AIRWAYS CORPORATIONS (REPORTS AND ACCOUNTS)

HC Deb 27 January 1958 vol 581 cc35-103

3.31 p.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, 1957. I genuinely welcome this debate, because it is not often that we debate these matters in the House. Perhaps I might say that I sometimes think that this House spends too much time in examining affairs in the abstract rather than in the concrete, and that we might more readily convince the nation that we are not all smitten in this House with what Matthew Arnold called …this strange disease of modern life. With its sick hurry, its divided aims… if we dealt more with the practical facts that condition our lives and our future.

The House certainly has an opportunity to do that today. My problem in opening this debate is how to compress the vast range of new and challenging facts within the compass of what I hope will be a short speech. Perhaps, therefore, the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) will accept that I must deal with broad outlines only, and that my hon. Friend the Joint Parliamentary Secretary will be only too pleased to fill in any of the details when he winds up the debate, because there is a vast field to cover and there is much that is new to put to the House in almost every aspect of civil aviation.

The first thing I want to deal with is something on which I am sure I will carry the House with me, namely, that the freedom of the air will be as vital to us as a nation in the future as the freedom of the seas was in the past and is today. So I thought the House might like to now a little about some of the current talks that are going on in an effort to secure a freer and more expansive position for British civil aviation in the world.

I am glad to say that we reached a bilateral agreement with Malaya, within two months of her independence, covering the air matters between us. I hope very much that soon I shall be signing an agreement with the Australian Government, and I am sure all hon. Members will welcome the visit of Senator Paltridge, the Austalian Minister for Civil Aviation, who is coming over here in a few days to sign this new agreement with the Australian Government. This is the first formal air services agreement to be signed on behalf of both Governments. It is interesting in that it provides for a most comprehensive exchange of routes between the United Kingdom and Australia, in addition to the Kangaroo route. which I think most hon. Members know, and the new Southern Cross route.

The two countries will have a pooling arrangement operating through Canada, Mexico, South America and Africa. There is also provision for routes via the Arctic and Antarctic, so it will be possible for the existing partnership arrangements between B.O.A.C. and Qantas, which have worked so well over the years, to be extended to any of these new routes. That is a promising and interesting development which I think the House will welcome.

As hon. Members know, we recently signed an air agreement with a Soviet delegation. That agreement provided for the operation of air services between London and Moscow, with a stop in Copenhagen in each direction, run by Aeroflot, the Soviet airline, and British European Airways. That agreement does not come into force at once because there are many technical details to be cleared on both sides, but the work is going on.

There is also a Polish air agreement, recently signed, which we hope will be valuable to both countries. A Czech delegation is expected in London next week to discuss an air services agreement, and there are talks going on with Ghana, the Sudan and Ethiopia, and I hope that, before long, there will be talks with other countries as well.

I thought that on this occasion the House should know that we are doing our best to secure the maximum freedom not only for airlines and air corporations operating from this country, but for all airlines, to traverse the sky as freely and with as much service to the travelling public of the world as can possibly be arranged. That is the policy of Her Majesty's Government and in those agreements I think we show that we intend to carry it out.

Obviously, my Department, and any Minister, in my position, must take a great interest in the safety aspect. Safety in the air is vital to the future of air travel, particularly as we move more and more into the tourist trade and, therefore, people have a greater option to travel either by air or by some other form of transport. The businessman and the politician must travel by air, whether he likes it or not, because his schedule is hitched to an air route schedule, but as we move into the mass carrying trade of the world it is important that safety should be carefully considered by all the Governments concerned and that the technical aspect of safety should not be neglected.

We have seen in the United States and other countries what can happen if there is a very high density of traffic round major airports. There are long periods of stacking, and in bad weather there are very great difficulties. So one of the most important factors in the near future that we must consider for our own airports is the question of handling dense air traffics, particularly in the vicinity of airports.

One of the most important requirements which vie hope will help to meet that is a completely improved type of radar which will enable the controller in the control tower to see on a screen all the aircraft under his control, and, therefore, to have a complete picture of the traffic surrounding the airport. Plans are now being made to build a number of new, long-range radar stations to give this kind of cover to the controller. We are also examining urgently the possibility of supplying him with electronic computers, which will make the calculation of the traffic problem for him, rather than have it presented to him in the form of a written message, as is done now.

There are, therefore, new and fascinating developments there. I am sure that they are essential if we are to maintain our lead, which I think we can claim at the moment, as being the safest country for the general control and technical arrangements of our airports. I am certain that we must maintain this, but the House should know that it will be an expensive business.

Another matter which has been concerning the House, particularly one or two hon. Members who, like the hon. Member for Feltham (Mr. Hunter), live near airports, is the problem which arose after the Viscount crash at Manchester last year. I said at that time that we would study the problem of danger caused to people living near airports by aircraft accidents. Officials of my Ministry and the other Ministries concerned have been studying the problem.

I would begin by saying that the record during the past eleven years shows that the risk of an aircraft crashing on a house near a runway is, fortunately, very remote. Still, over half the aircraft crashes on the approaches to airports occur within 4,500 ft. of the end of runways, and I think that the House was right to display concern about the problem.

The House should know that I have reached an agreement, in conjunction with my right hon. Friends the Secretary of State for Scotland and the Minister of Housing and Local Government and the Government of Northern Ireland, that we should now extend the present arrangements under which local planning authorities must consult my Department before granting permission for building within aerodrome approach areas. I will not go into the detailed arrangements, but, in general, the purpose is to secure that my Department is consulted about all new proposals for construction within the first 4,500 ft. of the approaches to the main runways of certain busy civil airports.

I understand that similar action will be taken by the Government of Northern Ireland. This will affect the civil airports under the control of my Ministry, and I am consulting the owners of other civil airports to try to obtain the same arrangements there. I should add that it is not intended to revoke planning consents already given, but what I propose will, I hope, make a contribution to the solution of the problem in the future.

The last subject which I wish to mention while dealing with the general amenity aspect is noise. Hon. Members have been right to take very considerable interest in the problem of the noise that will arise when we move into the jet era. I have been in contact with the New York Port Authority which operates Idlewild Airport, and I find that for the purpose of fixing its standard—I should be interested to hear what hon. Members think about this—it considers that the maximum tolerable level of noise has been reached with the Super-Constellation and it would like to keep the noise down below or to that level.

I am not suggesting that over here we should set any arbitrary level as our standard, but I would remind the House—it is only fair to both aircraft manufacturers and those who operate aircraft to do so—that I said on 12th July last year, and also in October and December, that I should have to take into very serious consideration the degree of success in reducing the noise from these big new jet aircraft before such aircraft could be permitted to use major civil airports under my Ministry's control. I say that quite firmly and seriously.

The New York Port Authority is taking a similar line. In fact, it is taking a set of circumstances which is a little more rigid. It is at the moment examining the noise level of the Comet III, and I do not think that it is yet prepared to say whether or not it will let that aircraft in. We shall adopt a similar principle in respect of the Boeing, and all other jet aircraft, not excluding the T.U.104 which the Russians may want to use if they open the proposed Aeroflot service. The Russians know this and have agreed to it.

We must measure the noise and be reasonably satisfied that it does not impose an intolerable burden on those who happen to live round airports. We may have to carry out some practical tests at the airports, and so on. Hon. Members know that there are consultative committees at these places, and no doubt they will have a right to be consulted and brought into the matter.

I would merely add that we have been successfully operating Comets from London Airport for some time, without complaint I think, but they have a slightly lower rated engine than the Comet IV and a very much lower rated engine than the Boeing and other bigger aircraft. I think it right that close measurement should be made and that we should be satisfied that aircraft designers and manufacturers have made every possible effort to silence the aircraft as far as it can humanly be done.

I wish to say a word about the problems in connection with the building of airport facilities. As we move forward into this new and very exciting air age it is worth thinking for a moment of what we are trying to do. We are trying to create the kind of port and transit facilities which it has taken generations to build up in our docks and harbours. I have some figures which may interest the House as showing the measure of the problem that we face.

The following are figures in respect of air passengers handled in the London area alone at intervals of ten years. In 1938, the number was 178,000. By 1948, it was 834,000. This year the number will be 4,500,000, and I am confidently informed that by 1968 the number will be 13 million. That is an example of the growth that we have to face. Aircraft movements were 29,000 in 1938 and they are expected to amount to more than 250,000 by 1968.

That is the measure of the problem which has to be faced by those who build airports. It is a fascinating problem, because all sorts of factors enter into it. One has to obtain views about vertical lift, take-off length, and other things, even how to handle aircraft on the airport, whether to tow them or taxi them. Consequently, I am sure that my right hon. Friend, the present Minister of Pensions and National Insurance, was absolutely right to set up the Millbourn Committee to examine London Airport. Equally, I am sure we are right to press on with Gatwick Airport as London's first alternate airport. I think it right to tell the House that if we are to keep pace with the kind of traffic increase that I have shown—it goes for freight as well as passengers—we shall have to face a further very big development programme in the next few years.

I want to say a word about Gatwick, which will be the next big addition to the airport facilities of London or the South of England. I think the House knows that Her Majesty the Queen has graciously consented to inaugurate it on 9th June. This will be the first airport in the world to combine air, rail and road transport in one unit. Therefore, passengers will be able to travel directly to and from the airport by road or rail, and there will not need to be a town terminal.

In the present wet weather Gatwick Airport is still in places a sea of mud, but if any right hon. or hon. Gentlemen would like to look at it a little nearer the time of opening I shall be delighted to provide facilities. I am sure that they will find it a very interesting visit.

Many new things are to be found at Gatwick Airport. Not only has it a railway station incorporated in the terminal, but it has a proper run-in off the road. I certainly accept the criticisms of my hon. Friend the Member for Horsham (Mr. Gough) and the right hon. Member for Vauxhall that the road ought to be double-tracked and not single-tracked where it runs under the building site. I gladly give an assurance that I hope it will be double-tracked before the opening. At all events, it will be very soon afterwards. What has happened arose from a mistake in the design. The road will certainly be made into a double-tracked road throughout. At the moment, it has a double track at each end but a single track where it runs underneath the airport building.

Mr. G. R. Strauss (Vauxhall)

I do not see how it is possible to make it a double-tracked road. The building is now being erected in such a way that it is not possible to widen the road.

Mr. Watkinson

It is possible to widen it. I have been there to look at it myself. Fortunately, there is room to do it between the pillars which hold the overpass. The work is now going on.

I want to mention one other interesting thing about the terminal building. We shall carry out some experiments in it. We shall try the Orly system, which will, I hope, get passengers more quickly and perhaps more individually from their train or motor car to the aircraft. Also, we are trying, for the first time in this country, what is called the "finger and gate" system. This is much easier to understand if I say that we are starting to build piers, like ordinary dockside piers, against which aircraft will pull up so that passengers can walk down a pier and step into their aircraft, as in the passenger terminal at Southampton Docks or similar docks.

It will be interesting to see how the pier system works. The Millbourn Committee has proposed that at London Airport piers should be tried out for the long-haul and short-haul buildings. We shall get valuable experience from that and see whether the pier idea works well, as I think it will.

My Department is in consultation with architects who are now preparing plans for the long-haul building in the central terminal area of London Airport. That will take the place of the greatly overcrowded buildings in the old London Airport North on the Bath Road, which we want to vacate as soon as we can. I am always considering how long it takes to get from London to its airport and as aircraft get faster so the delay looks worse and worse. I think that the House would like to know that with various experts my Department is considering three possibilities.

At the top of the list is a new road which will link the airport to the Chiswick fly-over now being built as part of the Cromwell Road extension and which, I hope, will be a double-decker road at least for some of the way from Chiswick fly-over to the airport. That might save knocking down some hundreds of houses—which I am anxious to avoid knocking down—and give us a fascinating new double-decker road, a principle which it might be possible to use elsewhere. The new road which continues Cromwell Road extension towards the airport and which forms the first part of the South Wales radial motor road is an important first priority and that is what we are now urgently examining.

Mr. John Rankin (Glasgow, Govan)

When does the Minister expect that first suggestion to be in operation?

Mr. Watkinson

I cannot say at the moment. If the hon. Member will put down a Question, I will try to answer it. I am now examining the technical problems and the balance between knocked down houses and building a double-decker road. I have to consult all the local authorities, and so on, and I have to do it quickly. I agree that the matter is urgent.

We are examining the fascinating project of a monorail, but I cannot give any views about that until the Chief Inspecting Officer of Railways has pronounced on whether he feels that it is a safe form of passenger carrying at the very high speeds which we shall require, and which will be a good deal higher than those in Germany; so that the German model will not necessarily be the answer for this country. We shall also require a bus which can be taken off the monorail and motored round the airport so that we do not have to build a tunnel underneath the airport. This is a fascinating project, but it would not be right to lead the House to believe that it will or will not work. I have to await technical advice, but I shall be very glad if the technical advice says that it will work.

The third possibility is a rail link which has been surveyed and details of which I now have before me. That is a very expensive project, because it involves a deep tunnel under the airport runways. It would cost about £20 million—or not very much less—and is, therefore, a heavy capital commitment. Those are the three projects which I am examining and about two of which, anyway, I hope to come to a conclusion before long.

That deals with the airport side of things, except to say that I was impressed with the Report of the Select Committee on Estimates in the Session 1955–56, which recommended that municipalities should be encouraged to own and operate their own airports. I think that that is absolutely right, and I should like to see more municipalities going into the airport business and my Department getting out of it, because it is not really our business.

I am, therefore, glad to be able to tell the House that discussions are proceeding with Birmingham and Southampton to that end. Liverpool is now holding exploratory talks with my Department and we will do all we can to encourage them to take over and operate their airports if they wish to do so, subject only to one thing, that we must keep overriding safety control in our own hands, because we could not have different systems of safety at different airports. Subject to that, I should be delighted if local authorities took airports off my hands—and paid for them.

