Finance Corporation. However, I am informed that the risk on the money from it is taken up as to 15 per cent. by the manufacturers of the aircraft and as to 85 per cent. by the Export Credit Guarantees Department. I fail to see why there should be such a very high rate of interest. I ask my right hon. Friend to look into the matter and to try to devise a better way of helping not only British airlines but foreign airlines. Capital Airlines of America, buying our Viscounts, had to take its money from this very expensive source.

I particularly say this because it is reasonable to suppose that in twenty years' time there will be no more piloted combat aircraft and that the only piloted aircraft flying then will be carrying civil goods and passengers. If we are to renounce our share in that market and leave our industry to sink or swim, we shall expose the industry to such prodigious international competition that America might well have the monopoly before very long.

There are further difficulties in relation to types and projects which are so far not even before us. In developing a new type, nobody but Governments can supply sufficient funds to cover the outlay. This is not a new point. It has been made quite a bit and is being made more and more frequently nowadays.

We have the question of finding the funds and also the question of active Government participation in a way which my hon. and gallant Friend mentioned at the end of his speech. There is, for instance, the utilisation of the Military Air Transport Service in America for proving new types. As we have heard said today, M.A.T.S. had the first 200 Boeing 707 flying as tankers. Military Air Transport Service has received 35 per cent. of Lockheed's total civil production since the war. The Stratocruiser which flies the Atlantic nowadays was proved as a military machine first and put into service. Although we can never match the scale of these endeavours in America, carefully chosen projects could very well be given this assistance.

If the R.A.F. orders the first batch of a military type and the Corporation the first batch of a civil type, that is all right, but supposing that it is not necessarily for our Corporation that a type might be marketable. That is where at present we completely fall down, because the independent side of the civil aviation industry is not likely, on its present tenure of funds and contracts, to be able to advance money. There are plenty of types. For instance, the Super Beverley, so urgently required as a civil machine, does not look like getting a look in anywhere unless it is specifically taken up by the R.A.F.

Yet the R.A.F. need it very badly indeed, and the development of that aircraft would, I think, be bound to bring a wonderful reward in due course. If we do not engage in some such attempt of the Government and industry combining to bring out new aircraft types, nothing bigger in the future than an ordinary minor private venture size of aircraft will be able to come about, except under the specific orders of two organisations in this country which can buy for themselves.

We are dealing with sponsored competition from America and I am sure that to meet it we must make a tremendous effort. I mentioned, in passing, a moment ago, the two categories of operators and I feel that I must make mention of the dichotomy in the air operational field which, I believe, is such a deplorable one at the present time. I would earnestly ask my hon. Friend whether he can possibly request his right hon. Friend to make a clear statement on the relative positions of the independents and the Corporations in our future aircraft operating field. I say this with no animosity whatever against the Corporations, which I admire as much as anyone—and I suppose I have as many friends in the Corporations as most.

I feel that the present administration is quite obscure, most unfair and not capable of giving any satisfactory hope of work and stability in advance for the independent field. I feel that in some ways the relative position of the two has never been quite candidly faced, and I believe that the time has come for a restatement of what the position and the division of the field is to be.

The basic bread and butter for the independents is undoubtedly known to be the trooping contracts. Can I hope, at this time, to be told why it is not thought practicable to issue even 7-year trooping contracts for air trooping, whereas 20-year trooping contracts are quite normal for sea trooping? If those contracts could only be given on that scale of time, it would be possible, I believe, for the independent side to go ahead with its capital requirements in getting the aircraft it needs.

Another thing is that in a time of emergency such as, unfortunately, we have upon us now, when transport is needed urgently, requisitioning is not the answer. We can requisition civil aircraft, but we cannot requisition spares, or pilots, or ground crews. We get into a tangle about ranks and the painting of the roundels and the fact that no self-respecting ground engineer is likely to wish to go back to the rank of corporal. We have to think again about the relationship between the operators in emergencies and Transport Command. I believe that a very reputable firm which I have come across has not one R.A.F. reservist in the whole of its air or ground crew. It has reservists for the other Services, but not for the R.A.F.

If we were to have, as we must have, a reserve of civil air transport, apart from our exiguous Transport Command, we must have this on some decent basis. I suggest that firms should be employed as civil contract carriers to the R.A.F., knowing that they had certain aircraft and crews committed to the R.A.F. on a retainer for Transport Command as civilian auxiliaries which the R.A.F. could call upon at any time of crisis, and which the operator would know he could release while the rest of his fleet continued to earn his daily bread. Such a plan would overcome some of the obstacles to which the present system is liable.

I feel that we must have a redefinition of the field of independent operators. We must understand, for instance, where the Corporation's limits of operation are to be. Are they to be limited to size? I would say with the greatest of respect that they should, although not to their own displeasure. I believe that there is an optimum and maximum size for big concerns like this. Peter Masefield is recorded as having said that B.E.A.'s most useful size would be 100 aircraft, and I see in the report today that they have 101. I think that is highly satisfactory.

What is the size of B.O.A.C. to be? At present, it has 84,000 route miles. The only operator in the world which is bigger is Air France with 111,000 route miles, and both of these are too great to be conveniently handled, although I congratulate B.O.A.C. on having done so well with it. As the hon. Member for Uxbridge mentioned, the Corporation is not growing as fast as air transport is growing and so it is performing a pro-pressively smaller share of the total of air transport. Can the Government come to an agreement with the Corporations on what their optimum or maximum sizes should be and let the other chaps have a chance of some work?

May we have some clarification on how the field, and, above all, the future field, is to be divided? I repeat that I deplore the division of opinion that there has been in the past about the air transport field. I always say that, and I mean it. I welcome all the arrangements which are come to jointly between the Corporation and the independents, and I am sure we all do, as long as they are genuine arrangements. I want civil aviation to stand as one entity in competition with the foreigner and not to be distracted by its own internal troubles. In that respect, I maintain that the Government have a clear task and I trust them to tell us what is intended.

2.9 p.m.

Mr. A. E. Hunter (Feltham)

I welcome the opportunity of taking part in this debate on B.O.A.C. and B.E.A. I do not speak as an expert on civil flying, like my hon. Friend the Member for Uxbridge (Mr. Beswick) or the hon. and gallant Member for Macclesfield (Air Commodore Harvey) ; but civil flying is a matter which is vital to my constituency. London Airport covers a great part of the Feltham constituency and is, of course, the centre of the main operations of B.E.A. and B.O.A.C. There are more than 22,000 employees at the airport, and when one considers the growth o London Airport in the last ten years one can see how the airline corporations in this country have expanded.

