§ (1) The Minister shall appoint three members (hereinafter referred to as "the members") of the Board of the British Overseas Airways Corporation, to represent the interests of passengers and shippers.
§ (2) The members shall have access to the working accounts of the Corporation and shall in particular be responsible for appraising from the customer's point of view the services provided and the charges made by the Corporation.
§ (3) If, on consideration of resolutions of the International Air Traffic Association regarding services and charges, the members unanimously disapprove of the terms of any such resolution, the Corporation shall report accordingly to the Minister who shall lay such report before Parliament.
§ (4) At any time within one calendar month after the laying of a report under subsection (3) above the Minister shall by statutory instrument direct the Corporation—
- (a) to give effect to the recommendation, or
- (b) to refrain from giving effect, thereto, and any such direction shall be subject to annulment by either House of Parliament.
§ Brought up, and read the First time.
§ Mr. Terence L. Higgins (Worthing)
I beg to move, That the Clause be read a Second time.
Perhaps I, as a back-bencher member, may be allowed to add my own appreciation of the work which Dame Edith Pitt did for the Committee.
The new Clause is concerned with the appointment of members of the Board to represent consumer interests. It was a remarkable factor in the Second Reading debate on the Bill that the Minister went right through his speech without once mentioniing passengers or users of B.O.A.C. services. The object of the Clause is to bring forward the fact that if we are to write off a very large sum of money—over£100 million—to put B.O.A.C. and B.E.A. on a commercial basis, it is only right and proper that, at the same time, we should take this opportunity to ensure that the consumer interest is adequately represented in the future. For reasons which I shall give, I think that it is reasonable to maintain that that consumer interest is not adequately represented at present. This is 1304 why my hon. Friends and I have tabled the Clause.
Our fundamental point is that we should put these Corporations not only on a commercial basis but on a competitive basis. If hon. Members look at the Clause, they will see that the Minister is asked to appoint three members of the Board who will represent the interests both of passengers and shippers; that they shall have access to the figures which will be necessary for them to carry out their duties and that, on any occasion when a resolution is passed by the International Air Traffic Association, these resolutions shall be put before the Minister in the usual way.
However, if the representatives of the consumer interests feel that it is not in the interests of passengers and shippers that the resolution should be approved, the Minister shall place the matter before Parliament and it shall then be possible for the House to decide whether to give effect to the I.A.T.A. resolution or refrain from doing so. This would ensure that the interests of the consumer are more adequately protected than they are at present.
It might reasonably be argued that a similar Clause should be added with regard to B.E.A., as well as B.O.A.C., but it would have been delaying the House unnecessarily if I and my hon. Friends had tabled a similar Clause to cover B.E.A. Clearly, if the principle is accepted by the Government—as I hope it will be—it will be possible to amend the Bill further in another place to cover B.E.A. The case for the Clause in connection with B.O.A.C. is somewhat stronger than that for B.E.A., because B.E.A., of course, operates both on domestic and international routes.
The Minister laid some stress during the Second Reading on the fact that B.O.A.C. operates in a competitive market. This was his first point in discussing the market structure of the industry when he said:…there is intense international competition on all routes.I suggest that this is not true and that competition has virtually been eliminated —both price competition and service competition—by the way in which the market structure has developed since the end of the Second World War.
1305 The Minister went on to say:…international fares are determined by machinery over which B.O.A.C. or any other single national airline, has relatively little control."—[OFFICIAL REPORT, 22nd November, 1965; Vol. 721, c. 340.]He did not make it clear whether he thought that this was good or bad, but certainly he proposed no steps which would elable B.O.A.C. to exercise more control in this respect. In my view it would be desirable that both B.O.A.C. and the Minister should be able to influence the fares which are determined under existing arrangements and that the House should have the right to scrutinisi, these, whenever they are not likely to be in the interests of the consumer.
I will, as briefly as I can, show how effectively competition is eliminated in this industry. The matter really dates back to the Chicago Convention of 1944, which effectively reaffirmed the sovereign rights of all countries over their air space. From then on, countries have used this sovereignty and the right to land for commercial purposes, to strike bargains in international agreements covering air fares. They have done this effectively not by a multilateral agreement, which it was not possible to create, but by a series of bilateral agreements of one of two kinds.
There is, first, what is known as the Bermuda-type agreement where there is no limit on the capacity of the route, but where both lines are entitled to fair and equal treatment. The effect of this is to prevent any significant increase in the market share of one party or another, for if this happens the other party always complains that excess capacity is being created. The alternative is the more rigid 50–50 type of sharing agreement. Under either type of arrangement any airline which is competitive is prevented from increasing its share of the capacity on the route. Thus, airlines are not encouraged to compete either in price or service.
In connection with these agreements, subsidiary arrangements have grown up under I.A.T.A. whereby fares are regulated by a series of traffic conferences, three in number, which determine what the fares shall be. These fares are then charged by all the member airlines. As 1306 a result, the consumer is completely deprived of any choice between one airline and another from the price point of view. He does not have any choice and he cannot say, "I will go by this airline rather than that because I can travel more cheaply". This means that the consumer does not have the sort of freedom which competition ought to give him.
The purpose of the new Clause is to restore to the passenger some degree of sovereignty in this matter. It is true that at present it is possible for individual airlines to stand out against any I.A.T.A. arrangement, but the threat of a so-called open market situation is not very effective. Moreover, an efficient airline may prefer to take a large profit—larger than its competitors—at the existing rates which have been fixed and at a constant market share rather than to cut its rates to compete with other airlines.
In addition to eliminating price competition, I.A.T.A. has sought to eliminate any form of competition in the service provided. This has gone to the ludicrous extent of I.A.T.A. defining what is meant by a sandwich—lest one airline gives a better sandwich than another and thereby increases its market share. Effective competition has been completely eliminated, contrary to the statement of the right hon. Gentleman, who has now been transported to the Home Office, in his speech on Second Reading.
