CIVIL AVIATION (BERMUDA AGREEMENT)

HC Deb 28 July 1977 vol 936 cc1294-320

9.27 a.m.

Mr. Norman Tebbit (Chingford)

It might be for the convenience of the House, Mr. Speaker, if I took a little longer than usual to reach the heart of my remarks in order to give the Minister who is to reply to the debate, whom I know to be in the building, time to reach the Chamber. I am sure he will not take many minutes to get here. The Whip who is just leaving the Chamber will soon drag him in—

Mr. Michael Mates (Petersfield)

On a point of order, Mr. Speaker. Is it reasonable for my hon. Friend the Member for Chingford (Mr. Tebbit) to address a completely empty Government Front Bench?

The Under-Secretary of State for the Environment (Mr. Ernest Armstrong)

It is not empty. I am here.

Mr. Mates

Is that the Minister who is to reply to my hon. Friend's debate? Are we not making a farce of our proceedings? The departmental Minister is required to be here to give a serious reply to the debate, but, for reasons best known to himself, he may be tucking into his bacon and eggs. This will not do, Mr. Speaker. I ask for your assistance. I see that the Minister is now with us.

Mr. Speaker

I only wish that I were tucking into my own bacon and eggs.

Mr. Tebbit

Now we can get on to the menu of the day, Mr. Speaker. I am grateful to the Under-Secretary of State for Trade for having arrived so quickly when we had not expected to reach the debate until much later.

The whole renegotiation of the Bermuda Agreement springs from the Government's determination to implement the policies which were outlined in the February 1976 White Paper, "Future Civil Aviation Policy", Cmnd. 6400. The question arises of who wanted to choose the particular method of renegotiating the Bermuda Agreement as opposed to the more conventional way of negotiating within it. It appears that at some stage the Government decided that the only way they were likely to achieve their objectives would be to give notice of termination of the agreement and then, in the ensuing 12 months allowed for the negotiation of the new agreement, to try to attain their objectives.

There is good reason to doubt the wisdom of that decision, on two major grounds. The first is whether it was wise at any time to adopt that method of approach towards achieving a more equitable arrangement—indeed, a better arrangement—for the British carriers. Secondly, there is the matter of whether the time that the Government chose was the best time to renegotiate, if that was the way they were going to do it.

I shall deal with the first point a little later, but let me again put to the Minister some of the points that were put to him when we warned him some time ago of the consequences of choosing the particular time for renegotiation which he did. The time chosen was June of last year. It was know that there would be a presidential election in November and it was generally thought likely that that presidential election would lead to a change of President—indeed, a change of party in the Administration—in the United States. In the event the Government would be faced with what was essentially a lame duck Administration—perhaps that was not a bad idea, having one lame duck Administration talking to another—until January when the new President came into office.

So it worked out. For the first six months of the renegotiation it was extremely difficult for any negotiator on the American side to get down to the nuts and bolts of the agreement because he knew that the policy of the Government he was serving would change. He knew that the Government he was serving would change. So nothing serious could be done until January of this year.

Then the Americans, quite naturally, wanted to reassess their position in the new Administration and there were further delays, the breathless gallop towards the terminal date for the agreement, and the final farce in which it was held that midnight in the United States was the deadline and not midnight in the United Kingdom as everybody else had thought, in order to give a further five hours of negotiating time. During those five hours—that last breathless bit of the negotiation—it appears from all accounts that a number of important British interests were allowed to go by the board. They were allowed to go by the board because the American position at that stage was very much stronger than the British position, and both sides knew it.

The American negotiators made no secret of their willingness to allow the Bermuda Agreement to expire and for there to be no agreement and, therefore, no direct air services between the United States and the United Kingdom. It was clear that this would cause considerable harm to the airlines concerned in both countries, but what was also clear was that the traffic of the American carriers to Great Britain would be routed through Continental destinations, particularly through Paris. The traffic of the British carriers would, of course, be routed through. Canada. That was the intention.

What we know and what the Americans knew perfectly well is that once an agreement was reached and we returned to normal service the traffic which had been routed through Canada would very rapidly go straight back to the United States. No traffic would be lost thereby.

But some of the traffic which had been routed from the United States to Great Britain and had started to be routed from Paris, Amsterdam and other centres would pretty certainly continue to be routed through those terminals to Great Britain, because much of the traffic from the United States to Great Britain is, in fact, European traffic in the broad context although for historical reasons it has tended to come via London and then go on to the Continent rather than the other way round. We should have lost a great part of that traffic and found that in the long term a significant amount of traffic would remain with Air France, KLM and others, via the Continent, and be lost to British Airways. It is clear, therefore, that at the end the Americans knew that they were in a strong position, and the British negotiators knew that we were in a weak position. That was when the damage was really done.

At the end of the day, what came out of the agreement? The Government entered the negotiation with clear objectives. They wished to secure single designation on all routes between Great Britain and the United States. They entered with a determination to end, or very seriously erode, the fifth freedom rights of American carriers to carry traffic on from the United Kingdom to other destinations in Europe. They had the objective of seeking new gateway cities in the United States and of achieving a form of capacity control to eliminate over-capacity on the North Atlantic route.

How did they fare? On single designation—a policy to which the Secretary of State is greatly attached, a policy, indeed, on which the White Paper itself puts great stress—the Government did not achieve what they set out to do. In fact, we now have double designation. We have double designation of American carriers from New York, and we have double designation of British carriers to New York in the form of British Airways and Laker. We have double designation of American carriers from Los Angeles and we have great doubt about which British carrier will take up the double designation to even that up. It is possible that British Caledonian could seek to use the licences which it has to operate to Los Angeles, but it is pretty clear from what the Secretary of State has said that that would not be the Government's policy and they would prevent it, unless, of course, British Caledonian followed the example of Laker Airways and took legal action over the matter. In addition, there is another gateway to come. So the White Paper was contradicted on that score.

