CIVIL AVIATION

HC Deb 13 May 1963 vol 677 cc953-1086

3.38 p.m.

Mr. Frederick Lee (Newton)

Today, we are inviting the Committee to discuss civil aviation. Following the news of the last two or three days, as the result of the slight problems on the Atlantic routes, hon. Members will no doubt agree with me when I pay tribute to the political sagacity of my right hon. and hon. Friends in bringing this subject to our attention.

Perhaps I might begin by asking the right hon. Gentleman whether he will take the opportunity which we have provided him with to inform the Committee of the latest state of affairs in relation to the I.A.T.A. fare dispute. It would appear now that the position of the Atlantic route is chaotic. The agreement reached in Arizona, which involved a reduction of tourist return discounts from 10 per cent. to 5 per cent.—a decision which was, by the way, taken quite unanimously by 92 airlines, including Pan-American and TransWorld—came into operation yesterday.

our understanding is that two weeks ago the United States Civil Aeronautics Board intimated its disapproval of this change, and that both American airlines are now refusing to honour the agreement to which they were parties. I have seen items on the tape and in the Press about the action the Ministry proposes to take. We understand that there is the possibility of American planes arriving here being detained if they have not honoured the new agreement.

I agree at once that the Americans are very much to blame. It is not much Good the airlines having an international organisation to determine these matters through conferences if, after agreement has been unanimously reached, individual members contract out. That is not good enough, particularly when the time factor is so short. I believe that I am right in saying that only two weeks' notice was given of this action by the C.A.B. and that, therefore, it is not possible for I.A.T.A. to convene another conference in time or for the Governments concerned to make other arrangements. Perhaps the right hon. Gentleman will tell us more about this situation.

It seems to us that there are occasions when our American friends want the best of both worlds in this respect. I remember the Decca incident some time ago, which left a nasty taste in the mouths of some of us. On the other hand, I recall that if we had been able to get differential fares for the Britannias, and aircraft of that type, their value would have been far higher than it is now. We have had to take this kind of thing and I hope that other Governments will take the same attitude when things do not go quite as they wish.

In the main, the I.A.T.A. set-up depends on Government sanction. These 92 airlines determine their fare structures without, I understand, consulting the Governments concerned. Perhaps the time has now come when the Governments should be represented at such conferences. Eveyone knows that Governments take a great interest in these matters.

We all realise that at this stage it is not the airlines which are in dispute with the British Government, but the United States Government. Instead of allowing this sort of thing to develop, with all the unpleasantness which follows, it would be better for the Governments themselves to be represented at the conferences. If that is not acceptable, then at least there Should be a deadline, following each conference, by which Governments would be allowed to object to decisions, but after which there could be no objection.

These things seem elementary, but, nevertheless, the present situation is be-devilling arrangements for air fares and also the good will between Governments. We must not permit it to go on. What does the right hon. Gentleman propose to do about it? I understand that there is a suggestion that American planes may be detained. I do not know that that will solve very much. Pan-American and T.W.A. are not the people in dispute with us. It is the United States Government who are in dispute. I know that a conference has been called for within a few days, but who is to say that we shall get unanimous agreement there?

One of the vital issues of this debate is the outcome of the conference which the Minister held at Chequers. This was one of the genuine conferences there. What can we expect to see as a result? We know that there was a big "get together" of the main producers, the airlines and of the Ministry. From the communiqué we learned that: The results of the rationalisation of the industry up to date and its relations to Government were reviewed What exactly does that mean? None of us who takes an interest in this matter can be happy about the present state either of our aircraft industry or of British aviation in general. Is it the case that the shape of the industry following the shotgun marriage of 1960 is proving unsatisfactory? If so, what can we expect for the future?

We are considering today vast sums of money totalling over £270 million, of which £201 million is being spent in the industry itself on Government account. There is growing evidence of the need for far closer supervision over the way in which these huge sums of money are now spent. More than £600 million of public money have been spent in this industry on aircraft, electronics, research and development over the past twelve months. I do not believe that the kind of supervision that we have is good enough. I want to see considerable improvements take place in that supervision.

In a supplementary answer to me on 6th May, the right hon. Gentleman replied: My right hon. Friend the present Secretary of State for Commonwealth Relations, in a statement to the House at the time, specifically named the light aircraft industry as a likely extension to the constitution of the two main groups."—[OFFICIAL REPORT, 6th May, 1963; Vol. 667, c. 35.] Does that mean that the Pressed Steel Company is coming into the consortium? Does it mean that we are seeing the forming of a new shape among the main components of the aircraft industry?

The Minister of Aviation (Mr. Julian Amery)

I have not checked in the OFFICIAL REPORT. Perhaps there is a misprint. In that reply I said "expansion", not "extension".

Mr. Lee

I am sorry if the right hon. Gentleman has been misquoted.

Ordering policy is a great problem. I know that the aircraft industry is unhappy about it, as, indeed, some of us are. In the mid-1950s the Government gave approval to B.O.A.C. to buy DC7Cs and Boeing 707s on the understanding that orders for British aircraft were increased. More Britannias were then ordered, together with the Comet V. But the Comet V never matured and was superseded by the VC10. Then B.O.A.C. committed itself to a firm order of VC10s four and a half years ahead of the first flight date. That is not a commercial way of doing business, but when an airline is a national flag carrier it is forced to do these things. That was seven years ahead of the first in-service date.

The Corporation took on an order for 35 VC10s because Vickers would not put the VC10 into production unless such an order was given. This is not a commercial policy by any means. In his speech in the House on 6th November, the right hon. Gentleman implied that B.O.A.C. had not committed itself or suffered very much in consequence of the duties imposed on the Corporation as a national flag carrier.

I quote this instance because I am worried about the situation regarding the VC10. The British aircraft industry would have been in terrible trouble had it not been that B.O.A.C., as a national flag carrier, was prepared to go well outside commercial practice, and take risks which no other airline would take, to ensure that the British aircraft industry received suitable orders. I think, therefore, that now the right hon. Gentleman should make clear the position of B.O.A.C. Is the organisation expected to function as a profit-making concern, or are the onerous duties, which, I maintain, have been accepted by the Corporation in the past, still to be imposed upon it, and must these duties be taken into account when the Corporation's balance sheet is under discussion?

It seems to some of us that Rolls-Royce is in great difficulties and that some of my hon. Friends who represent constituencies in Derbyshire are very worried. The thought has occurred to some of us that it may well be that there is one engine firm too many. Is there any question, in other words, of the production of engines being concentrated by bringing the two engine firms into one? These are important issues to which the right hon. Gentleman should address himself so that the country and the industry may know what is to happen in the future.

Sir Arthur Vere Harvey (Macclesfield)

I am sure that the hon. Gentleman is endeavouring to be quite fair in the manner in which he is presenting his case. But the VC10 contract was a commercial contract, as one understands that term, and safeguards written into a contract would have to be met.

Mr. Lee

That may well be. But I am saying that if an airline is flying for profit, it would not undertake the risk involved in the type of contract that I have mentioned. The risk is enormous and over and above anything which might be considered an ordinary commercial risk which any airline firm would be prepared to undertake. This was the price of Vickers producing any VC10s at all. There would have been no VC10s had B.O.A.C. not taken that enormous risk at that time.

Mr. F. A. Burden (Gillingham)

This is, of course, a commercial risk taken by a great many people, although perhaps there may not be so much money involved in most cases. But if a firm comes to a manufacturer requiring something to be made to the firm's specifications, inevitably the manufacturer asks for a commitment regarding the order to be placed by the firm.

Mr. Lee

No one is disputing that. I am saying that in this instance the ordering of 35 planes four-and-a-half years ahead of schedule, and seven years ahead of the time when the planes would fly, represents an abnormal risk which no airline, functioning entirely as a commercial airline, would undertake.

During Question Time on 4th March I asked the right hon. Gentleman to make a statement on the progress of the efforts made to extend the range of the VC10 in view of the longer distances which were being covered by the Boeing. It was requested that Vickers should try to expand the range of the VC10 so that B.O.A.C. could operate on the Los Angeles-London route. I was told that B.O.A.C. was continuing its study and that results were expected to be available fairly soon, and, indeed, they were.

Whether or not the issue was discussed at the Chequers conference, the fact is that a few days later Vickers stated that it was encountering difficulties caused by "drag" from the rear-mounted engines. There are £151 million worth of orders represented by the VC10, so we should like to know what is the position. Will the range requirements of B.O.A.C. be met so that B.O.A.C. may compete with the Boeings on economic terms? I have mentioned the Los Angeles-London run, which B.O.A.C. was concerned to obtain.

I may say that there is great apprehension in the industry about the future of the VC10. I am hoping that such fears as are entertained are groundless and that the right hon. Gentleman will say so today. To me, at least, the VC10 represents the first of the next generation of jets and should have marked advantages over the Boeing. It should be faster than the Boeing. It should have advantages represented by a slower landing speed and the ability to use a shorter landing strip. Problems of engine noise should have been cured by the use of rear engines.

This was the sort of thing in the minds of some hon. Members when we believed that the VC10 would be ahead of all the other big jets. I do not know what is now the position. But Vickers is asking for technical and financial assistance from the Ministry. Perhaps the right hon. Gentleman will tell us what progress is being made on the whole question of the VC10, whether it will be ready in time and be able to compete on economic terms with the Boeing.

Recently, we had a statement from Sir Basil Smallpeice about the size of the B.O.A.C. fleet. This was a great disappointment. I know that it means that there will be a certain amount of redundancy, although B.O.A.C. is to be complimented on the humane manner in which this has been handled. But the statement by Sir Basil contained the news that in four years' time the traffic to be expected would require a fleet of 52 aircraft, 49 passenger planes and three freighters compared with 62 which B.O.A.C. has on hand or on order for that time. The work load in four years' time is forecast as less than was expected by 10 large jet aircraft or about 15 per cent. of the fleet.

Here again, obviously a vital decision has to be made. Either the order for the 42 VC10s will have to be reduced, or some of the 20 Boeing 707s now in service will have to be disposed of, or a combination of those two courses of action will have to be taken. Strangely enough, this will have to be done despite an increase in passenger traffic for the year ended 31st March of 4.6 per cent. and in freight of about 25 per cent.

Among the reasons given by Sir Basil Smallpeice for the reduction is the evolution of the British Empire into the Commonwealth; the fact that some newly independent nations have their own airlines, or are opening their skies to foreign airlines, and the emergence of the German, Italian and Japanese airlines, all of which must compete more intensively internationally than ever before. I can understand that as yet B.O.A.C. is not in a position to announce any decision. I suppose that the question of the VC10 is involved from the point of view of future performance. If the VCIO has to go, I suppose that there will be compensation for Vickers on a considerable scale; and, here again, I should like all the information which the right hon. Gentleman can give to us.

I want to recall to the Committee a subject upon which we have had two important debates. I refer to the B.O.A.C.-Cunard agreement. We discussed this last July and again on 6th November. I said at the time that I did not like the agreement very much. I pointed out that the Cunard contribution was two Boeings and the spares, making a total of about £6 million. The Boeings were useless to Cunard because they had failed to get a licence to run on the North Atlantic route. I agreed in July with this statement which appeared in the Economist of 23rd June, 1962: The plain fact is that the arrangement between the two airlines comes close to making a gift of public assets to private investors—i.e. the shareholders of Cunard. I ventured this thought: So far as I see B.O.A.C. gets nothing out of it. It already has more aircraft than it needs so it gets some more surplus capacity to add to its overall running costs, a superfluity of surplus capacity."—[OFFICIAL REPORT. 18th July, 1962; Vol. 663, c. 443.] Where do we go from here? Apparently in those days there were to be eight planes too many. The only thing B.O.A.C. gets are two more planes which it does not require, with problems which Sir Basil Smallpeice has outlined and which, in any case, would never have had to be faced had this agreement never been signed at the time it was. My statement about superfluity was just about the understatement of the year. We know that the reduction which has to take place in the size of the fleet is 20 per cent. more than it would have been without the two Boeings which Cunard contributed and for which Cunard got 30 per cent. of the best business that B.O.A.C. has. I do not know whether the right hon. Gentleman, in view of Sir Basil's statement, will now defend the Cunard agreement. I in no way amend some of the things which I said about it when we discussed it before.

I do not wish, at this stage, to go through all the details of the argument which we deployed in the previous debates. We showed clearly the utterly contradictory nature of the Government's policy in setting up competition under the 1960 Act and then agreeing to a monopoly in the Cunard agreement because of the dangers of competition. That was the case. It is stronger now, if possible, than it was then. The Opposition believe that B.O.A.C.-Cunard should be fully integrated into B.O.A.C., with fair compensation to Cunard for the tangible and financial assets put into the joint company, but with no payment for appreciation of the assets under B.O.A.C. control.

We have previously expressed regret that the Minister has refused to make Public a copy of the Cunard agreement. If the agreement were made public, I am certain that other undesirable developments would be found to be within it. I still deplore the fact that the Minister has not seen fit to publish it. An inquiry into B.O.A.C.'s financial position is now going on. Mr. Corbett, an accountant, has had his experts in B.O.A.C. for some considerable time. On a number of occasions I have asked the Minister, as has my hon. Friend the Member for Loughborough (Mr. Cronin), when the report will be ready. We were told that it would be ready by the end of March or the beginning of April. Apparently the right hon. Gentleman has not yet received it.

But what is of even greater importance is that we asked the Minister whether he intended to publish the report when he received it. The answer was that he does not, that it is confidential to him. This is the most complete nonsense imaginable. This is becoming infectious. Great national corporations make agreements which are private. The people of Britain are not permitted to know how their money is being used. This financial inquiry into B.O.A.C.'s affairs was decided upon by the right hon. Gentleman after the Corporation had been criticised, both in the House of Commons and outside, because of its last financial return. Indeed, in November, the right hon. Gentleman himself was very critical of the B.O.A.C. management.

It was most unfair for a great corporation to be criticised publicly for the financial results of its performance and for an inquiry then to be held into its affairs, the results of which are not to be made public. This is most unfair to those who have been criticised and who are now in charge and who now form B.O.A.C.'s management. On grounds of fairness, it is incumbent upon the Government to let the nation know the results of B.O.A.C.'s finances. Nobody disputes that there was a heavy loss last year. There was the enormous problem of the write-down of its fleets, which when aggregated with the losses of the financial year came to about £64 million.

I assert that, these charges having been made, it is grossly unfair for the Government to refuse to publish the results of the inquiry. I do not know whether the inquiry will exonerate or condemn. I say that it is unfair without having seen a copy of the Report. I do not even know whether the right hon. Gentleman has had one.

Mr. John Rankin (Glasgow, Govan)

Does my hon. Friend recollect that at Question Time, a few weeks ago, the right hon. Gentleman, although not committing himself to the publication of the Report, did not deny to me the fact that we might discuss it in the House?

Mr. Lee

I can quote the right hon. Gentleman on this, because on 6th November he told us that when he had studied Mr. Corbeti's report and drawn his own conclusions he would— at once report to the House".—[OFFICIAL REPORT, 6th November, 1962; Vol. 666, c. 821.] How does anyone report to the House of Commons about a report which hon. Members are not to know anything about? This is a very convenient way of reporting. I should like such liberty myself. I thought that it was a rule of the House of Commons that when a Paper is mentioned in the House it has to be laid on the Table so that all hon. Members can see its contents. Therefore, either the right hon. Gentleman cannot at once report to the House or he is bound to publish the results of this inquiry.

The honour of the Government is at stake here. The right hon. Gentleman, in his way, is the only spokesman B.O.A.C. can have in the House of Commons. It is not good enough merely to criticise the Corporation's performance, to set up an inquiry, and then to refuse to publish the results of that inquiry while reporting to the House of Commons. We object violently to this procedure. I hope that the Minister will change his mind and publish the report of the inquiry.

I mentioned earlier the question of the VCIO and the enormous chances which B.O.A.C. then took. They are by no means the only chances which a nationalised industry like this has to take. One of the big issues on the question of the writing down of the B.O.A.C. Fleet is the policy on obsolescence which has been pursued and which the Minister criticised on 6th November. He pointed out that he did not believe that this sort of thing blows up in a single year. These are his words: What I cannot accept so easily is that the depreciation in the value of the Corporation's aircraft fleet has only been fully revealed this year. This is not a situation which has come upon us in the night. It has been building up far two or three years past; and in any business efficient management must call for a clear understanding and a clear presentation of the balance sheeit."—[OFFICIAL REPORT, 6th November, 1962; Vol. 666, c, 814.] According to my information, B.O.A.C. management strongly asserts that the policy which the right hon. Gentleman has been criticising was agreed with the then Minister of Transport and Civil Aviation in 1957. The right hon. Gentleman suggested that depreciation had not been properly anticipated in earlier years, but in 195859 B.O.A.C. wished to write down the book value of its fleet of DC7Cs by £6½ million, but was refused permission to do so by the then Minister.

There were discussions between the Ministry and the Corporation. The Minister made his position clear and because of his attitude the intention was abandoned. B.O.A.C. was thus prevented by the Minister from carrying out a decision to write down the value of part of its fleet, despite the fact that auditors appointed by the Ministry were in complete agreement with the B.O.A.C. decision. The right hon. Gentleman may have been misled by his advisers, but those are the facts. Years ago, the Corporation wanted to write down the value of its assets and it was deliberately prevented by the then Minister from doing so, and it is grossly unfair for the right hon. Gentleman now to criticise it. B.O.A.C. tried again during 1959–60 and 1960–61, but the Minister was still adamant in his refusal to permit that policy.

It was not until late 1961, with the increase in jet traffic and the check in traffic growth, that B.O.A.C. decided to withdraw its fleet of Britannia 102s. It wanted to withdraw them in late 1962. It tried to get a change of attitude so that the Minister would agree to the writing off of the existing book value of the Britannia 102 and DC7C fleets. Again, it had no success and as late as 1962 the Minister was refusing his permission.

This is a strange doctrine for a Minister who has criticised B.O.A.C. for these things and who has set up an inquiry and who has refused Parliament and the nation the opportunity to judge the accuracy or lack of accuracy of his criticism. I hope that the right hon. Gentleman will give us some satisfaction on this issue.

I want now to turn to the issue of licensing. The Civil Aviation (Licensing) Act, 1960, has had an extremely bad effect on the whole of the British aircraft and aviation industry. On other occasions I have referred to the damage done to the two airlines and to the industry itself because the Corporations could not order far enough ahead because they did not have any guarantee that the routes upon which they wished to use the aircraft would be open to them. I have studied this matter to try to find out what has happened to the licences which have already been agreed, and I should like to give the Committee the results of my studies. I will give a list of the routes which B.U.A. has received and the occasions upon which foreign government approval has been obtained, and the plans for operation.

On the London-Paris route, no approval has yet been obtained from the foreign Government concerned and, therefore, there are no plans for operation. London-Genoa, I will return to this; London-Amsterdam, foreign Government approval has been obtained, but there are no plans for operation so far as I know; London-Milan, no approval and no plans. London-Madeira, the same. London-Athens, no decision. London-Basle, no decision. London-Barcelona, approval and two services a week from 5th June. London-Palma, one service a week from 27th May. London-Tarbes, approval and one service a week from 6th June—there is no B.E.A. objection. There is no agreement on the Cunard Eagle routes Liverpool-Dublin, London-Dublin, London-Venice, London-Copenhagen-Stockholm, Manchester-Birmingham-Nice. On the domestic routes, permission was given, but no attempt has been made to take up any of the licences agreed for Glasgow, Edinburgh and Belfast.

Let us again consider the London-Athens route. The Licensing Board is now using the failure of the Ministry of Aviation to obtain Athens traffic routes for B.U.A. as a pretext for withholding licences for London-Corfu for B.E.A. On 8th January, the Board published a statement regarding B.E.A.'s application for that route in which it said: We are, therefore, on the evidence at present before us, disposed to grant this application on traffic grounds though not necessarily at the unlimited frequency and for the period of validity sought. However we have noted that B.U.A. have not yet secured traffic rights for their London-Athens service and we regard the securing of these rights as of more importance to the development of British civil aviation then the securing of corresponding rights for the B.E.A. Corfu service; and we do not wish any attempt to obtain the latter to prejudice the former. We have, therefore, adjourned the hearing of the current application until the situation regarding the B.U.A. traffic rights is resolved. Because B.U.A. cannot get the right to operate the Athens route, B.E.A. is refused the right to fly the Corfu route, and that is supposed to be in the interests of British aviation.

I now return to the London-Genoa route. As I pointed out, permission has now been given to B.U.A. to operate this route, but I understand that the price paid by Ministry of Aviation officials for that concession—not the price paid by B.U.A., but that paid by B.O.A.C.—is very high indeed. This issue relates to the stop-over traffic carried through Rome by B.O.A.C. which until now has been excluded from all agreements. In broad figures, it is worth about £100,000 per annum to B.O.A.C. As a result of the agreement to allow B.U.A. into Genoa, B.O.A.C. must now pay to Alitalia 50 per cent, of the moneys derived from the stop-over traffic in Rome—about £50,000 per annum. Over and above that, B.O.A.C. was not even consulted about that new agreement and did not know anything about it officially.

It is like Alice in Wonderland when B.O.A.C. is in the dock for financial insolvency and yet learns only at third-hand that £50,000 of its assets have been whistled away by the Minister of Aviation to allow B.U.A. into Genoa. We remember the speech of the right hon. Gentleman the Secretary of State for Commonwealth Relations, who was Minister of Aviation, when he introduced the 1960 Act and said that it was not introducing competition and that there would be no danger to the great Corporations and that the independent operators would only complement their efforts. This is the way in which the compliment is being paid.

I begin to despair of the manner in which the aviation and aircraft industries are being treated merely in order that the independents can be able to operate on the more profitable routes, routes made profitable by B.E.A. The story of B.E.A. in Northern Italy is a story worth reading—I do not have the time to tell it now. Before Alitalia came into existence, B.E.A. nursed the North Italian routes and made a terrific impact on them. A great deal of the profit which helped it to finance its non-profitable routes in Britain came from the North Italian routes, but now it is refused permission to operate on routes which it made profitable.

It makes one wonder how far the Tory Government are prepared to go to ensure profit for those who are "horning in" late on routes which have been made profitable by nationalised air corporations when there is no real possibility of B.U.A. or any other independent company being able to bring a substantial income to this country, as the Corporations can.

I have tried to show some of the reasons why we on this side of the Committee are worried about the conduct of Government policy in these matters. I have said that the Corporations are being made to look as though they are commercial concerns unable to run on a profitable basis, but the Select Committee on the Nationalised Industries long ago pointed out that B.O.A.C. and B.E.A. are under the jurisdiction of the Ministry of Aviation, particularly with regard to their policy for ordering aircraft. It is not good enough for the Ministry to say that because the Corporations are not showing a profit they should be condemned while, at the same time, insisting that all these non-profitable things which properly and rightly a nationalised industry should undertake will still be their liability.

The future of a great industry is in jeopardy because of Tory policy. Tonight, I shall ask my right hon. and hon. Friends to vote against these Estimates to show that, although we have criticised, we have also tried to put forward constructive alternatives. The Government are determined to paralyse the Corporations and to go on trying to use that which is not of itself fit to be a profit-making vehicle for no other purpose than to make profits for private people. We do not object to profits as such, but we object when it comes to spending hundreds of millions of pounds of public money for which there is no accountability, in the sense in which I use the term, to Parliament. We are grossly dissatisfied with the Government's policy, and I repeat that I shall ask my hon. Friends to oppose it in the Division Lobby tonight.

4.22 p.m.

The Minister of Aviation (Mr. Julian Amery)

We on this side of the Committee welcome the opportunity which the hon. Member for Newton (Mr. Lee) has given us to have a discussion on civil aviation. There are a number of important issues to be discussed, some of which the hon. Gentleman touched on. Two matters of particular importance are the Chandler fares issue, which is prominent in the newspapers today, and the forecasting of the size of the long-term fleet of the B.O.A.C.

During the course of his speech the hon. Gentleman knocked down a number of Aunt Sallies of his own making. He tried to present us as hostile to the work of the Corporations. Nothing could be further from the truth. It is in co-operation with Conservative Governments over twelve years that the Corporations have seen their maximum expansion and development, and in spite of current developments I have no doubt that in the years ahead we can ride out the storm.

The discussion on the Beeching Report has focused a good deal of attention on travel within the British Isles, and I should like to say something about our domestic air communications. There are two elements to this. First, airports and air traffic control systems, which are to the aeroplane what stations, permanent way and signals are to the trains, or roads and garages to the motorist, and then there are the aircraft themselves and the air services.

We have had many Questions recently about Scotland and the problem of Scottish air services. Last week, my hon. Friend the Parliamentary Secretary visited the main airports of Scotland both in the Lowlands and in the Highlands and Islands, and later he will give the Committee his impressions. In consultation with my colleagues I have also been considering whether we could not help to stimulate economic development, particularly in the areas of high unemployment, by improving air communications.

In Northern Ireland, we are providing a new civil terminal for Belfast at Aldergrove, because Nutts Corner, the existing air terminal, cannot be developed to meet the needs of modern aircraft. The total bill for the new terminal will be more than £800,000. It should bring about an important improvement in both tourist and business communications, and I think that it will also help to inject a good deal of purchasing power into Northern Ireland.

In the North-East, about which there were Questions earlier today, we have agreed with the local authorities at Newcastle to provide a grant of £250,000 towards the cost of re-equipping Wool-sington as the main airport for Tyneside. For Tees-side, the Secretary of State for Air and I are taking a further look at the possibility of arranging for increased civil use of the Royal Air Force aerodrome at Middleton St. George. Merseyside is, of course, well served by Speke. The plans for Scottish airport development now under negotiation should, if they come to fruition, greatly improve the air communications position north of the Border.

Taken together, I think that we can claim that our airport development progress is well designed to stimulate the economy of the more depressed areas and will help in its way to redress the drift of population from the North to the South.

Mr. Albert Roberts (Normanton)

Can the right hon. Gentleman say whether he has given active consideration to Yorkshire?

Mr. Amery

The development of traffic between London and Leeds and Bradford has been quite spectacular. During the last twelve months it has very nearly doubled. The Avro 748 is being used on these routes and it is producing sensational improvements. I flew to Germany last week in one of these aircraft. A big development is going on at the moment. There is a difference of opinion between the local authorities as to who should take the responsibility for the improvements and where they should be carried out, but my Department is in touch with them and if there is anything more that can be done to help I shall be glad to do it.

While on the subject of domestic airlines, I have one announcement to make about B.E.A. services between Land's End and the Scilly Isles. For many years this service has been operated with de Havilland Rapide aircraft. The Rapide has been a wonderful aeroplane, but it was designed in the 'thirties and cannot go on for ever. The Scilly Isles service at present costs B.E.A. a small annual loss. To close the route would be a great inconvenience both to the tourist traffic and to the islanders. On the other hand, to replace the Rapide with another fixed-wing aircraft would probably increase the loss, because it would involve higher operating costs and the extension of runways.

Since it seems inevitable that this service is to be run at a loss, B.E.A. has proposed to make a virtue of necessity and gain some valuable experience. It has proposed, and I have agreed, that the Rapide service should be replaced by a helicopter service. B.E.A. is to buy two Sikorsky S621 helicopters which will begin operations in the summer of next year. I regret that we have not been able to buy British helicopters for this service, but after exhaustive inquiries we have had to accept that there are no British helicopters available and suitable for this job in the time scale that we have in mind.

The requirement is too small to justify the cost of producing helicopters for this job alone, but I have very little doubt that this decision will be of considerable value to the British helicopter industry in the long run. Hitherto, every attempt to run a commercial helicopter service has foundered on the high operating costs. This is not just our experience, but that of every country in the world. Yet, in a country like ours, cheap helicopter services from city centre to city centre would be an enormous boon to the travelling public.

Industry and our research departments have been working hard to find ways and means of cutting down the operating costs of the helicopter. This is partly a technical and engineering job, but it is also partly a problem of operating experience. I believe that the operating experience which B.E.A. will gain from the Land's End-Scilly Isles service will outweigh not only any loss it sustains, but any temporary frustration the industry may feel at not being able to sell British helicopters. We shall continue to place contracts with B.E.A. for any development work that may be needed in connection with helicopter air traffic control techniques, safety rules, and so on.

The Government will also make a once-for-all grant of about £75,000 in token of the contribution which this first scheduled helicopter service will make to the longer-term development of vertical take-off aircraft in this country.