I suggest, therefore, that the new Clause should be acceptable not only to my hon. Friends, but to hon. Gentlemen opposite, too, because it will ensure not only the interests of B.O.A.C., but also the interests of the customers, on whom the airlines must ultimately rely. Unless one ensures that competition is reestablished and that there is a market which will determine what kind of aircraft people want, there is little basis for taking investment decisions in the aircraft industry.
On 26th January last I asked the Minister whether consumers preferred cheaper to faster air travel. He gave an extremely equivocal answer which suggested that no market research had been undertaken to establish whether people preferred cheaper to faster air travel. He said that there had been some research in connection with the Concord and that there seemed to be a considerable demand 1307 for supersonic travel, but he made no mention of fares, rates, and so on, and whether it would cover the cost of the exercise.
On that occasion the right hon. Gentleman did not say whether people preferred cheaper to faster air travel and it is the contention of my hon. Friends and I that a large number of passengers would like to have a choice—whether they might travel on one airline or another on the basis of price and also on the basis of the service provide, or, alternatively, whether they prefer to travel at a cheaper rate but with not quite so good amenities. At the same time when we are writing off more than£100 million of public money we should surely do something to ensure the interests of the passengers, shippers and others.
§ Mr. John Rankin (Glasgow, Govan)
I listened with great interest to the remarks of the hon. Member for Worthing (Mr. Higgins). I notice that those who sponsor the new Clause do not include any hon. Members of the Front Bench opposite. I take it that the Opposition are divided on the merits of the new Clause. One can say without guessing too loudly that the Front Bench opposite dissapproves of the proposal because it is full of inherent danger to air passenger transport.
The hon. Member for Worthing wants to introduce the idea of competition, as if that were not presently existing in air travel. The difference today is that competition consists of one set of operators trying to provide better services than another. That can be instanced in many ways, such as a few extras in the lunch, the fact that a plane will carry passengers more quickly, a better type of plane and more and varied services during the journey.
Hon. Members who use air transport frequently know only too well how much is said about the services and amenities that are provided and how one group of people will prefer to travel by one company's planes while another group will prefer the services of a different company, flying between the same two points. That is the competitive position which we all accept today. The hon. Gentleman wants to induce competition by providing inferior services.
§ Mr. Rankin
The hon. Member envisages competition which would result in lower wages and salaries for those who operate these services. If we are going to refuse to accept decisions made by I.A.T.A. and try to cost our services at a lower price, we will have people operating aircraft for lower wages. That is a type of competition that I do not want to see, because it would bring injury to this sort of service.
The hon. Gentleman spoke of freer competition. That phrase has a long history, not only in our air services and our rail services but in the general industrial aspect of British life. Competition by providing lower safety precautions and lower salaries—those are the things that would inevitably occur.
The hon. Member said that no attempt has been made to find out exactly what passengers desire. I challenge that statement, too, because on various occasions I have filled in little cards issued by B.E.A. asking this, that and the other question about what I, as a passenger, think ought to be provided, what is lacking, and so on. Attempts to find out what passengers desire and how they are thinking are being carried out. I have replied to these questions put by B.E.A. and by other air services I have used.
The hon. Gentleman asked whether we really knew that people desired cheaper services as against faster services. Obviously, if a person is travelling by air he desires faster services—otherwise he would not travel by air. He would go by train. The train fare between London and Glasgow is less than the air fare, yet people travel by air rather than use the cheaper means of transport. The fact that those using the air services are prepared to use a form of travel much more costly than rail travel or road travel—which is another alternative service that is very much cheaper than air transport —is an indication that they want to travel more quickly.
I can remember that when we had aircraft travelling between London and Glasgow at 250 miles an hour, passengers with whom I travelled said it was too slow. They wanted that journey to take not two hours, but one hour—knowing quite well 1309 that for the faster journey we would have to pay more—
§ Mr. Rankin
Yes, of course. We have achieved the increase in speed. Instead of travelling at 250 miles an hour we now travel at 400 miles an hour, so that the journey only takes 1 hour 10 minutes instead of two hours. And fares have had to go up to meet, in addition to other things, the extra cost of faster travel.
§ Mr. Lubbock
I would remind the hon. Gentleman that in spite of increasing speed, air fares are among the few things that have come down, in real terms, in the last few years.
§ Mr. Rankin
That is not my experience. I am talking about our internal services. The London-Glasgow fare is£21 2s.—a higher fare than we have had since I started travelling by air nearly 18 years ago.
§ Mr. Kenneth Lewis (Rutland and Stamford)
The hon. Member realises, of course, that this new Clause would not affect the fares at home, but only overseas fares? I.A.T.A. has no control over fares in the country of origin.
§ Mr. Rankin
The hon. Member for Worthing (Mr. Higgins) said he wanted this provision to apply to B.E.A. If that is the case, he has said that it will apply to internal services. If he wants it to apply to B.E.A., I fail to see how he can keep out the internal services—
§ 4.15 p.m.
§ Mr. Higgins
With great respect, I said that in order to save time we had not tabled a similar new Clause that would cover B.E.A., but that, in any event, the case in respect of B.E.A. was less strong than that for B.O.A.C.
§ Mr. Rankin
Even accepting that change of mind, I assert that if we once apply this provision to the external use then, as sure as fate, the party opposite will seek to apply it to the internal side also. Start it in B.O.A.C. and we will finish up with it in B.E.A., also.
I do not know the mind of my own Front Bench on this matter, but I oppose the new Clause because I believe that, in the long run, it would result not only in cheapening the cost of air travel, but 1310 in cheapening the whole of the air services, including wages and all the other aspects that are now involved in transit by air. From that point of view, I hope that we on this side will not agree to the new Clause.
§ Mr. Cranley Onslow (Woking)
I intended to be brief, and I still intend to be brief. In addition, I think that it would be best and kindest if I made no particular reference to the arguments put forward by the hon. Member for Glasgow, Govan (Mr. Rankin)—not even to speculate on the reasons that might have induced people sitting next to him in aeroplanes flying towards London to wish the journey might be accomplished in half the time.