We then come to the question of the fifth freedom rights. The fifth freedom rights, as such, seem to have gone, and something called Note 1 has appeared instead in the new agreement. Note 1 is a very difficult note. It involves the continuance of what were the old fifth freedom rights of the American carriers but in a somewhat different form. Some of them have been completely eroded. Others are continuing. But one of the consequences of the last-minute rush of the negotiations is that neither side knew, after the agreement was initialled just before the deadline, what Note 1 meant. The Americans thought it meant one thing. The British thought it meant two different things, because some of the British delegation apparently thought it meant one thing and some thought it meant another—a typical example of the muddle one gets into in negotiating up against a deadline.

What is certain, however, is that American carriers still have a wide measure of freedom to carry traffic on through the United Kingdom to other destinations, traffic which one assumes ought to be carried by British carriers. The quid pro quo for that, which the Americans have given, is immensely less useful to the British carriers. After all, if we take a passenger into New York, there are not many places outside the United States to which he is likely to be going on. It is quite a long distance before he can get out of the United States. But if a passenger is brought into London there is an enormous number of other countries to which a passenger can go on. There is no reasonable quid pro quo and no equity in any arrangements which have been reached between the two sides.

It is difficult for the airlines concerned to understand and it is difficult for the experts to know what will be the effect of Note 1. It is not possible for me to stand here and say that Note 1 is 100 per cent. bad. We do not know, because nobody understands yet what the effects will be. What is certain, however, is that Note 1 has not achieved the Government's aim in their renegotiation.

With regard to the other objectives—the new gateway cities—certainly new gateway cities into the United States have been achieved for British carriers, but where was the pressure for these new gateway cities? It was not only pressure on Her Majesty's Government. It was merely that British Airways and British Caledonian were seeking new gateway cities. But there was enormous pressure from the United States industry—the United States carriers on the United States Government to open those new gateway cities. It was a door which required not even a kick hut simply a very modest diplomatic touch, and it would have opened in any case. There was no difficulty about it. We were right with the American industry in wanting those new gateway cities.

I think the Minister could reasonably accept that the new gateways which had been achieved in an atmosphere of considerable bitterness and confusion in the industry are certainly no better than those which could have been achieved by conventional negotiation.

Then, the Government wanted to negotiate capacity control agreements. We already had capacity control agreements. They were in existence. They were working. They were not working particularly well. There is an argument that capacity agreements are a bad thing and should not work at all. That is not an argument that I altogether accept, but certainly there were capacity agreements and there is no reason to believe that, if it had been in the interests of the industry, the British Government, the American Government and travellers between the two countries, those capacity agreements could not have been strengthened. Indeed, it is curious that Article 11 of the new agreement, which refers to capacity control, is now headed "Fair competition" and not "Capacity control".

When we look at the annex to which Article 11 refers, we find that the methods by which capacity control will be operated are fortuitous, confused and, in the words of one American commentator, a bureaucratic dream of delight. Apart from anything else, the whole thing was based on action after the event and on a view of what might happen in the future, but there was no possibility, if one carrier or another, one nation or another, dug its heels in, that capacity could really be controlled effectively. The whole of that annex is a mess.

The question we have to ask ourselves is: how good a deal has been achieved, not only in isolation but compared with what might have been achieved by negotiating inside the Bermuda Agreement and trying to achieve these objectives bit by bit? The effect on relationships between the United Kingdom and the United States has to be taken into account as well, and that was wholly negative.

I do not want to get on to ground that we might be covering later in the day on the subject of Concorde landing rights, but it seems astounding to me and to any other observer that the British Government, in the midst of seeking the good will of the American authorities in obtaining Concorde landing rights in New York, should choose to tear up the Bermuda Agreement, which covers all air services between the two countries, and to adopt an unpleasant attitude towards the Americans over that issue.

Mr. Robert Adley (Christchurch and Lymington)

I wonder whether my hon. Friend is going to cover this point in detail. It is clearly within the scope of the debate, and I am looking forward to hearing what he has to say on the subject.

Mr. Tebbit

My hon. Friend places me in a difficulty. I do not wish to presume that we shall not reach the subsequent debate later today. Therefore, perhaps it would be better if, not having prepared myself fully at this time for the matter of Concorde landing rights, my hon. Friend, who is very well versed in the matter, were to seek to catch your eye, Mr. Deputy Speaker, and to give us his views on the matter. But I can think of very few things that the Government could have done, short of declaring war on the United States, to do more harm to our chances of getting Concorde in.

The Under-Secretary shakes his head. I do not know what he thinks could have done more harm. I cannot think of anything. The proof of the pudding is in the eating. Concorde is still not in, despite the negotiation of a new air services agreement.

The Under-Secretary of State for Trade (Mr. Clinton Davis)

The hon. Gentleman is being very simplistic—uncharacteristically so when it comes to aviation matters, though not necessarily in other areas. The hon. Gentleman is fully aware, is he not, of the stance that the United States Government have taken in relation to the litigation currently being pursued in that country? He must be aware of the dispute about the authority of the Port of New York Authority in this matter. It is this rather than the United States Government's posture that goes to the heart of the matter.

Mr. Tebbit

I never thought that I should have to suggest that the Minister was naĩve, but clearly he is. On the surface, the situation in the United States is as he described it. But the situation in this country could be described by an outside observer as very straightforward in relation to the Post Office dispute. The law states "The letters shall be delivered. All you have to do is to implement the law." But we know that politics come into it and that the Government, for political reasons, are unwilling to implement the law of the land. Equally, we know that for obvious and clear political reasons no United States Administration will be very keen on using political muscle over this matter because there are not many votes for American politicians, so it seems or so they believe, for getting Concorde landing rights in New York. Therefore, we desperately need our friends there in this matter. The decision to tear up the Bermuda Agreement did not win us any more friends in high places in the American Administration who are concerned with civil aviation matters.

