HL Deb 15 December 1936 vol 103 cc974-1004

LORD SEMPILL rose to ask His Majesty's Government whether, in view of the statement recently made by the Minister for the Co-ordination of Defence that he is not satisfied with the output of airframes for the Royal Air Force re-equipment programme, this House may be assured that all the resources of the aircraft industry in this country are being fully utilised; and to move for Papers.

The noble Lord said: My Lords, I make no apology for returning to a subject which I outlined in my previous remarks in your Lordships' House in October last. Indeed, the recent statement made by the Minister for the Co-ordination of Defence in another place makes imperative your Lordships' consideration of the progress of aircraft production for the Royal Air Force re-equipment and expansion programme. The matter gives rise to great anxiety to those who, like myself, have had some fairly considerable and lengthy experience of aircraft matters in all its branches. In common with other members of your Lordships' House I have a somewhat intimate knowledge of the subject and this knowledge makes us realise very definitely the need for offering constructive criticisms and suggestions in anything that we might say relative to this matter. I hope, therefore, your Lordships will bear with me, and agree that others of us who are concerned with aviation may be able to offer helpful suggestions to the noble Viscount the Minister for Air in the tremendous task which faces him.

If there were any doubt in your Lordships' minds of the necessity of inquiring into the present position it may be briefly justified by referring to the Government programme initiated in May of 1935, when it was promised that seventy-one new squadrons would be formed by March, 1937. It is now December, 1936, and but thirty of these new units have as yet materialised, although since 1935 the urgency of the situation has vastly increased. I should therefore like to ask your Lordships to bear with me for a few minutes whilst I outline the existing position of the aircraft industry, an industry which, unfortunately, is divided within itself. Like any house in such circumstances it cannot stand as a permanent and satisfactory structure unless the cause of this division is removed and real unity and single-mindedness of purpose are established. It will be the desire of your Lordships and of every responsible person that the aircraft industry should, whilst serving the urgent purpose of the present expansion programme for the re-equipment of the Royal Air Force, at the end of this period be in such a position that it can continue to uphold worthily British prestige in the markets of the world. There can be no two opinions as to the desirability, nay, the imperative necessity, of our having an aircraft industry which is in a position to bring to this country a growing volume of trade which will enable us to keep our place as the foremost producer of both civil and military aircraft.

In his various speeches in your Lordships' House on this subject the noble Viscount the Minister for Air has referred to the "aircraft industry," and your Lordships would naturally have had the impression that the entire aircraft and aircraft equipment manufacturing facilities of the country are referred to. As I pointed out in your Lordships' House a few weeks ago, this is in fact not so, as the Air Ministry policy followed without deviation since 1920, divides the aircraft producing facilities into two distinct categories—that of the approved and that of the unapproved firms. The approved firms, selected, as your Lordships may remember, as far back as 1920, were originally limited to four aircraft engine manufacturing firms and eighteen airframe manufacturers. Since then, by retirements, amalgamations and mergers, these approved firms have been reduced to twelve aeroplane manufacturing organisations, the four aircraft engine manufacturers remaining.

Since 1920 many new firms within the category of aircraft engine and airframe constructors have been created, but all of these are classed, as your Lordships will be aware, as unapproved, and there is no case on record for the past sixteen years of one of these unapproved organisations being promoted to the approved category, although quite recently an approved airframe manufacturing firm became an approved aircraft engine firm. The unapproved firms, some sixteen in number, represent a capital outlay of approximately £5,000,000, and I would like to emphasise to your Lordships that it is prudent and in the interests of economy that the whole capacity of these firms should be fully utilised in the national interest prior to the setting up of any fresh organisations financed from Government funds. The situation is such that the approved companies have an agreement with the Air Ministry that all invitations to tender and orders for new designs and productions shall be confined to them.


My Lords, I am sorry to interrupt, but I feel that I must intervene at once. That is not so. It is perfectly open and always has been open during the whole period of time for the Air Ministry to place contracts wherever it pleases. What is more—this is no new invention of my own, but has been the case for many years—whenever the Air Ministry has placed a contract with an aircraft firm it has always been a term in that contract that the Air Ministry could use the designs of that firm and get the engine or machine made by any other firm. I am sure the noble Lord would not wish to mislead your Lordships' House.