Two points deserve consideration. My hon. Friend the Member for Worthing (Mr. Higgins) has very clearly brought out the first point, which is that the effects of the I.A.T.A. agreements, as they have developed almost to a ludicrous point, deserve to be examined with great care. The stage has now been reached when we should, as a nation, consider whether we should not take steps to try to break some of the price ring which surrounds international air traffic regulations. There may be competition, but it is competition that relates only to speed, not to the extent of offering the kind of services that a great many consumers would, I believe, much prefer to those which they are now more or less forced to accept. This is the first reason why I commend the new Clause.
Second, if the Government will accept, if not exactly the text, at least the spirit of this new Clause, they will be being consistent. We recall the things said and the actions subsequently taken to appoint a consumer director to the board of British European Airways. I do not think it right for B.E.A. and B.O.A.C. to be treated differently in this respect. If there is a need, and the Government have argued that there is still a need, to have a consumer director for B.E.A., they should accept that there is a similar need to have one for B.O.A.C.
This is of particular importance, because B.O.A.C. carries the flag far further round the world than does B.E.A. It is important that all consumers in every part of the Commonwealth, in Asia and elsewhere, should receive the best possible attention. I am sure that at the moment 1311 B.O.A.C. does its utmost to provide it, but there must always be room for improvement.
With reference to shippers, action is urgently needed. I have been told that B.O.A.C. flew two new 707 freighters empty on its first cargo flight. That does not concern me so much as the situation at London Airport where, according to an editorial in the publication Skytrader International:London, B.O.A.C.'s greatest gateway for goods, is being shunned by U.S. exporters. Why? Customs clearance, they say, has become plagued with delay. Shippers use every lawful means to get cargo to London by other routes.In answer to a Parliamentary Question to the Chancellor of the Exchequer, I was told that in 1965 operators in and out of London Airport had to pay no less than£100,000 in consideration of extra services above the free attendance hours provided by Customs officials. A consumer or shipper director should be able to highlight at once these difficulties and make powerful representations about them. He would, I hope, have much more ability to correct them than is apparently provided in the powers which B.O.A.C. at the moment enjoys For these reasons I hope that the Minister will give the new Clause sympathetic consideration.
§ Mr. Ian Mikardo (Poplar)
I shall detain the House for only a short time to make only two points. If the hon. Member for Worthing (Mr. Higgins) thinks that there is no competition in obtaining customers—that is to say, selling tickets—between airlines, it must be a very long time since he has taken his morning stroll down the central part of Regent Street and along the eastern side of Piccadilly, where a large number of airlines have a large number of expensive offices, manned by expensive staff, entirely for the purpose of selling tickets, generally for journeys on the same routes, in competition with each other.
If the hon. Member thinks there is no competition between airlines it must be a very long time since he has looked at the advertisements in the travel sections of Sunday newspapers and similar journals, because there a great deal of space is taken up and much money burned up by one airline trying to com- 1312 pete for the same passenger on the same route with another airline.
The hon. Member starts with a wrong definition of competition. Perfect competition, of course, involves freedom in fixing prices and in services offered, but the absence of perfect competition does not mean the absence of competition. One could get perfect competition only when no one else was after the customer and that certainly is not the situation in which B.O.A.C. finds itself.
I very much regret the intensity of competition which makes the sales costs of B.O.A.C., and of course other airlines, a large and, I believe, an increasing part of the price that the passenger pays for his ticket. I would much sooner see that element of the ticket cost going over to reduce the fare or to improve the physical services offered, but all the airlines complain of the necessity of spending more and more on sales costs. I am sure that that proves conclusively that there is competition.
If I may say so without offence, in Committee the hon. Member gave us the benefit of some thoughtful and constructive speeches which clearly revealed that he has great knowledge and experience in the operations of commerce. He must know from that knowledge and experience that one of the worst ways of running a company or corporation, perhaps the worst way, is to run it by a board which is a collection of representatives of different interests instead of a board which is a policy-making body of people all of whom seek the same objectives.
As the hon. Member knows very well, probably better than I do, every board has to make decisions at times in which it has to weigh the interests of the finances against the interests of the customer and the interests of the customer against those of the worker, and so on. It has to make judgments about the relative validity of these different sectional interests. But, if we are to have a board which consists of representatives of sectional interests, we are asking for the judgment between the validity of different interests to be made by the advocates of those interests. That is a perfect way to secure that the judgment is made with the utmost lack of impartiality and, therefore, the judgment is made in the most ineffective way.
1313 Why stop at the interests quoted by the hon. Member? He spoke of consumers and of shippers. His hon. Friend the Member for Woking (Mr. Onslow), making plea, as he thought, for the representation of shippers, was a little confused. He actually called for representation of importers. He said that the United States shippers to this country have some complaints about what goes on. I dare say they have, but I am sure the hon. Member would not ask for American citizens to be on the board of B.O.A..C. or that the men who receive the goods should be put on the board. They are not shippers, but importers.
§ Mr. Mikardo
That is a very bright doctrine, that we should put on the board of a British public corporation people of foreign origin to represent special interests. That would start all sorts of precedents. If that is what the hon. Member has in mind I am not surprised that my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) pointed out that this Amendment is not supported by the Front Bench opposite. If we could have passengers, shippers and importers represented, why not workers? They are very much affected by the decisions of the board of B.O.A.C. We would finish with a board consisting of a large number of warring factions.
This is a piece of arrant nonsense. It would not have surprised me coming from some hon. Members opposite, but it does surprise me coming from the hon. Member for Worthing, who knows a great deal better than that. I feel sure that he knows so much better that he will not press the Clause.
§ 4.30 p.m.
