HC Deb 22 November 1962 vol 667 cc1428-44

Not amended (in the Standing Committee), considered.

4.22 p.m.

The Minister of Aviation (Mr. Julian Amery)

I beg to move, That the Bill be now read the Third time.

I do not want to detain the House for long this afternoon. I have not very much to add to what has already been said on this Measure, both on Second Reading and upstairs in Committee I am well aware that our business later this afternoon is to include a discussion on the affairs of Northern Ireland, which are of great consequence to my Department.

I do not think that we left many loose ends at the conclusion of the Committee stage. In fact, after looking through HANSARD, I can find only one point to which I wish to refer. The hon. Member for Gloucester (Mr. Diamond) asked whether any compensation payments made under Clause 5 of the Bill would be liable to Income Tax. I have looked into this point and I understand that under Section 37 of the Finance Act, 1960, they would be.

I think that the House feels that B.E.A. has a very good record, with profits ever seven years as evidence of its general health and stability and that it will overcome its temporary setbacks of last year and return to a period of making a profit. I am sure that the House will have seen with pleasure, as I did, the news that a Trident aeroplane flew from this country to Rome in an hour and twenty minutes yesterday, a very remarkable achievement.I think that there is no disposition on either side of the House to question the high standards of B.O.A.C., but there is considerable anxiety about its commercial organisation. On this, I do not want to say more, because I think we, must await the report which Mr. Corbett is to make to me.

I wish to thank hon. Members on both sides of the House for many useful suggestions which have been made during the course of our debates and for their co-operation, which has enabled the Bill to advance thus far so smoothly.

4.25 p.m.

Mr. Frederick Lee (Newton)

My hon. Friends and I agree about the importance of this legislation and have no wish to hold up its progress. The right hon. Gentleman told us that this is a narrow Bill in the sense that it is purely a borrowing Measure. On Second Reading, we explored many facets of policy which emanated from borrowing powers. For my part, I have no wish—nor would you, Mr. Speaker, allow me—to traverse that kind of ground again.

I think it important that we should understand, especially with the new powers that the Minister is taking to make advances to the Corporations to finance losses on operating account, that the sums for which the right hon. Gentleman is asking in this respect are not necessarily amounts which we think the Corporations will lose in the next two years. I was very pleased to see that Lord Douglas made this point in the B.E.A. magazine.

Although B.E.A. will have the facility, when the right hon. Gentleman gets these powers, to borrow up to £10 million between now and March, 1964, Lord Douglas made it abundantly clear that the position of the Corporation is far more healthy than would appear to be the case if anyone imagined that it is to lose £10 million in the next two years.

It is important that that kind of thing should be said. Those of us who are to agree to these powers being given would be very apprehensive if we thought that between now and March, 1964, either B.O.A.C. or B.E.A. would incur maximum losses to the amounts we are granting. That should be made abundantly clear.

I am glad that the right hon. Gentleman also referred to the fact that although both B.O.A.C. and B.E.A. had a bad year, in common with most of the great airlines of the world, they have, especially in the case of B.E.A., a fine record of profitability. Indeed, in the period 1954–55 to 1961–62 they made profits of £12,900,000, with a net profit of £8 million, including interest charges of nearly £3 million, leaving £4,300,000. One is pleased to see in what was something in the nature of an interim report that Lord Douglas was making that he pointed out that in the current year—which is a year of great importance to all of us, because we want to see the graph rising after the disasters of 1961—he estimates that from April to September an overall profit of nearly £3 million was made.

All this is very heartening, but we know that the worst period in the year is now beginning and the six months from now is the period in which passenger traffic falls away steeply. We cannot expect that the recovery shown in the first six months will be maintained in the second six months. We wish the Corporations the very best of luck. It is heartening to see that in the first six months of the financial year they have been doing very well indeed.

In our discussions on the various borrowing Clauses of the Bill in Committee, we asked for information about the rate of interest at which the money is to be borrowed. The right hon. Gentleman was not able to tell us precisely although he intimated that borrowing had been at 4¼ per cent. and 4½ per cent. I do not know if he can enlarge on that. As he knows, we believe that the lower the interest rate at which the money is lent, the better results we shall get from the two Corporations.