Mr. John Cronin (Loughborough) rose—

Mr. Amery

Perhaps the hon. Gentleman will allow me to ask him a question first. Will he draw the attention of his right hon. Friend the Leader of the Opposition to this decision. We know that the right hon. Gentleman likes to visit the Scilly Isles, and we propose to give him ample opportunity to enjoy doing that.

Mr. Eric Lubbock (Orpington)

Will the Minister reimburse B.E.A. for the additional operating losses that it will sustain as a result of using helicopters instead of the Rapide aircraft? What will this increase amount to?

Mr. Amery

I have announced that we were making a £75,000 grant to begin with. We are in discussion with the Corporation about any excess expenditure over that, and about any expenditure incurred in the change-over from the Rapide service, and I am willing to take a generous attitude on this issue, because it is important to get this new service launched.

Mr. Cronin

In view of the Government's newly-found enthusiasm for helicopters, do not they now regret that they scrapped Fairey Rotodyne at so much cost?

Mr. Amery

I was a supporter of the Rotodyne, but there is no doubt that the expense of the machine is very great, and both the Services and the Corporations had some reservations about their ability to use it.

I now turn to international air services. Like shipping, they make a vital contribution to our prosperity. For years our national accounts have shown the contribution to invisible earnings made by shipping, and the Committee may like to know that last year our airlines earned £34 million in overseas currency. When I tell hon. Members that the comparable figure in 1955 was £9 million they will realise how important this source of foreign earnings may become in the years ahead. I make this point about earnings to help convince the hon. Member for Newton that I am not such a critic of the Corporations as he may sometimes think.

I want to deal, first, with B.O.A.C. Last year, the Corporation's passenger traffic increased by about 5 per cent., which was slightly less than in the year before, when the increase was 6 per cent. In the interval, capacity has increased rather more than traffic. This has meant that for the third year running what is called the passenger load factor fell. In other words, less than one seat in every two was occupied. Freight traffic increased by no less than 25 per cent., but this had only a marginal effect upon the financial result. At the end of the day, total revenues were almost unchanged. It looks, therefore, as though the accumulated deficits will have been increased by about £14 million in 1962–63.

The Corporation's accounts for the year are being prepared and submitted to the auditors. They will be laid before the House in a few months' time. It would be wrong for me to try to anticipate what they will show in any detail, but I can say—to those of my hon. Friends and hon. Members opposite who have been interested in the operations of subsidiary companies—that the losses on the subsidiaries account have proved well below those in previous years, and do not total more than about £1 million. I am afraid that the outlook for the current year is not much brighter. The Corporation expects a slightly better load factor, but only a small increase in traffic.

Looking ahead, therefore, the Chairman and the Board have made something of a reappraisal of their long-term prospects. Their thinking on this subject was given expression a few weeks ago by Sir Basil Smallpeice in the article to which the hon. Member referred. He recalled that in the first decade after the war many of the countries served by the Corporation were in the dependent Colonial Empire. With independence, however, many of the new countries started their own airlines. They have usually done so in co-operation with B.O.A.C., but all the same the Corporation has lost a good deal of traffic.

Added to this is the fact that the airlines of countries who were defeated during the war—Germany, Italy and Japan—have returned to international trade and have had a pretty rapid expansion. During the same period airlines from other countries have been strengthening and expanding their networks. In this situation the share of world traffic carried by the primary starters of the post-war aviation business has become relatively less. This is not merely our experience; it is the experience of the United States as well.

Mr. Dan Jones (Burnley)

Why not issue more licences?

Mr. Amery

If we could issue more licences we would get more trade, but by losing traffic points with the contraction of our responsibilities overseas we have lost some of the bargaining power that we used to have to secure new traffic routes. It was in that context that Sir Basil Smallpeice forecast that B.O.A.C. will have to cut back on the size of its fleet, but the question where this cut-back would be effected has not yet been decided.

Here, I take up the points raised by the hon. Member for Newton about the VC10. The first VC10 ran into the problem of drag. If unsolved, this problem could have prejudiced the aircraft's operating efficiency and economic value. A number of observers have accordingly jumped to the conclusion that Sir Basil Smallpeice's article sprang from a lack of confidence in the VC10. This was the issue to which the hon. Member was drawing our attention. Last week, I went to Weybridge and discussed the problem of the VC10 in detail with the Chairman of B.O.A.C. and with Vickers. Vickers told me that the modifications that it has made to the fifth VC10 have beaten the problem of drag. My technical advisers have investigated this carefully and have confirmed it. Sir Matthew Slattery has told me that the question whether B.O.A.C. will sell some of its existing Boeings or cut back on its orders of VC10s does not turn in any way on the technical difficulties encountered by the first VC10. The problem which B.O.A.C. has to decide is whether it is justified in introducing a new large jet air liner in the same quantity as was thought necessary, when it first placed the order with Vickers. This decision must turn in part on the estimate of the second-hand market for the 707, on the estimate of the launching cost of the VC10 and the impact on the main traffic routes of the introduction of the supersonic Concord in the 1970s, B.O.A.C. is far from reaching a decision on all these matters.

After our discussion at Weybridge last week. Sir Matthew Slattery and I made a one-hour flight in the fifth VC10. Aircraft have already reached a high level of passenger comfort, but we were both deeply impressed by the quietness of the VC10. It is extraordinarily quiet. I had to discuss a certain number of problems with the Vickers people in the time available, and we held a meeting in the corner of the aircraft while it was in flight over Cornwall. We never had to raise our voices even to the extent that is sometimes necessary in the House.

Mr. Rankin

That is a new place for meetings.

Mr. Amery

We have to take every opportunity we have.

The hon. Member for Newton raised the question of possible redundancies in B.O.A.C. If this cut-back were to come into force, I understand that it would extend over some years.

Mr. Lubbock

Before he leaves the subject of the VCIO, can the Minister say whether it will be possible for the Los Angeles-London route to be flown?

Mr. Amery

I do not think that a final decision has been reached on this. Vickers has been concentrating on the problem of beating drag, and we can congratulate the company on having done so.

The Corporation is in consultation with the trade unions on the whole question of possible redundancies, and I gather that the number of men affected is not likely to be large, and that the changes will be spread over a period. I thought it right to deal with this question of the reappraisal that B.O.A.C. is making because it has attracted a good deal of attention. I do not wish to give any view of my own on it at this stage. Mr. Corbett has told me that he expects to let me have his report at the end of the month. What he says may have a direct bearing on this issue, and until I have received the report and studied it it would be wrong for me to anticipate its conclusions.

The hon. Member asked for publication of the report. I am sorry if what I have to say on this score disappoints him, but if we want a really frank and confidential report on what is happening in any organisation it is not fair to put it forward for publication. If we publish it I dare say that it will read well enough. The language will be flowing enough. But its readers will not get all the hard facts. A good many things have to be said which could conceivably be embarrassing either to the Government or to the Corporation.

Mr. Lubbock

That is a good reason for publishing it.

Mr. Amery

They could be embarrassing to anybody concerned. We will not get the frank exposition of the situation which the Ministry of Aviation needs if there is to be publication at the end of the day. I will report to the House the conclusions which l draw. I do not think that it is much use in a business flatter of this kind putting in an inquiry for publication at the end of the day.

Mr. Cronin

Surely the Minister realises that this is thoroughly unsatisfactory. The Corbett report will be of material concern to the reputation of B.O.A.C. all over the world and the morale of their employees. It is extremely important that everyone should know at the earliest opportunity the conclusions reached by Mr. Corbett.

Mr. Amery

It is an inquiry into the way in which the Corporation has been run. If the hon. Member has any reservations, the time to express them will be when he has heard the views which I express on the report. If he is not satisfied with what I have said he may wish to probe into the matter. But if we commission a report of this kind on the understanding that it will be published, we shall not get as near the truth as I hope to get on this occasion.

Mr. Rankin

The right hon. Gentleman said that we shall hear his views on the report. Shall we hear them in the House, shall we read them somewhere else, or shall we hear them from some other source? Shall we have an opportunity to debate them when we have heard them?

Mr. Amery

Whether the hon. Member hears them or reads them will depend on whether he is present in the House when I discuss them. Of course, there will be an opportunity to discuss and to debate my views on the report, which I shall give to the House after I have studied the report.

Mr. John Diamond (Gloucester)

Is the right hon. Gentleman seriously alleging that a chartered accountant who is instructed to make a report, given particular terms of reference and all the evidence made available to him, will make a different report if he knows that it will go to more than a certain number of eyes than if he does not know that?

Mr. Amery

The hon. Member is putting his own construction on my comments.

Mr. Philip Noel-Baker (Derby, South) rose—

Mr. Amery

I have already given way sufficiently often.

I come to the problems of British European Airways. The outlook here, I am glad here, is much more encouraging. In the year 1961–62, B.E.A. made a small loss after meeting depreciation on interest charges. The accounts for the year 1962–63 will be laid before the House, in the normal way, in August next. It looks as though the results will be considerably better than were forecast some months ago, though there may still be a small loss. The improvement is due in part to an increase in traffic and largely to small individual steps which the B.E.A. management has taken across the board to make its operations more efficient and attractive.

These measures have enabled B.E.A. to reduce its costs per capacity ton mile to their lowest ever. The Corporation tells me that it is confident that it will again show a profit in the year 1963–64. A further indication of the confidence which B.E.A. feels is that it has withdrawn its request, at any rate for this year, for a subsidy in respect of the Highlands and Islands service.

B. E. A. 's successes in the past have been largely due to the outstanding success of the Viscount. The Trident scheduled flights are expected to begin to build up from April next year. B.E.A. hopes to have a few of these aircraft on scheduled flights this year. We believe that this aircraft will do much to recapture some of the traffic which we have lost in recent years. Both the Trident and the VC10 will be equipped with blind-landing systems. When they first enter service the facility for automatic landing will still be limited, but the limitations will be removed by stages. By 1969, we expect both aircraft to be able to land fully automatically in all weather conditions, including even the kind of smog which we had last February. They should be the first aircraft operating scheduled services to have this capability.

Mr. Lee

What of the BAC111?

Mr. Amery

I asked whether the BAC111 would have the same capacity, but I had not had a reply before coming to the House. I hope that my hon. Friend will be able to say something on the subject when he winds up the debate.

The hon. Member for Newton referred to the services provided by the independent operators within the United Kingdom. They are making a considerable contribution overseas as well as at home. The bulk of their work has been at home, where they share a very large part of the services between London and the provinces and between different centres outside London. Their main effort continues to be on charter work, but they already have a valuable network of scheduled services to West and East Africa and Europe.

It has not been easy to secure traffic rights for the independents. Few foreign airlines go out of their way to welcome new competitors. But in spite of rather gloomy prognostications that we should fail to make good their rights, we have already arranged for B.U.A. to start new scheduled services to France, Holland, Italy and Spain this year. Cunard Eagle will also be free to start its service between Manchester, Birmingham and Nice. The latest right which we have secured for them is a B.U.A. service from London to Genoa, which will be served by BAC111 aircraft.

Securing this right has involved some revision of B.O.A.C.'s rights in Rome, but I doubt whether B.O.A.C. will suffer in practice. We estimate that any losses incurred here will be much more than compensated by the gains to B.U.A.; that is to say, on the calculations which we can make British aviation will gain overall. The hon. Member was wrong in saying that B.O.A.C. was not informed about this. I made quite sure that it was informed as soon as I heard what was in progress.

The growth of the independent airlines has, naturally, put in question their continued monopoly of trooping. There are three kinds of trooping contracts. The two nationalised corporations have always been free to compete for ad hoc trooping contracts and this, of course, continues. They have now proposed that they should be allowed to carry troops on scheduled services at rebated fares. This proposal is before the Air Transport Licensing Board where the views of the different parties can be properly evaluated. As the Committee knows, decisions of the board are subject to my confirmation and as far as I am concerned, therefore, the matter is sub judice, and it would be wrong for me to comment on this proposal.

There remains the question of long-term trooping contracts. Trooping contracts still represent about 40 per cent. of the passenger mileage of the independents. As their traffic rights are made good this proportion should tend to decrease. But it will be a year or two before we can hope to be in a position to assess the extent of the break-through which we can make for the independents. I do not propose, therefore, to make any change in the procedure for letting contracts for the coming year.

The prospects of the Corporations and, indeed, of the independents are largely dependent on the international fares structure. This brings me to our current discussion and disagreement with the United States over the so-called Chandler fares. This is a rather complicated matter, and I hope that the Committee will bear with me if I explain it in some detail, but, I hope, at not too great a length.

In September and October of last year there was a conference of I.A.T.A. at Chandler, in the United States. The conference recommended a new fares structure. This was in the form of a package deal. Under this deal, a variety of new cheap promotional and group fares were to be introduced. These will provide cheaper travel outside the North Atlantic area; for instance, B.O.A.C.'s excursion and group fares to Australia. At the same time, the 10 per cent. discount on ordinary return fares was to be reduced to 5 per cent. Under the old system, if the single fare to America were, say £100, the return fare was £180. Under the Chandler agreement it was raised to £190, partly with the intention of off-setting the cheaper group and promotional fares to which I have referred. This would have had the effect of increasing the return fares on the North Atlantic route by £10.

About 90 airlines took part in the Chandler conference and approved these proposals unanimously. Both Pan-American and Trans-World Airlines were among them, as were also Trans-Canada and Canadian Pacific.

For more than fifteen years international air fares have been fixed by I.A.T.A. conferences of representatives of the airlines. I am not sure whether the hon. Gentleman understands the relation of Governments to these conferences, but over this period the normal practice has been for Governments to work through the airlines in consultation with them. There have been occasions—the Honolulu conference in 1959 was one—when the British Government refused to accept an I.A.T.A. decision on economy fares. We had an argument before the Conference took place and we registered our opposition immediately afterwards. As a result, it was possible to resolve the dispute at a second I.A.T.A. conference before the time came for the original I.A.T.A. decisions to be introduced.

At the Chandler conference, the Civil Aeronautics Board, as it has since admitted, gave no clear instructions to the American airlines, nor did it react in any way to the Chandler decisions until about four months after the conference had ended. It was accordingly assumed by all concerned that the new Chandler structure would come into force in March. Think what this means in airline offices all over the world. The airlines planned their programmes of scheduled and special flights on the assumption that the Chandler fares would come into effect and they decided to devote a certain amount of effort to one sort of flight—that is, commercial flights to Australia and a certain amount of scheduled flights across the Atlantic. They published timetables accordingly, and spent a good deal of time advertising their new cheap fares.

I would stress here that the Chandler agreements were a package deal. If, for instance, B.O.A.C. was to continue with the extension of cheap flights proposed under Chandler, but not to increase the ordinary return fares by 5 per cent., it estimated that it would lose upwards of £1 million a year. K.L.M. similarly forecast a loss of £800,000 a year.

Suddenly, on 12h February, the Civil Aeronautics Board, by a casting vote of three to two—two voting each way and the Chairman giving a casting vote—announced that it provisionally disapproved of the Chandler decisions. There followed representations by European and other airlines and Governments. These were to no effect and on 18th March the Civil Aeronautics Board confirmed its decision. I must frankly tell the Committee that we were astonished to see the Civil Aeronautics Board disapprove the decision of 90 airlines without any previous warning and only a few days before those decisions were due to be applied. On the initiative of the French Government, representatives of the European aviation authorities met at Geneva to see whether they could work out a compromise.

Following this meeting, the Deputy Secretary in my Department who is responsible for civil airlines went to Washington to see Mr. Alan Boyd, the Chairman of the Civil Aeronautics Board. He explained to Mr. Boyd that in the view of the 12 European countries concerned it was much too late to go back on the decision to introduce the Chandler fares, at any rate at this juncture.

It was our general view that things had gone so far that these fares must now be introduced for an interim period at any rate—it might be for a year or even less—and that meanwhile there should be a meeting of representatives of Governments and later of the I.A.T.A. to try to resolve the position and, if they so thought it right, to revise the Chandler decisions.

Mr. Boyd rejected this proposal, but he agreed to come to London to meet the representatives of the European Governments concerned. At this meeting, the European side, meeting in the Ministry of Aviation, began by offering a conference with the United States on the other side of the Atlantic—the conference to be held in Washington, if so desired—to discuss the whole question of the rôle of I.A.T.A. and its relationship to Governments, and all sorts of problems that I think that the hon. Gentleman was a little concerned about.

We also repeated the proposals for inter-governmental and I.A.T.A. negotiations to look at the Chandler decisions again, provided that they were applied in the interim period. Mr. Boyd made it plain that he had not come to London to compromise. I have to tell the Committee that at one time the discussions became so frigid that we had to propose an adjournment. In the end, we had to record an agreement to disagree. The question then arose as to what was to be done.

Here, the American side indicated that they would not resent reasonable and legitimate action by European Governments to protect what they regarded as their interests and that they would accept the Chandler fares without fuss. When I saw Mr. Boyd, at the end of April, he certainly gave no indication that he would seek to enforce the American point of view or instruct American airlines to break the laws of other countries. We, for our part, made it plain that, while we intended to apply the Chandler fares, at any rate until such time as a further conference revised them, we would not seek to detain American aircraft landing in this country if, in the confusion which often prevails in the first few days of any new change in fare structures, some of their passengers flew in on tickets charged at the old rate. This concession was volunteered on the understanding that, whatever the Americans thought of the Chandler decisions, if required to do so they meant to comply with them. On 12th May, the North Atlantic Chandler fares came into force in this and at least a dozen other countries. In the course of yesterday, we learned that Pan-American and T.W.A. were still flying into London at the old rates. We accordingly asked the head office in the United States of both companies whether they were complying with the new fares or meant to comply with them. Both have now replied that on instructions from the C.A.B. they are not complying. Whether these are instructions or advice with reference to the relationship between the C.A.B. and the air lines is not for me to say. But that was the reply which was given.

The permit for American aircraft to land in this country depends upon their complying with any fare conditions that are included. Both American companies are, therefore, at this moment in breach of British law.

It seems to me than in inciting American companies to break our law, the C.A.B. has come very close to being in broach of the Anglo-American bilateral agreement. This situation is unacceptable and cannot, I think, be allowed to continue. The British Ambassador in Washington has accordingly been instructed to make the strongest representations to the United States Administration. We await the result of these representations. I would add that in all this we are working in close co-operation with all the other European Governments concerned.

In this dispute, which I deeply regret, the C.A.B. has claimed that it objects to the Chandler decisions on the ground that they involve an unnecessary increase in fares. I am not sure how much foundation there is to this claim. The Chandler decisions involved reductions in some directions, but admittedly involved increases in others. Whatever the merits of the case, I do not think that it can be right for a Government, however important and influential, to seek to veto at a very late stage in the day decisions of 90 of the world's airlines, endorsed by nearly all their Governments and reaffirmed without hesitation over several months by the countries most concerned with trans-Atlantic operations.

We are perfectly ready to have these decisions looked at again in the near future. Meanwhile, we must insist that some order be maintained in the fares structure of the world and, in particular, that British law should be respected.

Mr. Roy Jenkins (Birmingham, Stechford)

Before leaving this subject, will the right hon. Gentleman explain the position of Trans-Canada Airlines?

Mr. Amery

Trans-Canada Airlines, under Canadian legislation, has the right to enforce on planes coming into Canada the fares structure that its Government decide, just as we have here. B.O.A.C. is complying with Canadian law even though it is in conflict with the Chandler agreement. We should like to see the Americans complying with our law in the same way.

Mr. Rankin

Will the right hon. Gentleman make this clear? He stated that C.A.B. had accepted the Chandler recommendations and, at the last moment, changed its mind about them. Did the Canadian airline accept the Chandler agreement at any stage?

Mr. Amery

I tried to say in my remarks that Trans-Canada and Canadian Pacific Airlines endorse the agreement, as do Pan-American and Trans-World Airlines. The Canadian Government came out against the decision on, I think, 29th March, but some time later the C.A.B. confirmed opposition to it.

Mr. G. W. Reynolds (Islington, North)

The right hon. Gentleman has said that two American companies are breaking the law, but B.O.A.C. is not breaking the law law in Canada. What about Canadian companies flying in to this country? Are they breaking the law or not?

Mr. Amery

They are still charging the old fares. As I understand, the bilateral agreement between Canada and this country is rather different. There is a clause under which they can continue to charge the old fares while the dispute continues.

Mr. Farey-Jones (Watford)

Will my right hon. Friend bear in mind something which is much more important than the actual fares charged on the North-Atlantic route? If the Civil Aeronautics Board is used by the American organisation to break worldwide agreements formed by I.A.T.A. we shall have worldwide chaos among the airlines. That must not occur at any cost.

Mr. Amery

I agree very strongly with my hon. Friend. Whatever may be said about the shortcomings of I.A.T.A., it is the system under which we have operated for fifteen years. It was the system promoted largely by the United States Government. Until something is put in its place we must try to make a success of its decisions. It is not any good trying to enforce unilaterally a minority view on a matter of this kind.

Mr. G. A. Pargiter (Southall)

I am sorry to add to the interruptions, but I wish to ask whether other companies in relation to Canada are observing the same conditions as B.O.A.C. observes. Are all the nations breaking the Chandler agreement so far as it relates to Canada?

Mr. Amery

I do not know all the different conditions of bilateral agreements between other countries and Canada, but I understand that that is so in the case of most of them. The Chandler fares have been introduced pretty well throughout Europe and in Canada. I do not want to dwell on this issue longer, but I felt that I should give hon. Members a frank picture of where we stand, although I do not want to say anything which would be provocative or which would stand in the way of a solution. I think that we can reach a solution in this situation, but we shall have to reach it pretty soon.

I now turn to the prospects of the aircraft industry. It is, after all, this industry which provides the distinctive basis of our civil airline operations. The success of an airline must depend very largely on its equipment. The passenger appeal of B.O.A.C., B.E.A., and the larger independents will largely turn on the quality of the British aircraft they fly. The hon. Member for Newton referred to British equipment. I do not think that he can have understood the purport of some of the remarks I made last year. I went out of my way in my reference to the problem facing B.O.A.C. to exonerate the Corporation from any criticism about having bought British in the last few years. I think that the hon. Member will agree that if the Comet had not met with a tragic disaster few of us are in doubt that the financial position of B.O.A.C. would be a very different one.

Mr. Lee

My criticism was directed to the right hon. Gentleman's remarks about quality and depreciation of aircraft. I understood that the Minister of the day was enforcing a type of policy to which the right hon. Gentleman himself objected.

Mr. Amery

The hon. Member was good enough to criticise me on a number of points, but I understood him to charge me with criticising the policy of buying British. I have never criticised that policy and I am sure that B.O.A.C. was quite right to do it. We are confident that in the present generation of aircraft, the VC10, the Trident and the BAC111 will maintain a leading position. We have hopes that the Concord will maintain that leading position into the 1970s.

The aircraft industry also makes a major contribution to our exports. The technology of aviation sets the standard of much of our overall engineering and electronics technology, and so has a decisive impact on our whole industrial potential. Last summer, the outlook for the industry seemed pretty bleak, but, as I told the House in the Defence debate in March, there has been a great improvement since then. I hope that the hon. Member will recognise that things are looking very much better than most of the observers of the scene then thought. Order books are now reasonably full and the labour force in the industry appears to be stabilising at about 275,000.

There have, of course, been some relatively small fluctuations in the load on different sections of the industry, and more may have to be faced in future. Some were inevitable after the reorganisation through which the industry has passed. Even with the most careful planning there is bound to be some change and adjustment in an industry that is so much in the forefront of the new technologies and so dependent on exports, but I can say that the prospects of relative stability are now reasonably good. Military orders have, of course, contributed a good deal to the improvement in the conditions of the industry, but this is not the occasion for a detailed survey of the military side. As I tried to explain in the defence debate, however, there is a continuous inter-connection between civil and military research and development.

The production problems also interlock. Thus, the R.A.F. orders for VC10s, Avro 748s, DH125s and Beagle aircraft will make an important contribution to the production of these aircraft for the civil market. Orders to operators other than the R.A.F. so far amount to 47 VC10s, 45 BACI I ls, 26 Tridents. 32 Heralds, 26 Avro 748s and 10 Argosys. These are the figures for firm orders, signed up. They take no account of options or of the numerous negotiations in progress throughout the world.

The success of the BAC111, which is to make its first flight later this year, deserves special mention. Sixteen of the 45 BAC111 aircraft already ordered are for airlines in the United States and B.O.A.C. is in negotiation for possible sales to other American operators on a big scale. I am glad to be able to tell the Committee that Concord continues to make good progress. Our co-operation with France on this major project is excellent, and has been in no way affected by differences in other fields.

The hon. Member for Newton referred to engine firms, Rolls-Royce in particular. I have been studying this matter carefully. On some military problems, Rolls-Royce and Bristol Siddeley are working together to see how best they can share in dealing with those which affect the industry as a whole. We must not forget the enormous contribution which the equipment and the electronics industry makes. In Germany last week I saw some of this work going on in the industry there, I found it impressive to notice how much of the equipment came from this country.

Exports last year of both civil and military aircraft were rather lower than in 1961. The main reason, I think, has been partly a general recession in the world market for aircraft and also the fact that the new generation of British aircraft to which I have referred are coming on to the market only this year. Yet already at the end of last year the position had improved. The level of export orders increased by nearly 50 per cent. between June and December, 1962. Exports for the first quarter of this year are already higher than they were in the corresponding period of last year.

I am confident that the export prospects for our industry are good. I am sorry to introduce a note of party ran-cour, but these will not be helped by the policy which the party opposite, and the Leader of the Opposition in particular, have adopted on the question of exports to South Africa. I do not think that anyone with experience of government would seriously think that one can foist on to the air forces of other countries specific orders to meet the specific requirements of particular countries.

But, anyway, much more serious than that is that if we get into the habit of cancelling orders on purely political grounds we are not going to get orders placed with us. It would be a very great error to think that other Western countries will not snap up the orders if we drop them.

Mr. Cronin

Is the right hon. Gentleman aware that there is a motion before the United Nations, supported by the United States and by most of the nations in the United Nations, to adopt the same policy as that envisaged by my right hon. Friend the Leader of the Opposition—to stop arms being sent by this country to South Africa to further the policies of apartheid?

Mr. Amery

I am also well aware, of course, that both American and French firms have been assiduous in making inquiries as to whether they could replace the business which we are getting in this country. I have a feeling that pious resolutions will carry less weight than the hard-headed actions of some of the businessmen concerned.

Mr. Cronin

It is no use the right hon. Gentleman raising bogymen in the Committee. He must be aware that no military aircraft can be sent to South Africa from the United States of America without the consent of the American Government, and he must know that the French have to take into consideration the numerous countries with coloured populations which are associated with them. It is most unlikely that the French or the Americans will send aircraft to South Africa.

Mr. Amery

The party opposite has been wriggling on the hook ever since it impaled itself on the Trafalgar Square speech. It is really no good trying to get out of the problem on hypothetical arguments about what might be done by the American or French Governments in certain circumstances. What I was telling the hon. Gentleman was that I know that there are some firms with a good deal of influence in both countries which are looking for opportunities to snap up those orders and that self-denial on our part will have no more effect than it had on other countries in supplying nuclear weapons.

Mr. P. Noel-Baker

Does the right hon. Gentleman realise that these are precisely the arguments used by his party in 1938 and 1939, when we proposed an embargo on certain military materials to Germany?

The Temporary Chairman (Dr. Horace King)

I hope that the right hon. Gentleman will not go too far back into history.

Mr. Noel-Baker

I think that the Minister realises that if the Government were to put this proposal to ban the sale of arms to South Africa to the United States Assembly no Government whose country was a member of the United Nations would venture to oppose it.

Mr. Amery

I will not try to pursue what one might call the historic aspects of the problem. But if we want to maintain the health of the British industry and promote exports we shall only harm ourselves by threatening to cut off exports to South Africa not only in the South African markets, but in other markets, too. A good many people will ask whether, if this is the kind of way that we honour our contracts, we are the sort of people with whom they want to do business.

Mr. Burden

Will my right hon. Friend also make it clear to the Opposition that, if they refuse to send arms to South Africa, then South Africa, which buys a great many commodities from us, will refuse to continue to buy them? Will my right hon. Friend also ask the Opposition what they propose to do about the surplus material that would then be available?

Mr, Rankin

On a point of order. For my guidance, at least, Dr. King, I should like to know how far we can reconcile the introduction of this export business to South Africa with any of the Votes which are before us just now.