§ Dame Irene Ward (Tynemouth)
This is a very good Clause indeed. I say at once, however, that I would not in the least mind travelling to Glasgow with the hon. Member for Glasgow, Govan (Mr. Rankin), because we are both talkers. I hope that I do not talk so much rubbish as he talked this afternoon.
§ Dame Irene Ward
As I have just flown out to New Zealand and back again 1314 over the Pacific, as I have travelled by a large number of airlines, and also because I have sat on the Select Committee on Nationalised Industries when we made an inquiry into B.O.A.C., perhaps I may be allowed to say why I support the Clause. I shall not do it in any grand tones, because I do not know anything grand about these things, except that if B.O.A.C. had been allowed to buy more VC10s it would have been better for this country. I am sorry that the Corporation was not so allowed.
When it comes to consumer interests or passenger interests, the policy of airlines leaves much to be desired. For instance, when I was flying, I think in the middle of the night, on my way to Fiji or Auckland somebody came round and, in the consumer interest or in the competitive spirit, offered me a small bathing beach bag in which I could not have put my bathing cap. When I said, "Thank you very much, but I do not think I want to add this to my luggage", the most charming air hostess said, "Have you not any children that you could give it to at home?" My answer was, "I am on my way to New Zealand from London. I do not want to carry a tiny beach bag round the world to give to a goddaughter or possibly a godson".
The hon. Member for Poplar (Mr. Mikardo) said something about the sale of B.O.A.C. tickets and walking down Piccadilly or some other part of London. When I got my air ticket to go round the world, I was given a lot of sticky labels which added to the weight of the air ticket, and a notice put in by B.O.A.C. saying, "In your own interests, please stick these on your luggage". I try to be co-operative, so I stuck two on my luggage. They did not last one minute, and I could not see that it mattered to anybody as I flitted from airport to airport on all sorts of different lines whether I had the sticky label or the bit of the label which was left on my luggage.
In the interests of passengers, a great deal of the advertising undertaken by all airlines needs to be considered by someone who really knows something about advertising. I do not assert that I know about that, but I am a practical person. I have observed what has been happening over the past few years—in fact, since B.O.A.C. first started. Believe me, I 1315 flew out to China during the war. I know quite a lot about flying, whether it is sitting on bomb racks or flying first-class coming back from New Zealand. I know a great deal about it, and I know what passengers would like.
As to the advertising to the effect that "B.O.A.C. takes great care of you", it takes less care of you today than it did in the past. The advertising or attraction to fly B.O.A.C. or any other line has become great, but when one gets to an airport the conditions are such that it takes much longer to get through the airport and thus on the way to one's destination.
§ Dame Irene Ward
If there were a consumer interest represented on B.O.A.C., and people spoke up enough, it could get this whole matter considered by the international organisation. I hope that hon. Members will not think that I believe that Great Britain cannot speak up for its own B.O.A.C. if it has views on policy to put forward. I do not denigrate my country. We have the best aeroplane in the world. I do not know how much the hon. Member for Orpington (Mr. Lubbock) stuck up for it. I know that I did. I think that it is the best aeroplane in the world.
§ Dame Irene Ward
It is not at all unfair. You muttered that I was talking nonsense, so I say you are talking nonsense.
§ Mr. Deputy Speaker (Sir Samuel Storey)
Order. The hon. Lady must not tell me that I am talking nonsense.
§ Mr. Lubbock
Nor must the hon. Lady accuse me of not sticking up for the VC10. The hon. Lady has obviously not been present at any aviation debate since the VC10 was first on the stocks.
§ Dame Irene Ward
That may be. The point is that I sat on the Select Committee on Nationalised Industries. I do not think the hon. Gentleman sat on that. I know a lot about it, so I will get on with it. Besides, I am a great deal older than he 1316 and I have more flying time to my credit. So that is that.
I am certain that it is in the interests of the community and of our air services that we should have someone who can speak up for consumer interests. There are some magnificent people on the boards, but they talk so much, quite rightly, about technical details, designs of planes, their performance, safety, and all the rest of it. We are very grateful for that. However, just a few little interesting details as to what the consumer thinks would not come amiss.
This provides me with a wonderful opportunity to raise something which I have wanted to raise for a very long time. Suddenly, British air services withdrew that very delightful sweet allowance. Travellers on other airlines all over the world still receive these fascinating sweets. If B.O.A.C. does not know it, there cannot be a country without women because it would not exist at all. I speak from a woman's point of view. If B.O.A.C. would only realise how much adverse comment there is because our airlines do not hand out those charming little sweets, it might do something about it. Perhaps all the grand people who sit on the board of B.O.A.C. do not like boiled sweets. Perhaps these people are so important that they are paid sufficient money that, even if they travel tourist, they are able to buy champagne. However, women take a great interest in these litle sweets. I say that there should be a woman on the board representing consumer interests.
As I travelled around the world I was offered socks. That might be quite nice. I was offered a little model of the VC10, which I was very glad to receive. I thought that was a very nice thing to be offered. I had all sorts of funny bits and pieces. But very little attention was paid to passenger interests at the airports where the planes discharged their passengers. It would be a very good idea to have consumer interests represented on the board.
In addition, I fully support what was said by my hon. Friend the Member for Woking (Mr. Onslow) about shippers. All sorts of peculiar things are happening in this direction. Of course, hon. Members opposite think that nationalised boards, with their ideas, are "know-alls" of everything. But they are not "know-alls". I am a great believer in having 1317 the appropriate representation of interests on these boards.
I know very well that what I say does not suit the Government, and I doubt that the speech of the hon. Member for Govan would suit the Government any more than it suited me. But it is going a bit far if hon. Members opposite and, indeed, the previous Government, who appointed the members of the board, think that the people who are connected with or have done magnificent work on the aeroplanes, on the technical side, costing and that sort of thing are able to represent every interest. Anyone who thinks that is living in a fool's paradise and should study the very good Report which the Select Committee on Nationalised Industries presented on the problems of B.O.A.C.