Mr. Amery

I remind the hon. Member that I said that the Corporations were borrowing at the current Government rate. At present, it is, I think, 4¼ per cent. in the case of B.E.A. and 4½ per cent. for B.O.A.C. It varies, of course, as the rate goes up or down.

Mr. Lee

I am grateful to the right hon. Gentleman. I was making the case that the lower the interest rates in this business the better returns we can hope for from the investment which we—not only the House, but the nation itself—are making in the work of the two Corporation's. Within the Bill, I must not discuss the question of writing off dead capital, but I hope that the point which was made both on Second Reading and in Committee concerning it has not been lost sight of by the Minister.

I agree very much with the right hon. Gentleman that a great deal will depend upon the inquiry which he is now conducting into the affairs of B.O.A.C. I have suggested that it might be better to go far wider than the Minister has indicated, but he has not accepted that suggestion. We all hope, on both sides, that B.O.A.C. has now seen the worst of its problems and that the inquiry will show the directions in which constructive suggestions can be made to give the Corporation a better return in future years.

I am sure that all of us hope that the action we are now taking will assist the two Corporations in the great work which they have before them as the nation's flag carriers, so that we again see not only their share of the traffic increasing rapidly, but also a valuable return on the money which the nation is expending on these two great airlines.

4.32 p.m.

Sir David Robertson (Caithness and Sutherland)

I share the views expressed by the hon. Member for Newton (Mr. Lee) about the excellent work which is done by the two Corporations. I have travelled for years by B.E.A. and with its predecessor, Imperial Airways, and on B.O.A.C., too. Their services are unequalled.

I am particularly concerned with the excellent service which is provided between the principal cities in England and the Highlands and I rise to raise an issue which is dealt with in Clause 1 of the Bill, which refers to deficits. Unhappily, a deficit has occurred in these Highland services and B.E.A. has stated that it will have to curtail them unless it gets a subsidy.

This year, the greatest increase recorded at any airfield in Britain was at the county town of Wick, in my constituency. The percentage increase in the month of August was 41 per cent. Orcadians, Shetlanders and Caithness people have taken to the air services to a much greater extent than people in many other parts of the country, because their other means of communication are not so good, and I am sure that the people of Ross-shire would do the same if they had an aerodrome.

The service is first class. I can sleep in my own bed in London, get a plane leaving London Airport at 8.30 a.m. for Edinburgh, Glasgow, or thereabouts, have a hearty breakfast and be licking my chops when we come down at Renfrew or Turnhouse, having travelled and eaten at the same time. After waiting there, we go on to Aberdeen. After a halt there, I get into Wick at ten minutes past twelve, have lunch, do a good afternoon's work and come back on a plane leaving at 5.10, getting into London Airport in time to make a speech at the House if I succeed in catching Mr. Speaker's eye.

I cannot stress too strongly how efficient the service is; it is excellent. It is a great regret to me to think that a community which appreciates the services as much as we do in the Highlands is faced with a threat of curtailment.

I have seen the traffic increase. When I first became a Member for John o'Groats, we had the old Rapides, which could not pay even when they were full. The Corporation was nervous about doing so, but I pleaded with it to put on bigger planes. The Corporation did so and filled them, and then put on more of those planes. This horrible threat to curtail the services is something of which I must inform the House, because we must try to avoid it.

One factor that increases B.E.A.'s deficit in the Highlands is that the United Kingdom Atomic Energy Authority runs a private service rivalling B.E.A. on three days a week between Manchester and Renfrew, Glasgow and Wick. On three days a week, this private service is operated by Silver City Airways. In my judgment and, what is more important, in the judgment of many of my constituents, it is wholly unnecessary. All my constituents have to travel by the Corporation's services and they feel that the same thing should be done by officials and relatives and friends of those employed by the Atomic Energy Authority.

