§ Order for Second Reading read.
§ 3.38 p.m.
§ The Minister of Aviation (Mr. Duncan Sandys)
I beg to move, That the Bill be now read a Second time.
The Bill carries out a pledge that we gave at the General Election. It has two main purposes. First, to ensure that all who provide public transport by air shall be required to maintain proper standards of safety. Secondly, to establish an independent authority to whom all airline operators can apply on an equal footing for licences to run regular air services.
I will, if I may, deal first with the question of safety. B.O.A.C. and B.E.A., and most of the independent airlines, have established—and I am sure that the House will agree with this—a high reputation for reliability. There is, however, a growing feeling that the existing arrangements for individual safety in air transport need to be strengthened and extended. At present, no new scheduled service is approved by the Minister unless the Director of Aviation Safety at the Ministry of Aviation certifies that the operator's equipment and organisation are safe and satisfactory for the service proposed.
On the other hand, and this is our difficulty, we have no power to insist that the same standards of safety are observed by operators of charter services, who do not have to go through the procedure of obtaining the Minister's approval. This is a matter of some importance since many thousands of passengers now travel by these services each year.
The tragic crash of a charter plane at Southall, in 1958, in which seven people lost their lives, drew attention to the unsatisfactory state of the law. This led to a demand that all operators, without exception, should be made to comply with proper safety requirements. It is I think, in everybody's interest that the law should be tightened up. It is necessary for the protection of the passengers in the air and the public on the ground. It is necessary for the protection of conscientious operators against 1226 being undercut by less scrupulous rivals. It is also necessary to protect the good name of British aviation, which can so easily be damaged by the negligence of an irresponsible minority.
The Bill consequently provides that, in future, all commercial operators, without exception, will have to obtain what is to be called an "air operator's certificate." The precise form of the certificate will be prescribed by an Order in Council, under Section 8 of the Civil Aviation Act, 1949. This Order will be made after the Bill becomes law. The certificate will be issued by the Director of Aviation Safety, of the Ministry of Aviation—the same authority that now certifies to the Advisory Council on these matters. This certificate will certify that from the standpoint of safety an operator's aircraft are of a suitable type and that his maintenance system, operational staff and organisation are up to the standard required for the service in question.
Firms which are refused an air operator's certificate will have the right of appeal to an independent arbiter, who will be assisted, when necessary, by expert assessors. I considered whether the appeal should be to the Minister and not to an independent arbiter. But since it is a question of fact which has to be considered, and since the Director of Aviation Safety—whose decision is being questioned—is an official of the Minister, it seemed to me fairer that the issue should be settled by an entirely independent person.
All operators will be asked to apply for operators' certificates as soon as the Bill becomes law. To give time for these applications to be dealt with there will be an interval of a few months before the provisions of Clause 1 (2, a) are brought into force.
I come now to the other main purpose of the Bill, namely, to set up an independent authority to license air transport services. It might have been possible to create a licensing authority without any new Bill at all, since Parliament, in its wisdom, provided powers to do this by Order in Council under Section 13 of the Civil Aviation Act, 1949. However, in view of the wide interest which exists in this matter, we thought that the House would prefer us to deal with this by means of a Bill, which can be more 1227 fully debated and, if necessary, amended in Committee.
Before explaining the provisions of the Bill, I should like to say a word about the present practice and the way in which it has developed since the war. The Civil Aviation Act, 1946, later consolidated in the Air Corporations Act, 1949, gave the airways corporations and their associates a statutory monopoly of all scheduled services. The independent companies were thus restricted to the somewhat limited field of charter work. But before very long it was seen that this arrangement was unfair and to some extent unworkable. Accordingly, in 1949, the then Government authorised the independents to operate a small number of scheduled services to supplement those provided by the corporations.
In order to circumvent the statutory monopoly of the corporations, the independent companies concerned had to be appointed as associates of B.O.A.C. or B.E.A.—a most tortuous and cumbersome arrangement. In deciding what independent services should be authorised the then Minister of Civil Aviation, Lord Pakenham, turned for advice to the Air Transport Advisory Council. As a result, this body, which had originally been designed as nothing more than a normal consumers' council, gradually assumed the functions of a licensing authority.
In 1952, after the change of Government, this informal arrangement was further extended. In all the circumstances, I believe that the Air Transport Advisory Council has discharged its difficult duties with fairness and efficiency, and on behalf of the Government I should like to express our warm appreciation of the services rendered by the members of the Council and, in particular, by its Chairman, Lord Terrington.
But with the rapid growth of air transport, it would clearly not be right to rely indefinitely upon these somewhat makeshift arrangements. Moreover, the corporations naturally dislike the legal farce which obliges them to conclude associate agreements with the independent companies, which, in reality, are not associates, but rivals. The independents equally dislike the procedure under which they are precluded from applying for licences in their own right.
1228 The Bill will regularise this position in two ways. First, the monopoly of the corporations will be brought to an end by the repeal of Section 24 of the Air Corporations Act, 1949. Secondly, a Board will be set up to whom all operators, both corporations and independents, will be able to apply for licences on equal terms. I have not yet reached any final conclusions about the composition of the Board. All I can say at present is that it is intended to appoint men of wisdom and experience. Since one of the main tasks of the Board will be to adjudicate between claims of rival operators it would be inappropriate for the Board to contain representatives of the interests concerned.
Applications for licences will, in general, be advertised, so that any other parties which may be affected will have the opportunity to raise objections. The proceedings of the Board should normally be held in public—unlike the proceedings of the Advisory Council.
§ Mr. Sandys
If the proceedings are held in public I do not suppose that the Press will fail to take advantage of those facilities. It may, however, be necessary to hold private sittings from time to time, for example if issues affecting international relations are being discussed.
Clause 2 (2) sets out a list of considerations which the Board is required to take into account in deciding whether or not to grant a licence. These are intended to ensure that applicants will be given a fair opportunity to obtain licences for new services, while, at the same time, ensuring proper protection for existing operators.
It is my intention that the Board shall be as independent as it is possible to make it, for that is one of the primary purposes of the Bill. I have, therefore, kept down the Minister's powers to the minimum. The only important power which is reserved to the Minister is that of deciding appeals from decisions of the Board.
I think that it will be found that any other powers which are reserved to the Minister are very secondary in importance in comparison with the power to settle appeals. I considered most carefully the possibility of setting up some 1229 independent appeal machinery. But since, at times, issues of Government policy and of public policy are bound to be involved, I felt that hon. Members would not wish these matters to be settled by anyone except a Minister accountable here to the House of Commons.
In addition, the Minister is given two further powers, but, as I have said, these are very secondary in comparison with the power to settle appeals. The first is the power to require the Board to reject an application for a licence, the grant of which would entail negotiations with a foreign Government for traffic rights. I think that it will be agreed that it would not be right for an outside body such as a licensing board to put the Government under an obligation to open negotiations with foreign Governments if they do not think it wise and opportune to do so.
The other function reserved to the Minister is that of approving, as at present, the rates of international fares. In view of the existing procedure for the negotiation of these fares through the International Air Transport Association, I.A.T.A as it is called, or through direct bilateral agreement with other Governments, it would be not only inappropriate, but also not practicable, for the Government to delegate control of fares to any other authority.
In this connection, it may be convenient if I say something about current negotiations on fares. On 15th December, I informed the House that in view of the breakdown of the conference of the International Air Transport Association, at Honolulu, I had decided to authorise B.O.A.C. to introduce economy fares on our colonial cabotage routes to the West Indies, Africa and the Far East. I explained that I should have to consult other Governments concerned about the precise rates to be charged and the timing of the start of these new fares. At the same time, I gave an assurance that I would see that the interests of the existing colonial coach services, which were being run by independent companies, would be properly safeguarded.
Following my announcement of this decision, I.A.T.A. decided to make a further attempt to reach agreement. A meeting for this purpose is now taking place in Paris. I hope that it will be 1230 found possible to settle the outstanding issues. I cannot say much more today except that I will make a full statement to the House on this whole subject as soon as possible after the Paris meeting is over.
When the new Act comes into force, the air transport operators will require quite a number of new licences in order to legalise the continuance of their existing services. To prevent the Board from being immediately choked by a flood of applications to cover the existing services, power is given to the Minister, under Clause 2 (6), to authorise the issue of the initial licences which will be needed to tide things over. I have discussed this matter with the corporations and with representatives of the independent organisations; and they are agreed that the fairest thing to do will be to allow the existing pattern of air services to continue unchanged for the time being.
I therefore propose to authorise licences on this principle. These will be called transitional licences. I attach importance to the word "transitional". The object is to emphasise the fact that I am not prejudging the future decisions of the Board and that it is open to any operator to apply as soon as he likes for a new licence or for the amendment of a transitional licence issued to some other operator.
§ Mr. Charles Loughlin (Gloucestershire, West)
How long will the transitional licences last? Is it envisaged that at some point in time they will cease to exist because of the application or non-application for permanent licences?
§ Mr. Sandys
I am glad that the hon. Member asked that, because it needs clearing up.
The transitional licence will last as long as it is not altered by the Board. In other words, it could be a permanent licence if nobody applies for any other licence which either encroaches upon it or requires some variation of it. It is a transitional licence in the sense that these licences will be issued by the Board without application from the operators, and without examination and discussion, merely to legalise the continuance of the existing position. It will be open to any operator, whether a corporation or an independent company, immediately after the Act comes into force, to apply for 1231 additional licences or for the variation of the licence given to some other operator on the grounds that the applicant wants a licence which would require an amendment to an existing licence.
§ Group Captain C. A. B. Wilcock (Derby, North)
Is the Minister prepared to say whether he will give any instructions to the Board about the issue of these new transitional licences? Will he give the Board any guidance?
§ Mr. Sandys
Yes. The Board will not exercise any discretion in this matter. The transitional licences will be issued by the Board at the Minister's request, and in making that request to the Board it will be my intention to reproduce as nearly as possible the existing position. I shall have any necessary consultations with the corporations and the independent companies to make sure that as far as possible everybody agrees that the instructions which I give to the Board about transitional licences fairly reproduce the present position. There are one or two borderline points which will have to be clarified but, broadly speaking, there should be no difficulty about this.
I hope that the House agrees that it is much better for me to reproduce the present position in the first place than to try to do the Board's job for it in advance, in a hurry and without proper discussion. The essence of this Board is that it will enable everybody to go before it and to argue out their case. I think that that is the right way to handle it I am grateful that both the corporations and the independent companies have accepted my suggestion that we should not attempt to make any changes in the first place.
The future pattern of British aviation will emerge progressively from the decisions of the Board and from the results of appeals to the Minister. A kind of case law will gradually be built up. Since I have no intention of trying to settle this in advance, I cannot tell the House just how it will all work out. I can, however, give some indication of the general trends which I hope to see develop as a result of this Bill.
In particular, I can tell the House what the Bill will not do, and is not intended to do. It is not intended to undermine the position of B.O.A.C. or B.E.A. 1232 Those two corporations are our main flag carriers on the air routes of the world. Large sums of public money have been invested in them and they have to face fierce competition from foreign rivals. They therefore desrve, and will get, our full support and encouragement.
Another thing that the Bill will not do is to break up the partnership agreements the corporations have concluded with Commonwealth and foreign airlines. These pooling arrangements have proved valuable in eliminating wasteful duplication and promoting productive co-operation and harmonious international relations in the sphere of aviation. I shall certainly take care to see that nothing is done to upset these arrangements. In fact, I shall do all I can to encourage further international co-operation of this kind.
The independent companies have also a most valuable and constructive part to play. By their initiative they have created new traffic. I am sure that, if they are given scope, they will continue to do so. As I have explained, the Bill withdraws from the corporations their statutory monopoly. This gives to the independents something for which they have long been asking—freedom to apply for licences in their own right on the same footing as the corporations. Whether or not any particular application is successful will, of course, depend upon a number of factors, including the ability of the applicant to convince the Board that his company possesses the resources needed to provide an effective and a reliable service. With this in mind, I have been encouraging the independent airlines to get together and to form stronger units and I am glad to say that good progress is beginning to be made. In particular, I welcome the amalgamation of Airwork Ltd. and Hunting-Clan, which was announced this morning.
The introduction of some element of competition between the corporations and the independents and the continuing need for all operators to justify the retention of their existing services will, I am sure, provide an additional impetus for efficiency. I would, however, emphasise that neither the corporations nor the independents wish to see unrestricted cut-throat competition.
1233 The last thing any of them wants is a complete free-for-all. Nobody is prepared to put up the large sums of money required for the purchase of modern aircraft and the setting up of maintenance bases and sales organisations without some measure of security. They naturally wish to be assured that, having built up custom on a particular route, they will be given some reasonable protection against interlopers who seek to reap where others have sown.
Moreover, it should not be assumed that the corporations and the independents will always be in conflict with one another. At least one independent company has for some time been running certain services on behalf of one of the corporations. There is no reason why genuine pooling agreements should not be made between them on certain routes. In fact, I think that this is quite a likely development. Whether they operate in competition or in partnership, the new system, I believe, will afford an opportunity for all in an expanding market, while at the same time giving reasonable security against unfair competition. I have every confidence that the new Licensing Board will hold the scales fairly between all parties.
Over the next ten years there will certainly be a vast expansion in air transport. It will be more and more the normal method of travel for the mass of people in all countries. Parallel with this, aeroplanes will be used to an ever-increasing extent for the carriage of freight. For long past the British Mercantile Marine has carried a large part of the seaborne traffic of the world. In this age of flight, we must do the same in the air. With our support and encouragement—and I am sure that is assured from all sides of the House—I am confident that our British airlines, corporations and independents together, have it in their power to secure for Britain an increasing share of the expanding air traffic of the world.
§ 4.6 p.m.
§ Mr. G. R. Strauss (Vauxhall)
The Minister, as usual, has explained his Bill to the House concisely and lucidly and we are grateful to him for doing so.
Perhaps before I start on any criticism of the Bill, I should say that, however one may disagree with the right hon. Gentleman in his ideas, no one could 1234 complain that he is either a slothful or weak Minister. He has been in office for only four months, and already he has forced the aircraft industry to carry out a policy which it did not want and which it had been pressed by a previous Minister to do for about two years.
Further, the right hon. Gentleman has either forced, or, as a result of his pressure, brought about the amalgamation of two airline companies, as announced today. And now we are considering a Bill which will radically alter the relationship between the airways corporations and the airline companies. All that has been done in four months. Much as we may sometimes deplore the right hon. Gentleman's policies, we cannot help but admire the forceful and effective way in which he brings them into operation.
The right hon. Gentleman said that one of the purposes of the Bill was to fill a gap in the existing safety arrangements. We agree, of course, wholeheartedly with these proposals. I do not think that anybody questions that the existing situation is unsatisfactory and that it was ridiculous and contrary to the public interest that those operators responsible for non-scheduled or charter services should escape the safety provisions which applied to others. For some time we have asked that action should be taken to fill that gap. The Government have taken the opportunity presented by this Bill to do so. Without reservation we support his proposals in principle and believe that the procedure which the Minister described is right. We are glad that this change will now take place and we support it wholeheartedly.
The main purpose of the Bill, however, is to bring about a fundamental alteration in the present pattern of civil aviation. It will change the existing rights and prospects of the two corporations and the independent airlines. There may well be a case for tidying up the present procedure. One can well argue—I would not dispute this—that the arrangements, as they worked out under the 1949 Act, whereby independent companies have to pretend to be associates or agents of the air corporations, proved to be ridiculous. I agree that there was a strong case for making some alteration in the procedure under which airline companies operate. It was 1235 not only a fiction that the companies were associates of the air corporations. It was a lie, as they were, in fact, not associates at all. They were deadly competitors. But they had to pretend to be associates.
We do not quarrel with the proposal to make some alteration in the licensing arrangements or, indeed, with the idea of setting up a Board to consider applications. Our objection to the Bill is twofold. First, Parliament is asked to enact a Bill which is so vague and imprecise that no one knows what its consequences will be. Parliament should not be asked to pass such a Measure. Indeed, when explaining the Bill the Minister himself said that he did not know how it would work out. We say that is wrong, and contrary to the interests both of the corporations and the independent companies. Parliament should not do it. The Bill should be made much more precise about the conditions the Board will have to consider when carrying out its licensing functions.
Our second objection to the Bill is that it is likely to have the effect—it certainly will have such effect, if those who sit on the back benches opposite have their way—of inflicting serious damage on the two corporations, which are a great national asset, and in which nearly £300 million of public money have been invested.
The uncertainty created by the Bill affects the independent companies as much as the corporations. We have said in the past, but I will repeat it today in case anyone should suggest that we have any unreasonable prejudices against the independent airlines, that we appreciate the services that they have rendered. Many of them have shown commendable enterprise and carried out their business with praiseworthy efficiency. They have provided many popular services which lay outside the scope of the corporations. We wish them well, but we must say that they are not justified in complaining, as they frequently do, that they have been unduly restricted in the past.
Today, private airlines represent, in terms of passenger miles, when trooping is included, one-third of the total of British air transport. Their activities are increasing rapidly every year, more rapidly than those of the corporations. 1236 They are entitled to know where they stand under this new legislation and what are the intentions of Parliament regarding their future.
What does the Bill propose? That a Licensing Board should be set up consisting of six to ten people. I do not quarrel much with the numbers, but it seems to me that a board comprising six to ten people is too large to consider the sort of problems with which such a body is likely to be faced. But let that pass. What guidance is the Board to receive about the way it should conduct its business? It will have to bear in mind various considerations which it can reject or accept. These considerations appear in Clause 2 (2) in paragraphs (a) to (g) and they include everything that one could possibly think of. The right hon. Gentleman might have saved space by saying that the Board was to consider every relevant factor.
