HL Deb 27 October 1921 vol 47 cc85-99

LORD MONTAGU OF BEAULIEU had given Notice to ask the Under-Secretary of State for Air, if, in view of the termina- tion on 19th and 21st October of the agreements under which the temporary cross-Channel aerial service is now maintained, he can give information as to any arrangements come to with civil serial transport firms for the continued operation of services between London and the Continent; and whether there is a chance of agreements being made and subsidies being paid for the establishment of inter-Imperial services.

The noble Lord said: My Lords, I have raised this Question to-day from several points of view, one of which is that on October 19, I think, the present arrangements between the Government and those who run the cross Channel services by air came to an end. I understand that last March £ 50,000 were allocated as a subsidy towards helping these services, and that that money is now more or less exhausted. Since then, as we have seen from a White Paper just issued, the Government have entered into a new form of contract with two of the parties concerned, and although I do not care to express much opinion upon the wisdom, or otherwise, of that course at the moment, it is quite clear that to maintain these services, which I hope to show are very essential to us from many points of view, some kind of subsidy is necessary.

I think there can hardly be any doubt as to the desirability of maintaining commercial air services. We may compare them now, in value to this country, to the maritime services of various liners during the war, inasmuch as they formed a very useful reserve for the Admiralty to draw upon. If we had not had many of those ships available to be fitted up as cruisers, it would have been very much more difficult to maintain control of the sea. if, in this case, we were to allow Civil Aviation to fade away, so to speak, we should undoubtedly weaken our position from a naval point of view. Therefore, from the point of view of national defence, some subsidy for these services when in their infancy is justifiable.

All over the world other nations are maintaining air services, all of them, so far as I know, subsidised in some form or other. In some cases the service subsidised is a postal service, and in some cases it is paid per mile run or in other ways. In Germany the factories are entirely free from taxation. Therefore, it is clear that other nations besides ourselves realise the great import- ante of maintaining regular air services in addition to the ordinary naval and military establishments. At the present moment, to mention a few of these services, France maintains a postal service to Algiers and several internal services as well. All over Germany there are internal services arranged and to be arranged. The United States is very keen to establish further lines and further services, and has a considerable number of aeroplanes in daily use. In Spain lately the Spanish Government has been trying to purchase two German airships, to start a route between Spain and South America. In Japan, also, great. interest is being taken in aviation, and in fact one may say that in every nation of the world that is likely to be involved in any struggle in the future, it is realised that commercial aviation must be assisted, in order that there may be a larger supply of machines and pilots in case of trouble.

It has often been said in this House, and I think in the other place as well, that the best way of subsidising air services is by asking the Post Office to use them for postal purposes. I thoroughly agree with that view. Those who said that the Post Office was not justified in doing it at first, because it does not pay, forgot that a great many of the postal subsidies in other forms could not be justified on a strict economic basis. I believe that something like £400,000 a year is paid for the mail service to India, and I do not suppose that anything like that amount of profit is derived from that service. The Post Office also pays for services to the Cape and other parts of our great Dominions, and I suppose that hardly one of those services pays, if it is taken by itself. The general policy has been that it is desirable to make the services between the Mother Country and her great Dominions as rapid and useful as possible, and therefore there has been a general policy of helping lines which run a moderately good and fast service to distant points.

I suggest that the same policy should be adopted in the case of the air. The policy at the present moment, I gather, is only to subsidise cross-Channel services. I have seen no indication on the part of the Government of an intention to subsidise any inter-Imperial service, or service which would pass over a part of the Continent and the Mediterranean and give facilities to Egypt, Mesopotamia and possibly India. But I hope to hear from the noble Lord, who I am glad to see on the front bench, when he answers for the first time for the Air Ministry, something about inter-Imperial air services and whether there is any chance of such services being established. Of course, it was a sad thing when the airship service came to an end, and that that magnificent body of men and valuable material had to be dispersed, but much as I believe in airship services, and greatly as I think they will be the long-distance means of aviation, I realise the pressure of finance and I see how it was that the Air Ministry could not continue the airship service in view of that pressure.

Because R. 38 collapsed, with a loss of life which we all deplore, we must not think that airships are things of the past, or that they have been proved to be a bad method of conveyance. Accidents happen, and always will happen, when you are going through any experimental stage of transport. We all remember that the early ships were not particularly seaworthy, and in the early days of trains there were far more accidents than there are to-day. The early days of motor cars had the same feature. Therefore, we must not think that, because of this unfortunate accident, there is any reason why airships should not in future take their place at any rate among the methods of long-distance communication with the outlying Dominions of the Crown.