The B.E.A. service is operated six days in the week. The aircraft leaves Manchester at 7.35 a.m.—I imagine that the passengers get breakfast on it—and arrives at Renfrew at 8.35. It leaves Renfrew at 9.5 and gets into Wick at 12.10. That is the same plane as I use, only I start from London and go up via Aberdeen to Edinburgh. It is the same connection. The aircraft returns at 5.40 in the afternoon, gets into Renfrew at 8.20, leaves at 8.50 and gets to Manchester Airport at 9.50 p.m.

What could be better than that for six days in the week, outward to the North and back to the South? I say this with the greatest possible force to my right hon. Friend the Minister, because many of my constituents who complain about the private service are prominent citizens who use the regular services. It seems wrong to them and to me that another branch of Government service should resort to a private service, because the income from that three-days-a-week service might obviate any question of loss to B.E.A. and there would be no need for subsidy for that part of the North of Scotland.

There is bound always to be a subsidy for the Islands on the West Coast, where the population is so much smaller than on the mainland. Here, however, a Government Corporation runs a first-class service, which all the rest of the people have to use if they want to travel by air, but the Atomic Energy Authority, in its majesty, decides to run an air service of its own, operated by Silver City on Tuesdays, Wednesdays and Thursdays, which are the peak days of the week.

I appeal to the Minister to do something about this and to bring it to an end. I do not object in the slightest to the officials and their relatives from the Atomic Energy Authority travelling by air, but they should use the same services that I and everybody else use. The taxpayer cannot afford to meet losses which are quite unnecessary. The income from a full load going up from Manchester to Wick and return far three days in the week might make all the difference between a profit and a loss. It is all a question of turnover.

If the argument is put forward that there is not enough room, B.E.A. is well capable of meeting the demand. It has met it continuously in the past as the demand has grown. This private service seems to me to be wholly wrong and I hope that my colleagues on both sides of the House, and particularly the Minister, will agree.

I should not like to think that, because another Minister is concerned in the matter, it is not the affair of my right hon. Friend the Minister of Aviation. I say that it is his affair representing, as he does, the Members of the House and the public at large outside. I assure him that I will not be satisfied, nor will the people outside be satisfied, if they think that this kind of thing goes on. It is no wonder that B.E.A. is losing in the North when foolish competition like this is allowed to come from public funds.

4.40 p.m.

Mr. Emrys Hughes (South Ayrshire)

I wish to emphasise the importance of what has been said by the hon. Member for Caithness and Sutherland (Sir D. Robertson). We are perturbed at the future prospects of the air services in Scotland. We visualise the possibility of the rail and air services being closed down, so that it will be difficult to travel in that area by any reasonable form of transport and conditions will be as derelict as in the period of 1745. People may have to walk.

I wish to stress the importance of this matter to the Minister, who has a responsibility for aviation in that part of the world. The traffic could be developed were there an efficient or even a half efficient air service. I am quite sure that what has been said by the hon. Member for Caithness and Sutherland will be endorsed by everyone who is concerned about the future of this remote area. We wish to help the Minister to remedy the position in which B.O.A.C. is at present. We should like to travel from Prestwick by B.O.A.C. planes. But it is impossible to hoard some of these planes because of the ridiculous arrangements which the Customs authorities have instituted at Prestwick.

I know that there are a large number of people who would travel from the west of Scotland by B.O.A.C. planes and thus help to solve the financial problems associated at present with air traffic from that part. There are trans-Atlantic planes from Canada and New York landing at Prestwick at frequent intervals. But it is difficult to board them, especially the planes which come at the most important periods. I consider that there should be some arrangement with the Treasury to make it possible to extend the present limited Customs arrangements and enable people to make use of these planes. In this matter I speak for hon. Members on both sides of the House who represent constituencies in south-west Scotland. Such an arrangement will help to popularise what I believe would prove a developing traffic. I am sure that the Minister wishes to be helpful to Scotland and this suggestion would be supported by all hon. Members.

4.43 p.m.