There is no indication of the weight to be given by the Board to the various considerations set out in this Clause, any of which it is perfectly free to reject. Therefore, the Board is, in fact, absolutely free to come to its conclusion on any factors, on any ideas or prejudices, which its members may have in mind; and no one can know what its principles or policy are likely to be. The outcome of its deliberations is completely uncertain, and if Parliament passes the Bill in its present form the result will be unknown.
The considerations which the Board should have in mind are set out in paragraphs (a) to (f) of Clause 2 and then there is added paragraph (g):any observations made to the Board by the Minister.The right hon. Gentleman modestly puts his own observations at the bottom of the list, but that does not mean that they are the least important. In fact, we know that they will be the most important of all, because the Minister also has the right to hear appeals against any decisions of the Board. If the Board rejects the observations which the Minister puts before it regarding an application, it knows that it is likely to have its decision reversed on appeal. Therefore, the most important consideration will be the observations put to the Board by the Minister.
1237 No one knows what those observations are likely to be. The right hon. Gentleman will not publish them. Parliament will not know them, no one will. It may be that the applicants and those opposing them will not know. We therefore have the absurd situation of a Board considering a matter of great public importance, which may be a matter of life or death to the independent companies and the corporations, on a set of considerations which it can reject if it wishes, and one of them a secret observation by the Minister.
This appears to us to be ridiculous and indefensible. When the Bill is considered in Committee we hope that it will be altered in several respects. We hope that one alteration will be that any observations by the Minister must be made public. Secondly, and much more important, we hope that certain firm principles will be laid down which the Board must bear in mind and from which it will be unable to depart. We do not want a set of vague principles which the Board can discard if it wishes.
It is not only some hon. Members who think that the outcome of the Bill is vague and uncertain; the same thing has been said by spokesmen for the independent companies. In an interview reported in Flight the other day the chairman of one of the independent companies, when asked what he thought would be the outcome of the Bill, said that he did not know, that it depended on what interpretation was put upon it. I suggest, again, that that is a ridiculous situation.
It may be that the result of any individual application to the Board may not be known, but the broad principles on which the Board is to operate should be stated clearly and precisely. But nothing of the sort is happening. A series of considerations are set out which the Board can reject if it wishes.
May I here digress from my main argument to put a question to the Parliamentary Secretary about something which puzzles me. In Clause 2 (2, c) it is provided that the Board must consider what fares any applicant for a licence proposes to apply on a route. At the same time we are told in Clause 2 (5, b) that fares outside Great Britain have to be settled by the Minister. There appears to me to be a duplication. Sup- 1238 pose an independent company says that it could run a certain service with fares 10 per cent. below those being charged by B.O.A.C. Is the fare aspect of the application to be considered, discussed and settled by the Board, or is it exclusively the duty of the Minister?
Will the Minister consider the application of that company to run the service at cheap fares in competition with B.O.A.C.? Will that be argued between the company and the Board before the Minister, as well as before the Board? If it is to be both, it is ridiculous. Which should come first? As the Bill stands at present, the situation is completely unclear. I hope that we shall have some explanation of it.
The second reason why we oppose the Bill is that it will bring very grave danger to the two air corporations and put them in a position where they may not be able to function effectively against the competition of the world airlines. The 1949 Act gave them a virtual monopoly of British effort on scheduled routes, subject to working with associates and agents. The main purpose behind the 1949 Act, namely, the establishment of this monopoly, is still valid even if a case for reviewing the machinery for licensing independents can be made out. Everyone must agree that the corporations should be the instruments through which Britain should channel its resources and expertise to establish and maintain its position in world aviation.
Moreover, it is recognised by everybody that if the corporations are to be enabled to carry out that purpose, in face of the strong international competition of foreign airlines, they must be protected from having their position weakened by attempts by other British airlines to divert traffic and resources away from them.
That is the position which we maintain should continue to exist today. But the Bill removes from the corporations those necessary safeguards which protected them before, and it substitutes a set of vague considerations which may be interpreted in any way or discarded. That is very serious. Competition amongst world airlines is so strong that at the moment hardly any of them pay their way. Our own corporations have the greatest difficulty in doing so. To 1239 make them face further native competition as well as foreign competition will plainly weaken their position very substantially.
It is interesting to note that, at the very moment when it appears that the corporations are to be subjected to a greater degree of competition from private airlines than ever before, the reverse is taking place in Europe. Air Union is considering arrangements whereby the national airlines of the various countries concerned are not to compete with each other. Its members are devising means whereby they can co-operate by dropping out from some routes certain national airlines in favour of others. The reverse of what is going to happen in this country is going on abroad, and, I think, wisely.
§ Mr. F. A. Burden (Gillingham)
The right hon. Gentleman is not on very firm ground here. What he has been describing has taken place on internal airlines, but not on external airlines. There has been quite a duplication of France's international airlines.
§ Mr. Strauss
That was not the point I was making. My point is that those countries which comprise Air Union are now considering eliminating their own national airlines from competition with each other.
§ Mr. William Shepherd (Cheadle)
The right hon. Gentleman is still arguing on weak ground, because Britain is doing exactly the same. We are entering into pooling arrangements with European countries to save duplication of our own services and our bilateral correspondence overseas. We are not out of this by any manner of means.
§ Mr. Strauss
I do not think that we are. I did not say that. I was making the simple point that if the Bill does what we think it will do—namely, make our corporations face greater competition from rival British airlines—that will weaken them, particularly as other international operators are eliminating competition among themselves. That was 1240 the sole point I was making, and it is a valid one.
Independents have some advantage which the corporations do not possess. One advantage is that they do not have to pay, and many of them do not pay, the same rates of wages and salaries as are paid by the corporations. That is a decided advantage, although I will not take up the time of the House by arguing whether it is an unfair advantage, and one of the things which should be considered by the Board when an application is before it from the corporations and an independent airline to run a certain service is whether they both pay the same wages and salaries. If not, the independent company has an obvious advantage.
Independents have a further advantage. Because many of them are small concerns and operate limited routes, they have less overheads than the two corporations have to carry. That, again, gives them an advantage, although not an unfair advantage.
§ Sir John Barlow (Middleton and Prestwich)
Will the right hon. Gentleman make that clearer? Would he give a complete monopoly to B.O.A.C. and B.E.A. in this country?
§ Mr. Strauss
We know their situation at the moment. They have a monopoly, subject to certain rights. I shall come in a moment to what I propose as a reasonable way out of this dilemma. If the hon. Baronet will be patient for a few minutes, I will tell him what I think should happen.
Hon. Members opposite believe in competition as a philosophy, and particularly competition against a national enterprise. They are always pressing their views to that effect. However, in practice, they accepted long ago that in certain national enterprises competition of any sort, whether from private sources or any other source, is wrong and contrary to the national interest. No one would suggest that competition should be permitted in the supply of electricity or gas, although it might well be possible in certain cases for someone to say to the Government, "I can supply these services rather cheaper to a built-up area, and this will benefit the consumers". Some of the airlines use that argument, but no one in his senses would 1241 accept it as a good argument for allowing such competition to take place.
There is a monopoly in certain forms of transport. It would be perfectly easy to show that an independent bus company, as happened in the past, would be able to charge cheaper fares on some routes if it was allowed to compete with the monopoly of London Transport. No one in his senses would permit such a thing to happen, as, in the long term, it would be contrary to the national interest.
This argument applies in exactly the same way, but with special force, in the realm of civil air transport, because there competition has to be faced not only from a new line which may be permitted to compete with the corporations, but from all the airlines run by Governments or companies in all parts of the world. Therefore, it is particularly important to see that no competition is permitted from this country which will underline or weaken in any way the strength of the air corporations to meet such competition.
The Minister said that it is not his intention to undermine the position of B.O.A.C. and B.E.A. I am certain that he is sincere in saying that. If he is sincere, why not draft the Bill in such a way as to carry out his intention? The Bill permits the standing of B.O.A.C. and B.E.A. to be undermined. The right hon. Gentleman may tell us that as long as he remains a Minister and is able to resist the pressures of his back benchers he will do all he can to prevent that happening.
But we do not know what may happen. Ministers change. It may be that one of the back bench Members who have been pressing for greater liberty and opportunities for independents will one day become Minister of Aviation. Then where will we be? The wording of the Bill does not protect the corporations because the Board, if it is so minded and with the support of the Minister of the day, can well decide that competition shall be permitted on a large number of routes in such a way as to make the position of B.O.A.C. and B.E.A., if not untenable, very much weaker.
There is a very simple way out of this. The right hon. Gentleman's intention 1242 should be incorporated in the Bill. It can be done like this. Instead of saying that the Board should take into consideration certain factors, it should be stated that there is one overriding factor which the Board must apply in every application made. Words should be inserted to the effect that it shall not license an operator to run a service which would divert existing traffic from the corporations or such future traffic as it may properly expect to attract. That would not prevent the independents from developing along their present lines.
Of course, hon. Members opposite object to that because their purpose is, in fact, to divert traffic from the two corporations. That is not surprising. The philosophy which animates the Conservative Party, and which it carries out at every opportunity in practice, is to confine and restrict public enterprise in favour of private enterprise even when the national interest and finances suffer as a result.
The consequences of the Bill which we say are likely to take place are not merely the views of my hon. Friends and myself. They are the views of the responsible Press whose members have read the Bill and of experts who study aviation matters. Let me quote two sentences, one from the Economist and the other from the Financial Times. In an article in the Economist of 20th February dealing with aviation matters in general, there is this particular reference to the new policy of the Minister of Aviation of paying some of the development costs of the air corporations:The two nationalised corporations deserve the sop of a Government subsidy towards the cost of putting new aircraft into service, if only because they may take a severe buffeting when Mr. Sandys' new licensing bill comes into effect".That is what the Economist expects.
What does the Financial Times expect to happen? After dealing with the provisions of the Bill, it states:These are among the main points of the Civil Aviation (Licensing) Bill, the text of which was published yesterday. The Bill heralds the long-awaited 'new deal' for the independent airlines, and it should enable them to obtain a much larger share of the growing air traffic both within and outside the U.K. than has been possible in the past.If they are to obtain a larger share, that plainly means that the Corporations will 1243 obtain a smaller share. The corporations, in the view of these newspapers, will have a smaller share in the new traffic than otherwise they would have a right to expect.
We want to know, not so much the intention of the Minister, but whether he will embody the intentions about which he spoke in introducing the Bill into precise words in the Bill before it leaves this House. If he puts in words which will properly protect the legitimate interests of B.O.A.C. and B.E.A., we shall be satisfied, but those words do not at present exist. Without them we share the unavoidable conclusion expressed by the Economist, the Financial Times and a large number of expert sources that the corporations will get a buffeting as a result of the passage of the Bill.
§ Mr. Paul Williams (Sunderland, South)
May I revert to the quotation which the right hon. Gentleman made from the Financial Times? I should like to quote a passage from, I think, the same leading article, which states:It must be made clear that this ending of the monopoly does not mean that B.O.A.C. and B.E.A. are going to have some of their existing scheduled services taken from them and given to the independents. No such carve-up is in prospect.It seems that the right hon. Gentleman is a bit off-centre.
§ Mr. Strauss
I did not say that. I have no doubt that most of the existing services will continue. I do not question that. What the Financial Times was dealing with, and what is worrying us, is that, as this great industry develops and new traffic is thrown up, B.O.A.C. and B.E.A. will be deprived of their proper share of that traffic, which will go to the independents. Consequently, the strength of B.O.A.C. and B.E.A. will suffer materially.
It is also possible under the Bill for the very thing which the hon. Member for Sunderland, South (Mr. P. Williams) mentioned to happen. It is possible for some of the existing services which the corporations now run to be taken away and given to the independents. All we are asking is that the Bill should make that impossible. We believe, as I have said, that it is the major intention of 1244 many people, at any rate those who support the Bill, to bring about such diversion. As it is at present worded, the Bill certainly permits it, and we think that it is the intention of those who support the Bill to restrict the expansion and prosperity of the national airlines for the benefit of private airlines, to whose pressures the Government have now surrendered.
As this will clearly make it more difficult for the airways corporations to compete successfully with foreign airlines, many of whom are indirectly subsidised by their governments, we say that the Bill should be rejected by Parliament and replaced by one that will not do such grave damage to the national interest.
§ 4.37 p.m.
§ Mr. William Shepherd (Cheadle)
I am afraid that I became rather disappointed with the right hon. Member for Vauxhall (Mr. Strauss) as he went along. At the beginning of his speech, it seemed that at last he was able to resist the blandishments of the painted harlot of monopoly. As he progressed with his speech, it became clear that she still holds the same charm for him. By the end of his speech, the right hon. Gentleman was virtually saying that, although hon. Members opposite would like to make a pretence of being liberal, they want to write a Bill which will give no chance to the independent operators. I am very disappointed, and I hope that during the passage of the Bill through this House hon. Members opposite will appreciate the purpose of the Bill and will adopt a more liberal attitude towards independent operators.
First, I want to say a word or two about the alleged attitude of back bench members on this side of the House towards the corporations. On several occasions we were stated by the right hon. Gentleman to be seeking to damage the corporations. This is very untrue. We share the real pride of the whole House in the performances of the two corporations. They have done much to establish the prestige of British aviation, and we wish them well.
I had to perform a very disagreeable duty a few weeks ago in this House when I had to complain about the quality and leadership of the B.O.A.C. board. That was not an act of sabotage. Had I been 1245 anxious to damage B.O.A.C., I would certainly have kept quiet, because obviously the poorer the board the less likely is B.O.A.C. to compete effectively. I made a statement which was difficult for me to make personally but which was vital to the well-being of the corporation. I assure the right hon. Gentleman that all my hon. Friends are anxious to see the two corporations playing their proper part in British aviation.
But we are not anxious to see the corporations playing a monopolistic part. I must try to get the right hon. Gentleman to conceive the possibility that competition can have some beneficial and stimulating effect. If we cannot get to this position, we shall never get anywhere. I believe that if, for example, some of the additional frequencies on routes now operated by B.O.A.C. or B.E.A. were given to independent operators, it might well have a decisive effect upon the efficiency of both corporations. It might set a new standard of service, efficiency and enterprise. I am not saying that it necessarily would; all I am saying is that there is a strong presumption that competition would bring to the public a better service.
This can be done without endangering the financial security of the corporations. After all, they are in a pretty strong position, having got nearly all the major routes and having free access to Government financial resources, while these poor independents have to exist on the crumbs which drop from the groaning table of the corporations. It is improper to suggest that there is any possibility of hardship being imposed on the corporations in this process.
The right hon. Gentleman made a number of detailed criticisms of the criteria, and in particular with respect to the responsibility of the Minister. I agree that it is a little unfortunate that we have paragraph (g) in Clause 2 (2), which enables the Minister to make certain comments, but I do not think we can exclude that paragraph. There might be international considerations which would have to be taken into account. That is the answer to the right hon. Gentleman's point that the Minister ought to be compelled to publish his comments. I can conceive of a situation involving delicate international negotiations where it would be 1246 undesirable for the Minister's comments to be published. Therefore, I hope the right hon. Gentleman will not press that point in Committee.
On the question of criteria, the right hon. Gentleman said that we should lay down a precise basis on which licensing applications should be considered. He went even further and suggested that we should decide what weight should be attached to each one. Such a suggestion would be very impracticable. If I may say so with deference to hon. Members opposite, this shows how they fail to appreciate the nature of business. [HON. MEMBERS: "Oh."] Yes, that is so. I must insist upon this, and perhaps hon. Members opposite will agree if they listen to what I have to say. It may be that in respect of a given criterion the weight to be placed in 1960 is entirely different from the weight which ought to be placed in 1962. Business is constantly changing its pattern, and we cannot lay down to an independent authority in precise terms exactly all the considerations which should weigh with that operator and attach to each of these considerations a weight for all time. It is quite impossible to tackle the problem in that way. If we are to have an independent Board, we must accept some of the uncertainties that are attached to having such a body, and we must give to it the flexibility that is necessary for it to change its policy in the light of changing national and international situations.
I suggest to my right hon. Friend that there is one detail which should be omitted, and that is the provision which requires that an applicant should establish the need for the service. I do not think an applicant ought to be required to prove that the need for the service is established. What he should prove to the Board is that the need for the service is capable of being generated—not that the need for the service exists. If we are to make the progress in this industry that is essential, we must certainly get new traffic generated, and I hope that this requirement for need to be established will be dispensed with so that there will be no question of the need for the service to be detailed in the criteria.
The position of the corporations is abundantly safeguarded in the other 1247 criteria. If the right hon. Gentleman will read from paragraphs (a) to (g) in Clause 2 (2), he will see how many of those considerations safeguard the position of the corporations. But even if that were not so, I feel that we have now come to the stage in civil aviation where we must concentrate the whole of our effort on those customers who pay for their own tickets. Up to now a great deal of the traffic on the civil airlines of the world has consisted of people who do not pay for their own tickets. The number of such people is necessarily limited, and the future must depend upon those people who do pay for their tickets. In this connection, we must have a bold and adventurous policy. I believe—and I hope hon. Members opposite share this view—that in this bold and adventurous policy the independent operators are particularly well-suited to play a substantial part. They have led almost every development in recent years which has resulted in lower fares.
I do not wish to detract from B.E.A., but this corporation makes a big splash on the subject of lower fares. After all, people who spend as much on advertising as B.E.A. do are entitled to make a splash. But there is this great fanfare about the introduction of low prices on the service to Paris—and what does it amount to. It is the same price which B.E.A. charged six or seven years ago to Paris—£9 10s. That is not really a low fare in terms of what is really practicable.
I was recently looking at some figures which may be of interest to the House. This was a theoretical calculation which involved using the new American Super-Hercules aircraft—it could, of course, be applied to other types of aircraft as well—giving the passengers ordinary bus seating accommodation and working on the basis of a 60 per cent. load factor. It was considered that the route between London and Paris could be operated on a return fare of £2. That is an indication, if only theoretical at present, of what is practicable if we get down to really low fares. I agree that, on the whole, it would not be practicable to operate the London-Paris route in this way, but there are plenty of areas, such as Portugal, Greece, and islands like Malta and Cyprus, which could be 1248 opened up to a vast volume of new traffic if there were really low air fares.