I am very pleased that the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation is present. I have had much correspondence with the Ministry and I should like to take this opportunity of paying tribute to the courtesy which I have always received from the Parliamentary Secretary. With vast concerns like B.O.A.C. and B.E.A. employing more than 22,000 men, one has to have a staff in which morale is very high. I am very pleased to be able to inform the House that the morale of all the employees of both Corporations is very high indeed.

These men are very keen to make these new, publicly-owned corporations a great success. In this industry there are no bitter memories. It is new and the men are keen on seeing that the Corporations are a great success. I often meet constituents who are Corporation employees. They are all concerned not only with conditions at London Airport, but in making the Corporations not only the safest but the best airlines in the world.

There are one or two grievances which I wish to raise. The first is probably the responsibility of the Treasury and not of the Ministry of Transport and Civil Aviation, but I hope that the Joint Parliamentary Secretary will note it and see whether he can do anything to speed negotiations. I know that the Whitley Council machinery exists for joint settlement of negotiations, but sometimes, as my hon. Friend the Member for Walthamstow, West (Mr. Redhead) knows, the machinery is very slow and needs to be accelerated.

Non-industrial civil servants at London Airport, including Customs and Excise officers, security officers and others, are not paid at London rates. That is a real grievance, because industrial workers are paid at London rates. Despite the fact that the very name is London Airport and that it is a matter of only 13 miles from Charing Cross—perhaps one mile outside the agreement limit with provincial civil servants—the London Airport area has high travelling costs and the rents and cost of living are high. If the Parliamentary Secretary could do anything to speed up negotiations on this matter, I am certain that many non-industrial civil servants at London Airport would be greatly obliged.

Another grievance which I wish to raise concerns the new buildings at London Airport. Although these buildings are very attractive for the travelling public, a number of improvements could be made for the benefit of the staff. Some of these buildings lack air conditioning plant. They get very heated. Last summer, hoses sprayed water over the roofs to cool the air inside the buildings. Architects should take account not only of the travelling public—and we want to make them comfortable—but should see that there are proper conditions for those who work in modern buildings.

My constituents who work at London Airport are practical people who are on the job every day and who know the work of the airlines. They know that one essential to making London Airport more efficient in the operation of its timetables is to have a railway line from central London to London Airport. Airline coaches and motor cars are often delayed in London traffic, arrive late at the airport and thus delay the departure of aircraft. I know that the Ministry is considering a scheme for building a railway through Feltham or Whitton to London Airport, and if the Parliamentary Secretary can give the House any information on that I should be obliged.

Lack of garage space is another matter. There was a scheme for an underground garage at the airport, but I understand that it has been scrapped in favour of a different type of building. It would help if we could be given any information about that.

I want now to criticise not the Minister of Transport and Civil Aviation, but the Minister of Supply. Many B.O.A.C. employees are disappointed about the Britannia. They are interested in having an efficient aircraft industry not only for the export trade, but for the home market and to make sure that B.O.A.C. gets efficient, long-range aircraft. Whenever we have attempted to question the Minister of Supply about the Britannia—I and my hon. Friend the Member for Uxbridge have raised this several times—the Minister of Supply gets upset, because he regards our questioning as a criticism of the industry. I am sorry that he is not present.

Last Monday the right hon. Gentleman was most unfair to my hon. Friend the Member for Uxbridge, who was not only a war-time pilot, but has been a civilian pilot and a captain of B.O.A.C. Nobody in this House takes a greater interest in civil flying and in the aircraft industry than he and if ever I want advice about London Airport, or civil flying, I gladly seek it from him. B.O.A.C.—I will mention no names—is disappointed with the British aircraft industry's policy on long-range aircraft. The Minister of Supply may speak of the export of more than £100 million worth of aircraft per year, but the bare fact remains that today B.O.A.C. has no long range airliners for the near future.

The Corporation has been forced to spend £44 million in America, of which £35 million were in dollars, dollars of which we are short. The Corporation went to America to get American airliners only because the British industry today cannot supply B.O.A.C. ; £18 million of public money have been spent on the Britannia, and it is not yet in service. While not blaming the Ministry of Transport and Civil Aviation, I hope that there will be very close co-operation between those two Ministries in making sure that B.O.A.C. is not faced with the situation of depending upon overseas aircraft for its passenger services for long-range flights.

I want, next, to raise a constituency point, which has been discussed many times in the House. It is the question of noise. As the Parliamentary Secretary knows, it is a very important question for those living around London Airport. I urge the Minister to carry on research into the problem of noise, to co-operate with the aircraft manufacturers and to use the Ministry's research section department in finding a solution to this problem, which is bound to grow in the years ahead. It affects not only my constituency, but other constituencies near London Airport and it troubles people not only by day, but also by night.

Here, I should again like to thank the Parliamentary Secretary and the officials of London Airport. Whenever we want the Ministry to receive a deputation on the question of noise, the Parliamentary Secretary always arranges it. The Deputy-Commandant at London Airport meets residents' associations and has been to meetings of the Feltham Urban District Council, has addressed them on the subject of noise and has outlined some of the London Airport's plans, including the building of 30-foot earth walls, facing certain directions, to combat the noise. I should like to thank them for the help which they have endeavoured to give. They know that it is a difficult problem and that the noise upsets the people living around London Airport and they would very much like the Ministry to find a solution to the problem.

I will not detain the House much longer, because I know that other hon. Members wish to speak. In opening the debate the Minister said that the age of flying is a new age. Probably we in our lifetime will not see the great expansion which must come. We have today B.O.A.C. and B.E.A., and I hope that it is the wish of all hon. Members to make them not only the finest but also the safest airline corporations in the world. We also know the great interest which youth takes today in civil flying. Many thousands of children from my constituency go to London Airport and, as the Minister said, the question of visitors is almost becoming a problem for the Airport at the week-ends. The future should, therefore, be with civil flying. We want flying to develop in the great cause of international peace to enable people to travel abroad on business and in friendship.

I will end on this note : I hope that the Ministry will do all in their power to see that these two airline Corporations are made the safest and the best in the world.