I may be being simplistic, but I think that the Minister is at least being naĩve in putting forward that argument. We are politicians, and we know that politics affect these matters.

I return to the matters that I was discussing. At the end of the renegotiations we must ask ourselves who wanted the agreement to be renegotiated in the first place. From whence did the pressure come? I have inquired around the industry and I have not found anybody who will tell me that he was lobbying the Minister to repudiate the Bermuda Agreement and renegotiate it. That is not just the case now, when it is seen to be a disaster, but it was the case at the beginning. Neither the State airline, nor British Caledonian, nor Mr. Laker was constantly lobbying for this to be done.

The story is circulating that a pair of civil servants dreamed up the idea because one was approaching retirement age and he had never achieved anything exciting. I am sure that is not true, but it is typical of the explanations that the Americans have for this bizarre step.

If it is a mistake, which it is, how can we restore our position? That is very difficult. Over the next 10 years we shall have to do precisely what we could have done in easier circumstances before—to negotiate within the new agreement bit by bit for what we need.

The difficulty is compounded because the British Government have not negotiated in an even-handed manner. There are good reasons for believing that the Government were not fair towards British Caledonian in the negotiations. In fact, there are very good reasons for believing that in the last hours of the negotiations the British were under pressure to chuck something into the pot, and it was British Caledonian they tended to chuck in.

The main requirement of British Caledonian was the opening of its routes into the southern United States, particularly Houston. In the negotiations it was clear to those who keep their ears to the ground —and, as usual, the negotiations leaked like a sieve—that the United States was perfectly happy to allow British Caledonian to operate out of Houston. Naturally, the Americans wanted reciprocal rights. But in their considerable generosity they were willing to come to arrangements giving a favourable position to British Caledonian for some years. They were willing to hold back their carriers from operating through Houston. In the end we managed to keep that position to a certain extent, but not entirely. We knew perfectly well that if an American carrier operated straight away out of Dallas-Fort Worth, which is in the same traffic area, there would be a severe problem for British Caledonian.

We now have a position in which there will be an American carrier in direct competition with British Caledonian. Even worse, at one stage the British Government had allowed a freight carrier to operate out of Houston to Britain, thus robbing British Caledonian of some £4 million to £7 million in revenue a year from freight. British Caledonian faces an extremely difficult situation.

British Caledonian had believed that the rights at Houston and Atlanta would be granted on a straightforward basis which might include provision for reciprocal United States services. The possibility of Fort Worth being introduced into the schedule did not arise until the last minutes of the negotiations. At that stage the Government gave it away and thereby damaged British Caledonian's interests. It is good that British Caledonian has the right to operate at all, but it could have been a great deal better. Now, the position of British Caledonian has been further eroded.

The House of Lords recently had a short debate on this matter, and I should like to draw the attention of the House to the most important point in that debate. I direct the Minister's attention to it. Lord Oram said: The counter argument, to which noble Lords have referred, is that from the start British Caledonian will have to face indirect competition from United States airlines operating to London from Dallas/Fort Worth. This airport, as has been said, is only some 200 miles from Houston, and clearly, I agree to a considerable extent that they are serving the same market".—[Official Report, House of Lords, 22nd July 1977; Vol. 386, c. 601.] I hope that the Minister will agree with that. Naturally, British Caledonian would have preferred not to have had to face competition from an American carrier at Dallas, and that is perfectly understandable. Unfortunately, it was just not negotiable that British Caledonian should be the only airline on either side to operate non-stop services between Texas and London for three years.

A little later in the Lords debate there appears another interesting proposition. The Command Paper of February 1976, which was approved by both Houses, put Dallas-Fort Worth into the sphere of interests of British Airways. We now come to the rub. It is becoming increasingly clear not only that it is the intention of the Government to leave British Caledonian in an exposed competitive position against the stronger American carriers operating from their home base but that the British Government intend to put British Airways into Dallas as a second British carrier, in the same traffic area as that from which British Caledonian operates. British Airways will be competing with British Caledonian.

I can only suspect that the Under-Secretary is suffering from some severe stomach disorder or has found that he is extremely short of answers to my questions and has gone to find someone who can tell him what to say.

Mr. Adley

The Minister may have beeen slightly put off by my arrival in the Chamber because I wish to take part in the debate. I am sure that the Under-Secretary knows that.

Mr. Walter Harrison (Treasurer of Her Majesty's Household)

rose—

Mr. Mates

On a point of order, Mr. Deputy Speaker. I heard the Deputy Chief Whip attempt to move the closure. If that was so, may I say that some of us have been here a long time trying to raise subjects and that it would be quite improper for the closure to be moved.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. The hon. Gentleman must have some psychic powers, because all I saw was the Deputy Chief Whip stand in his place.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

On a point of order, Mr. Deputy Speaker. Is the Government Deputy Chief Whip rising on a point of order, or has my hon. Friend the Member for Chingford (Mr. Tebbit) given way to him?

Mr. Tebbit

I have given way to the right hon. Gentleman.

Mr. Walter Harrison

I was posed a question and, as I was the only person on the Government Front Bench, I felt that it was only right that I should reply to it. That is what I was attempting to do.

I do not now have to reply because the Under-Secretary has returned and he can explain why he had to leave.

Mr. Clinton Davis

On a point of order, Mr. Deputy Speaker. The debate came on a little sooner than was expected and an urgent matter arose to which I had to attend. I thought that the hon. Member for Chingford (Mr. Tebbit) had reached a slight gap in his speech. I did not intend any discourtesy.

Mr. Tebbit

I am sure that the Minister did not intend any discourtesy. It is probably just as well that he left for a moment. Seeing the Deputy Chief Whip with the chance to say something rather than simply move a motion, it would have been less than generous of me not to give way to him.