I thank the noble Viscount for his remarks. There appears to have been some doubt on the part of the Air Ministry as to the policy of restriction of design, for towards the latter part of last year the non-combine firms were asked to tender for the design of a high speed military machine, and the tendering firms were particularly encouraged to submit designs of a radical kind. This break with tradition was quietly abandoned without any explanation after many firms had spent a considerable sum of money for which they have received so far no recognition or recompense. With the historical background which I have briefly explained to your Lordships an industry has been created, as I have previously mentioned, which is divided against itself. There are, in fact, within the aircraft industry two distinct parties—the approved firms, who naturally seek to maintain their position, and the unapproved companies who are fighting to be included. It is common knowledge in the aviation world that at the present time very strong representations are being made, by the representatives of unapproved firms to the approved companies, that steps should be taken to do away with privilege and to co-ordinate the industry as a whole.

It is interesting to record that a similar ring situation in aircraft manufacturing circles existed at one time in America and Germany, but the air authorities in those countries, unlike our own authorities here, saw that stagnation in design had resulted from this ring system of approved firms and decided to open the door to the Fresh air of competition. In consequence, new firms are now on the approved list of the Governments in question and are competing with the older firms. This has probably helped the recent great advancement in aeronautics in the countries in question and is ore explanation of the favourable position in which the constructors of civil aircraft in the United States in particular find themselves in the world market, at this moment. The motives which actuated the two countries mentioned were perhaps different, but in the case of the United States the change of policy was undoubtedly dictated by financial considerations, as it was found that the previous state of monopoly made for higher expenditure. But, what is at present a matter ox the greatest moment is the profound influence that their civil designs have had upon the character of our most advanced military types. I shall have to dwell on this point as later in my remarks its full significance will become evident to your Lordships.

Your Lordships will appreciate it cannot be left to an industry to adopt a policy which reflects far-sighted statesmanship, if a strong body within itself is not seeking to promote at all times those things that are best for the industry as a whole, but which is perforce weighing all matters in the loaded scales of its own immediate interest with its judgment biased by sectional prerogatives. It is from the products of the unapproved firms in particular that the present supplies and the future designs of civil aircraft will be largely drawn. In a time of national emergency these organisations should be given an opportunity to share in the expansion which has been decided upon. In explaining the shadow scheme, the noble Viscount, the Secretary of State for Air, omitted to visualise the effect on these firms, or to explain to your Lordships the logical result of their being left out in the cold. Entirely on their own initiative and at their own expense the organisations in question have built up technical and production facilities which make them entirely suitable to be entrusted with a share in the re-equipment programme. These organisations are, for the most part, managed and staffed by those who have left the service of the approved firms because they felt their opportunities cramped and confined. The splendid work they have done already increases the admirable potentialities they possess. If they are not now allowed to participate in the fullest measure, the inevitable result will be to transfer all their skilled designers and mechanics to the shadow firms. That, in fact, is already taking place to some extent, and it means their loss to the creative side of the industry. Further, it will lead to the setting back of our position as suppliers of civil aircraft, and not least, when the shadow factories at present visualised are no longer required, this expert personnel will find itself without employment and without the hope of being re-absorbed in the aircraft industry which will, as the result of the Air Ministry's present policy, be reduced to a skeleton organisation so far as the civil side is concerned.

When explaining the, shadow scheme the noble Viscount informed your Lordships in the White Paper that he had called the well-known automobile manufacturers into consultation with him, but he has said nothing about calling the aircraft industry as a whole into consultation. Although it is my intention to confine myself to constructive remarks, I am sure your Lordships will allow me to utter a word of suggestive criticism on the course taken in this emergency. When there is such a huge demand for aircraft production, unequalled in modern times, surely the reasonable and immediate step for the Air Ministry to take would be to go to the whole aircraft industry and say to them: "Gentlemen, we need during the next few years a production of aircraft which will tax you beyond your present capacity. We want you to co-ordinate the whole of your industry in such a way that every available source of supply or asset you have may be applied to the immediate purpose in view." Air Ministry failure to have done this lays a very heavy responsibility on the noble Viscount, the Secretary of State for Air, particularly as he has in fact decided to create a shadow industry outside the realm of the aircraft manufacturing organisation.

