MINISTRY OF AVIATION (Hansard, 16 June 1966)

§ The Prime Minister (Mr. Harold Wilson)
With permission, Mr. Speaker, I would like now to answer Question No. Q10 with, for the convenience of the House, unstarred Question No. 21.
The House will know that the question of the future of the Ministry of Aviation has been under consideration for some time. The issues involved obviously raise a fundamental and difficult question, namely whether Ministerial responsibility for the production industry concerned should be associated with the responsibility for the management of the airlines, who are, amongst others, the customers of that industry, or whether the aircraft industry, which is a significant part of the engineering industry, should not be handled Ministerially together with the rest of the engineering industry.
In addition, there is the fact that a very considerable proportion of the nation's research and technological resources are engaged within the aircraft field, and this, together with the declared policy of the Government to transfer more and more of its resources front 1659 defence to civil production, including the development of export trade, provides a further case for ending the present division on the industrial side.
Problems arising out of responsibility for the airline corporations and broader issues, many of them international—including relations with the International Air Transport Association—have much in common with the problems associated with the national and international aspects of the shipping industry, for which the Board of Trade is responsible. The Government, have, therefore, decided that the responsibility for the aircraft industry should, in due course, pass to the Ministry of Technology as should most of the research and development functions. Responsibility for civil aviation will go to the Board of Trade.
For similar reasons, the shipbuilding industry, responsibility for which has been in the Department responsible for the shipping industry, namely, the Board of Trade, will also be transferred to the Ministry of Technology since it has become more and more illogical to separate marine engineering from other aspects of the engineering industry. Most of these decisions will take effect in the autumn.
I had considered an earlier transfer of all civil aviation functions to the Board of Trade, but with the urgent decisions still to be taken about future purchasing programmes of the airline corporations, I thought it right to leave responsibility for the supervision of the air corporations and independent airlines in the hands of my right hon. Friend the Minister of Aviation until those decisions had been taken. We shall, however, immediately be transferring to the Board of Trade all other aspects of civil aviation.
I should, perhaps, add that while it is intended that the greater part of the research and development work at present conducted by the Minister of Aviation will be transferred to the Ministry of Technology, a comprehensive examination is now being undertaken to determine to what extent procurement responsibilities of the Ministry of Aviation might more appropriately be transferred to the Ministry of Defence. This examination will be completed before the Ministry of Technology takes on these new responsibilities.

§ Mr. Biggs-Davison
Despite what the Government has done to the British aircraft industry, does it not deserve better treatment than this? On the question of space, which was part of the subject of my Question, can the Prime Minister say whether he now intends to bring together under one head this great question, which is at present the responsibility, I believe, of six different Ministers? Does the Prime Minister believe that Britain, which has led at sea and in the air, should now try to catch up in space?

§ The Prime Minister
In reply to the last point raised by the hon. Member, which was in his main Question, both the previous Government and we ourselves have had to take this decision. A considerable number of Ministers are concerned with space. While it might be convenient from one point of view to put it all into one Department, there are many questions affecting E.S.R.O. as well as E.L.D.O. on all these issues and I do not think that the best answer is simply to combine it all into one Department.
With regard to the general question and the hon. Member's preamble to his question, it is a very difficult decision to know whether to have the vertical or the horizontal pattern. I am bound to say that when the Ministry of Aviation was set up I was converted to the view that that was right. We all realise, however, particularly after reading the Plowden Report, what has gone wrong with that industry and what are its problems going back over four, five or, perhaps, even 10 years. On the whole, I think it right that this industry, which is so central a part of the engineering industry and of electronic research, should be combined, with its departmental responsibilities, with the rest of engineering and electrical engineering.

§ Mr. Rankin
The statement which my right hon. Friend has made is one of extreme complexity. Would it not have been advisable to discuss it in the light of a debate on the Plowden Report? Will we have an opportunity of debating the Plowden Report and also the statement which my right hon. Friend has just made? Will he recollect that civil aviation has been pushed around on other occasions and has been lodged with the Ministry of Transport and found not to work?

§ Mr. Speaker
Order. This is a Question, and on Questions only short supplementary questions may be asked.

§ Mr. Rankin
This is a short but important one, Mr. Speaker. Did my right hon. Friend the Prime Minister also give thought to the fact that if civil aviation was transferred to the Board of Trade that Department might make as big a mess of it as did the Ministry of Transport?

§ The Prime Minister
Civil Aviation was never in the Ministry of Transport during the currency of the present Government.