The Government appear to be taking the attitude, consequent on renegotiation, that British Airways is to be allowed to go to Dallas-Fort Worth in direct competition not only with American carriers but with the British carrier, British Caledonian. This is extraordinary, because it seems to be in complete contradiction to the Government's White Paper. Paragraph 7 of the guidance in the White Paper says: In the case of long-haul scheduled flight services, i.e. services from the United Kingdom to a point outside the areas to which paragraph 9 applies, the Authority"— that is, the Civil Aviation Authority— should not, except as provided for in paragraph 8 license more than one British airline to serve the same route. The exceptions in paragraph 8 would not apply in this case. So the guidance to the CAA is clear and Lord Oram has confirmed that Houston to London and Dallas-Fort Worth to London services are drawing from precisely the same traffic catchment area. They are only 200 miles apart, and that is a very short distance in America.

Mr. Adley

May I reinforce that point'? Concorde has achieved an astonishing success and a high proportion of its traffic in Washington comes from hundreds of miles away. This is important in the light of the Bermuda Agreement and the situation in Texas.

Mr. Tebbit

My hon. Friend is right. This is the heart of the problem. Concorde draws from twice the catchment area of a conventional service. I do not know how one can maintain control, in commonsense terms, of two routes from the southern United States. Lord Oram said that the Command Paper of February 1976 put at least Dallas-Fort Worth into the sphere of influence of British Airways. That is the first that I have heard about it. It is the first that British Caledonian has heard about it. It might even be the first that British Airways has heard about it.

If we study the White Paper, we find in Annex A that only the British Caledonian sphere of influence is described. It is described as a direct route to Atlanta and/or Houston in the United States of America. How that can be held to imply, let alone to state clearly, that British Airways has the right to operate into Dallas-Fort Worth is beyond the reasoning of anyone who knows anything about the geography of the United States. I suspect that Lord Oram had never been to the United States when he came out with this sort of language, but that is obviously now the Government's policy.

I turn to the question that was asked in the debate that took place on the White Paper. I asked the Minister: At the end of this debate, however, we still seek assurance that the British Caledonian sphere of influence is now sufficiently large to ensure a margin of safety in the case of unforeseen circumstances. I later said: The Secretary of State has expressed his will that British Caledonian should succeed and his judgment that his guidelines will give it the means to do so. Our judgment is that he has cut the margins pretty fine—but he had to do so. However, we take him at his word that he now shares our objective, which is the continuing prosperity of an independent second-force scheduled flag carrier alongside the continuing prosperity of British Airways."—[Official Report, 26th February 1976; Vol. 906, c. 681.] I never did get that assurance clearly from the Minister. I was never told what he meant. However, I was clear enough. I referred to the unforeseen circumstances that might operate against British Caledonian and, of course, we have already seen that happen. For example, in the sphere that was granted to British Caledonian in West Africa, the company has been forced to withdraw its services from Zaire, for precisely the sort of circumstances that I had in mind—namely, political and economic problems. Those circumstances have had nothing to do with the airline; they have related to the country concerned. As the House will know, British Caledonian has found itself unable to get out of Zaire the earnings from its operations in that country.

Mr. John H. Osborn (Sheffield, Hallom)

I frequently go to Brussels and I see the Air Zaire flight. I think that it is almost a daily flight. Would the negotiations have been more successful from a British point of view and fairer as against American strength if the airlines of Europe had had a better forum to come together to sort out their joint requirements? I very much value my hon. Friend's view on this issue now and subsequently. This is a matter that has been raised in the European Parliament.

Mr. Tebbit

That is one of the most far-reaching questions that we have to face in Europe. Given the present atmosphere within the Common Market it would have been counter-productive to the British interest to attempt to negotiate with the other European countries. I say that for two reasons. The first reason is that the arrangements that each country has with the United States are variable. Some countries have a better balance of advantage in their air traffic arrangements with the United States than Great Britain. They would have been very unwilling to see that advantage eroded, even in the interests of Europe as a whole.

There is no doubt whatsoever that they would have been bitterly opposed to giving this British Government anything. I shall not say "by way of assistance", but they would have been bitterly opposed to allowing the British Government to profit at their expense. At a time when the Cabinet is split on the issue of European elections and it is quite clear that the British Government will not be complying with their treaty obligations, and at a time when we are unwilling to revalue the green pound and are hence asking, the Germans, the French and others to subsidise our food to the tune of £300 million a year, it would have been very unwise of us to have gone forward in a joint negotiation with the United States with our European partners.

At some time in the future it may be possible to do that, but I do not see it happening in the very near future, and certainly not while we have in office a Government who are under the influence, if not under the control, of a party that is becoming more and more dedicated to taking us out of the Community in breach of our treaty obligations.

Therefore, whatever view one takes of the question whether we should be in or out, while the Labour Party is in the state in which it is, it is no time to ask for help from our friends in Europe.

I ask the Minister this question: is he of the opinion that the routes from London to Houston and from London to Dallas-Fort Worth are so different that although the terminal cities are only 200 miles apart, and although they have the same business catchment area, they constitute separate spheres of influence? If so, the British Caledonian sphere of influence is one of the smallest that one could imagine in this respect. It would be akin to declaring that Boston was a totally separate sphere to New York. In fact, it would be worse than that, because there is more distinction between Boston and New York than there is between Dallas and Houston.

Those are some of the matter that I raise with the hon. Gentleman. But there are one or two others.

First, as I mentioned, the White Paper, Cmnd. 6400, makes it perfectly plain that the Government's policy and, indeed, their guidance to the Civil Aviation Authority, is that the CAA should not license two British airlines in competition on the same route. The White Paper was approved by the House. We are now going in for double designation of British carriers.