At this stage, I must refer to the second half of the Motion which deals with the accounts and future of the two Corporations. I shall also refer to the independent operators, because I want to make it plain that I regard this air business today more as a merchant air service than as a kind of Department of the Government. We should never have built up our shipping fleets if shipping had been regarded entirely as a Department of the Government. Although I leave the independent operators until last, for reasons which will become obvious, that is not to be taken to mean that I think they are last in importance. I do not think that they are.

No doubt hon. Members have read the accounts of British European Airways and B.O.A.C., so I will not go through them in detail. But there are one or two things which I want to point out. B. E. A.' s results last year were down. The net profit was £217,000 compared with roughly £600,000 the previous year. That was for obvious reasons. There was a lower revenue rate, resulting from a higher proportion of traffic carried at cheap off-peak fares, while unit costs went up. However, load-ton-miles increased by 14 per cent., which is very good, while freight-ton-miles—to which the House should pay some attention; I am a great believer in air freight carrying which, I think, will become more important—went up by 22 per cent. against an increase in world freight-ton-mileage of 13 per cent. That is a very good situation.

While I do not intend to go through all the figures, because I am sure that hon. Members will have read them, I am very glad to say that at the moment this year appears to be a good deal better than last year. Both traffic and financial results are better—traffic is up by 16 per cent. and the estimated profit for the calendar year 1957 exceeded £1 million.

That is very satisfactory and shows what enlightened private enterprise methods will do for a State airline when people get down to it, as they have done. Of course, we all agree that this is a highly competitive business and the industry must adopt this kind of method if it is to survive.

I am sure that the House will want me to say something about B. E. A.' s aircraft. It is very difficult to discuss this matter at Question Time and, as the House is the right place for these matters to be discussed, I hope that hon. Members will bear with me if I give a short history of B. E. A.' s jet requirements. In the autumn of last year, the Chairman of B.E.A. told me that the Corporation had now to consider a requirement for a medium-range jet aircraft. This was only to supplement the turbo-prop aircraft which were to continue to be the main carriers for B.E.A. and the main basis for its services. However, it was rightly felt that B.E.A. would, in time, meet competition from jet aircraft in Europe and should have some answer to it.

It appeared to me and the Minister of Supply, quite independently of the view which Lord Douglas of Kirtleside and his colleagues formed, that there might well be a market in the world, perhaps a large one, for this kind of aircraft. B.E.A. produced its design requirements, with all support and encouragement from me and my right hon. Friend, and submitted them to the aircraft industry.

As a result, three firms initially displayed an interest in the project—Avros, Bristols and de Havillands. The first difficulty that arises—it always arises—is that any order which B.E.A. might place could not possibly be large enough to justify any firm's putting down a production line for this aircraft. I am advised that 60, 70, or 80 aircraft of this type would have to be sold to make the manufacture of them worth while.

B. E. A.' s order is, of course, for 20 to 25 aircraft. That is a problem, and it was not surprising to find that all the firms initially concerned felt that they would need a great deal of support from the Ministry of Supply to help to develop this new aircraft. However, B.O.A.C. has succeeded in ordering the V.C.10 as a private venture, and I think that B.E.A. could do the same.

If there has been delay—and I do not accept that six months is a long time in which to consider a completely new type of aircraft—it has certainly been profitably spent, because it has ensured that the aircraft offered to B.E.A. are now on a private venture basis, which is a good thing. If firms take the risk they will be the keener to make this project a success.

The discussions which my right hon. Friend and the Ministry of Supply had with a view to seeing that all this happened, and to make this aircraft a genuine private venture, led, naturally, to negotiations within the industry to see what joint effort, financially and technically, could be harnessed to this project. B.E.A. gave thought to this matter, and I think that the history of its attitude was, to begin with, that the Corporation rather favoured the Bristol design concept, but, after discussion and technical examination, the final decision of its board was in favour of the de Havilland design concept.

At all times B.E.A. was and is willing that the construction of the aircraft should be shared as widely as desirable among any number of reputable firms. I will not trouble the House with the detailed course of the various negotiations. In the later stages B.E.A. joined in the talks and, latterly, B.E.A. has been having talks with the industry on its own, as a customer should. I am very grateful to B.E.A., particularly Lord Douglas of Kirtleside and Sir John Keeling, Deputy Chairman of B.E.A., for putting in a lot of work in these discussions, which are obviously difficult and highly technical.

I do not think that there is now any aircraft manufacturer who has not had the chance of associating himself with this order if he wants to, bearing in mind all the difficulties. That, I think, was the right way in which to approach the matter. There is no compulsion, but my right hon. Friend and I wanted to ensure that we gave firms a chance to participate if they wished and if they could meet B. E. A.' s requirements as the customer.

For the moment, this is the last major civil aircraft order to be placed. Then we shall have new and interesting developments. However, they are some years away. Therefore, an opportunity is provided for a concentration of resources which will be of great importance to the future of the industry. As I have said, there is no compulsion.

The House would like to know what is the present position. The Bristol Company and the Hawker Siddeley Company have formed a joint company which is offering a medium jet aircraft conforming to the general design specifications set out by B.E.A. At present, this group has a sales team in America testing out the possibilities of this project. I am told that they have at least one inquiry that they are discussing in America. De Havilland' s have also set up an association of companies.

Associated with them are the Fairey Aviation Company and Hunting Aircraft. The Rolls-Royce Company has agreed to supply and finance the complete power plant for the de Havilland concept or any other aircraft. They make engines and are willing to supply them to any firm. Handley Page Ltd. has offered technical assistance to the de Havilland Company because of its special experience with high-speed aircraft and tail design. I am told that an endeavour will be made to pass on to Saunders-Roe Limited, by subcontracting any work that the group cannot undertake itself.

All these final detailed proposals from the de Havilland group and its associates reached my right hon. Friend and myself only this morning. They are being urgently examined. I hope that in the next few days we shall know how the Bristol-Hawker Siddeley group has got on in America, which will show us the world's reaction to this kind of aircraft, and we shall have a clearer knowledge of the basis on which the de Havilland offer is made. We shall have the benefit of the technical examination which B.E.A. is making into that project, both as to finance and production capacity. As I said in the House last week, as soon as those two matters are clear a decision will be taken and it will be announced.

Sir Arthur Vere Harvey (Macclesfield)

I want to be quite fair in this matter. My right hon. Friend has explained that the Hawker-Bristol group is exploring the market in the United States. May we be assured that equal facilities are available to the de Havilland group, or is it tied in not being able to offer its aircraft overseas?

Mr. Watkinson

I am glad that my hon. Friend has asked that question. Of course, when I make these statements I do not make them on behalf of the aircraft industry, but, to some extent, only as the customer. It is the view of de Havilland' s and their associates that they would prefer to do their selling overseas when they are a little further forward, first, with their combination of companies, which they have now finalised, and, secondly, I think they want to try to obtain the B.E.A. order first. As it is only today that they have sent their propositions to my right hon. Friend and me, they may well decide now to do what Bristol's have decided to do. It is a free world, and, of course, they can do what they like.

Lord Balniel (Hertford)

Surely the de Havilland organisation has a kind of gentleman's agreement with B.E.A. that it will not divulge its specifications or seek outside orders until a contract has either been signed or rejected with B.E.A.

Mr. Watkinson

Relationships between customers and suppliers are not for me. It is a private venture, but I think my hon. Friend is quite right.

I do not express my opinion on its merits, but there is a view that it is sometimes a mistake to tell possible competitors—of course, the Americans are competitors with us in this sphere—too much about a new kind of aircraft that you propose to produce. There are conflicting interests. My own view, however, is that the Government should try to stick to presenting the facts and to getting the best backing for whatever aircraft is eventually put on the stocks. That is the limit of our responsibility.

I have tried to tell the House frankly and clearly what is the present position. No doubt the right hon. Member for Vauxhall will express his views. I shall listen to them with great interest.

May I now say a word about B.O.A.C. The story here at the moment is not so encouraging. Last year the Corporation fared better, as can be seen from the current accounts that we are examining. A profit of £303,000 was made, compared with £118,000 the year before. This is why it is right to pay enormous attention to trying to get these aircraft right and, if necessary, wait a little time to be sure that they are right, because with B.O.A.C. one sees clearly the disadvantages of not having the right tools for the job at the right moment.

In saying that, I am not criticising anybody, but it is a hard fact that the Corporation's position, as shown in the accounts which we are examining and the year in which we now are, has been much affected by the fact that it has been operating obsolescent aircraft. In the modern world that is done only at one's peril. Therefore, it is only fair to say that in the year 1956–57 the Corporation's increase of profit would have been a good deal greater if the Britannia 102 had entered service on time. Nobody regrets the fact that it did not do so more than the Bristol Aircraft Company, but it is my duty to the Corporation to explain the reason for its financial result.

Because of this fact the Corporation's unit costs rose to 39.9d. per capacity ton mile, and although it did well in some ways we have to recognise that the number of passengers carried increased by only 7 per cent., as compared with the world increase of 15 per cent.

As to the current year, I must tell the House that we still suffer from the same problem. I must not lead the House to believe that the Corporation will have a good financial year, because it will not. I cannot tell what the result will be, but I had talks with the Chairman, before he left for his Canadian and American visit, to ascertain what new business can be done out there, and we agreed that the Corporation must now make a great attempt to cut down its internal costs. They are very high and if it is to put its financial position right a constructive effort must be made to do it.

To sum up, all I would say is that the Corporation has suffered from not having the right aircraft at the right time. The proof is that since the DC7C and the Britannia have been in service on the North Atlantic the Corporation's position has completely changed. In October, 1957, its share of the traffic was back to 40 per cent. having been below 30 per cent., and this rise was entirely due to having the right aircraft. I think that any hon. Members who have travelled in its aircraft will agree that the Corporation gives better service than any other airline in the world.

It should not be thought that I am criticising the airline; I am not. It has suffered great difficulties. I am thankful that it is now getting the right aircraft, and I am satisfied that with the right aircraft its position in the world will be completely changed, and that it will attain the target which it has set itself of being the leading long-distance airline in the world.

The Corporation has now got its ten DC7Cs, which, to some extent, fill the gap on the North Atlantic route, and 15 Britannia 102s, besides five of the long-range Britannia 312s. All these air developments become so publicised nowadays that it is nice to discuss them in the more factual and calmer atmosphere of the House of Commons.

I should like to say a word about the Britannia's icing difficulties. Here, there has been a real triumph for our back-room boys, and I say that with complete sincerity. A really fine job of work has been done by men from the R.A.E., and personnel of B.O.A.C. and Bristols. This work has received little notice; there has been plenty of criticism when things have gone wrong, but not so much praise for the scientists and others who have been working night and day, for seven days a week, to get things put right.

We always seem to have to pay the penalty for being first with a new project. We paid the penalty with the Comet because we were ahead of the world and did not quite understand enough about stresses and strains of flight at 40,000 feet. We have had it with the Britannia, because this was the first big turbo-prop aircraft to fly through intense monsoon conditions. The ordinary icing conditions which we expected and were known in advance were cured in advance but, particularly when the aircraft flew through heavy monsoon conditions over India and some parts of Africa, it experienced a completely new kind of icing—a dry ice which heat made worse instead of better, and also a mixture of dry and wet ice, the cures for which inter-acted upon each other, so to speak, and made the position worse. This was something that no aircraft had met before, and it was made worse by the U-shaped design of the inlet of the Proteus engine. That was another thing which nobody could have foreseen.

The House will not want a technical dissertation from me about the icing difficulties of the Britannia, but I want to pay tribute to the men who put it right. They made test rigs and subjected them to all sorts of icing conditions. They were working under great difficulties for seven days a week—men from B.O.A.C., the R.A.E. and other Government establishments, such as the National Gas Turbine Establishment and Bristol's. I know that on that job they did everything that man could do to get this right—and I believe that they have got it right.

They have found a system of injecting air into the intake whereby a certain turbulence is created, which seems to have cured both kinds of icing. But they have not left it at that. They have carried out experiments with increased cowl heat and a multi-duct power plant—the "rabbit warren"—which is a completely redesigned intake. Beyond that there is the N.A.C.A. intake, which shields the engine and prevents the entry of ice. I mention that to show that we are trying to over-insure against any more difficulties. If any new difficulty should arise there are at least two more new devices being produced by Bristol's for B.O.A.C. which should meet it. Thanks to the devoted work of the men whom I have mentioned we have, I believe, cured this problem. Good luck to the Britannia, which is undoubtedly a world-beating aircraft.

Mr. A. E. Hunter (Feltham)

The Minister will be glad to know that the Britannia is also a very quiet aircraft.

Mr. Watkinson

As a satisfied customer, I certainly agree with the hon. Member. It is a very fine aircraft, and we are all sorry that it was late. I do not blame anybody about it. I have been assured by B.O.A.C. that it will do its best to publicise the machine and fill it with passengers. I wish good luck to the Corporation, because its future depends upon its having the right aircraft at the right time.

Mr. Rankin

Is the Minister now leaving the B.O.A.C. Report?

Mr. Watkinson

No, Sir.

Mr. Rankin

I am concerned with the second paragraph in the general remarks in page 8. The Minister has said that the coming year may not be a good one for the Corporation. That second paragraph indicates the same thing, but it also implies that the Corporation will not have a free hand in putting into effect the necessary remedial measures.

Mr. Watkinson

I am just coming to that point. The Corporation's future depends upon the aircraft position. We have the Britannia ready and it will be capitalised. B.O.A.C. has bought a certain number of Boeing aircraft, largely as a stop-gap operation to preserve its position on the North Atlantic route. When the big Britannias start meeting the competition of the Boeing 707s nobody knows which will win. Some say that the turbo-prop will maintain its position against the big jet, and others say that the big jet will have a great deal of trouble through noise, the high landing speeds required, and many other problems which have to be resolved. It was right for the Corporation to back itself both ways.