I want to assure your Lordships that I support the principle of the shadow industry in its right place, but the support of a high principle does not mean that we must of necessity accept the mistaken application of this principle. In criticising the action of the Air Ministry I do so only with the desire to put forward an alternative constructive scheme which it is not yet too late for the noble Viscount to put into effective operation. The noble Viscount may have had it in his mind that had he pursued such a course he would have got into an embarrassing situation at the end of the expansion programme, by having encouraged the aircraft industry to make great extensions in factory plant and machinery only to find, at the finish of that period, that the industry was burdened by a o millstone round its neck of extensions for which there was no future use, except in the melancholy event of war. With this in view he too readily jumped to the conclusion that he could cut out any possible embarrassment in this direction by the creation of the shadow industry.

I believe, however, that your Lordships will agree that a suggestion which I am about to make—made as it is as a compromise to the existing status of the sections comprising the aircraft industry and one which would perhaps be welcomed in that respect by the authorities concerned—is worthy of the close consideration of the noble Viscount, and it is put forward with a view to assisting him in the quandary with which he is faced. I submit, my Lords, that a sound and constructive policy would be for the Air Ministry to bring the representatives of the whole of the existing aircraft industry together to invite their co-operation and to define their requirements broadly on the following lines. The firms on the present approved list and those who are now in the unapproved category are invited to co-operate fully for the purpose of assuring the Air Ministry of a given supply of aircraft and aircraft engines. In order to achieve the intended production the constructing firms will be required to make addition as necessary to their factory plant and equipment, the cost of which will be borne by the Government. The purchase price or rentals of these extensions and the cost of upkeep when not in use will be agreed and guaranteed by the Air Ministry so that at any future time they can, if they so desire, buy or rent the factories from the Government after the present emergency has passed. If at that time they have no wish to do so they can at least be assured against loss by the action of the Government, who will have guaranteed the agreed payment for care and maintenance. The approved and unapproved firms will have the same opportunity of participating in the re-equipment programme to the extent of their present resources and capacity for expansion, but those firms mainly engaged on civil work will be expected to keep their existing programmes going and expand them.

By this arrangement the whole industry would have been co-ordinated and strengthened, and the Government would have ensured that the best use was made of every bit of available experience in the form of management, design, and technical and skilled personnel. At the end of the present expansion programme the industry would be provided with ample capacity to carry on with what will presumably be regarded as a permanently increased volume of aircraft replacements and progressive re-equipment. The Air Ministry could then decide who in the future should enjoy the limited orders which it would pass out to the industry on what I would hope would be a similar basis to that successfully adopted in the United States of America, to which I have already referred: selection on merit. The other firms would return to concentration upon the civil markets with organisations right up to date, well-equipped, with great potential strength for ample production, but again without the embarrassment of the upkeep of too vast a plant and equipment. They would therefore be in a powerful position to take a lead in the civil aviation markets of the world.

Undoubtedly the development of new designs and technique in this sphere would be invaluable to military progress, and those making substantial contributions in this field should be encouraged to apply their art to military requirements without having to scale the almost impregnable barrier of privilege when that time came. The policy I propose recognises that the essential in any situation of emergency is the existence of organised bodies of trained specialists, experienced in working together and ready and capable of absorbing an increased number of personnel as the pressure rises, without confusion or inefficiency. Had the noble Viscount taken that action at that time he would have saved the country millions of pounds spent in creating, without due preparation, a shadow scheme outside the aircraft industry. What has actually happened is the result of not consulting and co-ordinating the aircraft industry: the Ministry is faced with an industry which is lighting amongst itself for the spoils when it should be working wholeheartedly and with single-mindedness in co-operation to obtain the very best possible results.

I should perhaps state at this juncture that three of the unapproved or non-combine firms have received one order each from the Air Ministry, but this is begging the whole question, as the firms mentioned have ample additional capacity and all their efforts to induce the Air Ministry to utilise it have failed utterly. At the same time it should be stated that the Air Ministry are indebted to certain unapproved firms for the supply of monoplanes for training purposes. The new types of Service aircraft are largely of monoplane design, and the only firms who were able to supply aircraft of similar construction to train the new pilots being recruited while the Service types were being built were the organisations which the Air Ministry had refused to place on their approved list. This country has been lamentably behind other countries in the design of monoplanes, which are now being adopted generally for all purposes, and there was therefore definite reason why these unapproved firms, who had had the foresight to concentrate on this type of design, should be given an opportunity to share in the design and construction of Service aircraft.

