CIVIL AVIATION POLICY

HC Deb 17 February 1965 vol 706 cc1186-93

The Minister of Aviation (Mr. Roy Jenkins)

I would like to make a statement on certain aspects of civil aviation policy.

The Civil Aviation Licensing Act, 1960, provides for the Air Transport Licensing Board to grant licences, subject to a right of appeal to the Minister, to operate specified services. I do not propose, at this stage, to ask the House to make a change in this legislative framework. I nevertheless believe that it would be in the public interest to lay down some guide lines to the Government's views of the objectives of licensing policy.

Three main types of operation are concerned: inclusive tour charter services; scheduled services overseas; and internal services within the United Kingdom.

In general, it is not, in my view, desirable to apply restrictions to the inclusive tour charter services on holiday routes. The growth of such services has been made possible by an agreed European policy of licensing liberally applications by reputable operators of each other's countries. This traffic may have some effect on scheduled carriers, but to attempt to deal with this problem by restricting licences would prevent some members of the public who want inclusive tours from booking them and, in addition, might tilt the balance of trade within the restricted market against British operators.

I have accordingly asked the Air Transport Licensing Board if its procedures for dealing with the applications of British operators for this type of service can be simplified and expedited. The two Corporations are, of course, free to compete in the inclusive tour charter market.

So far as scheduled services on international routes are concerned, I am not convinced that the national interest is, in general, served by more than one British carrier operating on the same route. No other European country attempts to insert two of its carriers on any single international route and I believe that a continued British attempt to do so is likely not only to be harmful to the established British operator, but to bring no net gain to British civil aviation as a whole. I do not, therefore, propose to reopen with foreign Governments those cases where the A.T.L.B. has licensed parellel international services by British operators and it has so far proved impracticable to secure the necessary traffic rights on acceptable terms.

I shall also be ready to use my statutory power to direct the Board to refuse applications when it appears to me that foreign rights cannot be obtained without detriment to an established service or to the British share of the traffic as a whole. At the same time, any British operator, public or private, who wishes to provide a genuinely new service or open up some fresh market for British aviation will have my full support.

On some trunk routes in the United Kingdom independent companies are now operating services of limited frequency alongside B.E.A. The A.T.L.B. has not so far thought it right to allow them to operate at anything approaching an unrestricted frequency. That accords with my own view. In the short run, unrestricted competition might produce a better service to passengers, but probably at the cost of all the operators serving the routes in question doing so at a loss. The longer term results could well be to force up fares, or to lead to a lower frequency after one operator had been eliminated. The benefits to the passenger would be likely to be short-lived. While, therefore, so far as rests with me, the independent airlines may continue undisturbed to operate their present limited frequencies on these domestic trunk routes, I do not think it right to offer them the prospect of an unrestricted or extended frequency in the near future. In these circumstances, it will be for these companies to consider whether they wish to continue as at present, or to withdraw completely from these routes.

Should they choose the latter alternative, B.E.A. will revert to being the sole operator. I therefore propose to institute special measures to ensure that B.E.A. pays particular regard to the consumer interest. I shall seek an early opportunity to appoint to B.E.A.'s Board a member who will be charged with paying especial attention to the interests of the domestic passenger. I also propose to strengthen the terms of reference of the Regional Advisory Committees for Civil Aviation, with particular emphasis on the quality of service and convenience of timings to meet local needs. I am sure that B.E.A. will not wish to fall down on their national responsibilities in any of these respects.

On other internal routes there may be a case for more enterprising development of air services by independent airlines, and for giving them reasonable security of tenure of licences. The Government's eventual policy must naturally have regard to the study of the co-ordination of the transport system which Lord Hinton has undertaken to conduct.

These general statements of policy intention, which must be subject to exception in some cases and which are, of course, without prejudice to the duty of the Board and of myself to give full attention to evidence and argument in particular cases, will, I believe, offer reasonable security and a good prospect of growth both to the Air Corporations and to the independents. Both types of operator have an important part to play in the rapidly expanding future of British civil air transport. In the view of the Government they need not achieve this at each other's expense.

Mr. Maude

Is the right hon. Gentleman aware that, coming on top of the recent change in policy in respect of trooping tenders, this statement represents a very severe blow to the independent airline operators, who have made an enormous contribution to the growth and efficiency of British civil aviation?

Is he aware that he has admitted in his statement, by implication, that they have served as a yardstick and an incentive to the efficiency of B.E.A., because he says that when competition is reduced he will have to put a special extra watchdog on B.E.A.? Does he realise that this is absolutely no substitute for the discipline which competition alone can bring? Will he reconsider these policies and recognise that competition in civil aviation is the only safeguard for the passengers?

Mr. Jenkins

The hon. Member was enunciating a very extreme position at the end of his supplementary question. It was not the case that under the previous Administration unrestricted competition—unrestricted competitive rights—or anything approaching it, was granted to independent operators.

As for trooping, I made a statement about this treating the issue on its own merits, which I believe made it reasonable that the Corporation should compete for carrying the nation's troops.

As for charging B.E.A. with looking after passengers' interests especially, if the removal takes place—and independent operators are entirely free to decide whether they should carry on as at present, as they can do—I shall be extremely anxious to ensure that B.E.A. pays the fullest regard to consumer interests in this matter.