Beyond that we must look, for the last big conventional jet aircraft, to the V.C.10. This country has not taken much notice of the fact that a contract has been signed with B.O.A.C. for 35 of these aircraft, and I believe that it has an option for another 20. B.O.A.C. regard this aircraft as a world beater. It is faster than the Boeing 707 and has completely different characteristics. It can be operated from almost any type of runway, in almost any kind of conditions. It is able to fly the North Atlantic and the Eastern routes, and fly into airports which the Boeing 707 could not use at present. The Corporation has received the support of the Government and myself in trying to insure a profitable future, and I wish good luck to it.

I wish now to refer to the independent companies. I have always thought it odd that my Ministry should be called the Ministry of Transport and Civil Aviation. Aviation, in my opinion, is not civil and, again in my opinion, aviation is transport. More and more we must look upon it as transport, and as we regard civil aviation as a sort of merchant air service—I hope that that concept is coming—it will remove this awkward and anomalous distinction between airlines which are Government owned and those which are privately owned airlines.

Both publicly and privately-owned airlines are trying to do the same job and some are working under great handicaps. They all deserve the support of my Ministry, and of the Minister, regardless of ownership. I do not wish the House, particulary hon. Members opposite, to doubt that I intend to go on doing all that I can to help the privately-owned airlines. That is my duty and I intend to carry it out.

It is interesting to see that in many Ways these airlines are doing well. I have often heard grumbles from B.E.A. that the independents are cutting its throat. But B.E.A. is doing well and so are the independent companies. In many ways both are helping one another, and that is the kind of economy we wish to see. In the inclusive tour and air car-ferry services, and also in other ways, they have done remarkably well. Neither the Corporations nor the independent companies have harmed one another and I shall support any way in which they may get together to their mutual advantage, a tendency which, I hope, will develop over the next year or so.

In 1956–57, the independent companies carried 733,000 passengers, which does not seem a bad record. Their total traffic of 25 million load-ton miles compares with B.E.A.'s figure of 89 million and a great tribute is due to them.

Mr. Rankin

The right hon. Gentleman has given the passenger figure of the independent operators for 1956–57. Will he compare that figure with the figure for 1953–54?

Mr. Watkinson

I will ask my hon. Friend to do so, because I think that I have delayed the House long enough.

Sir Ian Clark Hutchison (Edinburgh, West)

Will my right hon. Friend say something about the development at Prestwick?

Mr. Watkinson

Yes. I left out Prestwick and to do that would be to do something for which I should never be forgiven.

The Government reaffirm that this is, so to speak, our second international airport. The jet era presents great problems and we had to think up a new plan for Prestwick to take account of the new jet developments. That we are doing, so there is no doubt that Prestwick will be able to cope with the problems.

Mr. F. A. Burden (Gillingham)

I hope that my right hon. Friend will not allow his interest in Prestwick to sabotage his references to the independent companies.

Mr. Watkinson

Prestwick has certainly not been left out of the airport plans.

I do not wish to conclude by talking exclusively about the independent companies, but I regard them as part of the merchant air service which to our children, if not to us, may mean much more than we can imagine today. We should do all we can to prepare for the future and to harness every kind of help—whether provided by shipping companies or the Government, or by anybody else—to this end.

We hear too much from right hon. and hon. Members—like the right hon. Member for Huyton (Mr. H. Wilson), for example—who pontificate about our stagnant economy and state that we are not getting anywhere and that we do not know what to do. But here is an example of a new and vigorous industry which is quite prepared to face a challenging and difficult future, and which realises that on its success depends much of the prosperity of our country.

The Government will do all they can to support this industry. They will do so not by going into the business and trying to teach the industry how to do its job, but by encouraging, as I said before—I know that hon. Members opposite do not like these words—the adoption of the most enlightened principles of private enterprise. That is the only way in which this industry will succeed and in that spirit I commend the Motion to the House.

4.26 p.m.

Mr. G. R. Strauss (Vauxhall)

The Minister has given us a full, informative and interesting survey of the civil aviation situation in this country. We are grateful to him for doing so and sympathise with him in his difficult task of trying to concentrate into a short time observations on so many of the problems affecting this industry.

The right hon. Gentleman did so very well but he said some things with which we disagree and some things which puzzled us and are unable to understand. His constant emphasis on the enlightened private enterprise which, he says, has characterised the nationalised industries, seems to us to be complete nonsense. Either we have an efficient and imaginative enterprise, or we have a bad enterprise. Whether it is operated as a private enterprise or as a national enterprise is something different. Obviously, it is the object of all enterprise, to be enlightened. To suggest that private enterprise is necessarily good, and public bad, is meaningless. This part of the right hon. Gentleman's speech fell well below the standard of the rest.

Today, the House is in the happy position of considering two success stories, the Reports of the two Corporations, and also in having the same Minister as we had last year to explain them to us. In view of the constant reshuffling of posts which has been a feature of this Government, due to resignations and other causes, it is gratifying that we have had a comparative measure of stability in the occupation of this most important post. I am not sure whether I would express the same view about some of the right hon. Gentleman's predecessors.

We are considering the highly satisfactory record of these two Corporations. The Minister was a little ungenerous and unfair in his comments about B.O.A.C. when he suggested that the Corporation was not as successful as it might have been.

Mr. Watkinson

I said—I am sure that the right hon. Gentleman will not disagree—that it was not for want of trying on the part of the Corporations. I said several times that no Corporation can succeed unless it has the right aircraft at the right time.

Mr. Strauss

We all agree with that. We all know—the Minister has admitted this—that the difficulty which has affected B.O.A.C. has been the long delays over the Britannia. I am not blaming the Bristol Aircraft Company, though I suppose one could say, if one wished to make a political point, that it is private enterprise on the one hand and public enterprise on the other. But I think it unfair to say that B.O.A.C. has not such a good story to tell because it has not had the right aeroplanes, when the absence of the right aircraft was in no way the responsibility or the fault of the Corporation.

Mr. Watkinson indicated assent.

Mr. Strauss

In spite of that, and many other difficulties which beset them during the year, the Corporations have a remarkable record of achievement. I do not wish to read out the many figures that one could select to prove that point, but I will mention two which I consider are important and symbolic. British European Airways Corporation increased its operating revenue by 11 per cent. and B.O.A.C., in spite of its difficulties, by 14.5 per cent. The number of passengers the latter carried increased by 19 per cent.

Perhaps the best indication of the success of the Corporations is contained in a sentence in page 11 of the B.E.A. Report. The paragraph states: Whereas world air traffic in the past five years has increased by 93 per cent., B.E.A.'s traffic has increased by 144 per cent. Thus B.E.A.'s rate of expansion has been 55 per cent. greater than the overall world average. That is a very striking achievement. In view of that statement, which is unquestionable, it is just worth while reminding the House for a moment—

Mr. Burden

As the right hon. Gentleman is drawing that parallel between the two Corporations it is only right that I should point out to him that, as he criticised the Bristol Aeroplane Company because it did not provide the right aircraft for B.O.A.C., so he should give credit, when mentioning the growth of B.E.A., to the manufacturers of the Viscount, which has been largely responsible for that growth.

Mr. Strauss

Certainly. I give credit to the British aircraft industry as a whole. It is a very good industry. Some parts are not as good as others, but, on the whole, it is excellent. I was not criticising the Bristol Company because of its difficulties, which may have been unavoidable. I hope that that statement satisfies the hon. Member for Gillingham (Mr. Burden). In view of the great achievement embodied in the quotation I have just made, let me recall a comment made some years ago by the right hon. Gentleman who is now Secretary of State for the Colonies. In March, 1949, 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. 462, c. 313.] I mention that quotation not to embarrass the Secretary of State, but because it is very similar to the sentiments which are being expressed today by some of the leaders of the steel industry at the annual meetings of their companies.

Before I deal with wider issues affecting the Corporations, and, in particular, with the problem of new aircraft which the British European Airways Corporation wants to order, I want to make one or two comments and ask a few questions about the Reports. They show, as they have shown in previous years, that there is an extraordinary and continual growth in the popularity of air travel all over the world. It comes out particularly in the Report of the B.E.A. It is truly remarkable that, in the year with which the Report is dealing, one-third of the travellers from this country to the Continent went by air in the summer and more than half in the winter. Particularly revealing is the fact that the great increase in the passenger service of B.O.A.C. has been in the tourist class, which accounts for 57 per cent. of the traffic it carries.

I am pleased that B.O.A.C. is budgeting for a very substantial increase indeed in the amount of its carrying capacity in coming years. Its Report says that in ten years it hopes to quadruple its present capacity. It is clear and praiseworthy that it is looking ahead in such a bold way. The growth of the tourist traffic endorses the view held by many people, including myself and it may be the Minister, that the future of civil aviation depends far more on providing seats in aeroplanes which are cheap rather than in providing aeroplanes which are fast. Those who put the emphasis on speed—on getting to New York an hour or two sooner—are few. What is really important is to provide aeroplanes in which accommodation can be sold by the thousand at cheap rates. The operating companies that will succeed in doing that to the greatest extent will lead the world in civil aviation.

It is for that reason that I regretted to read in today's newspapers that many of the fares for civil aviation will go up in the course of the year. That may be inevitable. I am pleased to see though that a new "economy" class is to be introduced at fares substantially below the existing tourist fares. Even if there is a measure of discomfort for the passengers who travel in that way I have no doubt that there will be a big increase in the number of people who will take advantage of that facility.

Another matter, after the cheapness of fares, which is of immense importance—this opinion is confirmed for me by what I have been told in parts of the world where I have been travelling—is the quality of the service which is rendered by the competing aircraft companies. There is no doubt that our two Corporations have given a fine lead in this matter. I have been informed everywhere that the service rendered by the people who man our aircraft is outstandingly better than that of any other, and is much appreciated.

It might be proper if congratulations went out from both sides of this House on this occasion to all those who are responsible and who operate that service. My own experience is that the friendly, helpful, patient, good-tempered and, with it all, highly efficient service rendered by the officials who meet passengers, and the stewards on the aeroplanes, is beyond praise. It puts all passengers at their ease and makes them feel comfortable and at home.

I desire to put a few questions to the Parliamentary Secretary, and I hope that he will be able to reply to them later. May I take it that there will be no cuts whatsoever, as a result of the Government's new economy measures, during the present year, which will have any harmful effect, however indirect, upon our airlines? I am not aware that the cuts will damage them in any way, but I would like an assurance about this.

We have been told by the Minister that agreement has been reached with Soviet Russia about interchange air services between this country and Moscow. We are all pleased to hear it. The Minister did not say when they were likely to start. Perhaps he does not know and, therefore, cannot tell us, but if he can the information will be interesting and much appreciated. He has told us, further, about the new organisation of London Airport and of the improvements which will take place there. Plans are now being made—they appear to be rather late—for building new reception and departure halls for long-distance aircraft. Everyone who knows the present ones must think they are rather antiquated. Nevertheless, in spite of the very bad facilities, it is remarkable how well things have been managed there. It will be interesting to know when the new facilities will be built and will be available to passengers.

Another point concerns the costs of sales and advertising. One of the advantages of having two Corporations which issue their Reports at the same time is that one can compare their costs and expenses. There is a big discrepancy here. According to the B.E.A. Report, the Corporation's costs for sales, advertising and publicity went up last year by 12.8 per cent., which is understandable in view of the increased costs of the increased services. On the other hand, according to the tables submitted to us by B.O.A.C., its costs went up by 28 per cent. There is an increase of £500,000 in advertising. There may be a good explanation for the difference. It may be justifiable, but it is striking. Whereas B.E.A.'s total costs for these services went up by £250,000, those of the B.O.A.C. went up by £1 million. The difference is such that an explanation is called for, and I hope that it will be forthcoming.

The only other question arising directly out of the Reports is one closely related to the statement of the Minister about the independent operators. The right hon. Gentleman has told us that the independent operators are doing a fine job, that they are part of British civil aviation for which he is responsible, and that he intends to give them every encouragement. He does not pay any attention at all to the comments in the Reports, of B.E.A. in particular, where it is alleged that, in fact, the operations of the independent companies are doing damage—may be, serious damage—to British Europen Airways.

It has never been our view that the independent companies are not rendering a service to civil aviation. We have always felt that there is a place for them and that they can usefully supplement the work done by the Corporations. It has been our strongly held view, and is today, that it would be wrong for civil aviation as a whole if, by competition or other means, they were allowed to erode each other's powers and position. The end of it would be a weakened civil aviation organisation in this country and the prospect for British aviation would be damaged.

Mr. Burden

Would not the right hon. Member agree that we do not want to get this out of balance? There is a case here both for the Corporations and the independents, but the measure of how much independents have been eroding B.E.A. business is surely made clear by the enormous figures of increased traffic which B.E.A. has acquired recently and which he himself gave. There is no erosion at all; there is plenty of room for both.

Mr. Strauss

That is not my view, and it is not the view of the British European Airways Corporation. Because of the importance of this matter, I want to quote one or two comments made in the Report and to ask the Minister whether he thinks the Corporation is talking nonsense or that those comments are correct. In page 26 the Report talks about the work of the independent operators and has some comments to make about the inclusive tour services. There, it is said: The volume of these services to the main Continental holiday centres has, however, now grown far beyond the scale which could be regarded as economically helpful in dealing with peak traffic demands. Further, the Report states: In our view these operations have caused material diversion of traffic from B.E.A.' s services. It goes on, in a paragraph headed "Colonial Coach Services," to talk about the independent airlines services to Cyprus and Gibraltar, and there the Report says: We doubt whether this type of service has, in its actual operation, met those requirements… Those are requirements the Minister previously laid down— at any rate, so far as services to Cyprus and Gibraltar are concerned… In fact, we believe diversion of traffic from our own services has resulted. Those statements were put forward, no doubt, after due consideration by this national airline and cannot be dismissed as nonsense. The question which arises, and which the Government of the day have to decide, is, to what extent it is right to allow independent operators to interfere with the traffic of British European Airways Corporation, and so to weaken it and make it less able in the long run to meet the competition of the many other lines which run over its routes?