If we are to achieve this, the independents will have to play a big part, and they will have to surmount this terrible obstacle of I.A.T.A. which at the moment is clamping down on low fares. I hope that during the passage of this Bill my right hon. Friend will try to arrange matters so that air clubs are legally possible in this country. If we are to progress towards really low fares—fares one-quarter of what are charged today—the charter service on a club basis is essential as a forerunner. At the moment, firms which want to establish a club for the purpose of getting a high load factor on a charter service cannot do so because of legal difficulties. I hope my right hon. Friend will try to eliminate those difficulties so that we can pave the way to low fares and when I say "low" I do not mean £9 10s. return to Paris but something like three guineas.
I for one welcome this Bill in no spirit of criticism of the corporations. I believe that the stimulus it will give to the corporations will make them even better servants of the community than they are now. I believe that the independent operators, who have engaged in a magnificent struggle in the last ten years against almost impossible odds, have earned what we now seek to give them—that is, a place in the sun in British civil aviation. I believe that both independent airlines and the corporations can work together to improve the share which we enjoy of world civil aviation.
§ 4.50 p.m.
§ Mr. A. E. Hunter (Feltham)
I am pleased to have an opportunity to speak on the Second Reading of this Bill. I hope the hon. Member for Cheadle (Mr. Shepherd) will forgive me if I do not follow him in his line of argument, because I want to deal mainly with the first part of the Bill, which deals with the question of air safety.
A debate took place in the last Parliament, in which I took part, on the Report on the civil aircraft accident at Southall. This was a tragic accident in which the pilot and crew of a Viking aircraft and civilians lost their lives. The Report of Mr. Justice Phillimore indicted the airline operators of that aircraft, Independent Air Travel, and the 1249 Government promised during that debate a Measure to ensure high standards of safety.
In the Queen's Speech last year, there was reference to the Bill which we are now discussing. It states:A Bill will be laid before you for improving the arrangements for licensing air services and air line operators and to ensure the maintenance of high standards of safety."—[OFFICIAL REPORT, 27th October, 1959; Vol. 612, c. 50.]For some while I and other hon. Members have pressed the Government to implement that promise.
Civil air transport is now rapidly expanding, not only in this country but throughout the world, and it is of paramount importance that all safety measures are taken for the protection of the travelling public which is growing every year, the crews and those engaged in the airline services, and also the residential population below, which is of vital importance. Accidents can take place anywhere: in the countryside, in the cities, in the towns, in the air and at sea. The residents of my constituency who live around London Airport often feel that, with aircraft of all countries taking off and landing, there are special risks for those living around an international airport. I consider that my constituents should be given a high standard of safety. Thousands of people who live around London Airport run a higher risk than those who live in other towns and cities.
There has been a number of emergency landings at London Airport. In reply to my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), whose constituency adjoins mine and who, like myself, has been pressing the Government for safety measures, the Parliamentary Secretary on 15th February this year said:The total number of full emergency and local standbys at London Airport during the period 1st June, 1958, to 30th April, 1959, is as follows:
[OFFICIAL REPORT, 15th February, 1960; Vol. 617, c. 942.]
Full emergencies 30 Local standbys which are purely precautionary measures 367" —
There is some justification, therefore, for people living around London Airport feeling that they run a greater risk from air accidents than the rest of the population.
1250 My complaint against this Bill is that it does not go far enough in measures for air safety to safeguard the public. It establishes an Air Transport Licensing Board with power to withdraw the licence of an unsatisfactory operator. I trust also that it will prevent the issue of licences to companies like Independent Air Travel, or of doubtful or mushroom growth. Let an airline operator establish a reputation for efficiency and high standards of safety before a licence is issued.
I want to refer to something which I consider should be included in the Bill, to which I hope the Minister will give his consideration, and that is the compulsory insurance of aircraft owners against third party risks. In reply to a Question by myself on 16th November, the Parliamentary Secretary stated:There is no requirement for compulsory aircraft third-party insurance. Under the Civil Aviation Act, 1949, aircraft owners are legally liable to pay compensation for material loss or damage caused by aircraft to persons and property on the surface. In view of this legal liability, operators normally insure against the risk."—[OFFICIAL REPORT, 16th November, 1959; Vol. 613, c. 790.]I have had this matter raised by a number of my constituents on several occasions. I am sure that it must be of some concerned to local authorities which have considerable housing estates around London Airport; the same problem also arises around airports in other parts of the country.
A motor car owner is compelled by law to insure against third-party risks. It seems illogical to me that an aircraft owner should not also be compelled to do so. It is a poor argument for the Government to say that these owners normally do so. I appeal to the Minister to consider this matter and perhaps bring forward an Amendment during the Committee stage to strengthen this Measure in the interests of the public.
We all trust that accidents involving great loss of life or great loss of property will not happen, but should one take place when the airline operator is not insured and is uable to pay for damage, action will be demanded for compulsory insurance, so why not do it now? The Minister said today—and I agree with him—that civil air transport will grow. B.E.A. are flying 3 million passengers yearly from London Airport and B.O.A.C. are also flying many passengers. 1251 The independent airline operators are also flying passengers to all parts of the world.
When we have civil air transport growing and people using the services for business, holidays and travel, and also goods being carried by aircraft, it seems to me that the Minister should take powers to ensure that all airline operators, especially the independent ones, insure against third party risks. After all, B.O.A.C. and B.E.A. are backed by the State, and I imagine that the independent operators would welcome it. All should be compelled to insure against third-party risks. Heaven forbid that it should ever happen, but what a disaster it would be if a serious accident should take place and the company were unable to pay for the damage done. I hope very much that the Minister will give close attention to this point and will bring forward in Committee an Amendment to provide for it.
I do not agree with certain parts of the Bill. My right hon. Friend the Member for Vauxhall (Mr. Strauss) has already made certain criticisms of it. I am sure that most hon. Members are proud of the air corporations. They are the two main airline operators of this country. They fly for Britain, and we can be proud of their progress and efficiency. They pay great attention to air safety standards. I have visited their training school and I know well the high standard to which they train their pilots and the great attention they give to detail. I hope very much that it will be the wish of all Members of the House to join with the Minister when he wishes the air corporations well.
I believe that air transport will expand rapidly in the future. Britain has a great reputation in the air. A splendid record of achievement. We brought forward the Britannia and the Comet, and we have made great strides across the seas and the continents. Britain has a high reputation for safety. Let us do all we can to ensure that Britain is a leading power in civil air transport and the leading air power in maintaining and ensuring high standards of safety for the travelling public, for the crews and for the populations on the ground.
§ 5.2 p.m.
§ Mr. F. A. Burden (Gillingham)
I listened with great interest to the speech of the right hon. Member for Vauxhall (Mr. Strauss), but I thought that he tried to paint a picture of this Bill as some short of bogy which will be regretted by all concerned. At one stage, he said that the independents do not like it. At another, he strongly implied that the corporations would not like it. Above all, he made it perfectly clear that he did not like it. The more I listened to his arguments, the more certain I became that I really do like it.
Quite frankly, it seemed to me that most of the right hon. Gentleman's arguments were based on far too narrow a conception of what air transport is. If the Opposition are thinking and speaking on the same basis as the right hon. Gentleman, I am very glad that we have as our Minister today a man who can hustle in the way spoken of by the right hon. Gentleman and, moreover, hustle in what I regard as the right and proper direction.
The right hon. Gentleman criticised the terms under which licensing by the Board will take place, but, in my view, the points he made seemed to me almost entirely Committee points which can be raised later. I do not intend to deal with many details in the Bill, but before I proceed I wish to declare an interest. I am associated with a company the chairman of which was described recently in an article by Mr. Frank Beswick, who used to speak on civil aviation affairs for the Opposition, as "the most independent of independents". I am very glad to be associated with that company, although it was only recently that my association with it began.
My stand on the whole subject of civil aviation, together with that of many of my hon. Friends, has been absolutely consistent over the years. We did, indeed, visualise the enormous growth in air transport which was bound to take place, and our concern was, very largely, that Britain was being left behind in reaching out for the new amount of traffic which was coming. I have always thought that if we, as a great trading nation, were to continue to thrive in the world, we must ensure that our civil aviation played a part as great as or even 1253 greater than that played by our Mercantile Marine in the past. The scope of international overseas transport, particularly in the widely separated British territories, creates and should continue to create for us an enormous incentive to go after the available world air traffic and to intensify and expand our current air network.
In my view, that desirable pattern should have been clear a long time ago. However, Britain, wrongly I believe, preferred to build up this great new industry through a monopoly, through the present air corporations. I join with my right hon. Friend and my hon. Friends in saying that the corporations have played a very great and honourable part in extending the influence of British aviation throughout the world, but I believe, also, that, had the enormous scope of our opportunity been recognised back in 1924, when the change-over in Imperial Airways took place, it should then have been realised that, in the long-term interests of our economy and of British civil aviation, a great multiplicity was desirable and should have been established.
Unfortunately, those commercial facts were not understood by Governments and by our planners. Despite the trend in the United States and France to license several external licensed operators, in order not to bring in undesirable competition but to boost their carriage of passengers and freight, this country has gone forward on the basis of the monopolies.
Now, of course, my right hon. Friend has very speedily come in to implement the pattern which many of my hon. Friends saw was necessary. In a very short time, he has been able to stand back and look at the picture and introduce this new trend for the future. Hon. Members opposite have often predicted doom for what this party intended to do. I believe that in three or four years, when what is now proposed has been implemented, they will have cause to eat any words of criticism they may make today and will have to admit that the corporations have neither been emasculated nor weakened, but that they and British aviation generally have been given vigour and stature as a result of this Bill.
1254 About 86 per cent. of the air traffic of the world is shared now between eight leading countries. The United Kingdom has had a falling share in the number of passengers carried. I believe that we must look ahead over the remaining forty years of the twentieth century. With the development of jets and the new supersonic aircraft, the possibilities of expansion in air traffic, both passenger and freight, are enormous.
Today, under I.A.T.A., there are, I believe, 74 or 75 airlines belonging to 55 countries. Thirteen belong to the United States. The average is only 1.3 airlines per country. I ask hon. Members to consider those figures and compare them with the multiplicity of shipping interests which grew up over the years. If we look at the situation in perspective, it is clear that the number of the airlines today is a mere token of what they will be tomorrow. We must, therefore, consider as the first step the opportunities that will exist for this country in the next forty years.
Britain has large sums of capital assets and trade potential tied up in its shipping. It will be necessary for us to compensate for the loss of our sea trade. As aircraft become bigger and faster, it is inevitable that more people will travel by air. I believe, also, that fares will become cheaper. The pressures from international airlines, even if they are resisted by this country, will become so great that the trend is inevitable. Our own tempo, too, must be increased if we are to retain and ever increase our existing carrying capacity. The foundations for this increase will be laid by enabling the introduction of new enterprises and the transfer of capital from sea to air without delay.
The flexibility of policy changes will emerge much more freely as a result of the Bill than would have been possible under the old static arrangement. Hitherto it has always been the case that when any policy change has been suggested, practically every hon. Member opposite regarded it as leading to the denationalisation of the corporations. It has even been argued that since the competition from foreign airlines is so intense, it would be wrong for us to license further airlines to run parallel with B.O.A.C. and B.E.A. from this country.
1255 There is no question of denationalising the corporations, or of emasculating them in any way, or reducing their activities. The independents certainly have no desire for this. Right hon. and hon. Members opposite are doing the independents a great injustice if they suggest that they wish to see the corporations eroded and they themselves set up in their place to operate on the same scale and in the same way as the corporations overnight. That is quite impossible. The independents do not want it overnight or at any period in the future.
§ Mr. Loughlin
I know that the hon. Member would not attempt to be unfair. We are not suggesting that the independent airlines desire the denationalisation of the corporations. Would the hon. Member not agree, however, that there is an analogous situation to that which arose from the denationalisation of road transport, when the unprofitable railway services remained nationalised? That is precisely the situation which we see in the Bill.
§ Mr. Burden
This is another bogy in which the future will prove the hon. Member to be quite wrong. There is no question of skimming off the cream. Since the hon. Member and his party are so concerned for the big corporations, I remind them that, very largely as a result of the legislation which they introduced, they forced the independents to live off crumbs for far too long, to the detriment of British civil aviation. It is about time that the independents also had an opportunity to get some of the decent business that accrues to civil aviation. I wish to make it perfectly clear that the independents, hon. Members on this side of the House and everybody interested in air transport generally wish to see the strength, dignity and the opportunities for B.O.A.C. and B.E.A. maintained.
§ Mr. George Chetwynd (Stockton-on-Tees)
The hon. Member has told us quite clearly what the independents do not want to happen. Will he now tell us what they do want to happen? For example, does he envisage that the independents will be running in parallel with the corporations on highly profitable routes?
§ Mr. Burden
If the hon. Member is patient a little longer, I will try to state my views.
I must, however, return again to what I regard as Britain's function in the air. We must all co-operate in trying to make our airways as important a carrier as our Mercantile Marine has been in the past. We had a bigger share of the world's sea trade than any other nation. In 1955, on the North Atlantic, Cunard carried 27 per cent. of all passengers and the United States Lines carried 10 per cent. In 1954, the last year for which figures are available, B.O.A.C. carried only 9 per cent. of the air passengers across the Atlantic whilst Pan American and T.W.A. carried 52 per cent.
That is the kind of situation that worries me. That is the picture that we must get into perspective as a great trading nation. More and more people are turning to air travel and unless vastly more of them are carried by British airlines, there will be a considerable adverse effect upon our balance of payments. One must always remember the enormous amount of money that we have earned in the past and the difference which has been made in our standard of living by the foreign exchange earned by our shipping interests.
At the present, as an air-carrying country, we are about on a par with Holland and France. We carry about one-third of the international air traffic carried by the United States. One moment's thought by those who fear that the Bill will cut into the corporations will make them realise that the future will demand no less effort on the part of the corporations. Not only does the future call for the infusion of new blood through the independents, but it means that the corporations will be asked to exert an even bigger effort than they have done in the past.
Hon. Members opposite are concerned, for example, about the effect of the duplication of air traffic over the Atlantic if Britain were to introduce a new operator. Under the 1947 Bermuda Treaty between America and Britain, it was agreed that if Britain asked for it we should have parity of frequency. At the moment, the frequency of Pan American and T.W.A. is far greater than the British frequency. We should 1257 endeavour to take up the provision that was made in 1947 and ensure that under the treaty we fly a number of flights equal to those operated by America through Pan American and T.W.A., and now Seaborne and Western.
There are still tremendous opportunities in Europe. The bulk of the traffic carried in the high density cross-Channel area is that of British nationals. I believe that there are new openings there and that we should take every opportunity to grasp them. In the competition for new routes and frequencies we must not allow Britain's opportunity to be lost. I hope that as a result of the general overall strengthening of British aviation, as a result of this Bill, the British case for higher frequencies and new routes on the international lines will be pressed much more strongly and more often than in the past.
I believe that another feature arises in this matter; that we should look to shipping as an example of how to operate and increase the efficiency of a great many of our services in the air. The shipping companies, if we look at the overall picture, have always concentrated their activities on a limited number of routes. They have specialised, they have carried out intensive market research and they have set their efforts in certain areas. I believe that all that is highly desirable and should be much more the pattern of the future for civil aviation than it has been in the past. It may be that B.O.A.C. may have to grow much bigger, but it is certain that the overall total effort of British civil aviation must get very much bigger than it is today.
We as a party, and I think the country generally, have accepted the need for decentralising, rationalising and pruning, in some directions, some of the nationalised industries, and I believe that had the party opposite been the Government today it would have found it necessary so to do. None of these nationalised industries is subjected to intensive foreign competition, but the air corporations are.
The right hon. Member for Vauxhall said that the independents may pay lower wages and asked what the Minister intends to do about that. Neither the Minister nor anybody else can do anything about foreign companies, with 1258 which B.O.A.C. and B.E.A. are in competition, if they pay lower wages and so reduce their costs. That is a matter that must be taken into consideration. Therefore, I suggest that if it is right to look at the position of the internal nationalised industries to try to increase their efficiency, to improve their costing, and to make them produce better goods at a cheaper price, then it is absolutely vital and essential that we should be prepared to look at the position of the nationalised air corporations in the same way.
I do not believe that the corporations will suffer any ill whatsoever from this infusion of new opportunity for the independents. I believe, in fact, that it will be a stimulant and a challenge to them and that as a result of it the overall picture of air for this country will be vastly better tomorrow than it is today.
What has arisen in other countries? France has had a nationalised air corporation in Air France, but she has now licensed private enterprise airlines, in addition to Air France, to operate on the international routes. The position of Air France has not been weakened thereby; indeed, it has been strengthened, because it is on the routes in which Air France is in competition or running parallel with the other French airlines that it is making a profit. It has not made for increased weakness for France. Why should it for us?
What about Pan America? Consistently, the American subsidy for mail has been reduced, but no one is suggesting that there has been an economic deterioration in Pan American airways as a result. The results of the French and American multiple enterprise influence should abate the fears of right hon. and hon. Members opposite that the Bill will do damage to the great corporations.
There are, as I say, enormous possibilities, and I think that the following figures will sum up just what those opportunities are. In 1949, B.O.A.C. everywhere carried 155,557 passengers. In 1958–59, it carried 495,000 passengers. The overall picture of passengers carried on the international airways in 1958–59 was 69 million. B.E.A. carried quite a lot more. It carried 751,000 in 1949 and 2,828,750 in 1958–59. That is still only just over 3 million out of the 69 million 1259 carried by the international airways of the world.