2.25 p.m.

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

I must apologise to those hon. Members who have attended the civil aviation debate for the fact that I was not in my place when the debate opened. That was not due to lack of courtesy to the House—1 made my apologies to the Opposition Front Bench—but because of the rearrangement of Parliamentary business this week and the fact that I had a function to attend which I simply could not avoid.

It is strange that the Opposition, who have the choice of which nationalised industries shall be debated each year, always choose civil aviation. For myself, I am very pleased that it is so, because I and some of my colleagues on these benches take a very special interest in civil aviation. It is nevertheless surprising that some of the other nationalised industries are never debated in the House.

Mr. Ernest Davies (Enfield, East)

Surely the hon. Member appreciates that there have been many other occasions on which we have been able to debate the National Coal Board, the electricity supply industry and the British Transport Commission, because there has been much legislation before the House. Because there has been no legislation concerning civil aviation, that is the subject which has been raised today.

Mr. Orr-Ewing

I am sure the hon. Member is right in saying that that is one of the reasons for which we always have this particular debate in the autumn.

In previous years I have criticised the accounting in the two Corporations' Reports, but I think this year it is very much clearer and I do not think that one can criticise it. B.E.A. shows a profit on operating aircraft of £1.1 million after allowing for depreciation of £1.4 million. I think that is a wholly healthy position and I hope that by increased efficiency within B.E.A. the Corporation may be able to reach a position in which it can repay the taxpayers of the country some of the very considerable advances which have been made by the Treasury, which in the last five years total over £6 million. It should not be forgotten that in 1950–51 the Treasury lent £1 million and in 1951–52 £1.4 million.

Mr. G. A. Pargiter (Southall)

Why not go further back?

Mr. Orr-Ewing

The position is even worse further back. I thought it would be better not to take the first five years because I thought that it was only fair to the Corporation not to take the years immediately after the war. If I went further back it would look much worse.

Mr. Pargiter

rose—

Mr. Orr-Ewing

I do not want to be interrupted, because others wish to speak.

We all wish to praise the very high standard of cabin service and general service which is given by the British Corporations. I have had to travel by air on many occasions, and I have spoken to other travellers both from the Continent and America, and they are always unstinting in their praise for the consideration, courtesy and politeness which they get from the Corporations' staff. Nevertheless, I have the impression that the Corporations and particularly B.O.A.C. are over-generous in the numbers of staff which they have—not on aircraft, where the numbers are strictly limited according to the size of the aircraft and needs of the passengers—but on the ground services.

If one studies the figures of the total staffs of the different airlines and compares them with the fleets of those airlines, the differences are extremely marked. T.W.A., for instance, has 169 aircraft in its fleet, with a staff of 17,000. In B.O.A.C. there are about 53 aircraft—about one-third the number—and a staff of 18,000. That is a big staff for one-third the size of fleet. In B.E.A. there is a staff of 9,500 for 101 aircraft. If we study the figures right through the International Air Transport Association's Report—unfortunately that Report becomes available only in December each year and therefore is not up to date for this debate—we see this fact to be most marked : that the British Corporations have far more staff for the numbers of aircraft operated than almost any other airline in the world. I hope that both the Corporations will examine this problem very closely. After all, what the average traveller wants is the lowest possible fare so that air travel comes within reach of the pockets of the many.

I will not mention B.O.A.C. here, but I think B.E.A.C. is fortunate in the aircraft which it has. The Viscount has proved to be an outstanding aircraft. I hope that when our Corporations run into very heavy development flying costs, some way of recompensing them may be found, because if they are to be competitive Corporations, and if we are to criticise them, it is not fair that they should do development flying with new pioneer aircraft while other foreign airlines cash in on the results.

I think that we must not forget—and this fact has been forgotten in many quarters—that the Ministry of Supply carried the Viscount development for at least eighteen months. B.E.A. lost faith in it during its development, and had it not been for the Ministry of Supply there would not be any Viscounts at all today, not only in B.E.A. but in the other airlines of the world.

The utilisation which B.E.A. is getting out of its aircraft, according to this Report, is, I think, a little disappointing. Let me first acknowledge, as the Report says, that B.E.A. has a spoke network, mainly short haul, and that its problems, because of this short haul with international complications, with passports and all the other problems when passengers cross frontiers, are more difficult than those of some others.

I recognise the validity of some of that, but Capital Airlines have Viscounts, have a spoke network and yet are able to get more than 3,000 flying hours out of their Viscount aircraft. According to its latest Report, B.E.A. say that it is getting only just over 2,200 flying hours out of its aircraft. If we look at the figures of all the airlines in the world which are are now operating Viscount aircraft, one cannot help noticing that most of them are getting more revenue flying hours per annum out of those aircraft than is B.E.A. For example, Trans-Australian airlines are getting 3,156 flying hours ; Butler Airlines, 3,120; Capital Airlines, 2,994; Trans-Canada Airlines, 2,820; Middle East Airlines, 2,600 ; Aer Lingus, 2,444, and Air France, 2,392. B.E.A. is at the bottom of the list with 2,200.

An hon. Member opposite said that the distance problem came into the matter, that these utilisation figures were for longer distances. That is not so in the case of Capital Airlines, where the average stage length of the airline is 239 miles compared with the average stage length of 466 miles in the case of B.E.A. The average stage length of 466 miles is almost double the distance of the stage length of the Capital Airlines, so that that criticism is not completely valid. I only mention that because if we want the Corporation to be more efficient it must use more intensely the world's best aircraft, with which it is equipped at the moment.

Mr. Ernest Davies

I think the hon. Gentleman will admit that, so far as Capital Airlines are concerned, their aircraft have no frontiers to cross and, therefore, clearance at local airports is much quicker than where aircraft have to cross several countries. Similarly, there is the question of density.

Mr. Orr-Ewing

I made the point that there is some justification, but the figures are so different that I think the matter should be most closely examined.

I now come to the question of stockpiling aircraft. I cannot help wondering whether B.E.A. really needs all the aircraft shown in its fleet returns. It has 46 aircraft of the DC3 type, named Pionairs and Leopards. Those aircraft are being utilised for only 1,500 flying hours a year, four hours in every twenty-four. That is not the way economically to use capital equipment. The Corporation must make better use of its aircraft or should dispose of them and improve its financial position. I wonder whether it is stockpiling in order to prevent the aircraft getting into the hands of the independent airlines and letting them make revenue out of them?