§ Mr. Rankin
No, the previous Tory Government.

§ The Prime Minister
Turning my mind back to the beginning of my hon. Friend's question, I agree that my statement was complex, but it was not 1 per cent. as complex as the problem with which I was dealing, as, I think, my hon. Friend will recognise. Secondly, as I have said, there is the big problem of whether to put the Department which is responsible for aircraft production and the customers of the industry into one or whether to try to get a grouping of engineering industries-in other words, vertical or horizontal. It is a very difficult decision.
Certainly, I do not think that this matter could be postponed longer until final decisions are taken on the Plowden Report, although my right hon. Friend the Minister of Aviation will be concerned with that. The question of debate, whether on the Plowden Report or on what I have said today, is a matter for my right hon. Friend the Leader of the House.
I forget the fifth part of my hon. Friend's supplementary question, but the answer to the sixth part is that I do not agree that the Ministry of Transport, even under the previous Government, made a hash of civil aviation. It is quite wrong to say that it did. There are, however, enormous difficulties, concerning both civil aviation and the aviation industry, and this is probably the right answer that we have found.

§ Mr. R. Carr
Can the Prime Minister tall us whether the aerospace industry was consulted in full about these changes, 1662 and, if so, whether it agreed with both the principles and their timing? Secondly, whatever may be the merits of these changes—and at first sight we are a little doubtful about them—is it not folly to make such an administrative upheaval of this kind when so many fundamental problems of the aircraft industry are in the melting pot and when the attention of Ministers and officials will inevitably be distracted from making the urgent vital policy decisions which must be made?

§ The Prime Minister
I am to see representatives of the aerospace industry. I should say right away that I think they will be against these decisions, I think that I am right to say that.
With regard to the question of timing, if we were to say that we should not make changes which are believed to be necessary as long as there are all the problems that the aircraft industry is facing, we should never make them. We want to get into a posture in which these decisions can be properly considered.
As to implementation of the Plowden Report and decisions consequent upon that, my right hon. Friend the Minister of Aviation will have time while he is still within his Department to deal with that question.
There are also, as I have mentioned, the important decisions about the future purchasing programmes of both the national and the independent airlines. That is why we are not immediately transferring that part of civil aviation to the Board of Trade.
If the right hon. Gentleman has the shipbuilding side in mind, the first stage of the implementation of the Geddes Report on Shipbuilding is being handled by the Board of Trade. That will provide a convenient point for transferring it to be dealt with with the rest of the engineering industry in the Ministry.

§ Mr. Probert
While congratulating the Prime Minister on making these arrangements, which are much more in conformity with present-day requirements, may I ask him to assure me that the staff concerned will be fully consulted about the necessary changes?

§ The Prime Minister
Yes, Sir. For many years there has been a problem of 1663 anxiety about the future among the staffs of the Ministries concerned. I think that this will provide a permanent solution and security for them to be able to do their work in what I think is the right interdepartmental setting.
As the right hon. Gentleman said, the aviation industry has gone through a very tough time over recent years. The Plowden Report gave its version of why that was. It has had an over-concentration of defence expenditure. It has also failed to develop as it should have developed on the civil side. We believe that putting it with the engineering industries will help it to face a better future—a better situation than it has faced in the past few years.

§ Mr. Lubbock
Will the Prime Minister bear in mind that if he is making an announcement of this importance it is much better to make it by means of a statement than by answer to a Question? May I ask him two questions? First, does he intend to introduce legislation giving effect to these changes during the current Session? Secondly, will he say something about the guided weapons side of the aircraft industry? Is this to be under the Ministry of Technology?

§ The Prime Minister
I think that I should have used exactly the same words if I had been making a statement. I cannot see that there would have been very much difference. There were Questions down by the hon. Member for Chigwell (Mr. Biggs-Davison) and by my hon. Friend the Member for Aberdare (Mr. Probert), and I thought it convenient to answer them.
Much of this can be done by Order, but if there is any legislation necessary, it will be introduced in time to meet the timetable which I have had in mind.
Guided missiles come under my concluding words, in which I said that certain aspects of procurement responsibilities on the defence weapons side are being looked at, at the moment, to see which of these responsibilities should be transferred to the Ministry of Defence.

§ Mr. Shinwell
When the Prime Minister said that shipbuilding would be transferred to the Ministry of Technology, did I understand him to say that shipping would be transferred there, too? [HON. MEMBERS: "No."] I am sorry if I mis- 1664 understood my right hon. Friend. May I, then, ask him whether he has finalised this position, or whether this is merely an outline of what is in contemplation?