A little study of that Report shows that the structure of B.O.A.C. was severely criticised by the Select Committee because some of the people who were working in the Corporation, not on the hoard but as departmental chiefs, and so on, very able men indeed, were quite unable, because of the structure of the business, to present to the board what they thought ought to be presented to the board.
I am not all that keen on having a few grand people at the top without a few ordinary people on the board who can consider and present the problems which arise and give advice when necessary. This does not mean that the other members of the board would necessarily accept the advice which is offered, but the interests of the consumer must be put, and they cannot be put if there is no one on the board to make the case.
I should like to know how many members of the board of B.O.A.C. fly tourist or economy class when they go round the world. It makes a lot of difference. I imagine that they all get V.I.P. treatment. V.I.P. treatment is very nice when one happens to be a V.I.P. It am not complaining about that—it is absolutely marvellous—but someone who gets V.I.P. treatment, who is met and rushed away from the airport and who always travels first class, cannot know very much about the consumer interests of people who travel tourist or economy class.
The hon. Member for Govan seems to be very pleased that he has filled in a lot of little forms. I get simply infuriated 1318 when I am comfortably settling off to sleep, or looking out of the window and enjoying flying over Mont Blanc, or something like that, and then someone pushes a little form into my hand, and says, "Please fill this in". I do not want to fill in forms in aeroplanes. I very much doubt that all the forms which are filled in play any part at all. I should like to know how many of these little forms which are filled in are read by the present chairman of B.O.A.C. He may ask for a précis sometimes, but I cannot think that that sort of thing is any use at all.
We should be very well served if we had a representative of travellers and shippers on the board of B.O.A.C. who could explain how irritating it is to have so many forms to fill in. The right hon. Ernest Bevin said that it was his ambition that we should travel the world without passports. I should like to see his burly figure with us today and hear his comment on how nice it would be if we could only travel the world without having to fill in printed forms which do not mean anything. I am sure that he would be on my side.
Perhaps the Minister will tell me whether any members of the board of B.O.A.C. ever fly tourist or economy or ever fail to receive V.I.P. treatment. Someone who can get quickly away from the airport and not have to fiddle about as the ordinary passenger has to do would be much better off if he heard the views of a few ordinary people who travel in the ordinary way.
It is not a question of money. Of course, we are proud of our increased technical knowledge, of our improved speed and that sort of thing. We are proud of our record of safety, which is second to none—I am very proud of both B.O.A.C. and B.E.A.—but it is the smaller interests which ought to be looked after; I am not putting it higher than that. I am delighted that my hon. Friend the Member for Worthing (Mr. Higgins) talked about small things rather than great things. It is often the small things in this country which are so irritating, because the Front Bench opposite is all for the great and never for the small. I have the greatest possible pleasure in supporting the new Clause.
§ 4.45 p.m.
§ Mr. Peter Doig (Dundee, West)
The hon. Lady the Member for Tynemouth (Dame Irene Ward) argued that three representatives of consumer interests should have seats on the board. Obviously, this would cost money.
§ Mr. Doig
It would mean setting up some form of organisation for finding out what the consumers want. Yet the hon. Lady is against filling up a form which can convey direct to the board exactly what every consumer wants. She is quite willing to spend the public's money so that three people can demonstrate to the board what the public want, rather inaccurately because they will never get the information from everyone, but she is opposed to a simple method which costs little or nothing for supplying just that information at first hand. She objects to the small effort in filling up a form. This is a rather strange point of view.
§ Mr. F. A. Burden (Gillingham)
The House will probably agree that it is probably a good thing that there is not at present an absolutely silent aircraft flying between London and Glasgow with both my hon. Friend the Member for Tyne-mouth (Dame Irene Ward) and the hon. Member for Glasgow, Govan (Mr. Rankin) travelling on it. We have had an exhibition this afternoon of how they can talk, and I have no doubt that the rest of the passengers would have a rather difficult time.
We have rather got away from the intention behind much of the new Clause. Here I must declare an interest. I am a director of a private airline. I agree to some extent with the argument put from the opposite benches that the board must not be one which is likely to wrangle the whole time. One would have to be assured that any new members who were brought on to represent the consumers' interests would work in such a way that the board could get through some business at some time. Otherwise, there would be nothing done in the interests either of consumers or of anyone else connected with the airline.
The whole point of the new Clause, which, I think, was lost by the hon. Member for Poplar (Mr. Mikardo), is that 1320 these two airways Corporations of ours are great corporations. Let us accept that. It is not quite the point which I want to make, there is no difference of opinion on this, but I want to establish it nevertheless. Second, I imagine that we shall all agree that our two Corporations are not perfect. No commercial organisation is perfect, and one can always improve it. But, above all, they are public corporations; they are there for the benefit of the public. This is the crux of the matter.
If we accept that the nationalised industries are publicly owned and there to serve the public interest, it follows that the consumers' interests must at all times be given the greatest consideration. I do not imagine that the Minister and I will differ about that. Therefore, it is merely a matter of deciding how best the public interest can be served.
With respect, I think that it would have been better if my hon. Friend the Member for Worthing (Mr. Higgins) had suggested that the new Clause should be related mainly to B.E.A., not to B.O.A.C. In international aviation, the International Air Transport Association controls the fares. There is no question of any international airline being able to cut its fares on scheduled international services and as a nation we have no direct control over them. But B.E.A.'s internal services are a matter for us and the Minister of Aviation and the Air Transport Licensing Board set the fares.
What my hon. Friend the Member for Worthing is asking is thatThe Minister shall appoint three members …of the Board of the British Overseas Airways Corporation, to represent the interests of passengers and shippers.There is nothing wrong with that suggestion. There are many ways in which such representatives could help to some degree, although not to the extent that my hon. Friend believes. They could, for instance, give some help concerning airport conditions—but I would be out of order if I were to pursue the subject of airports, because they do not come within the Bill.