The Temporary Chairman

I was in the same anxiety myself. I gather that the Ministry of Civil Aviation is interested in the whole matter of the supply of aircraft.

Mr. Amery

The basis on which I ventured to raise this issue at all was that the health of our civil aviation depends on the strength of the aircraft industry and this, in turn, depends on the strength of our exports and on maintaining a reasonable standard for those who work in the industry, and I thought it important to make clear that the policy of the party opposite would prejudice our exports not only to South Africa, but to other markets as well. [An HON. MEMBER: "It is a matter of opinion."] It is a matter of opinion, and I am giving my opinion.

Mr. D. Jones

But the right hon. Gentleman said it as a matter of fact, and that is the difference.

The Temporary Chairman

I hope that the hon. Member will not conduct the debate sitting down.

Mr. Amery

The hon. Member for Newton asked me to say something about the conference at Chequers. He said that he was not happy about the state of the industry and asked whether the "Sandys" policy was working. I think that it is, in the sense that the industry has now achieved a pretty stable level, that the order books are fairly full and that the order figures looked like being stable, and that the aircraft coming out of the stable are pretty good and look to me as if they may command a strong position in both the civil and military programmes of the world.

The object of the conference was to bring together the Ministry of Aviation with the producers and main consumers, the civil corporations and the three fighting Services which, between them, buy the largest part of what the industry produces. We had two days of free and frank discussion on all the main problems. I listed some of them in the statement which I made to the House. We were able to confront one another with the main problems which we have to try to solve. I think, therefore, that the conference was a useful one. I think that it showed that partnership between the Government and industry. The Government side of the consumer interest is. perhaps, best brought into focus and line by meetings of this kind. We have not attempted it on this scale before. I think that it has been a useful precedent, and I am hoping to have a similar kind of meeting, perhaps on a smaller scale. with the electronics industry later this year.

I do not think that the hon. Member for Newton shares the views of some of his colleagues about nationalising the aircraft industry, and I do not want to blame him for some of the more intemperate statements made on that score, but I think that it is by talking things over between the main firms concerned and the Government that we are likely to get good progress. The aircraft industry, which has been working for the Government for many years, has done a tremendous job for us in two world wars and we must remember the rush job which it did in the years immediately before the last war to give us the equipment which saved us in the Battle of Britain.

I think that the partnership between the Government and industry is a good one and one on which we can build. It is a good foundation and it is certainly the one on which we must build.

Mr. Stanley R. McMaster (Belfast, East)

Considering particularly my right hon. Friend's last remark, has he nothing to say about the role of those aircraft manufacturing firms not in the main group, Short Bros. and Handley Page, which have played a very great rôle in the past?

Mr. Amery

I have said a good deal on other occasions about Short Bros. and about the support which we give that firm and which I hope will enable it to maintain a high and steady level of employment for the rest of the decade. I would remind the Committee that I paid a tribute earlier to Handley Page for the large orders which it received for the Herald aircraft and which it secured independently.

Mr. Cronin

May I point out to the right hon. Gentleman that he has not commented on a matter put to him twice by my hon. Friend the Member for Newton (Mr. Lee)? My hon. Friend deployed a prima facie case for a grave charge, which is that the Government, in recent years, have been putting pressure on B.O.A.C. to put misleading statements in its accounts with regard to its capital assets. This is really a grave matter and I do not think that we can leave it without some comment from the Minister. Admittedly, the right hon. Gentleman may have had only a short time in which to consider the matter, but can he assure us that the Parliamentary Secretary, when he winds up the debate, will give us a full explanation?

Mr. Amery

No, Sir. I took note of what the hon. Member for Newton said. It is one of the matters on which the Corbett report will furnish very useful information and I propose to make my remarks on this subject when I have read that report.

Mr. Cronin

It has nothing to do with the Corbett report.

The Temporary Chairman

As the Minister has finished his speech, I do not think that we can have too many supplementary interventions.

5.20 p.m.

Mr. A. E. Hunter (Feltham)

I want to take up a very important point made in the Minister's speech. The right hon. Gentleman travelled a long way. He almost made a world flight. I want to raise the question of the special report of the chartered accountants. The right hon. Gentleman said some time ago in the House of Commons that he was appointing chartered accountants to make a special report on the finances and the administration of B.O.A.C., but he informs us today that this report will not be made available to the House or to the public. It will be available only to him and he will make a report of his opinions on it.

This is a wrong and bad policy. Many of my constituents work for B.O.A.C. They were very suspicious of the Cunard-B.O.A.C. merger. They protested strongly against that act on the part of the Minister. The agreement was never made known to the public. No copy of the agreement was ever made available to Parliament or to the employees of B.O.A.C. Now we have another instance where the Minister appoints special chartered accountants to make a report on the finances and administration of an airline Corporation and that report is not being made public.

Does not that cause suspicion among the employees? If there is anything wrong with the administration of B.O.A.C., or if the set-up is found to be good, the public and the House of Commons should have a copy of the full report from the chartered accountants. I very much hope that the Minister will reconsider his announcement. I repeat that this policy is wrong.

I appeal to the Government to give the airline Corporations all possible support and encouragement. The Times published some useful leading articles on the subject this month, which I hope the Minister has read. Both the airline Corporations should be instruments of national policy, to build up the prestige of Britain's civil air transport and to assist the British aircraft industry to secure not only home orders but export orders as well. I am certain that our airline Corporations operate successful jet aircraft which are admired in other countries. This should lead to export orders. The airline Corporations, therefore, are a vital link with the British aircraft industry.

The past two years have been difficult for those who provide aircraft travel outside Europe. Traffic has not expanded as we had expected, and with the airlines of all countries competing for this traffic it has been a case of two many aircraft for too few passengers. B.O.A.C. has clearly had the more difficult task of the two airline Corporations. It faces international competition on most of its world routes, and the most intense competition on the North Atlantic route. B.E.A. can hold its own in Europe. It carries more passengers than any other European airline, a fact of which we can be proud, and for seven years in succession it made a profit.

B.O.A.C. does not have summer holiday traffic as carried by B.E.A. People go to France, Switzerland, Italy and Spain, etc., for holidays and this means very good revenue for B.E.A. and the independent airlines in summer, but people do not travel a great deal on the world routes on holiday. It is mainly business travel on the world routes. The keen competition on the North Atlantic route must be one of the most serious problems facing B.O.A.C., and I understand that on this route the Corporation has been using only about 50 per cent. of capacity in its aircraft.

I believe that when the Parliamentary Secretary winds up the debate it will be his first speech in reply to a major civil aviation debate, although he has dealt with Adjournment debates on aircraft noise. I am sure that we all wish him well in his new job. When the Government announced the B.O.A.C.—Cunard merger we were told that Cunard had special facilities for booking passengers in America. I should like to ask the Parliamentary Secretary in what way the merger has assisted B.O.A.C. If, according to accounts, B.O.A.C. has been flying with only 50 per cent. of passenger-carrying capacity occupied, in what way has Cunard helped B.O.A.C. in booking passengers?

The Minister was quite firm on the international fares dispute which has now cropped up. I hope that he will continue to give B.O.A.C. full support. If the new fares are not charged as agreed by the majority of the countries concerned, this could mean a revenue loss of £1 million to B.O.A.C. on the North Atlantic route alone. I hope, therefore, that the right hon. Gentleman will stand firmly by B.O.A.C. in its policy. I warmly support what the hon. Member for Watford (Mr. Farey-Jones) said in an intervention.

The airline corporations are most important to the British aircraft industry. We know that when it comes to keeping skilled men in employment in the industry only the airline Corporations can place the large necessary orders for civil aircraft which will ensure long-term planning and employment. The Corporations, therefore, are an important instrument of national policy in the aircraft industry.

If the difficulties are examined, it will be found that B.O.A.C. has not had the best of luck. The Minister was right in mentioning the early troubles with the Comet. That was a big blow, and there was a further blow in the long delay with the Britannia, when there was icing trouble and difficulties with the engines. Delivery was delayed twelve to eighteen months. Even B.E.A. received the Vanguard too late. Both Corporations have not had the best of luck with their deliveries of aircraft. I trust it will be better in the future. I hope that we shall see both airline Corporations and the aircraft industry being given every encouragement by the Government. Both are vital to Britain.

I now want to raise a different subject, in which I know the Parliamentary Secretary is taking a keen interest. It is the question of aircraft noise. This is a vital matter to those who live around international airports, and especially London Airport. Therefore, I ask the Minister to impress upon aircraft manufacturers the importance of eliminating noise at its source. I was pleased to hear the Minister say that the aircraft in which he travelled was much quieter. I believe he said that it was a VC10. If that is quieter, that is a step forward. I hope that the Minister will intensify and increase research into this problem. It affects hundreds of thousands of people, and at night time it is becoming a very serious problem indeed. I am pleased to know of the interest that the Minister is taking in this problem, and I hope that he will continue to do so.

Civil aviation is of special importance to this country. We want Britain to be a leading civil air Power, for in time there will be an expansion in air travel and in the carriage of freight by air. We want the Corporations to be successful. We want them to expand. Both Corporations are important to my constituency, for many of my constituents work for B.O.A.C. and B.E.A., as well as for independent operators. I want civil aviation to expand so that we can maintain full employment in the operating services, and at the maintenance bases throughout the country.

As I said in opening my speech, both airline Corporations are instruments of national policy for Britain and of prestige on world airline routes. They are also of vital concern to the British aircraft industry and to the country as a whole.

5.32 p.m.

Sir Thomas Moore (Ayr)

I am sorry that I have not the time to follow my right hon. Friend the Minister of Aviation and the hon. Member for Newton (Mr. Lee) in their fascinating analyses of our civil aviation problems. I intend, in the few minutes in which I shall speak, to deal with a much more limited aspect of aviation. I am concerned with aviation in Scotland, in particular the west of Scotland, and especially Prestwick Airport, which is in my constituency.

Prestwick is the main trans-Atlantic airport for Great Britain. I well remember being thrilled in 1940 when, with the late David McIntyre, I saw the first Dakota touching down under that generous Lend-Lease arrangement. Those Dakotas continued to touch down every quarter of an hour, and they were rapidly sent to the various fighting stations throughout a full year.

Also, apart from being the main trans-Atlantic airport in Great Britain, Prestwick is the second international airport to London. It is. therefore, of some importance. Quite lately, as a result of the discontent of some of my constituents, the Government lengthened the main runway so that it might take the largest and heaviest aircraft, both supersonic and otherwise, which are envisaged for the next fifteen years. That is the background to my very short story.

Renfrew Airport, the local airport Ito Glasgow, as many of my colleagues know, is shortly to be closed down. It suffers from many defects, with which I will not burden the Committee. They are well known in the aviation world. Naturally, that means finding an alternative airport to Glasgow. There are only two alternatives. There is the airfield called Abbotsinch, which has already been mentioned today. It is soon to be discarded by the Navy. There is also Prestwick.

One might ask, why Abbotsinch? The answer is apparently simple. This field is only 10 to 12 miles from the centre of Glasgow, whereas Prestwick is 30 miles away. Therefore, to enable the returning traveller from the United States, who finds himself 15 miles further from Glasgow to go there—if, indeed, he wants to go to Glasgow—it is intended to spend a great deal of taxpayers' money. I mentioned that it is possible that these returning visitors from the States may not want to go to Glasgow—and I do not blame them. The only time that I ever wanted particularly to go to Glasgow was when I was fighting my first election at Coatbridge, thirty-nine years ago, and was defeated by 57 votes—so Heinz has no monopoly!

To make Abbotsinch suitable to take the heavy aircraft now contemplated will cost approximately £3 million to £4 million. So one wonders how the patient ratepayers of Glasgow will willingly accept the additional burden thus put upon them, for it will have to be found by the Corporation of Glasgow. They will have to find the money, though no doubt the Government, as is the custom in these matters, will make a grant.

Now for the alternative, Prestwick. As I have said, Prestwick is ready to accommodate any kind of aircraft, either of today or in the foreseeable future, without any extra cost. No extra expenditure of any kind would be needed. It has a control tower, which I had the privilege of opening last year, second to none in the world, and terminal buildings now nearing completion which will make London Airport gasp with envy.

Therefore, the whole dispute rests on one issue—the time factor. Even now it seems to me somewhat childishly unimportant. To get by car from Abbotsinch to Glasgow takes from 12 to 20 minutes, according to the traffic. To get from Glasgow to Prestwick by the new diesel service will take about 25 minutes. For the sake of those 10 minutes or so, £3 million to £4 million is to be spent to enable the tired Glasgow businessman to get to and from his aircraft a few minutes earlier, or the eager traveller from the United States to reach that haven of gaiety and excitement, Glasgow, a few minutes sooner.

I know that my hon. Friend the Parliamentary Secretary, who is to reply to the debate, is aware of these arguments, because he was good enough to allow me to share a Press conference with him last Friday, when these matters were discussed. But I noticed afterwards in the local and, indeed, in the national Press that it did not get that publicity which I am hoping will ensue as a result of this debate.

I know that the Minister has not reached a final conclusion in this matter. Nor is his mind closed, as the Minister of Defence once said to me in answer to a Question that I put to him. No doubt, he also said so to the hon.

Member for Glasgow, Govan (Mr. Rankin). But he said it to me, too. The exact words he used were that his mind was "not closed." For that I was called a liar—

Mr. Rankin

Will the hon. Gentleman tell us the occasion when that was said?

Sir T. Moore

No, I cannot.

If my right hon. Friend's mind is not closed to any convincing argument, I should like to give him one final argument. Prestwick is said not to be paying. That seems to me a conclusive reason for transferring the surplus traffic from Renfrew, which is to be closed down, instead of to Abbotsinch to Prestwick itself. If the traffic is transferred from Renfrew to Abbotsinch, Abbotsinch will not pay and neither will Prestwick. It seems to me that this is pure foolishness. I can only hope that the few arguments on behalf of Prestwick which I have put to the Minister will remove further doubt from his mind and he will be able to give me a welcome assurance by the end of the debate.

5.40 p.m.

Mr. John Diamond (Gloucester)

Naturally, a mere Sassenach following the hon. Member for Ayr (Sir T. Moore) hesitates to intervene in a matter which, obviously, is of closer interest to those who use those two airports more frequently than I do, although, as the grandfather of two Scottish grandchildren in Glasgow, I have a relative interest. I only wish that the hon. Gentleman could be put on to selling aircraft. He is very persuasive in the arguments which he uses, and nothing is mare necessary than that our exports of aircraft should be increased.

The hon. Gentleman will forgive me if I turn to the main topic of the debate and come at once to my major criticism. Having attended, without exception, all the debates since 1957 on the aircraft industry, I am more convinced than ever I was that what we lack, and particularly what the Government lack, is a fundamental policy and philosophy in regard to the three arms of the industry jointly with which we are concerned. The fact that we are today in a quiet period, for all we know the quiet before the next storm, is no reason why we should not draw attention to the need for a policy the lack of which has been the main cause of all the crises which have occurred in the aircraft industry.

The Minister, in a speech which showed far too much complacency, in my view, said that the numbers employed had now reached comparative stability. In my constituency, the stability is complete. It is the stability of the graveyard. There are in my constituency no aircraft workers working now whereas, a short time ago, when I was elected to the House, there were about 9,000, although, of course, there are constituents of mine working in aircraft and associated plants in neighbouring constituencies.

Therefore, I do not take the placid view which the Minister takes about our having achieved temporary stability, if, indeed, we have achieved it. All I know is that, every time we have asked the Government what the future size of the aircraft labour force is to be, we have never been given a single figure because they have no means of knowing, and they have no means of knowing because they have no plan.

It is as plain as a pikestaff, and needs no words of mine to demonstrate it, that what I call the three arms of the industry, the military side, the manufacturing side and the carrier side, are so closely related, each affecting the other, that, unless we have a plan co-ordinating them and a philosophy which is the same for all, they must land in trouble. At least, there will be disharmony between the parts.

Unless we have a long-term plan for aircraft, we shall be in trouble. Aircraft are supremely the things which take the longest to produce. The period of gestation, the period between the time when, so to speak, the idea is first conceived and the point when the designees thoughts take flight, is about seven years or even more. Therefore, one must look ahead. One must plan. One must have a long-term plan. This long-term plan has been sadly lacking. Leaving aside military aircraft, I shall give examples in regard to each of the three arms to show how the lack of planning has affected and damaged us in our employment, in our prospects as a country as an exporter, and in our capacity, to compete as carriers.

First, I take the problem of the two carriers, the two flag carriers which we have left. Obviously, Conservatives find it very difficult to reconcile their dogmatic hatred of nationalisation with their responsibility as a Government for seeing that the two nationalised industries succeed. This inability results in an ambivalance which shows in their decisions virtually every week. We were firmly promised by the then Minister when the new Act destroying the exclusive flying rights of the two nationalised industries was introduced that the two flag carriers would still be regarded as flag carriers. We were given that promise in those terms, that is, that first preference would be given to them in the Minister's thoughts and in his heart. Nothing could be further from that promise than what has happened in fact.

In opening the debate, the Minister made the most extraordinary statement that the two nationalised Corporations had achieved the maximum expansion of traffic. "Maximum" was his word. He did not speak of an expansion. He did not speak of a considerable expansion, or even of very great expansion. He spoke of the maximum expansion. He was alleging that in no other circumstances could the Corporations have carried more persons more passenger miles. This is impossible to prove and, as a statement of opinion, I wholeheartedly reject it. A reference to the figures attained by the independents in the meantime is enough to throw the argument out of the front door.

Although there always was a place for the independents, it was a place in terms of contract flying, in terms of non-schedule flying. The new introduction has been scheduled flying, the carving out and taking away from the two Corporations of a part of their exclusive rights. What has happened? The figures for the past six years which I have been given show that, in the part in which they were always expected to operate, namely, their non-scheduled flights, the number of passengers carried has doubled. That is a good expansion. Good luck to them for performing a useful, necessary and wholesome social service. In the scheduled services, the part which was new and which has been carved out of the territory of the two Corporations, there has been an increase in terms of passengers of five times, not two. If one takes the separate figures for inclusive tour passengers, a rather special service, the number of passengers has increased thirteen times compared with the basic twice for their normal, natural services.

It is nonsense, in the face of these figures, to allege that, if the Corporations had continued to be treated as this side of the Commitee always treated them and as the opposite side of the Committee promised, through the mouth of the Minister, to continue to treat them, as the flag carriers of the nation, they would not have carried more passengers than they have carried in fact.

This all stems from the fact that the Government have the responsibility for looking after the two transport Corporations but they have a dislike for doing so in full measure because they are tempted the whole time to look after their friends. Their philosophy prompts them to support the independents and they not at all understand that the two Corporations have so much international competition to bear that all arguments about giving them additional competition are sheer nonsense.

Mr. William Shepherd (Cheadle)

Can the hon. Gentleman say how many aircraft are operated by the independent operators in comparison with the Corporations, and will he say whether he would himself invest money in these enterprises?

Mr. Diamond

Usually, I am much interested in any intervention by the hon. Member for Cheadle (Mr. Shepherd). It is a little difficult to think of investing money in nationalised industries.

Mr. Shepherd

No; I am talking about the independent companies.

Mr. Diamond

I am coming to that. I am armed with the balance sheet. I have all the details here and I shall come to them shortly. Yesterday's newspaper gave one ample opportunity to read of the full dividend distribution and everything else. That is a major part of my speech and I hope that the hon. Gentleman will be good enough to stay for the next five or ten minutes until I reach that point.

There is this muddle in licensing which has affected the Corporations in this way and which, no doubt, is part of the cause of their being overstocked with aircraft for the future. We want to know how this situation has arisen.

It is difficult for us to distinguish between what is reason and what is excuse, but one reason for this situation has been given, namely, that the development of the Commonwealth has meant that those who previously had no choice in the use of their own aircraft now have a choice, and that now that they have been given a choice they use fewer of the two Corporations' services than they did previously. This can at most be only part of the story because everybody in the business knew that this development was going on. It has not suddenly struck us in one year. It has been going on over a considerable period, and it has been going on all over the world. It is the kind of development which any sensible manager anticipates, perhaps not precisely but generally.

There must therefore be other reasons why there has been such a considerable overstocking with planes by B.O.A.C. Ten out of 62 is a major figure, and we should like an explanation of it. There is also the frightful and ridiculous complication that, in addition to the Boeings which B.O.A.C. has already, there are two mare given in by Cunard which presumably will have to be disposed of, too.

The Minister says that the Corporation has not made up its mind whether it will cancel its order for British aircraft, which has an enormous effect on employment as well as other things in this country, or whether it will dispose of some of its American aircraft. The Minister should have views on this and he should make them known. He said that he has never criticised anybody for buying British. What does be mean? Does he mean that he supports a policy of buying British? Has he a policy? Does he know where he stands in this matter? When he says that he has never criticised anybody for buying British, does that mean that he will not criticise anybody for selling British or American? What is the advice that he will offer if no decision has yet been made?

The Government should have a policy on all this and should know where they stand. They cannot know where they stand unless they are prepared to look facts straight in the face. One of the facts which must be looked at is the cost of deviating from the normal commercial policy in order to buy British for an aircraft carrier who otherwise might want to buy something else. We have just been told—it is a surprising story, but I assume that there are some reasons for it—that we have gone outside this country in order to place an order for the first two commercially operated helicopters. We have a manufacturer of helicopters in this country.

There may be a very good reason for this action, and the Minister has gone so far as to say that he recognises some of these reasons—such as the advantage of experience to be gained from operation—and is prepared to give recognition in financial terms. So far, this question has been avoided. No one has been prepared to look it slap in the face and to say what is the cost of doing something which we would not otherwise do but which is, perhaps. in the national interest as opposed to the short-term commercial interest.

We are beginning to do that. We are having to do it in connection with the Beeching Report. Some considerable and very useful social accountancy has been done on the Beeching Report to show that one cannot limit oneself to a purely commercial profit and loss account in trying to arrive at what is in the national interest, and no accountant says that one can. The profit and loss account, in its present form, does eminently well what it sets out to do, namely, to give the commercial results. It does not pretend to do more, any more than a book pretends to present between its covers more than the title on the outside. If one wants to know the whole story, one must go beyond the purely commercial profit and loss account.

The Minister was beginning to touch on this today when he referred to the fact that he was prepared to look generously at the additional cost of operating this. It is apparently worth while to keep up traffic to the Scilly Isles because of the tourist industry, and so on.

Mr. Lubbock

And because the Leader of the Opposition has a place there.

Mr. Diamond

I am grateful to the hon. Member for that.

These are powerful reasons why this matter should be looked at, but what I want to impress on the Government is that there will never be a solution of these problems until a real attempt is made, greater than has been made with regard to the Beeching Report, to find out the real social cost of these various alternative acts.

For example, Sir Matthew Slattery is, quite rightly, complaining bitterly, I understand, and in very precise language, about having to carry in his accounts the results of non-commercial activities. Why should he have to do this? Why should he have to rely on a criterion which is not appropriate in judging something different? The balance in the profit and loss account is not the right yardstick to use in measuring an act which is, perhaps, wrong or, perhaps, right—no one knows—in the national interest. He is capable of saying how much extra it has cost his Corporation to have this decision put on him of buying British when he might otherwise prefer to do something else. There is no earthly reason why this should not be worked out and a note put on the balance sheet or the balance sheet adjusted, or, better still, to draw up a proper set of social accounts covering all of the three arms to which I have referred. Only then will we know what is or is not in the national interest as a result of this decision.

Until the Government stop avoiding this, and as long as they continue their muddled attitude of partly trying to support a nationalised industry because they are the Government but wanting to support private industry because that is their philosophy and fundamental belief—and nobody complains about people acting in accordance with their beliefs but we should recognise what is going on—and until they get out of this ambivalent attitude, we shall never have a satisfactory solution to the problem of the air Corporations.

We are concerned not only with the air Corporations but also with the manufacturers. There have been the most frightful ups and downs with regard to the manufacturers since the 1957 White Paper which struck fear into all their hearts. The crisis appeared to be greater than it has turned out to be, but that does not alter the fact that enoromous anxiety has been caused to the worker and to the employer through their not knowing where they stood and through there not being a long-term plan.

Two things at least need to be done: first, we must have exports, and, secondly, we must take a closer look at the manufacturer. I thought that the Minister dealt with the matter of exports in a most complacent way. He talked about a slight down-turn in 1962. As far as I am aware, the figure of exports of aviation goods for 1962 is £114 million, the lowest since 1956, and £35 million less than the year before. There has been an enormous drop, and the figure has continued to drop since about the middle of 1958, when it reached a peak. In these circumstances, to say that there has been a slight down-turn which leaves satisfaction for the future is, to my mind, wholly over-complacent.

There are two respects in which the exporter could be assisted: first, in interest, and, secondly, in the royalty charge. I am not sure what the position is about interest, and I should be grateful to the Parliamentary Secretary if he could deal with it when he replies to the debate or at some other time. It is alleged by the British manufacturers that they are put at a considerable disadvantage compared with the American manufacturer in terms of the interest which they are charged. The American manufacturer gets his money from the Treasury. It is produced at 2 per cent. He is enabled to get paid and to charge a figure of something like 5½ per cent., which covers the credit and the creditability of the ultimate purchaser.

The British supplier borrows at 5i per cent., so that he is at this stage on level-pegging, but, in addition, to get creditability—that is to say, the likelihood of his account being paid—he has to go through the Export Credits Guarantee Department at an extra cost of anything up to 9 per cent. It seems on the face of it, therefore, that because of the Government's unwillingness to allow borrowing from the cheapest or central source, the British manufacturer is put at this considerable disadvantage, because a percentage of this kind can make all the difference, and the convenience of credit over five or six years is something which must be accorded to a purchaser if one hopes nowadays to sell an aircraft. That is one thing.

The other thing about which I shall make a suggestion, although, perhaps, not the same suggestion as the manufacturers themselves would make, concerns the royalty. That, I think, is the term which is used. I have in mind particularly the Viscount, which the only relevant instance in which, after a certain number of aircraft had been made and the costs of producing the Viscount had been covered, a royalty was payable on each future sale.

Mr. Lee

A levy.

Mr. Diamond

I thank my hon. Friend. The manufacturers allege that this levy is too high in its impact when it falls, as a result of which the price they have to charge in estimates and tenders is too great and they lose business this way. There is something in what the manufacturers says, and I therefore suggest that instead of the levy being based upon the turnover of the number of aircraft of a certain category which are sold, it should be based on the profits of the company. In this way, it would avoid a direct charge on the aircraft, it would not affect the ability of the manufacturer to sell competitively and it would enable the Minister to obtain a reasonable return for the investment made in respect of which the levy is agreed to be paid.

Every aircraft manufacturer says that he loses money on every aircraft which is made for the Government—and, no doubt, this is what he tells the Government cost accountant also—but the curious thing is that if we add up all these losses, we arrive at a substantial profit in the balance sheet. This is where I come to the question which the hon. Member for Cheadle asked me.

For example, the Bristol Aeroplane Co. has recently published its accounts and the chairman's statement is shown in yesterday's Observer. It makes interesting reading. It shows that the total profits of the group amounted to nearly £3 million, an increase of over £ ½ million compared with 1961. These are useful figures which might impress us were we interested as the hon. Member for Cheadle suggested we should be.

The statement goes on to say that the dividend has been increased from 12½ per cent. last year to 17½ per cent. this year. That is a substantial increase, to which none of us shareholders would seriously object until we started to work it out in the House of Commons and realised that here is an increase in the income of a shareholder of 30 per cent. this year as compared with last year.

A 30 per cent. increase is much more than a 3 per cent. increase. It is ten times as much. The guiding light must have caught fire at that time, such a blaze has there been. I wonder, therefore, what is the reason for the delay on the part of the Government in referring this case to the National Incomes Commission. Why has it not been announced? The National Incomes Commission deals with incomes and not purely with wages, although, curiously enough, only wages have been referred to it so far. It deals with all cases after the event, and here is an event in the aircraft industry of a dividend—

The Temporary Chairman (Dr. Horace King)

I do not like to interrupt the hon. Member, but he must link what he has to say with the Ministry of Aviation.

Mr. Diamond

I am asking the Parliamentary Secretary the simple question of why there has been delay by the Government in recommending to the National Incomes Commission, as they are entitled to do, because it is a commission dealing with incomes, a case which seems a startling one and which comes under the responsibility of the Minister, because a good deal of the profits are drawn from public funds under his responsibility. I am sorry that I did not make that clear in the first place, Dr. King.