I hope that the Minister will not allow these aircraft to be used for that type of traffic which has hitherto been the prerogative of the independent airlines. I hope that inclusive tours are not going to be operated by the Corporation, because that would be totally unfair in view of the fact that the scheduled services have been reserved for it.

Finally, I wish to say a few words about B.O.A.C. I hope that the Minister will consider whether we can go on accepting larger and more expensive aircraft, with the consequent demand for longer and longer runways. This is a sort of world blackmail. The Boeing 707 is about double the price of the Britannia, but under the I.A.T.A. Agreement the same charge has to be made whether the expensive or the cheaper aircraft is used. But the Boeing needs vastly longer runways and has a landing speed of 150 miles an hour. We cannot go on laying thick strips of concrete across this country on valuable bits of land close to the Metropolis. The time must come when we shall have to say to designers, "We are very sorry, but we are not going on lengthening our runways two or three miles and making them ever thicker. You must design aircraft that can land on the runways available." That must apply particularly to the Commonwealth where in many places we cannot afford to provide runways of such length.

I hope that when the new De Havilland aircraft comes along it will be equipped with high-lift wings and lower landing speeds so that it can be usefully used on the runways now available in the different parts of the Commonwealth. We cannot go on spending more and more of the taxpayers' money on lengthening air runways used for a small fraction of time in every twenty-four hours.

I think that the Corporations, B.E.A. in particular, have carried the British flag with renown. They have done a first-class job, but I would ask them to pay attention to the matters which I have mentioned because, if they do, they will become more efficient and more deserving of praise.

2.36 p.m.

Mr. John Rankin (Glasgow, Govan)

When the Minister addressed the House he indicated that, in his view, there was an all too ready desire for some of us to criticise the productive side of the aircraft industry. If that is the right hon. Gentleman's feeling, I should like to direct his attention to page 1 of the Report of B.O.A.C. in which we are told : The disruption of the Corporation's plans for substantial re-equipment with Comets continued to affect seriously the revenue-earning ability of the Corporation's services. Further on, it says : The only aircraft available for immediate delivery to fill the void created by the loss of Comet capacity were unable to match in passenger appeal and revenue earning potential the competition from airlines equipped with modern aircraft. That is certainly a very serious criticism of the productive side of the aircraft industry. In view of it, I think B.O.A.C. is to be congratulated, because, faced with those difficulties, it has now wiped out its accumulated deficit of £861,974, and, for the first time in its history, has a surplus of £17,881. Because of the difficulties with which it has been faced, it ought to be congratulated very warmly on achieving that result.

Some criticism has been made of the fact that the aircraft industry could not be expected to produce aircraft for which no orders were being placed. But, as the Minister himself showed, in page 10 of the Report we are given a long list of aircraft which B.O.A.C. requires soon and for which orders have been placed. Therefore, I do not think it can be said that encouragement is not coming from operational side.

If we look at page 24 of the B.E.A. Report, we find a similar complaint to that enunciated by B.O.A.C. It says : During 1955–56, B.E.A. suffered from a serious shortage of aircraft. Its fleet is "inadequate." Further we are told that there was delay in delivery of the later Viscount V701. It is clear that both Corporations have exactly the same complaint to make against at least certain parts of the productive side of the industry, and that, due to these shortages and to delays in deliveries, both Corporations have not done so well as they might have been expected to do had their needs been met more adequately by the industry.

The Minister said today that it was our business to maintain our position in the air. It is not untrue to say that the Tory Party, when they were in opposition, did not always give the Government of the day the support which they might have done to secure that position. It may be correct that even now when they are in office there is some truth in that, although I do not wish to pursue that point very far. It would not have greatly dismayed hon. Members opposite when they were in opposition had the nationalised Corporations collapsed.

When the present Secretary of State for the Colonies was leading for the then Opposition in civil aviation debates he had some brutal things to say about civil aviation and the work of the Corporations. In one of his speeches he said : … the evils of bureaucracy, centralisation and monopoly, will always prevent us having our proper position in the air."—[OFFICIAL REPORT, 1st March, 1949 ; Vol. 468, c. 313–4.] Time has moved forward, and we find that the success belongs to that part of the service which is publicly owned and the failure has occurred in that part of the service which is still in private hands. That is the swing which has taken place, and no hon. Members opposite have had the courage today to acknowledge their error.

Despite the handicap imposed by private enterprise on the public Corporations, their progress has been very great. It is indicated by the map published in the B.E.A. Report. I think it one of the most interesting features of the Report, because it shows, at a glance, the enormous advance which has been made from 1946 to 1956. When one looks at the map for 1946, one notes that there were five airways serving London. Now it is almost impossible to count their multiplicity because they are so diversified. So far as I can make out there are 26 airways or airlanes leading into London, plus six that skirt the city. That is the graph of progress.

Of course it places upon our shoulders, and upon the Government, a problem of immense complexity, because with that increase in the number of aircraft using London Airport there has also been an amazing advance in the speed of the machines. On Monday this week I flew from Glasgow to London in an hour and fifteen minutes—and took about as long to come from London Airport to the centre of the city. But at the period of the first map it was taking us three-and-a-half hours to fly from Glasgow to London, and we had to come down at Liverpool to refuel. Then the speed was around 100 miles per hour. On Monday it was 320 miles an hour.

The Report says that after 1960 we shall have 96-seater machines flying at 425 miles an hour, and in the year after next we shall have the V840 flying at 400 miles an hour. These aircraft are flying under the control system created for the machines that were operating in earlier years, and the Chairman of B.E.A., Lord Douglas, when presiding at the International Air Transport Association Meeting in Edinburgh a month or so ago, said that it was a matter of immediate urgency that the rules and procedures should be reviewed to reduce the present danger of mid-air collision. A map of which I spoke pinpoints the risk which now exists, and which Lord Douglas emphasised, of mid-air collision.

For a long time that danger has been evident. Looking back on some of our previous debates I see that on 9th March, 1949, I submitted a Question to my hon. Friend the Member for Lincoln (Mr. de Freitas) who was then Under-Secretary of State for Air, asking him to ensure that flight plans are submitted by Royal Air Force aircraft including training aircraft when they are likely to approach, or cross, the pre-determined lanes of flight of any civil aircraft."—[OFFICIAL REPORT, 9th March, 1949; Vol. 462, c. 1160.] I was assured that both the Minister of Civil Aviation and the Secretary of State for Air were not satisfied with the air traffic control, and were trying to improve existing arrangements. Although in the end we did get a system of air lanes, they are now recognised to be quite inadequate, and we have a new set of rules and procedures before us.