As regards the Channel services, they have been extraordinarily successful. During the six months ending September 30 last there have been some really remarkable records. At present there are two British and two French services and one Belgian and one Dutch service in operation, and they have flown in the six months well over half a million miles—to be exact, 526,621 miles. It is a noteworthy fact that not a single passenger was killed or injured during that period. In the five months from May 3 the total number of passengers was 7,862, an average of 1,572 per month, or about 400 passengers a week. Of those the British machines carried 3,560 passengers, and the French 3,310. I am glad to be able to inform your Lordships that in point of reliability the British machines were far ahead of the French machines on every occasion. The British machines were Messrs. Handley Page's, which had 96 per cent. reliability, and the Instone Company's machines, which had 95 per cent. In the past seven weeks the Handley Page machines made eighty-four flights, all of which were accomplished without any troubles, and there was only one stop, which was due to fog. No claims were made upon the underwriters, which is really the commercial test of safety. In the six months the two British companies flew 135,1,90 miles, and the French companies 176,362 miles.

Thus, in the period of six months ending September, we arrive at this remarkable result, that no passenger was killed or injured, and only two passengers were slightly hut on one occasion, which was, I believe due to fog. I admit that this summer has been an exceptional one in regard to weather, and that there has been an absence of strong winds and fog. The facts I have given, however, show to what degree of popularity these cross-Channel services are attaining when we get an average of something like 400 passengers a week: during the summer. I do not believe that at the present moment any cross-Channel service could be put on a strictly commercial basis. Two of the companies are. I think, approaching the point at which they w ill be commercially successful, but at the present moment none of them could pay its way. The French Government subsidises its machines very hem ily—much more heavily than we do, and yet they are not nearly so reliable. I do not wish to depreciate the excellent work done by the French, but there is no doubt that in their machines the factor of safety is lower, and their load is proportionately higher, and that makes a good deal of difference when we are considering the commercial aspect of these matters.

I hope the noble Lord who will reply for the Air Ministry will be able to give us some comfort to-day with regard to the future of these services. The figures I have quoted point to the conclusion that more and more people are being converted to the use of aircraft for travel, and that next year the number of passengers wilt probably reach a figure which will warrant serious commercial enterprise. At the moment, the outstanding factor is the struggle between the French arid the British companies for traffic between London and Paris. Both the British and the French companies realise that in the future there may be a great chalice of making the services a commercial success. Also, both countries' appreciate the fact that to maintain the progress of design and the increase of efficiency these regular services are necessary. As a matter of fact, military and naval supremacy in aeronautics will, in my opinion, depend very largely on the assistance given to Civil Aviation at this stage.

In view of the fact that overhead charges form such a large proportion of the expense of the carrying companies, I hope, for my part, that no more companies will enter the field at the present moment. Any great multiplication of companies on the London-Paris route must tend to hamper business. It is better to assist two or three approved companies on a comparatively generous scale than to assist other companies which might come into the field. In the early stages of developments of this kind a certain number of people are willing to put up money, hardly expecting a commercial return, and doing it out of enthusiasm, or more or less as a hobby. In the end those people disappear, and the firms which run their business on a commercial basis must be those which will carry on the business in the long run.

I hope the noble Lord will be able to assure us that the Government are giving this matter very serious consideration. We must remember that, although aviation does not command the attention that it did during the war, if there should be another war aviation will be a much more serious factor in our national safety. Experiments have recently been made by nations in the sinking of battleships by bombs—the bombs not necessarily falling on their decks, but alongside of them—and there have been some very important results reached. I have no doubt whatever that aircraft in the future—at any rate, at the beginning of a war—will be the most formidable means of attack, and therefore we must have a formidable means of defence.

I have pleaded in this House before for attention to this subject, and your Lordships have always received me very kindly. I do so now deliberately, because at the present time, when there is no longer the same thought expended upon aviation as there was a little time ago, Governments and Departments are very apt to neglect vital issues. We must never allow our commercial aeroplanes to disappear. Their maintenance is most important, and in case of war they would be invaluable.

THE EARL OF CARRICK

My Lords, before the noble Lord replies on behalf of the Air Ministry I should like first of all to endorse what Lord Montagu of Beaulieu has just said about the commercial air services. It is most important that the commercial air services should be put on a thoroughly sound business basis, and it is to be hoped that all the pilots engaged in those air services will be maintained as Air Force reserves. It has been suggested by the noble Lord, Lord Montagu of Beaulieu, that only the two companies which are now carrying between London and Paris should be retained, and that other companies should not be brought into consideration at present. At this moment trade is in a very depressed state, as we all know. Those who chiefly benefit by the quick transit by aeroplane are the merchants and traders of the country. By degrees the quick passage between Paris and London will be taken advantage of more and more by the commercial community of both countries, and, with an increase of trade, I think we may look for a large increase in the number of passengers carried between the two capitals. There will always be a certain number of passengers who will make the journey by air for the excitement of it or who want to get from one place to another rather more quickly than is possible by other means.