We have therefore a substantial part of the aircraft industry, the unapproved firms, with an adequate capital of some £5,000,000 sterling, being thwarted in their efforts to get work from the Air Ministry, except in the cases to which I have just referred, where the necessary training machines could not be obtained elsewhere, while this section of the industry has been struggling to uphold British civil aviation prestige abroad. At a time when it might be expected to share in a programme which would strengthen its position it is being despoiled by the section comprising the approved firms on the one side and by those who have been given the terrific task of organising the shadow scheme on the other. So we see the dismal picture of a Ministry, which could be and should be strengthening the aircraft industry at the present time, by its mistaken action inadvertently disorganising and destroying one section of it. One deplorable result of the lack of support given to that section of the industry which has been chiefly employed in civil work, which has not escaped the attention of the noble Viscount, is the permission which he has recently given to a British-subsidised air line operating from these shores to buy American equipment. Since that decision the Dominion of New Zealand has followed the example of the Home Government and sanctioned the purchase of similar equipment to replace British machines on their air lines.

Again I feel your Lordships will agree that the noble Viscount cannot escape criticism in this matter, as he is as much responsible for civil as for military aviation. In view of his expressed intention to safeguard by every means in his power the interests of the manufacturers of civil aircraft, he should have been looking ahead and placing orders for the right type of aircraft with British firms. As it seems, by our meagre support of British air lines—


Pardon me, may I interrupt the noble Lord for a moment on that argument? Is it suggested that His Majesty's Government should place the orders which are usually placed by civil air lines? Is that really what the noble Lord is suggesting?


In answer to the noble Viscount's remarks, it is suggested that His Majesty's Government could have facilitated a situation whereby the firms specialising in that matter could have made more progress than they did and have therefore avoided the placing of orders with America. In view of the expressed intention to safeguard the manufacturers of civil aircraft, he should have placed orders along the lines suggested or facilitated the placing of those orders. Your Lordships should appreciate that some of the things that have been said might be construed by the uninformed as being a criticism of the British aircraft industry. This is not so. The British aircraft industry is like all other British industries. When freed from hampering restrictions and unnecessary interference, British industry has always proved itself capable of competing successfully with foreign competitors. While it will succeed with a certain amount of the loading of the dice against it, there is obviously a point beyond which it cannot go. A striking example of this in the aircraft industry is that owing to the archaic system of testing new aircraft, it has admittedly been years before a new type gets into production.

The plain fact is that the elaborate technical and testing departments of the Air Ministry, which were built up to ensure our technical supremacy in aircraft, defeated their own object, in that their main energies were devoted to equipment and not to superiority of performance. Such was their careful and conscientious application to detail that by the time prototype aircraft were fitted with the various accessories and items of equipment to the satisfaction of the specialised departments of the Air Ministry, and the aircraft tested and passed as ready to be put into production for Service use, the design was six or seven years old. A case in point which might be referred to is that of the night bomber produced by one of our oldest firms, designed some years ago, the first production model of which has just been delivered, and of course its performance is hopelessly inadequate to compete with modern machines possessed by other countries. This system has proved a great embarrassment to the noble Viscount and your Lordships must sympathise with him, for not only has it prevented the production of machines until they were obsolescent, but it has tended to foster a lack of initiative amongst the designers of the supplying firms who thus lacked the inspiration of knowing that their efforts would get prompt recognition.

Faced with the urgent need of expanding the Royal Air Force he found himself with the alternative of speeding up production of obsolescent types which under the system in vogue comprised our first-line aircraft, or take the bold and unprecedented action of ordering in quantity from up-to-date designs hurriedly prepared by the designers of our manufacturing firms. To his lasting credit the noble Viscount, when faced with this impossible situation, cut through red tape and threw himself entirely upon certain manufacturers in the aircraft industry for support. As he has stated in public utterances, he has made a virtue of necessity by adopting a procedure which he has rightly described as ordering "from the drawing board.'' One must admire the courage shown by the noble Viscount in coming to this decision, which throws a great onus of responsibility on our aircraft designers and manufacturers, and if this policy succeeds, as we all sincerely hope and trust it will, although it is most disconcerting to have to admit in the case of one of these new machines at least that these anticipations are not being realised, we shall owe a great debt of gratitude to the designers attached to those aircraft firms who have been responsible.