This week the Minister told me that he was in complete agreement with the Secretary of State for Air on the rules and procedures now devised. I ask him not to be in complete agreement with the Secretary of State for Air on these matters, because he is in competition with him. The right hon. Gentleman must realise that the Secretary of State for Air, and, as I discovered seven or eight years ago, the R.A.F., will always resist any more air space being given to civil aviation.

I hope that the Minister is listening to what I am saying. I ask him to pay attention to this. While he may be in agreement about procedure for raising the operating altitude and that kind of thing, and the minimum clear weather conditions in which the pilot will be responsible, I urge him not to be in complete agreement with the Secretary of State for Air, because he must be in competition with his right hon. Friend, who wants more air space than he now has.

Mr. Watkinson

I am sorry to interrupt the hon. Gentleman. I quite agree with him that there are competing problems between the two of us. He is quite right in that. We will between us do the best we can to get a solution, bearing in mind that military requirements are not the same as civil requirements.

Mr. Rankin

Granted. I am glad to know that the Minister of Civil Aviation is not going simply to succumb to the Secretary of State for Air on this matter, because it is of fundamental importance in the transport of passengers by air.

Note has been taken of the fact that the number of passengers carried has been rising steadily. Fares have been tending to drop, and we want to carry more and more passengers by this new and glamorous service. There is an element of glamour about it which I think we ought to encourage, if only as an advertisement, in order to get more people to travel by air ; and safety must be the keynote in the transit of these people.

I am among those who fly every week. I have flown in all sorts of conditions, once for a very brief period upside down. On that occasion, however, I was in the hands of the R.A.F. who, of course, are more accustomed to aerobatics than is the Ministry of Civil Aviation, which is not partial to such occasions of momentary dislocation. We do not want those incidents to occur in a civil aeroplane. That is why I have always insisted on keeping before the Government this need to ensure safety as far as is humanly possible and which has become more important now because of the increasing speed of aircraft.

With the introduction of new methods we will place a great deal more work on some people. Today the Minister paid tribute to one group of people who will be especially affected—those in charge of air traffic control. All that he said about them was deserved. But I want to emphasise what I have already said in a small intervention, namely that their work is not only vitally important but is also extremely exhausting. If that work is to become more onerous because of new and improved methods of control we must think of some way, by scientific methods, of easing the burden on them.

Nearly nine years ago the then Government and the party who will soon be reoccupying our position on this side of the House agreed that the guiding principle in civil aviation must be safety first, safety second and safety all the time. These new rules and procedures are devoted to carrying out that principle, and I hope that the Minister of Transport and Civil Aviation will see that they are carried out to the fullest extent. That principle is not at present fully embodied in the decisions which have been taken. There will need to be complete radar control over the movement of every aircraft in this country, because it is only when we get that control, which is now lacking in the procedures which have hitherto been laid down, that we shall have achieved the safety which everyone wants.

2.55 p.m.

Mr. Ian Mikardo (Reading)

This is the first time that I have ever had the honour—and it is a very great honour, indeed—to address the House from this Box. I feel almost as though I ought to ask the House for the sort of indulgence which is shown to a maiden speaker. I shall try very hard indeed not to be too greatly inhibited by this unaccustomed responsibility, and respectability, and be my usual sweet and uncontroversial self. I do not know how long this temporary promotion of mine will last, though I have the feeling that it will not last as long as the Prime Minister's so-called temporary occupation of the Suez Canal base.

We have had a good debate, even if it was in the beginning a little curtailed, and even if it is likely to be curtailed in the later stages by the consideration of factors which the House rightly considers to be even more important than civil aviation. It has been, as our debates on civil aviation invariably are, a factual and a constructive debate, in which many hon. Members on both sides of the House have demonstrated not only their interest in the subject but their great knowledge of the subject, or at least of some parts of it.

This debate has had one theme running right through it, which is that the Reports of the two Corporations which we have today been considering are in the very highest sense of the word a success story. We have had tributes paid to the Corporations and to their work even from hon. Members opposite who, in the past, in the most doctrinaire way, have been savagely critical of anything that was publicly owned, including the airways Corporations themselves.

The Minister has expressed pride in the achievements which these Reports represent, and I share his pride, but I am bound to say—I do not wish to introduce a tone of partiality into what has been a balanced and impartial debate—that some of his observations and the observations of some of his hon. Friends today are a little difficult to reconcile with what they tend to say at other times, especially at Election times, about the effect upon an industry when it is changed over to public ownership. So many of them have told us so often, and ad nauseam, that a publicly-owned industry always makes a loss.

Here we have a publicly-owned industry making a profit, a publicly-owned industry which is doing extraordinarily well on dollar earnings, whose service to the public is improving the whole time, a publicly-owned industry which is steadily reducing its prices.

At this point I should like to refer to a passage in the Report of the B.E.A. in regard to prices, which goes to show that during the period which is covered by the Report B.E.A.'s average rate per passenger mile has fallen since 1947–48 by 2.5 per cent. This reduction in prices has been achieved in a period when the general cost of living index has increased by some 50 per cent. In terms of the value of the pound in 1947, B.E.A.'s average fare has therefore been reduced by no less than one third.

Mr. Burden

rose—

Mr. Mikardo

No ; I am sorry, I cannot give way. Our proceedings are to be curtailed and there is not much time.

This seems to sort very ill with the suggestion that the hon. Member for Gillingham (Mr. Burden) himself has made all over the country, that nationalisation is always bound to put up prices. I was particularly glad that the right hon. Gentleman—[Interruption.] If we are to have interruptions in our proceedings, neither the Parliamentary Secretary nor I will have very much time.

I was glad to hear the Minister talk about greatly increased productivity and efficiency in the Corporations. Again, I share his view about that. The Report of British European Airways says that in 1955–56 for an increase in total output of 26.6 per cent. the staff was increased by only 5.3 per cent. Thus, productivity increased by 20.2 per cent. Again, while sharing in offering the congratulations which the right hon. Gentleman rightly showered upon the Corporation for this achievement. I am bound to say that right hon. and hon. Gentlemen opposite will find it difficult to square these practical tributes with some of the arguments they use in the country when they are in more theoretical mood.