Is this the right moment to bring into the field several companies who will draw a subsidy from the Government in order to test which of them is best able to carry out that work in the future? Would it not be advisable for the Government to consider the question of subsidising only two companies at the moment? As the passengers increase and the demand grows from clay to day for more flights, then is the time to consider the question of including other companies, when the subsidy, granted en bloc to the carrying companies, can be distributed among them in proportion to their respective carrying capacity. It also seems to me that the apportionment of any subsidy should be made on a reduced sliding scale rather than that a lump sum should be given en bloc, because it is hoped that the number of persons availing themselves of aerial transport in the next two years will be greater than during the coming season.

In regard to the subsidy itself, I hope we shall receive an assurance from the noble Lord who replies that the portion to be given to the carrying companies will be very largely in relation to their carrying capacity, and that the subsidy will not be utilised as a capital grant out of which they will be paid for their machines and will repay the Government on the hire purchase system. It ought to be the business of the companies themselves to provide the necessary machinery with which to comply with the Government's requirements.

Then, again, there is the question of the machines which are now in use. If such subsidy as may be given is used for the purpose of providing new machines and those now in use by the carrying companies are to be scrapped and new ones to be put into the service, it seems to me that it would be regrettable if those machines which have been thoroughly tested and, as you have heard from the noble Lord, Lord Montagu. of Beaulieu, have traveled in carrying out their duties over 500,000 miles with scarcely a mishap, should also have to be scrapped and new ones put in their places. The other point is that if the Government controls an industry the Government should pay for the losses sustained by that industry in its initial stages. Therefore, I press it upon the Government. that they should base the subsidies on a sliding scale, making them larger for the first year and coining down in proportion until the end of the period for which they are granted.

THE UNDER-SECRETARY OF STATE FOR AIR (LORD GORELL)

My Lords, we have had a most interesting speech reviewing commercial aviation in its widest aspects from the noble Lord, Lord Montagu of Beaulieu, who has been associated so long with every form of transport, and a number of questions on details of the subsidy scheme. The noble Lord gave certain figures rather with reference, so far as I could gather, to the volume of flying in countries generally. I may be able to supplement some of those figures with a definite account of the complete work done under the first part of the subsidy scheme.

Your Lordships may remember that the whole idea of the subsidy is founded, first of all, on the Report of the Advisory Committee, presided over by Lord Weir, which recommended a subsidy of 25 per cent. on gross receipts. But in March of this year, mainly owing to the very largely increased subsidies which were -being given for Civil Aviation by the French Government., the British companies were finding it almost impossible to compete, and there was a very great danger that no British aeroplane would be able to compete at all successfully on a commercial basis. In consequence of that position a Committee was set up, as promised in another place, which consisted of my noble friend the Marquess of Londonderry, the Controller-General of Civil Aviation, and Sir James Stevenson. Their first duty was to try to bring in some scheme, with as little delay as possible, which should enable the cross-Channel service to be maintained against French competition. They formulated a scheme, which was admittedly of a temporary character, with Messrs. Handley Page and the Instone Air Line, the two firms who were then in a position to carry out a service. The terms have been published in the Command Paper which has just been issued and I need not go into them in any detail.

But to supplement the figures given by Lord Montagu of Beaulieu, I would like to state the total numbers carried by the British and French firms respectively since that temporary scheme came into operation; that is, for seven months. The one scheme ended on October 19 and the other on October 21, and the two British firms have carried from London to Paris in that time 2,356 passengers, and from Paris to London, 2,140, making a total of 4,496. The French have carried from London to Paris, 1,861, and from Paris to London, 2,081, making a total of 3,942. These figures are, I think, a rather striking justification of the terms of the subsidy under the temporary scheme, when we consider that in March we were almost in the position of doing nothing at all.