Mr. Paul Williams (Sunderland, South)

What the right hon. Member is saying, surely, is that A.T.A.C., in the past, has been sanctioning inclusive tours and other operations of that nature and has behaved in a totally irresponsible way.

Mr. Strauss

I say nothing of the sort. I say that A.T.A.C. has behaved perfectly correctly, following directives given it by the Minister. The Minister has given certain directives and A.T.A.C. is carrying out those directives. It is not the responsibility of A.T.A.C., but of the Minister.

Either the statements in this Report are untrue, in which case the Minister ought to say that he denies them completely, or they are correct, in which case the Minister ought to take some action. It may be that no serious damage has been done so far, although the Corporation says it has. If the situation is allowed to continue, serious damage might be done in future. In this matter, I and my colleagues are not just concerned about B.E.A. because it is a publicly-owned undertaking. We want a strong British civil aviation instrument, or instruments, and do not want anything to be done which will weaken those instruments.

As probably hon. Members are aware, similar problems arise in the United States of America. There, a Civil Aeronautics Board stops this kind of thing happening. It makes no difference whether it is a privately-owned or publicly-owned company, it is stopped if it is against the interests of civil aviation generally. In one year that Board turned down 350 applications from potential operators because, if they had been allowed to operate—although obviously that might have been of some convenience to some people—it would weaken American Civil Aviation as a whole.

Sir A. V. Harvey

Assuming that the right hon. Member is correct, to take one example, B.E.A. has a route from London to Manchester where, more often than not, it is impossbile to get a seat and very few additional aircraft are provided. Does he think that the consumers' interests would be protected if independents were given an opportunity to operate besides the Corporation?

Mr. Strauss

I cannot give an answer on a proposal of that sort—I am not technically equipped and one would want to know all sorts of facts—but the Corporation alleges that it is being economically damaged. When the Minister gave a directive to A.T.A.C. he did so on the understanding that such damage would not take place. The Corporation says that it has taken place. It may be right or wrong, but the Minister must either controvert this statement and say that the Corporation is talking nonsense, or, if the argument is correct, he should modify his instructions so that this erosion will not continue, with harmful results to British aviation in years to come.

We believe that to some extent in the directives he gives to A.T.A.C. the Minister is prejudiced, maybe as a result of the views of hon. Members sitting behind him, in favour of private enterprise as against national enterprise, and he should not have that prejudice. He should look at this British service as a whole and, from wherever it comes, he should look at a threat to British civil aviation as a whole. If that threat is what B.E.A. says it is, he should take some action to counteract it.

Mr. Farey-Jones (Watford)

In view of the last two sentences of the right hon. Member's speech, may I ask how, in his general desire to create a civil aviation instrument, he proposes to give room for expansion of independent airlines if the views of hon. Members behind him are that a B.E.A. monopoly should be created and expanded?

Mr. Strauss

I do not want to create a monopoly. As I have said, the independents can render a service. I want to protect the future of civil airlines in this country just as in America the Civil Aeronautics Board protects civil aviation against erosion.

Mr. Farey-Jones

Ever since it was created, the Civil Aeronautics Board has given a sphere of influence to every single airline operating in or outside the United States. That is what we should do to the independents here.

Mr. Strauss

I really cannot pursue that. I do not know if what the hon. Member says is really related to the situation in this country. Time is pressing and I have given way many times, and I do not want to say anything further on that subject.

I want to come to the part of the Minister's speech dealing with the present requirements of B.E.A. for a number of jet planes which will travel at about 600 miles per hour. The value of the contract is likely to be about £30 million, and it is obviously exceedingly important to all the companies concerned, as well as the Corporation, to know which way the decision is going and which group of companies will get the order.

Speaking as one who always believes everything I see in the Press, I had hoped that the right hon. Gentleman would tell us today the final outcome of all these deliberations, but we were disappointed. The Minister says he hopes to be able to make some announcement before long, and, therefore, we will have to wait. But I want to make one or two comments on this problem.

I believe that the Minister has the right, and that it is his duty, when a big order of this sort is to be placed, to have a say. After surveying the aircraft industry as a whole and considering its future, the Government may have some view as to where an order of this sort is going. There may well be a conflict between the desires of the Corporation and the interests of the aircraft industry, and no one can complain—I certainly do not—if the Government step in and say that they want to have a look at this and may want to offer strong advice to the Corporation before making a final decision. The responsibility of doing so must be that of the Minister. It is not his responsibility to say what type of plane the Corporation wants to buy. The Corporation has decided to buy a jet plane. No doubt the technical advice which it had before coming to that decision was strong and correct.

There are a few laymen, and I am among them, who are rather doubtful whether, in fact, a jet plane is the most suitable for B.E.A., and we wonder whether the Corporation has not been influenced in making its decision by the fact that its competitors are ordering jet planes, particularly Caravel, the French plane; and whether, as jet planes are only economic at distances of 800 miles or more, they are really suitable for this Corporation's services. It is a technical problem, and I can only express an amateur's view. The fact is that the Corporation has decided that it wants a jet plane, and the problem now is where the order is to be placed.

Again, it is impossible for a layman to do more than express tentative comments about the relative potential of the firms tendering for this job. I have no doubt at all that the designs of both groups are very good, probably equally good. The designers, after all, have worked on the specifications laid down by B.E.A., and there is probably not very much between them. But I know very well from my own experience as Minister of Supply—and the present Minister of Supply, who is here today, knows it very well—that what is all important when such an order is being given is to take account of the ability of the firms concerned to carry out that order and to deliver the plane on the date promised and that the aircraft, when delivered, will come up to this specification. This is just as important as, or may be more important than, the qualities of the design.

In this case, what is happening? I only know what has been stated in the Press. On the one side, we have Bristol's and Hawker's, both companies with great reputations and resources, which have produced marvellous planes in the past. They are to set up a joint company to carry out this project. I am doubtful about joint companies. They mean joint control and joint responsibility, and I do not like it. I gather that, in this company which is proposed, the chief engineer will come from Hawker's and the chief designer from Bristol's.

Once we have a joint company carrying out a project there is always the danger of blurred responsibility and loyalties, and it is often, though not always, not satisfactory. I am sure that every care will be taken by both companies to have a satisfactory arrangement, but, prima facie, it is not a prospect which attracts me. I think, further, that it is not necessarily a step towards that concentration of the industry which the Government desire and which must take place. To set up a joint company to carry out some particular project does not bring us any nearer to that complete concentration which means amalgamation of companies, under one leadership and control. That is not taking place here.

On the other side, there is de Havillands, the only firm which has experience in producing a jet aircraft, and in whose team—and it is the team in control of the project which is all important—B.E.A. presumably has full confidence. I understand, and this was confirmed by what the Minister said, that the B.E.A. prefer at present the de Havilland project.

Sir A. V. Harvey

May I qualify what the right hon. Gentleman has just said? De Havilland' s are not the only company producing jet aircraft, as the Avro Company has produced a military jet plane.

Mr. Strauss

I thought I made it clear that I was speaking about civil planes.

Sir A. V. Harvey

No.

Mr. Strauss

If I did not, I meant to do so, and I apologise.

The Government say that they want a company which can do this work out of its own resources, and which will have sufficient not only for building the aeroplane but for meeting all emergencies and difficulties should there be a failure. I understand, though I do not know, that both contending parties maintain that they have ample resources for any possibilities which may occur, and I understand further that de Havilland' s has organised a group of companies to which it is to sub-contract a great deal of its work.

In view of these facts, and unless there are other facts entirely unknown to me and the public, it seems that the Minister will have to have a very strong case, supported by convincing facts, if he is to insist upon the Corporation giving the order to a group other than that which it wants. The Minister is entitled to take such a decision in certain circumstances, but, in the present case I do not see how he could be right in doing so.

There is a point which he mentioned about the Bristol and Hawker group having a team in the United States trying to sell this plane, and, of course, it is true that no planes built for the Corporation can be economic propositions without big sales abroad. I do not think that the sending of this team to the United States is relevant to the situation at all. De Havilland' s could also, if it wanted, send out a selling team to the United States.

All experience shows that air corporations in other parts of the world will only put in an order for a particular plane when it has been accepted by one of the existing corporations, and maybe not even at that stage, but later, when it is evident that it will be a success. Just because one group has rushed in and sent a selling team to the United States, where we know they will undoubtedly receive a friendly response—because the Americans are very friendly and hospitable—the Government should not be in any way biased in its favour.

If one can judge by the expressions on the faces of hon. Members while I have been expressing these views, they have met with a fair amount of support from both sides of the House. Unless the Government have very much stronger reasons than those about which we now know for turning down B.E.A., they ought not to do so; and if they do they will be severely questioned on their reasons. We hope that the decision, one way or another, will be taken before long, as it is undesirable that the Corporation or the two companies—the one that loses the order is likely to suffer severely—should be left in doubt any longer than is necessary.

Before sitting down I wish to say something about the broader aspects of the aircraft industry, because one cannot talk about the Reports of the Corporations and civil aviation generally in the country without making some reference to the aircraft industry. The Corporations not succeed as great operators of airlines unless they had behind them a firm base in a successful aircraft industry. There is no doubt that the present capacity of the aircraft industry has to be reduced substantially and that this is going to be an extraordinarily painful process. It is one which faced the Labour Government just prior to the Korean conflict, and it was a very difficult problem. But something has got to be done about it.

Two things seem to me to be essential. The first is that the requirements of civil aviation and military aviation should De decided and pronounced as quickly as possible. I know that an aircraft requirements committee has been established for this purpose. I hope that its decision will not be long delayed, although, plainly, it cannot answer all the important questions involved in a week or two.

The second thing is that if the British aircraft industry is to maintain its present position and lead, there must be no significant cut in development and research. We have all been worried about this. Forecasts of cuts in research and development were made in the Defence White Paper. We should like to be assured that nothing is going to be done to reduce the amount of research and development in British aviation even if that costs money, for if that happens there is no doubt that the position of the aircraft industry in the coming years will be immensely weakened and that it will no longer be able to maintain its present strong competitive position.

I apologise for having spoken longer than I intended as I know that many hon. Members wish to participate in the debate. However, I hope to be forgiven because on each occasion when an hon. Member wanted to ask a question I gave way. The comments of some hon. Members who will speak after me may be rather more critical about the Corporations than were mine, but I think all will agree that, in spite of grave difficulties beyond their control, these two corporations have during the year we are considering done a fine job. They present to us today a record of steady and, in many ways, spectacular progress.

I am sure that we would all agree, too, that the Corporations have proved that they possess capable and imaginative leadership and that throughout their staff there is a fine spirit of loyalty and service. I do not think that any hon. Member on either side of the House has any reason to doubt that their future, as their past, will redound throughout the world to the credit of this nation's skill, enterprise, vigour and vitality.

5.4 p.m.

Lord Balniel (Hertford)

I feel rather diffident about entering this debate, because I realise very well that civil aviation debates are usually conducted by hon. Members who are rather expert in civil aviation. I must disclaim straight away, before it becomes too obvious to the House, that I have no particular expertese in this matter. None the less, I make no apology for speaking in the debate because there are many thousands of my constituents whose well-being and livelihood depend on the health of civil aviation in this country and, more particularly, upon the health and strength of the aircraft companies.

I, in common with my constituents, have been extremely perturbed by reading a whole flood of Press comments, inspired from what source I do not know—though one would have thought them justified in view of my right hon. Friend's remarks today—to the effect that B.E.A. has reached a decision in favour of purchasing the DH121 jet airliner whereas the Government have reached a contrary decision and are opposing its purchase.

I must confess that I join with the right hon. Member for Vauxhall (Mr. G. R. Strauss) in expressing my disappointment that a decision on these very protracted and delicate negotiations was not announced today. I am sure that my right hon. Friend will be the first to agree that this delay is having a serious and prejudicial effect on the export potential of the aircraft industry.

Mr. Watkinson

I am not sure that my hon. Friend heard me when I said that it was only this morning that my right hon. Friend and I received de Havilland' s final proposals.

Lord Balniel

Yes, I heard my right hon. Friend say that. I was merely going to say that I hoped that, as it was in July last year that Lord Douglas of Kirtleside said he hoped shortly to order an aircraft, it will not be long before a definite decision is reached.

I would also agree with the right hon. Member for Vauxhall in saying that I feel that my right hon. Friend skirted very delicately round this question of negotiations. So far as I understand, we have not been given any explanation at all as to what lies at the bottom of this dispute between the Government Departments and B.E.A. We have not been told why the Government are apparently intervening in favour of one company and not on behalf of others.

When one remembers that the total cost of producing this aircraft, developing it and manufacturing it, is to be borne by private finance, irrespective of which company is involved, whether it be the Bristol Hawker group or the de Havilland, Fairey, Hunting group in association with Rolls-Royce, I think that one must question the matter. I think that the ethical position in which the Government find themselves intervening in support of one group of companies as opposed to another when, in fact, the Government have no financial interest at all in the matter is something which, while understandable, should be explained very fully to the House and justified to the House. To a layman, it appears that the Government are trying to bring indirect pressure to bear, perhaps by means of refusing sanction to B.E.A. to raise the £20 million or £30 million which it needs. It would appear that the Government are trying to call the tune without paying the piper.

Mr. Frederick Gough (Horsham)

In the interests of fairness, I think it should be pointed out that the Government are eventually going to pay for this aircraft.

Members

No.

Lord Balniel

I must disagree with my hon. Friend. The Government, in the shape of the customer, are paying for the aircraft, but the Government are having no financial interest whatsoever in the cost of producing it, and, indeed, is having no financial interest in the risk involved.

Of course, I would agree—perhaps I might quote the Aeronautical Correspondent of The Times—that the Government have an indirect interest in the well-being of the aircraft companies. The Aeronautical Correspondent of The Times says: The organisation receiving the order will have had to satisfy the Ministries that they have ample financial, technical and production facilities to carry the project through without any risk of the Government having to come to the rescue at any stage. Presumably, the Government's interest lies either in the production facilities or in the financial strength of the companies, but, equally presumably, these very matters have already been looked at by B.E.A. Presumably, before reaching a decision B.E.A. sent its auditors to the various companies to see their financial structure. It must also have sent its engineers to the Bristol-Hawker Group and the de Havilland group to see whether the necessary production facilities are available.