Do the Government need to issue a revised White Paper? Do they feel that they need statutory authority to change their policy? Will they require new legislation to do any of these things? I see that the hon. Gentleman is nodding his head. That is a most useful admission from the Under-Secretary, because when we were originally given this White Paper, which changed the policy from that of the previous White Paper, the Government's position was that they did not require legislation to do it with the same act of approval, the White Paper was sufficient. We have now got a totally different story from the Government over these two matters. Then, they felt that legislation was not needed; now, they feel that legislation is needed.

Mr. Ridley

My hon. Friend is making rather a meal of this matter. Does he not remember that when the House was asked to take note of the White Paper on public expenditure, the House voted not to take note of it, and it then became part of Government policy? If one can get away with that, I think that one can get away with what my hon. Friend is saying about this White Paper.

Mr. Tebbit

I would have thought it would have been generally accepted that if one has a White Paper enunciating policy which has been approved by the House the Government would have come forward with legislation or a new White Paper or something.

Mr. Ian Gow (Eastbourne)

Is not my hon. Friend overlooking page 4 of the letter of 15th December 1976 sent by the Chancellor of the Exchequer to Dr. Johannes Witteveen? That letter, as my hon. Friend knows, was placed in the Library on the same day as the Chancellor made his statement to the House about the loan made to the Government by the IMF. I quote only one sentence which is germane to my hon. Friend's argument: For this purpose,"— this is the Chancellor writing to the Managing Director of the IMF— an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector". My hon. Friend may have overlooked that and he ought to pay more attention to that document, which was placed in the Library by the Chancellor as long ago as 15th December last year.

Mr. Tebbit My hon. Friend is indeed right. I confess my sin immediately, that I have not paid sufficient attention to that letter. But my sin is not half as great as that of the Chancellor, who does not seem to be paying very much attention to it either.

I would presume that the Chancellor would have posted it on the bathroom wall so that every time he had a bath he could read it and ruminate upon it. But that, as my hon. Friend implies, suggests that it should be rather more the duty of British Caledonian to provide these services than of the State carrier.

To be fair about these matters—and one wishes to be fair—I should say that British Airways is far from the worst of the nationalised industries in taking public finance from the Government. Indeed, it is doing extremely well in raising its own money in its own way.

Mr. Gow

Before my hon. Friend leaves that point, it is only right to say that it is not only my hon. Friend who is monitoring very carefully the undertakings given by the Chancellor to Dr. Witteveen—because one of the unseen attenders at our debates in Dr. Johannes Witteveen. Is my hon. Friend aware how closely Dr. Witteveen follows our proceedings and how much attention he will be paying to the courageous speech that is being made by my hon. Friend? It is that letter of 15th December 1976 and the monitoring of it, not only by the IMF but by my hon. Friend, that I think will be able to gain a very high appointment with the IMF for my hon. Friend in 30 or 40 years' time, when he has given up this place.

Mr. Tebbit

I am grateful to my hon. Friend. I must confess that I did not until this moment have that prickly feeling that I was being watched by unseen persons.

Sir Bernard Braine (Essex, South-East)

Apart from unseen witnesses, there must be nearly 55 million people who, if they knew what my hon. Friend was saying to the House, would give loud praise, if for no other reason than that my hon. Friend is going to the heart of the way in which this Government waste British resources and injure British interests.

Mr. Tebbit

As always, my hon. Friend puts it quite beautifully in a nutshell. In the aura of the noted Dr. Witteveen, who is keeping an eye upon us in the kindly manner in which he operates in the IMF, I shall come to a conclusion. [HON. MEMBERS: "No."] I know that my hon. Friends are fascinated by my speech.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

Coming a little closer to home than Dr. Witteveen, I have the misfortune to have to travel between London and Edinburgh once a week. I have a choice between going by nationalised shuttle service or by British Caledonian. That choice is essentially one between travelling freight and travelling passenger. If one goes by British Caledonian one is looked after, fed and watered, one can sit where one likes, and one is not crowded, but if one goes by British Airways one is not fed or watered, and the same number of crew wake one up to ask for a ticket which one has bought beforehand.

Mr. Patrick Cormack (Staffordshire, South-West)

On a point of order, Mr. Deputy Speaker. Is it in order for my hon. Friend to malign the stewards of British Airways in that revolting way?

Mr. Deputy Speaker

That is nothing to do with the Chair.

Mr. Tebbit

I hope that my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fair-bairn) will not unduly criticise British Airways. It is quite the best of our nationalised industries. When we find a nationalised industry that is running as well as British Airways we should say so and support the management that is trying to make it better, and the staff who work at making it as good as it is. [Interruption.] My hon. Friends should relax. It is wrong to criticise British Airways in that way. I appreciate what my hon. and learned Friend says about the shuttle service. I do not find it particularly attractive. I hope that he will not let this spill over into generalised and unjustified criticism.

Mr. Fairbairn

rose—

Hon. Members

Withdraw.

Mr. Fairbairn

I have said nothing that I would want to withdraw. I repeat what I said. The shuttle service is the most nauseating invention, and only a most insensitive organisation such as British Airways could operate it.

Mr. Tebbit

We might leave the matter there. I shall conclude my speech.

Mr. Gow

Most uncharacteristically, my hon. Friend has in mind to conclude his speech before he has completed his argument. It would not be right for us to allow my hon. Friend to sit down at this stage when there are so many further arguments that could, and I venture to say should, be advanced. For example, I have the complete text of the letter of 15th December 1976 from the Chancellor of the Exchequer to Dr. Witteveen. Many of these arguments are not simply germane; they are central to the whole of my hon. Friend's case, and the letter should be handed down to him.

Mr. Nigel Lawson (Blaby)

On a point of order, Mr. Deputy Speaker. Is it not the case that an hon. Member may speak only once on the Second Reading of the Consolidated Fund Bill and that if my hon. Friend has any point he wishes to make on any of the subsequent subjects listed in this debate he may do so in his speech, otherwise he will not have a subsequent chance to do so? Therefore, is this not the only opportunity he will have to address the House on some very interesting matters?