Hon. Members opposite say that this infusion of new blood is going to weaken the position of B.O.A.C. and B.E.A. Every day, every week and every year more and more people are travelling by air. In 1954, B.O.A.C. carried 9 per cent. of the passengers who crossed the Atlantic. Pan America and T.W.A. carried 52 per cent.
Let us look at the whole situation in broad outline. Let us look to tomorrow. Let us see the opportunities that will exist tomorrow and let us endeavour to make this country as great in the air as she has been on the sea. I believe that my right hon. Friend has taken the first step to chart the way for British airways in the future, which will help to bring this country greater economic security and abundance than it has at present.
§ 5.19 p.m.
§ Group Captain C. A. B. Wilcock (Derby, North)
I will not follow the remarks of the hon. Member for Gillingham (Mr. Burden), although I must say that his statistics are most interesting. He has certainly made out his case for a great extension in air activity part, of course, which he wishes to go to the independents.
In my fifteen years in the House I have spoken many times, but never have I been on such thin ice as I am this afternoon. I agree with my right hon. Friend the Member for Vauxhall (Mr. Strauss), who commented on sub-paragraph (g) of Clause 2 (2). It would appear from the Bill that we shall be subject to the caprice of a Minister. I say straight away that if that Minister were the present Minister I would not object.
All of us in the aviation industry—operators, manufacturers and everyone else—know that although the decisions may not be in our favour they will be fair. I know, and I must say it, that the Minister made it perfectly clear outside the House that he would not see any deterioration in the position of the public corporations.
This Bill does not deal just with independents, B.O.A.C. and B.E.A. It is a Bill that deals also with safety, and we would welcome it for that alone. It is long overdue, and we thank the Minister and the Government—although 1260 a Conservative Government—for wasting no time in bringing in a Bill to stop some of the very nasty holes that previously existed in the operation of aircraft and the carrying of passengers by private companies that were not fit to do it.
I must confess that I find very little to quarrel with in the Bill. The powers taken by the Minister are sweeping and it would, therefore, be nice to know more about the Government's policy. We would then know the kind of decision the Minister would make and the pressure that the Minister would be likely to bring on the new authorities that he is setting up on certain interesting subjects.
I think that we have to make up our minds, once and for all, about the position of the independents vis-à-vis the corporations. Looking back in HANSARD, I notice that quite a few years ago I advocated a clear-cut rôle for the corporations. I said that all passenger schedules, both here and abroad, should go to them—the lot. I advocated that all charter flying, holiday flying, tours, trooping and freight carrying should go to the independents.
I thought that to be a sensible policy, without any ambiguity. We could have all planned ahead and gone ahead, with the corporations and the independents supporting each other. It was decided not to do that. It was decided, and by a Labour Government, to allow this overlapping. So it has gone on for many years, and it has caused a certain amount of chaos and some hard feeling in different directions. I do not know whether I have made it clear that I have an interest in this matter, but if I have not it is my duty now to tell the House of that interest.
It is really not good enough for right hon. and hon. Members—particularly those on this side of the House—to say, "Yes, there is a place for the independents, but it must be constricted, kept down, and made secondary." That is not good enough. No independent wants to take the place of the corporations. All independents are just as proud of the work of the corporations as are those who are not in aviation. No independent ever assumes that he could undertake their work. He neither has nor expects to have the resources or the backing.
1261 What we have to settle today is whether we are to have independents at all. If we do not want them let us say so, and that is the end of it for them. But, if we do want them, it is not good enough to say that they must not do this or that. They, too, must be encouraged. They are British. Their aircraft are now becoming as British as those of the corporations. The pilots and crews are British. The whole thing is as British as the corporations. The independents have a part to play, and although I am speaking now as though I were on that side of the House in this matter, I hope that it will be recognised that I am speaking from my experience and the significance that I am on this side of the House will not be lost on hon. Members.
It is necessary that we should give them every encouragement. It is not good enough to put them in a position in which they cannot plan ahead. If they cannot plan ahead, it is not fair on them or their staff, or those who have invested their money in these enterprises. They must not be given the crumbs, but something worth while; that is, if we are to have them at all. If we are not to have them, let all of us on this side say so now.
I do not believe that any of my hon. and right hon. Friends will say that we do not want the independents. To be fair, I have never heard it said, but it has been said, or intimated, or hinted, "Let's have them, but do not let them affect the corporations?" Why not? Why should they not affect the corporations? I have never been one who wanted to see the corporations making millions of pounds of profit. They are doing a service—they are carrying the flag.
They are opening and developing routes under the British flag, and I do not see why we should always look for a money dividend on that. In any case, we shall not get one for many years. Profits, therefore, must not be the first thing in our minds, and here I repeat only what I have said before on air development and State corporations. If they lose money, what does it matter? If they are developed correctly, run efficiently, as we all know they are, why worry if an independent company is operating a route that a corporation may wish to operate in five years' time?
1262 One hon. Member made some observations on the future of the new Board, and spoke of the difficulty there might be in the Board coming to decisions. I do not think that there has ever been an example of the present Board not being wise and perfectly fair in its decisions between the corporations and the independents. An exception to that might be the occasion when the Minister used his weight and influence with the Board at a certain time, and the decision was detrimental to the corporations, but the result was not anti-British. I am sure that we shall have the same high respect for the new Board as we have for the present one. Politics has not yet, to my knowledge, entered into the decisions and findings of the present Board.
Having made the position as difficult as I possibly can for myself both inside and outside the House, I should like to put one further point to my hon. Friends. The independents do not comprise just the big three or four companies. Some of them are small, developing on their own individual lines, parochially, and I should like to see, as I think, the House would this type of development going on that is tied to cities, places, zones and areas.
As I see the future—and I hope that the Minister will agree with me here—every city and town will have its airport, and its local independently-operating aviation company meeting the particular requirements of the town and area. Therefore, we must be very careful, when we consider this matter of the independents versus the corporations, that the term "independent" does not necessarily mean a company which is operating on the same route and the same line and skimming the traffic and cream away from the corporations.
As I said, I find it difficult to criticise—even more difficult would I find it to vote against—this Bill. I believe that it is time we had a Bill of this type. There are things in it which are wrong—or rather, not wrong but loose, which want tidying up. They are not clear. The Minister, I am sure, will feel that himself. However, there is one thing that the Bill does do, and, if it is for that alone, it must go through and go through quickly: it gives greater safety to the travelling public. We can save lives with 1263 this Bill, and we can lose them if we fiddle about with it and stop it for some other reason.
§ 5.40 p.m.
§ Mr. Paul Williams (Sunderland, South)
The hon. and gallant Member for Derby, North (Group Captain Wilcock) plays an extremely respected part in British civil aviation not only by his own example and by his own dynamism but in a very enterprising concern, and he has, if I may humbly say so to him, made a remarkably well-informed and helpful speech today. He has made what some of us on this side of the House, although we may be personally committed to the independents' side, have been talking about and trying to get from his side of the House for some time, and that is a dispassionate review of the relative merits of all British air operators. We must get away—I shall return to this matter a little later—from what he himself said is a fictitious battle between the corporations and the independents, because often their interests do not clash, and often their interests and routes and operations co-operate with and support one another.
As the hon. and gallant Gentleman disclosed an interest in this industry, perhaps I should at this point again do the same thing myself, and more especially after the remarks of the right hon. Member for Vauxhall (Mr. Strauss), who implied that if perchance the present Minister were to leave his office in the next few weeks the hon. and gallant Member for Derby, North or I might try to make a take-over bid for his chair. There is certainly no attempt on our side, the side of the independents, to do anything of that nature.
I should like also to re-echo the remarks he made about the A.T.A.C. and, by implication, the great work it and Lord Terrington have done for a long time, often unthanked and for very little reward.
To take the speech of the right hon. Member for Vauxhall, it seemed to me that he exaggerated too much the consequences of this Bill, and inflated dangers which just do not exist. In fact, the changes being carried through in this Bill are relatively minor and relatively marginal. To suggest that this Bill is both imprecise and damaging to the 1264 corporations seems to me contradictory. Also, to say that the Bill is imprecise and to ask for an independent board appears to be contradictory. It seemed to me that there was much criticism of himself in the speech of the right hon. Gentleman.
I should like to quote to the House the last sentence I used in the speech I made on 15th December when we last debated civil aviation. I said:If my right hon. Friend will set his hand to the task of establishing a new licensing authority separated from political consideration, which bases its judgment on economic and operating efficiency, he will be doing what I suggested was his task, namely, establishing in this Parliament a new charter for British civil aviation."—[OFFICIAL REPORT. 15th December, 1959; Vol. 615, c. 1316.]On that note I want to congratulate my right hon. Friend on introducing a new, perhaps limited, charter for British civil aviation, in that it opens up new possibilities and gets away from many of the old shibboleths.
I support the Bill on four main counts—first because of the establishment of the independent Board; secondly, because of the introduction of the air operator's certificate; thirdly, because of the breaking of the monopoly of the Air Corporations Act, 1949, and, fourthly, because of the whole move towards the introduction of an air service licence.
First, on the establishment of the independent Board. In those words of mine which I quoted a few moments ago I used the phrase, "separated from political consideration." I must admit that I have a hesitation about the Board as it is constituted at the moment and whether, the Bill gives it enough independence. I have a feeling that there is still much power in the hands of the Minister. Some of the ways in which this new licensing authority will operate will, of course, depend on the calibre of those who are appointed to the Board. That is quite obviously one of the most critical things in the Bill. It is obviously nothing which can be disclosed or even implied in too great degree at this stage, but I would urge my right hon. Friend to consider seriously the appointments to the Board, in enabling it to be as independent as is humanly possible.
1265 I recognise that much of the power which the Minister retains in his own hands by the Bill is inevitably retained. The matter of negotiation with foreign Governments must inevitably rest with the Government. Therefore, I conclude, on this question of the independence of the Board, that this is an experiment which is worth supporting, but which may well need to be reviewed at the end, perhaps, of five or ten years. In the interim, it seems to me that the independence of this Board will serve British aviation well.
The second reason I have for supporting the Bill is the introduction of the air operator's certificate. The hon. Member for Feltham (Mr. Hunter) and the hon. and gallant Member for Derby, North both referred to this essential ingredient of the Bill, the safety Clause which is introduced. I think that this is, perhaps, one of the most vital ingredients, because it is aimed at stopping up the existing loopholes which all of us connected with civil aviation know to exist. A result of this change should be to induce a sound assurance among intending passengers that the companies which will fly them and the aircraft in which they will fly will provide a high degree of safety.
Saying this, however, shows that the earlier regulations were lamentably inadequate. I think that this is another matter for welcome advice, but we in this House must receive the assurance that the safety standards demanded through the Bill will be sufficiently high to avoid repetition of the sort of thing to which the hon. Member for Feltham referred a few moments ago, the Southall accident. This is a charter of safety as well as a charter for aviation.
Now for the breaking of the monopoly of the Air Corporations Act, 1949. Obviously, that is a Measure which in practical terms has been out of date for some considerable time. Parliament in its wisdom is now catching up with fact. I thank the Government for having so speedily introduced a degree of reality into civil aviation, a degree of reality which has been missing for some years. This introduction of reality should enable us to meet the requirement to which the hon. and gallant Member for Derby, North referred, that we must now begin to think not of the independents versus the corporations but of all the 1266 operators. That is the new point, the key point, in this Bill. We must get away from this old, sterile argument in relation to competition, and the Bill, although it may not be very immediate and tremendous in its impact, will have influence on the scope and size of British aviation in the years to come.
Finally, on the question of air service licensing, Clause 2 of the Bill, of course, is the crux. I would think that even the Minister would not be surprised if it were said that one or two Amendments are likely to be suggested to Clause 2. It is through that Clause, I feel, that some of the power which resides in the Minister's hands may appear to be rather great.
Again there are perfectly natural and logical explanations of this, for example, in relation to the question of negotiations on international relations. I would have thought it wise that the Minister should have power to instruct the Board to refuse applications which he knows that, in turn, he will have to refuse if they are applied for and granted by the Board. If because of international arrangements. France, for example, said that frequencies over a certain period were not to be increased, the Minister would seem wise to instruct the Board to refuse applications, because to allow an applicant to go through the whole rigmarole, all the expense and the time and the tedium, would be wasting the efforts of the Board and of other genuine applicants.
Although I have hesitation about the Minister's powers, I understand that in many cases they are felt to be in the interests of aviation itself. My conclusions about the Bill are fairly simple. It can be used to increase the safety of British civil air transport. It can become a charter of fairness between all operators. However, the hesitation which I have generally about the Bill is that it does not appear to do enough—perhaps that is not possible in a Parliamentary Bill—to stimulate greater British efforts and to meet the demand of my hon. Friend the Member for Gillingham (Mr. Burden) that Britain should be flying a greater proportion of world routes than she does today.
I should be happy if at some suitable stage the Board could be given an overriding instruction that its main aim 1267 should be to promote an increase in British air transport and a greater share of world traffic. If this is the major undertaking which the Board shoulders, the Board will do well and the Minister will have done well by the nation.
§ 5.53 p.m.
§ Mr. Arthur Skeffington (Hayes and Harlington)
I do not want to detain the House for very long. I want to confine my remarks almost entirely to that part of the Bill which deals with safety, though I should like to make one comment at the end of my speech on the other part. It is true, as my hon. Friend the Member for Feltham (Mr. Hunter) said, ever since the Southall disaster we have been waiting for the first part of this Measure which seemed to us very necessary to prevent any possibility that such a disaster should occur again, in so far as these things can be prevented by human action.
I am sure that it will be appreciated that those who live and work near London Airport were deeply disturbed by that incident. A slight change in the flight path, or a slight variation in the speed of the machine, or of the wind, and the disaster could have happened elsewhere with possibly even greater loss of life. It seems from what the Minister has said, and from my hasty perusal of Clause 1, that the Bill will go a very long way towards allaying the fears that, in future, it will be possible far an aircraft to be in the air either without proper maintenance and servicing or with incompetent personnel. We can also take it that if the Air Transport Licensing Board does the job in the way that is envisaged, it will also be impossible for either the machine or the personnel to be overworked, which was obviously among the factors which accounted for the Southall disaster.
We shall have to examine the Bill in more detail in Committee to see how the Clause is to be applied and how effective its sanctions are, but the safeguards seem to me to be considerable and very much better than anything we have had up to now. I am sure that my constituents, and people who live round London Airport and other airports, will be very grateful that the Measure has reached the Floor of the House.
1268 It will be appreciated, I hope, and particularly by hon. Members who are more interested in getting the machines in the air and flying them, that those of us who express concern about safety are not just seeking to add further burdens on those engaged in air transport, either the corporations or the private operators. But when one realises the considerable risk that must exist round airports, there is a responsibility upon those who represent constituents living in such areas to see that their fears and their needs are not forgotten in the House. I am sure that that will be appreciated by every hon. Member.
Some figures were recently given in Flight relating to major disasters in Europe since the war up to 1958. Out of 570 major disasters, 380 had occurred either at take-off or at landing. Therefore, I am sure that the concern which we feel for residents and workers round the airports will be appreciated. We have only to think of examples at Munich and Belfast, and the incident involving the Vulcan at London Airport, to realise that these are places where trouble can more often be expected.
In so far as the new measures in the Bill will see to it that all reasonable precautions are taken in relation to the servicing and maintenance of the aircraft, this is a great step forward. I hope that, at the same time, this action will be matched by the best possible public relations between the Ministry, and London Airport and other airports controlled by the Ministry, and those who live round the airports. On previous occasions I have mentioned to the Parliamentary Secretary to the Ministry of Aviation the arrangements at New York, where there is constant co-operation with the residents' associations. Details of the monitoring of noise are exchanged weekly, and also news about incidents, so that everyone knows exactly what is happening. People do not feel that they are being misled.
I mention this because I think that some of the good will and the real security which the Bill will create will not have an impact upon the minds of people if the fullest information is not exchanged between the Ministry and residents. There must be confidence between the parties. It is right, on the point of safety, to refer to a recent 1269 example at London Airport. The South Harlington Residents' Association had asked for figures of emergency landings up to last year. For some reason, these were refused at the airport. I cannot think why, because I should have thought that people who live near the airport had a right to know how many emergency landings had occurred. When I put a Question to the Minister, the information given to me was, on the whole, reassuring when one considers the vast amount of traffic that goes in and out of London Airport.
In twelve months up to last May there had been only 30 full emergency landings. Even though there is an emergency landing, that does not mean that an accident follows. It means that the airport is prepared for a possible accident. Against the background of the traffic handled at the airport, those figures were not unduly perturbing. I hope that in future it will be thought highly desirable that the figures should be known, even if they are bad, let alone when, as in this case, they were reasonable having regard to the volume of traffic. When a great deal has been done to tighten up regulations dealing with the aircraft themselves, it would be a great pity if people still felt that there is a greater risk than in fact there is.
While I am dealing with safety, should like to mention that there has been a proposal for slewing the No. 2 runway by quite a small angle, which will mean that the take-off would be over open country instead of a considerable built-up area, as is the case at present at Cranford Cross. It is the built-up areas at new airports where trouble is more likely to happen than elsewhere. Unfortunately, at London Airport some of the nearest houses are only 2,400 feet from the end of the runway. Consequently, a slight slew of the take-off run would obviate a considerable danger. I am sure that I speak for a considerable number of my constituents when I say that we are grateful for this part of the Bill. I hope that every possible step will be taken to ensure that the provisions are adequate and effectively applied, as I think will be the case.
I have no great enthusiasm for the other matters in the Bill. It is unfortunate that measures for safety have been mixed with measures giving 1270 greater freedom to private airlines. There may be a case for doing so, but it is a pity to put these provisions in the Bill, because many of us who will give full support to the safety precautions cannot give it to other measures which we think have considerable defects.