The main point regarding consumer interest has been dramatically highlighted this week. On Monday, I put a Written Question to the Secretary of State for Economic Affairs, asking him to refer to 1321 the National Board for Prices and Incomes the fare increases granted to B.E.A., which will raise internal fares by 7½per cent. The right hon. Gentleman replied, "No, Sir".
I have declared my interest, so I am able to make this point. When the application for the increases was made, it was contested by one of the independents and it went before the Air Licensing Board. In its decision, the board stated that it could not really decide whether the increases were necessary or not—and I draw the Minister's attention to this—yet, in effect, said, "But as B.E.A. say it needs the increases, we will grant them".
§ Mr. Mulley
I have read the report of the board and I think that the hon. Gentleman will agree that he is giving a rather colourful version.
§ Mr. Burden
But this is substantially what was said. The board said, in effect, that it really did not have enough information to be able to determine the merits, but that since B.E.A. had pressed its case it would grant the increases.
Here is surely an illustration of the necessity for having on the board of B.E.A. someone to watch the consumer interest. Had someone been watching the consumer interest in this case, the consumers would probably still be benefiting to the tune of about 15 per cent. on the fares which will have to be paid.
§ Mr. Mulley indicated dissent.
§ Mr. Burden
The right hon. Gentleman shakes his head. But at least B.E.A. would have had to make a stronger case. An independent will not say that an increase is unnecessary unless there is a fairly substantial case against making that increase. These matters are very important. If there had been a member of the B.E.A. board caring for the consumer interest at the time, on that specific date, does not the right hon. Gentleman agree that such a member might have had a substantial effect on the board in this issue? I am not saying that the Air Licensing Board was wrong in granting B.E.A.'s application. I presume that it did so in the light of the information it had. But the point my hon. Friend makes in the new Clause is that someone should be watching the public 1322 interest not only from the point of view of rising fares but from other aspects.
B.O.A.C. is a nationalised Corporation. It belongs to the public. It is an airline of which we are all justifiably proud. But it is not perfect and will never be perfect. There are criticisms of its services and many of its actions and therefore the new Clause would help. If the right hon. Gentleman will give the Clause sympathetic consideration, I feel sure that he will agree that, by it, the public image of this nationalised concern will be considerably improved and will benefit from the actions taken.
§ Mr. R. Carr
I am sorry to disappoint the hon. Member for Glasgow, Govan (Mr. Rankin) in telling the House that I do not disagree with my hon. Friend the Member for Worthing (Mr. Higgins). On the contrary, I agree very strongly with the purpose of my hon. Friend the Member for Worthing and my hon. Friend the Member for Woking (Mr. Onslow) and disagree very strongly with what the hon. Member for Govan had to say. However, having recently travelled with the hon. Gentleman in a not very large and not very fast aircraft between London and Bordeaux and back, I certainly stand up for him as a travelling companion. In that capacity I can give him very high references indeed.
This House should be very jealous about consumer interests. There are plenty of organised associations of employers, workers and others to stand up for sectional interests. It is much more difficult to find ways in which the rights of individual citizens can be represented. But that is one of the main functions we in this House should perform. Whatever legislation we may be dealing with, we should have that aspect in the forefront of our minds. For that, if for no other reason, the House should be grateful to my hon. Friends for this new Clause.
First, the Clause proposes that there should be three members on the board of B.O.A.C. charged with the direct task of looking after the interests of the consumers—and by consumers I mean both the individual traveller and those who use the services of the airline for the carriage of goods. I hope that the Minister will give serious thought to this. It is quite nonsensical, if the Government appoint a consumer director to the board of 1323 B.E.A., to refuse to appoint one to the board of B.O.A.C. It might be argued that three were too many. But to have no director of this kind on the board of B.O.A.C., after having made such a point of putting one on the board of B.E.A., would be indefensible, and the Minister must give us our way on that.
The second part of the new Clause deals with I.A.T.A. As the House will know from previous debates, we on this side believe that the best and ultimately the only safeguard for the consumer is competition. This has been made clear in airline operations as in other things in recent years. I am sure that the Minister and the Parliamentary Secretary will have read the proceedings of recent hearings in connection with licences for the operation of internal routes and will have noticed what was said by the Commissioner in summing up when he paid tribute to the new services which were provided for the benefit of the consumer when the independents started to operate and which were copied by B.E.A., but, unfortunately, withdrawn again after the independents temporarily went off the route.
I do not want to pursue that now except to give it as an example of the way in which competition can and does serve the interests of the consumer more effectively than any other way.
§ Mr. Rankin
I take it that the right hon. Gentleman is referring to the independents on routes between London and Scotland. Does he not realise that that competition is somewhat false for the simple reason that the services by the independents were highly subsidised?
§ Mr. Carr
I do not think, Mr. Deputy Speaker, that you would approve if we were drawn into a debate on the whole economics of internal airlines. The independents entered on that route in the belief that they could be expanding services. The point that I was making was that the introduction of those services directly resulted in better service for the consumer, not only on the independent lines, but on the nationalised lines. We therefore think that competition is important.
At the same time, I agree that one cannot have completely unrestricted competition with airline operations. There- 1324 fore, with both domestic and international routes one has to have some sort of regulation and it is all a matter of how much and in what form. Because of this I am in general agreement with the work done by I.A.T.A., but I also feel that it could easily become too restrictive and too powerful and that if we looked into it closely we could find ways in which from the consumer point of view matters might be improved. The hon. Member for Poplar (Mr. Mikardo) and my hon. Friend the Member for Tynemouth (Dame Irene Ward) spoke of the competition which took place in the form of advertising, or gifts of travel bags and models and the like, but that is exactly the sort of unwanted competition which the rigidity of I.A.T.A. thrusts upon the airlines. I do not believe that passengers want to be given these things to attract them to one airline or the other. That is not the sort of competition which they are seeking.