Mr. Gow

Further to that point of order, Mr. Deputy Speaker. Is it not the case that it is in order for an hon. Member to make more than one speech on the Second Reading of this Bill, provided that he has the leave of the House? Who can doubt that leave to address us a second, third or even twenty-third time would be granted to my hon. Friend? If that should be the case, perhaps the important points raised could be canvassed.

Mr. Deputy Speaker

It is correct that on the Consolidated Fund Bill an hon. Gentleman should address the House only once. It is also important that he should keep his remarks relevant to the matter under discussion.

Mr. Tebbit

As I was saying—

Mr. Ridley

On a point of order, Mr. Deputy Speaker. What is the reason for an hon. Member having to keep his remarks relevant? Surely he may discuss any matter that arises on the Consolidated Fund Bill. We are discussing the Second Reading of a Bill that covers the whole ambit of Government activity. It would be helpful to the House if you would explain in what way an hon. Member would be circumscribed in talking about any matter that comes to his mind at this time.

Mr. Tebbit

I intend to remain very much closer to the point I raised originally and not to be tempted by my hon. Friends into going too far. I shall keep the letter which purports to be from Dr. Witteveen in some convenient place, although it worries me that the last page is torn and that the signature is missing. I hope that it is genuine and I hope that my hon. Friend did not get it from a reporter on the Daily Mail.

Mr. Cormack

It could be MI5.

Mr. Tebbit

It could, indeed, be MI5. I prefer to get on with the speech I am making and deal with the issue of the Bermuda Agreement instead of being sidetracked.

The point I wish to make is quite clear. During the negotiations on the Bermuda Air Service Agreement it has become apparent that the Government have changed their overall policy towards the spheres of influence of British Caledonian and to British Airways—

Mr. Walter Harrison

rose—

Mr. Cormack

On a point of order, Mr. Deputy Speaker.

Several Hon. Members

rose—

Mr. Walter Harrison rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House proceeded to a Division—

Mr. Cormack (seated and covered)

On a point of order, Mr. Speaker—

Mr. Speaker

I call the hon. Member for Staffordshire, South-West (Mr. Cormack), if I recognise him correctly.

Mr. Cormack (seated and covered)

Is there any precedent for the Government seeking to curtail an important debate in this manner when my hon. Friend the Member for Chingford (Mr. Tebbit) has not finished a speech, which was entirely pertinent, relevant, and captivating to his audience?

Sir Bernard Braine (seated and covered)

Further to that point of order, Mr. Speaker. There is a valid argument that there is surely no precedent for the Government to act as they have before the Minister, who has been in attendance waiting to speak, has had the opportunity to address the House. While none of us would deny that in certain extreme circumstances the Government have the right to curtail discussion—much as Back Bench Members dislike it—is it not gravely discourteous and an affront to the House to do so before the Minister who has been in attendance and who has been palpably ready to address us has had the opportunity so to do?

Mr. Adley (seated and covered)

I wish to raise a point of order, Mr. Speaker, by no means a frivolous one. You will be aware of the importance of the Bermuda Agreement, and some hon. Members are most anxious to speak on this issue. It is not just a question of discourtesy. The Government Deputy Chief Whip appears to have some motive in mind for curtailing this debate not only before the Minister has spoken but before other hon. Members, who have contributions to make which may be critical of the Government's attitude to some aspects of the Bermuda Agreement, have also had the chance to speak.

Mr. George Cunningham (Islington, South and Finsbury)

rose—

Mr. Tebbit (seated and covered)

Further to that point of order, Mr. Speaker. I believe that it is customary for hon. Members not to stand when points of order are raised after a Division has been called. The point which may perhaps have been missed is that the Bermuda Air Services Agreement is in fact a treaty—

Mr. George Cunningham

This is the House of Commons at work!

Mr. Adley

Name him. [Interruption.]

Mr. Speaker

Order. I cannot hear the point of order.

Mr. Tebbit (seated and covered)

The Bermuda Air Services Agreement is in fact a treaty between the United Kingdom and the United States. The Government Deputy Chief Whip has chosen to move the closure, which prevents discussion of that treaty. I suggest that perhaps this should not be so.

Mr. Speaker

I fear that the House will decide whether the Question should be put. I can only accept the closure, or otherwise, using my judgment. I accepted the closure and now the House will have to decide.

The House divided: Ayes 103, Noes 32.