I am asking why there has been a delay in submitting the case to the National Incomes Commission. Is the explanation that the Commission deals only with wages? If so, we would like to be told. If that is not the explanation, we would like to know what it is, because a 30 per cent. increase is substantial and, according to my arithmetic, this is precisely the amount of increase in the gross income of each shareholder in the Bristol Aeroplane Company this year as compared with last year.

In these circumstances at all events, it would be appropriate—timely, let us say—to suggest to the aircraft manufacturers that a more reasonable way of recompensing the State for its contribution which is made through the Ministry in terms of research, development expenditure, development contracts, and so on, and a way which would avoid all the awkward problems without apportioning costs as between Government and non-Government contracts, would be to switch from a levy on the aircraft produced to a modest share of the net profits produced by the company during the years when they get the benefit of it.

I refer once more, as one has had to do on every occasion of this nature, to the position of Short Bros. I know that the hon. Member for Belfast, East (Mr. McMaster) will welcome support. I will not say anything that he would not wish to suggest. He knows that I have been interested in the situation for some time and he knows as well as I do that nobody seems clear whether the Government have made up their minds whether Short's is an adopted child, an approved child, or what the relationship is between the Government and Short's. [An HON. MEMBER: "Illegitimate."] The Government cannot make up their mind. There is as much lack of understanding in this as in anything else.

The Government introduced the scheme, which was praiseworthy as far as it went but was not part of a general plan, which was an essential criticism against it, under which there was to be co-ordination in aircraft manufacture. and as a result of the co-ordination orders would be obtained. This was the bait. In due course, there was coordination and we had two airframe manufacturers and two aero engine manufacturers, excluding one helicopter manufacturer.

But we also had Short's. What was their position? Were Short's expected to co-ordinate and merge before getting further contracts? If they were expected to merge but did not, did not the Government have power, by virtue of their 70 per cent. or 75 per cent. controlling interest in Short's, to see that their wishes as a shareholder were carried out? If the Government's wishes had been carried out, why do not Short's get a fair share of the work that is going? Why do they seem to be excluded?

It is no good the Parliamentary Secretary telling me that Short's have been given some hack copying work to do which will keep some of their people employed. It is true that they have, at the last moment, been given work of that kind. It is true also that the Chairman of Short's has to camp in the House of Commons Lobbies before anything happens about getting work for his 5,000 or 6,000 employees. He has to turn himself into a political agitator rather than the chairman of an aircraft manufacturing company, because the Government never think about making up their minds until the crisis has nearly expired, never mind started.

That is true. It is no use the Parliamentary Secretary shaking his head. He is new and we do not wish to be unkind to him, for a variety of reasons.

Mr. Cyril Bence (Dunbartonshire, East)

Let us have the variety of reasons.

Mr. Diamond

There are personal reasons—[HON. MEMBERS: "Oh."

Mr. Rankin

A favourite child.

Mr. Diamond

We will see. Give him a chance. Let him hang himself with his own rope. He will find if he looks at the past history of it that there has been a real crisis and real anxiety among some of his own back benchers as to the future of Short's, and it is not until the crisis is almost spent that the Government come forward—with something which is less than satisfactory. I want to make this point to the Parliamentary Secretary, that to give skilled engineers and a skilled design team work of hack copying, which is all they are getting out of it, is not the way to get an efficient, live, imaginative business going, or a profitable one, in Northern Ireland. It is the idea and the possibility of designing something new, the idea of creation, which is the real stimulus and impulse. To exclude all this from Short's needs explanation, and we should be grateful if the Parliamentary Secretary could give us one, so that Short's, at all events, may know their own future.

Talking of the future, I would ask the Minister, who has been good enough to return—though I make no complaint at all of his having gone out—what is his future? I should have thought that one thing he would have told us—and I am putting this seriously, and I am not referring to the night of the knives—would have been, what is to be the future of his Ministry in relation to the new responsibilities of the Minister of Defence.

At the moment there is a situation in which he is responsible for three arms, as I understand it—for the carriers, for the civil aeroplane manufacturing, and for the supply of military machines. He has got this joint responsibility. Is any part of this responsibility going to be removed from him? I myself hope not. I do not mind if it is removed from him, but it should be co-ordinated in one single person. Wherever one part goes the whole should go. The essence of my speech has been that all these three hang together. I was hoping that by now at all events the Minister would have been able to tell us something about the future shape of his responsibilities and of the way in which his duties should be carried out.

6.12 p.m.

Mr. F. A. Burden (Gillingham)

I am sure that the hon. Member for Gloucester (Mr. Diamond) would not expect me to follow him to any great extent, but there was one point on which I found myself very close to him. I believe the time has arrived when there must be reappraisal of the whole future of aviation and, in particular, of civil aviation.

I am glad to see the hon. Member for Newton (Mr. Lee) back in his place, because I found some of his remarks interesting and illuminating; illuminating because I felt they showed the confusion which there really is in the mind of the Opposition about the Corporations and about civil aviation generally at this moment. I took down very carefully two or three of the remarks he made. He said there is not enough supervision over the money now spent, that the supervision is not good enough over the money spent by the Corporations.

Mr. Lee

No.

Mr. Burden

I think that if the hon. Member looks at his—

Mr. Lee

Public money spent on research and development in the aircraft industry.

Mr. Burden

Well, we are glad to know the Opposition says there is to be no accountability for the money which is spent by or over losses incurred by the Corporations. If this is the case, it logically follows that the hon. Member would say it is in the national interest that the Corporations should carry the flag and that they have no responsibility for profit, and if this is the case I think also that the British public should know just to what extent they are committed to B.O.A.C. and B.E.A. in terms of money, and for how much of public money the Opposition is prepared to say no responsibility should be attached to either of the Corporations—no responsibility attached to either in the way of spending. This question has got to be answered by the Opposition if it takes this view.

Mr. Lee

I said that the Minister must make up his mind. Does he want B.O.A.C. to run as a profitable commercial undertaking with profitability at the end of the run, or to carry out national interests and to serve national considerations which cannot be successfully carried out on the basis of profit-making considerations?

Mr. Burden

What are the national considerations? How are they different from the considerations which Pan-American, T.W.A., or the Arab airline or any other airline have? These are points which hon. Members opposite have got to face up to and which they have got to answer, and I hope they will.

I would remind the Committee that I am a director of an independent airline, of Cunard Eagle. During his comments the hon. Gentleman made some remarks about the association between Cunard and B.O.A.C. Although I have been very reluctant in the past to engage too much in any discussion over this, I think the time has come when some of the misconceptions about this whole matter should be put right. For instance, the hon. Member said that Cunard had contributed only some £6 million, being the price of two Boeings. The hon. Member for Gloucester said, "And B.O.A.C./ Cunard will now apparently be wanting to sell them." The hon. Member for Newton continued, "In return Cunard got a gift of public assets for private industry and received 30 per cent. interest in the best traffic B.O.A.C. has." He implied that nothing else had been put into this by Cunard.

In fact, Cunard Eagle stopped operating several daily services between New York and Bermuda and Nassau and Miami and the mid-Atlantic service between London, Bermuda, Nassau, Jamaica and outward to Miami. Would the B.O.A.C. directors have agreed to this association unless they had thought B.O.A.C. was getting something out of it? Is there really such a lack of confidence by hon. Members opposite in the directorship, including the Chairman, of B.O.A.C. that they say that they accepted this without getting anything whatsoever out of it? The hon. Gentleman nods his head and says, "Yes". This is the gravest reflection I have ever heard on the board of a nationalised industry.

Mr. Lee

If the hon. Member will recall our debates in July and November, he will remember that the argument was that this route was denied to Cunard by the then Minister of Aviation, now the Minister of Defence, who refused to give it certification, but B.O.A.C. was afraid that in the future Cunard would get licensed and the only way to eliminate that threat was to swallow it up. This was the argument.

Mr. Burden

Really, this is not good enough. The hon. Gentleman shook his head when I put a straight question to him. I asked whether he believed that the directors of this great nationalised Corporation would have accepted this agreement without one murmur of discontent if they had felt that they were getting nothing whatsoever out of it. The hon. Gentleman nodded his head and agreed, and that is the point.

Now, of course, the situation is perfectly clear. The hon. Member for Gloucester says that the Boeings which B.O.A.C. has it may now have to sell, but if B.O.A.C. had not gone into the Boeing market it would have lost three parts of the Atlantic traffic, because the VC10 would not have been ready in time to compete with the Boeings, and B.O.A.C. perforce had Ito go into that market in order to retain its position. Indeed, I would hazard a guess and say that at that time the Board of B.O.A.C. considered it was a jolly good investment to get these two Boeings and the other things which went with them.

Mr. Rankin

Is the hon. Gentleman sure of that?

Mr. Burden

I said that I would hazard a guess. I am not like the hon. Gentleman—

Mr. Rankin rose—

Mr. Burden

I am sorry but I cannot give way again. I have made it perfectly clear. I said that that was my view, and I go no further than that—

Mr. Rankin rose—

Mr. Burden

No, I cannot give way.

Mr. Rankin

All right.

Mr. Burden

The hon. Member has not yet made a speech. I am sure that he will have plenty of time to do so and, when he does, he can then criticise anything that I might have said and put forward his own views.

There should now, I think, be a general understanding of the whole purpose of the B.O.A.C.-Cunard agreement. It has been misunderstood in most places. People have referred to a merger between B.O.A.C. and Cunard Eagle. This is a general view which has been expressed by hon. Members opposite. Various other definitions have been given. However, none of them seems to me to portray the facts. It is, in fact, an arrangement which I believe is not in accord with the best traditions of Conservatism as we have known them in the past. Nor is it, in my view, the way that private enterprise would have approached the problem or would have wished it to be presented. I have no intention of defending the agreement. I merely want to try to clarify what I believe took place.

The Labour Party certainly has no complaint about the prime factors, for what has happened is that as a result of the agreement there has been eliminated, for all time apparently, private enterprise competition against B.O.A.C. in the Western hemisphere. From that point of view, hon. Gentlemen opposite, instead of criticising the agreement, should welcome it, particularly if, as the hon. Member for Newton said, it cost B.O.A.C. a mere £6 million. It is a jolly good investment on the part of B.O.A.C. if it has completely removed any competition from independent operators. What the agreement has acheived is the elimination, through the withdrawal of Cunard Eagle Airways, of any fear of an independent operating from this country in that area in the forseeable future.

There is also some misunderstanding in view of the fact that at the moment the routes that were flown previously by Cunard Eagle are still published in Air Guide and elsewhere in the name of Cunard Eagle, but they are, in fact, operated by B.O.A.C. in association with Cunard.

There is another point which hon. Gentlemen opposite ought to realise. As a result of the agreement there came about some considerable redundancy in the staff of Cunard Eagle. Some of the redundancy was absorbed by B.O.A.C., but there was certainly redundancy. I know how strongly hon. Gentlemen opposite and all hon. Members, no matter what their political affiliations may be, regret it when redundancy takes place and hardship is created in the homes of many worthy people. In all these matters this has to be taken into consideration. I shall return to this subject again because I believe that hon. Members opposite must face the fact that some of the proposals they make and some of the things we are now saying would lead to a very considerable redundancy, and they cannot on the one hand criticise the Government and on the other say "When we get back into power we shall do this" when "this" will, in fact, also create redundancy.

What happened was that finally B.O.A.C. received from Cunard two B.707s and cash totalling an investment of about LID million for a minority holding in B.O.A.C.-Cunard and a share—a very big share—in the loss—a very big loss—on this operation so far. Obviously the views of everyone who has looked at this have merits and demerits, but from the Labour Party point of view one thing is quite certain and that is that private enterprise competition in the Western hemisphere was eliminated. It makes me wonder why there is so much opposition to the agreement on the part of hon. Members opposite.

Mr. Diamond

The hon. Gentleman has now made that unwarranted statement about four times and seems to be building his whole case on it. Why does he maintain that opposition has been eliminated? What is there to prevent any future carrier from applying for a licence? If the hon. Gentleman is saying that he would not get a licence, would he remember that Cunard Eagle also did not get a licence from the Minister?

Mr. Burden

If the hon. Gentleman knows the terms of reference given to the Air Transport Licensing Board he will know that there is very little likelihood that any application from any other operator would be approved, and that if the Board issued another licence it would have to pass my right hon. Friend and I doubt whether it would go through.

Mr. McMaster

If my memory serves me right, the hon. Member for Gloucester (Mr. Diamond), my hon. Friend the Member for Gillingham (Mr. Burden) and I served on the Standing Committee which drafted this provision, and it has, as experience has proved, weighted the scales very heavily in favour of existing operators.

Mr. Burden

The hon. Member for Gloucester really knew that quite well, I am sure. During his speech the hon. Member for Newton made a couple of points about Cunard Eagle and stated that no foreign permit had been received for any of the overseas routes for which licences had been granted. My hon. Friend has pointed out that one has today come through from Nice. In his criticism the hon. Gentleman also paid that there was no sign that Cunard Eagle was beginning to operate on the domestic routes. I can tell him that it will certainly start operating on 1st November and that much of the delay has been caused by the very fact of the agreement between Cunard and B.O.A.C., which put the whole future of Cunard Eagle in the melting pot. The company is now free from that and is planning for the future and will go ahead, and I hope and believe that it will play a very important part in the future of civil aviation in this country.

I have two more points to make. One relates to supersonic development. The Concord, we are told, is going ahead. We are told that the arrangements between the British and French Governments are proving at this time to be highly satisfactory. But I believe that certain essential features should be examined very seriously before the whole thing is finally launched. We must avoid the mistakes of the past and learn from experience. We have a good many examples of our mistakes in regard to aircraft procurement. Perhaps the best illustration of this is the Comet. We all know that unfortunate history, but, even after the major calamity to the Comet I, although the later versions were built satisfactorily, they basically lacked range and were much too small. At the moment, the Concord is expected to have a range of 3,000 miles and to travel at a speed of Mach 2. I believe that we should seriously examine this proposed vehicle, particularly looking at the range and size.

B.O.A.C. has already said that 3,000 miles range is not good enough for the VCIO. It wants an aircraft that will fly non-stop from London to Los Angeles. Why should it be any less important for the Concord to fly that distance in one hop than it is for the conventional jet of today?

Of course, considerations of size must be taken seriously into account as well. I believe we must also try to understand what the United States is likely to do in this. It is no good producing a Mach 2 aircraft with a range of 3,000 miles and of a certain size only to find the American aircraft industry and the American Government announcing, as it is about to be launched, that within a very few years—certainly before such an aircraft as a Mach 2 Concord has been amortised—they will produce a Mach 3 aircraft. This must be looked at very seriously. In this context I believe that the essential users must develop a possible point of view about what they really want from the competitive standpoint and from the point of view of sales in foreign countries.

My final point is one on which I find myself rather close to the hon. Member for Gloucester.

Mr. Shepherd

It is dangerous proximity.

Mr. Burden

He is an accountant as well, and whatever side of the House accountants sit on, they share fundamentals which are very good sense. I believe it is time we began to look at the practicability and the need for a reappraisal of the aviation scene. It seems essential that my right hon. Friend should now appoint a committee to look at aviation as a whole, something on the scale of Project Horizon—which was far too massive but of which an abridged version has been produced.

I believe that if my right hon. Friend again got together economists, accountants and, probably, members of both the construction and the users sides of industry, to look at the way we must go in the next ten years or even further, this could do nothing but good. If the Americans have found it necessary so to do at this stage, why should it be less desirable for us to do so?

This committee should analyse aircraft procurement, the roles of respective companies, including the two Corporations and the independents, the question of traffic rights and the integration probably at first in aircraft procurement, of B.E.A. and B.O.A.C. I am quite convinced that somewhere along the line closer co-operation or integration in some phases of the activities of the two Corporations could well be for the benefit of each and for British aviation as a whole.

The interest of the industry should come first in any such committee, and it should certainly not be affected by political considerations. I believe that if this were done many of the political fears that now exist in the industry would be eliminated through the guidance and information which would arise and the agreement which would come out of this course could cut right across party lines.

But, above all, I ask the hon. Member for Newton one rather pointed question. It has been shown, as a result of the merger between B.O.A.C. and Cunard, that Cunard Eagle had staff redundancy both here and in the Western hemisphere. Now B.O.A.C. has stated that it will have to cut back the size of its staff. The hon. Member had said that it is the intention of the Labour Government, if returned, to eliminate the independents.

Mr. Lee

I said nothing of the sort.

Mr. Burden

I want to know exactly what the Labour Party does mean to do. It will cut them right back.

Mr. Lee

No.

Mr. Burden

Presumably leave them as they are.

Mr. Lee.

No.

Mr. Rankin

Wrong again.

Mr. Burden

One of the things that the Opposition must remember at all times when they consider these matters is that if they bring pressure of such an extent on the private carriers, who must show a profitability in order to acquire the capital necessary to run, that they drive them out of business, they stand a very good chance of putting a considerable number of men and women on the shelf who are now engaged in the industry.

6.37 p.m.

Mr. Philip Noel-Baker (Derby, South)

I do not want to follow the hon. Member for Gillingham (Mr. Burden), except to express my belief that, in spite of the policy which the present Government have followed since 1951, the two nationalised enterprises of B.O.A.C. and B.E.A. have established themselves as the greatest airlines in the world—and I challenge contradiction of that proposition. I travel with many airlines in many parts of the world, and I find that opinion confirmed by passengers from other countries wherever I go.

I have risen to say a few words about my constituents, the world famous firm of Rolls Royce. This great firm has its engineering works in various parts of the country: motor cars in Crewe, oil engines somewhere else, diesel locomotives at Shrewsbury, plants on the Clyde and a test establishment at Hucknall. But its headquarters, its principal aero-engine works, with which we are concerned today, and its nuclear propulsion division are all in Derby, South, and many thousands of my constituents work for the firm there.

I have said that it is world famous. It has been so for 50 years. It is a very common feature of Rolls Royce that people who had Rolls Royce cars keep them for many years and that some people prefer to have a second-hand Rolls Royce, which may have already done 20 years service for somebody else.

In the United States, Rolls Royce owners form their own clubs. In some countries, some firms succeed in getting owners' clubs formed only by great endeavour. Not so the Rolls Royce firm. I heard the story of a man who owned a Rolls Royce in California. He was a high executive of a large manufacturing firm. The directors issued a diktat that all executive staff must in future drive American sedans which would be maintained for them at the firm's expense. Rather than give up his Rolls Royce, this man gave up his job.

I heard of another Californian who was so proud of his Rolls-Royce that he insisted on being married in it. At the end of the ceremony be sent out greetings cards to all his friends signed, "Lois, Louis and Sir Henry"—Sir Henry being the name of his car, named after Sir Henry Royce, one of the great men who came to Derby.

Rolls Royce has rendered and is now rendering great service to the nation. The Minister told us this afternoon that last year British airlines earned £35 million of foreign exchange, which was a remarkable result because it had risen since 1955 from a total then of only £9 million. I agree that it is a remarkable result and very warmly to be welcomed. But in 1961, Rolls Royce earned £55 million in foreign exchange for aero engines and spare parts which it exported to other countries.

From the introduction of the turboprop in the Vickers Viscount in 1953 until the end of 1961, Rolls Royce exports amounted to £300 million. That total included a lot of United States dollars. For the next year it will also include some Chinese currency, and I rejoice to think that that is true. Rolls Royce has sold aero engines to 110 airlines throughout the world and 57 per cent. of the world's jet and turbo-jet commercial aircraft outside the Communist bloc have Rolls Royce engines, including Darts and Avons and now the Conways and the Speys.

The Minister spoke of the fine achievement of B.E.A. and its good prospects with the Trident in 1964 and later years. Mr. Milward, the chief executive of B.E.A., said in Derby the other day that the Rolls Royce insignia were behind 99 per cent. of all the aircraft hours ever flown by B.E.A. The other day I helped to open the Merlin Boys' Club in Derby, and perhaps it is not inappropriate to recall that the Battle of Britain was won by the pilots of Spitfires and Hurricanes, all of which had Rolls Royce Merlin engines, as had most of our bombing aircraft, too. Rolls Royce has led the world in everything it has produced. It is doing so still. Its Research Division has brought in, and is still bringing in, new ideas and new devices in aero-engine construction of every kind—the air-cooled turbine blade, the higher internal gas temperatures, high temperature operation which gives such great efficiency, an engine with greater power per lb. weight than any other in the world; it is developing a small lightweight plastic engine; its re-heat thrust boost of 70 per cent. on the Spey is of vast importance for supersonic aircraft and Rolls Royce expect to get still higher results from this re-heat thrust boost as development goes on.

In a speech the other day, Sir Denning Pearson said that the Conway engines have achieved a remarkable degree of reliability and, what is extremely important for commercial operators, very long life between overhauls —many hundreds of hours more than other engines. The Conway engines are operating at higher gas temperatures Than any military gas turbine engine now in service". He said: This is a remarkable technical achievement; coupled with this high temperature operation, which is primarily made possible by the use of air-cooled turbine blades, is the experience we have gained in making the rest of the hot part of the engine stand up to these high gas temperatures. In addition to operating at these higher temperatures, we have also been operating at higher efficiency and lower fuel consumption and represent the most advanced state of the art of gas turbine development. But the Rolls Royce Advanced Research Group is now engaged on a new and revolutionary advance—a new material of metal reinforced with ceramic filaments which is of great strength at high temperatures. It is made of fine silica threads coated with aluminium. Work on it began four years ago. The head of this Group, Dr. A. M. Smith, now feels already able to predict that: This is the start of a new era of composite materials which will have a far-reaching effect on engineering in future. The silica threads have a strength exceeding 1 million lb. per sq. in. The new Rolls Royce process does not degrade this strength. The finished block of the new material is as strong at temperatures of 300° C. as conventional aluminium alloys when they are cold. Dr. Smith says that this material would be suitable for any kind of sophisticated engineering.

Rolls Royce is the very foundation of British greatness in the air and, above all, of our civil aviation. It is therefore very difficult to understand why there should have been redundancies at Rolls Royce in Derby in the last 12 or 18 months. The Minister spoke some comforting—perhaps I should say complacent—words about the prospects for employment in the aircraft industry in the near and longer future. I hope that he is right. Unemployment is a devilish blot on our social system.

I lived through what many hon. Members present are not old enough to remember as vividly as I do—the epoch of mass unemployment in the decades between the wars. It was a nightmare for the workers of that time. When I fought the Derby by-election in 1936, after the resignation of the late Mr. J. H. Thomas from the Government of the day, my Tory opponent claimed that the Borough of Derby was then the most prosperous town in the country. Unemployment in the borough was 6 per cent.

I found it a haunting nightmare to the workers then. How were they to keep their families? What was the use of their lives if society had nothing to give them to do? I have been distressed in the last few months to find that the spectre of unemployment has begun to haunt my constituents again, as it did in 1936. They are again asking what happens to them and how they will maintain their families, keep up their standard of living, keep up their payments on their houses or their hire-purchase payments, if they lose their jobs.

This is what has happened to the Rolls Royce workers since August, 1961. At that time, the firm was advertising 500 vacancies. It wanted more workers than it could find. In April, 1962, during the by-election in Derby, North, in which my hon. and learned Friend who now sits for that division trebled the Labour majority while the Tory candidate lost two-thirds of the vote which his party had had in 1959, Rolls Royce gave notice to 1,500 men. Since then, there has been a further dribble of redundancy among the workers, in addition to the normal wastage. Some of the workers' leaders told me last week that, as they believed, there were today between 4,000 and 5,000 fewer men on the books of Rolls Royce than there were in April, 1962. They added that there was no overtime now; that on the contrary at least 500 workers were on short time; and that on the average men were taking home, perhaps, £5 a week less than they were in April, 1962.

I do not think that the Government can escape responsibility for this result. I gather from what the Minister said this afternoon—and indeed I had learned it in Derby—that he has done something to right the injustice which he did by his original allocation of his orders some time ago. But I have risen to say that I hope that the same thing will never happen again. It is a grave national loss when Rolls Royce loses its skilled men and thus diminishes the tremendous contribution which it has made, and which it is making, to the economic welfare and international prestige of Derby, of Derbyshire, and of Britain.

6.51 p.m.

Sir Arthur Vere Harvey (Macclesfield)

I am sure that the Committee has enjoyed listening to the speech of the right hon. Member for Derby, South (Mr. P. Noel-Baker). A few weeks ago some of us on this side of the Committee spent a day visiting the Rolls Royce plant at Hucknall and Derby, and we were given information similar to that which the right hon. Gentleman has given us today.

This great company has been supreme in the world for 30 years in building aero-engines, but in the last three or four years it has been noticeable that the Bristol Siddeley company, under the direction of the able Sir Arnold Hall, has come on enormously and taken rather a preponderance of the more recent military orders. This has, of course, affected Rolls Royce. One hopes that it is only a temporary spell, and I hope that my right hon. Friend, in placing these contracts, will take note of the fact that apart from giving Rolls Royce a share of the production work given to Bristol Siddeley, it must have development work as well. The company has spent millions of £s on building a new test house—£6 million to be correct—and it must be encouraged, because, although it is a free-enterprise concern, it is a national institution. It would be a tragedy for Britain if anything went wrong with this company.

Rolls Royce exports since the end of the war have been enormous—well over £150 million—and the company has diversified its production considerably. It now builds marine engines, traction engines, and small aero-engines, and we must keep the brains alive in the design department. I hope, therefore, that my right hon. Friend will provide all the assistance that he can to support the company.

The hon. Member for Gloucester (Mr. Diamond) talked about the drop in export figures of the industry and, I thought, be- cause they had dropped, was being rather critical of the industry. I think we all recognise that the figure has dropped be- cause in the last four or five years the whole pattern of military aviation has changed. It is going over to missiles, as opposed to manned aircraft, and engines now last 4,000 to 5,000 hours between overhauls. I therefore do not think that the British aircraft industry can be blamed for the drop in exports. The same thing is happening in California with one of the large American companies.

The hon. Gentleman also spoke about the B.O.A.C.'s non-commercial routes. We know that B.E.A. run social services in Scotland where they lose money, and we were told that they are to buy two helicopters to operate from Cornwall to the Scilly Isles. I hope that my hon. Friend will tell the Committee which non-commercial routes are operated by B.O.A.C., because I do not think that the Committee has ever been given this information. Quite recently the B.O.A.C. extended one of its routes from the Caribbean to Peru. I understand that this was done because an aircraft was there overnight, and rather than leave it idle on the ground it went to Peru and picked up a few passengers and developed that route. It is not a non-commercial route. A route has frequently to be developed from scratch by the company which builds it up, as has been done on the London to Manchester route. Only a few years ago a mere handful of people travelled by this method between London and Manchester. Today one has to book a seat three or four weeks in advance.

I enjoyed the speech of my right hon. Friend, and I congratulate him on the stand that he has taken with the United States in this quarrel over fares. It is refreshing to see a Minister in Britain standing up for the country in a trouble like this, and it really is a trouble. The Civil Aeronautics Board in the United States is behaving in a most high-handed manner and, to be frank, since its success at the second shot at Cuba, I notice that the Americans give the impression that they want to control the free world. This is just not "on".

The increase in fares was agreed by the world's airlines back in October of last year, including the two United States carriers, Pan-American and Trans-World Airlines, and no objection was raised until 12th February of this year. This trouble has caused inconvenience to travel agents and passengers not only in this country but throughout the world.

Many of us would like lower fares, but if the world's airlines come to an international agreement it little behoves the Americans, who are telling us what to do in Central Africa and elsewhere, to back out of an international agreement. The same thing happened at the I.A.T.A. conference over the Decca navigational equipment. This was admitted to be the best equipment, but could the Decca people get into the United States? Of course not. The conference was rigged, and many of us know what took place. The decision was rigged in a most disgraceful way, and I hope that the Government will stand firm and, if necessary, ground two or three American aircraft at London Airport. This will do them all the good in the world. In the meantime I would prefer to see the whole business settled.

Mr. Rankin

While I would not quarrel too much with the hon. Gentleman's suggestion that the Minister should ground some American aircraft to teach them better manners, does not he think that the better step would be for the Minister to exercise his legal right and withdraw their licences to fly into Britain?

Sir A. V. Harvey

That means the same thing. If they fly in contravention of the licence they will be grounded, and the alternative is to stay at Idlewild.