I was glad to hear the Minister say that he did not want to do anything to weaken B.O.A.C. or B.E.A. We shall watch and try to ensure that this does not happen. However, the kind of developments which will be allowed to take place under this Bill will inevitably affect the financial fortunes of the two corporations. I could not understand the supporting speech made by one hon. Member, who seemed to suggest that any competition must of itself inevitably improve matters. I should have thought that the watchword or principle for air transport, in view of the vast capital investment in it, would be co-ordination, not competition. This has been true of all transport, and it is particularly true in the case of air transport.
I could not help thinking, when the hon. Gentleman the Member for Gillingham (Mr. Burden) was speaking very much on the same theme, of his part of the country when there was competition between the rival railways serving the South. I was thinking of the old London, Chatham and Dover Railway and the London and South Eastern Railway. One has only to read the correspondence columns of The Times of sixty years ago to realise the deterioration of the service when that fierce competition was at its height. Indeed, the Railway Commission said that what was wanted in south-east England was the co-ordination of resources and not rival systems which, of course, provided a good service where this was profitable but an appalling service where it was not.
From what has been said this afternoon I find myself dissatisfied with that part of the Bill, and I only hope that it will not do as much harm to the air corporations as I fear it may.
§ 6.3 p.m.
§ Sir Wavell Wakefield (St. Marylebone)
I had not intended to intervene in the debate until I was provoked to do so by the right hon. Gentleman the Member for Vauxhall (Mr. Strauss), who 1271 spoke first for the Opposition I have been interested in aviation for many years. My uncle made the first successful flight on Windermere, forty-nine years ago. It is now forty-three years since I first flew as a pilot, and as well as being a pilot I have been interested in recent years in commercial independent aviation in this country.
If I understand aright, the Opposition are opposing the Bill because they fear that the corporations may be undermined, and that, as a result, British aviation may suffer. That fear is groundless, because we have in our State-owned lines two very fine corporations backed by immense sums of taxpayers' money, with the latest aircraft in the world and with some of the latest aircraft ordered for years ahead. Those corporations are operating some of the best and most profitable services in the world and there is not the slightest chance of them being undermined by the Bill.
If we look at the future of aviation we can foresee a great expansion not only of passengers, but also of freight. If we also look at the flow of passengers and freight in the world, we must face the fact that British aviation is sliding behind. More and more goods and passengers are being carried by other countries in proportion to ourselves. As I see it, the Bill will give an opportunity to British aviation as a whole to get a greater proportion of that expanding trade.
I believe that the corporations will continue to expand and will continue to carry more and more passengers and freight. Equally, I hope, because of the protection which will be given by the Bill, that the independents will have far greater opportunities than they have had in the past to participate in that expanding world trade. What will this mean? It will mean greater employment in this country for our skilled men in the maintenance and service of aircraft. It will also mean a greater number of British aircraft being needed, and, therefore, built in British factories. All this will mean more employment and activity in Britain.
I suggest that by opposing the Bill hon. Gentleman opposite are really saying that they do not want so much air 1272 activity in this country, that they do not want so much employment in the aviation industry. I am sure they do not mean that, but, in effect, that is what they will mean by opposing the Bill. I am certain that it will give a new and fresh lease of life to our aviation industry, which is what we want.
The right hon. Member for Vauxhall also criticised the Bill by saying that Parliament should not be asked to pass a Measure the wording of which is so vague and whose effects on the future are not known. I suggest that it would be wrong to have too tight, too specific and too rigid a Bill. Why? Because in the aviation industry, which is expanding so fast, it would be unwise to tie the new authority too closely and too tightly to the future. The new authority should be given the opportunity to use its intelligence and to use the provisions of the Bill to help British aviation to be even more successful than it has been in the past.
It is, therefore, a good thing that the Bill is somewhat vague. After all, when hon. Gentlemen opposite passed their various Measures for nationalisation, they could not have foreseen the results. Indeed, hon. Gentlemen opposite have said again and again that they were passing Bills for nationalising various industries and that they could not envisage the result of their actions. So I suggest that it is not a bad thing that the Bill should give flexibility to the authority.
In common with other hon. Members, I greatly welcome the safety provisions of the Bill. It is essential that the travelling public should be fully assured that if they fly British they are flying in the safest possible way. It is horrifying to think that, until this Bill becomes law, anybody can put a four-engined aircraft into the air—which, if on a private charter flight, can carry 70 or 80 people or more—more easily than a London taxicab can be put on the streets. That is why I am sure that we all welcome the safety provisions.
It is everybody's intention that fares, both for freight and for passengers, should be reduced as rapidly as possible. The freight structure is rather like a cone, with its apex at the top; every layer that can be cut out by lowering prices means a considerable expansion of freight carrying. I hope that every 1273 encouragement will be given to this licensing authority to assist in lowering fare and rate structures, not so that there will be a free-for-all, or a reduction in the ability to pay good wages, or that safety factors will be weakened or undermined, but so that there will be encouragement for more and more transportation of people and goods by air. What happens if a company, which does not, perhaps, belong to I.A.T.A., decides to reduce its fares? Is it allowed to do so? It would be helpful if this could be clarified by the Government.
I congratulate my right hon. Friend on bringing in the Bill, and earnestly hope that in the years to come it will result in stronger and more flourishing State corporations, side by side with a powerful, efficient, independent aviation industry for the benefit of employment, aircraft manufacturing and everything that goes to make up a successful industry.
§ 6.13 p.m.
§ Mr. John Rankin (Glasgow, Govan)
I have listened today to some astonishing speeches from the benches opposite. The hon. Member for St. Marylebone (Sir W. Wakefield) wants lower fares and many of his colleagues joined in that demand. They want lower fares with greater safety and better aircraft, together with air terminals of the present high quality, and the comfort which is provided for passengers from all over the world who use our services. They want to increase all these things so that more people will use our flights, and at the same time they want to lower fares.
I hope that the Minister, or the Parliamentary Secretary, will tell us how these things are to be done under a capitalist system, of which we have heard so much today, and which we are told, almost in so many words, is going to put us back in the race in which we have been left behind. Perhaps he will tell us how this system, which we are told can do so much because of the great financial and manipulative geniuses who run it, will supply the answer, assuming that the Minister cannot give it, if it gets the chance. We have never had any notable proof that under capitalism we could reduce fares, increase the standard of living, or produce any of the benefits which, we have been told today, the 1274 national air services have failed to provide.
§ Mr. P. Williams
The independents, wherever they have been allowed to do so, have consistently reduced fares.
§ Mr. Rankin
That may be the case, but I have flown in aircraft operated by some of those services, and, even with the reduced fare, I would rather go by a nationalised corporation every time. I have flown in one of these independent aircraft where the individual who was serving breakfast to the passengers was doing a sweated job. I saw that myself.
We have been told various other things. We have been told about the virile, expansive nature of private industry. I do not quarrel with that, because that virility and expansiveness are coming from the public money being pumped into it. One can scarcely mention a private project today which is not clamouring for public assistance in order to enable it to do the things that we have been told it can do of its own accord.
We were given an example in Pan-American Airways by the hon. Member for Gillingham (Mr. Burden). According to him, Pan American Airways are doing without any help things that we are failing to do—such as attracting customers—while at the same time the post office subsidy which they have been getting is being steadily reduced. But the hon. Member failed to tell us that another subsidy has come into the hands of Pan American. They are now getting 100 million dollars as a subsidy from the United States Government. We heard nothing of that.
It is against that that B.O.A.C. has to compete. Pan American Airways get that 100 million dollars for clearing from the sea the flying failures that flop back into the ocean from Cape Canaveral from America's attempts to hit the moon. These missiles return to the sea and Pan American Airways clear away the debris. They get 100 million dollars to do it and thus they operate with less worry than B.O.A.C.
We are told that B.O.A.C. only gets 9 per cent. of the trans-Atlantic business as compared with Pan American's 52 per cent. That was perfectly true, but at London Airport one sees that American passengers mostly travel by American planes, and as America has a population 1275 which far outnumbers our own, a gross national income greater than ours and individual incomes reaching a higher standard, obviously far more Americans will cross the Atlantic by plane than will British people. That accounts for this discrepancy in the percentage results which appear to be so much to our detriment.
I do not want to spend too much time dealing with what was said by hon. Members opposite, because I have several comments of my own. However, I want to refer to the speech of the hon. Member for Gillingham who chided us with being responsible for the loss of air traffic. I wonder what the Tories were doing. They have been in Government since 1951 and they have had the power to issue directives. Why did they not do so? They have been doing nothing helpful since they came to power in 1951, and yet responsibility for the problem is now placed on our shoulders.
The hon. Gentleman said that we failed because we concentrated on building up a monopoly. That that charge should come from the party of monopolies, amalgamations and mergers, with all its agglomeration of capital and interests, is fantastic. Then I discovered that the hon. Gentleman was going back to 1924 and saying that if things had been done properly at that time we would not have difficulty today. But 1924 was a year when a Tory Government came to power and a time when we had hardly known a Labour Government—a minority Labour Government had preceded it in office by consent of the Liberals. Save for two years, from 1924 to 1939 the Tory Party was in office and if the Tories had wanted to do anything politically to help the development of British aviation, they had undiluted power to do so. On the evidence which they themselves have supplied, the Tories have done absolutely nothing. Now they blame the Labour Party for the result.
With other hon. Members, I congratulate the right hon. Gentleman on introducing the Bill. It has been said that he has shown his usual rugged determination in bringing it in and that he will show that continued rugged determination in putting it through. We are all familiar with it, because he 1276 showed the same rugged determination when putting through the 1957 White Paper on Defence, which has created the trouble now facing him as Minister of Aviation. He must now show that rugged determination in helping to clear up the difficulties which his rugged determination caused in 1957. That is a tough job, yet I hope that he will be successful.
I agree with the hon. Member for Sunderland, South (Mr. P. Williams) about the need for the independent Board and for the air operator's certificate as a safety measure. I wish that when considering the need for the certificate the right hon. Gentleman had remembered to extend his safety measures. He will recollect that a few months ago we discussed the need for unified control when aircraft were landing or taking off. That, too, is a safety measure. I would have welcomed the introduction of two Bills. One could have gone through with the complete approval of the whole House and would have dealt with safety in all its aspects; while the other would have dealt with the licensing system which will be subjected to much criticism.
The hon. Member for Sunderland, South welcomed an independent authority to license services. At that stage I recollected that the right hon. Gentleman seemed to diminish his own authority. He emphasised that this was an independent body, with the emphasis on "independent". But almost every page of the Bill testifies to the fact that it may be far more dependent on, than independent of, the Minister. In Clause 1 we find the phrase:… the Minister may by instrument in writingdo this. In another Clause we find:The Minister may by Orderdo that. In yet another example we find:Except with the consent of the Minister … the Board shall not grantsomething else.
That phraseology runs through the Bill. It may be, as the right hon. Gentleman said, that the powers are not very great, but they are nevertheless vested in him. It is true that he may not choose to invoke them, but he is given great power. I do not 1277 quarrel with that, because it means that everything which is now done by the independents will be within the scrutiny of the House. That is a new pattern. It would have been interesting if we had had it many years ago. I congratulate the right hon. Gentleman on this new pattern.
The right hon. Gentleman has two very important powers. One is power over international fares, contained in Clause 2 (5, b). Domestic fares are to be under the control of the Board, but international and cabotage fares are to be under the control of the Minister, so that the Board will be deprived of another power which it might have had to influence the rate-making functions of the international fares organisation.
The right hon. Gentleman explained that. He said that international air agreements would not be under the control of the Board. So long as the Board does not have any policy-making powers about international agreements and fares, it is obvious that, whatever its members may think, the person in control will be the Minister. I do not know that I shall seriously object to that because, as I have said, it will bring Parliament more closely into association with this work.
Clause 2 (2) deals with those things which the Board "shall consider in particular". It is remarkable that there is no reference to the public interest. One would have thought that the Board would have considered the public interest. Despite all that we have heard from hon. Gentlemen opposite, the Board is not bound to consider in particular the expansion and promotion of British air transport. Again I would have thought that that should be regarded as a chief function of the Board.
We are told that the Board will regulate services. To us, regulating means getting a bigger bite out of the business at present done by the corporations. Unless we presuppose what hon. Gentlemen opposite presupposed, some unprecedented increase in traffic, which we all hope for, any benefits to the independents must come from a bigger bite of the existing business. Where will the increase come from? Last year the total loss on world air traffic was £57 1278 million. That loss was not borne by us alone. It was carried by some of the countries which were applauded by hon. Gentlemen opposite tonight. Out of that £57 million loss we are to promote and expand British air traffic and prevent the corporations being affected by the Bill. I want to hear what the Minister will say in reply to this.
Under the Bill no definite purpose is assigned to the Board. There is no Clause which says that the Board has any particular purpose. I can suggest one purpose that it should have, and I hope that the Minister will agree. It should collect statistics from all the air companies that will be affected by the Bill. It should collect statistics of finance, traffic, profits and losses so that we will know exactly how the airlines which have so far kept their accounts private are getting on, and we can then see whether they will show the nationalised corporations how things should be done.
I intervened earlier to ask the Minister whether the Board would meet in public. He said it would. We welcome that. He said that the Press would be present, and we welcome that also, because it does not always follow that because a meeting is held in public the Press are present. We regard the presence of the Press at meetings of the Board as a desirable form of public accountability.
What has the Minister in mind? He has a most interesting mind, but it is extremely difficult to probe into it. It does not matter what kind of Question one puts at Question Time, his Answers are short, terse and never to the point. He is a master of evasion.
§ Mr. Rankin
I understand that we have until 10 o'clock to debate the Bill. My hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) is on the wrong side of the House for me to deal with him on this question.
I have asked the Minister many Questions, but he has always managed to evade the issue. I wonder why he has introduced the Bill. Perhaps I know the answer, because I think he has indicated his purpose. He looked at the productive side and saw that there were too many companies trying to make a living 1279 out of an industry which everyone says is not big enough to provide a living for them all. He therefore said to himself, "Now come on, curl up and combine into smaller groups." The Society of British Aircraft Constructors is no longer known by that name. It is now called the "Society of Both Aircraft Constructors."
The Minister has turned his attention to the operational side. He saw how successful his pattern was on the productive side. He looked at these 33 independents and found that some of them were still flying the D.H. Rapide, an aircraft that ought not to be flying across the sea if safety is to be considered. That is still happening among some of the independents. The right hon. Gentleman wisely took the view that just as there were too many people making aircraft there were too many people flying them. To what number does he propose to reduce these 33 companies? One, or two? I do not want to disturb him. I do not know whether he is reading the answer that he proposes to give later, but the House is entitled to know what is in his mind. He knows that he cannot bring 33 independent companies into the umbrella created by the Bill.
I do not know the number to which these companies will be reduced, but I suggest that the right hon. Gentleman is out to create one great merger of independents on the operational side to compete with the internal-State corporation. That is how he will get his competition.
§ Mr. Richard Collard (Norfolk, Central)
Did the hon. Gentleman say that it was dangerous to use a D.H. Rapide for sea crossings?
§ Mr. Rankin
I said that the D.H. Rapide is still being used for sea journeys. At a function I attended I spoke to one of the chiefs of one of these companies which was still flying D.H. Rapides across the sea. It is too long a distance for a machine of that kind.
§ Sir W. Wakefield
I have flown across the sea in a Rapide, and I felt very safe in it. I felt far safer in it than in modern aircraft, which are sometimes not properly tried out before going into service.
§ Mr. Rankin
On that line of argument the hon. Member would feel even safer in Noah's Ark. He should try that. That would take him even further back.
§ Mr. Rankin
Let me finish with one before I start on another. The hon. Member for St. Marylebone does not mean what he says.
§ Mr. Rankin
Then are we to go back to the days of the D.H. Rapide? No. Now I will deal with the next one.
§ Mr. Collard
It is very serious to cast this sort of aspersion upon an aircraft which, although old, is giving good service. I believe I am right in saying that B.E.A. operates Rapides to the Scilly Isles.
§ Mr. Rankin
Let me make it quite clear that I am casting no reflections upon the D.H. Rapide. I have flown in it perhaps more often than any other hon. Member, and I have a great regard for it. I am merely saying something which is recognised and accepted by B.E.A., which has now got a replacement for the D.H. Rapide. The D.H. Rapide has been a useful machine, but it is now out of date. Any company with sufficient financial backing would scrap it and get something more modern, but many of these independent companies are not in a sufficiently good financial state to do so. That is what is causing so much of the difficulty in the industry. They just do not have the money. They are, therefore, trying to get it from the public purse. [Interruption.] I do not know where the money which is being put into the mergers is coming from if it is not coming from the Exchequer, and I do not know where the backing provided by this Bill will come from if it does not come from the Exchequer.
I suggest that the Minister is thinking not of 33 independents but of one. That one is to be a competitor with the nationalised service. There will probably be another competitor with 1281 B.O.A.C., so we shall really have four corporations. That will damage either the nationalised corporations or the independents.
§ Mr. Sandys
I would ask the hon. Member to stop pretending to read my thoughts. He is wasting the time of the House, and he is hopelessly wrong.
§ Mr. Rankin
At least I have drawn that answer from the right hon. Gentleman. It is difficult to read his thoughts, but he is merely emphasising what I said.
The hon. Member for Gillingham referred to France and said that she was creating two other lines despite the fact that she had a State airline. He should know that the reasons for that are political.
§ Mr. Rankin
The reasons are political. In French eyes it is not advisable to fly what would look like a State airline to certain parts of Africa, at the moment.
§ Mr. Burden
The hon. Member is hopelessly wrong. These airlines have been in operation for years. They have nothing to do with the present situation.
§ Mr. Rankin
Then the hon. Member is not thinking of the two airlines I am thinking of. In that respect he is as far out of date as he was when he talked about 1924. He is still there. I hope that he will soon join us, in 1960.