In winding up the debate, will my hon. Friend say whether B.E.A. is completely satisfied with the production facilities of the new de Havilland organisation—production facilities which are available in the constituency of my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson) at Christchurch, at Hatfield, at Chester, and at Portsmouth; production facilities which are available through Hunting and Fairey at Luton and Hayes? Is not B.E.A. completely satisfied that those production facilities are quite adequate? Is not B.E.A. equally satisfied that the financial strength of the company is completely adequate?

What is wrong with a financial structure in which 67½ per cent. of the financial risk is borne by de Havilland, 22½ per cent. is borne by Hunting, 10 per cent. is borne by Fairey and the total cost of the installation and the total cost of the development of the engines is being borne by Rolls-Royce? I hope that my hon. Friend will be able to confirm that B.E.A. is completely satisfied with the production facilities and the financial facilities of this organisation of companies.

I think that in spheres other than those who earn their living in civil aviation, many of the ordinary public would be very disturbed if B.E.A. were ordered to buy an aircraft other than of its own choosing. I think that many people would regard it as a very serious matter indeed if, having chosen an aircraft on grounds of its efficiency, its economic operation, its safety and also because of the confidence which it has in the company making it, B.E.A. were then over-ruled by Government Departments for reasons entirely unrelated to the efficiency of the aircraft and were ordered to buy another aircraft.

If that happened, I feel that it would be extremely difficult for B.E.A. to inspire among its staff the confidence in the aircraft which is so necessary. While my right hon. Friend perhaps has the power to force B.E.A. to buy an aircraft which it would not choose of its own will, he certainly has not the power to force operators of overseas airlines to buy the same aircraft and it would not commend an aircraft to overseas airline operators if it were known that B.E.A. were forced to buy it against its wish.

I should like to ask my hon. Friend whether he can give a categorical assurance to the House that B.E.A. will not be directed to purchase any aircraft other than that which it itself has chosen.

5.14 p.m.

Mr. A. E. Hunter (Feltham)

I have already questioned the Minister about the future aircraft requirements of B.E.A., I have a number of matters to raise on the Annual Report, I know that a number of other hon. Members wish to take part in the debate and I therefore will not follow the noble Lord the Member for Hertford (Lord Balniel) in his line of argument except to say that I have sympathy with him in the subject that he has raised and that I hope the Minister will take a careful note of the important points which he has made.

The Minister has made an interesting statement today. I have often disagreed with him on high policy and other policies, but I feel that he brings a modern mind to this great subject. He sees the vast possibilities of air transport for Britain in the future and he brings a young modern mind to a policy of expansion. He sees the great field ahead. When he mentioned that by 1968 13 million passengers would pass through London Airport each year, he revealed that air travel, for Britain and the world, will expand in the years ahead.

Despite a difficult year, the Annual Report and Accounts of the airline Corporations for the year ending March, 1957, show a surplus of trading profits and report progress and expansion. We are still in the early days of air transit and there are many difficult days ahead, but I am confident that air travel will continue to grow and that the Corporations in this country will continue to expand. This is an important part of British industry. The tourist trade is worth a good deal to this country in foreign currency, and it is, therefore, in our interest to encourage air travel and to encourage foreign visitors. It is also important to the aircraft industry, if wisely directed by the Government.

The noble Lord the Member for Hertford said he was a layman in these matters. So am I. My interest has grown from a constituency point of view. I do not know whether the Minister took an interest in civil flying before he became Minister of Transport and Civil Aviation, but he certainly takes an interest in it now. Like him, I find civil transport fascinating and absorbing. Although I take a great interest in London Airport and the airline Corporations initially from a constituency point of view, I have found the study interesting and well worth while.

The Corporations have brought to south-west Middlesex problems such as those mentioned by the Minister and others which I shall mention. We have the problem of noise and of travel and of the pressure on housing accommodation. In addition, however, the Corporations have brought great benefits to south-west Middlesex in that they are very large employers of labour. The Corporations employ about 20,000 people in the United Kingdom and altogether about 30,000 work at London Airport. This has brought problems, but it has also brought great benefit through the Corporations being such large employers of labour in south-west Middlesex.

Among the problems confronting air transport is that mentioned by my right hon. Friend the Member for Vauxhall (Mr. Strauss). He rightly said that cheaper fares were as important as more speed. If we are to expand air travel so that people from all classes of the community can use it, we must offer cheaper fares. I am sorry that an increase has been announced by B.O.A.C. in the Press today, and I hope that the Corporations will pursue a policy of endeavouring to offer much cheaper fares in the future, and that they will seek international cooperation for this policy.

We can see great progress in B.E.A., and the opening this summer of Gatwick Airport will help that Corporation very much. I understand that it is to operate on Channel Islands traffic during the holiday season. Here I should like to congratulate B.E.A. on its advertising. Those who have seen its advertisements on television of the all-in holiday will know that it is very effective and well done. I am very glad to be able to give that word of praise.

The Minister spoke of the problem of travel to London Airport. As hon. Members know, the Bath Road is very crowded, and if either the B.E.A. or the B.O.A.C. coaches are delayed as a consequence, the aircraft also are often delayed. There is need to take some of the traffic off that road, and off the upper length of the road leading to the airport, so I am very pleased that the right hon. Gentleman is considering the monorail system, or a railway link between Central London and the airport. In that way, I hope, this problem will be solved in the very near future.

Reference has also been made to the aircraft industry. I believe that the success of the Corporations is now of paramount importance to that industry. The alterations in defence policy and the cancelling of military contracts means that, in future, the industry will have to depend on supplying the needs of civil aviation. The Minister of Supply, in a recent interview with trade union representatives, when told that redundancy was taking place, pressed on the union representatives that, in future, orders must be sought amongst the civil aircraft companies. We have the independent operators, but I think that all hon. Members will agree that the two Corporations will now be the main source of the industry's orders.

The success of B.E.A. and B.O.A.C. cart also help the British aircraft export industry. On the last occasion that this matter was mentioned, the House was told that that export trade of aircraft and aircraft parts amounted to over £100 million. Therefore, with an expanding industry, and with more people travelling by air, the industry's exports to India and to Asia, for instance, can be most important, especially when many employees are unfortunately facing the prospect of redundancy.

I know that the Minister has taken an interest in the noise problem, and from his Answers to Questions that I have put to him in the House I know that he is consulting the international airports, and has warned aircraft manufacturers to pay attention to this matter. In addition to noise, there are many other problems connected with air transport, that are not confined to this country. Could not the Minister take a lead in trying to bring about an international conference of the leading air Powers, so as to secure co-operation with other countries on such things as safety of travel, noise, vibration and damage, and cheaper fares?

It is not clear who is legally responsible for damage caused by aircraft, and this is a matter which worries not only householders living near international airports but local authorities as well. Is the Minister, as owner of London Airport, responsible for such damage, or are the operators? This point was put by my hon. Friend the Member for Uxbridge (Mr. Beswick) in a recent debate concerning alleged damages to houses in my constituency. I am sorry that my hon. Friend is unable to be here today to take part in this discussion. He always takes a great interest in the work and progress of the Corporations. Could not the Minister attempt to get standardisation of liability or procedures for damage? As, even now, we are only on the eve of man's discovery of the skies—after all, it is only a matter of thirty or forty years since man began to fly—could we not try to get international co-operation on some of the matters I have mentioned? Let us trust that the bomber aircraft will disappear, and that the civil aircraft will take its place.

There was once a song called either "The Skies are Free to Everyone", or "The Air is Free to Everyone". The Minister spoke of the freedom of the skies being needed for our civil aircraft in much the same way as the British Merchant Fleet needs the freedom of the seas. With the great technical and scientific advances being made, could not the Minister take the lead in getting an international conference such as I suggest to discuss subjects such as I have mentioned? It might be much easier to get agreement on civil flying than on disarmament. I very much hope that the Minister will give consideration to my suggestion.

I take a great interest in the Corporations, because so many thousands of my constituents work for them. My right hon. Friend the Member for Vauxhall referred, quite rightly, to the keenness of the staff. I find that all employees at London Airport, whether crew or ground staff, are very keen indeed to makes the Corporations a great success. I welcome this debate, therefore, as I feel that the future and success of the B.E.A. and B.O.A.C. is linked with the future and success of Britain as a great civil flying Power for peace and progress.

5.29 p.m.

Sir Arthur Vere Harvey (Macclesfield)

I am sure we have all listened with great interest to the views of the hon. Member for Feltham (Mr. Hunter). In the years since the war we have had many interesting debates on this subject, and I have noticed that there has always been at least some degree of unanimity on the main issues as they affect this country. In those debates I have, I think, invariably declared my interest in the aircraft industry, but I am now on the eve of leaving it completely—a decision I took some eighteen months ago. My efforts in business will take me, I hope, into a less controversial, though, perhaps, not less interesting a sphere.

The revolutionary development that is taking place in the missile field has brought the aircraft industry up against a major dilemma in the last twelve months or so. Almost overnight, the demand for military and civil aircraft has rapidly decreased, and the same applies in the United States. That can be compared with the situation in 1950, when there were 50 different aircraft projects under consideration. If I might say so, the Labour Government of that day, through the Ministry of Supply, initiated rather too many different aircraft projects.

I want to say a word about supersonic aircraft. We have got aeronautics with us for good. Whatever form or shape or size they may take, they are with us. Undoubtedly civilian supersonic aircraft will come, and I am concerned at the very little we are doing in the investigation into the future of supersonic aircraft. So far as I know, no suitable engines are being developed, and if Britain is to do her part it is essential that the engine-makers be given encouragement to go ahead. If we started now with the engine and the airframe, we should not have an aircraft ready until 1970. It would take from 10 to 12 years to get a civilian supersonic aircraft flying.

Looking at the world traffic in the next ten years, Mr. Raymond of the Douglas Company in America estimated that by 1967 the world cargo volume will be 11 billion ton miles, which is tremendous. It shows the prize there is if we go out and grasp it. But this demands special new aircraft, and it should be linked with aircraft which are capable of carrying bulk cargo. Very little is said these days about the freight business, and I believe that there is a tremendous future if only we concentrate upon it. The freight figures of B.E.A. have gone up considerably because of the larger hold in the Viscount; but, even so, that is not nearly enough. We want special cargo-carrying aircraft operating at night. They could earn revenue carrying bulk equipment not only on the Continent, but over the Atlantic as well. Ordinary airliners are quite unsuitable for that task.

Mr. Burden

Would my right hon. Friend agree that it is absolutely imperative that the Government and the aircraft companies should look into this problem, in view of the enormous freightage which will come about with the inception of the European Free Trade Area?

Sir A. V. Harvey

Yes, I quite agree. That will enhance the possibilities. I think one should mention that the Armstrong Whitworth Company and the Hawker-Siddeley Group are building the Type 650, a freight carrier, which is a private enterprise effort with no Government finance involved. I should like to know if the Corporations are seriously looking into this. Airwork had a go at it across the Atlantic. They failed because they had little or no Government support. They had to fly the Atlantic with freight that they were able to pick up and watch American aircraft carrying British mail.

Mr. Ian Mikardo (Reading)

The Corporation was prevented by the Government from offering this service.

Sir A. V. Harvey

No attempt has been made to do it since Airwork failed, and there has been nothing in the Report about it. I should like to know if the Corporations are looking into it and whether the independent companies are being encouraged.

Taking an area of the globe enclosed by a circle of 6,400 statute miles with its radius centred on London, this would encompass nearly all the main cities in the world. In this area lies 58 per cent. of the world's land area, 50 per cent. of its population and 90 per cent. of its commerce. Here, as I see it, civil aviation is going ahead much faster than any of us realise. In the years since the war, passenger traffic has gone up on the average from 16 per cent. to 20 per cent. each year. As soon as prices come down for the individual, as they will with faster aircraft—not immediately, but in the years to come—great things will happen. It will be possible to connect London with any capital city in the world in less than a single day's flying.

The present position is not an easy one, as the right hon. Member for Vauxhall (Mr. G. R. Strauss) said. One has to consider the aircraft industry in the context of the problem we are discussing. It is not an easy situation either for the operators or for the aircraft industry. Tremendous sums of money are involved; things can go wrong, and the risk is tremendous. The industry is obviously going to be cut even more, and I should like to see the development carried out sensibly. I should like the industry to be taken into the confidence of the Government and to be told in more detail what are their intentions in the military field. If it were possible to build civil aircraft in the same plant as is used for military aircraft, the overheads in connection with building civil aircraft could be kept down.

The Ministry of Supply has far exceeded its powers in dealing with this problem. I recognise that the Treasury has got to give consent to B.E.A. to make the investment, but, after all, it is private money which is backing the venture. My right hon. Friend the Minister of Transport is quite right to ask the Minister of Supply to look into this matter, but I think he has got out of his depth in the last two months. I wish he had left it a little more to the companies and to the Corporations to determine their own affairs. I am sure he has done his best, but I think he has been influenced by the civil servants who surround him at Shell Mex House. My experience of them does not lead me to say that they are the most efficient people in this business. There are some very good people there, but there are also a great number of third-raters.

If we consider the question of B.E.A. jet aircraft, it seems that one firm was prepared to carry the financial responsibility and brought the others into line in saying that they would do so. So it seems that some good was done in that direction. I recognise that the Treasury and my right hon. Friend have got a weapon in dealing with contracts. But what is the result? There has been squabbling and bickering and, I would go so far as to say, some double-dealing [HON. MEMBERS: "Oh."] That is my information. Although I am within the privilege of the House, I am not going to give the facts. The plan to bring three firms together, which was the intention three weeks ago, is quite impossible. It does not work out in practice. Imagine throwing together design teams who have been built up over a period of years. Imagine them suddenly being told that they have got to work with another team eighty miles away. They would be looking over their shoulders for the first two years. I am sure it would not work. It would not help the industry or the project.