Mr. R. Gresham Cooke (Twickenham)

Before the House parts with the Bill I wish to say a word on behalf of the ordinary "man-on-the-ground"—the taxpayers and the residents who has to live near our airports. In such debates as this speeches are made by the experts and technicians and others who are vitally interested in the aviation industry, but infrequently do we hear what the ordinary man thinks.

The ordinary man considers that the air traveller is a highly subsidised person. The airlines make losses. The collective losses last year amounted to £50 million, to which sum our airlines contributed about £15 million.

Mr. A. E. Hunter (Feltham)

I think that the hon. Member must have misunderstood the position. B.E.A. has made a profit for seven years, from 1954. The Corporation made a loss only last year.

Mr. Gresham Cooke

That is what I said. Of the losses made by air corporations last year our Corporations contributed over £15 million.

Airports in other parts of the world are subsidised. Even London, Gatwick and Prestwick which we try to make a commercial proposition made a loss last year of over £1 million. Radar services and landing facilities, and so on, for foreign airports are provided by their Governments. The research and development which goes into machines and engines is provided by many Governments on a military budget rather than from straightforward commercial operations. Therefore, in the view of the ordinary man, the air traveller should move through the air with modesty and acknowledge with gratitude the help and money provided for his means of transport by the poor "groundling". Instead, we see them moving amid more noise and clamour and with more bombast. Those of my constituents who live near London Airport feel strongly about this.

The increased loans which will be made available by the provisions in the Bill mean to the ordinary person that larger and more powerful planes will become available, and they will be noisier. I hope that the Minister can tell us that that is not what is intended for the future. But there are proposals for a supersonic aeroplane capable of travelling at 1,500 miles an hour to be provided at a cost of £150 million. This may mean more booms and bangs over Twickenham. I think of all the old aircraft which have been scrapped—the Brabazon, the Princess flying boats, the V1000, and so on.

What advantage will be derived from having this great supersonic aircraft? Will it be scrapped in the future? The only advantage which I can see in having such an aircraft would be for businessmen who might be able to get from London to New York two hours quicker—if they are not frizzled to death when the aircraft re-enters the atmosphere at 1,500 miles an hour. This supersonic monster will have to take off from London Airport, as no doubt it will be owned by the B.O.A.C. We cannot move London Airport. We have already spent over £30 million on the Airport——

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

Order. I do not wish to interrupt the hon. Member, but I hope that he will bear in mind that this is a Third Reading debate and we are dealing only with what is in the Bill.

Mr. Gresham Cooke

Thank you, Mr. Deputy-Speaker, I appreciate that.

The Bill will give the Corporations increased borrowing powers and no doubt some of the money borrowed will have to be spent on providing new aircraft. That means more traffic, and possibly noisier traffic, and, therefore, it will affect those people living near the airports May I ask a question of the Minister——

Mr. Deputy-Speaker

Order. I do not wish there to be any misunderstanding between the hon. Gentleman and myself. It was the reference to London Airport that was perplexing to the Chair.

Mr. Gresham Cooke

Well, Mr. Deputy-Speaker, I think that you will agree that if, in future, the Corporations are to have larger and noisier aircraft, it will affect a great number of people. The Corporations will be able to buy more aircraft. Everyone expects them to be busy and I am only endeavouring—I hope within the rules of order—to point out that, in addition to the industry and air travellers, the provisions in the Bill affect the ordinary man in the street and alarm some people.

Air travellers are a privileged class. From time to time I am an air traveller myself and I acknowledge that fact. The public want cheap travel to be provided by the Corporations. I do think that it matters whether air journeys are cut short by an hour or two. That is a marginal difference of which businessmen may take advantage. But the ordinary person wants cheap air travel. Surely that is something which the Corporations should provide in the future.

I therefore ask my right hon. Friend, and those responsible in the Corporations, to spare a thought for the little man on the ground and for the air travellers who desire cheap travel. They should remember the little man on the ground who pays for the power and glory of the great Corporations which he subsidises.

4.50 p.m.