I come now to the question of the B.O.A.C., which I think has been the main point of the debate, because the Corporation has lost about £14 million in two successive years. Obviously much is Wrong. I canot decide whether my right hon. Friend should publish the Corbett Report or not. If it is a damning report, it will lower the Corporation's morale still further. I am inclined to think on balance, however, that the situation is so serious that it would be better to publish the report and face the consequences.

Going back to the end of the war, some of us on this side of the Committee opposed the nationalisation of the airlines for reasons which we had then, but I think we can say with complete honesty today that everyone wants to see the Corporations succeed as British national carriers. There is, however, much wrong with the B.O.A.C. There is not so much wrong with B.E.A. who have done well, and it is our duty to try to probe the problem and make suggestions. In referring to this matter, hon. Gentlemen opposite blame the traffic lost to the independents as the main cause of this loss. If, however, the B.O.A.C. were given all the traffic which the independents have had, it would probably be only a flea bite compared with the Corporation's total loss. Sir Matthew Slattery has been chairman of the B.O.A.C. for three years. He is a fine man with a splendid record in the Service and with Short's of Belfast, and I wonder whether he is getting the support that he should from his own Corporation. When Sir Matthew Slattery took over he would have been wise to ask the Minister whether he would like to make changes in the constitution of the board of directors. I do not want to go into names or details, but anybody who examines the names will find that there are far too many non-executive directors. I would like to see some directors promoted from within—from among the senior captains. This happens in other airlines all over the world. They can make many practical suggestions for running an airline.

Nevertheless, after three years one would have thought that Sir Matthew would have begun to show results, but B.O.A.C. seems to be standing still. I cannot see the looked-for improvement. But we must remember that it is a thankless task being chairman of such a corporation. His decisions are questioned in this House every Wednesday, and two or three times a year the affairs of the Corporation are debated. The Government are fortunate to get anybody to take on the job under those conditions. I do not see how the Chairman and his immediate executive can run the Corporation under that rather remote supervision from Westminster. I would rather see something on the lines of K.L.M.—a concern in which the Dutch Government have the majority control, although it is run as a private company—or Swissair, which is remote from Parliament, although I agree that meantime we have a job to do as shareholders.

Nevertheless, B.O.A.C. is a shop window for Britain, and it is in the country's interest that all these problems should be straightened out. I agree with the right hon. Member for Derby, South that the Corporation is second to none for safety, but I travelled back recently from Delhi in a Comet, in the company of two other people, and—this may be regarded as only a small thing—when we boarded the aircraft we found that eight of the front seats were covered in such a way that they looked like coffins. They were covered by dirty old blankets. We found that the blankets concealed luggage. It seemed an odd place to stow luggage. The stewards wore shiny peaked caps and their clothing did not look very good. The furnishings were shiny and required re-upholstering.

We got out at Kuwait and Beirut in the early hours of the morning and asked for stimulants—and we were asked to pay for them. We did not have any local currency, even if we had been willing to pay. Other airlines treat these matters differently. If B.O.A.C. wants to maintain its good name for cabin service it will have to make improvements on that route.

In discussing international airlines we have a good yardstick to measure efficiency—unlike the case of the Coal Board or the Central Electricity Generating Board, which are wholly within Britain. We can make comparisons with other airlines, and in this connection I will venture to weary the Committee with a few revealing figures, which should be on the record. According to the latest figures available from I.A.T.A.—for 1961—B.O.A.C. had 74 aircraft; it had 295 employees per aircraft; revenue passenger miles per employee were 121,416, and the load factor was 57.5. Qantas had 26 aircraft; it employed 250 persons per aircraft; revenue passenger miles per employee amounted to 108,921, and its load factor was 53. Incidentally, Qantas has made a profit every year for forty years—remarkable achievement. South African Airways had 29 aircraft; 109 employees, against our 295; revenue passenger miles were 125,552, and the load factor was 55.2. Swissair had 35 aircraft, with 219 employees per aircraft; its revenue passenger miles amounted to 114,944.

Mr. Lubbock

Does not the hon. Member think it a little unfair to compare the number of employees per aircraft, since the other companies may be using different sizes and capacities? Would it not be fairer to refer to the number of employees per million passenger miles?

Sir A. V. Harvey

If the hon. Member had waited he would have found that I was going to explain that the companies whose figures I am quoting mostly operate small or medium-sized aircraft in addition to the larger aircraft. That strengthens my argument. They would be expected to have more employees. My figures are quite favourable to B.O.A.C. United Airways—a domestic company in the United States—had 286 aircraft, and 109 employees per aircraft. Delta, another United States airline, had 78 aircraft, with 109 employees per aircraft. 13raniff, which has routes to South America, as well as operating domestically in the United States, had 62 aircraft, with 89 employees per aircraft. Continental—another American Company—had 27 aircraft, with 105 employees per aircraft. It is worth noting that B.O.A.C. employed three times more men per aircraft than Braniff, which also operates outside the United States. This extraordinary situation must be looked into. I hope that the Corbett Report—published or not—will disclose some of these figures.

B.O.A.C. has suggested reducing its fleet by 10 aircraft and its staff by 900. In that case the personnel per aircraft will increase to 325, which will be four times greater than Braniff and three times greater than South African Airways. Putting it more simply, if B.O.A.C.'s efficiency is to be increased to the standard of Qantas there will have to be a staff reduction of over 5,000, and to make it comparable with Swissair, a reduction of over 7,000. I give these figures in order to show the appalling situation in which the Corporation has found itself, for various reasons. I agree that it has a problem, in carrying large losses, spread over the years, but I hope that when other remedies are brought in this problem will also be dealt with. We cannot allow the Corporation to go on spending taxpayers' money year after year when other airlines are getting more traffic.

The annual growth rate of B.O.A.C. per revenue passenger mile has been given at 9i per cent., but other world airlines have been averaging 14 per cent. B.O.A.C. has been consistently losing growth compared with other international carriers. The airline business of today is one of the most complicated and technical in the world. To be successful an airline organisation must be based, from top to bottom, on a deep and thorough understanding of technical requirements. Time after time in the House I have said that B.O.A.C. has lacked scientific men, who look into the question of future requirements of aircraft and equipment.

The British taxpayer is paying the price. Today, B.O.A.C.'s organisation bears no relationship to that which hard airline experience dictates as vital to economic success. Mr. Juan Trippe, president of PanAm, has been at the business for 25 or 30 years. We are up against the toughest men in the world in. these major airlines. This reflects on British-built aircraft I am told on good authority that some foreign airlines are dubious about buying British aircraft, developed by B.O.A.C., because of the poor showing which B.O.A.C. makes in running its services.

B.O.A.C. pilots are as good as any in the world in matters of safety, and they do their job well from any point of view. These pilots contend that the Corporation is being strangled, because fresh thought does not get through to the board. The board lives in isolation. The pilots consider that empire building is going on in various departments, and they state that the views of senior pilots are ignored and discounted—contrary to the practice of most other airlines. The impression of the pilots is that the economies which are taking place today are merely a political gesture, and that the Corporation is not really getting down to its job. We have read the B.O.A.C. Journal and the article written by the managing director, Sir Basil Smallpeice, who put the blame on the break-up of the British Empire. The hon. Member for Gloucester (Mr. Diamond) referred to this. Why was not this foreseen? The Dutch have gone through the whole process of seeing their empire broken up, and K.L.M., as a result, is half the size it was a few years ago. It does not take much imagination to know that the first thing which a colony does when it becomes independent is to open a bank and an insurance office and to buy a couple of Boeings, whether it can afford it or not. This is bound to affect the traffic of the corporation. The managing director said that to have acted in advance would have been sheer defeatism.

Nevertheless, the aircraft requirements in four years time will be 52, including three freighters, compared with 62 on hand or on order today. The House wishes to know which aircraft are to go. The hon. Member for Newton (Mr. Lee), who opened for the Opposition, was less than fair to the VC10, which is a remarkable British aircraft. My right hon. Friend cleared up many points in giving the exact position as he knows it about this aircraft. This is the most complex civil aeroplane built or flying so far.

The Boeing went through some stages of development in the American Air Force during which it continually had accidents and misfortunes. The VC10 has a slight drag problem. I am assured by a senior executive of Vickers that this has been practically overcome and that they are confident that the B.O.A.C. specifications will be met. The Boeings are now six or seven years old and there is nothing between the Boeing and the supersonic aircraft except the VC10. I feel confident that when this aircraft is operating on the North Atlantic route its passenger appeal will be such that the other airlines will be compelled to buy some or B.O.A.C. will collar most of the traffic.

Let us give credit where it is due to a British aircraft. The Daily Express today explained very clearly and lucidly the position about the VC10, and it is unfortunate that a week or so ago, I think on a Saturday, some of the national Press had headlines about the failure of the VC10 which were mildly contradicted by them a few days later. It is a great achievement of British designers and workers and it behoves all of us, if we reasonably can do so, to do all that is possible to help in its success. It is not easy to sell aircraft in the world markets against Americans, but we have an aircraft here which is worthwhile and we wish it every success.

I want to refer to London Airport. I asked me hon. Friend about the accommodation for domestic passengers who are flying, for example, to Scotland and Manchester from London Airport. I had a written reply that nothing much will be done until 1966. He assured me that he had been there to look for himself and, knowing him, I am certain that he has gone into the whole thing fully. But if he looks at London Airport accommodation when there is a flight delay or on Saturday morning he will see that there is absolute chaos. It is the worst possible advertisement for Britain. I am sorry to say that the Socialists are to blame. They will remember the late Lord Winster digging up the first piece of turf on 1st January, 1946. They were determined to build a monument to themselves regardless of the experience of other countries. It went up very quickly and the price is being paid now. The airport is congested. There is little room for expansion. All the traffic has to go through tunnels and the airport is quite unsuitable for a city the size of London.

Mr. Rankin

Does not the hon. Member agree that if the Labour Government had listened to all the expert advice they were given when they first considered the development of London Airport as a civil airport just after the war, they would not have made the airport as big as it is.

Sir A. V. Harvey

It is easy to be wise after the event. The fact is that London Airport as a system today is not capable of very much expansion. The hon. Member must know that when he flies from Scotland he has to get into a bus at London Airport and has a very slow ride. This is an inconvenience which all passengers suffer. I hope that my right hon. Friend will do something about it and will explain his long-term plan. It cannot be allowed to continue like this. It will probably require a large amount of money spending to reorganise London Airport, but it should be tackled before it is too late.

I conclude by a brief reference to the export of armaments and its effect on civil aviation. Some aircraft companies, through no fault of their own, are extremely short of work. This is partly due to a change in the pattern of the fighting forces and to some extent of the airlines. The fact that British industry will probably lose orders for South Africa cannot but have a damaging effect on the British aircraft industry. Huntings were about to conclude an order for 200 jet trainers at £55,000 each. Spares would have been sold for ten years. I am told that that order may well go to the Italians. My right hon. Friend's information confirms mine—that there are representatives from at least five countries now in South Africa selling their wares against Britain and giving their assurance that no strings will be attached.

The sad point is that it does not only apply to aircraft but has also affected orders for Bedford trucks, Land Rovers, hydro-electric equipment and equipment for modernisation of the railways.

What is the difference between supplying military aircraft to South Africa, who could never use them against the local people, and supplying Viscounts and possibly Britannias to Red China, which might well be used as troop carriers against India? I have never heard hon. Members opposite complain about supplying aircraft to China. Why should there be one set of rules for one country and another set for another country? I ask my right hon. Friend to give South Africa all the assurances that we can. I do not agree with apartheid, but nor do agree with what is going on in Hungary or any other country behind the Iron Curtain. Why should we differentiate? The speech of the Leader of the Opposition in Trafalgar Square was utterly irresponsible and damaging to Britain.

7.18 p.m.

Mr. Eric Lubbock (Orpington)

must take issue with the hon. Member for Macclesfield (Sir A. V. Harvey) in his concluding remarks which, I think, spoiled an otherwise admirable speech. The fact that somebody else is prepared to do it can surely make no difference to the question of whether we sell aircraft to South Africa. If you were to commit a burglary it would not be a valid argument in defence to say that if you had not been prepared to commit it, somebody else would.

The Chairman (Sir William AnstrutherGray)

Order. I hope that the hon. Member is not suggesting that I am prepared to commit a burglary.

Mr. Lubbock

No, Sir William. I should have said, "If one were prepared to commit a burglary".

The important part of the hon. Member's speech was concerned with the current financial difficulties of B.O.A.C., and that is the problem to which we should give our attention this afternoon. I do not agree with him that there can be too much discussion of the subject, but there may be too much discussion of it in the absence of proper information, which we frequently lack.

We have no more information today than we had at the time of the debate on the air Corporations Bill last November. On that occasion the Minister asked a number of very interesting questions but did not give the answer to any of them. May I remind the Committee what those questions were? He said: How far is the present management of B.O.A.C. to be held responsible for losses on operating account? How far have these arisen from circumstances outside its control? Could the Corporation have been expected to foresee the decline in traffic growth? Could it have insured against it even if it had foreseen it? Is it operating too many routes? Is its sales operations efficient enough? How does its performance compare with that of its competitors? He followed that string of extremely interesting and pertinent questions with the frank admission that he was not in a position to answer them in detail or any other relevant questions. He said: My plain duty…is to find out as far as I can the detailed facts about the losses and then to consider what action, if any, is called for from the Government."—[OFFICIAL REPORT, 6th November, 1962; Vol. 666, c. 818–19.] I think that the Minister was very much to blame for not doing that duty earlier when these losses could easily have been foreseen and for being unable to give the House at that time any account of the factors which had got B.O.A.C. into such severe financial difficulties. This is a question on which we are none the wiser today. The appointment of Mr. Corbett to look into these and associated questions was made last July, although it was not announced by the Minister until the debate on the Air Corporations Bill. At that time he said that the report would be expected in the spring. In answer to the hon. Member for Loughborough (Mr. Cronin) the Minister said on 25th February that the Corbett Report would be available in the course of March or early April. By the end of April he was saying that he expected the report shortly. He has told us this afternoon that he does not expect it until the end of May.

I want to make one or two points about the report. I agree that the Minister was perfectly right in instructing that it should be compiled, although I was not satisfied at the time, and I am still not satisfied, that the inquiry should have been led by an accountant. I know that the Minister's answer to this is that other experts have been called in by Mr. Corbett during the course of his inquiry, and, incidentally, I should like to know who those experts were, so that we can judge whether the right skills have been deployed in giving the answers to these vitally important questions.

I think that it would have been better if the team had been led by someone with direct experience of running airlines rather than by someone outside the industry, however good he might have been as an accountant. This point has been made before by, I believe, the hon. Member for Tiverton (Mr. Maxwell-Hyslop), who generally takes an active part in these debates and whom I am sorry not to see in the Chamber this afternoon.

Secondly I am extremely dissatisfied by the Minister's decision not to publish the Corbett report, particularly as he told us this afternoon that one of his main motives in not doing so was that it might embarrass the Government. I think that this would be a very good reason in favour of publishing the report. I do not understand why, when we have had what I think is an analogous discussion of the problems that the railway industry is going through, we cannot have a similar report on B.O.A.C. problems, and discussion on it.

One of the most pointed comments that I have seen on this in the Press was by Mr. Roger Bacon in last week's Flight International. He said something which I do not think I would dare say in the House of Commons: I suppose contempt for the public and Parliament has gone further than this, though I can't recall an instance at the moment. On the question of the Corbett report, I should like to ask the Minister why, since he must have known—in fact he did know—that it would take nine months to prepare—and in the event has taken longer than that—did he not think of asking Mr. Corbett whether he would make interim recommendations, so that the Government could take urgent action in order to improve what has turned out to be a steadily deteriorating financial position for B.O.A.C. If we are not to be allowed to see Mr. Corbett's report when it is produced, I think that it will make it much more difficult for us to comment on whatever recommendations the Minister will make ultimately to the House—in fact it will be impossible—although I should have thought that there were certain factors in this situation which might have been fairly evident without needing the services of this team of investigators to tell us about them.

First, it is clear that there is a bad relationship between B.O.A.C.'s management and some of the staff in the Corporation. The hon. Member for Macclesfield referred to this and said particularly that there are pilots who feel that people at the top of the Corporation do not take adequate account of operational parameters and there should be more experience of these operational requirements on the Board. I would heartily endorse what he said about that.

I should like to see a director elected to the Board of B.O.A.C. from the number of pilots employed by them. I would go further than that. I think that there should also be a director elected to the Board by the engineering staff. Those are the people who really make B.O.A.C. tick—the people who are flying the aircraft and the staff on the ground who are maintaining these aircraft and the engines which power them. I think that it would be very valuable for B.O.A.C. to have representatives of these two categories of people on the Board to bring their experience to the Board on the problems confronting B.O.A.C. today. Secondly, I think that it is clear that there has been wasteful duplication of activities in our total civil aviation effort, the very thing that the Act of 1960 was designed to avoid. There are a great man activities within the Corporations which could be combined to give cost savings. This is true not only of the Corporations but perhaps of the independents as well. I will give one or two examples.

There is the activity of the reservations. Both B.E.A. and B.O.A.C. are going ahead with separate computor backed systems for reservations. Would it not have been possible for them to have got together and have had a common system which would have minimised the expense falling on each and which would have enabled them to have an integrated operation for reservations? Then there is catering, which is in no sense an activity affected by the route one is operating, and which could well have been done in common by B.E.A. and B.O.A.C.

There is also the question of transport to and from the airport. This is a very important problem facing us. It seems to me to be one in which neither the Minister of Aviation nor the Minister of Transport is very interested. We are constantly told that as soon as the M.4 is built transport to and from London Airport will become much easier. I think that this ignores the experience of all our large cities, that when one builds these multi-lane highways the traffic increases, too. I am quite certain that when the M.4 is completed it will take just as long to get from Cromwell Road London Airport. My point is that we have B.O.A.C. and B.E.A., and independents as well, operating separate bus services from the centre of London to London Airport and these services could quite well be integrated and have a common terminal in the centre of London. That also would avoid duplication, and I could give many examples along these lines.

The final one which I wish to put before the Committee is of particular importance. That is the integration of the sales operations. B.O.A.C. announced proudly in its last Annual Report that it was opening new sales offices in various European cities. We have separate sales offices for B.E.A. and B.O.A.C. even in many British cities. I understand that in Leeds the B.E.A. and the B.O.A.C. offices are next door to one another. This is incredibly wasteful and something that I hope Mr. Corbett has looked into. Unfortunately, we shall not know what he has said on this subject.

There is, I believe, considerable antipathy in some quarters to the idea of merging B.E.A. and B.O.A.C. in their entirety in spite of the obvious potential economies in the matters that I have mentioned and many others. The principal objection which is enunciated by the opponents of such integration is that B.E.A. and B.O.A.C. operate on an entirely different route structure, with different types of aircraft and different types of engineering needs. But all this means that there are only two activities within the two Corporations which cannot be merged satisfactorily. Those are the operating and engineering sides of the airlines.

I wish to suggest a solution which would achieve the very desirable object of integrating those departments which could easily be merged while still keeping B.E.A. and B.O.A.C. as separate operating Corporations. My solution is that one could form new companies to carry out functions such as catering and transport to and from airports, those companies being jointly owned by the two Corporations. Perhaps even in certain cases there could be financial participation by the independents as well.

One could go further and have participation or co-operation by Commonwealth airlines operating in and out of some of the cities served by B.E.A. and B.O.A.C. By that means we could get the operating economy we are trying to achieve without having the problem of different route structures and engineering needs of the various airlines. This idea would, I believe, yield almost immediate commercial returns, although probably it would not solve the more fundamental problem facing B.O.A.C. at the moment of having too many seats chasing too few passengers.

It was unfortunate that last year, at the time when traffic figures were falling all over the world and this had already become clear, B.O.A.C. was still adding to its jet capacity. It now says that it will have 10 aircraft too many. When I asked the Minister this afternoon why the Corporation did not reconsider the orders still outstanding last year for three Boeing 707s he said that the purpose of this order was to meet an anticipated shortage of large jet capacity. There has not been a shortage of large jet capacity. It was pointed out as early as the spring of last year that there would be none. That was stated in the magazine Flight International.

The second answer given to this question by the Minister this afternoon was that we should still have to have the Boeing 707s to replace the Comets because people would no longer fly in Comets and the 707s had a greater attraction for the flying public. That I do not accept. I believe that many people in this country and in the Commonwealth will always put patriotism high on the list when they have to decide on which airline to travel. I confess that if I were offered the choice of going by B.O.A.C. in a Comet or by some foreign airline in a Boeing 707, I should fly by B.O.A.C. every time. I hope that many of our countrymen would take that view. I am sure that they and many people in the Commonwealth also would take that view. If, instead of writing down these Comets in the B.O.A.C. accounts, taking them out of service and replacing them by American aircraft, we had carried on with them for many years we might have made great savings in the position of B.O.A.C.

There are many airfields in the Commonwealth to which Boeing 707s cannot operate, so the Comets cannot be taken out of service altogether. It was a big mistake not to cancel the order for the three remaining Boeing 707s last year. The hon. Member for Newton (Mr. Lee) spoke of the supervision this Committee exercises over the way in which Ministry of Aviation money is spent. This is an outstanding example of the way in which we have no supervision and of how we are not given the facts on which to criticise this kind of decision.

If we had been in full possession of the facts last year, I think many would have joined me in this criticism. The basis of the trouble has perhaps been the absence of any form of directive from the Minister as to what objectives B.O.A.C. should pursue. We do not know to what extent the profit motive has been subordinated to the requirement of building up air routes round the world and to buying British aircraft. The answer to this question ought to be spelled out in detail. It would not be good enough even if the Minister said that the objective of having a sound aircraft industry was to be taken into account in the buying of aircraft for the Corporations. One would have to know to what extent that was true and to spell it out in detail so that there was no question of misunderstanding on the part of B.O.A.C. management or the industry which is making a living out of supplying aircraft. The requirements which Sir Matthew thought that he had to place at the top of the list may be perfectly legitimate ones and it may be that they ought to have taken precedence, but we should have felt happier if there had been some public discussion of the long-term objectives of the industry as a whole.

In the United States, as was mentioned earlier in this debate, President Kennedy commissioned a study known as "Project Horizon". I hope that the Minister has read the report and noted two very important facts about it. President Kennedy wrote to Mr. Najeeb Halaby, administrator of F.A.A., commissioning the study on 3rd March, 1961. The report was in his hands on 5th September that same year. Secondly, in the letter accompanying the report, Mr. Halaby wrote: Because of the wide public interest, I recommend that the report be released immediately and at the same time circulated among the various departments and agencies with a view toward early and vigorous fulfilment wherever desirable and feasible. The Corbett report which covers a much more limited field, is going to take nearly twice as long to prepare and, when he gets it, the Minister will withhold it from the House and the nation. Does he not consider that a report on the lines of "Project Horizon" would be of great value to this country?

Whether the Corporations should be integrated, either as a whole or on the lines I have discussed, the role of the Corporations vis-à-vis that of the independents, the long-term procurement policies which the Corporations and independents should be encouraged to adopt, and the part which aviation can play in developing Commonwealth links and the relationships between military and civil aviation —these are the kind of factors which ought to be considered in developing a logical policy for civil aviation. That policy is glaringly lacking today, as has been shown by this debate. I do not think it means that we need nationalisation, as some hon. Members on this side of the Committee claim, but it does mean that we need planning and co-ordination of our national aviation effort.

What is to be the pattern of events for B.O.A.C. over the next few years? Even if we had an "Horizon" type of report before us now there would still be some very unpleasant facts to be faced. Those could not be altered by any changes of policy we could make from now onwards. The loss in the year just ended, the Minister says, has been in the region of £14 million. Over the years, from 1962 to 1967, the Corporation will have to find no less than £117 million in debt retirement and £151 million to pay for the VC10s, assuming that that purchase goes through as planned. The Minister or his luckless successor will have to come to the Committee and ask for something like £250 million over the next five years if my calculations are correct.

Would it not have been wise to be perfectly frank with the Committee and to give us as detailed forecasts of these requirements as the Minister could so that we should know just what to expect for B.O.A.C. over the next five years? The situation might have been even more serious than that if the troubles of B.O.A.C. with the VC10s could not be cured and if, after all the introductory work done by the Corporation, it had been necessary to substitute some Boeings for the VC10s now on order.

I am sure that we must all congratulate the British Aircraft Corporation on its success in its efforts to eliminate the excess drag which was preventing the aircraft from meeting the specifications. It ought to be made clear that the aircraft now meets all B.O.A.C. requirements. The British Aircraft Corporation is to be congratulated also on the frank way in which it handled the difficulties and explained them to the aviation Press. It was a poor return when one national newspaper published a completely inaccurate report that the attempt to cure the design faults had failed. This kind of thing does a great disservice to the British aircraft industry at home and overseas, where I hope the VC10 will be an outstanding success.

These technical difficulties which have upset the VC10 lead me to question whether we are wise at this stage of knowledge of aviation to proceed with the development of the supersonic airliner in which the "unknowns" are much more formidable. It is not as if the subsonic aircraft has yet reached the limits of their development, because before the supersonic transport can possibly be in service there will be a third generation of subsonic jets which will give even better operating costs than the present ones.

The right hon. Member for Derby, South (Mr. P. Noel-Baker) referred to the great firm of Rolls Royce. I was glad to listen to his remarks. I am an old boy of the firm and I spent a great deal of time on the development of cooled nozzle guide vanes, to which the right hon. Gentleman referred. I should like to refer to the comments made by Mr. Ellis, chief engineer of Rolls Royce, who, speaking in Derby recently, said that by combining further improvements in the air cooling of turbine blades with the latest advances in materials in future by-pass engines "further substantial improvements" in fuel consumption and performance would be achieved. The report of "Project Horizon", which I mentioned earlier, said precisely the same thing.

It must be remembered that if and when the SST comes along it will be competing with subsonic jets the direct operating costs of which may be down to as low as one U.S. cent per seat mile. I think that it is impossible for SST aircraft to compete with that, and I wonder whether it would not have been better for the Government to spend this relatively large sum of money of £85 million on improving the economics of subsonic jets rather than on going into the development of supersonic aircraft of doubtful performance.

The right hon. and learned Member for Chertsey (Sir L. Heald) has made some wise remarks about the difficulties which face the House of Commons when it comes to making decisions of this kind. In his Graham Clark lecture last year he said that it was very difficult for us to make technical decisions when we have not the advice of technical people available to us. This is an outstanding instance of that kind, because no information has been published on supersonic airliners. We do not know how much they will cost and what their operating characteristics will be. When we try to probe these things we are told that for commercial reasons it is not possible to reveal them.

I turn now to the question of redundancy in B.O.A.C. Everyone in the firm concerned, and I understand that this also applies to B.U.A., had a very unpleasant shock on reading the remarks made the other day about the large number of personnel which the Corporations would have to get rid of. I thought that the hon. Member for Macclesfield was a little unfair to the Corporation in saying that it had such a large number of personnel per aircraft in comparison with many of the American airlines. In fact B.O.A.C. has drastically increased output per employee over the last 10 years, as the chart in its last Annual Report shows quite clearly.

We must distinguish two reasons for the situation that has occurred. Firstly, air transport is very sensitive to the volume of international trade as a whole and this is quite outside the control of any individual airline. Secondly, the price mechanism is important in the expansion of air traffic. The most successful airline on the North Atlantic route which has made a profit quite regularly is the Icelandic non-I.A.T.A. carrier using DC6B's which take 16 hours for the journey. This reinforces the point which I made earlier that people who have to pay their own fares are willing to accept some lack of comfort and speed relative to the big jets for a price which is differential. Travel could be made cheaper than it is now if we could have in the future the 9 per cent. rate of growth which B.O.A.C. has achieved in the past.

As for the current dispute between I.A.T.A. and C.A.B., I should be against any drastic action of the kind recommended by some hon. Members opposite. To ground American aircraft would possibly so inflame tempers as to make it even more difficult than at present to reach a solution. This is the sort of problem which is best solved by sober negotiation. I had the amusing thought that the action by C.A.B. in this dispute has been very similar to that of the Minister of Education in his rejection of the Burnham Committee's reward. As I listened to the Minister I observed a great similarity between his remarks and those made by myself and hon. Members on this side of the Committee when we discussed education the other day. The Minister said today, "Whatever may be said about the shortcomings of I.A.T.A., it has been in existence for 15 years and, until it is replaced by something else, we must all stick to it and try to make a Success of it." If we substitute "Burnham" for "I.A.T.A." the same remark applies.