Division No. 232]	AYES	[10.29 a.m.
Armstrong, Ernest	Garrett, W. E. (Wallsend)	Orme, Rt Hon Stanley
Ashley, Jack	George, Bruce	Owen, Rt Hon Dr David
Atkinson, Norman	Hamilton, W. W. (Central Fife)	Pendry, Tom
Barnett, Guy (Greenwich)	Harper, Joseph	Phipps, Dr Colin
Barnett, Rt Hon Joel (Heywood)	Harrison, Rt Hon Walter	Price, C. (Lewisham W)
Bates, Alf	Hattersley, Rt Hon Roy	Rees, Rt Hon Merlyn (Leeds S)
Benn, Rt Hon Anthony Wedgwood	Hayman, Mrs Helene	Richardson, Miss Jo
Blenkinsop, Arthur	Healey, Rt Hon Denis	Rodgers, Rt Hon William (Stockton)
Booth, Rt Hon Albert	Hooley, Frank	Roper, John
Bottomley, Rt Hon Arthur	Horam, John	Shaw, Arnold (Ilford South)
Brown, Robert C. (Newcastle W)	Howells, Geraint (Cardigan)	Sheldon, Rt Hon Robert
Brown, Ronald (Hackney S)	Huckfield, Les	Shore, Rt Hon Peter
Butler, Mrs Joyce (Wood Green)	Hughes, Robert (Aberdeen N)	Silkin, Rt Hon John (Deptford)
Callaghan, Rt Hon J. (Cardiff SE)	Jackson, Miss Margaret (Lincoln)	Silverman, Julius
Campbell, Ian	Janner, Greville	Spearing, Nigel
Carmichael, Neil	Jeger, Mrs Lena	Stallard, A. W.
Carter-Jones, Lewis	Jenkins, Hugh (Putney)	Steel, Rt Hon David
Clemitson, Ivor	John, Brynmor	Stewart, Rt Hon M. (Fulham)
Cocks, Rt Hon Michael (Bristol S)	Judd, Frank	Strauss, Rt Hon G. R.
Colquhoun, Ms Maureen	Kaufman, Gerald	Summerskill, Hon Dr Shirley
Corbett, Robin	Latham, Arthur (Paddington)	Taylor, Mrs Ann (Bolton W)
Cox, Thomas (Tooting)	Leadbitter, Ted	Thomas, Jeffrey (Abertillery)
Cunningham, G. (Islington S)	Lever, Rt Hon Harold	Tuck, Raphael
Davidson, Arthur	Lipton, Marcus	Walker, Terry (Kingswood)
Davis, Clinton (Hackney C)	Luard, Evan	Ward, Michael
Deakins, Eric	MacFarquhar, Roderick	Watt, Hamish
Dell, Rt Hon Edmund	McNamara, Kevin	Willey, Rt Hon Frederick
Dormand, J. D.	Mason, Rt Hon Roy	Williams, Alan Lee (Hornch'ch)
Douglas-Mann, Bruce	Meacher, Michael	Williams, Rt Hon Shirley (Hertford)
Eadle, Alex	Mikardo, Ian	Williams, Sir Thomas (Warrington)
Ellis, John (Brigg & Scun)	Millan, Rt Hon Bruce	Wilson, Rt Hon Sir Harold (Huyton)
English, Michael	Miller, Dr M. S. (E Kilbride)	Wrigglesworth, Ian
Ennals, David	Miller, Mrs Millie (Ilford N)
Foot, Rt Hon Michael	Morris, Charles R. (Openshaw)	TELLERS FOR THE AYES:
Fowler, Gerald (The Wrekin)	Morris, Rt Hon J. (Aberavon)	Mr. Peter Snape and
Fraser, John (Lambeth, N'w'd)	Moyle, Roland	Mr. Ted Graham.
Freeson, Reginald

NOES
Adley, Robert	Gardner, Edward (S Fylde)	Rhodes James, R.
Alison, Michael	Gow, Ian (Eastbourne)	Rhys Williams, Sir Brandon
Atkins, Rt Hon H. (Spelthorne)	Hamilton, Michael (Salisbury)	Ridley, Hon Nicholas
Biggs-Davison, John	MacGregor, John	Sims, Roger
Bottomley, Peter	Mates, Michael	Tebbit, Norman
Braine, Sir Bernard	Morgan-Giles, Rear-Admiral	Townsend, Cyril D.
Clark, Alan (Plymouth, Sutton)	Neave, Airey	Weatherill, Bernard
Cormack, Patrick	Neubert, Michael
Drayson, Burnaby	Newton, Tony	TELLERS FOR THE NOES:
Durant, Tony	Osborn, John	Mr. Nigel Lawson and
Eyre, Reginald	Prior, Rt Hon James	Mr. Carol Mather.
Fairbairn, Nicholas	Rees, Peter (Dover & Deal)

Question accordingly agreed to.

Mr. Speaker

The Question is, That the Bill—

Mr. Cormack

On a point of order, Mr. Speaker—

Mr. Speaker

I cannot take points of order while I am putting the Question.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 103, Noes 21.