I think they are worth analysing a little further, and I would like to give the figures for the first half of October: Carried by British machines, 149 passengers in 25 machines —that is an average, roughly, of six passengers to a machine—by the. French, 52 in 36 machines, an average of 15 passengers; and from London to Amsterdam the Dutch carried 11 passengers in 11 machines. For the other way, from Paris to London, the figures arc: The British carried 130 passengers in 24 machines, or an average of 5 4 passengers; the French 84 in 35 machines, or an average of 2 4 passengers; the Dutch 12 passengers in 11 machines. During the part of October to which I have referred there were no Belgian aeroplanes flying, in view of the fire at the Belgian aerodrome. The point of the figures that I have given is that though the British are really flying fewer machines they are carrying a considerably larger number of passengers, and throughout the whole seven months period I can amply confirm what Lord Montagu said that there has not been a single casualty, which is rather striking testimony to the growth of safety in the air commercially.

I should like to endorse generally all that the noble Lord said with regard to the mails, but he will realise that it is a difficult matter to place mails upon a contractual basis. It means long negotiation with the General Post Office, but we do find now an increasing disposition on the part of the General Post. Office to recognise the possibilities of aerial transport. The greatest factor in the cost of mails is the cost of handling, and it may be a considerable time before we can get contracts for carrying mails by air at the same rate as by land. But if the cost is additional for air transit, there have been carried, in the. period under review, an average of 380 lbs. weight of mails per month for six months—-that is, roughly speaking, 4,910 letters per month. An interesting and encouraging feature is the development of the parcel service which was inaugurated as recently as July 12. In July there were 216 parcels carried; in August, 363; and in September, 489. Those are the figures for the part of the scheme which ended with the termination of the agreements of October 19 and 21, but the work of the Committee was devoted all through to the idea of trying to bring into operation a scheme on a more permanent basis. It sat regularly, and took a great deal of evidence from many people connected with the aircraft firms.

I am concerned rather directly with Civil Aviation, which has been under my attention, and have been chairman of the Committee since July. It has now formulated a scheme which we hope to maintain for the next three years. The first point is that we are setting aside a sum of £200,000 per annum on this cross-Channel subsidy scheme. As a result of the negotiations and the evidence laid before the Committee, we issued a communication to the Press on June 15, giving certain lines on which the scheme was to proceed. There are two main points—first, that the Air Ministry should order machines of proved types, which will be hired out to firms to augment their existing fleet; and secondly, the Air Ministry will pay sub- sillies on a basis of 25 per cent. to approved firms on gross receipts from carriage of passengers, goods and mails taken on any of the three routes — London —Paris, Brussels, and Amsterdam. The machines were to be insured by the companies. They would be hired out to the company at a monthly rental of 21 per cent. of the cost of the machine, and after the thirtieth payment they were to become the property of the company—that is to say, at 75 percent. of their cost. Other conditions were that personnel was to be of British nationality, and the aircraft and engines of British manufacture and design. In order to qualify for the subsidy any company approved was required to make a minimum of forty-five complete single journeys in each direction during each period of three months.

The Committee had a number of inquiries from a considerable number of firms and —this point has been referred to by both noble Lords who have spoken —the Committee had to consider how far it was justified in approving more than the two firms that had been operating in the past. There are arguments both ways, but, in view of the volume of traffic that was to be expected, the Government decided that it was not justifiable to limit the approval to the two firms only. At the same time, they thought that it was not possible to extend approval at all widely. We had, further, to consider the suggestion that has been made in the past of the formation of a national company, but after full consideration we decided that that was not advisable in the interests of the development of Civil Aviation.

The negotiations which have been taking place with the firms that seem to be in a position to carry out a scheme in future have been very protracted, and the more evidence that was laid before the Committee, the more obvious did it become that it was impossible, upon the conditions issued on June 15, for those firms to carry on in the future without a very serious risk of financial loss, which they were not prepared to undertake. Nor was it the desire of the Government to press them unduly, for the interests of both were to develop Civil Aviation as far as possible. As a result, the Government have made certain concessions, until, at any rate, the end of February, 1923, and are prepared to make a grant of £3 per passenger and 3d. per pound on mails and goods carried.

The next question was that of the insurance for machines. It has been decided that the Air Ministry will bear 50 per cent. of the insurance premium of the hired-out machines, subject to its contribution not exceeding 10 per cent. of the value of those machines. One other point of considerable difficulty is the question of the return of machines if it becomes at all apparent that their types are being superseded by newer types. Noble Lords will realise that here the interests of the firms and the interest of the Government are really one and the same, the whole object being to keep in the air a service based upon those machines which will develop in their design the latest and best methods of aviation. There are still certain details to be threshed out with the firms, but the Government are prepared to agree that machines, if returned in an airworthy condition, will be taken back, after no fewer than eighteen monthly payments of 2 per cent. of their value, and will be replaced by the latest machines if the Air Ministry is satisfied that the change is desirable.