Mr. Eric Lubbock (Orpington)

I have listened with interest to the remarks of the hon. Member for Twickenham (Mr. Gresham Cooke) about the disadvantages of supersonic aircraft. I agree with him that they have their disadvantages, but I should like to correct one thing he said. He said that on re-entering the atmosphere people could be frizzled up by the heat. Supersonic aircraft flying at Mach 2.2 will still be within the atmosphere. If the hon. Gentleman would like to know how to calculate the temperature rise caused by the forward speed of an aircraft he would be advised to remember that the formula (v/100)2 gives the rise in temperature in degrees Centigrade.

Mr. Gresham Cooke

I do not intend to bandy formulae, but the supersonic aircraft would have to rise to a height of 70,000 ft.

Mr. Lubbock

In the case of the Mach 2.2 aircraft that would be about the right height, but at that height an aircraft is still within the atmosphere.

I do not want to make a lengthy speech on Third Reading, but I do want to refer to what I think must have been a slight misunderstanding on the part of the Minister of something I said on Second Reading which is relevant to the Bill. I made the proposal that the capital of the Corporations should not be in the form of a number of loans at varying rates of interest. In the case of the B.O.A.C. there are about 25 different loans at interest rates varying between 2½ per cent. and 6⅝ per cent. I was proposing that the capital structure of the Corporations should be reorganised so that all those loans were redeemed and replaced by ordinary shares and that the Corporations should pay dividends on their ordinary capital according to the profits they make so that in a year where they had poor results they would not have to pay anything out.

Mr. Deputy-Speaker

I am sorry to interrupt the hon. Member, but none of this appears to me to be in the Bill.

Mr. Lubbock

Yes, Mr. Deputy-Speaker. The increased borrowing powers provided for by the Bill are in the form of fixed interest capital. With great respect, I think that one must consider this factor, because there is some question whether we might, instead of having the increased capital in the form of a fixed interest loan, have it in the form of ordinary shares.

Mr. Deputy-Speaker

Order. I do not think that that would be within the Bill. On Third Reading, we cannot put forward what we would like to see in the Bill. We are restricted to dealing purely with what is in the Bill.

Mr. Lubbock

I am most grateful for your Ruling, Mr. Deputy-Speaker.

Under the terms of the Bill we have the fixed interest capital. We are now appointing accountants to advise us on how the capital of the Corporations should be organised. That is one of the things Which they will have to consider. However, as I am out of order, I will leave that point.

The hon. Member far Caithness and Sutherland (Sir D. Robertson) said something about the internal services operated by B.E.A. He said that the Corporation operated two services to Scotland and elsewhere which were very comfortable and suitable for the routes on which they were operating. He said that various facilities were provided on them. We must be more careful about the facilities provided by the Corporations on very short routes. This is one of the ways in which the Corporations are wasting money. There are expensive meals and champagne on services which take only 1¼ hours, or even less. There need not be elaborate services on the routes between London and Glasgow and London and Belfast.

One of the ways in which the Corporations have been wasting money is on this kind of provision. In these days everyone who travels by air should be treated as a V.I.P. There should not be these very vast differences in the type of services provided for different classes of traveller. It would be much better, particularly on internal services, if there were no differences in class.

I welcome the increased borrowing powers provided in the Bill and I hope that the two Corporations will in future be able to operate on a more profitable basis than they have done in the last year.

4.55 p.m.

Mr. E. G. Willis (Edinburgh, East)

I wish to return for a minute or two to the point that has been raised in connection with the services in Scotland to the Western Isles. These are exceedingly important in 'the life of the Western Isles. Without them we could look forward to a continuing decline of population and probably the final decay of the communities there. These services lose money. It has been recommended to the Government that B.E.A should not be asked to bear the losses incurred as a result of running these services. In view of recent developments on the railways, we are entitled to ask some questions about these services.

If these services continue to lose money, if B.E.A. continues to lose money, will the same policy be adopted as that which is being followed on the railways, namely, that only those services which pay will be run? If that is done, the services to the Islands, particularly to the Western Isles, will come to an end. This would be a very shortsighted policy and a very uneconomic one, because the Government through other channels are spending fairly sub- stantial sums of money on trying to strengthen the communities in these areas, on trying to build them up, on trying to give them a means of livelihood, make them viable, and enable the people to enjoy a sufficient degree of comfort and amenities so that they will wish to continue living in the areas.