§ The Prime Minister
These are firm Government decisions. Of course, where legislation and Orders are concerned, they are subject to the authority of the House. I said about shipbuilding, as I said about aviation, that there is a case for it being with shipping, which is with the Board of Trade, and there is a case for it being with the rest of the metal-using and engineering industries. On balance, we think that the second alternative is the right answer. But shipping is to stay in the Board of Trade.

§ Sir G. Nabarro
Is the Prime Minister aware that the greatest concentration of scientific manpower affected by his announcement today is at the Royal Radar Establishment, at Malvern, in Worcestershire? As that establishment works for the Ministry of Defence, for the Ministry of Aviation and for the Board of Trade in maritime and nautical matters, will the Prime Minister say whether it is the intention to fragment it, to disperse it, or to pass it in total to a new Ministerial parent and, if so, which parent?

§ The Prime Minister
The Royal Radar Establishment, like other Royal establishments, for example, Farnborough, has a tremendous record, as the hon. Member knows, over a very wide field, both defence and civil. The importance of these establishments is growing in the civil field and particularly in electronic developments for exports. There is no question at all of fragmenting the establishment. It will continue as it is. I think that I am pretty safe in saying that this establishment will pass, with the rest of responsibility for the electronics industry, to the Ministry of Technology.

§ Mr. Woodburn
Is the Prime Minister aware that the future of the country depends on being in the forefront of engineering and science skill and that this engineering science and skill is indivisible? He is to be congratulated, therefore, on trying to bring all the research and development in engineering as far as possible into one comprehensive circle. Is he aware that aerospace, especially, is revolutionising the whole engineering industry and that the skill and 1665 science from it must be made available to all the rest of industry in this country?

§ The Prime Minister
My right hon. Friend had a very close experience of these matters Ministerially before many hon. Members opposite, who obviously disagree with him, were even Members of the House. I very much agree with what he said. One of the trends in the last two or three years has been the growing importance of these industries in the civil field as opposed to the defence field, or as well as in the defence field. That is why we think it right that they should be unified in one Department which has a special civil as opposed to defence orientation.

§ Sir J. Eden
Is it not unfortunate that the Prime Minister has not taken this opportunity to announce a firm decision on the matter of military procurement? What will be the relationship between the Minister of Technology and the Ministry of Defence in respect of the acquisition and sale of military equipment?

§ The Prime Minister
This matter is at present being considered—indeed, it has peen under consideration for some little time—between the Departments concerned o see exactly what the boundaries should But clear defence issues, including nuclear defence questions, are matters for ihe Ministry of Defence.

§ Mr. Robert Howarth
Does the Prime Minister not feel that to divide responsibility for the growing field of transport will introduce the possibility of delay still further into an industry which has already suffered more than enough from indecision in the past?

§ The Prime Minister
Whatever we do Ave have to divide some responsibility. Today, civil aviation is divided from shipping in the international field and from internal transport in the domestic transport field. What we are doing by this operation is to ensure that civil aviation, with its vast international ramifications, will be in the same Department as shipping, which also has great international ramifications. It would not be possible to amalgamate all these and domestic transport, too.

§ Mr. Heath
I agree with the Prime Minister that decisions on these matters 1666 involve a very nice balance of responsibility, but whatever conclusions one reaches, is it not important that they should not be implemented until the major decisions affecting the industry which the Prime Minister has mentioned have in fact been taken, in particular on the question of military procurement?
Is it not also important that the balance between military and civil procurement should also be maintained and that military procurement should not receive supremacy over civil procurement? As the Prime Minister said that he will discuss these matters with the industry tomorrow, may I ask whether he will confirm that these decisions are liable to reversal by the Government in the usual way?

§ The Prime Minister
I did not say that I was going to discuss it with industry tomorrow. The right hon. Gentleman must have got his information from somewhere else. [HON. MEMBERS: "A leak."] Quite probably it was a leak. I did not say when it was.
I agree that this is a very nice balance, and I certainly agree with the right hon. Gentleman that we want to strengthen the civil as opposed to the military side because of the trend in industry. That is the basis of what we are trying to do. The major decisions have been taken. What is being looked at in defence procurement is only the marginal question of the drawing of the boundaries. For example, where there is an aircraft which is primarily defence, there is a strong case for defence handling the development of that aircraft, but where, as in so many cases, it has a big civil application, one can see the argument going the other way. This has been the problem throughout between aviation and defence and we are trying to solve that difficult problem.