§ The President of the Board of Trade (Mr. Douglas Jay)The Government have decided to institute a broadly-based inquiry into the civil air transport industry.
Since the Board of Trade assumed responsibility for the industry a year ago, I have been impressed both by the achievements of the industry and by the problems it faces. There is undoubtedly a feeling of uncertainty about the future of British civil aviation. This has found particular expression in criticism of the present licensing system, with its influence on the structure of the industry. Hon. Members on both sides of the House have shown concern and sought reform.
Because our civil aviation industry is of great importance, both as an integral part of our system of transport and as an earner of foreign exchange, the Government are anxious that it should be as strong and competitive as possible. Before considering changes affecting the industry, the Government have decided to obtain independent advice. There has been no independent inquiry since the war, and the time has come to take stock. I am, therefore, setting up a committee with the following terms of reference:
To inquire into the economic and financial situation and prospects of the British civil air transport industry and into the methods of regulating competition and of licensing currently employed; and to propose with due attention to other forms of transport in this country what changes may be desirable to enable the industry to make its full contribution to the development of the economy and to the service and safety of the travelling public.While the inquiry must be thorough, it is also important that it should be completed quickly. I hope that it will be able to make at any rate a first report with recommendations in spring, 1968. 642 I trust that the industry itself will respond to this opportunity by giving the committee its full support and co-operation.
§ Mr. OnslowThe House will welcome the Minister's statement and will agree that the economic state of the industry has been causing grave concern. We would also agree that a review of the Air Transport Licensing Board procedure is overdue. May I ask the President, first, who will serve on this committee, and what staff it will have, and whether, in particular, any hon. Members of this House are likely to be invited to serve? When does he anticipate that the work of the committee will be likely to lead to legislation to implement its findings?
May I also ask him whether the committee will be empowered to look at the matter of investment grants; what evidence it will be able to take in this country and abroad, particularly in America; whether it will look into the development of regional air transport and air taxi work; and, finally, whether he agrees that, if this industry is to be strong and competitive, it must be an expanding industry?
§ Mr. JayI certainly agree with the proposition in the last part of the hon. Gentleman's remarks. As for the personnel of the committee, I am not at present able to give names. I thought it right to make this statement to the House immediately before it rose. The appointments would be made in due course.
The hon. Gentleman asked when legislation will be possible. The answer is not before next spring, because, first, we must have the recommendations of the committee, and before I know what they will be I would not like to pledge myself to the time when legislation will be introduced.
We would all like to have a practical solution to the problems of the industry as soon as we can. It will be part of the committee's function to look into questions of regional transport and the achievement of the best possible service throughout the United Kingdom.
§ Mr. MendelsonIs my right hon. Friend aware that there will be a general welcome for his announcement of this inquiry? So far as its terms of reference are concerned, will the committee conducting the inquiry be in a position to 643 look at structural changes and the relations between the publicly-owned company and the privately-owned company, bearing in mind that competition may not be the last word, but that co-operation and logical arrangement might be a much better solution?
§ Mr. JayI am grateful to my hon. Friend for his remarks. The issue which he has mentioned will be right in the centre of this investigation.
§ Mr. FortescueWhile I add my welcome to those of other hon. Members, may I ask the President to comment on the suggestion of my hon. Friend the Member for Woking (Mr. Onslow) about the examination of the investment grants condition for aircraft? As the right hon. Gentleman will know, at the moment aircraft are specifically excluded from invest-grant grants, for reasons which the right hon. Gentleman has given in the House, and with which we do not agree. Could this matter be specifically included in the terms of reference?
§ Mr. JayI do not think that the committee could reasonably be precluded from taking an interest and having views about this sort of issue.
§ Mr. MartenWould the Minister agree that one of the big drawbacks to fair competition is the point raised by the hon. Member for Penistone (Mr. Mendelson), namely, that part of the industry is nationalised and part is not? Would the committee be able to look into the question of bringing about fairer competition by investigating the proposition that the two nationalised corporations might be denationalised?
§ Mr. JayAll these questions would be within its terms of reference, but I am not expressing any opinion about the merits of that.
§ Mr. MonroIs the right hon. Gentleman aware that much needs to be done to encourage executive air travel and private flying generally? Will the committee look into those two aspects?
§ Mr. JayThat is rather on the margin under the committee's terms of reference. It will be mainly concerned with civil air transport used by the public.