I have tried to suggest the purpose of the merger. I know that the right hon. Gentleman has said that I am wrong, and that there will be no attempt to coalesce the independents. But that is the present pattern, and not a new pattern which he said was to be created. If the present pattern is to continue, what a hopeless mess operational flying will get into, with all these small independent airlines seeking to cash in on the business of B.E.A., and perhaps B.O.A.C. Some day the right hon Gentleman may change his view, assuming that he stays in his present office longer than he stayed in his previous ones.
§ 6.45 p.m.
§ Mr. Farey-Jones (Watford)
I do not propose to follow the remarks of the hon. Member for Glasgow, Govan (Mr. Rankin), because during the whole of his 1282 speech he appeared to have both feet firmly planted in mid-air while travelling upside down. As the House knows, I have spent many years with aeroplanes, and, having listened to all the speeches of hon. Members opposite, except one, I find it impossible to understand the Opposition's attitude in referring to the present position as a fight between the independents and B.O.A.C. and B.E.A. It is rather as if we were trying to tether an old cart horse down and clip off his wings.
We have hardly begun to develop air transport. In Cleopatra's day there was a saying:He who impedes the wheels of Pharaoh, let him be ground into the dust.I can tell hon. Members opposite that if B.O.A.C. and B.E.A. carry out the responsibilities facing them in the next fifteen years they will have far more than enough to do. As for the independents, throughout the world the challenge of the air today is greater than it has been in the whole of my life, or even since Icarus flew too near the sun. We have not even begun to think about it properly yet.
I am grateful to the hon. Member for Feltham (Mr. Hunter) for bringing up the subject of London Airport and the safety measures which are necessary. Many hon. Members are gravely worried about this question, as I am. We must carry out a complete rethinking of the future of air transport. We must think not of London Airport, but of airstrips all round the coast, as near to the sea as is Prestwick, with hovercraft services from them to the cities. We cannot go on constructing giant airports such as London Airport or La Guardia Airport. The challenge of the air is similar to the challenge of the roads. Our internal transport system is steadily becoming constipated, as is air transport in Europe. It is also becoming highly dangerous. We must consider how best to solve this problem.
The Minister's introduction of the Bill is something to be glad and proud about, but I should like him to know that the Bill is not wide enough or high enough. Nevertheless, it is beginning to provide help for air transport. I should like to see it extended to cover the situation that must develop in the next ten years. 1283 Instead of arguing whether the independents will take business from the corporations, we should be thinking of what the real truth will be. The truth is that in the next ten or fifteen years we will have reached the age of the hovercraft.
Already, there are in existence "chopper" aircraft capable of lifting and putting down weights of up to 50 tons. Within three years at the most that figure will have been increased to 150 tons. All our main London railway stations should have flat roofs, so that hovercraft flying to and from the coast, or between cities, can deliver cargoes straight to their destination. We should envisage the appearance of London, Birmingham, Manchester and Glasgow in twenty years' time, instead of indulging in petty arguments about whether a few passengers will be taken from B.O.A.C.
Do hon. Members realise that every year for the last seven years traffics on the Atlantic routes have gone up by at least 30 per cent.? Today, we have aircraft capable of carrying 250 passengers, and if, as I think will happen, the Minister succeeds in getting his supersonic airliners, they will be crossing the Atlantic or the Pacific in six hours, carrying 500 or 600 people at 750 miles an hour.
Is it wise to indulge in this foolish argument about whether the independent airlines should be kept out or in? I am grateful that there is at least one hon. Member opposite honest enough to say that we must put the question clearly, "Do you want the independent airlines or not?" We have to be open and truthful about that. We must have air strips near the coast. I believe that fast flying inter-continental aircraft will have to start their approach run from the sea at least 250 miles away. There must be helicopters capable of carrying 50, 60 or 70 passengers to ferry people from these air strips to their destinations.
This Bill gives us a chance to do some rethinking. I hope that the Minister will not mind if I say that the type of personnel on the proposed Licensing Board is of paramount importance. Unless they are people with some knowledge of the past and imagination with which to face the future, heaven help us all.
§ 6.53 p.m.
§ Mr. Richard Marsh (Greenwich)
I share the belief of the hon. Member for Watford (Mr. Farey-Jones) that there is a great future for the helicopter or "chopper" aircraft, but I think the major contribution in that direction will be made by the State airlines. This has been an interesting debate because of the feeling of apprehension which has divided hon. Members on each side of the House. Hon. Members on this side of the House believe that this Bill is a device which will be operated against the State corporations for the benefit of independent airlines. Mention has been made by hon. Members opposite of the safety provisions contained in the Bill. I think we should be honest about this. No hon. Member would suggest for a moment that safety in the air is other than of the utmost importance. Hon. Members on this side of the House are as anxious as hon. Members opposite to ensure that safety regulations shall be as stringent as possible.
But this is not a Measure concerned solely with air safety. The prime purpose of the Bill is not to implement safety measures in aviation. At the most, those safety provisions were included as something which might be conveniently slotted into the same exercise. At the worst, one might wonder whether that was done to provide a camouflage to conceal the bigger issue—whether the other part of this Bill is designed to operate against the State corporations, to provide greater financial rewards for the independent companies at the expense of the State corporations and, therefore, at the expense of this country.
I have not been a Member of this House for very long, and I find it interesting to listen to hon. Members who make a speech on this subject and to speculate about their background. What fascinates me is that not one hon. Member has supported this Bill who has not a financial interest in a private airline. I think I am right in saying that, although there may be one exception. Each hon. Member has declared his interest and, with his hand on his heart, has said that he desired to help and assist the great corporations. Then, by the most ingenious and tortuous reasoning, he has endeavoured 1285 to prove that if the competition which the State airlines have to face is increased, in some peculiar way the State airlines will be assisted. Hon. Members have endeavoured to prove that their interest is completely detached and objective. That may be so, but some of us remain unconvinced that this—as was said by the hon. Member for Gillingham (Mr. Burden)—is consistent with the attitude adopted towards independent airlines ever since the State corporations were set up.
§ Mr. Burden
The hon. Gentleman is wrong. I said that I had recently become a director of an airline, but ever since I have been a Member of this House I have consistently held the view which I still hold.
§ Group Captain Wilcock
My hon. Friend the Member for Greenwich (Mr. Marsh) has made the serious statement that no one who has taken part in this debate supports the idea that the independent companies should exist unless they have some financial interest in the companies. I think my hon. Friend should be corrected. Hon. Members on both sides of the House have taken part in the debate because they are interested in the subject and have been concerned with aviation practically all their lives. There are other considerations besides finance, and I think my hon. Friend should realise that.
§ Mr. Marsh
I am grateful to my hon. and gallant Friend and to the hon. Member for Gillingham. I agree that his prime reason for speaking in this debate is that the hon. Member knows something about the industry. But in 1952, when he spoke in a similar debate, my hon. and gallant Friend—on whose pronouncements I place considerable weight because of his interest in the industry—said that under a Labour Government it was made clear that the scheduled services would be operated only by the public corporations and that that policy had his full support. Today my hon. and gallant Friend appears to have changed his tune.
§ Group Captain Wilcock
My hon. Friend cannot have heard the speech I made in which I said the same thing as I said on the previous occasion, that it did have my support. I also think the independent companies should have a share.
§ Mr. Marsh
I am grateful for that explanation from my hon. and gallant Friend. It has assisted me in my efforts to feel my way on this subject, but my hon. and gallant Friend also said in the debate in 1952:The situation today is that the Government, pledged as they are—and this fact is well known—to support the independent operators, intend to grant them further opportunities of operating scheduled services. That is being done under the quite erroneous impression that the Government are thereby helping the independent operators. In other words, the Government intend to help the independent operator even if they ruin him in the process. That is what will happen to any but the largest combines in private enterprise.He went on to say:If the Minister intends to help the independent operator then he must allocate routes to him which fall under the category of profitable routes. If he does that he is deliberately retarding the development of public corporations. He cannot have it both ways."—[OFFICIAL REPORT, 16th July, 1952; Vol. 503, c. 2274.]I think my hon. and gallant Friend should take advice from his own speech on this point.
§ Group Captain Wilcock
My hon. Friend is quoting me to such an extent that I am sure he will give way again. This is eight years after the speech he is quoting. He is talking of a debate in 1952 when circumstances were very different from what they are today. There was very little development in the air in 1952. The corporations were losing millions at that time and the independents were having an extremely hard time. Now, when we are approaching a time when we want to look ahead, we should look at our legislation of the past to see whether it can be improved. When I spoke today I repeated almost the very remarks which my hon. Friend has quoted. I said that I thought there was a place both for the corporations and for the independents. I am sorry to have to make a second speech, but I wanted to point that out. Neither I nor anyone on this side of the House has spoken against the corporations. I hope my hon. Friend will remember that.
§ Mr. Marsh
I am sure the interests of everyone in this House are in the same direction so far as the corporations are concerned. All I am trying to work out is whether the measures the Government wish to introduce will benefit the corporations or not.
I come back to the point which has been made by hon. Members. In the past it has been suggested by people with a very intimate knowledge of the industry that competition against the corporations cannot assist the corporations. This is a point on which there can be honest disagreement on both sides, but one cannot maintain that this Bill is a sort of charter for the corporations and that there is not a very great risk, at the least, that a Bill such as this might cause the corporations considerable difficulties.
In opening the debate, the Minister went to great trouble to say that in fact this was not the intention of the Bill. He made the point that the independents were not the associates of the corporations but were, in fact, their rivals. Do not let us be naïve about this; if the independents can take trade from the corporations, they will do so. They are not in business for the benefit of their health, but to get as much as they possibly can—[An HON. MEMBER: "And it applies the other way round."]—and it applies the other way round. The only difference between us is that the corporations are devoted to the benefit of the community whereas the independents are devoted to the interests of a small group.
§ Mr. P. Williams
The hon. Member is arguing from a completely false assumption, that air transport is not going to expand. If he made that one concession to fact he might get nearer to truth.
§ Mr. Marsh
I am sorry to be causing this disagreement because I had set out to put some of the points which seemed to be fairly obvious. I have no doubt that air transport is going to expand. I do not think any hon. Member would deny that any corporation or section of the industry that cannot expand with it will go under. One of the biggest problems, and one of the worries of us on this side of the House, and I should think of hon. Members opposite, is that in this great. State industry, unless they can 1288 claim an increasing share of business, the corporations will proceed to lose that degree of success which they discovered after tremendous effort in the past few years.
Who are the best judges as to the effect of this Bill and the effect of com petition upon the corporations? Obviously, they are the people who know best, the people in the industry. We have heard the view of the independents, but, of course, the view of the corporations is very different. The right hon. Gentleman knows that neither of the corporations views these proposals with anything but the greatest apprehension. Both have made the point in their last annual reports. I think that B.E.A. summed it up well when it said:B.E.A. is not afraid of competition and we do not adopt a 'dog in the manger' approach to the expansion of the independent airlines. But we must oppose developments which would adversely affect our traffic and necessary future expansion.The same sort of line is taken by B.O.A.C. There is no doubt that both the State corporations have been very worried about the possibility of independent airlines competing with them. One must accept that the corporations, which have some knowledge and interest, are extremely apprehensive.
My right hon. Friend the Member for Vauxhall (Mr. Strauss) dealt with the point about competition against the two State corporations. He asked why, if this was not the intention of the Bill, we should not have it stated. I should have thought that a perfectly simple thing, although since I have been here I have discovered that "shall" means "may" and "may" means heaven knows what, so I have ceased wondering what anything might mean. It seems a simple thing to insert in a Bill a proviso that no licence shall be granted if the granting of such a licence is against the interests of State corporations and they are unable to prevent it.
Some hon. Members on the back benches opposite say they are very much interested in this subject, but they chortled over that. Then they composed their faces and put on an expression to show that they were concerned for the wellbeing of the corporations. If they so wished, the Government could make a provision in the Bill to ensure that it does not operate against the interests of 1289 the two corporations. If the Minister would come to the Dispatch Box and say that the Government were interested in doing something like that, I am convinced that that alone would make an enormous difference to the attitude of hon. and right hon. Members on this side of the House.
The hon. Member for Cheadle (Mr. Shepherd) made a heart-rending speech about independent airlines existing on the crumbs left by the corporations. We are talking about one-third of the total air travel in this country. They describe that as crumbs, but it is a pretty hefty sort of dinner. Hon. Members opposite tell us that the independents—due, I admit, to the efficiency of many of the independent companies and due to their initiative because they were forced into a position in which they had to fight or go under and rose very well to that challenge—have under their wing something like one-third of the total air traffic of the country. They have a rate of expansion which is higher than that obtained by the two State corporations. Do not let us paint a picture of poor, suffering private industry existing on a few meagre scraps left by the wicked State corporations who take all the cream.
One of the problems and difficulties with which we are faced is that this competition between the two sections of this essential industry is not fair competition. The corporations are faced with the same sort of problem that faces any State industry. They not merely have an obligation to make a profit. I should say that making a profit is one of the least important needs of a State industry. Their prime purpose is to produce a service for the people in the country as a whole. We believe that if the independents were prepared to operate on the same terms some of the routes operated by the State corporations they would find those routes uneconomic. I doubt whether there will be a big struggle to get into those routes.
What do the independent companies want? I do not know. The hon. Member for Watford mentioned, in passing, the North Atlantic route. Are the independent companies interested in that route, or are they interested in the internal Scottish routes?
§ Mr. Marsh
It would be impossible in a debate in the House not to mention Scotland if one wanted to remain in this party.
Because of the fact that they have to run uneconomic routes, the corporations are, and always will be, at a disadvantage compared with the independent companies. There is no doubt that the provision of frequent services on many routes results, and is bound to result, in a load factor of about 60 to 65 per cent. The hon. Member for Gillingham mentioned fares. There is no difficulty about decreasing fares if one can run a more infrequent service with a higher load factor. That is certainly one way in which it could be done.
§ Mr. Burden
Is the hon. Member aware that the average fare per passenger-mile in the United States is about 3d. and in Europe about 8d. and that there is, therefore, plenty of room for a reduction?
§ Mr. Marsh
Military contracts and trooping contracts given to certain American airlines are worth a large sum. I should like to see more done in the direction of trooping contracts in this country, if we want to have a healthy aircraft industry.
This is an extremely important subject which has much wider implications than the narrow argument whether we should allow the independent companies a little reign against the State corporations. In recent months in the House, certainly since I have been here, there has been constant criticism of the disregard of public money by the Government. Hon. and noble Members opposite have constantly complained about the apparent lack of concern by the Government for the taxpayer's pocket. This is becoming increasingly obvious. The Bill appears to some of us to be another example of how a Government can make sums of public money available to their supporters and to sections of private industry, directly and indirectly, because 1291 if this Measure operates against the State corporations it will be the taxpayer who has finally to foot the bill, and in recent months he has had to foot some very large bills. One can understand the growing concern of some hon. Members opposite, which is reaching the stage at which we can hear their consciences rumbling in their stomachs right across the Chamber.
§ Mr. Marsh
I shall be only too pleased to assist the hon. Member and any others in a discussion on where people keep their consciences, if they have any. I am sure that in due course, if he ever develops a conscience, he will watch its position with great interest.
Large sums of public money have been given away in one form or another since this Government took office. They have given it away by two methods. The first is by straight gifts of large sums of public money and the other is by the misuse of State industries. The denationalisation of the road haulage industry was a classic example of a magnificent gift of the nation's money to private firms.
Now we are to improve the position of the independent airlines, knowing that this is bound to react against the State corporations and, if it is continued, to result in a deterioration in a State industry and a consequent payment by the public of a subsidy, as has happened so often in the past, to private interests. One can understand the moral justification, as it were, for this. After all, large sums of money were spent by sections of British industry in the last election, and one expects that they will begin to receive their just reward, if not in Heaven at least in the House.
The taxpayer has invested in recent years large sums of money in the two State corporations. In the early days the State corporations met tremendous obstacles, primarily because of their lack of experience in international aviation. In recent years they have overcome most of those difficulties. For the last six years B.E.A. has been a profitable corporation.
There is agreement in the House that air transport is probably the most deli- 1292 cate industry in international affairs. It is highly competitive, indeed to the highest degree. It is extremely sensitive to fluctuations of politics and of financial trends in the world. Because of this, anything which adds to the difficulties of either the corporations can only increase the possibilities that they will cease to remain as profitable as they have been in recent years.
Turning back to the degree of competition between the two sides of the industry, it is a fact that the two corporations provide many services for this country which are not expected of any independent company. The preoperational development burdens which fall on the two State corporations are enormous and are of considerable value not only to the corporation but to the whole of British aviation. If we are to have competition, we might well claim that there should be some balancing factor to allow for the extra problems which beset the State industry. Earlier, B.O.A.C. was making very heavy weather. It is not nearly as profitable today as B.E.A., but it has proved that as a State corporation it can operate in the most competitive sections of the world very well.
What is the position? In the 'sixties, the degree of competition will be much more intense than ever before. Speed will increase. The expenditure upon new types of aircraft will be enormous. I understand that at present B.O.A.C. has on order aircraft to a total cost of over £90 million. This proves that State corporations have to attain a degree of operating efficiency higher than that generally accepted by the independent companies. Many independents operate aircraft which are to some extent outdated. The State corporations lead this country and other parts of the world in providing modern aircraft.
All this involves tremendous expenditure of public money. We on this side do not feel that the State corporations should be used to provide a sort of milch cow helping the independent companies to compete, not on equal terms, but on very unequal terms. I say without any shame whatsoever that the corporations, which are backed by the public purse and are representative of the country, deserve from the House more consideration than any private company.