This glowing success story, of which we should all be proud—and I hope we all are—has been achieved in spite of gross errors of Government policy which have persistently handicapped the Corporations. It is important that we should see these achievements as having been registered in spite of the Government not always acting in the best way in the interests not only of the Corporations but of British civil aviation as a whole.

First, there are the general effects of Government economic policy, which are felt by the Corporations in common with all other enterprises. The hon. Gentleman the Member for Gosport and Fare-ham (Dr. Bennett) made a very valid point when he said that some of the competitors of British airline operators have a great advantage in being able to borrow money for their capital requirements more readily, on better terms, and much more cheaply than is the case in this country in the borrowing of either the Corporations or the private companies in business. Who has the hon. Gentleman got to blame for that but his own Chancellor of the Exchequer?

Mr. C. I. Orr-Ewing

Might I make a point?

Mr. Mikardo

No ; I am sorry, but there is just not the time, if I am to be interrupted. Nobody interrupted the hon. Gentleman when he spoke.

There appears on the balance sheet of B.O.A.C., in page 36 of the Report, an item which shows that there are bank overdrafts of about £2½ million. If the hon. Member for Hendon, North (Mr. C. I. Orr-Ewing), who is so anxious to interrupt, wanted to make the point that the Corporation gets a lot of money from the Treasury, I give him that at once. But what I am saying is that this £2½ million at the present inflated rates of interest must be costing the Corporation a great deal of money, because it is a straightforward bank overdraft.

Nor is that the only way in which the Corporations are adversely affected by Government policy. British European Airways Corporation says, in page 12 of its Report : There have been some signs that the rate of increase of B.E.A.'s traffic in the current year has slackened as the Government's economic measures have begun to have more widespread effect. Those are ways in which the general economic policy of the Government, apart from any special acts of policy towards the industry or Corporations themselves, has adversely affected and acted as a brake upon the work of the Corporations.

In addition, there are two special effects of Government policy, one of which acts as a brake on British European Airways and the other on B.O.A.C. The brake on British European Airways is the result of the deliberate policy of which we on this side have complained before, and about which we have heard something today ; the Government's policy of encouraging the chiselling away of British European Airways' trade in favour of private companies. In its Report, the British European Airways Corporation itself refers to two means whereby this is done. The first is the inclusive tour traffic, to which reference has already been made today.

What B.E.A. has said about this is that … the Inclusive Tour traffic carried by Independent operators has increased very considerably, and a position may soon be reached—may, indeed, already have been reached—when the drifting away of traffic of B.E.A.'s services has a marked effect upon the Corporation's revenue. Indeed, it is already having an effect, because B.E.A.'s anticipated increase in passengers for this year have not been reached.

In fact, the Corporation has lost ground on a number of routes, such as the very profitable London-Palma route, by the device of this inclusive tour traffic. In 1956, there was a very large increase in the amount of this traffic carried by independent operators—sometimes on scheduled services, which they were supposed to keep out of—to points in Spain, Switzerland, Northern Italy, and the South of France. They are trying to double this traffic in 1957.

That increase, if they get it, will coincide with increased capacity available for B.E.A., including the new series of Viscount 800s which were ordered in anticipation of a steady increase in traffic. What we shall get as a result of this failure to correlate the demand with capacity, through breakneck competition between independents and the Corporation, is a wasteful use of the capacity, of the resources and of the aircraft, which, in the long run, is of benefit neither to the Corporation nor to the independent companies themselves.

The second way in which B.E.A. says it has been hampered is by the development of colonial coach services. Here, I would remind the House, so confident are Her Majesty's Government of the superiority of private enterprise that they forbid the Corporations from offering competition to the private operators on colonial coach services. There is a potential danger to B.E.A. on its existing routes where there is competition from these services.

In the past, the Corporation has fended off this competition to no inconsiderable extent, because the Air Transport Advisory Council, under Ministerial guidance, has required the operators of colonial coach services to use aircraft, as it is put, "substantially different" from those operated on tourist services by the Corporations.

Now, however, there is an application from one independent operator to use Hermes aircraft to fly to Gibraltar and Cyprus, and at the lower fare, that will compare very favourably with the existing Corporation equipment. If that is done, I see no reason why Hermes aircraft should not be used to compete with British Overseas Airways on its East African services.

There is a third threat to British European Airways which, again, is also a threat to British aviation generally. As has already been pointed out by my hon. Friend the Member for Uxbridge (Mr. Beswick), it is now universally accepted that economic operation demands a high density on a concentrated route pattern. If we get our routes filtering out more and more and the density thinning out, then, in the end, every concern goes "broke"—whether publicly or privately owned. As my hon. Friend pointed out, other countries do use effective regulatory mechanisms to ensure there is not this thinning out of density over too wide a route pattern.

My hon. Friend mentioned the very important book, "The Economics of European Air Transport", which, I am sure, the Parliamentary Secretary knows very well indeed. Mr. Wheatcroft, who wrote this book, quotes the fact that in one year, in the United States of America, there were almost 350 applications before the Civil Aeronautics Board for more than 500,000 miles of routes to more than 3,600 cities, and that if those had all been granted they would have expanded the airline system to ten times its existing size.

Mr. Wheatcroft goes on to say : The pressures from the airlines for an expansion in the route network were clearly no less in the United States than in Europe. The fundamental difference has been the existence of a regulatory agency in the United States which believed that there would be adverse economic consequences of too rapid expansion in the route mileage and which had powers to prevent it. It is unfortunate that the Air Transport Advisory Council does not behave as intelligently about applications in this country as the Civil Aeronautics Board does in the United States of America. I am not blaming the A.T.A.C. It is acting within the Minister's directive. Over and over again, however, we have had examples of wasteful duplication.

Take, for example, the route, Manchester—London—Dusseldorf. At present, the London—Dusseldorf services are being fed partly by people coming into London Airport from Manchester. A private company is going to run direct Manchester—Dusseldorf in competition with Deutsche Lufthansa. The net result will be that it will lose money, B.E.A. will lose traffic on London—Dusseldorf, and, in the end, Deutsche Lufthansa will fight those services out with a British private company, with the main British flag carrier, British European, being artificially kept out of the scrap altogether. I have no doubt in my mind—I am very sorry to say this—that it is the Germans who will win.