If the Government are prepared to do that, they should be prepared, as a corollary, to take the steps necessary to provide proper services to them. As far as I know, B.E.A. is anxious to continue these services. In consultations we have had with B.E.A. the Corporation has always expressed a wish to continue these services and is very anxious to do so, because it recognises the social need of the area. If the Corporation is to be asked to bear the loss at a time when the services are losing money, there is a danger to these services.

The Minister appears to be under an obligation to tell us exactly what he intends to do about them. I should like him to accept the recommendation that the Government should bear the loss in respect of these communities. I cannot see that that would cause B.E.A. to engage in a great deal of wasteful expenditure running services which were quite unnecessary. B.E.A. knows what is required. It knows the most efficient way of meeting the requirements. The Corporation would do that. Therefore, I do not think that the Government would be asked to meet what might be considered to be an extravagant expenditure. This is a necessary expenditure not only for the services, but if the Government's policy in regard to these areas is to be carried out properly. Before we leave the Bill the Minister should tell us what he thinks about these services up the West Coast of Scotland to the Western Isles.

5.0 p.m.

Mr. Amery

By leave of the House, I shall reply briefly to what has been said. May I try to correct what I thought was a slight misconception in the mind of the hon. Member for Newton (Mr. Lee)? I think that he is still a little under the impression that Mr. Corbett's Inquiry is of a very narrow character because Mr. Corbett is himself a distinguished accountant.

Mr. Lee

My suggestion was that instead of confining it to B.O.A.C. we should look at the whole of the aircraft industry. I agree with the right hon. Gentleman that, although it is confined to B.O.A.C., it is a very wide inquiry indeed.

Mr. Amery

I am glad that the hon. Gentleman has made his point clear. I gathered from his previous remarks that he thought the scope of the inquiry into B.O.A.C. was too narrow, but it is, as I have explained before, on a very wide front embracing both the technical and the management side.

My hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) and the hon. Member for Edinburgh, East (Mr. Willis) stressed the importance of the Highland and Island services. I do not want to add to what I said on Second Reading on that, but if the hon. Members will look at what I said I think they will find that I went out of my way to stress the vital rôle of these services in the life of the Highlands and Islands and the great importance which the Government attach to them. There is no question of their being cut out. There is a proposal before us made by B.E.A. that we should meet the loss it incurs on them. As I have said in debate in the House and in reply to Questions, this is something that I am urgently considering. I cannot give an answer here and now on whether we shall accept the proposal or whether we shall have to find some other solution for it. There is the whole problem of the administration of the airports in the Highlands and Islands which is a related but a distinct problem.

My hon. Friend referred to the problems of the Atomic Energy Authority and its taking charter aeroplanes for certain purposes. This type of charter does not require a licence. This is a matter for the Atomic Energy Authority, and if my hon. Friend wants to pursue the matter further I would ask him to address any questions on it to my noble Friend the Minister of Science or his representative in this House.

Sir D. Robertson

I did that in the first place. I have never raised anything in this House in the twenty-three years that I have been here without the courtesy of a letter to the Minister concerned. I did that, and I got a thoroughly unsatisfactory answer, indicating to me that his powers were un- limited and that this is how he was going to run it. I take an entirely contrary view. I am sorry that the Minister said that this was not his concern, because in answer to my question the other day he asked me to put down a specific Question. However, I have this opportunity now. I cannot see how the Minister of Aviation can dissociate himself from this. This is the Government. It is two different Departments of the Government, and one is cutting the throat of the other.

Mr. Amery

My hon. Friend will realise that the Atomic Energy Authority has considerable autonomy in these matters. It is entitled to charter flights if it regards this as necessary and desirable. I must admit that I have not received sufficient grounds to challenge the decision. But, as I have said, matters affecting it are not directly in my Departmental sphere, and that is why I suggested to my hon. Friend that if he wants to pursue the matter further the Departmental responsibility is with my noble Friend and his office.