As for redundancy in B.O.A.C. and B.U.A., there is an important point which the Minister should not overlook. Unless the operating side of the aviation industry can have some stability it will be much more difficult in future to recruit the kind of people we need. Any young man thinking of entering the service of an airline would be deterred if he thought that this situation was likely to be a recurring one. There is, therefore, a danger that lack of prospects in the aviation industry might prevent us in future getting the right calibre of people. We should remember particularly that the cost of training pilots is so enormous that we have here an asset which cannot possibly be treated lightly.

I suggest to the Minister that perhaps it will be possible to slow down the output of pilots from Hamble until we have got over this—I hope temporary—phase of an over-supply of pilots. Perhaps we could use the facilities at Hamble to enable pilots to keep their hand in when they are out of a job, because in order to qualify for their licences, which have to be renewed every six months, they have to put in a certain number of flying hours. If they have no job at the moment with an airline that is impossible and, therefore, they will be out of the profession for ever. I ask the Minister to consider the possibility of using facilities at Hamble to keep pilots who are out of a job at the moment in training.

I want to make two points in connection with B.E.A. I have spoken mostly of B.O.A.C., but, although B.E.A. is relatively profitable, I do not think that the discussion of B.O.A.C. should blind us to the fact that B.E.A. is equally important to the national interest. My first point is one which is perhaps of importance to the independents as well. One of the fastest growing components of the air transport industry at the moment, and one which I believe demonstrates the most obvious potential for future expansion, is in the inclusive tour market. I think there is a vast number of people in this country who could well afford to take holidays by air on the Continent of Europe if only they realised how simple and easy it can be.

We recently held in my constituency a great air fair, which the Minister opened, at the famous airfield of Biggin Hill—and where, incidentally, we attained an increased majority in the recent local elections. I had to work that in somehow. The main object of this air fair was to demonstrate to the general public the opportunities which are available to them, and to popularise air travel. To my own great disappointment, this very enterprising venture was virtually boycotted by the two Corporations. I believe that until one gets people into the state of mind of thinking of air travel as just another means of getting from A to B, and a very much more convenient one when compared with surface transport, rather than an adventure for the privileged few, the growth of air traffic will never reach the sort of level which is required to sustain a healthy and prosperous British airline industry.

But what is happening at the moment to all this inclusive tour traffic, which, as I say, is one of the fastest growing sectors of the whole industry? It is not going to the Corporations because they are not interested in it. It is not even going mainly to the independents. The hon. Member for Gloucester (Mr. Diamond) said that the independents had multiplied their inclusive tour traffic in the last ten years by 15 times, but the point is that it started from a very low base. Inclusive tour operations are an entirely post-war phenomenon. They did not exist at all until the early 1950s.

What I want to point out to the Minister in connection with this inclusive tour traffic is that it is all being snapped up by the foreign flag operators. These people, Sabena, Aviaco, and even some of the Communist airlines such as Tarom, the national airline of Rumania, are taking away traffic which could potentially be carried either by our Corporations or by independents, and I do not care which. I am not being political here. We have got the aircraft sitting on the ground. We have got Britannias which have been taken out of service by B.O.A.C., and which, as I mentioned last year, would be suitable for this inclusive tour traffic—very good aircraft from the point of view of passenger appeal and with the sort of range required to take them to the major holiday centres on the Continent.

I suppose that the answer that would be given by the Minister to this suggestion is that the Corporations do not really want traffic which is exclusively seasonal. One must admit that there is a very high peak in the summer for this inclusive tour traffic, and it might be difficult to employ these aircraft in the winter. I accept that answer partially, but I should like to know how it happens that all these foreign airlines are ready to grab it up. How can Sabena, Aviaco and Alitalia take all this traffic from our country when the Corporations say that they do not want it and when they have got aircraft sitting on the ground doing nothing and of which the Corporations are trying to dispose? The 700 series Viscounts, all the Britannias, whether 112 or 312 series, and the Comets which have been taken out of service are all eminently suitable aircraft for these inclusive tour operations.

The second point that I want to make on the question of B.E.A. is in connection with the Minister's announcement this afternoon of the introduction of helicopter services to the Scilly Isles. He said there would be a grant of £75,000 initially to B.E.A. to start it off with this service. I take it that will cover the costs of introducing these helicopters into service, stocking up with spares, training the crews and so on. I should like to be certain that the Minister has calculated what the cost of operating the service will be and that he has given B.E.A. a firm guarantee that it will be reimbursed for whatever the loss may turn out to be.

It is certain that it would be impossible to charge an economic fare for helicopter operations to the Scilly Isles. I think this is art important point to establish because B.E.A. is having to operate a great many uneconomic services at the moment. The Scilly Isles is only one example. There are the services in the North of Scotland which are in the same position. But B.E.A. does not seem to help itself. I am told that it operates Viscounts on some of these services to the north of Scotland where it is impossible for it ever to generate the traffic to fill such a large aircraft. It has got three Heralds, but there are not enough of these to be certain that they can always be on these services, and sometimes it has to operate Viscounts instead. I should like to know whether the Minister does not think there is a long-term requirement in B.E.A. for a smaller aircraft capable of fulfilling these social service functions, or alternatively whether he is considering that some of this work should be given to the independents.

I have spoken for long enough, and I shall skip the peroration, but I conclude by saying that the most important long-term problem which I have mentioned is that we should have a plan for civil aviation as a whole so that the manufacturers, the Corporations and the independents can work within the framework of such a plan to an expanding and more prosperous future. It is the Government's failure to produce such a plan, even at this late stage, which will force me to advise my hon. Friends to vote against the Government this evening.

7.57 p.m.

Mr. William Shepherd (Cheadle)

I give one undertaking, and that is that I shall not keep the House as long as the hon. Member for Orpington (Mr. Lubbock) has done. Neither shall I regale the House with snippets from Flight International which, I can assure the hon. Gentleman, I read from timer to time and which many of my hon. Friends read with considerable regularity.

I want to make one or two comments on what has been said from hon. Members opposite. Every time we have a debate on aviation there are references to the independents and a little shiver is sent down the frames of hon. Members opposite—a delicate shiver—at the ghastly situation in which these mammoth Corporations are menaced by the growth of the independents. We have had a repetition of the old act today, and it has been fortified on this occasion by the speech of the hon. Member for Gloucester (Mr. Diamond), who told us what a wonderful result B.U.A. had got and how this increase in profit ought to be referred to N.E.D.C.

Had the hon. Member attempted, as he ought to have done as an accountant, to look into the profit more closely, he would have found that of the profits of B.U.A., 75 per cent. come from trooping, and that trooping contract could end in 1964. Is this a very desirable basis for an operation of this magnitude, to try to run an airline on the basis of a contract which might be cut off entirely in a year or so's time? If the shareholders of B.U.A. are getting a little extra dividend today, it is a very small recompense for the risk they are carrying. I would say, contrary to what the hon. Member for Gloucester has said, that I view with considerable concern the position of independent operators in this country who are going to be compelled to fly more and more scheduled services. I think that against the flag barrier they have a very difficult task indeed.

Now, a word about helicopters. I really cannot understand my right hon. Friend's announcement. I remember that B.E.A. spent about £450,000 proving helicopters in flying them from Westminster to London Airport, to the considerable annoyance of many people. I do not see why anyone should want to prove again how much money can be lost in flying helicopters. No doubt, a helicopter service would make it very convenient for the right hon. Gentleman the Leader of the Opposition to fly to and from the Isles of Scilly more readily, but perhaps it would be better if he took longer getting there and longer getting back. All I would say is that, among the items on which I should be disinclined to spend more public money, flying the helicopter would have the highest priority. In thirty years of development, the wretched contraption has got nowhere at all—at least, nowhere commercially.

Turning to B.O.A.C.—I do not want to go into this at inordinate length, because we shall have an opportunity to discuss the matter arising out of the Corbett report—I hope that the chairman will refrain from making slashing attacks upon the position which he occupies. I know that his operations are difficult and B.O.A.C. has problems. I realise that having to fly a lot of useless miles, having to buy British aircraft and having other State requirements put upon one does not help, but this is the situation, and it is, I feel, much better, if one is doing badly, as B.O.A.C. is doing, not to complain that the blame lies everywhere save on oneself. It would be very much better, I suggest, if the chairman of B.O.A.C. refrained from creating the impression that everyone is wrong except Sir Matthew Slattery.

I am very pleased that the problems of the VC10 seem to have been overcome. I have great faith in this aircraft, if only for the reason that I.A.T.A. means that one flies on whichever aircraft one likes. If we have in the VC10 an aircraft very quiet in operation and giving to the passenger the same sort of comfort and quiet which the Caravelle gives, a lot of people, I am convinced, will opt for this aeroplane across the Atlantic and elsewhere. As the 707s are now coming towards the end of their life, though not entirely, I hope that we shall have a substantial number of orders from overseas for this magnificent aircraft.

Now, the Corbett report. My right hon. Friend knows my views. I regard the set-up as bad. I should never have given this job to an accountant on his own. It is too big a job for one man, even if he brings in one or two other individuals to help him out, because, ultimately, his judgment colours what other people say to him. I would have had on the job at least three people with more varied experience than an accountant can have, and I should have preferred, on the whole, an arrangement which would have enabled publication of the report.

I realise that there might have to be some deletions. With a whitewashing report like the Vassall Report, my right hon. Friend would not have to worry. He could publish it ten times over and there would be no anxiety. If he receives a report with some meat in it, a report which says some of the things which some of us may think but do not say publicly, there can be problems. Nevertheless, it ought to be possible to get together with those affected, Mr. Corbett and the B.O.A.C., and agree upon such deletions as are necessary in the public interest. I hope that my right hon. Friend will consider this. A lot of public money is involved. A lot more public money will be involved in this Corporation before another ten years are up and, when this amount of public money is involved, it is desirable that the report should not be private to the Minister. When all is said and done, the Minister is only the temporary keeper of the public purse in this connection. We, the taxpayers, are permanently responsible financially.

Turning to the subject of subsidy, I have no doubt in my mind what I want to see the Corporations do. I want them to pay their way. I want them to be commercial operators. If this is to be—I feel that we must aim at it—we must give them subsidies if they fly uneconomic routes which otherwise they would not fly. I do not like disguised subsidies. If we have to spend another £5 million a year to make Scotland a habitable place—

Mr. Rankin

For Englishmen.

Mr. Shepherd

—all right, even for Englishmen—let us say so in specific terms. Let us not disguise the fact that we are giving subsidies. If we attempt to continue to operate on the present subsidy basis we shall have Sir Matthew Slattery and other people asking how they can make their business pay when they have to fulfil these social functions. I hope that my right hon. Friend will do his best to arrive at a situation in which there are no routes which have to be flown on a social basis unless there is a countervailing subsidy.

I come now to Rolls Royce, about which the right hon. Member for Derby, South (Mr. P. Noel-Baker) spoke so effectively a little time ago. All that the right hon. Gentleman said about the great service which Rolls Royce has rendered to this country is true. Unhappily, he did not deal with some of the matters which have been rather less satisfactory during the past few years. I do not want to sound too disturbing a note because, having regard to the propects for the Spey engine, one can come to the conclusion that Rolls Royce will, for the next eight or nine years, just about keep its place; but, of course, in aircraft engine manufacture this is a relatively short time and, undoubtedly, Rolls Royce has in the past few years to some extent lost the touch which it once had.

Mr. Lubbock

No.

Mr. Shepherd

The hon. Gentleman says "No", but one can point to a number of ways in which the company has failed to make the grade. Clearly, this must happen to all companies at some time or other.

Mr. Lubbock

If the hon. Gentleman says that kind of thing, he ought to substantiate it. He has admitted that the Spey engine is an outstanding engine. In what respect has Rolls Royce fallen down?

Mr. Shepherd

I do not wish to take up the time of the Committee as the hon. Gentleman did. All I am saying is that, in many instances, Rolls Royce has failed to win orders which, perhaps, four, five or six years ago it would certainly have won. This must mean that there is something not entirely satisfactory in the set-up.

One of the features of the company to which I draw my right hon. Friend's attention is this. It has a part-time chairman. In an organisation as big as this, into which my right hon. Friend pours a great deal of money, which carries a large part of the engineering prestige of this country, having a part-time chairman from the City is not the right sort of arrangement. My right hon. Friend has his own problems in finding men for jobs, and they are quite pressing at the moment, but I hope that he will do what he can to influence affairs with the idea that a new broom, a whole-time broom, should come along to this company. At present, I feel, it needs that stimulus and, in particular, I feel that it needs a stimulus in its methods of production, which could be taken forward a stage beyond that at which they now rest.

Mr. P. Noel-Baker

Will the hon. Gentleman substantiate a little further what he has said? Merely to talk about a part-time chairman does not make the case which he has stated in general terms. The total of £55 million worth of exports in 1961 which I gave does not seem to indicate failure during the past five or six years.

Mr. Shepherd

I am not saying that there has been a failure. I ask the right hon. Gentleman to follow the point I make. In this industry the cycle is long. Clearly, there is no immediate danger. All I am pointing out is that, for instance, in the past year or so Bristol Siddeley has made great progress and has done extraordinarily well. If the right hon. Gentleman asks me to point out where Rolls Royce production is not sufficiently competitive, let us look at the diesel engine business. Here one will see a very marked difference in costs. As the right hon. Gentleman knows, Rolls Royce is pulling out of that field.

Mr. P. Noel-Baker

British Railways are not making the kind of single coach unit Rolls Royce wants to put forward and which I think would be a very good plan.

The Temporary Chairman (Sir Harry Legge-Bourke)

Order. I do not think we can discuss railway coaches on a Ministry of Aviation Vote.

Mr. Shepherd

I realise that we were straying from the real purpose of the debate, Sir Harry. I will have a talk with the right hon. Gentleman afterwards when we can go into greater detail.

British aircraft manufacturers face a difficult task to compete against the Americans, who have larger orders and a lot of military backing. Another difficulty is that their aircraft have to be ordered for one corporation, or, at most, two corporations. Often we are not producing the kind of aircraft which would have the highest export sale. The Trident is, perhaps, one example of this aspect. Is there anybody in the Ministry of Aviation which tries to ensure that what we go for—and, with our resources we can only go for a limited number of projects—is the project with the best possible sale overseas, military or civil? We are losing overseas business because of the lack of an organisation of this kind. I ask my right hon. Friend to look into this point to see whether he can do something to ensure that, with the limited resources available to us, we maximise our export prospects.

8.12 p.m.

Mr. John Rankin (Glasgow, Govan)

I have sat in the Chamber since the debate started. The amount of information which I have acquired during its progress is so great that if I were to try to use it I should make the hon. Member for Orpington (Mr. Lubbock) look like a short-distance runner. However, as I realise that there are still one or two hon. Members who have, perhaps, not too vain a hope of saying a few words, I will mention only some of the more recent points which have been raised. That will not prevent me from dealing with the main reason which has caused me to sit in the Chamber all day, and that is the issue raised by the hon. Member for Ayr (Sir T. Moore). I shall return to the question of Renfrew, Abbotsinch and Prestwick Airports. I give that notice so that hon. Members may be fortified in the knowledge that, while I wish to cover one or two points, that is only the beginning.

First, I wish to support what has been said about Rolls Royce, for the simple and personal reason that it is a great source of employment on the verge of my division. It also provides work for many people in Hamilton and East Kilbride. Naturally, we in the west of Scotland are interested in the hope expressed today that Rolls Royce will be maintained, if necessary by Government help, because we have suffered enough unemployment. We do not want any more. I shall not go into the aspects of the problem which have been raised by the hon. Member for Cheadle (Mr. Shepherd), because it is too late, but I wish to make it clear that I believe that Rolls Royce is a great engineering firm, and I hope that the Minister will ensure that it continues to play the part in the engineering industry which it has been playing for a long time; perhaps with help from the right hon. Gentleman.

I listened with interest to the argument about whether there should be a greater field of recruitment for directors to the two Corporations. The Minister will recollect that some time ago I put a Question to him asking if he would widen that field and not restrict it to air marshals, as seemed to be the case. I have not the slightest doubt that these are able people, but I suggested that the right hon. Gentleman might consider air captains. I do not think that he was hostile to the idea. Captains have shown that they have knowledge of the industry and ability and that they have capacity for making quick decisions, which are necessary in their occupation.

The field has been expanded during the debate, and I wish to expand it still further. When we are thinking of all the people interested in running these two great industries, do not let us forget the men who work in them, those who are commonly called the workers. If the engineering and refreshment and catering sides should be represented on the board of management, why not the workers? Why should not there be a director on the boards of B.O.A.C. and B.E.A. who has an intimate association with the working side of the industry?

Like other hon. Members, I wish to mention the situation at London Airport with particular reference to the roads. To suggest that the roads at London Airport are chaotic would be flattering to them. They are absolutely unbelievable. The parking regulations are disregarded. Yesterday I saw six car owners booked for parking next to the main building in a place where there were notices stating that owners should not park there. At times it is almost impossible for people in transit to the terminal building to get through. I ask the Minister to have a very close look at the disorder and chaos which exists on the roads and passageways at London Airport. I could include in that the terminal. I have had to protest to the manager at the terminal because of the occasional inability of our bus coming from London Airport to get through.

I turn to the much talked of Corbett report. The Minister is not going to publish it. I will not quarrel about that. However, in view of all that has been happening recently in Great Britain and other parts of the world, can the Minister guarantee that the Corbett report will not "leak" or that it will not be "leaked"? One can think of what the consequences to B.O.A.C. would be if the contents of this report got out. No one can reject that possibility. Obviously, the one way to stop it leaking is to publish it, so that we will know the truth. Then, we would be able to discuss the report in all its implications.

A good deal has been said of the financial standing of B.O.A.C. That involves the supersonic project. I was pleased to listen to the interesting remarks of the hon. Member for Gillingham (Mr. Burden) about the Concord, but the hon. Member did not take part in the debate which I initiated on the Christmas Adjournment, when I would have welcomed his aid. Some of the points that were put forward by the hon. Member today were made in that debate by myself and other hon. Members.

Mr. Burden

I am in very good company.

Mr. Rankin

When the hon. Member is near me, he is always in good company. I was interested in what he had to say about the Concord.

I have been trying to find out what has been happening since Christmas and I am told that everything is going according to plan. I assume that the Minister may be able to verify this tonight and to tell us that the companies are associating harmoniously. Apparently, there is now an Anglo-French understanding which was lacking a month or so ago. I was glad to hear this and I hope that everything that the right hon. Gentleman has told us about the supersonic aircraft will be realised.

The fact remains, however, that nobody expects the Concord to fly 3,000 miles. The Minister tonight has the opportunity of saying if I am wrong and that the Concord will fly 3,000 miles. I hope that it will. If it does not, it will fail in one of its major purposes.

There is, however, another aspect. During the debate to which I have referred, I spoke about what was happening in the United States of America, where people are thinking in terms of Mach 3. Quoting top-level information, I said that Mach 3 had become, not merely a feasible, but a practical proposition. That was the view of high-level authorities in America. One would like to be assured that the Minister is closely informed of the progress which is being made in America towards developing and ultimately building a Mach 3 aircraft.

I congratulate the right hon. Gentleman on some of the things he said today. When he spoke about the helicopter, I made a note to ask whether it would be cheaper to operate than the Rapide.

Mr. Amery

indicated dissent.

Mr. Rankin

That settles it. If it will not be cheaper to operate, it will be difficult to convince operators that it is fair to ask them to operate it. I take it, therefore, that the subsidy will meet any deficiency that is created.

One of the troubles of the Corporations is that they have been used as intruments of the Government in a great many ways that we little dream of. B.O.A.C., which is condemned because of its somewhat weak financial standing, is to some extent in that state because it has done what the Government have asked it to do in the purchase of aircraft and in the operation of uneconomic routes. The Corporation has purchased aircraft which have come on to the market too late and were not economic in the period during which they were operated. B.O.A.C. had to pay for these things and is now being condemned.

Hon. Members who condemn the Corporations should recollect that many of their losses have been incurred because they carried out a policy which the Government forced upon them. I hope that the Minister will not do the same with the supersonic machine and expect B.O.A.C. necessarily to take it over regardless of the economic consequences.

Nevertheless, I welcome the advent of the helicopter as a commercial aircraft. I ask the Minister whether we can now look forward to the day when the helicopter will carry us from London Airport into the centre of London.

Mr. Bence

Or Glasgow.

Mr. Rankin

The helicopter would be too slow now to take us to Glasgow. We are accustomed to 500 m.p.h., not 100 m.p.h.

Mr. Bence

I meant from Abbotsinch to Glasgow.

Mr. Rankin

Yes, of course. Why not? If we can have the helicopter to cross the English Channel, why not use it to cross the seas that separate the Western Isles from Scotland? If it is possible in the one case, so it is in the other. If it could be used to ensure the transit of passengers from London Airport into the centre of London, it would do a considerable service in reducing road congestion on the route about which hon. Members have been complaining. If that is a vision in the Minister's mind, I wonder what he will do with that huge edifice, the new terminal, which is being built at Cromwell Road.

I congratulate the Minister on telling us that blind landing is now a possibility and that the Trident and the VC10 will be fitted with blind-landing apparatus. The right hon. Gentleman will remember that last July, when he was telling us about his own blind-landing experiences, I interrupted him, briefly as I always do, to suggest that he might share them. He immediately accepted that suggestion and as a result, a number of us, from both sides of the Committee, had the opportunity of making blind landings in November last year.

I should, of course, explain that the blind landing on that occasion was done on a clear day. There might be a difference psychologically between blind landing on a clear day and on a day when it is not possible to see very much in front of one. The two experiences may be quite different. I hope, however, that the conclusion will be equally happy and some day, perhaps, we will fly from Glasgow into London, not blind, but landing blind. That would be tremendous revolution in air transit because of the disturbance that fog causes to aircraft schedules.

I want now to deal briefly with the main part of what it is essential to say in regard to the business of Renfrew and Abbotsinch. I am sorry that the hon. Member for Ayr is no longer in his place. He spoke earlier today, and since then has not been within the Chamber. He did not say much of consequence. His speech was short and it contained absolutely no argument in favour of going to Prestwick—other than this, that when speaking he built a new diesel service between Glasgow and Prestwick and that of course, was a remarkable thing to do in a speech of 15 minutes. He built a new diesel service and told us that we could now go from Glasgow to Prestwick and vice versa in 25 minutes. That is sheer fantasy, as the right hon. Gentleman knows. There is no diesel service in existence.

For 10 years—indeed for more—we have been talking airily about a diesel service which will move people rapidly between Glasgow and Prestwick so that one just lands at Prestwick and then is whisked at diesel speed to Glasgow—and there the new age has started; but, unfortunately, we have not just entered the new world in getting up to Glasgow in that time.

What are the facts about the diesel service as one reason for going to Prestwick? In order to get the matter into its proper perspective I consulted the general manager of British Railways in Scotland, and he said that the diesel service had not been thought of. At the present moment, indeed instead of thinking of opening new services, the policy of the Government is to close existing services. They are not going to expand them, yet a stalwart supporter of the Government gets up and tells us today that at the period when we are closing services he is going to open another. Whether he will be allowed to do that or not I do not know, but this problem of the diesel service of diesel trains carrying—

Mr. McMaster

On a point of order. Many hon. Members want to speak in this debate, and is it in order, Sir Harry, for an hon. Member in a debate on civil aviation to talk about diesel services?

The Temporary Chairman (Sir Harry Legge-Bourke)

I was listening very carefully to the hon. Member for Glasgow, Govan (Mr. Rankin) and I had a feeling that this was not related to aviation, and I was about to ask him to relate what he was saying to the Vote. I would ask him to bear in mind that we are on the subject of aviation.

Mr. Rankin

Yes, Sir Harry. I have had that in mind for about six hours, and I had it in mind when the hon. Member for Ayr was speaking about diesel services which would connect Prestwick Airport with Glasgow. To that there was no objection at all, and I fail, with great respect, to see how it becomes out of order when I speak of it; when it was perfectly in order for another hon. Member on the Government side to deal with it. With regard to the interruption by the hon. Member for Belfast, East (Mr. McMaster), I shall do my best to finish in good time what I set out to say, but I am very sorry that he has made his objection only at this point in the debate and did not make it earlier.

I want to point out, as I said, that this is merely a fantasy, because while it is easy going down you cannot, Sir Harry, have a diesel train sitting waiting on every aircraft which comes into Prestwick Airport, and the Minister knows it.

I want to look at what has happened in this argument, which has gone on for some time, because of certain things which were said today. I want to take the Committee back to the first Question which was put to the Minister by me. It was for written reply. I asked the then Minister in charge of aviation whether or not he had anything to say about the development of Renfrew Airport and these were the words the then Parliamentary Secretary used in reply: There are certain limitations on the further development of Renfrew. My right hon. Friend is therefore considering whether, in the event of the Admiralty deciding to withdraw from Abbotsinch, that airfield might make a better airport for Glasgow in the long term than Renfrew."—[OFFICIALREPORT, 1st February 1960; Vol. 616, c. 96.] That was the reply to my Question on the future of Renfrew. I returned to the matter on 4th July, 1960, when the hen Minister, now the Secretary of State for Commonwealth Relations, in reply to a similar Question, answered in these words: The surrounding buildings and docks will make it difficult to provide at Renfrew satisfactory facilities to meet the anticipated future requirements of air traffic. I am therefore considering whether a suitable airport for Glasgow could be provided elsewhere, possibly at the Naval Airfield at Abbotsinch, in the event of the Admiralty deciding to give it up. In any case, Renfrew Airport will continue in operation for the next three years."—[OFFICIAL REPORT, 4th July, 1960; Vol. 626, c. 19.] I hope the right hon. Gentleman is paying attention to that closing phrase—the next three years. The story continues on 14th November, 1960, when the present Minister of Defence who was then the Minister of Aviation, in reply to my Question as to what was the future of Renfrew, replied in these words: I have been considering what airport should he used to replace Renfrew in about three years' time. I have consulted my right hon. Friend the Secretary of State for Scotland and my noble Friend the First Lord of the Admiralty and a number of bodies representing Scottish opinion and the travelling public in the Clyde Valley. I have also recently visited Renfrew, Abbotsinch and Prestwick. My noble Friend has decided that the Naval Air Station at Abbotsinch could be closed. That was three years ago. It is still open; and today I was told it would be closed again in September of this year. The right hon. Gentleman went on: It will then be taken over by my Ministry as the civil aerodrome for the Clyde Valley. Nothing could be more definite than that. It was a clear Government decision indicating Government policy over this airport.

On that day I urged the right hon. Gentleman to speed up the matter and try to reduce the period to less than three years. The right hon. Gentleman said that he would certainly consider it but pointed out that there will be a good deal of work to do at Abbotsinch before it is converted into a civil airport. Despite other advice which the Minister received on that occasion, he went on to say: I have made what I think is the best decision I can."—[OFFICIAL. REPORT, 14th November 1963; Vol. 630, c. 27–8.] Later on the same day the right hon. Gentleman said that his mind was "absolutely clear" on the matter of going to Abbotsinch.

Having got the airport from Renfrew to Abbotsinch, I then proceeded through Questions, by the usual House of Commons procedure, to get an architect to design the airport. The airport is not there yet. An architect was appointed in 1961, but there is no sign that he has been operating even in 1963, the year in which the then Minister of Civil Aviation said he hoped the airport would be in use. There has been no progress since.

Is the right hon. Gentleman going back on that promise made by one of his predecessors about the future of Renfrew Airport? The right hon. Gentleman must speak clearly on this matter. He now says that negotiations are going on about this with Glasgow. But that promise was made before there was any talk about meeting Glasgow. The promise was made in 1960, and the White Paper published in August, 1961, had nothing whatever to do with the promise the Minister made on behalf of the Government about the transfer of the airport. There was never any talk about entering into negotiations with Glasgow. Glasgow was not considered or consulted about the matter. Now the subject of consultation is being used as a reason for holding up the transfer from Renfrew to Abbotsinch of an airport which handles an average of 800,000 persons a year.

I hope that the Minister will not make use of a situation which did not exist when a firm promise was made about a civil aerodrome being built at Abbotsinch. If the right hon. Gentleman wants to keep his word, I hope he will go ahead, as I urged him to do last week, and build the airport. He gave a promise to build this new airport which his predecessor had promised. It has been the same Government talking. The right hon. Gentleman should proceed to build the airport. As he has claimed that since that promise was made a new policy with regard to the ownership and maintenance of state aerodromes has been pronounced by the Government, he should talk that aspect of the problem over with Glasgow Corporation and ask what it is prepared to do to help.