Though all details have not been settled, and full agreement has not been reached with all the firms concerned, we hope that at the beginning of March next there will be three firms running between London and Paris, and one between London and Brussels. The arrangements we hope to make for a firm between London and Amsterdam are, for the moment, in abeyance owing to the exceptionally strong position of the Dutch company there.

It was hoped that this three years' arrangement would be brought into operation immediately on the conclusion of the temporary agreement which concluded on October 19 and October 21. That, I am afraid, has not been possible for two reasons. The firms, not unreasonably, were unwilling to commence the services on a durable basis after the conclusion of this wonderful summer and at the beginning of the winter. Further, the negotiations have been concerned with so much detail that it was never certain until recently that they would come to a satisfactory point, and until they had done so it was impossible for the Government to place orders for the new machines. As a result, it has been necessary to renew the temporary agreements with the two firms who have carried on this summer for services during the winter. They will carry on until the end of February next year, and the maximum Government liability will be reduced according to the shorter time.

There is one remark I should like to make with regard to the whole of these schemes. I think it is generally admitted that without some subsidy of the kind indicated the firms and the cross-Channel services would not have continued. But I do not think that we should regard any subsidy scheme as necessarily of an absolutely permanent character. I do not like, in general, the idea of subsidies; arid I think the policy of the Government is clearly stated by the Committee presided over by Lord Weir, to which I have referred, where they say— We record at the outset that we should in no ease contemplate the continuance of such assistance (direct assistance) as part of the permanent policy of the State. We have dealt with it solely as a matter for consideration during the present critical years when the fortunes of British Civil Aviation hang in the balance. While that is admitted, there is no doubt that it was an absolute necessity to preserve the cross-Channel services, because the advantages of commercial flying, which have been stated by the noble Lord, arc advantages which it is the duty of the Government to develop as far as it can.

We have to contend in England with certain disadvantages. We are a country where the distances are comparatively short; we have an excellent network of railways, and we are not always favoured with very good weather. In maintaining these services across the Channel we are doing something to break down the innate conservatism of the British mind towards anything new and demonstrating daily the practicability of air transport. It was hoped at one time that Civil Aviation would undergo a boom, but it has not. Nevertheless, the total amount of flying is steadily on the increase. The figures for the quarter ending June 30 last are -4,985 machine flights, with only three accidents and only one which had fatal results. That is for the whole of civil flying, including the cross-Channel services. I am not so familiar as the noble Lord with the days of early motoring, but I think this ratio of accidents to flights will compare favourably with the early days of motoring.

I would emphasise the point that in their regard for these services the Government are vitally concerned with the development of Civil Aviation and that the Secretary of State for Air has that development keenly at heart.. It is true that the primary responsibility of the Air Minister must be the defence of the country, but it is a mistake to suppose that Service and civil flying are rivals. They are really mates, and there is a good deal of ground which is common to both in which each may help the other.

The noble Lord has asked me a specific Question with regard to the development of other routes, especially inter-Imperial routes. He will realise that the amount of money at our disposal is limited, and after full consideration the Government consider it prudent to concentrate all their limited resources upon maintaining, and if possible developing, the cross-Channel routes rather than dissipating them over a number of routes which it might not be possible afterwards to carry to success. I think it is by no means agreed that a general scheme of subsidies is the best means of assisting the development of Civil Aviation. The policy which the Government are pursuing is that the development, though it may be encouraged and assisted by Government, cannot either be operated or initiated by them and that the true foundation for a healthy industry is in civil enterprise.

At the same time, we are not neglectful of the inter-Imperial side. There, I think, co-operation between the Service and the civil side can be of direct assistance. There will be an example within the next few days of the way the Service will come in with regard to the carrying of mails. The mails for His Royal Highness the Prince of Wales will be caught up at Alexandria by a Service aeroplane and taken across to Suez in time to catch His Royal Highness in H.M.S. "Renown." We are constantly using Service aeroplanes for mail services from such places as Bagdad. The most recent example is that in which a Service aeroplane carried six bags of mails and saved eighteen days upon the ordinary route.

I feel that the possibility of attempting to establish inter-Imperial routes is not one which can be greatly assisted by subsidies. In the outlying parts of the Empire it is the work of the Service side to "blaze the trail," so to speak; establish the routes and safeguard them. I hope I have said enough to show that from rather a serious position in March we are now, though not by any means developed as fully as one might hope, on the pathway of development, and that the cross-Channel services will be established on a successful and, I hope, increasingly successful, basis in the ensuing year.