The hon. Member for South Ayrshire (Mr. Emrys Hughes) raised an interesting point about the possibility of overcoming Customs difficulties and making greater use for internal purposes of trans-Atlantic flights. I am not well briefed at the moment on this point, but it is one which on the strength of what the hon. Gentleman said I propose to examine carefully.

My hon. Friend the Member for Twickenham (Mr. Gresham Cooke) spoke about the serious problem of noise. It is one of which I am well aware and one which. I hope, will to some extent be diminished with the advent of the VC.10 aeroplane which, so far as I can see, looks likely to be slightly less noisy than the big jets have been hitherto. My hon. Friend also stressed the importance of cheap travel as against swift travel. One of the difficulties in this issue, which is canvassed from time to time, is that so far experience has shown that the operating economics of fast jets are superior—that is, they are cheaper than those of the older and slower aircraft. This is partly because the turn-round is much swifter, and if we had a supersonic aeroplane it could do the trans-Atlantic flight two or three times in the same day.

Mr. Hunter

Would the right hon. Gentleman bear in mind that the new jet airliners make bigger losses on the aircraft equipment already owned by the Corporation?

Mr. Amery

I take the hon. Gentle man's point. I was simply saying that the operating economics of the swifter aircraft tend to be superior and cheaper. On the point that the hon. Gentleman makes, that is where we are in a certain dilemma. If we stick to the old aircraft when other lines are taking the modern ones we tend, of course, to lose traffic to our competitors. This is the dilemma. Once one airline embarks upon a superior new type of aeroplane it is very difficult for the others not to follow suit, and ail market research suggests that what passengers really want is swiftness and speed above all. They may be wrong. But that seems to be the way they operate. In many ways it was more comfortable travelling in the old-fashioned type of motor car from which one could get out with one's hat on, if one wore a hat, and get out frontwards instead of backwards. People do not want that sort of car any more and one has to cater for the travelling Public's taste.

Mr. Gresham Cooke

I think my right hon. Friend would agree that experience shows that this cheap travel fills the aircraft whereas many of the jets are going half empty.

Mr. Amery

As my hon. Friend probably knows, B.O.A.C. has calculated that, but if it were to reduce its fares by 20 per cent. it would have to increase the passenger load by 25 per cent. to break even, so it is not very simple. This is where the hon. Member for Orpington (Mr. Lubbock) may run into difficulty. With passenger loads as they are today, to convert them all to tourist class, that is to say to reduce the fares of what is now about a quarter of the ordinary aircraft load, would perhaps run one into even great financial loss under present conditions.

Mr. Lubbock

If the Minister really wanted to do this, would it not save a great deal in duplication of operating expenditure in terms of cabin staff and the separate facilities which at present have to be provided for first-class services which are operating in B.O.A.C. at much lower load factors than the tourist class?

Mr. Amery

I am advised that that is not the case. The hon. Gentleman made the point before in Second Reading, and I am advised that the gain to the Corporation outweighs whatever expense and additional overheads there may be. The hon. Gentleman also referred to the make up of the capital structure of the Corporation. This is no doubt a point that Mr. Corbett can consider. It has been made before. It would be difficult in present circumstances for B.O.A.C. to raise equity capital in the market, if that is what the hon. Gentleman had in mind. I think that this is a matter which can best be left to the accountant's inquiry.

I think that I have covered the main points that have been raised, and I do not want to delay the House beyond expressing my gratitude and the Government's for the ready co-operation which we have had from both sides of the House in receiving support for what is, after all a request for a very sizeable sum of money, although, I hope, as the hon. Member for Newton said, that not a great deal of it will have to be spent on financing a deficit. I look forward to seeing the greater part of the expenditure used on constructive re-equipment of the Corporations with more modern aircraft to put them in an increasingly strong and competitive position in the airline markets of the world.

Question put and agreed to.

Bill accordingly read the Third time and passed.