HC Deb 18 November 1974 vol 881 cc867-9
4. Mr. Michael McNair-Wilson

asked the Secretary of State for Trade what recent discussions he has had with representatives of British Caledonian about the company's future; and if he will make a statement.

19. Mr. Leslie Huckfield

asked the Secretary of State for Trade whether he will make a statement on his policy on the future of British Caledonian Airways.

Mr. Shore

I saw the Chairman of British Caledonian Airways on 4th October and again on 14th October. He outlined his company's plans for the future, which have since been put into effect. The position of British Caledonian will be considered in the course of the review of policy which I have set in hand.

Mr. McNair-Wilson

Does not the right hon. Gentleman agree that there is every need to maintain the viability of this airline? What discussions has he had with this airline and with British Airways about the rationalisation of routes? Are the Government prepared to put up financial assistance to help in any such rationalisation?

Mr. Shore

I should not wish to prejudge the results of the inquiry to which I have referred. On the question of rationalisation of routes, I can tell the hon. Gentleman that there were continuing talks between British Airways and British Caledonian on this matter but agreement was not reached.

Mr. Mikardo

Does my right hon. Friend recall that this is the third time in the history of British civil aviation that a privately-owned second force has been artificially created for doctrinaire reasons to compete with the publicly-owned flag carrier, and that each time it has done damage to the flag carrier without doing any good for the airline concerned and it has got into trouble and had to be bailed out? Is my right hon. Friend aware that no country, not even the United States of America, can now afford two flag carriers, and is it not time that the Labour Government carried out Labour Party policy in this field if in no other?

Mr. Shore

I hope that my hon. Friend, who has a particular knowledge of this industry, will accept that we shall seek to carry out all the policies on which we gave pledges in our manifesto.

The answer to the particular question here, and it is a fundamental one that my hon. Friend has posed—namely, whether there genuinely is room for two airlines across the board in the way that the Edwards Committee originally recommended—is that this is a serious matter to which we have to find the answer, and I hope that we shall find it within the context of the review.

Mr. Hordern

Will the right hon. Gentleman accept that the one thing British Caledonian and other independent airlines require is commercial security for their operations? Will he, therefore, undertake that the present airline routes operated by British Caledonian will remain undisturbed?

Mr. Shore

I am not prepared to give any assurances in advance of the result of the review to which I have referred.

Mr. Russell Kerr

Is my right hon. Friend aware that there is a widespread demand, particularly among British Caledonian employees, that the implication of the question asked by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) should be carried out, namely, that this company should be nationalised as soon as possible in accordance with the Labour Party manifesto?

Mr. Shore

I note what my hon. Friend has said. There are many factors that we shall take into consideration in the course of the review.

Mr. Heseltine

Can the right hon. Gentleman tell the House how long the review will take? Secondly, does he accept that while the review is taking place there is no purpose in British Caledonian's developing or investing in any of the routes that are the subject of the review?

Mr. Shore

The hon. Gentleman ought to be aware that British Caledonian is not so much developing routes as it is contracting them. As for the review itself, there is the usual problem of combining thoroughness with speech, but I hope we shall complete it in the spring.