But I submit that the onus is on the Government because their honour is bound up in this. If they break the pledge which was given, they will dishonour themselves. I hope that the right hon. Gentleman will consider this business very seriously. He had made a promise, and he can go ahead and carry it out and at the same time have talks with Glasgow to see if a reasonable compromise can be reached on the issue of meeting the capital cost which will be incurred in building this great new civil aerodrome.

8.45 p.m.

Mr. John Eden (Bournemouth, West)

The three votes before the Committee, involving proposed expenditure of about £360 million, cover such a wide range of subjects that I suppose it is inevitable that, in order to do justice to them, one must speak for more than the few minutes I have allotted to me at the end of the debate. I have listened with interest to the many speeches and find, therefore, that I can refer quite readily in passing by way of agreement with many of the points my hon. Friends have made.

First, I want to say how very much I agree with my right hon. Friend's actions over the Atlantic fares. The attitude of the C.A.B. is quite indefensible. Having come to an agreement, after considerable negotiation and discussion, the Americans must surely stick to it. It is quite wrong, whatever else may be the arguments the Board chooses to bring in, that it should seek now to take unilateral action to overthrow an international agreement in this way, and I strongly support my right hon. Friend, as I am sure the whole Committee does, in his determination to stand firm and protect the interests of the other parties to this agreement so solemnly entered into.

Hon. Members opposite are really over-sensitive about our air Corporations. It is time they forgot the nature of the birth of the Corporations and stopped looking back into the past and to background history. Instead they should contemplate with greater seriousness how we are to help the Corporations in the future. This, at any rate, is what our forward-looking Government are doing, although we can hardly expect that from the backward-looking Opposition.

As has been pointed out in a number of speeches from this side of the Committee, there are differences between the two Corporations. On the one hand, there is B.E.A., where the morale seems to be very much better than the morale of B.O.A.C., and where the prospects seem to be so much more encouraging at the moment. B.E.A. carried nearly 5 million passengers last year. It occupies a prominent position in the league table for world airlines, and is budgeting for a very substantial profit in The coming year. I hope that it Secures it.

The fact that there is a better morale throughout B.E.A., if I sense it aright, must be in no small way due to the robust management and personality of Lord Douglas of Kirtleside, who has had some 15 years' experience at the helm and has proved a great leader. B.E.A. has hopeful prospects for the future, particularly now that it is building up its fleet with D.H. Tridents. There is no finer aircraft flying today or so far developed towards coming into service.

The picture at B.O.A.C. is a little less happy, and I agree with some of the strictures which have been levelled at it, although I feel that it is too easy to attack an organisation like this. I should hate the job of having to boss an organisation of this kind. It is very tempting to snipe at people in such a job, but I know that every one of us must wish that B.O.A.C. will get over its immediate difficulties. Certainly I echo very much what my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) said—that it is our hope that both Corporations will thrive and continue to carry the flag of the country with a greater degree of success in the future.

Mr. Bence

The hon. Member is making a party point.

Mr. Eden

It is not a party point, except possibly to Members opposite.

I was very pleased to hear my right hon. Friend's reassurances about the VC10. Can he say whether it was the case that B.O.A.C. was forced to buy the VC10? Was it required to place this order? If so, and if the aircraft was tailor-made to B.O.A.C.'s specifications, I cannot understand why so soon after the work had got under way B.O.A.C. asked for modifications in the range and the capacity. I should have thought that that could have been thought out from the beginning instead of having to make the modifications to bring about the Super-VC10. Perhaps I am wrong, in which case I hope to be told so, but this has certainly happened in other cases, which shows the need for the manufacturers and potential users to get together as closely as possible and being in the closest co-operation throughout the stages of the development of an aircraft.

The pilots have had a good innings in this debate and, whatever else may be said for them, they have certainly drawn the Committee's attention to their views. I hope that they succeed in drawing the attention of their employers in the Corporations to their views equally effectively. It was interesting to note that they felt that the fault was in B.O.A.C.'s middle management and that it was here that they would like some changes. I am not in a position to judge, and I appreciate that this was probably one of the matters investigated by the Corbett Committee.

I notice that the proposed cutback in the number of aircraft on order for B.O.A.C. might result in about 800 jobs being declared redundant. I cannot help wondering whether the actual number should not be more than that and whether this does not reflect one of the troubles in B.O.A.C. All the way through, the Corporation has been hampered by the political activities of some of the unions, as hon. Members opposite well know to be the case. The whole country would be happier if it could get rid of those troubles. If it is contemplated that only 800 jobs will become redundant, it might be that an altogether fresh look at the employment structure is needed.

I join with those who have advocated that more heed should be given to the views of the pilots. The pilots have been advocating, for example, that the United Kingdom should bring aid to the under-developed countries by the provision of navigational aids. Pilots particularly feel this strongly, flying, as they do, fast and heavy aircraft into airports not so adequately equipped for dealing with them as those in more developed countries. At any rate, would my right hon. Friend consider bringing operational pilots into some of the work done on the Supersonic Transport Committee for example, if he has not already done so? This is certainly something worth taking up and he might keep in close touch with the pilots' organisations on this and related matters.

On traffic control problems; I am delighted to see that my right hon. Friend has been active in promoting the work of Eurocontrol, but I wonder whether in dealing with the problems of supersonic aircraft there should not be some kind of supra-national body, a much wider international body than the present European organisation.

Can my right hon. Friend assure the Committee that the British electronics industry is having as strong a say as it should in the development of the supersonic aircraft? We do not want to leave everything to the other partners in the sense of the important and interesting technological developments which are taking place. The British electronics industry, for which my right hon. Friend has a responsibility, has a very strong claim to effective participation in these developments.

I shall not say too much about the independents, because this point has been covered, but hon. Gentlemen opposite seem to lay all the blame for the Corporations' difficulties on the activities of the independents. This attitude was not shared by the 1961 Report of the Air Transport Advisory Council which said; The Council considers that…the increased participation of the Independent Companies in scheduled services has been achieved without materially restraining the growth of the Corporations' traffic. That was a considered view, and I do not think that the views of the hon. Member for Newton (Mr. Lee) come into the same category at all.

I think that we must have regard to the relationship between the independents and the Corporations in the future. We have to bear in mind the enormous cost of replacing aircraft, and we should ask ourselves whether it is likely that we shall be able to support two Corporations and a number of independent airlines in the future. At any rate, whatever happens I think that we must see this whole problem from the national viewpoint and not so much from the narrow limited perspective of the Opposition who see this as one more argument to try to promote nationalisation as opposed to private venture.

There must be some form of partnership between the two, and it is this form of partnership in the operation of our civil airlines which must be reflected to an even greater extent in the work being done in research and development and manufacturing industries generally. Here I welcome very much Subhead E.2 of Class IV, Vote 7, which is a token provision for underwriting the production of transport aircraft if we want to get them with greater urgency. I am delighted to see this token provision, and I hope that it will lead us to backing the right projects and making decisions early enough to ensure that the advantages which they appear to have are followed up as quickly as possible.

My right hon. Friend referred to the BAC 111, a private venture aircraft, which already has a fine story to tell, and I hope, as my right hon. Friend does, that they will succeed in selling this aircraft to other American airlines.

The support for research and development work by industries totals about £200 million in Subhead C.1 of Class IV, Vote 7. While this is a large sum of money, what I am concerned to ensure is that we are so organised in Government and in industry as to be able to make proper speedy assessment of the projects worth backing. For example, can my right hon. Friend tell us whether the Government have made a decision to back the lamina flow concept work being done by Handley Page? Again—and here I support the right hon. Member for Derby, South (Mr. P. Noel-Baker)—has a decision been made about backing Rolls Royce in the breakthrough in new materials? It is important that we have the machinery by which we can recognise a winner and speedily follow it up with firm backing, because where resources are limited we must be sure that our main effort as a nation is directed to those projects which will bring the maximum advantage to the country as a whole.

This is particularly important in space research. I notice under Subhead C.2, that support for research and development work by industry for space projects totals £1,175,000. This seems a small sum compared with the £9 million contributed to E.L.D.O. I hope that we shall not burn our fingers with E.L.D.O., and, more than that, that we shall not dissipate any of our resources which could otherwise be more properly channelled to work in British industry.

Finally, I come to the question of the organisation of Government control of this work. This is clearly an enormous subject, and it is high time that fresh action was taken. I know that my right hon. Friend has this very much in mind.

We are all grateful for the work of the R.A.E. and the N.R.D.C., but there must be close co-operation between the Civil Service and the Departments on the one hand and the research bodies, the universities, the industry and the establishments on the other. We are living in the age of the technocrat, and I want to see the technocrat becoming as much a part of Government establishment here as he is in the United States. For these developments we must have a single Minister in charge. It is no good switching responsibility for space matters from one Minister to another, with nobody knowing who is responsible for co-ordinating the programme. We must bring these things together.

I hope that my right hon. Friend will have an opportunity to do this. He has demonstrated far more clearly than any of his predecessors, and far better than any hon. Member opposite, that he champions the interests of British aviation. Hon. Members opposite are led by the most effective deterrent to voting Labour that the Labour Party has ever produced. They adopt a dreary, sectional attitude towards the Corporations. They would deny Britain her proper rôle in the defence of the West, and would further attack and damage the British aviation industry with their nonsensical proposals to curb our valuable export trade.

9.1 p.m.

Mr. John Cronin (Loughborough)

I hope that the hon. Member for Bournemouth, West (Mr. Eden) feels better after his peroration.

I congratulate the Minister on his announcement that the VC10 has overcome its difficulties. This side of the Committee always had complete confidence that that would be the case. Those of us who take an interest in aviation matters have kept in close touch with Vickers Armstrong, and we long ago became confident that all would be well.

I can also tell the Minister that we are in substantial agreement with his views on the situation which has arisen as a result of the refusal of the United States Civil Aeronautics Board to accept the fares which were agreed at Chandler, Arizona, at the I.A.T.A. meeting. We have not heard the case of the Civil Aeronautics Board, but it seems to have behaved unwisely. Nevertheless, I hope that, consistent with maintaining our rights, the Minister will adopt a conciliatory attitude and do what he can to ensure that a solution satisfactory to all concerned is arrived at.

I shall confine the remainder of my speech to matters which are the reverse of complimentary to the Minister and his predecessors in their handling of aviation affairs. In doing so, I want to make two points of a rather comprehensive nature. First, by their policies, the Minister and his predecessors have created the maximum embarrassment, confusion and difficulty for the airlines and the Corporations and also to the aircraft industry.

I start with the affairs of B.E.A., which have been bedevilled by the very unfortunate Civil Aviation (Licensing) Act, 1960. This Act was passed in spite of the most stringent warnings by the Opposition, which pointed out that foreign airlines were amalgamating while this measure would have the effect of fragmenting the competitive efforts of British airlines. We pointed out that traffic rights had been negotiated among other countries and that we were to a large extent in the hands of other countries. Finally, we warned about the substantial diversion of revenue from the Corporations. This have not materialised as badly as we expected in the diversion of revenues, but that is no thanks to the Minister; it is thanks to other Governments.

My hon. Friend the Member for Newton (Mr. Lee), in an excellent speech, pointed out that the Minister had negotiated rights for B.U.A. to fly from London to Genoa. This represents a diversion of £350,000 per annum from B.E.A., as a result of fewer people travelling to Nice and Milan. This is a substantial figure. This year it is probable that B.E.A. will make a loss of nearly £1 million. It is probable that B.E.A. will make a profit of £1 million next year. This £350,000 will swing the balance to a substantial extent, making the difference between profit and loss next year.

What quid pro quo has the Minister given to Italy in exchange? My hon. Friend the Member for Newton pointed out that B.O.A.C. will suffer by being obliged to pay money in respect of the stop-over in Rome which it did not pay before. But what else has been given to the Italians to agree to this?

One of the most unhappy aspects of the Civil Aviation (Licensing) Act, 1960, is that negotiations of traffic rights have all so far been secret. It is only from the Greek Press that one heard that the Greeks had utterly rejected the idea that B.U.A. should have traffic rights from London to Athens. This is very unsatisfactory, because one suspects, on the basis of what one knows, that the Minister is handing away substantial concessions to other countries in exchange for such traffic rights as he can obtain. The Minister will perhaps tell us which traffic rights have so far been negotiated. We know that London-Barcelona-Palma and London-Tarbes has been settled. London-Amsterdam traffic rights have been negotiated. But I understand that British United Airways do not intend to take up these rights, which means that it has been a great waste of time and effort to everybody concerned.

Will the Minister tell us what has been happening about his negotiations for traffic rights for B.U.A. in respect of Paris, Nice, Basle, Milan, Lisbon and Madeira? What has happened about negotiations for traffic rights for Cunard Eagle in respect of Copenhagen, Stockholm, Venice and Dublin? I understand that all those countries have refused to grant these traffic rights, and the reason is simple—all these countries have own national airways which have pooling arrangements with B.E.A. They will not let traffic rights be given when this will impair the profits of their own national airlines. Their attitude is that if we are such mugs as to try to cut down the profits of B.E.A. and to hand them over to independent companies, they will certainly not do the same thing in respect of their national airlines.

I hope that the Parliamentary Secretary will give us a little more information about this. It seems an absurd situation that the House has passed the Civil Aviation (Licensing) Act but that foreign countries are the ultimate authorities. It is not the Minister who has the power to grant licences. It is the foreign countries advised by their national airlines. This is surely a ridiculous situation.

Several hon. Members opposite have suggested that we on this side of the Committee are opposed to the independent airways. Nothing is further from the truth. We feel considerable sorrow for them because they have been led right up the garden by the Minister. They believed that there would be rich pickings.

Mr. Burden

If the hon. Member and his party are so fearful about the independent airlines and their competition, why do they not encourage them to get these licences, because if the position in the airways is as bad as they indicate, those companies will soon go bankrupt and the whole of the air traffic for this country will be left to the Corporations?

Mr. Cronin

I am quite incapable of understanding the relevance of that intervention. I have said that we are sorry to hear that the independent airways have been led up this very expensive garden. The Minister encouraged them to believe that they would have these traffic rights, but they will not have them. As a result, B.U.A. have already announced that there will be substantial redundancies; 110 pilots will shortly be unemployed in B.U.A. simply on account of the expectation which the Government held out to the independent airways.

I turn to the question of charter flying. The Government have caused the maximum confusion in charter flying and the Air Transport Licensing Board has probably played the part of the Sorcerer's Apprentice.

Hon. Members will recall that in the last year or two, the Licensing Board has almost completely abandoned all restrictions on charter flying; there were, of course, substantial restrictions made by the Air Transport Advisory Council, its predecessor. The Minister has adopted the most liberal attitude in giving licences to foreign charter companies. The result has been that travel agencies have found that they can make very substantial profits by having all-inclusive holiday tours using charter aircraft, of course obsolete aircraft have been available. When the Air Transport Licensing Board took over, there were 500,000 seats a year given to charter aircraft. In the very short time that the Air Transport Licensing Board has been operating, that figure has been increased to I million. The figure has doubled and, presumably, by next year it will have been trebled. This is producing an absolutely chaotic situation.

First, the charter companies depend on high-load factor. But there are already signs that as a result of this wholesale granting of licences the charter companies have been operating with rather smaller load factors. The result is that the charter companies which can most easily make a profit are those companies which are prepared to cut down on standards of service and of safety. [HON. MEMBERS: "No."] This certainly is the case. [Hot. MEMBERS: "No."] I am quite prepared to concede that there are certain charter companies which run their services impeccably, but the result of this wholesale granting of licences is that there are excess charter seats available, and that must lead, if the companies are to compete with each other, to a cut in services and, probably, a cut in standards making for safety.

The other effect is that business is being taken away from British European Airways. This means that B.E.A. will suffer very heavy losses this summer as a result of the business which is being diverted to the charter companies. One cannot help feeling that B.E.A. has very little to thank the Minister for over the last two or three years.

Sir A. V. Harvey

The hon. Gentleman said, if I heard him aright, that some charter companies operate without due regard to safety. I am sure that the British public ought to be told if that is the case, so that it will know how to avoid these particular companies. The hon. Gentleman must come clean about it.

Mr. Cronin

I do not think that the hon. Gentleman heard me. I said that some charter companies run their services impeccably, but that the result of this wholesale granting of licences to charter companies will put a premium on those companies which to some extent lack the finer precautions of safety. [HON. MEMBERS: "No."] It is obvious that if one charter company is competing with other charter companies in severely competitive conditions, it has to cut down expenses and it can only cut down expenses on services and safety. I cannot carry this further.

Mr. Burden

Name the companies.

Mr. Cronin

I am not giving way again. The hon. Gentleman knows perfectly well that one cannot name companies. It would be an abuse of the privilege of the House if one did so.

I would now say a few words on the Government's policy on B.O.A.C. The history of B.O.A.C. difficulties goes back a long way. Lord Boyd, Mr. Lennox-Boyd as he then was, in 1952 removed from the Corporations their monopoly on future planned scheduled services. As a result we had the Colonial Coach Services, which came into action in Africa. If one goes into the figures one finds that from 1954 to 1962 there has been a diversion of revenue from B.O.A.C. of about £9 million. This is a substantial proportion of the very large accumulated deficit which B.O.A.C. has shown in its last accounts.

When we turn to the figures for the Atlantic route, we see that Cunard Eagle caused diversion of a substantial nature of B.O.A.C.'s revenue. It was only £100,000 in 1960–61, but in 1961–62 it was £456,000. As a result of this arithmetical progression of diversion, B.O.A.C. was compelled, as a defensive tactic, to make the unfortunate merger with Cunard.

Mr. Shepherd

Surely the merger with Cunard dealt basically with trans-Atlantic traffic? There was no question of diversion of that by independent operators.

Mr. Cronin

I wish hon. Members would listen before they interrupt. I did not say anything about diversion of Atlantic traffic after the merger. The effects of the merger would cause excess capacity for B.O.A.C. Everyone knows that as a result of the merger B.O.A.C. has acquired two additional Boeing aircraft. It now has to get rid of Boeing aircraft.

Mr. Burden

Why is it buying three more?

Mr. Cronin

I cannot give way again to the hon. Member.

I hope that the Minister will pay attention to this. B.O.A.C. has been forced to make application to the Civil Aeronautics Board for a licence to operate the new B.O.A.C.-Cunard service in the United States. It has to pay for that concession. B.O.A.C. has to hand over to the United States the Florida-Bahamas routes and the trans-Atlantic cargo routes. The Minister spoke earlier about the lack of traffic routes. Here are two very important and profitable traffic routes given away simply on account of the Cunard-B.O.A.C. merger. One could hardly feel that that is helping aviation in this country.

I turn to the question of trooping. On this side of the Committee we have pressed the Government for years to allow the air Corporations to do trooping apart from ad hoc trooping. If we look at the consolidated balance sheets we find that the independents in 1961–62 made £3.7 million out of trooping and in 1962–63 £4½; million. Those are substantial figures. These trooping contracts have been built up as a result of Government action and, in consequence, large sums have been diverted from B.O.A.C. and represent a substantial part of the accumulated deficit of B.O.A.C.

The Minister disappointed us greatly in his attitude towards the Corbett report. We on this side of the Committee feel it essential that that report should be published. We cannot accept a situation in which we have merely to listen to the Minister's views on the report. Clearly it is a very unsatisfactory situation—I am sure I carry hon. Members opposite with me on this—in which a nationalised air Corporation has this tremendous accumulated deficit. It is obviously in the national interest that we should have an impartial investigation and its conclusions should be fully published. I cannot understand why the Minister should adopt this negative attitude.

It is extremely important, not only from the point of view of the country but that of the Corporation, that the report should be published. British Overseas Airways Corporation is rather on trial at present. It is having a deleterious effect on the morale of its employees that it should be under a suspicion of inefficiency. We ought to be able to make the situation quite clear, one way or the other.

There is one matter on which I should certainly like to ask the Minister some questions. It was raised in the debate by my hon. Friend the Member for Newton. When we debated the Second Reading of the Air Corporations Bill last November it was revealed from the Reports that there was a £31 million accumulated loss from depreciation of aircraft, and we learned that £26 million of this applied to other years. This caused a considerable sensation in many places besides the House of Commons and, as my hon. Friend pointed out, the Minister adopted a rather censorious attitude towards the fact that the real value of these assets had not been shown in the previous years.

I asked the Minister today whether the Parliamentary Secretary would be making some statement on this. He replied that it was the Government's policy that the matter should be dealt with only in the Corbett report, that no statement was to be made this evening on this important point, and that we should have to await the report. If that is the Minister's policy I should like to know why the Parliamentary Secretary in another place made a statement about this improper representation of capital assets. Is it the case that one Minister does not know what the other is doing? I feel some sympathy with the Ministry if that is the situation.

I should like to refer to a debate in another place on 19th December when this matter was raised and the Parliamentary Secretary to the Ministry of Transport made a statement in the following terms: It is true that B.O.A.C. came to the Minister with proposals for writing off a large amount of capital. It is true again that these proposals included sharply writing-down the D.C.70s, as well as other much wider proposals for revaluation of their assets and changing the form of the accounts. The Minister at the time was quite properly concerned that the account should not show a needlessly unfavourable result. He raised some questions one by one on each of the various items which comprised the total. And he invited B.O.A.C. and their accountants to reconsider their proposals so as to avoid unnecessary losses …"—[OFFICIAL REPORT. House of Lords, 19th December, 1962; Vol. 245, c. 1139.] This is an extraordinary state of affairs that a Minister—it was the then right hon. Member for Woking (Mr. Watkinson)—should ask a nationalised Corporation to alter its accounts so as to present a more favourable picture.

I am not drawing any inferences from this, because it occurred in 1959, but it is something on which the Government ought to make some sort of statement. One does not have to wait for the Corbett report for this. It is the gravest irregularity, to put a very mild tone on it. If this had happened in the affairs of a private company the situation would have been very unfortunate for whoever was responsible for it. I hope, therefore, that we shall have some explanation from the Parliamentary Secretary. I repeat that there is no reason at all for waiting for Mr. Corbett's report. This is something factual in the files of the Ministry of Aviation.

I turn briefly to the affairs of the aircraft industry. We know that they are not going well. We know, for instance, that exports which were £93 million of aircraft and aircraft parts in 1958 are down to £41 million now. We know that aircraft engines, which buoyed up the export accounts, are down from £83 million in 1961 to £63 million in 1962. These are very grave figures and something has got to be done about them.

There is increasing redundancy in the aircraft industry. We have heard from my hon. Friend the Member for Gloucester that 9,000 people became redundant in Gloucester. We have heard from my right hon. Friend the Member for Derby, South that in the last year there has been redundancy of between 4,000 and 5,000 workers in Rolls-Royce.

Mr. P. Noel-Baker

I beg my hon. Friend's pardon for interrupting him. The information that I received was that the number employed by Rolls-Royce this year is between 4,000 and 5,000 less than it was in April, 1962, but that includes normal wastage which, of course, is very considerable in so large a force.

Mr. Cronin

I think that my right hon. Friend's meticulous accuracy in these matters does him credit. [Laughter.] There is no escaping the fact that there is massive redundancy. Hon. Members opposite laugh about this. Perhaps they do not know the human effects of redundancy. There is massive redundancy in the aircraft industry; there are about 25,000 fewer in that industry this year than there were in 1960.

We know that the aircraft industry has been to some extent bedevilled by uncertainties among the airlines, but I should like to know what help the Government are giving this industry. In France there are Government organisations which help with exports, market surveys, propaganda and sales campaigns. What are our Government doing to help our aircraft industry? In the United States there is massive Government support in propaganda abroad. The Federal Aviation Agency has agents in every country abroad helping to sell United States aircraft.

What are the Government doing about the financial arrangements? Every British aircraft sold abroad which has been the result of research and development in this country and financed by the Government has to be sold with a levy superimposed on the price to reimburse the Government. This does not happen to French or United States aircraft. It is only British aircraft which, when sold abroad, carry an additional burden in the form of a levy which is paid to the Government. Why does the British aircraft industry have this very serious impediment to its export programme? What help do the Government give in financing the sale of aircraft abroad? In addition to the normal rates of interest, British aircraft have to carry a charge of from 3 per cent. to 9 per cent. for the Export Credits Guarantee Department's cover. Why do they have to carry this extra price?

I should like the Minister to tell us why there are these very large delays in his Department in making up their minds about orders. Take, for instance, operational requirement 351. That was formulated in the early part of 1961. The Minister only announced his decision last month—a delay of two years. The result of that will be that in Coventry 3,000 people will become redundant this year simply because the Minister was two years in making up his mind. Why was there such delay in connection with the TSR2, which was first formulated as an operational requirement in 1957, and for which there is still not a production order? As a result, countries abroad which are interested, such as Australia, are doubtful whether it will really come into production.

On top of all this, there is the constant confusion caused by cancellations of aircraft which have been started under the auspices of the Ministry of Aviation. There is a formidable list. Fighters such as the Hawker 1083, the Supermarine 545, the Avro 720, the Saunders Roe 177, a strike aircraft the Hawker P1121, civil aircraft the V1000, the Fairey Rotodyne; and missiles such as Blue Streak, the PT428, Blue Water and Skybolt. All these aircraft and missiles have been started by the Ministry of Aviation and then cancelled without anything of any kind being produced of value to the country.

Will the Minister tell us what this casts the country? I say that it is somewhere between £200 million and £300 million, £200 to £300 million spent with nothing to show for it. And this is the Government's help to the aircraft industry.

I submit that the influence of the Government on the fortunes of the aviation industry and the airlines has been mischievous and maladroit. Diminishing overseas earnings, diminishing employment and diminishing British prestige have been the result of a series of wrong policies and mistaken measures. But the aviation industry is not alone in this. The whole of British industry has been suffering as a result of the Government's measures.

Sitting on the Treasury Bench are tired, incompetent Ministers who cling like limpets to office. In voting tonight my right hon. and hon. Friends will be echoing last week's clear and unmistakable electoral verdict.

9.31 p.m.

The Parliamentary Secretary to the Ministry of Aviation (Mr. Neil Marten)

If I am a limpet clinging to office, I am very glad to get off the Front Bench and start my speech at the Box.

The hon. Member for Loughborough (Mr. Cronin) implied that, as a measure of economy, the independent companies engaged in charter work would cut down on safety. I take this opportunity at once to say categorically that safety standards are meticulously enforced by the Ministry of Aviation. Let there be no doubt that this policy will continue.

A great number of questions have been posed during the debate. Obviously, I cannot answer them all, but I shall deal with them after the debate and get in touch with hon. Members. I am grateful to the hon. Member for Feltham (Mr. Hunter) for the kind remarks he made in welcoming me to my job. Perhaps I ought to explain to the Committee a remark made by the hon. Member for Gloucester (Ms. Diamond) who said that he wanted not to be too unkind to me, implying that we had a special relationship. There were murmurs in the Committee at this, and, having regard to certain events, perhaps I should explain that there was nothing more sinister about it than that we were both members of the Parliamentary ski team last winter. I concede that the hon. Gentleman was the far better skier.

There are so many points to be dealt with that I have decided that I shall not discuss B.O.A.C. tonight in winding up. I think that it would be premature for me to do so, as my right hon. Friend is waiting for the Corbett report and he has said that we shall have an opportunity to debate the affairs of B.O.A.C., provided that the usual channels agree. In the meantime, the points which have been made about B.O.A.C. during the debate will be studied by my right hon. Friend.

The hon. Member for Orpington (Mr. Lubbock) asked why the Corbett report was late. The report has taken a little longer than we at first thought. Nothing worse than that. The hon. Gentleman asked also whom Mr. Corbett employed apart from his own firm, and I can tell him that he employed Messrs. Urwick Orr and Partners and Associated Industrial Consultants.

I shall not deal further with the question of the Chandler air fares dispute because there has, happily, been a general consensus of agreement on it in the Committee tonight. We have noted, and I hope the Americans will note, the support in the Committee for my right hon. Friend's policy in these temporary troubles. Suffice it to say that I can assure the Committee that we are acting in concert with our European and other colleagues over this matter.