Mr. Rankin

I gather from what my right hon. Friend has said that he will encourage B.E.A. to pay greater attention to consumer interests in aviation. Does net he agree that B.E.A. has done a great service in opening up the routes to the Western Isles—at a continuing loss to the Corporation—and also the routes over the Irish Sea? Does he realise that this results yearly in a loss of £500,000 to the Corporation? Will he bear that fact in mind, and consider the possibility of giving the Corporation a little assistance in relation to those developments?

Is he further aware that the policy of the independents has been to compete on the lucrative routes, particularly between Glasgow and London, which B.E.A. has developed? Will he encourage the independents to try to develop those parts of Scotland and England which are not at present sufficiently catered for in aviation?

Mr. Jenkins

I am very well aware of the most valuable service which B.E.A. performs by its Highlands and Islands services. I think that we should keep that closely in mind.

On the latter part of my hon. Friend's question, I said towards the end of my statement that on other internal routes—and that includes other Scottish routes—there may well be a case for more enterprising development of services by independents.

Mr. Marten

Is it true that the independent airlines have sent the Minister a memorandum about this very subject? Is it also true that the Minister is seeing the independent airlines tomorrow? If so, is it not extremely discourteous that he should have made this dreary Socialist statement today?

Mr. Jenkins

I am, of course, in constant touch with airline operators. I took the opportunity of seeing—[HON. MEMBERS: "Answer the question."] If hon. Members wish to have the question answered, I will respect their wishes. Yes, it is true that the independent airlines sent me a policy statement, but the policy of the Government, with great respect, is not determined by policy memoranda of this kind.

Mr. Philip Noel-Baker

May I congratulate my right hon. Friend on his statement? It will be particularly encouraging to those who believe that the expansion of civil aviation is a major hope for the future of the aviation industry.

Mr. Jenkins

I am grateful to my right hon. Friend.

Mr. Lubbock

Could the Minister more precisely define the criteria to be followed by the A.T.L.B. which we on this bench welcome?—[HON. MEMBERS: "Why?"] Does he consider that this eliminates the need for legislation to amend the Civil Aviation Licensing Act, or is he leaving that for further consideration at a later stage? Could he also say whether the independent operators will have every opportunity of developing feeder services in the British Isles, in spite of the fact that this general new byelaw is under way now? In safeguarding consumer interests, will he bear in mind, now that B.E.A. has a virtual monopoly of the more lucrative long-range internal routes, that it has an obligation to maintain less lucrative services in the Highlands and Islands?

Mr. Jenkins

As I said earlier, I am not proposing for the moment to disturb the legislative framework. Let us see how we get on under this statement of policy.

I am very anxious to see a growth of scheduled services throughout the United Kingdom and I shall be glad to see new ones developed, whether by public or private operators.

I must correct the hon. Member on his third point. B.E.A. is not being given a monopoly. The position is not being changed from that which exists. I am merely refusing to allow a position in which unrestricted competition is allowed. I am sure that the Corporation will continue, as it has done in the past, to discharge its national responsibility.

Sir A. V. Harvey

Does the right hon. Gentleman agree that where the independent airlines have competed with B.E.A. there has been an immediate improvement in B.E.A.'s services? Is he further aware that on the London-Manchester run, the time-keeping of B.E.A. services is very bad indeed and that for many months in the year it takes one, two or three weeks to get a seat and that some competition there would do a great deal of good?

Finally, is he aware that the independent airlines have said that they would place large orders for new civil aircraft if they were given reasonable tenure in the future? Will those orders now be placed?

Mr. Jenkins

The first part of the hon. and gallant Member's premise is arguable. In any case, the question which I have to decide is whether to move from here to a position of unrestricted competition on these domestic routes. [HON. MEMBERS: "No."] Yes. I did not think that it was right to do that.

So far as the equipment purchasing policy of the independents is concerned, they have first to decide whether to maintain their existing frequencies on these routes and, secondly, what purchasing policy they will pursue.

Mr. Galbraith

Is this not a most monstrous policy, showing that the Government have no concern at all for consumers and are more interested in preserving the monopoly of the nationalised concern?

The right hon. Gentleman referred to the national interest. What does this curious phrase "national interest" mean, when it is the interests of the passengers which should count? Is he not aware that in the Toothill Report it was stated that B.E.A. was failing to fulfil traffic needs between Scotland and England? What is the good of adding one extra man to the Board of B.E.A. to keep it on its toes? The way to keep any company on its toes is to have some competition.

Would he be good enough to answer the second part of the question put to him by my hon. Friend the Member for Banbury (Mr. Marten)? Is he or is he not seeing the independent airlines tomorrow? If he is, why did he make this statement before seeing them?

Mr. Jenkins

I shall, if I may, answer the second part of the hon. Member's question first, as it seemed a little more precise than the first part. I saw representatives of the two main independent airlines which this statement must affect before making this statement. I made this statement today, at the earliest possible opportunity, partly because I had been under considerable pressure from one of those airlines to make the statement as soon as possible. It is true that I have a meeting—I shall be very glad to see it go ahead, if they are—with a body which does not represent all the independent airlines to discuss general matters with them.

Several Hon. Members rose—

Mr. Speaker

Order. We must get on.