Mr. Mikardo

I do not disagree substantially with the argument which the hon. Gentleman is putting forward, but I would draw attention to the very strong and serious allegation that he has made of double-dealing. It is the problem of the Government, not mine, but I hope that if that allegation stands on the record the Joint Parliamentary Secretary will have something to say about it when he winds up.

Sir A. V. Harvey

I do not want to modify what I have said, but I think it ought to be put into its correct perspective. There have been firms desperate to get this order, and I think that they have gone beyond the ordinary bounds of business in trying to do so. I will perhaps put it that way.

Mr. Gough

I seldom agree with the hon. Member for Reading (Mr. Mikardo), but I find myself in complete agreement with him on this matter. We are speaking within the privilege of this House, and if there is double-dealing it is our duty to say so. If my hon. Friend is not going to give details, he is casting a slur on both sides of the House. We do not know if the double-dealing has been in my hon. Friend's constituency or in other constituencies where the Hawker-Siddeley and Bristol groups are situated. Will my hon. Friend say where the double-dealing lies?

Sir A. V. Harvey

I do not want to become involved in personalities, because I do not think it would help, but I did modify what I said. What I was getting at was that the original agreements between the Bristol Company and de Havilland's were torn up in the middle of the negotiations and then the other two got together. I think it is probably best to leave it at that.

I am quite unbiased in this matter. All I want to see happen is that B.E.A. should have the best aircraft that can be built for it. One has to take into account past successes, and even past failures. de Havilland' s has something like 45,000 flying hours behind it with various types of Comets, on flights to Woomera, Christmas Island, across the Atlantic, and 15 times a week to Beirut. This is a great deal of experience of fully pressurised fuselages. One cannot ignore it in weighing up the merits of these two propositions.

Avro, of course, has successfully built the V-bomber, which is pressurised only in the nose. That is a subtle difference; but there is great experience behind that group, including Bristol's, which is now happily operating the Britannia as a very successful aircraft. It will take a great deal of careful thought and consideration to decide which proposition is the better.

If the three firms could have been brought together as a consortium it might have been the ideal thing, but we must be guided by B.E.A. I have been highly critical of B.E.A. at times when it has needed a jerk, but in the last few years Lord Douglas has built a very fine team of men around him, together with technicians who decide upon the equipment which he wants to operate. He has done a far better job for B.E.A. than has been done for B.O.A.C. in these past years. He has a more efficient airline. He has technical men to help and advise him, and I hate to think what will happen if that advice is not taken. I leave that to the imagination of hon. Members. I hope that at any rate a decision will be taken very soon and that we shall get on with the job.

B.O.A.C. last year, and the year before, bought some DC7 aircraft with dollars, and we were told at the time that if British aircraft came along those would be replaced and sold. As the Britannia has proved a successful aircraft, will the DC7s be sold for dollars and further Britannias ordered from Bristol's? It would be logical to do so if the industry is short of work, and I think that the DC7s could be sold in a very ready market. In deciding these matters, we must take into account the fact that the airlines of the world combined make 1.5 per cent. net profit. This is very small, and there may be difficulty in obtaining capital for world airlines. This is why prices go up, but perhaps we shall soon reach a standstill for a period so that we may consolidate what has been done in the past ten years, both in design and in the amenities offered to passengers.

I was horrified in September and October at the bad publicity put out by B.O.A.C. about the Britannia. It became world news and denigrated British efforts. When similar things happen in America, we are the last to hear about them. The Americans keep very quiet about their failures. Their Stratocruiser was frequently grounded a few years ago, and it was often described as the best three-engined aircraft in the world. The Americans never told us their troubles, and the aircraft went on selling. I hope that B.O.A.C. will handle these matters at a better level in the future.

Reference has been made in the debate to research and development, and I beg my right hon. Friend, who is in the Cabinet, not to cut the Estimates on this account at all. Last year about £200 million was spent. If the figure is cut it will be the death-knell of the aircraft industry in Britain; but for heaven's sake let the Government see that the money is properly spent. I should like to see all aircraft when built tried out at Boscombe Down and there get through their teething troubles away from the public eye. I should also like to see a good deal of the money that is devoted to research and development spent on accessories. It is not the aircraft frames that fail but the bits and pieces which go into them untried in service. The Americans have the advantage that their accessories are tried out in military aircraft before being installed, as in the Boeing 707s, where they give a satisfactory performance. We do not do that. There is a lack of co-operation between the military and civil authorities.

Although I have been connected with a firm concerned, perhaps I might be allowed to mention laminar flow, which sucks air into the wing and improves performance by as much as 38 per cent. It would be a revolutionary event if this device were developed, but the difficulty of persuading civil servants even about the prospects in this field involves years of hard work and effort. We require a clear policy for military and civil aircraft. I hope that the Minister of Defence will soon come to a conclusion on matters which have been outstanding since the White Paper was published. There should be decisions on both the military and civil side, because the two go together and these decisions affect not only defence but our own airlines and our export trade.

I ask my right hon. Friend to consider seriously setting up an air policy tribunal, a body of men quite independent of the industry. It should be composed of men like Lord Hives, now retired, who got to the top the hard way. Somebody like him as chairman, if he would serve, could do a tremendous job for the country. In America, the Findletter Commission does a great work in this respect. A body such as this could inquire into the Corporations, the independent airlines and Fighting Services, and into any branch of the industry and advise the Government. In view of the changes in Ministerial appointments, it is necessary that some such body should be in being.

Britain is not lagging behind at the moment. It undoubtedly leads the world in engines, although the lead has been shortened in recent years. In the Britannia we have what the Americans have not got, whatever they care to say about it. We have the best airliner in the world. We have also some remarkable heavy bombers. We must maintain this lead. Our whole economy revolves round the country putting its efforts and brains in such things as nuclear energy, about which we heard such good news last week, and the aircraft industry. The only way to success is to spend money in the early days on research and development. We shall never reap dividends unless we do that. I urge my right hon. Friend to do these things for all he is worth, to see that the money is wisely spent and to ensure that clear-cut guidance on policy is given to the industry and to the airlines. If those things are done, we shall hold our own.

5.50 p.m.

Mr. Cledwyn Hughes (Anglesey)

The hon. Member for Macclesfield (Sir A. V. Harvey) has great experience in civil aviation. As a result, he is listened to with great respect when he makes his contributions to these debates. It is all the more unfortunate that he made his allegation of double dealing without any shred of real evidence to support him. It was unworthy of him. I also thought his reference to third-raters in the Ministry was uncalled for. He gave no reasons for making the statement, and I do not think that he should have made it.

In common with previous speakers, I was gratified to learn that, despite great difficulties, B.E.A. was able to increase its total traffic in the year under review by as much as 14 per cent., and also to show a net profit of over £200,000. The rate of expansion of B.E.A. has been remarkable—55 per cent.—greater than the overall world average. It is all the more noteworthy when we consider that it was achieved in the year of the conflict with Egypt and of general unrest in the Middle East. There is no doubt that the two British Corporations carry a reputation for reliability and efficiency of service in all the countries in which they operate which is second to none, and the House of Commons should be proud that this is so. But having praised these achievements, as a member representing a Welsh constituency, it is now my duty to criticise B.E.A. for its complete lack of initiative in Wales.

There is a growing body of opinion in Wales which is resentful of the continued neglect of the Principality by B.E.A. I would remind the House that Wales is the only country in Europe this side of the Iron Curtain which is not served by the Corporation. I have said before during these debates, and I say again, that when B.E.A. was sustaining losses Wales, through taxation, was bearing a share of those losses. Since, however, B.E.A. has been making profits Wales has derived no benefit. Hon. Members on both sides of the House must accept that this is grossly unfair, so I hope the Minister will make the strongest representations to the Corporation to ensure that a start is made shortly in providing regular services in Wales.

Many of us had hoped that Wales would have derived some benefit from the new Anglo-Irish Air Agreement of 1956. We felt that the monopoly previously enjoyed by Aer Lingus was hampering developments in Wales, but in the event we are no further ahead, as the Minister knows. The Schedule to the new Agreement included four new Welsh routes, but three of the routes were to and from Haverfordwest, which had been closed by the time the Agreement was concluded, and so we did not derive any significant benefit from the new Agreement.

Page 49 of the Report before us states: B.E.A. is keenly aware of its responsibility to the British public, and the Corporation welcomes constructive criticism. Up to the present the Welsh section of the British public is non-existent as regards B.E.A. The Report deals at length on pages 16 and 17 with domestic services and states that it is the intention to continue the expansion which has been so marked a feature of the domestic routes in recent years. It goes on to say: With the co-operation of the regional Advisory Councils, we believe that considerable progress to this end can be made in the next two years. When the Minister winds up the debate, will he say whether Wales is to share in part of this progress during the next two or three years? I know the Minister knows that the Welsh Advisory Council on Civil Aviation has been urging some modest development for years without any noticeable result.

I want to make the following suggestions to the Minister. First, a regular service from Haverfordwest to London via Swansea and Cardiff should be given serious consideration by B.E.A. Haverfordwest serves a large catchment area in South-West Wales and will become increasingly important as the development of Milford Haven as a great oil port gets under way. Swansea and Cardiff are the centres of a great industrial area, and the argument which the Report advances on page 16 in relation to Manchester and Birmingham as important feeder links with the Corporation's international network is equally applicable to Cardiff and Swansea.

Secondly, I would refer to the three daily services to Dublin operated by B.E.A. during the summer. Is it not practicable to include an airfield in North Wales on one of these routes? The Minister knows that there are airfields in Wrexham and that there are first-line airfields in Anglesey; so it should not be beyond the bounds of possibility to include some position in North Wales on the route from London to Dublin.

These are modest suggestions, and I hope that the Minister will put them forward to the Corporation. It may well answer that it can hardly add to its difficulties when it is already running the domestic services at a loss. My argument is that our demands are reasonable and that the Corporation cannot leave Wales out of the picture indefinitely. I do not underestimate the contribution made by Cambrian Airways which, as the House knows, is an independent air company operating in South Wales. It has made a contribution since the end of the war which should be praised, but I have come to the conclusion that when B.E.A. entered into its agreement with this company on 9th May, 1956, the Corporation shrugged off its responsibilities towards Wales, and this is unworthy of a public corporation. I do not know the financial position of Cambrian Airways, but I am sure it could not afford to operate a service with the risk of any loss.

What if, for example, B.E.A. discontinued the present Isle of Man route? Could that be run profitably by a private company? Cambrian Airways deserves every encouragement, but we need two basic, regular services in Wales—one in South Wales and one in North Wales—run by the public Corporation. Here I draw the attention of the Minister to the maps at the end of the Report, and I would remind the right hon. Gentleman again that the Corporation is not leaving a city or a region out of its programme but is neglecting a whole country which, through its industry and its tourist trade, is making a vital contribution to the economy of these islands.

5.58 p.m.

Mr. Farey-Jones (Watford)

I shall confine my remarks to as few minutes as possible. First, I congratulate the Ministry of Civil Aviation on the extraordinary wisdom of its direction since we were last discussing the problem we are discussing today. I want to place on record that I have the gravest fear of the shotgun marriages that apparently are taking place behind the scenes at the present time, because therein lies a menace to the future of civil aviation and to a number of other industries. I deprecate it when I hear anyone in the House say that any board of directors, however they are or were created, should be dictated to by the gentlemen in Whitehall about the machinery or instruments they should use. That is a vital principle of civil aviation from which this House must never depart.

If rumour is true in this case these shotgun weddings are apparently being directed by the Ministry of Supply. In civil and military aviation the Ministry of Supply has been for years the biggest barnacle on the keel of efficiency that ever was. [Laughter.] That is mixing my metaphors, but I hope very much that the practice will not be allowed to continue. I say that because, when it conies to discussing the efficiency of firms like de Havilland's or the Bristol Aeroplane Company, that is not what is really at the heart of this matter.

There are thousands of people in my constituency who are directly or indirectly engaged in the consideration of aviation problems, just as there are in the divisions of many other hon. Members. But, good heavens, what a terrific mistake this House would be guilty of if we said to a nationalised Corporation or to a private enterprise concern that it must use the equipment which a buffoon—I said "buffoon" not "boffin"—in Whitehall said it should use. I hope my hon. Friends will never be a party to that.

I should like to know whether either of the Corporations has a far-seeing plan for what is becoming a growing menace in civil aviation—the shortage of pilots. All engaged in the aircraft industry know that within three years from now there will be a desperate shortage. Most hon. Members know the reason for it. I should like a scheme to be organised to provide a pool of pilots for the Corporations and any other companies which may be engaged in aviation.

I should also like to know whether the Department is playing any part in a vital development, the development of atomic-powered flying-boats. Is there any scheme for equipping the Princess flying-boats with atomic power, thus starting a competely new venture in aviation?

I want the Minister to tell me whether the Government would regard with favour the development of a helicopter corporation to serve the remote parts of Wales and Scotland? We already know that helicopter services can be made to pay. I should also like to know whether the Prestwick Pioneer will be developed in various parts of the world. We know that the late managing director of the company did a wonderful job with the aircraft, and we should like something done about it.

Both Corporations have, in the last year, done a better job than they have done for many years previously. However—let us make no mistake about it—even foals could provide additional passenger services with flying developing as it is today. Only wise men realise that ten years from now the traffic will be fantastic, so much so that neither a developed nor an extended London Airport or, Gatwick Airport will be able to deal with its. In the light of my experience in air transport, I am convinced that this country' must synchronise with its land plane development the development of atomic flying-boats, and I hope that the Minister will have something to say on that subject tonight or on some future occasion.

Because air transport is so seldom discussed in this House, I feel that tonight a very great tribute should be paid to the pilots of the Corporations who have performed a fantastic and wonderful job in the last five years. I hope that the House will support me in that tribute.