Mr. Kenneth Lewis (Rutland and Stamford)

As my hon. Friend knows, I have sat through the debate and tried to get in—[HON. MEMBERS: "So have we."]—and I have succeeded. It is generally known in the travel world that there is a cutting of I.A.T.A. under the counter unofficially by many of the Eastern airlines. For example, it is known that one can get a rebate on a return ticket to Egypt through the National Tourist Office of Egypt. This cuts right across I.A.T.A. Can my hon. Friend assure me that the Minister intends to draw attention to this matter when considering the question of the Americans and their prices?

Mr. Marten

The hope is that, as a result of this present little local difficulty, we shall have a very full meeting of I.A.T.A. I am sure that this is just the sort of point which will be brought out at such a meeting.

Before answering some of the questions which have been raised, I should say that my right hon. Friend has charged me with the task of saying a few words about airports. Britain is well provided with airports, and with air traffic control facilities. There are 90 civil aerodromes, of which 21 are owned by the State, 26 by municipalities and 43 privately.

I should like to comment first on the London group and Prestwick. These four airports taken together made a profit in 1961–62 for the first time in our history. I have every reason to believe that they will have done as well or even better in the financial year just ended. For his part in this satisfactory achievement, I should like to pay my tribute to Mr. Edwards, the capable general manager of the London group, who is shortly leaving us to become docks and general manager of the Mersey Docks and Harbour Board.

Of the airfields serving major centres of population, 26 are municipally owned and only six State owned. Many cater not only for domestic but for international services. On the basis of passengers handled in 1962, the 10 busiest airports comprise 5 which are municipally-owned, 4 State-owned, and one, Ferryfield, privately-owned. It has been the Government's view that all airports serving particular local areas should be under local management and control. This is the pattern already adopted for the majority of airports in this category. Experience shows that there are many advantages in this policy.

It can be argued that those who stand to gain most from particular services—that is, the ratepayers of the town or area concerned—should carry more of the burden than taxpayers as a whole, but our approach is based primarily on the belief that local ownership and management is more likely to seize local opportunities and to respond to local feeling. It is freer to take decisions because it is less subject to Parliamentary and Treasury control. The new air terminal at Manchester is a striking example of how civic pride and civic purpose, combined with Government help, can meet local needs.

Scottish airports have presented a special problem, as we have heard in the debate. Last year, the local authorities in Scotland and other Scottish interests urged my right hon. Friend to set up a Scottish Airports Board. We have examined this proposal very carefully, but have been driven to the conclusion that in Scotland, as in England, municipal ownership and management is the wiser solution.

I am not yet in a position to make an announcement about our current negotiation's with the Scottish authorities. But last week, as my right hon. Friend said, I went up to Scotland myself and visited Renfrew, Abbotsinch, Prestwick and Edinburgh aerodromes and some of the airports of the Hebrides. All the time various questions kept cropping up and they have boon asked today. People asked, "Why not use Prestwick for domestic as well as international traffic?". It is true that rival views have been strongly represented by both sides. We have beard some today from my hon. Friend the Member for Ayr (Sir T. Moore), who wondered why anybody ever wanted to go to Glasgow. That was symptomatic of many of the arguments which have been pressed upon us from both sides. It is, however, important to stress that the distance between Prestwick and Glasgow is 30 miles, while the distance between Renfrew and Glasgow is only 7 miles and between Glasgow and Abbotsinch, I think, 9 miles.

Mr. Rankin

When the new road is constructed through Renfrew Airport, the difference in time will be two minutes.

Mr. Marten

I said that the difference was two miles—

Mr. Rankin

Two minutes.

Mr. Marten

—and the hon. Member will do it in two minutes.

If the people of Clydeside wish to have the convenience of an airport of their doorstep and are prepared to take the necessary financial steps, this is a question for them. If they decide against it, the question of transferring Glasgow's domestic services to Prestwick clearly will have to be reconsidered. It is up to my hon. Friend the Member for Ayr, if he believes so strongly in his case, to persuade the Glasgow Corporation of his point. As the House knows, negotiations with the Glasgow Corporation are still going on. There has been a further meeting of officials today.

People have also asked why we should not use Abbotsinch for international as well as domestic traffic. Intercontinental jet aircraft need about 10,000 ft. of runway, and this is not practicable at Abbotsinch. It would mean diverting the Paisley to Greenock railways and roads and it would bring the runway within two and a half miles of Johnstone, with the result that aircraft would pass over this town at a height of only 500 ft.

People whom I met on my visit also asked why not have one central airport between Glasgow and Edinburgh to serve all that part of Scotland. A survey was undertaken in this connection and the proposal was found not to be suitable for reasons of hilly surroundings, poor meteorological conditions and subsidence due to past coal-mining works. Compared with Abbotsinch and Turnhouse, which are close to Glasgow and Edinburgh, respectively, a central airport would have little attraction to the inhabitants of those two cities, as their journeys to such an airport would be trebled or quadrupled.

As my right hon. Friend said in opening the debate, I visited the Islands, too. Last week, in a small Dove aircraft, I visited the Island airports of Tiree, Benbecula and Stornoway. It was a memorable trip. It was about one of the best days they have had up there this year. The sky was blue, the sea looked equally blue and I thought highly of Scotland.

I did not land at Barra Beach, where B.E.A. carries out its operations to the Island of Barra and lands its aircraft on the sands. In passing, however, I should like to pay tribute to Kitty McPherson, who runs that beach for B.E.A. She looks after the meteorology, she reports to B.E.A. on the state of the tide, she marks out daily whereabouts on the beach the aircraft has to land, she is the air traffic control officer, she looks after the passengers and she is also the fire service. I mention that partly out of tribute to her and the work she has done and also as indicating the sort of economies that might be effected in the running of such airports.

I regret that I did not have time to visit the other airports in the Highlands and Islands, but I was left with the impression that it was unlikely that these airports will ever be able to pay their way. In 1961–62, the operation of these airports resulted in a total trading loss of £620,000 plus B.E.A.'s loss of about £250,000 in operating services to them, but they are, of course, important for the economy and social welfare of these areas. [HON. MEMBERS: "What about the Beeching plan?"]

I understand that in my absence from the Chamber, the hon. Member for Orpington (Mr. Lubbock) criticised the use of Viscounts on the service to Stornoway. I wondered why Viscounts were used, but I was informed that they were packed throughout the whole of the summer and that it was difficult to get a seat. But this really is not a question for me. It is for the commercial judgment of B.E.A. to decide what type of aircraft to put on any particular service.

Mr. Lubbock

My right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) came down from Orkney in a Viscount on Saturday and there were 20 people in it.

Mr. Marten

Finally, the White Paper on civil airports, in paragraph 31, referred to the possibility of arranging for the management of these airports in the Islands and Highlands to be carried out by an agency on behalf of the Government. I should like to say that a final decision on this has not yet been taken.

Now I turn to other points raised in the debate. My hon. Friend the Member for Gillingham (Mr. Burden) raised the question of the economics of the Concord aircraft. It is far too early as yet to make precise forecasts of the economics of this aircraft. Much will depend upon the success achieved in translating theory into practice. Economics of operation will also depend to a large extent on the selling price of the aircraft, of course. It cannot accurately be forecast so far in advance. It is certainly our objective to ensure that the aircraft will be economically competitive with the subsonic jets.

The hon. Member for Glasgow, Govan (Mr. Rankin)—I am sorry I missed part of his speech—raised the question of the range of the Concord. As the Minister said in the House on 29th November. 1962, the Concord aircraft is being designed in two versions, one a long-range version capable of non-stop trans-Atlantic flight up to 3,250 nautical miles—not 3,000 as someone suggested—and a medium haul version of 2,450 nautical miles. It was suggested that we should go in for one capable of the London to Los Angeles trip but this is technically almost impossible with an aircraft of that size due to the fuel consumption involved. It would mean going in for a very much larger aircraft than the one we are designing at the moment. But there has been no change of design objectives; nor have we any reason to believe those will not be achieved.

The hon. Member for Orpington questioned the wisdom of the whole Concord operation. I have not got it here, but I know he has put down a Motion on the Paper noting the fact that we were going in for the Concord and then seeing a whole variety of objections to it. I must say that it does not strike me as being typical of the "new frontier" spirit of the Liberal Party. I should have thought that it would have welcomed this great attempt, but it has not. It has been very lukewarm about it.

My hon. Friend the Member for Bournemouth West (Mr. Eden) asked whether the British electronics industry was getting a fair share in this, and I can assure him that that is so and that it is one of the points we are watching very closely.

But I think the whole thing about this Concord adventure is what my hon. Friend the Member for Gillingham said, that we should anticipate what the United States of America is thinking. I can assure him that this has been taken into account. The Americans appointed a committee to go into what supersonic aircraft, if any, they should have. The committee reported last year. The report, I understand, was not very satisfactory and President Kennedy asked for another report by the end of May this year. When they get that second report they will presumably consider whether or not they go in for supersonic aircraft at all, and if so whether they go in for a Mach 2.2, as we are, or a Mach 3 with a stainless steel airframe.

I think that this is a question of a balance of opinion, but I would end what I have to say on the Concord by saying that it is an essential part of our joint production programme with the French that we should be on time with airline service by 1970, and at the moment there is no reason to doubt that that will be so.

The right hon. Member for Derby, South (Mr. P. Noel-Baker) talked about Rolls Royce in his constituency. I visited Hucknall the other day to pay my respects to the firm on the tenth anniversary of its jet engine. I recognised that there has been short-time working since January, 1963, but the management, as is probably known, hopes that this will end this summer. I think it is right to bear in mind that the loading of Rolls Royce is affected by home civil and export orders as well as by United Kingdom military orders. This is, of course, primarily a matter for Rolls Royce, and the Government help in all ways that they can with a base of military orders and with assistance in developing the Spey for the BAC111, together with help in exports overseas.

The right hon. Gentleman gave us many examples of Rolls Royce contributions in the world of aero engines. I was very glad that he did so, because the firm has made very fine contributions. There was one contribution which he omitted to mention, and that is that Rolls Royce turbine engines have completed 26 million running hours in civil airliners and 12 million running hours in military aircraft, which is a total of 38 million running hours, and that works out to a total of 4,350 running years of Rolls Royce engines, which is a very fine performance.

The hon. Member for Feltham raised the question of noise. We debated that subject recently, but I should like to restate our position as I see it. Last month a Petition was presented to the House praying that night flights from London Airport should be banished altogether. In the debate I said that this could not be done because of the economics involved in operating aircraft, particularly aircraft on international services, round the clock. I said that they must go on. It is really a matter of attacking the problem of noise in the engine and behind the engine, and noise going into the ear or into one's bedroom window. As the hon. Gentleman knows, I am personally taking an interest in these latter aspects and hope perhaps to make some contribution. I can assure the Committee that the industry as a whole is extremely keen to develop a more silent jet aircraft. Indeed, the Trident has a rating of 12 perceived noise decibels below that of previous aircraft.

Mr. G. A. Pargiter (Southall)

The subject of night testing of jet aircraft was also included in the Petition. That is an equal nuisance, and one which ought to have been overcome.

Mr. Marten

The night testing of jet aircraft at London Airport has to go on in order to get the aircraft serviced for the following day's operations, but limitations are laid down. As the hon. Gentleman probably knows, the engines have to be run in mufflers, and a log has to be kept and any complaints are dealt with straight away. There are also baffle banks to try to deflect the noise.

In an intervention when my right hon. Friend was speaking, the hon. Member for Newton asked whether blind landing was going to be available for the British Aircraft Corporation 111. The answer is that space in the 111 is being reserved for it, and it will be put in on the basis of experience gained with the VCIO and the Trident.

The hon. Member for Gloucester raised many interesting points which I should like to study, if I may, and then I will write to him about them.

Mr. Roy Mason (Barnsley)

That is no good. We want the answers in the debate.

Mr. Marten

I have six minutes left and am now going to use them. I have dealt in the debate with as many questions as was possible in the time allotted, but I should like to try to follow up some of the more interesting ones with hon. Members afterwards.

I should like to end by gathering together my feelings about civil aviation. I believe that our airlines have a very high standard as airline operators. I believe that the best and safest form of air travel is to fly with a British airline using a British aircraft. That is not just jingoism, because if one studies this, as I have done since I took up my job, one learns of the pilots' training college at Hamble and then the refresher courses for even the most experienced pilots, all of which gives confidence to passengers in the skill and experience of our aircrews. Then there is the work of our engineers, right through to the workshops at London Airport, which can give passengers every confidence in the workmanship which goes into our aircraft. Then there is runway maintenance and the work of our air traffic control officers. All of this means that passengers of B.E.A., and B.O.A.C. can rely on the highest safety standards in British aircraft and at British airports.

Whether it be the public Corporations or the independent airlines, they are all doing a magnificent job. Behind all this is the aircraft manufacturing industry, now producing some world-beating machines—an industry equal to and often better than any in any other part of the world. Three weeks ago I went to Hucknall, flying from Hatfield in a Trident. The journey took 18 minutes. It was smooth and extremely silent. It is a plane of the very highest quality. Like the Avro 748, the VC10, the DH125, the BAC111 and others, and, in future, the Concord, it will continue to make our Aircraft industry one of the world leaders.

What does the Labour Party propose for it? That I have been waiting to hear all day. The hon. Member for Newton (Mr. Lee) said that he did not believe that Government supervision over the industry is adequate. How much more supervision would the Labour Party exercise over the industry? That is not at all clear. It is being coy about all this. Is it testing the number of votes it will win or lose if it advocates this or that policy?

There is an indication of what the party thinks on the Order Paper. An Amendment to a Motion dealing with unemployment in the aircraft industry reads: … together with measures to take into public ownership as much of the industry as may be necessary to make it as efficient as, or competitive with, foreign aircraft manufacturers, including those that have been nationalised in France and elsewhere; and to ensure that, in future, when public money is spent for the benefit of the British aircraft industry, shares in the private firms concerned are acquired for the nation. How would a Labour Government buy these shares? And how many of them? How would they exercise control? Would they buy the shares on the open market? Would they be equity shares? Would they pay high prices for them? These are practical questions and we want to know the answers. Labour's policy is based on a complete failure to understand industrial and business life. I hope that the Committee will reject the Opposition's views and I believe that later this year, or next year, the country will also reject the Labour Party and its doctrinaire policies.

Mr. Lee

I beg to move, That Item Class IV, Vote 7 (Ministry of Aviation), be reduced by £5.

Question put:—

The Committee divided: Ayes 175, Noes, 251.

Division No. 109.]	AYES	[9.58 p.m.
Alns!ey, William	Herbison, Miss Margaret	Popplewell, Ernest
Allaun, Frank (Salford, E.)	Hill, J. (Midlothian)	Prentice, R. E.
Awbery, Stan (Bristol, Central)	Hilton, A. V.	Price, J. T. (Westhoughton)
Bacon, Miss Alice	Holman, Percy	Probert, Arthur
Baird, John	HOoson, H. E.	Pursey, Cmdr. Harry
Beaney, Alan	Houghton, Douglas	Rankin, John
Bellenger, Rt. Hon. F. J.	Hughes, Hector (Aberdeen, N.)	Redhead, E. C.
Bence, Cyril	Hunter, A. E.	Reid, William
Bennett, J. (Glasgow, Bridgeton)	Hynd, H. (Accrington)	Reynolds, G. W.
Benson, Sir George	Hynd, John (Atterclitfe)	Rhodes, H.
Blackburn, F.	Irvine, A. J. (Edge Hill)	Roberts, Albert (Normanton)
Bowden, Rt. Hn.H.W.(Leics.S. W.)	Irving, Sydney (Dartford)	Roberts, Goronwy (Caernarvon)
Bowen, Roderic (Cardigan)	Janner, Sir Barnett	Robertson, John (Paisley)
Bowles, Frank	Jeger, George	Robinson, Kenneth (St. Pancras, N.)
Boyden, James	Jenkins, Roy (Stechford)	Rodgers, W. T. (Stockton)
Braddock, Mrs. E. M.	Johnson, Carol (Lewisham, S.)	Rogers, G. H. R. (Kensington, N.)
Bradley, Tom	Jonee,Rt.Hn. A. Creech(Wakelleld)	Rose, William
Bray, Dr. Jeremy	Jones, Dan (Burnley)	Royle, Charles (Salford, West)
Brown, Rt. Hon. George (Belper)	Jones, Elwyn (West Ham, S.)	Short, Edward
Butler, Herbert (Hackney, C.)	Kelley, Richard	Silverman, Julius (Aston)
Butler, Mrs. Joyce (Wood Green)	Kenyon, Clifford	Sketfington, Arthur
Carmichael, Neil	Key, Rt. Hon. C. W.	Slater, Mrs. Harriet (Stoke, N.)
Castle, Mrs. Barbara	Lawson, George	Slater, Joseph (Sedgefield)
Cliffe, Michael	Ledger, Ron	Small, William
Colilck, Percy	Lee, Frederick (Newton)	Smith, Ellis (Stoke, S.)
Corbel, Mrs. Freda	Lee, Miss Jennie (Cannock)	Snow, Julian
Craddock, George (Bradford, S.)	Lever, L. M. (Ardwick)	Sorensen, R. W.
Cronin, John	Lewis, Arthur (West Ham, N.)	Soskice, Rt. Hon. Sir Frank
Crosland, Anthony	Lubbock, Eric	Spriggs, Leslie
Cullen, Mrs. Alice	McBride, N.	Steele, Thomas
Dalyell, Tam	MacGoll, James	Stewart, Michael (Fulham)
Darling, George	MacDermot, Niall	Stonehouse, John
Davies, Harold (Leek)	McKay, John (Wallsend)	Stones, William
Davies, Ifor (Cower)	Mackie, John (Enfield, East)	Strauss, Rt. Hn. G. R. (Vauxhall)
Davies, S. 0. (Merthyr)	McLeavy, Frank	Strose,Dr.Barnett(Stoke-on-Trent,C.)
Deer, George	MacPherson, Malcolm (Stirling)	Swingler, Stephen
Delargy, Hugh	Mallalieu, E. L. (Brlgg)	Taverne, D.
Dempsey, James	Mallalieu, J.P.W. (Huddersfield, E.)	Taylor, Bernard (Mansfield)
Diamond, John	Manuel, Archie	Thomas, George (Cardiff, W.)
Dodda, Norman	Mapp, Charles	Thorpe, Jeremy
Donnelly, Desmond	Mason, Roy	Wade, Donald
Driberg, Tom	Mayhew, Christopher	Wainwright, Edwin
Ede, Rt. Hon. C.	Mendelson, J. J.	Warbey, William
Edwards, Robert (Bilston)	Milian, Bruce	Weitzman, David
Edwards, Walter (Stepney)	Milne, Edward	Wells, William (Walsall, N.)
Foot, Dingle (Ipswich)	Mitchison, G. R.	White, Mrs. Eirene
Fraser, Thomas (Hamilton)	Moody, A. S.	Whitlock, William
Ginsburg, David	Mulley, Frederick	W lgg, George
Gordon Walker, Rt. Hon. P. C.	Noel-Baker, Francis (Swindon)	Wilkins, W. A.
Gourlay, Harry	Noel-Baker,Rt.Hn,Phillp(Derby,S.)	Williams, W. T. (Warrington)
Greenwood, Anthony	Oliver, G. H.	Willis, E. G. (Edinburgh, E.)
Grey, Charles	Dram, A. E.	Wilson, Rt. Hon. Harold (Huyton)
Griffiths, David (Bother Valley)	Oswald, Thomas	Winterbottom, R. E.
Grimond, Rt. Hon. J.	Paget, R. T.	Woof, Robert
Gunter, Ray	Pannell, Charles (Leeds, W.)	Wyatt, Woodrow
Hamilton, William (West Fife)	Pargiter, G. A.
Harper, Joseph	Parker, John	TELLERS FOR THE AYES,
Hart, Mrs. Judith	Pavitt, Laurence	Mr. Charles A. Howell and
Hayman, F. H.	Pearson, Arthur (Pontypridd)	Mr. McCann.
Henderson, Rt. Hn. Arthur (RwlyRegis)	Pentland, Norman
NOES
Agnew, Sir Peter	Bennett, F. M. (Torquay)	Braine, Bernard
Allan, Robert (Paddington, S.)	Bennett, Dr. Reginald(Gos & Fhm)	Bromley-Davenport, Lt. Cdl. SirWalter
Allason, James	Berkeley, Humphry	Brooke, Rt. Hon. Henry
Amery, Rt. Hon. Julian	Bevins, Rt. Hon. Reginald	Brown, Alan (Tottenham)
Arbuthnot, John	Biffen, John	Browne, Percy (Torrington)
Atkins, Humphrey	Biggs-Davison, John	Buck, Antony
Balniel, Lord	Bingham, R. M.	Bullard, Denys
Barber, Anthony	Birch, Rt. Hon. Nigel	Bullus, Wing Commander Eric
Barlow, Sir John	Bishop, F. P.	Burden, F. A.
Barter, John	Black, Sir Cyril	Butcher, Sir Herbert
Batsford, Brian	Boesom, Hon. Clive	Campbell, Gordon (Moray & Nairn)
Baxter Sir Beverley (Southgate)	Bourne-Arton, A.	Carr, Compton (Barons Court)
Beamish, Col. Sir Tufton	Boyd-Carpenter, Rt. Hon. John	Carr, Robert (Mitcham)
Bell, Ronald	Boyle, Rt. Hon. Sir Edward	Cary, Sir Robert
Chataway, Christopher	Hopkins, Alan	Powell, R1. Hon. J. Enoch
Clark, Henry (Antrim, N.)	Hornby, R. P.	Price, David (Eastleigh)
Clark, William (Nottingham, S.)	Howard, John (Southampton, Teat)	Prior, J. M. L.
Clarke, Brig. Terence(Portsmth, w.)	Hughes Hallett, Vice-Admiral John	Prior-Palmer, Brig. Sir Otho
Cole, Norman	Hughes-Young, Michael	Profumo, Rt. Hon. John
Cooke, Robert	Hulbert, Bir Norman	Proudfcot, Wilfred
Cooper, A. E.	Hutchison, Michael Clark	Pym, Francis
Cooper-Key, Sir Neill	iremonger, T. L.	Rawlinson, Sir Peter
Cordeaux, Lt.-Col. J. K.	Irvine, Bryant Godman (Rye)	Redmayne, Rt. Hon. Martin
Cordle, John	James, David	Rees, Hugh
Corfield, F. V.	Jenkins, Robert (Dulwich)	Renton, Rt. Hon. David
Costain, A. P.	Johnson, Eric (Blackley)	Ridley, Hon. Nicholas
Coulson, Michael	Johnson Smith, Geoffrey	Ridsdale, Julian
Courtney, Cdr. Anthony	Jones, Arthur (Northants, S.)	Roberts, Sir Peter (Heeley)
Craddock, Sir Bereaford(Spelthorne)	Jones, Rt. Hn. Aubrey (Hall Green)	Robinson, Rt. Hn. Sir R. (B'poo1,S.)
Crawley, Aldan	Kaherry, Sir Donald	Roots, William
Critchley, Julian	Kimball, Marcus	Ropner, Col. Sir Leonard
Crosthwaite-Eyre, Col. Sir Oliver	Kirk, Peter	Royle, Anthony (Richmond, Surrey)
Cunningham, Knox	Kitson, Timothy	Russell, Ronald
Curran, Charles	Lagden, Godfrey	Scott-Hopkins, James
Currie, G. B. H.	Lancaster, Col. C. G.	Seymour, Leslie
Dalkelth, Earl of	Leavey, J. A.	Sharpies, Richard
Dance, James	Lewis, Kenneth (Rutland)	Shaw, M.
d'Avigdor-Goldsmid, Sir Henry	Linstead, Sir Hugh	Shepherd, William
Deedea, Rt. Hon. W. F.	Litchfield, Capt. John	Skeet, T. H. H.
Digby, Simon Wingfield	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfleld)	Smith, Dudley (Br'ntf'd & Chiswick)
Donaldson, Cmdr. C. E. M.	Lloyd, Rt. Hon. Selwyn (Wirral)	Smithers, Peter
Doughty, Charles	Longden, Gilbert	Smyth, Rt. Hon. Brig. Sir John
Drayson, G. B.	Loveys, Walter H.	Spearman, Sir Alexander
du Cann, Edward	Lucas-Tooth, Sir Hugh	Speir, Rupert
Eden, John	McAdden, Sir Stephen	Stanley, Hon. Richard
Elliot, Capt. Walter (Carshalton)	MacArthur, tan	Stevens, Geoffrey
Emery, Peter	McLaren, Martin	Stodart, J. A.
Errington, Sir Eric	McLaughlin, Mrs. Patricia	Stoddart-Scott, Col. Sir Malcolm
Farey-Jones, F. W.	Maclay, Rt. Hon. John	Storey, Sir Samuel
Farr, John	Maclean,SirFitzroy(Bute&N.Ayrs)	Studholme, Sir Henry
Fisher, Nigel	Macleod, Rt. Hn. lain (Enfield, W.)	Tapsetl, Peter
Fletcher-Cooke, Charles	McMaster, Stanley R.	Taylor, Sir Charles (Eastbourne)
Foster, John	Macmillan, Maurice (Halifax)	Taylor, Edwin (Bolton, E.)
Fraser, Ian (Plymouth, Sutton)	Macpherson,Rt.Hn.Niall(Dumfrlea)	Taylor, Frank (M'ch'atr, Moss Side)
Freeth, Denzil	Maddan, Martin	Taylor, Sir William (Bradford, N.)
Gammana, Lady	Maitland, Sir John	Teeling, Sir William
Gardner, Edward	Markham, Major Sir Frank	Temple, John M.
Gibson-Watt, David	Marshall, Douglas	Thatcher, Mre. Margaret
Gilmour, Fan (Norfolk, Central)	Marten, Nell	Thomas, Peter (Conway)
Gilmour, Sir John (East Fife)	Mathew, Robert (HOniton)	Thompson, Sir Kenneth (Walton)
Glyn, Dr. Alan (Clapham)	Matthews, Gordon (Meriden)	Thompson, Sir Richard (Croydon, S.)
Glyn, Sir Richard (Dorset, N.)	Mawby, Ray	Thornton-Kemaley, Sir Colin
Goodhart, Philip	Maxwell-Hyslop, R. J.	Touche, no. Hon. Sir Gordon
Goodhew, Victor	Maydon, Lt.-Cmdr. S. L. C.	Turner, Colin
Grant-Ferris, R.	Miscampbell, Norman	Tweedsmuir, Lady
Gurden, Harold	Moore, Sir Thomas (Ayr)	Vane, W. M. F.
Hall, John (Wycombe)	More, Jasper (Ludlow)	Vickers, Miss Joan
Hamilton, Michael (Wellingborough)	Morgan, William	Welder, David
Harris, Reader (Heston)	Morrison, John	Walker, Peter
Harrison, Brian (Maldon)	Nabarro, Sir Gerald	Wall, Patrick
Harvey, Sir Arthur Very (Macclesf'd)	Neave, Airey	Wells, John (Maldstone)
Harvey, John (Walthamatow, E.)	Nicholson, Sir Godfrey	Whitelaw, William
Harvie Anderson, Miss	Nugent, Rt. Hon. Sir Richard	Williams, Dudley (Exeter)
Hastings, Stephen	Osborn, John (Hallam)	Wills, Sir Gerald (Bridgwater)
Hay, John	Osborne, Sir Cyril (Louth)	Wilson, Geoffrey (Truro)
Heald, Rt. Hon. Sir Lionel	Page, Graham (Crosby)	Wise, A. R.
Henderson, John (Cathcart)	Pannell, Norman (Kirkdale)	Wolrige-Gordon, Patrick
Hendry, Forbes	Partridge, E.	Woodhouse, C. M.
Hlley, Joseph	Pearson, Frank (Clitheroe)	Woodnutt, Mark
Hill, Mrs. Evellne (Wythenshawe)	Peel, John	Woollam, John
Hirst, Geoffrey	Pickthorn, Sir Kenneth	Worsley, Marcus
Hobson, Sir John	Pilkington, Sir Richard
Holland, Philip	Pitman, Sir James	TELLERS FOR THE NOES:
Hollingworth, John	Pitt, Dame Edith	Mr. Chichester-Clark and
Hope, Rt. Hon. Lord John	Pott, Percival)	Mr. Finlay.

Original Question again proposed.

Sir Stephen McAdden (Southend, East) rose—

It being after Ten o'clock, The CHAIR-MAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress; to sit again Tomorrow.