I sympathise with the purposes which my hon. Friends have in mind in promoting the Clause. The only reason why I shall not advise them to divide the House if the Minister is not very forthcoming, and I hope that he will be, is that I believe that the machinery and rules of I.A.T.A. are very complicated and should be considered as a whole rather than dealt with piecemeal.
Because I feel somewhat inhibited on those general grounds, I hope that the Minister will be as forthcoming as he can and will certainly accept the first part of the Clause and go as far as he can to a sympathetic understanding of the purposes of the second. What he might say might lead us to be able to make constructive suggestions about I.A.T.A., and so on, when the Bill goes to another place.
§ Mr. Mulley
The House has just heard a most remarkable speech from the right hon. Member for Mitcham (Mr. R. Carr) in which he has invited me to give a forthcoming reply on a new Clause for which he is not prepared himself to vote. If there is any doubt, perhaps I should say at once that the Clause in the form in which it appears is not one which I could recommend the House to accept. I hope that I shall never condemn any Motion or Amendment put down by an hon. Member for its drafting deficiencies, because I have had the experience of the 1325 difficulties which hon. Members encounter in that respect, but the Clause is such that it is not just a matter of putting drafting deficiencies right. Frankly, the whole concept is misconceived.
The whole purpose of this very cumbersome device of having three consumers on the board is to get the House of Commons to consider decisions of I.A.T.A. With rather less ingenuity than the hon. Member for Worthing (Mr. Higgins) has employed in drafting his Clause, he could at any time ask Questions about I.A.T.A., because I or my successors as Minister would be responsible for any such decisions. After the I.A.T.A. conference has made its recommendations, they are governmental decisions and there is no need to go through a very cumbersome procedure of having three members to represent consumer interests on the board.
Presumably, the idea was that they would make a report to the Minister who would then put it before Parliament and the hon. Members concerned could ask Questions or have a debate. There is rather lass complexity about the present procedure under which the matter has been raised in the past, and I expect that it will be raised again.
However, the House is entitled to ask about the particular issues which have been raised, the need or desirability of definite consumer representation on the one hand and the position of I.A.T.A. and the general issue of competition on the other. I confess that when the hon. Lady the Member for Tynemouth (Dame Irene Ward) was entertaining us with a characteristic and lively speech, I was almost persuaded that it would do no harm for such views to be expressed from time to time at board meetings of either independent or nationalised corporations. Frankly, I cannot answer her question, because it was outside my day-to-day responsibilities in a sense, when she asked how many and how often members of the board travelled by economy or tourist class. I can tell her that I as Minister and my hon. Friend the Parliamentary Secretary have had very much experience of travelling economy class in the airlines of the world and, unlike the hon. Lady, we did not have the tag "V.I.P.", so that we know what it is to trudge across an airport carrying one's own luggage. She need not despair that under present arrange- 1326 ments these matters are overlooked. I will see that her views are brought to the personal attention of the Chairman of B.O.A.C. who, I am sure, will be most interested to have her views about the operation of the airline and, in particular, on the subject of sweets.
The hon. Member for Woking (Mr. Onslow) asked why, as my predecessor had appointed a member to the board of B.E.A. for the purpose of representing consumer interests, I should not be able to accept this rather wider proposal in respect of the board of B.O.A.C. I should say straightaway that there is no question of there being a statutory representative of consumers on the board of B.E.A. There was a rather special reason at the time because there was a very substantial monopoly of B.E.A. services on the domestic routes, which is not the case now. In making recommendations any Minister is obviously bound to see that there is on the board a body of people with a wide spread of experience. On the present board of B.O.A.C. there are four full-time directors and seven part-time directors. In any event, I am only allowed to have 11 directors by the 1949 Act, which the movers of the Clause have not sought to amend. Without such an amendment I would have to put three of these members on by sacking three of the existing members.
§ Mr. Higgins
I am grateful for the right hon. Gentleman's kind remarks on drafting. I think that the Minister will find if he looks at the proposal that it is not necessary to do as he suggests. It is simply that three of the existing members could be appointed alternatively.
§ Mr. Mulley
If someone is a member of the board how does one appoint them as a consumer representative additionally? If the hon. Member is saving that the members of the board are in a sense representatives of consumer interests, then I will agree. I am certain that all the representatives of the board have the consumers at heart.
I dispute the argument that there is no competition in international airlines. The North Atlantic route at present is about the most hazardous and arduous competitive business of all. The hon. Member for Gillingham (Mr. Burden), who has some experience of these matters 1327 concurs with me in this. It is a highly competitive affair. Among those recently appointed to the board are businessmen and a trade unionist who is a former Member of this House, with a very important job concerned with redevelopment in the North-East.
At present, the board is made up of Members who have between them a wide knowledge and experience of interests to ensure that all these points are before the board when decisions are taken. I would agree with my hon. Friend the Member for Poplar (Mr. Mikardo) and there was in the earlier part of the speech of the hon. Member for Gillingham a recognition that one cannot run a board or business on a group of representative interests. The board has to take collective responsibility for decisions just as Mrs. Munro, the B.E.A. director who has a special concern for consumers, takes responsibility as a furl member of the board. I am glad to say that Mrs. Munro's appointment has been of that character from the beginning. She is a full member of the board.
§ Mr. Burden
Mrs. Munro is a rather unique person in this connection, because, while she is representing the consumer interests, she is a person with a very wide knowledge of the airline industry.
§ Mr. Mulley
I agree and I am quite certain that her appointment by my right hon. Friend was a very satisfactory and imaginative one. I hope that all members of the boards would acquire a great knowledge of the airline industry, so that they may carry out their duties more efficiently. It would not be right or proper to have designated consumer representatives on the Board even though they were not tied by the rather complicated duties which the hon. Member for Worthing seeks to impose upon them.
I would like to turn briefly to the other points of substance, about competition and, in particular, about our participation in the International Air Transport Association. I want to make it quite clear to the House and to the hon. Member for Gillingham that I cannot reply to his remarks about the recent decisions of the Air Traffic Licensing Board, because there are still seven days in which an 1328 appeal can be made and that appeal will be made to me. It will be my responsibility to decide. In these circumstances, I am a person with an interest and I regret that the hon. Gentleman saw fit to make the kind of remarks which he did.