The Deputy-Speaker (Sir Charles MacAndrew)

Mr. Mikardo.

Mr. Mikardo

rose—

Mr. Rankin

On a point of order, Mr. Deputy-Speaker. Are we to understand that with the intervention of my hon. Friend the Member for Reading (Mr. Mikardo) the debate is now concluding?

The Deputy-Speaker

I understand that the arrangement made through the usual channels was that the debate should finish at about 7 p.m. and that we should then proceed with the debate on the Report and Accounts of the North of Scotland Hydro-Electric Board.

Mr. Rankin

May I point out to you, Mr. Deputy-Speaker, that I was given to understand that the arrangement to close the debate at 7 p.m. was a flexible one and that those who desired to participate in the debate would not be excluded? Is that now not the case?

The Deputy-Speaker

So far as the Chair is concerned, this debate could continue until 10 p.m.

Mr. Rankin

May I take it, then, Mr. Deputy-Speaker, that hon. Members on both sides of the House who still desire to contribute to the debate will have a right to do so when the Front Bench speakers have finished?

The Deputy-Speaker

When this debate comes to an end it will be wound up by two Front Bench speakers, one from each side, and they will be followed by two more Front Bench speakers opening another debate, the one on the Report and Accounts of the North of Scotland Hydro-Electric Board.

6.7 p.m.

Mr. Ian Mikardo (Reading)

I think that, in the light of what you have just said, Mr. Deputy-Speaker, we are approaching the end of a debate which, in common with most of the debates that we have on civil aviation, has been characterised by an absolute minimum of heat and controversy and by a series of constructive speeches from both sides. In case the—

Mr. Rankin

I am sure that my hon. Friend will realise that certain rights have been abused this evening. The whole thing is a swindle.

Mr. Mikardo

I was about to say, when interrupted by my hon. Friend the Member for Govan (Mr. Rankin), who is now leaving the Chamber, that, in case the Joint Parliamentary Secretary is in a state of palpitation, I want at once to assure him that the report which appeared on the front page of the Daily Express this morning to the effect that the Opposition intended to divide the House on this Motion was characterised by the same level of inaccuracy as characterises almost all that appears in the Daily Express except the football scores.

My only regret about the debate—I say this as one whose occupancy of a seat on the Opposition Front Bench is highly temporary and transient, and, indeed, fleeting—is that there has not been time for more back bench Members to take part.

I wish, first, to comment on a number of points arising out of the Reports of the two Corporations. Secondly, following the excellent example set by the Minister, I wish to direct the attention of the House to some of the long-term problems which face the industry, and, in particular, some which arise out of the structure of the industry.

I shall deal, first, with four points in the Reports which seem to me to be worthy of particular comment. The first, which has so far escaped attention, is the fact that the two Corporations, like all other enterprises, both publicly-owned and privately-owned, are being seriously and adversely affected by the high cost of money resulting from the Government's economic policies.

The fact is, and it is a great pity, that the more enterprising an organisation is—I repeat that this is true whether it be a public or a private one—and the more it seeks to make its equipment and methods the best and most up to date, the more it is penalised by the high interest policy. There is evidence in the Reports of both Corporations that they have not escaped from this.

The accounts in page 84 of the B.E.A. Report show that during the year the Corporation's bank loan rose from £500,000 to £1½ million. I should very much like to know what rate of interest the Corporation has to pay on that. The bank balance of B.O.A.C. is shown in the Report at no less than £10,800,000. I have gone closely through the accounts and supporting statements, but nowhere can I find anything which indicates what the Corporation has to pay in interest on its loan; but it is, clearly, a very substantial amount. These seem to me to represent unnecessary burdens, created entirely by Government financial policy, to place upon two Corporations in an industry in which, as everybody readily admits, the financial margin within which one works is very narrow indeed.

Secondly, I want to refer to the section of the Report—in page 39—which deals with airport planning. The right hon. Gentleman directed a good deal of his speech—and I am sure that we are all very grateful for what he said and for the information he gave—to the many problems which arise in airport development. I am sorry to have to introduce a critical note and I do so only because I draw attention to past mistakes in order to do what I can to ensure that the same mistakes are not repeated.

We have recently had, with a great flourish of trumpets, the opening and bringing into use of the Queen's Building, at London Airport. I am sorry to have to say that the Queen's Building is one of the most inefficient institutions for its purpose which I have ever come across in a very long career. In some respects it is an absolute mess and the right hon. Gentleman and his Department are responsible for it. In some parts it is impossible to do the work which is supposed to be done there.

That illustrates the folly of designing work places and working spaces without consulting the chaps, or their representatives, who will have to work in them. Intricate work has to be done in parts of the Queen's Building which have no access to the outside and where there is no natural light and no ventilation. The conditions make it impossible—not difficult, not embarrassing, not uncomfortable, but impossible—for the personnel who have to work there.

What the Ministry now has to do, after the building has been finished and made to look so pretty-pretty and opened with a great flourish of trumpets, is to rip out the walls and rip up floors in order to install air conditioning for the middle of the building. That would have been much cheaper if it had been done when the building was being erected in the first place. It might not have been necessary at all if the Ministry had taken the simple precaution of asking some of the people who were to work there what it would be like.

Many people have to work in the building. Many said that they would not work there. If they had carried out that threat—and they would have been quite justified, because conditions are appalling—that would have been most embarrassing and damaging to British European Airways. They finally said that they would be willing to work there if the Minister undertook that by the time the hot temperatures of the summer came along, when the place would become a bakehouse, the air conditioning would be installed.

That promise was given, but I understand that not only has no start been made with the installation of the air conditioning—and it should have been started by now if the work was to be finished by the summer—but, after much "hoo-hah" and haggling, the Ministry has not yet placed the contract for the air conditioning work, so that it is virtually certain that the building will not have civilised working conditions by the summer.

The Minister has said that there is to be a new long-haul building to replace the present somewhat unsatisfactory facilities—we all know why they are unsatisfactory—at the northern end of the airport. I suggest that he should ensure that the silly and thoughtless errors made with the Queen's Building are not made in this new building. The best way to ensure that is by seeing that before designing gets too far the people who will have to work in the building, or their representatives, are consulted about the design and the conditions of the workers.

Thirdly, I stress that each Report contains an excellent example of the value to the Corporations of the advice which they get from the trade union side of the National Joint Council. If any justification of the value to management of using the knowledge, sense and experience of the representatives of the people who work for it were required, it is provided by the two Reports.

The example in the Report of B.O.A.C. concerns the engine and propeller repair establishment at Treforest. It is not so long ago that the Corporation was seriously thinking about shutting down that establishment. Even more recently it was talking about running it down, if not shutting it down, to a small fraction of its present capacity. It was only because the trade unions did a serious job of examining the potential forward load for Treforest and arguing it until they were black and blue in the face that the management of the Corporation was finally persuaded that there was a permanent job for Treforest to do.

The Corporation is now clearly very glad that it took the advice of the unions, because in page 5 of the Report it says: The question was carefully studied and it was considered that the balance of advantage rested with overhauling these engines at the Treforest factory"— instead of sending them back to the manufacturers— which is accordingly being equipped for its new tasks. That is an excellent example of the way in which workers' participation in management is of great value to both sides.

The measure of that value is to be found in page 36 of the Report, where the accounts of the Treforest establishment appear. They show that profits in the year under review nearly doubled compared with the previous year. That, I repeat, is an establishment which might well have been shut down, but for the insistence of the workers and their representatives.

In page 42 of the Report of B.E.A. is a paragraph headed "Base expansion." I have seen the new hangar of British European Airways and I think that it will be a magnificent job, but I smile a little wryly when I remember that two or three years ago, when we were arguing about the closing down of the Renfrew base, the representatives of the workers said that Renfrew base ought to be retained and the Corporation said that it did not want to retain it. The management said that the workers were wrong in thinking that any extra capital expenditure would be needed to do the Renfrew work at London. The management said that all the Renfrew work and all the other work which could be reasonably foreseen could be handled in the Corporation's existing building. How very quickly the Corporation has been proved wrong!

The fourth and final point arising immediately out of the Reports is one about which we have heard a good deal. That is about the way in which and the extent to which the airline operators—and, for that matter, the independent operators, too, although to a lesser extent—have been let down by the British aircraft manufacturing industry. As the House knows, I have said one or two hard things about that industry—nothing which I did not believe—but I am bound to say that I have never been so tough as was the hon. Member for Macclesfield (Sir A. V. Harvey) this afternoon.

I have said that the industry was incompetent; I have said that it was badly organised; I have said that is was very greedy; I have said that its particular efficiency has been in the design, development and production of sales baloney, but I have never said, as the hon. Member did, that it was guilty of double-dealing. We now have this evidence about ethical standards among British aircraft manufacturers from a director of an aircraft manufacturing company. I hope that the Minister of Supply, whom I am happy to see listening to the debate, will take cognisance of that and find out more and tell us more about it.

I was glad that the Minister said what he did about how much British Overseas Airways has been handicapped by the delay in delivery of the Britannia. I would say to the hon. Member for Macclesfield that it is no good talking about our publicity. There cannot be good publicity about bad things or bad publicity about good things.

For my sins, I have spent much time flying during the last twelve months. A great deal of that time was taken up in sitting in airports waiting for things to come and things to happen. When people all round the world are sitting around for a long time because an aircraft is supposed to depart at a certain time, and does not, and they are told that it did not depart because its engine did not function, then we cannot, by any amount of publicity, change their minds from thinking that they have been let down. The best way to get publicity about an aircraft is to deliver it when you say you will deliver it and deliver it up to specification.

Nobody disputes the accuracy of what B.O.A.C. says about its new aircraft, but if one looks at the Report there is a contrast which is very unflattering to us in this House and to people in this country. I quote from page 5 of the B.O.A.C. Report: In view of the delays in bringing the aircraft into service— that is, the Britannia— the Corporation was obliged to disband temporarily the personnel of the Britannia fleet. Do hon. Gentlemen appreciate what that involves? It means that there has been a building up of a fleet of personnel with different skills. They have been trained and are working, and then they are told, "Chaps, go home; we have no aeroplanes for you to work on now that you have been trained."

The Report goes on: The disruption caused by the postponement of Britannia services resulted in substantial expenditure. The delays also partly account for the lower percentage increase of capacity produced compared with the percentage for the preceding year. If one looks at the previous page, there appears this sentence

"The DC7Cs—"

which, as hon. Gentlemen know, is an American aircraft— which had been ordered by the Corporation in March, 1955, were all delivered on or before the delivery dates provided in the contract… Of course, that, too, has its effect, because if hon. Gentlemen will turn to the accounts in page 34, where we find the account for technical training, preoperational, and development costs, we find that the expenditure ascribed to the Britannia in the two years 1955–56 and 1956–57 was almost exactly £2 million. The expenditure ascribed to the DC7C was about £600,000. The Britannia costs three times as much as the DC7C because of the delay in bringing the Britannia into service.

That is only the delay factor. In addition, there is the point which B.O.A.C. did not mention in its Report because I can think that it was only too charitable to do so. Whereas the DC7C was up to specification, the Britannia was well down on performance compared with its specification. It does not surprise me at all that B.O.A.C., faced with this problem of selecting a new aircraft upon which its future may depend, hesitate very much to adopt one in which the manufacturers of the Britannia will have a very significant part.

Sir A. V. Harvey

The hon. Gentleman has said that the Britannia was well down on specification. That is a very serious thing to say, when we are negotiating at present for overseas orders. Perhaps my hon. Friend the Joint Parliamentary Secretary will verify that statement, but my understanding was that the first flight of a prototype over the Atlantic was down on specification. However, I understand that that has now been corrected and the aircraft is now up to specification. It is wrong for the hon. Gentleman to make a statement which is not accurate.

Mr. Mikardo

The hon. Member ought to know that I would not have said that if I did not know that it was accurate. He ought not to use my time to ask questions of his hon. Friend. I shall be very happy to hear what the Parliamentary Secretary has to say about it. The fact that negotiations for sale have been carried out elsewhere is quite irrelevant, because overseas customers know all the facts and figures. The fact is that B.O.A.C. has a large claim on the Bristol Company over this aircraft. There must be something not quite right, because one cannot claim for nothing.

On the question of delay on the B.E.A. jet, it seemed to me that the Minister was very defensive. It is not quite as simple as he would have us believe. There have been really serious effects because of the delay. It is now more than six months since the Report was presented. Art that time the Corporation said that it was shortly expecting to make its decision and to place an order. Page 52 of the B.E.A. Report reads: The Corporation expects shortly to make a decision on the project considered most suitable, and to place an order… That is in respect of the new B.E.A. aircraft. The Chairman's covering letter at the beginning of the Report is dated 30th July. The Corporation was clearly expecting to place an order months ago, and it has not been able to do so.

I want to say one or two words, very shortly, about two long-term problems of the industry arising out of its structure. I think that this is a suitable moment to have a look at this question. The post-war structure of British civil aviation grew out of the Act of 1946. Although the intervening years have seen certain changes in the original pattern that the Act laid down—for instance, the reduction in the number of corporations from three to two, the elimination of a separate Ministry of Civil Aviation, and changes in the relations between the Corporations and the private operators—the basic structure still remains.

Now we have reached a time when—with the dislocation of the immediate post-war years behind us, with the teething troubles of the industry over, with a full decade of experience to guide us and reasonably reliable forecasts of future traffic potential available—it is possible to have a better-informed forward look at this question.

The first problem of structure in the industry regards the relations between the two Corporations. There was a time when many knowledgeable people considered that there was a case for the two Corporations to be merged. Most people now accept that it is better to keep two separate corporations. Nevertheless, I believe that there ought to be a modification of the degree of separation. I believe that those two bodies, although they should remain completely separate entities as they are now, can and ought to work more closely together than at present. There have been examples—I know some of them at first hand—of efficiency being lowered and public money being wasted through a too fierce passion in each Corporation for independence and self-sufficiency, and even empire-building.