1293 Everyone will agree that the prime purpose of Members of Parliament is to look after the British taxpayer and the British citizen, and not to look after small private companies. If the purpose behind the Bill is nothing more than to tighten things up, to allow fair competition and to introduce safety measures, the Parliamentary Secretary can easily say, in winding up the debate, that the Government are prepared to write into the Bill an undertaking that they will not grant licences which appear to militate against the interests of the State corporations.
If we cannot have such an undertaking, most hon. Members on this side will not feel disposed to assist the Government to place a State industry and the British taxpayer at a disadvantage so that we can transfer a few more tens of millions of pounds of public money to the pockets of private companies.
§ 7.22 p.m.
§ Mr. Stanley McMaster (Belfast, East)
I should like, very briefly, to answer a few of the points made by the hon. Member for Greenwich (Mr. Marsh). I say straight away that I have no financial interest in any independent company. Of course, I have a financial interest in B.O.A.C., as has every taxpayer.
The hon. Gentleman said that he is concerned with the taxpayers' money. Does he think that it would be in the taxpayers' interests for these large boards—B.O.A.C. and B.E.A.—to be completely free to run a monopolistic concern free from competition? The Bill ensures that any competition which arises will improve the efficiency of B.E.A. B.O.A.C. and the independent airlines, and is in the interests of the taxpayers and the travelling public.
We have heard that a return fare to Paris of about £3 would be possible by independent airlines running bus services to Paris. The travelling public must be considered. The taxpayer cannot be continually asked to subsidise an industry which has a complete monopoly.
§ Mr. McMaster
In many cases State corporations have a monopoly. There 1294 are scheduled services. The situation arises under the 1949 Act, which is being relieved in the Bill, whereby the independents have only a small share of the market. They should be given a fair share of the market. Strong independent companies or strong independent combines are in the public interest, because they can reduce fares and reduce the burden on the taxpayer. They can also help B.O.A.C. and B.E.A. to compete with foreign airlines more efficiently.
I wish to make one point to the Minister in connection with the appointment of the Board. Paragraph 1 of the Schedule says that the Board, whichshall consist of not less than six nor more than ten membersis to be appointed by the Minister. This, along with the provisions in Clause 5 (1, c), which allows an appeal to the Minister, is a matter of some concern. It means that the Minister, who is in the position of an interested party, will appoint the Board and that he, or his nominee, will sit to hear appeals.
It might be possible to qualify the provisions of paragraph 1 of the Schedule so that the Board which is to be appointed will be fairly representative of independent and State boards. In addition, appeals should lie to a completely independent arbitrator. It is not fair to the Minister to ask him to decide any dispute as to issuing or granting a new licence to an independent along the lines set out in Clause 2. I should be grateful if the Parliamentary Secretary would say something about this when he replies to the debate.
§ 7.27 p.m.
§ Mr. George Chetwynd (Stockton-on-Tees)
This has been a very remarkable debate indeed, because it has shown quite clearly the different approach of the two major parties in the country to what is a great issue of public policy. I shall return to that theme a little later.
First, I wish to say that we are in complete agreement with the safety provisions of the Bill. My right hon. Friend the Member for Vauxhall (Mr. Strauss) welcomed them. My hon. Friends the Members for Feltham (Mr. Hunter) and Hayes and Harlington (Mr. Skeffington) spoke of the great satisfaction it would give to their constituents to have the safety provisions 1295 in the Bill. It is clear to me that safety is one of the major considerations in any person's mind when deciding whether he shall travel by air, sea or land. That is probably the first consideration, more than cost or speed. Therefore, anything which we can do through the Bill to improve safety in all aspects of aviation will be much appreciated.
I have only one question of this aspect. Will there be any major additions to the regulations which have so far been issued under Section 8 of the Civil Aviation Act, 1949? If we could have some information about any extra provisions which may be made to avoid such an accident as we had at Southall two years ago it would be very welcome.
We certainly approve of bringing in the non-scheduled and charter operations, covering them in the Bill and making it absolutely impossible for the sharp operator to run his business. Some people think that this could well have been done in a separate Measure if necessary. Although we do not object to it being dealt with in the Bill, we regard it as the main purpose of the Bill to deal with the relationship between the public corporations and the independents in future allocations of aviation business.
At one stage in the debate I thought that I was in the wrong place. I rather thought that I was at the annual general meeting of the British Independent Air Transport Association. It seemed to me that all the arguments which the Association has put forward in its meetings between 1952 and now were being made tonight, not only by hon. Members opposite but also by one of my hon. Friends. I do not object to that. They have a perfect right to put those claims forward, and the hon. Gentlemen concerned declared their interest.
One thing which was significant in the debate and which emphasised our fears of what the Bill might bring forth was that, although the Minister probably expected some very fierce attacks to be made on him by his hon. Friends, because of their view that perhaps he had not gone far enough in satisfying the independent interests, he had a favourable reception from his hon. Friends on this point.
1296 I think that those hon. Members read far more into the Bill than the Minister himself has been prepared to indicate tonight. One of the weaknesses of what we have so far had is that we really do not know what the Minister has in mind. We must probe much further to find out, and I hope that the Parliamentary Secretary will be able to give us more information on how the future activities of the independents and the corporations are expected to work out.
We have been asked: what about the place of the independent? We certainly admit—indeed, my right hon. Friend did so at the beginning of his speech—that we are not against the independents as such—certainly not. It was the Labour Government, in 1949, that enabled them to step up their business to a very considerable extent and, over the last eight years, they have been able to develop their interests from very small beginnings to 30 per cent., if not 33⅓ per cent., of all operations in this country.
We believe that there is a place for both forms of operation, but the argument is, and must be, over how much is to be in one sphere and how much in another. The argument will be over the allocation of space. We think that there will be a vast expansion of air traffic. The corporations are certainly basing all their future planning on a tremendous increase in air travel, and we should be very foolish indeed if we did not think that the independents should not get a considerable part of that expanding air business. That is inevitable, even under present arrangements. I therefore want to make it quite clear that the corporations, which are our chosen civil aviation instrument, must be viable in order to take part in this expansion, and so benefit the public interest.
I have been really touched by the solicitude that certain hon. Members opposite have displayed for the wellbeing of the corporations. It is most helpful to us. I only hope that if, in Committee, we move Amendments to establish those principles in the Bill, we shall get their support; but I very much doubt it.
In the Bill we are trying to establish a relationship between the independents and the corporations. We are giving this new Board an extremely difficult 1297 task, with the vaguest of instructions to help it carry out the policy. Really, two contradictory policies are being advocated. The Minister has said on more than one occasion, as have his predecessors, that there is full ministerial support for the corporations as the main flag carrier of the nation, and that nothing he wishes to do, and nothing he intends to do, will undermine that position. At the same time, there is pressure from the independents' spokesmen to get a greater share of the existing air business. All Ministers have had to face this dilemma. I thought that after the 1952 changes in policy—which have been working out gradually over the years—we had reached a stage of peaceful co-existence in this struggle but, apparently, I am wrong.
Some hon. Members opposite have spoken as though the Labour Party and its policy had restricted the development of the independents, but that cannot be seriously maintained for a moment when the facts are studied, because even now we have reached what I look upon as a reasonably satisfactory modification of the 1949 Act, working out in practice.
We have had the growth of the independents up to as I say, about 30 per cent. of the business being carried. We have the significant suggestion that we are stopping competition, as though this were a field in which there was not real cut-throat competition between one national enterprise and another. The hon. Member for Belfast, East (Mr. McMaster) spoke of there being no competition, but he has only to pick up any newspaper to see the prestige advertisements of all the world airlines competing with ours for the trans-Atlantic and Continental traffic. The competition is tremendous.
The tendency of the independents has been against competition. They are now formed into four main and powerful groups of companies who, between them, carry 90 per cent. of all the independent traffic and we have had an indication this morning of a merger between two of the largest companies. That will provide a fairly formidable organisation, which should well be able to stand on its own in the world of air transport.
I want now to refer to the speech made by the Minister at the annual dinner of 1298 the independents—I think, early this year. As reported in The Times, he… wondered whether some of the independent companies might not think it worth while to join to form a smaller number of units.In anticipation of what? Airwork and Hunting Clan were fairly quick off the mark, but what are they anticipating? For what purpose was it to be worth their while to get together?
The Minister has been rather good at inducing people to join together, and we want to know what inducements have been proffered to the independents to this end. We have tried to find out in this debate exactly what the independents want. I asked, but I got no answer. They certainly have not been getting just the crumbs as has been suggested.
I think that it was the hon. Member for Cheadle (Mr. Shepherd) who referred to the "poor" independents, but that is not right. They have not been crippled by previous legislation. I should like here to quote from an interview between Mr. Frank Beswick and the chairman of Eagle Airways, reported in a recent isue of Flight. This is what Mr. Bamberg said, and he is probably the archetype of the independents, with whom, I believe, the hon. Member for Gillingham (Mr. Burden) is associated.
Mr. Bamberg said:We see our future largely in terms of international scheduled flying"—With whom will that competition be? Obviously, it will be with the corporations—both passenger and freight. Even under present arrangements he confirms that his company has the largest British network of independent scheduled services in Europe, with 12 routes in Europe now showing a profit.That does not sound as though we have been preventing this enterprising organisation from going ahead.
Mr. Bamberg went on:Like others, I accept that the corporations' basic interests must be protected: they are a vital part of British aviation. But there is still scope for parallel services and the new Board has the job of deciding where they will be.This issue of scheduled parallel services goes right to the root of it all, and if the private companies are to get a parcel of scheduled services handed to them from the corporations, or are allowed to run in parallel to places to which the 1299 corporations go now, it seems to us to be against the interests of the corporations.
§ Mr. Burden
The point is that out of last year's total traffic of 69 million passengers only 3 million came through British airlines. There is obviously a tremendous opportunity for enlightened operation on that scale, and we must take it if we are to retain our position as a great commercial nation.
§ Mr. Chetwynd
Until B.O.A.C. had misfortune with some of its aircraft we had been getting an increasing share of world traffic, and we are now going ahead again. If we take the North Atlantic route alone, B.O.A.C. is pulling in more and more of the world traffic, and I understand from the very good advertisements of B.E.A. that one out of ten people travelling in Europe travels by B.E.A. What it all comes down to is that hon. Members opposite are trying to denigrate in this sort of way the achievements of the corporations.
Let me ask this question of the Parliamentary Secretary. It is proposed to give the independent air lines scope to expand, in spite of the fact that the Minister wants to maintain the corporations as the main flag-carriers on the international routes. May I ask this simple question: where does he propose that they shall expand? Which part of the kingdom of B.O.A.C. and of B.E.A. is to be handed over? If we look at what the companies are able to do at present in the spheres of charter work, trooping, freight, scheduled routes in association, which we agree must be put right, car ferries, colonial coach, inclusive tours and possibly in the near future very low fares, that is giving a good field to the independents in which to operate.
We have to ask definite questions. It is no good talking in airy-fairey fashion about wanting to give them greater chances. We have got to ask, "Where? What next?" There are two main areas of possible conflict between the corporations and the independents. One will be affecting B.O.A.C. with the routes to Africa and perhaps to the Far East and the Caribbean, and the other one will be affecting B.E.A. mainly on its European high traffic services. B.E.A. 1300 operates social service routes. Not much has been said of them today, but they are operating uneconomically to give services to the Highlands and Islands and to the Isle of Man which they are covering by the proceeds of what they make on their other routes.
It is extremely unlikely that any independent will come forward and offer to take this route off B.E.A., and if such an offer were made by an independent it would want a subsidy or a return for doing it. If an attempt were made to operate such a service without a subsidy, after a little while the independent operators would say, "We are sorry, but we cannot carry on at the prices we are getting The alternatives are that the fares go up or the service is suspended, or we get a subsidy." It is clear that they will not want to take over some of the corporation's marginal routes. They are not in business for that sort of thing. They are in business to get as much as they can out of it, and that is understandable. There is a case, perhaps, for certain peak services on highly seasonal routes, but they can do that now in association, if they wish, with the corporation.
There is the whole question of very low fares, and perhaps we shall hear something about that in the near future. In connection with that matter, certain complications may arise. It is a shrinking market because the colonial dependencies are reaching their independence, and then I.A.T.A. comes into the question. There is the question of foreign rights wihch will have to be negotiated—a very difficult question. There will be the possibility of avoiding undercutting and the disruption of the regular services which the airline corporations are running. Therefore, I should think that there is not a great deal of scope for the independents to operate in this shrinking market.
All this leads us to the point that there is nothing wrong with the original policy of the Labour Party in relying for the main international routes upon the policy of a chosen instrument, which, in our case, is represented by B.O.A.C. and B.E.A. The only part left where the independents are likely to want to come in are on the high density traffic routes. I think the hon. Member for Gillingham said that the Paris— 1301 London air route was one which would offer a suitable field for the independents.
Let us examine that possibility. If we were to let an independent company come into this field, immediately the French would respond and say, "We want another line on this, too" and it would he almost impossible for the Minister to negotiate traffic rights on that basis. That, therefore, is a non-starter.
§ Sir W. Wakefield
The hon. Member must realise that already there is a London—Paris private independent service carrying tens of thousands of passengers.
§ Mr. Chetwynd
If that is so, what are we quarrelling about? If they have got this arrangement whereby they can do it in present circumstances, why is it required to be scrapped and something else put in its place? That is a different service from the normal B.E.A. scheduled Paris route. It is clear to us—and what we have heard only emphasises our conviction—that the independents are really interested in skimming off the cream from the best of the services. If they are allowed to do that, that will obviously jeopardise the position of the airline corporations.
We can see no place at all for disrupting the services which have been built up over twenty-five years in the case of B.O.A.C. and over ten years in the case of B.E.A. We can see the difficulties which will arise over trying to get reciprocity and foreign rights. The negotiating is bad enough as it is with one operator, let alone with two or three. This is going against the way in which European airlines have been steadily working.
My right hon. Friend the Member for Vauxhall mentioned the case of Air Union. It is against all good experience. The corporations are working well. There is a tremendous investment in their present and their future. About £275 million of public money is already invested in the airline corporations. Their plans for bringing in new aircraft this year and in 1963 are running into hundreds of millions of pounds. We cannot expect corporations with liabilities and responsibilities of that kind to look with any favour upon a Government Measure which, to say the 1302 least, is unsettling to them and which, if the worst comes about, will disrupt their activities.
If the kind of advice is given to the Board which we suspect, the effect on the corporations will be a material financial diversion of their proceeds. That is borne out in the Report of the Select Committee on Nationalised Industries and in the annual reports of B.E.A. and B.O.A.C. It would have a disastrous effect on the morale of the people employed in this industry, which is extremely high and very important indeed to the wellbeing of a State line. It would have a serious effect upon the future planning of the corporations. We could not possibly expect them to go ahead with their large orders for the Boeing 707, the VC10, the DH121 and the super-VC10 if their future were not assured to them. The whole of the aircraft industry is tied in with this. It is not just a question of the air transport side; it is a question of the industry as well.
Foreign competition would become extremely acute, and in that case it would be the companies with the largest resources which could rely upon their Government for the largest subsidies which, in the end would survive. I believe, also, that instead of leading to lower fares all round, the chaos would he such that it would mean a setback to the controlled policy of lower fares which the corporations are now actively pursuing. For those reasons, we want much more information about the Government's intentions.
The corporations are left with tremendous obligations and responsibilities. If there is to be competition, then let it be equal. The corporations have to pay interest on all their capital, whether they make a profit or not. They have got to maintain their scheduled services. They have got to take the rough with the smooth. They have got the heavy costs facing them in the future of introducing new British aircraft; and perhaps at this stage we might get from the Minister a little more definite information on what assistance he is going to give the corporations in introducing these new aircraft.
Whatever assistance the Minister gives, there is still a considerable amount of money to be found by the 1303 corporations. They have got to carry out non-commercial investments in the furtherance of Government international policy, such as in the case of B.O.A.C., in Kuwait. They have got the higher standing charges, higher wages, higher maintenance and higher overheads. All those are extremely good reasons for not making it more difficult for the corporations to exist, but for trying to assist them even more.
It is a curious thing that this demand for greater help for the independents comes again at a time when the corporations are showing signs of getting on a sound footing. We have B.E.A. making a profit and carrying more people, and B.O.A.C. getting rid of the difficulties of the associated companies and probably coming out just on the right side of the line this year. They are just recapturing lost ground. They are earning more foreign currency and more dollars than ever before. They are making a bid at this stage to capture new markets in the world, and this is the time when the Government are creating more uncertainty for them and causing them considerable unrest and confusion.
As the Minister well knows this is an extremely marginal industry. The least little thing happening in international relations, the slightest recession in world trade, and all the plans for improved traffic go wrong. They are facing tremendous problems with their future aircraft and this is not the time in our view when we should be tinkering about with some means of helping the independents which we regard as worsening the position of the corporations.
The weaknesses of this Bill have been brought out very well so far. There is no provision whatsoever for public knowledge of what the Minister's observations to the Board will be. I am not referring to his observations on international traffic rights which may be inexpedient; I am referring to the general provisions of Clause 2 (2, g), whereby the Board must take note of any observations made to the Board by the Minister. Some of my hon. Friends have said that that is all right so long as we have the present Minister. If I read my Sunday papers aright, he will be the next Foreign Secretary or Chancellor of the Exchequer—we just do not know.
1304 We may get the hon. Member for Sunderland, South (Mr. P. Williams) or the hon. Member for Gillingham (Mr. Burden) in his place. What kind of observations will they make to the Board? Perhaps they would be different ones from those of the present Minister, but the point is that we would not know. There is no provision for telling us what these observations would be and it is obviously one thing which we would want to put right.