What makes this so unfair to the Corporation is that once a private operator puts in an application to A.T.A.C. for a service the Corporation is not allowed to run it, even if the operator then does not start the service. So it is easy enough. This is competition par excellence with a gilded lid on. To stop the Corporation all one has to do is to ask for a route.

The other way in which B.O.A.C. has been hampered by Government policy is, of course, with regard to the supply of aircraft. There have been many references to this today, and particularly to the Britannia. My hon. Friend the Member for Uxbridge asked the Parliamentary Secretary how much B.O.A.C. has already sunk in the preparatory work, and which it will lose as a result of the Britannia's being late. I am not sure whether the Joint Parliamentary Secretary knows the answer to that question, but I do, so I will give it. It is £1¼ million, and it gets no recompense for this at all.

In fact, there can be no doubt at all that if through these years—without going into detail—B.O.A.C. had been free, like K.L.M. or Air France, to buy aircraft wherever it liked it would have given much better service than it has, it would have done more business than it has done, it would have made much more profit than it has made, and it would have made even more nonsense of Tory gibes about nationalisation than in fact it has made right through these years.

Of course, B.O.A.C. has been one of the instruments of the Government's featherbedding and cotton-woolling of the British aircraft manufacturers. It really is no defence for the Minister to say that the British aircraft industry is efficient because it is doing a lot of exports. It is easy enough to build up a big export trade in an industry where the Government take all the risks, the Government pay for almost all the research, the manufacturer gets carte blanche on development costs, the Ministry of Supply keeps the order books filled, and the Airways Corporations take all the snags out of the aircraft after they have been delivered not merely late but also defective.

I guarantee to the House that I could build up a large export trade in electricity generating equipment if the Government would undertake to do all the research and underwrite all the risks, give me a free hand on development costs, keep my order books filled and compel the Central Electricity Authority to buy and test the first runs of my product, however bad. Indeed, under those conditions I could offer to build up an export trade in any product the Government desired. We are here shielding and cushioning the most inefficient industry in the country. Public enterprise has to "carry the can" for shielding the efficiency of an industry which, with the connivance of the Government, refuses every request that somebody should have a close look at it.

I have telescoped my observations very much and, with great regret, have refused requests from hon. Members opposite to give way—a thing which I have never done before—only because we are expecting an interruption in our proceedings. We all are, or ought to be, proud of what the nationalised civil airlines have done. We wish them great success in the future, but we want to see that their efforts are not inhibited by the rank inefficiency of a privately-owned industry and the gross errors of Government policy.

3.16 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo)

On behalf of my hon. and right hon. Friends, I should like to congratulate the hon. Member for Reading (Mr. Mikardo) on being promoted to the Front Bench to speak in the debate. I find him slightly less menacing with extra propinquity. I do not know whether it is due to the fact that he has had both feet well on the Floor, but I have been interested in the reasonably impartial way in which he has put his case. We have been able to debate this important matter in an atmosphere which one believes exists in the middle of a tornado. I have no desire to create a storm, at any rate until the weather forecasts one, but I must take the hon. Member up at once on one problem which he mentioned.

The hon. Member cast gibes across the Floor of the House about my party's view of nationalised industries. He suggested that B.O.A.C. and B.E.A. were an extremely good example of how publicly owned industries can make profits even though, as he suggested, some of my hon. and right hon. Friends did not believe in them.

I think that the hon. Member knows that there is no doubt at all about the attitude of my hon. and right hon. Friends towards nationalisation. As a party we dislike it intensely, but when we took office we were landed with certain industries which were publicly owned, and our only desire has been to try to see that they may be run efficiently and make a profit. I should like to draw the hon. Member's attention to the fact that it was not possible apparently for B.O.A.C. and B.E.A. to make a profit until a Conservative Government were finally returned to power. [An HON. MEMBER : "Poor stuff."] That is perfectly true.

If hon. Members try to say that the injection of independent civil companies is bad for the civil air transport industry, it makes me wonder how it has been possible for the two Corporations to have done so excellently as they have done, as witnessed by the Reports which we have been discussing today. No one would wish not to congratulate all members of B.O.A.C. and B.E.A. on their record. My right hon. Friend has already made that clear.

At the same time, I think I should say a word about the independent air operators. My hon. Friend the Member for Gosport and Fareham (Dr. Bennett) asked whether we would try to elucidate our attitude. He mentioned long-term trooping contracts and suggested, quite rightly, that if we were able to give contracts of much greater length it would be possible for the independent operators to buy more up-to-date aircraft and to plan efficiently.

That is all very well, but my hon. Friend will realise how difficult it is to see ahead as far as seven years from the point of view of trooping contracts to any part of the world. At the same time my right hon. Friend and I have this matter very much in mind, and we are extremely pleased to note what progress the independent companies have made, and indeed what services they have rendered to the British air transport industry since my right hon. Friend the present Secretary of State for the Colonies introduced a new air transport policy.

Although the opportunities which have been available to the independents since 1952 have necessarily been limited, they have taken full advantage of them, and they have rapidly built up their traffic within the sphere open to them. This is the case not only in charter work and not only in colonial coach services. Here, if I may digress, it seemed to me extraordinary that the hon. Member for Reading should wonder why it was that the Corporations were denied the services of colonial coach operations when they have reserved to them all the scheduled services all over the world which they had at the time when the present Government took office.

It would be far better if those of us who are interested in civil air transport stopped arguing the political toss as to what the scales and measures should be about the activities of the nationalised industry and the independent field, and tried to settle down to taking an interest in British civil air transport as such. In that I believe that the hon. Gentleman genuinely agrees with me.

My right hon. Friend and I are confident that there is a great deal of service which the independent operators can render without damaging or harming the Corporations and without damaging or harming all those thousands of people who work in civil air transport and who have such a great love for it. The Government welcome the progress which has been made by the independent companies in recent years, and will continue to foster their development in every possible practical way.

In all probability it will be impossible for me to deal with all the points which have been made by my hon. Friends and by hon. Gentlemen opposite. May I, therefore, say in advance that if I am not able to cover these problems in time it is my full intention and that of my right hon. Friend to give the closest study to everything that has been said in every part of the House. If any hon. Member feels that he has been left out, and would like to have a word with my right hon. Friend or myself afterwards, we will do our best to clear up any difficulties there may be.