§ Mr. Burden
I am very sorry about that. I did not realise we were still within the period. I apologise.
§ Mr. Mulley
I understand that there is still a week to go. The hon. Member will understand that it would be most improper for me to make any observations on this matter, quite apart from the fact that, as I see it, it is rather wider than the scope of the Clause.
The House must find out whether the Opposition support I.A.T.A. It is not simply an organisation of nationalised airlines. At least two of our own independent airlines, British United and British Eagle, are members. In other countries there are some publicly-owned, some partially publicly-owned and some completely privately-owned airlines involved. It is a matter for not only national, but international policy, and this should be made clear. The right hon. Gentleman was a little equivocal as to whether he supported I.A.T.A. or not. The broad principle of whether it is beneficial to the country for air corporations and independents to remain members of I.A.T.A. ought to be made clear so that no wrong inference will be drawn outside.
§ Mr. R. Carr
I will put this right, if there is any doubt about it. I thought I said very clearly that I recognised that completely unrestricted competition was not appropriate in that area of airline operation, and that there must be some body, both internal and international to control affairs. Therefore, I supported the principle of I.A.T.A. I do not think that this is inconsistent with saying that from time to time this House should take a look at I.A.T.A. and see how it is working. I also said that one reason why I would not advise my hon. Friends to divide on this new Clause was because if and when we take a look at the workings of I.A.T.A., it ought to be done as a whole and not bit by bit. In principle, I supported the I.A.T.A.
§ Mr. Mulley
It is as well to have no misunderstanding on this, because it has 1329 very wide implications outside. None of us would claim that I.A.T.A. is perfect but, like all international organisations, it is no better or worse than its members make it. If one belongs to an organisation, and is clearly in a minority, it is sometimes the case, as in every other international sphere, whether of sport or economic affairs, that one can persuade other countries to agree with one and carry the day. In other cases one may wish things to go differently.
It is in the interests of the country and of civil aviation that we continue to support the international organisations involved. If we were to accept this Clause it would not have any bearing on whether we belong to I.A.T.A. or whether things went on as they are. All it would do would be to give a statutory right to Members of Parliament to talk about it in this House. In my experience there is no need to appoint three people to write a report for Members of Parliament. After all Members of Parliament represent consumers because we are in direct contact with a whole range of passengers and shippers. In my experience our constituents very rapidly bring to us their complaints and experiences. Therefore, I should have thought that this device to permit Members of Parliament to do their job was not only unnecessary but very uncomplimentary to the way in which the House discharges its duties.
The hon. Member for Worthing did not like the answer which he received about market research, about whether people preferred to travel cheaper or faster. I was not able to give him a clearer answer because this kind of question is not susceptible to a precise answer. It all depends on the circumstances. One of the market research surveys conducted in the United States showed that it was very difficult to obtain significant data because about two-thirds of the people who were questioned were travelling on business or for some official purpose and did not have to pay their fares. Therefore, they were not primarily activated in their choice of aircraft by the amount which had to be paid for their fares.
Generally, if people on aircraft are asked to fill up forms, this is going to a lot of trouble to produce an answer which we probably know before we start. If we ask people the simple question, 1330 "Would you like to have something cheaper?", they will say "Yes". If we ask them, "Would you like to get to the end of your journey faster?", equally they will say "Yes". But between these two propositions there is a complicated range of options.
We are studying this matter with particular reference to the impact of supersonic flight and the Concord project.
§ Mr. Higgins
Would not the right hon. Gentleman agree that it would be possible to frame a question such as, "Would you prefer to have a 10 per cent. reduction in fares, or get to your destination 10 per cent. faster?".
§ Mr. Mulley
That would not be a very significant question either, because if a person were going across the world, 10 per cent. would have a very much greater bearing in both senses. In certain circumstances one would willingly pay 10 per cent. more to get to one's destination more quickly. My hon. Friend the Parliamentary Secretary spent 42 hours in an aircraft this week to get back here for the debate on the Plow-den Report. I think that he would have been very happy if he could have got back more quickly.
§ Mr. R. Carr
Would the right hon. Gentleman give a bit more recognition to the ordinary traveller? Many people, like myself, have relatives in, for example, Australia. They cannot spend three or four weeks to go by ship. They would willingly take three days rather than one day to go by air if they could have a cheaper fare for the slower journey. This is the sort of interest which we feel these great organisations are inclined not to give proper attention to.
§ Mr. Mulley
I was not saying that there was not a case for cheaper fares. What I was disputing with the hon. Member for Worthing was the difficulty of conducting market research on the basis of simple questions without having more information on the things which annoy travellers so much, and about which the hon. Lady the Member for Tynemouth spoke.
The right hon. Member for Mitcham cannot have it both ways. One cannot work with an international organisation and then expect me, or our individual companies or corporations to fix the 1331 fares. In the highly competitive international air transport business there are many airlines which are very anxious to reduce fares on the basis that it will increase their business. This is a point of view which comes before every airline board at every meeting which it has.
§ Mr. Burden indicated assent.
§ Mr. Mulley
The hon. Gentleman confirms that.
Neither the writing of consumer representation on the board into the Bill nor this very complicated way of discussing I.A.T.A. is necessary. I would ask the hon. Member for Worthing to withdraw the Motion. If he will not, I ask the House to reject the Clause.
§ Mr. Higgins
I cannot agree with any of the arguments put forward by the Minister. A very considerable division of opinion between the two sides of the House has been revealed. However, I agree with my right hon. Friend the Member for Mitcham (Mr. R. Carr) that perhaps this matter would best be discussed in the wider context of a discussion on I.A.T.A. I hope that we shall have the opportunity of having such a discussion in the near future. On that basis, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.