The first post-war White Paper on Civil Aviation—I well remember the debate on it—argued that the Corporations should have common instruments to exercise certain functions. It listed a number of aspects of the Corporations' work to which that method might apply. The only common instruments of any significance which have been set up between the two Corporations are the Employers' Secretariat and the pensions fund. I believe that there is a prima facie case—I do not put it higher at the moment—for saying that there are much greater possibilities of more action along these lines than the Corporations now take. I have in mind some aspects of provisioning and storekeeping, where there are common stores; personnel recruitment, training, seconding and exchange; medical services; surface transport—where there is a little common working, but not much—and sales—where there is a good deal of common working, but not enough.

My experience of the two Corporations leads me to believe that if we want to examine the position properly the examination must be carried out by a body independent of the vested interests, namely, the managements of the two Corporations. Whether it should be the Ministry or some ad hoc body I will not pontificate about.

The most thorny internal problem facing the industry is the fixing of the line of demarcation between the industry's private and public sectors. I have said before—and I am bound to say again—that some of the changes of Government policy in this matter have been motivated by considerations other than those of the overall welfare of the industry, and have resulted in some overall damage to it. The only ultimate benefactors from a constant state of civil war between the two sectors of the industry are our foreign competitors.

As my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) pointed out, B.E.A., for the first time—it has been rather timid about it in the past—says in its Report what hon. Members on this side of the House have been saying for a very long time in respect of its relations with independent operators. I suggest that we can end this civil war between the two sectors only on the basis of the acceptance of some broad principles.

To my mind they are these: First, that there is a rôle in the industry for both a public and a private sector; secondly, that the external inhibitions which have been placed upon the Corporations' offering capacity for the carrying of troops and freight, and for Colonial Coach Services, ought to be withdrawn; thirdly, that the demarcation line between the two sectors, and the relations between them, ought to be arranged so that they can work together in harmony; fourthly, we should give public support to those private companies which have shown themselves to be willing to work amicably with the Corporations and withdraw public support from any private company which, as some do, mistakes buccaneering for enterprise.

We should encourage joint arrangements between the companies—either permanent or ad hoc—which are freely entered into, but I share with the hon. Member for Watford (Mr. Farey-Jones) an active dislike for shotgun weddings. He spoke of those between the aircraft manufacturers, but I do not like the shotgun weddings between the Corporations and private operators. I have never yet heard of any couple, married in a shotgun wedding, who lived happily ever after. As my fifth and final principle, I believe that we should restore the monopoly of scheduled services to the Corporations.

We have talked about a success story today—a story in which, irrespective of ideological differences, we should all take pride. As politicians, we ought to direct our future efforts to setting a political background for this industry in which its successes will not only be maintained but greatly increased.

Mr. Burden

Will the hon. Gentleman tell us what is the difference between buccaneering and enterprise on the part of the independents?

Mr. Mikardo

Not in the very short time which is available—but I am sure that any of the hon. Member's Friends, most of whom know the industry better than he does, will be willing to enlighten him.

6.34 p.m.

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

This has been an excellent and constructive debate, and it has left me with a formidable number of points to answer. If I miss some of the points owing to time, I hope that those hon. Members who have raised them will forgive me. I certainly undertake to let them have the replies by other means.

My right hon. Friend and the hon. Member for Reading (Mr. Mikardo)—and I agree with a great deal of what he said; it was important, and I shall certainly consider a number of his points—both referred to this as a success story. It is a success story, in spite of the difficulties that both the Corporations and the independents have been suffering in several ways. This year's Reports indicate very great advances in British aviation. One of the best things about this debate has been that we have all been concerning ourselves with the future of British civil aviation and have not been too partisan about it. That being so, I shall not be, either.

First, I should like to congratulate the two Corporations, and all those who are employed by them who have made these successes possible, upon achieving net profits for 1956–57 in the face of great difficulties. For B.O.A.C. the great problem has been the continuing shortage of suitable aircraft, resulting from the Comet disasters of 1954. For B.E.A., which for the time being has solved its aircraft problems—although I shall come to the question of its jet aircraft later—because it has the highly successful Viscount, the difficulties have been rather different; they have been more of the general economic kind associated with short-haul operations and highly seasonal traffic: it also has to operate the social services, to the Scottish Islands, for example, on which it inevitably incurs a loss.

In view of those circumstances and the intensive competition on most of the international routes, the achievement of both Corporations in being able to declare net profits of £303,000 odd and nearly £217,000, for B.O.A.C. and B.E.A., respectively, is a very fine performance.

I want to mention something which has not been brought out in the debate. We have all mentioned the expansion of the services of the Corporations. At the moment, B.O.A.C. is considering the resumption of its services to South America. It has now decided to return to those routes, and hopes to make a beginning, to Caracas, in the autumn of this year. That point has not been mentioned. I thought that it was of importance and that I should mention it, because I know that many hon. Members are interested.

As to the future aircraft position of B.O.A.C., I need not add to what my right hon. Friend has said about the Britannia, except to say that I shall look immediately at the point made by the hon. Member for Reading, about the Britannia not being up to specification. As I understand the position, that charge applied to the prototype of the 300 series, but it does not apply in the case of the production models. However, I shall obtain the exact details and let the hon. Member know. I hope that nothing further will be said by me or by anyone else which does not make it quite clear to the world, and especially our potential customers, that this aircraft is one of the finest of its kind, as was pointed out by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey).

My right hon. Friend has also stated the factual position with regard to B.E.A.' s order of the jet aircraft. Some of the wider implications with regard to the aircraft industry are matters for my right hon. Friend the Minister of Supply—who has been sitting here throughout the debate and who, I am sure, has taken a great interest in it and a note of what has been said about his Department and the industry in general—but it is important for me to repeat what my right hon. Friend said about this potential order, because I have been pressed to give certain assurances.

The fact is that the detailed proposals of the de Havilland Company and those associated with it were received by my right hon. Friend only this morning. In those circumstances, while we in my Department, and particularly my right hon. Friend, are most anxious to ensure that B.E.A. gets the best possible aircraft for the job, I do not think that we should be forced to go further than that at this stage. My right hon. Friend has promised the House a statement at the earliest possible moment. He pointed out that the ordering of a new aircraft of this type is a complex affair, and when one considers that it will not be delivered until the middle of the next decade, the delay is not really a very serious one. What is important is that B.E.A. should get the right aircraft.

Dr. Reginald Bennett (Gosport and Fareham)

May I ask, when this is being considered, that proper weight should be given to the Ministry of Supply end of things and the industry end of things in order that in any appropriate amalgamation or merger they get the work, which they can carry out, and that there is not some ringing of the changes on a system of sub-contracting?

Mr. Neave

I can assure my hon. Friend that we have been listening to the comments which have been made about shotgun weddings and so forth, and—the different types of bodies, and the amalgamation of firms which have been discussed. Perhaps the House will permit me to repeat the words of my right hon. Friend, who said that B.E.A. was at all times perfectly willing that the construction of the aircraft should be shared as widely as desirable among any number of reputable firms, and that that is the position. We shall make a statement to the House as soon as possible.

I was asked to deal with a great many other matters, one being the situation of the independent airlines and their relations with the Corporations. I have always shared the view held by hon. Members on this side of the House, and by some hon. Members opposite, that it is perfectly possible for the independent companies to work with the Corporations and that there is room for both. In the present case there is a success story so far as concerns both the Corporations and the independent companies. B.E.A. carried 52 per cent. of the normal scheduled traffic on its European routes in 1956–57, and there was a great increase in the numbers carried on the inclusive tours by the independent companies. We should be satisfied that there is room for both.

I was asked whether the comments by B.E.A. on page 26 of its Report was something I ought to confirm or deny. It is fair to say that B.E.A. does not give any details of the material diversions of traffic which it alleges. It also says, as hon. Members know, that these matters are dealt with by the Air Transport Advisory Council, which makes recommendations to my right hon. Friend in accordance with its terms of reference. Regarding the inclusive tours, in which B.E.A. is itself interested, the last paragraph on page 27 says that: …no criticism is implied or intended of the way they have carried it out. That being the position, and Parliament having set up the Air Transport Advisory Council as an impartial body, I do not see what I have to answer. There are, in fact, no details of what is said to be the damage.

Mr. Strauss

Is it not the fact that the A.T.A.C. work under broad directions given by the Minister of Transport and Civil Aviation? No one has suggested that the A.T.A.C. has acted improperly or incompetently. Our criticism is that the directions are wrong, not the actual detailed work of A.T.A.C.

Mr. Neave

Of course the Minister prescribes the terms of reference. The A.T.A.C. is an impartial body and judges each case on its merits—I do not think we ought to imply anything further than that—within its terms of reference which are laid down by the Minister under the legislation. The position is that both sides are doing well, and I hope they will do better next year.

The right hon. Member for Vauxhall (Mr. Strauss), in a very detailed and interesting speech, asked a lot of questions with which I should like to deal as briefly as possible. He asked about the sales, advertising and publicity expenditure of B.O.A.C. It is true that in 1956–57 B.O.A.C. increased its expenditure on sales and advertising by about 28 per cent. over the figure for 1955–56. The main reason is that B.O.A.C. planned a much increased advertising campaign to build up the traffic which it expected to need to fill the large increase in capacity for the ensuing year, and to rebuild the traffic after the Comet disaster. That is the explanation. However, I will get more information about it and will let the right hon. Gentleman know further details.

The right hon. Member for Vauxhall put another point of some importance, namely, whether any future cuts in expenditure, as the result of Government policy, would affect the operating of the airlines. I am informed that none of the cuts in expenditure which has been proposed will hamper the operations of the airlines.

The right hon. Gentleman asked a number of questions about London Airport and its facilities, as indeed did several of my hon. Friends and hon. Members opposite. The Government are still considering the proposals contained in the Millbourn Committee. A lot of this is bound up with the important proposal for a rail link or monorail, whichever the case may be. The recommendations of the Millbourn Committee are still being considered; I am sorry I cannot say more about that at the moment.

What I can say which will interest the House is something about the new fares and freight rates about which I was questioned, particularly international fares. The most important development of the international services is a proposal by the International Air Transport Association, at present awaiting the approval of Governments to introduce a new low fares service on the North Atlantic. This service, to be known as the economy class, is to be introduced from April, and the London—New York fare will be £90 single compared with the present tourist fare of £103 12s. Tourist fares will be increased so that the differential between the new economy fare and the tourist fare will be 20 per cent. B.O.A.C. will be offering nearly half of its trans-Atlantic capacity in the new class. The decision to introduce this new service was taken after long discussions between the airlines which stretched over two conferences.

At the same time as these economy services are introduced, fares on the North Atlantic tourist, first-class and deluxe services, will be increased by about 8 per cent. to 9 per cent. The new single fares will be £112 10s. tourist; £115 8s. first-class and £173 5s. deluxe. I thought I should give these details since the subject was mentioned, so that it will be seen what are the actual figures for the fares which were mentioned by the right hon. Gentleman.

Since we are talking of the economies by the Corporations, may I say that both my right hon. Friend and I will give serious consideration to the point made by the hon. Member for Reading that we should look at the possibility of new services and economies. We shall certainly follow up the suggestion of the hon. Member, as it is one of considerable importance.

I now turn to points made by individual hon. Members. The hon. Member for Reading mentioned the air-conditioning plant in the Queen's Building, a subject with which I have had a good deal to do since I have been at the Ministry. We are doing everything we can to speed up the air-conditioning plant. The hon. Member mentioned that there was an error; the design at Gatwick will not involve us in a situation of that kind. The hon. Member can be satisfied upon that point.

The Millbourn Committee recommended that a new terminal building with a hall should be built on the southwest face of the central area. The Ministry is giving urgent consideration to this recommendation in the hope that at least part of the building will be ready for service by 1960. That is one of our jobs.

The hon. Member for Anglesey (Mr. C. Hughes) asked me about Welsh services. I have recently been down to his part of the world and to Haverfordwest, and I have studied the problem with Cambrian Airways representatives. I will take up all his points, particularly in respect of the service from Rhoose.

I was asked about noise. I have nothing further to add to what my right hon. Friend said about noise. It concerns all Governments. Conferences are going on about it. My Department has already discussed the subject with several other countries, and although the discussions have been informal it is understood that we all take the matter very seriously. The hon. Member for Uxbridge (Mr. Beswick) raised the question a short time ago on an Adjournment debate on the Tupolev 104. As a result of the debate we have been studying the problem of possible damage. At the moment no one can give any legal interpretation of the position. The Government are not in a position to accept liability, especially in view of the type of evidence that came out of that particular case.

I have not been able to answer every question, but I have taken note of all these matters. I thank hon. Gentlemen for the interest which they have shown in the problem of civil aviation and for the way in which they have put their points this evening. My hon. Friend the Member for Watford (Mr. Farey-Jones) ended his speech by paying a tribute to the pilots. I should like to do the same and join in a tribute to the pilots who have helped to make the recent year such a success for the Corporations and for the independents. For that reason, I will end my speech by telling the hon. Gentleman something—since he asked a question—about the Government's position with regard to pilot recruitment. It is a subject of great interest.

Towards the end of 1956, a pronounced shortage of pilots was expected in the following year, but an increased supply from the Services, following new manning policies, met the further demand. No difficulties are foreseen by B.E.A. for the next few years, but B.O.A.C. and some of the independent operators are doubtful whether their needs can be met from Service sources for very much longer. Our own estimate is that the new demand for pilots cannot continue to be met from Service sources for more than a year or two.

As hon. Gentlemen will be aware, Air Service training Limited has recently announced a scheme under which pilot training can be financed on a repayment basis, backed by the United Dominions Trust. Any boy of adequate educational and medical standards should be able to train by this means. The scheme is very important and interesting as a general air-training scheme. It is a bit early to estimate its actual effect on the whole problem. The Government's interest in the future training of pilots is still being considered by the Corporations and by my Department.

I am sure that we all look forward to greater successes in civil aviation and that we wish well to all those who work in it.

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, 1957.