It is a little difficult for me to know which points I ought to deal with, but the hon. Member for Uxbridge (Mr. Beswick), who opened the debate, voiced in his speech problems which are felt acutely in all parts of the House. Therefore I will deal with some of them, and I hope that other hon. Members will acquit me of any discourtesy.

On the problem of B.E.A.'s service to Moscow, I hope that Pravda will read what the hon. Gentleman said, because the only difficulty which we are facing here today is that of getting the Russian representatives to come over and discuss the matter with my right hon. Friend. As soon as they are able to do that, we shall be able to make some progress with the service, which I agree is important not only to B.E.A. but to everybody living in this country. So I hope that we shall make progress there.

The hon. Gentleman also asked about a recent application for a freight service to Australia by an independent company. I can assure him that this application was dealt with in the normal way. The Air Transport Advisory Council was approached, it heard the application from the independent company, it made a recommendation to my right hon. Friend and, at that stage, as is normal, my right hon. Friend referred the matter to the Government of Australia. The Government of Australia decided, in their wisdom, to refuse the request made by the British Government, and for that reason the application never saw the light of day.

The hon. Gentleman suggested that it might be a better idea if the Ministry of Transport took over the job of the Air Transport Advisory Council. My right hon. Friend would not like that at all. Among other things, we should be constantly accused of partisanship. I can assure the hon. Gentleman that that is the last thing we want. It seems to me that in circumstances such as we face today, it is of the greatest importance that the Air Transport Advisory Council should be an independent body comprised of people who have no interest whatsoever in the organisation of my Department.

In passing, I wish to pay tribute to the work of Lord Terrington and the Council. Lord Terrington has been working for some time without a deputy-chairman, and he has done valiant work in spite of increasing complexity. My right hon. Friend is hoping to appoint a successor to Mr. d'Erlanger as Deputy-Chairman of the Council in the not too distant future.

The hon. Member for Uxbridge complained that B.O.A.C. was not expanding its business as rapidly as some of its rivals are doing. He suggested that that might have something to do with independent companies operating freight services, etc. Perhaps I might dismiss that, because I have already touched upon it. I do not believe it is true at all. However, we must face the fact that B.O.A.C. is not increasing at the same rate as some of its rivals.

If anything justifies the decision taken by Her Majesty's Government to allow B.O.A.C. to buy the new Boeing aircraft, I think it is just this. The hon. Gentleman will be as well aware as anyone else in the House that it is hoped that the traffic of Transatlantic business during the next few years may increase by up to as much as 150 per cent., now that we are to have the new cheap third-class fares. It is not unreasonable that B.O.A.C. should hope to be able to get about 50 per cent. of that traffic. That will be wholly impossible, of course, unless B.O.A.C. can have aircraft able to compete on fair terms with the great new jets which America has produced and which the major American international lines will be using.

The whole question of our aircraft policy was raised by the hon. Gentleman and by several other hon. Members. I think that I should be straining the rules of order if I were at this stage and during this debate to go into matters which are the responsibility of my right hon. Friend the Minister of Supply. Mr. Speaker might not feel that that was justified. Consequently, all I shall do is to say a word about aircraft policy from the point of view of B.O.A.C. and B.E.A.

It is clear that B.E.A. has been able to settle its future for itself in conjunction with the British aircraft industry in a way which hon. Members in all parts of the House will applaud. The circumstances in relation to B.O.A.C. have changed in three aspects since it turned down—I emphasise that it was the Corporation which turned it down—the V1000. To begin with, the Boeing 707 has come along very much faster than could have been expected. Secondly, all B.O.A.C.'s competitors have placed orders for either the Boeing or the Douglas. Thirdly, we have, of course, the I.A.T.A. decision of June, 1956, to introduce cheap fares on the North Atlantic. It is for those reasons that it has become imperative that B.O.A.C. should have the latest American jet aircraft.

The last part of the picture is the order which B.O.A.C. has itself still to place for a British jet aircraft. I just want to answer the hon. Gentleman's very valid point. No influence or pressure has been brought to bear by my right hon. Friend upon B.O.A.C. in deciding the type of aircraft which it requires. It wants something which will be suitable for the North Atlantic ; it wants something which will be equally flexible for all the routes of the world, if possible ; and it wants, just as we do, to buy British. Therefore it is not unnatural that it should have gone into close consultation with the De Havilland Aircraft Company with whom it already has very close liaison.

I was asked about the Britannia, and I think that I should say one word about that aircraft. The certificate of airworthiness has not been affected. The Air Registration Board has never called it in question, has never requested my right hon. Friend to withdraw it, and there is no modification of the certificate in existence. Arrangements have been made that the aircraft should not fly at the present time at more than a height of 16,000 feet under conditions in which it might meet the icing problems which it has already met. It is in the hands only of B.O.A.C. and Bristol's, and I think that there is no danger of anything serious happening. We do not quite know how long this problem will take to solve. Both my right hon. Friend and the Minister of Supply and the Chairman of B.O.A.C. have every hope that this particular problem can be overcome. When the Corporation puts this aircraft into operation, although it will have cost a lot of money, it will, of course, be the first airline in the world to operate a long-range turbo-prop aircraft.

I think that before we end this debate I should pay tribute to the new Chairman of B.O.A.C. He has not been in that position for very long, but he has distinguished himself immensely since he took office, and I was glad to hear the hon. Member for Uxbridge pay tribute to him personally, whatever he may have thought at the time the appointment was announced.

I think that one of the most interesting things that he has done since he took office, is to see that senior pilots have not only been included in the aircraft requirements committee but also given very responsible posts in the hierarchy of the Corporation. I think the House would like to know, for example, that the Corporation has appointed a pilot to the job of Chief of Flying Operations. That is just the sort of thing one wants to see in order to have a proper spirit existing in the Corporation.

I should also like to pay tribute to the two new chief executives appointed since our last debate. Both Mr. Milward and Mr. Smallpeice have already shown the value of their appointments.

I am afraid that I have not been able to answer all the points raised, but I hope that hon. Members will forgive me, as I know that they wish to hear the statement which is to follow.

Question put and agreed to.

Resolved, That this House, in reviewing the progress of Civil Aviation, takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March, 1956.