Division No. 233]	AYES	[10.40 a.m.
Armstrong, Ernest	Carter-Jones, Lewis	Eadle, Alex
Ashley, Jack	Clemitson, Ivor	Ellis, John (Brigg & Scun)
Atkinson, Norman	Cocks, Rt Hon Michael (Bristol S)	English, Michael
Barnett, Guy (Greenwich)	Colquhoun, Ms Maureen	Ennals, David
Barnett, Rt Hon Joel (Heywood)	Corbett, Robin	Foot, Rt Hon Michael
Bates, Alf	Cox, Thomas (Tooting)	Fraser, John (Lambeth, (N'w'd)
Benn, Rt Hon Anthony Wedgwood	Cunningham, G. (Islington S)	Freeson, Reginald
Booth, Rt Hon Albert	Davidson, Arthur	Garrett, W. E. (Wallsend)
Bottomley, Rt Hon Arthur	Davies, Bryan (Enfield N)	George, Bruce
Brown, Robert C. (Newcastle W)	Davis, Clinton (Hackney C)	Hamilton, W. W. (Central Fife)
Brown, Ronald (Hackney S)	Deakins, Eric	Harper, Joseph
Butler, Mrs Joyce (Wood Green)	Dell, Rt Hon Edmund	Harrison, Rt Hon Walter
Callaghan Rt Hon J. (Cardiff SE)	Dormand, J. D.	Hattersley, Rt Hon Roy
Carmichael, Neil	Douglas-Mann, Bruce	Hayman, Mrs Helene
Healey, Rt Hon Denis	Mason, Rt Hon Roy	Silkin, Rt Hon John (Deptford)
Hooley, Frank	Meacher, Michael	Silverman, Julius
Hooson, Emlyn	Mellish, Rt Hon Robert	Spearing, Nigel
Horam, John	Mikardo, Ian	Stallard, A. W.
Huckfield, Les	Millan, Rt Hon Bruce	Steel, Rt Hon David
Hughes, Robert (Aberdeen N)	Miller, Dr M. S. (E Kilbride)	Stewart, Rt Hon M. (Fulham)
Jackson, Miss Margaret (Lincoln)	Miller, Mrs Millie (Ilford N)	Strauss, Rt Hon G. R.
Janner, Greville	Morris, Charles R. (Openshaw)	Summerskill, Hon Dr Shirley
Jay, Rt Hon Douglas	Morris, Rt Hon J. (Aberavon)	Taylor, Mrs Ann (Bolton W)
Jeger, Mrs Lena	Moyle, Roland	Tuck, Raphael
Jenkins, Hugh (Putney)	Orme, Rt Hon Stanley	Varley, Rt Hon Eric G.
John, Brynmor	Owen, Rt Hon Dr David	Walker, Terry (Kingswood)
Judd, Frank	Pendry, Tom	Ward, Michael
Kaufman, Gerald	Price, C. (Lewisham W)	Watt, Hamish
Latham, Arthur (Paddington)	Rees, Rt Hon Merlyn (Leeds S)	Williams, Rt Hon Shirley (Hertford)
Leadbitter, Ted	Richardson, Miss Jo	Wilson, Rt Hon Sir Harold (Huyton)
Lever, Rt Hon Harold	Rodgers, Rt Hon William (Stockton)	Wrigglesworth, Ian
Lipton, Marcus	Roper, John
Luard, Evan	Ross, Stephen (Isle of Wight)	TELLERS FOR THE AYES:
Lyon, Alexander (York)	Shaw, Arnold (Ilford South)	Mr. Peter Snape and
MacFarquhar, Roderick	Sheldon, Rt Hon Robert	Mr. Ted Graham.
McNamara, Kevin	Shore, Rt Hon Peter
NOES
Adley, Robert	MacGregor, John	Ridley, Hon Nicholas
Bottomley, Peter	Mates, Michael	Shaw, Michael (Scarborough)
Braine, Sir Bernard	Moate, Roger	Sims, Roger
Clark, Alan (Plymouth, Sutton)	Morgan-Giles, Rear-Admiral	Townsend, Cyril D.
Durant, Tony	Osborn, John
Eyre, Reginald	Rees, Peter (Dover & Deal)	TELLERS FOR THE NOES:
Fairbairn, Nicholas	Rees-Davies, W. R.	Mr. Ian Gow and
Hamilton, Michael (Salisbury)	Rhodes James, R.	Mr. Norman Tebbit.
Hunt, David (Wirral)

Question accordingly agreed to.

Bill read a Second time.

Mr. Cormack

On a point of order, Mr. Speaker. May I seek your guidance on behalf of myself and the whole House? I was shattered this morning when I listened to the radio—as I am sure many other colleagues were—to hear the extraordinary allegations of the previous occupant of the highest office of State. For greater accuracy I have procured a copy of the report in question and it certainly raises some matters of high importance.

It would appear that we have lost Friday's business. I had intended to table a Private Notice Question asking the Prime Minister whether he would make a comment on this quite extraordinary report. Since we have now lost Friday's business, it would seem, I cannot do that. I have observed, and I am sure that you have, Mr. Speaker, that the Prime Minister has been present this morning. I wonder whether it would be possible for him to make a statement to the House on this matter, because it is quite unthinkable that we should adjourn for the long recess without having this point clarified and without having the opportunity to question the present holder of the highest office of State.

Mr. Speaker

I did not hear the radio. I was in the Chamber. That was for the eight o'clock news. I have had no request for a statement and therefore I must follow the business of the day.

Mr. Raphael Tuck (Watford)

On a point of order, Mr. Speaker. I rise to ask whether anything can be done to amend the procedure of this House to stop certain Members of the Opposition from obstructing the business of this House by acting like overgrown schoolboys, as they have been doing this morning—and I refer particularly to the hon. Member for Chingford (Mr. Tebbit).

Mr. Speaker

If the House wishes to change its rules that is a matter for the House and not for me.

Mr. Ridley

Further to that point of order—not the frivolous one but that raised by my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack). The House might well wish to debate the events which have been revealed in this morning's Press and it would have been possible for us to apply to you for a debate under the Standing Order No. 9 procedure had we proceeded to Friday's business. As that now seems, on balance, to be improbable I wonder by what procedure—

Mr. Speaker

Order. The hon. Gentleman is well versed in our affairs and knows that the Standing Order No. 9 procedure does not apply on a Friday.

Mr. Ridley

It is Thursday.

Mr. Speaker

But the hon. Member said that he would have raised the matter on Friday. We ought now to get on to the remaining business. We have already lost Friday's business.

Mr. Adley

On a point of order, Mr. Speaker. I am raising this point of order directly for you. It relates to a document from the Committee of Privileges, on a matter which you will recall I raised with you originally and which you ruled should be referred to the Committee of Privileges. I refer to the question of the NUPE resolution. The House accepted your recommendation that the matter be referred to the Committee of Privileges. It seemed to be directly relevant to the Select Committee's Report which we discussed earlier this week. I have been awaiting the arrival of this report from the Committee and hoping to receive it earlier this week before our debate on the report of the Select Committee. Late yesterday I received in my post, on the board, this small report from the Committee of Privileges, with a compliments slip from one of the Officers of the House.

I submit that the contents of this report are extremely relevant to the debate that we had earlier this week. Yet, although the report is dated 19th July, I received it only yesterday. My question is: why was this report from the Committee of Privileges, which so many hon. Members would have liked to have earlier in the week and which was printed on 19th July, apparently withheld and presented at the Vote Office only yesterday?

Mr. Speaker

I have allowed the hon. Member full scope to make his point of order as an act of courtesy on the last day before the recess, if we do eventually go down. However, I must say that it is quite disorderly to interrupt the business for points of order that are not related to that business.

Bill committed to a Committee of the whole House; immediately considered in Committee pursuant to the Order of the House this day.

[Mr. BRYANT GODMAN IRVINE in the Chair]