There is no question in this Bill of the new Board making an annual report to Parliament through the Minister. There was in the old A.T.A.C., but that has been dropped. We should like to have an annual report from the Board to the Minister in which we can see the directions which the Minister gives to the Board. There is no power under the Bill for the Board to call upon the airlines for full financial and traffic statistics. How can we tell the relative merits of one application against another on the scanty information that we have now? No one knows the financial state of the independents. No one really knows how much traffic they carry. Their finances are swallowed up in the parent groups, which are mainly the shipping companies, and here again we have a woeful lack of information about the whole thing.
There is no definition of purpose, as my hon. Friend the Member for Greenwich (Mr. Marsh) said in his excellent speech. There is no provision apart from what the Minister has said orally for public hearings and, what is more important, there is no regard for the customers. The old A.T.A.C., whatever its faults, was meant to be a forum through which public complaints and suggestions could be brought forward. That, again, has been dropped, and it is something which ought to be brought in.
There is no obligation on the Licensing Board to adopt the positive things which I should like to put in Clause 2. All that it has to do under Clause 2 is to consider certain things and, having considered them, it need not do anything more about them. It can say, "We have considered it and we have not taken any notice of it." We wish to turn that round into a positive obligation upon the Board that where there is no proven need for a service, where a company cannot show clearly that it can carry 1305 out a service and where there is a material diversion of the corporations' profits, it shall be an obligation on the Board not to grant a licence. I hope that, in view of the great concern of hon. Members opposite for the wellbeing of the Board, they will certainly help us on that.
The difficulties facing the independents, which we recognise, are not difficulties of the structure in the Bill. They are the difficulties of airline economics as a whole. They are not common to us, but they are common to all the world. It is our belief that the national corporations have not failed the nation. We believe that they have done a grand job. We think that they should be encouraged to go on doing that job in the future. This is not really a matter for political decision. It is a matter for economic decision and if the worst of our fears are realised the Bill could well be harmful and, indeed, disastrous in some cases to the future of the corporations.
Therefore, unless we can get a fairly firm assurance, which we have not had hitherto, we shall be compelled to oppose the Bill on Second Reading and in Committee we shall try to make it a much better and much more worthwhile Measure.
§ 7.57 p.m.
§ The Parliamentary Secretary to the Ministry of Aviation (Mr. Geoffrey Rippon)
We have had a very good debate with views fairly and thoughtfully expressed on both sides of the House. I thought that the hon. Member for Stockton-on-Tees (Mr. Chetwynd) put the position very fairly from his point of view. I hope that I may succeed in allaying some of his anxieties and those of his hon. Friends. I thought that he went very much to the root of the matter when, in the earlier part of his speech, he said that this was not a cut-throat industry. I thought that much of what he said indicated that there is really no great fear of damaging either the corporations or the independents.
I can assure the hon. Gentleman that he need not fear that the integration of the independent companies into stronger units is for the sinister purpose of undermining the structure of the corporations. They are forming stronger units for the reasons why my right hon. Friend indi- 1306 cated when he moved the Second Reading. They are doing it because, in considering the granting of licences for any air service, one of the factors to which the new Board will have to have regard is the financial and other resources of the applicant. As traffic is expanding, as aircraft are becoming more expensive, and as new opportunities arise—and we have heard much about that today—it is imperative that operators should have sound financial resources.
Many of the questions which the hon. Gentleman and his hon. Friends have asked—what will the independents do; what will happen?—are, of course, all matters which it will be for the Board to determine in the first instance. It is important to recognise on both sides of the House that we are very much concerned to set up an independent and impartial body which can sift the evidence and weigh all the considerations. The great safeguard will be the public hearing. The hon. Gentleman said that we have only the oral assurance of my right hon. Friend about that. I am sure that he has no reason to be dissatisfied with that undertaking. It is clearly important that there should, normally, be public hearings.
The hon. Gentleman was concerned that the advisory functions of the Air Transport Advisory Council were being abolished and the new Board would be merely a licensing authority. If he looks at Clause 4 of the Bill, he will see that it substantially reproduces the advisory functions of the Air Transport Advisory Council as originally set up under Section 12 of the Civil Aviation Act, 1949. This is an important provision to which the House may well wish to have its attention drawn. It is the provision under which any person will be able to make a representation to the Boardrelating to, or to facilities in connection with, air transport services by means of aircraft registered in the United Kingdom, being services required by this Act to be authorised by an air service licence, or with respect to the tariff or other charges in respect of any such service or facilities.Provided that it is not a frivolous or vexatious representation, the Board will have to consider it, make a report to the Minister, and make recommendations. Clearly, it is a very wide power. I hope this will go some way towards satisfying the hon. Gentleman.
1307 There is, I think, a very large measure of agreement on the Bill between the two sides of the House. As far as I judge the situation, there is no disagreement in principle on the primary objective of the Bill, namely, the establishment of the Air Transport Licensing Board in place of the present Air Transport Advisory Council. By a curious process, initiated, as the hon. Member for Stockton-on-Tees said, by the Labour Government, the Council has developed into a de facto licensing authority acting in an informal way. As has been widely acknowledged on both sides of the House, it has carried out its duties with considerable success. However, neither its constitution nor its procedures are really suitable to sustain such a rôle indefinitely. In order to circumvent the legal monopoly of the airways corporations, independent companies were appointed as "associates" to the corporations for particular services. This was something which the Labour Government did and, as the right hon. Member for Vauxhall (Mr. Strauss) said, it involves a completely false relationship between the corporations and the independents.
The right hon. Gentleman described the present state of affairs as ridiculous, a fiction, even a lie. The present procedure necessitates also the exercise of a quasi-judicial function without public accountability or rights of appeal. I should have thought that it must be accepted on all sides that we should regularise the position by setting up this new independent Air Transport Licensing Board, with proper procedures, in a way which will safeguard both the corporations and the independents.
We appear to be equally agreed on not merely the desirability but, indeed, the absolute necessity of the provisions in the Bill about safety. In a sense, the Bill in itself is not directly concerned with considerations of safety; they will not fall within the terms of reference of the new Board. But there is no doubt, as several hon. Members, including my hon. Friend the Member for Sunderland, South (Mr. P. Williams), have said, that the present regulations do give cause for concern. The hon. Member for Hayes and Harlington (Mr. Skeffington) and the hon. Member for Feltham (Mr. Hunter) have very much in mind, quite rightly, 1308 the accident at Southall, which drew public attention to the difficulties.
Hitherto, as an incidental preliminary to the approval of services by the Advisory Council, operators of scheduled services have been inspected by the Director of Aviation Safety, but this, of course, has not extended to non-scheduled flying. The provisions of the Air Navigation Order—which we propose to strengthen—were quite general in effect and enforcement was difficult and cumbersome. It is now intended, under a new Order to be made under Section 8 of the 1949 Act, to cover all commercial operators. It is, I think, generally agreed to be an essential provision. Of course, an air operator's certificate cannot prevent all accidents taking place. It will, however, ensure that facilities for air transport are offered to the public only by firms with adequate safety arrangements.
That is the measure of agreement between us, which is, I think, very substantial. Coming to the main objections of the Opposition, which were voiced both by the right hon. Member for Vauxhall and by the hon. Member for Stockton-on-Tees, they are really two-fold. First, they say that the Bill is vague and imprecise so that none can tell what the consequences may be. Secondly, they say that the Bill is likely to have an effect seriously damaging to the corporations. As my hon. Friend the Member for Sunderland, South pointed out, those are somewhat contradictory conclusions to arrive at.
I think the real answer to these and other criticisms and questions which have been raised concerning the activities of the new Board and their effect on the future pattern of aviation is that they ignore the main aim of the Bill. The main aim is to bring the law into line with reality, by abolishing the now quite fictional monopoly of the corporations and securing equality for both public and private enterprise before an independent Board.
Of course, as several hon. Members, including my hon. Friend the Member for Sunderland, South and my hon. Friend the Member for Watford (Mr. Farey-Jones) have said, the success of the new system must ultimately depend upon the strength, wisdom and independence of the members of the Board 1309 themselves. My hon. Friend the Member for Belfast, East (Mr. McMaster) wanted a representative Board, but as my right hon. Friend said, that is not at all what we have in mind. The right hon. Member for Vauxhall thought that the numbers proposed were excessive. The numbers are somewhat larger than in the case of the Air Transport Advisory Council because it is intended that the now Board should be able to sit, as and when necessary, in two divisions. I believe that that is an important provision to make.
The right hon. Member for Vauxhall was very much concerned that the Board could, apparently, take anything into account or ignore anything, and that the factors which it will be asked to bear in mind are imprecise. It ought to be remembered, as my right hon. Friend pointed out, that under existing legislation there was, perhaps, no need for any Bill at all. Section 13 of the Civil Aviation Act, 1949, provides for a licensing authority to be set up merely by Order in Council. We have gone much further than was proposed in Socialist legislation.
It is fair also to make the point that the right hon. Member for Vauxhall, among many distinguished offices he has held, was himself Parliamentary Secretary to the Ministry of Transport and must appreciate the great similarity there is between the procedures envisaged under this Bill and those provided for by Section 72 of the Road Traffic Act, 1930, another piece of Labour legislation, governing the grant of bus licences. It is there provided that, in deciding whether to issue a road licence, the commissioner is to have regard to many matters which are similar to those in Clause 2 of the Bill—the suitability of the routes, the extent to which they are adequately served, the extent to which the service is necessary in the public interest, the needs of the area as a whole, the possibility of unremunerative services, and so forth. I should not have thought that the operation of that system had in any way prejudiced the position of the British Transport Commission. That body may have other troubles, but they do not stem from the operation of the licensing system. Indeed, it is fair to say that there has been very little criticism of the procedure proposed under the Bill. This, I think, 1310 is because it is probably recognised that what is proposed follows fairly closely the procedure which has already been tried and tested satisfactorily in connection with bus licences.
My hon. Friend the Member for Belfast, East raised the point that it was not, perhaps, appropriate for the Minister to hear appeals. As my right hon. Friend pointed out, the matters with which the Board will be concerned are questions of opinion or policy and not merely of interpretation of law or of fact, as in the case of the air safety certificate. Parliament would wish that in the last resort the Minister should be the accountable authority.
It is the same kind of reasoning that led Parliament to provide for the Minister of Transport to hear appeals from decisions of traffic commissioners on bus licence applications. Incidentally, that whole procedure has been recently considered by two Committees. It was considered by the Thesiger Committee on the Licensing of Road Passenger Services, which was appointed in 1952. That Committee recommended against any change in the appeal procedure. The Franks Committee considered that Report and said that they had received no evidence which led it to differ from that conclusion.
The list of considerations set out in Clause 2, which is like that set out in Section 72 of the Road Traffic Act, 1930, is by no means exhaustive. We should not attempt an exhaustive list. It does, however, indicate an intention to ensure a measure of protection to existing established operators, whether air corporations or independents. At the same time it allows sufficient flexibility to permit of constant new developments of the kind of which many hon. Members have today spoken and to provide reasonable scope for both the corporations and the independents to expand.
It is against that background that we have to consider the major charge that in some mysterious way an independent licensing authority, weighing all the evidence and sifting all the considerations, would damage the corporations. My right hon. Friend has made it clear that, with the agreement of both the corporations and the independents, we are making provision to ensure that the 1311 Board gets off to a fair start concerning the carry over of existing traffic rights. There should be no difficulty with provisional transitional licences in ensuring this fair start.
In the case of the corporations, the position is simple. They will simply carry on as at present on the routes they now serve. When the independents are operating approved services, those approvals will continue for the existing period and for the present frequencies. There is a little more difficulty in the case of independent services which need no approval now but which will be controlled hereafter. We will therefore have to set a date reasonably far in advance before it becomes an offence to fly without a licence.
As my right hon. Friend said, in making these generally acceptable provisions for transitional licences, there is no question of perpetuating the present pattern. Nor is there any question of smashing it. I assure hon. Members opposite that the great public investment in the corporations will be protected. The hon. and gallant Member for Derby, North (Group Captain Wilcock) put the position clearly when he said that no independent wants to take the place of the corporations. As the hon. and gallant Member said in the little debate which took place between himself and his hon. Friend the Member for Greenwich (Mr. Marsh), demonstrating that there is no workers' solidarity on the other side of the House, there is a place for both the corporations and the independents.
At the same time, however, in answer to the hon. Member for Stockton-on-Tees, there may be scope for parallel services. That, however, is a matter that the Board will have to determine in the first instance. There will certainly be no sudden change in the pattern of traffic. It is, however, a fact that the corporations' monopoly of almost every British domestic and international air route will not be automatically inviolate. All operators will have the opportunity of making their case to the Board.
My hon. Friend the Member for Sunderland, South was quite right in emphasising that we should think of the corporations and the airline companies 1312 as operators. There should be no thought of a battle between the corporations and the independents. This is not a great ideological issue. The independents may well try to seek a bigger share of an expanding traffic, but that does not necessarily mean a bigger percentage. It might be described as a growing share of growing cake.
That point was brought out in the speeches of my hon. Friends the Members for Gillingham (Mr. Burden), Watford and Cheadle (Mr. Shepherd) all of whom, together with the hon. and gallant Member for Derby, North, emphasised the enormous possibilities of traffic expansion. The hon. and gallant Member for Derby, North went out of his way to explain to his hon. Friends the distinction between the sort of jobs that the independents want to do and those that the corporations are carrying out. We must not take too narrow a view of this matter.
We can recognise quite properly that the independents have played a great part in opening up new routes and services. They have concentrated particularly on popularising flying among people who might never have flown. In the long run, that must be generally in the interests of British aviation and, indeed, of the corporations themselves. The independents have also made a notable contribution, not merely in pioneering new services, but in pioneering them, as my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) said, at reduced fares.
At the same time, one does not belittle the achievements of the corporations. The hon. Member for Stockton-on-Tees referred, quite fairly, to the fact that in the last calendar year, British European Airways reported a profit and that B.O.A.C. also has had its successes. It is fair to point out that B.O.A.C.'s share of Atlantic traffic between New York and London has enormously increased since the low 1954 figure quoted by my hon. Friend the Member for Gillingham. The corporation is now getting roughly 40 per cent. of the traffic. This is an achievement which should be put on record.
The right hon. Member for Vauxhall showed himself also a little concerned about the possibilities of unfair competition between the independents and the 1313 corporations. One of the advantages of tightening up the safety regulations is that we shall ensure that there is no possibility of economising in that direction. It is also fair to say that there is no possibility of the independents undercutting the corporations in the way that the right hon. Member suggested by offering less favourable terms and conditions of service.
Clause 2 (2, a) of the Bill provides that the Board shall be satisfied of an applicant's ability to provide, among other things, satisfactory staffing arrangements, but that is not the whole story. The Bill leaves quite unaffected Section 15 of the Civil Aviation Act, 1949, which provides that the terms and conditions of employment offered by independents, unless they are regulated by another Act or by an agreement between the independents and the trade unions or in accordance with a national joint council agreement, mustcomply with the following requirement, that is to say, that they shall not be less favourable than the terms and conditions observed by the Airways Corporations in the case of persons engaged in comparable work".I turn now to the questions which arise on the terms of reference. The right hon. Member for Vauxhall was particularly anxious that it should be mandatory upon the Board to refuse any application that was held to result in wasteful duplication or material diversion of any kind. I cannot feel that that is a fair way of ensuring equality before the law. I should have thought that these matters should be left to the Board to take account of together with other aspects of public interest, and to balance fairly.
The right hon. Gentleman also drew attention to an apparent discrepancy as regards tariffs. Clause 2 (5) provides for the fixing of fares whereas paragraph (c) of subsection (2) of Clause 2 only provides that the Board shall have regard to the tariff in force in respect of a similar service. In other words, it would be proper for the Board to have regard to the fact that on a certain route there was only a first-class service and that therefore there was a public need for an economy or some other lower fare.
My hon. Friend the Member for Cheadle questioned the necessity to have regard to the need for a proposed service and said he would like that to be eliminated. It should be understood that, as 1314 drafted, the Clause does not require the applicant to prove a need, so it does not put him at a disadvantage. If there is a need it is an argument in his favour.
§ Mr. Strauss
This is not a point of controversy but it is of some importance, so would the Minister say more about the question of fares because it is not clear at the moment? The Board must take account of the tariff of any similar service when an application is before it, but the Minister fixes what the fare shall be for all services abroad. If an applicant states that an ordinary service is being run by B.O.A.C. at a certain fare and that he will run a similar service at a lower fare, is it for the Board or the Minister to decide what the fare shall be?
§ Mr. Rippon
The Board does not fix the fare so it will not argue about precise details. Clearly, however, in the circumstances to which I referred that is a relevant factor for the Board to consider. That is as far as one can reasonably go at this stage.
The other matter under the terms of reference which has caused some discussion arises under paragraph (g) of Clause 2 (2), namely, the observations made to the Board by the Minister. It is accepted that there may be matters relating to international negotiations on which it will not be wise or possible to publish the Minister's observations. I can say, however, that where the observations are of a general character, for example on fares, it is our intention that these shall be published so that applicants may know where they stand and so that the House may question the Minister about them. There is one further point to which the hon. Member for Stockton-on-Tees referred, namely, the annual report and statistics. I can undertake that we will consider this point.
In all the circumstances I think we have had a valuable debate which has ranged over many points arising under the Bill and I have tried to deal with as many as I could. I can safely commend to the House the broad principles of the Bill, although I assure all hon. Members that we will take full account of all that has been said before we reach the Committee stage. If either the corporations or the independent operators had felt that in every particular the Bill was welcome to them, that would have 1315 been a very worrying circumstance. Indeed, the hon. Member for Stockton-on-Tees seemed to be expecting the independent operators to complain about a number of matters. The fact that this has happened is a good thing.
The purpose of the Bill is to secure a full share of opportunity for both the
§ corporations and the independent operators through a procedure which we trust will be in every way open, fair and impartial.
§ Question put, That the Bill be now read a Second time:—
§ The House divided: Ayes 233, Noes 175.1317
|Bill accordingly read a Second time.|
|Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).|