The noble Viscount will undoubtedly endorse my statement that those selected firms did not fail him and that within a very short time they were able to produce an entirely new set of designs for machines in various categories, which will, it is hoped, result in the Royal Air Force attaining a standard comparable with that of other countries. Colour is lent to this possibility by a recent statement made by the noble Viscount that all the countries of the world were coming to him to buy our new machines. Although your Lordships can hardly believe he desired to convey that included among those aspirants were the great Powers of Europe, with the possible exception of Russia, we do know that the predicts of our aircraft industry have always appealed to those smaller countries who have not been in a position to build their own equipment, although of late years we have lost trade in certain directions to other countries.

In the light of policy now decided upon by the Air Minister it is perhaps pertinent to ask what is to be the function of the elaborate, and within its scope admittedly competent, machinery, comprising the scientific and technical research organisation of the Air Ministry. Are the personnel to be loaned to the constructing firms to assist in the inevitable teething troubles to which the new types will be subject as they pass along the band of mass production? The noble Viscount claims that years will be saved by the method which has been adopted; and I have quoted one case which illustrates the truth of this contention. Are we to assume that when the present emergency has passed this time-wasting machinery will be reinstated, or is it the intention to disband an institution which it would now appear can be dispensed with? I submit, my Lords, that we cannot afford to lose any technical or scientific skill or experience in aircraft matters. Knowledge of aviation has been built up by dint of supreme application; every available source must be conserved and utilised if we are to remain a first-class Power, but it must be rightly directed. If through the competency of our aircraft designers the risky policy of ordering "off the drawing board" is justified in this instance, we cannot make such a practice a normal procedure. Even if the noble Viscount's confidence is proved to be based on sound conjecture, we must not rest on the present programme. New designs both of military and civil aircraft and aircraft engines must be encouraged and a number built and tested out so that we shall never have to take such risks again. There is no finality in aircraft performance and we must always be in a position to build craft of the very latest design in such quantities as may be necessary. There is no doubt whatever of your Lordships' desire to see the rearmament programme of expansion proceed with the utmost dispatch, and there can be no doubt of the wish and intention of the noble Viscount the Minister for Air to speed up the expansion of the Royal Air Force, which is his special responsibility. I have emphasised and dwelt upon one fundamental reason, as I see it, why he has not so far been able to press forward as rapidly as we should have liked.

The noble Viscount has inherited an out-of-date system, useful perhaps in the leisurely times of secured peace and prosperity, but shown to be entirely inadequate to meet the present emergency, and many examples could be instanced to prove what a handicap it is under present circumstances. I will quote but two. In the recent armament debate in your Lordships' House a question was asked as to the Air Ministry's attitude to the use of heavy calibre armament in aircraft, and the noble Viscount has told your Lordships that his advisers are not convinced of the superiority of the use of this type of attack over that with machine guns of smaller calibre. Be that as it may, the Air Ministry, it is understood, have placed a development order with an approved firm of aircraft manufacturers for a cannon engine, a power unit which experience shows will take from three to five years to develop. If this is so, the irony of the situation is that a firm of British unapproved aircraft engine constructors are in the position to offer the Government an up-to-date cannon engine thoroughly tested out at the present moment, and adopted as standard equipment by our gallant allies across the Channel, and used by them in considerable numbers in their latest fighting aircraft. Although the noble Viscount has indicated the Air Ministry policy in regard to this new form of armament, I would emphasise to your Lordships the desirability of not falling behind in its development. It is admitted that the type of cannon engine to which I have referred, the constructing licence of which has been acquired by a British firm, is of foreign origin, but I would point out that its adoption, at least for trial purposes, would not be a precedent in the use of foreign design as, to quote only one instance, the Ministry has adopted a controllable pitch airscrew of American origin which is to be put into production in quantity in a shadow factory to be built for the purpose.

I feel that your Lordships are unaware, and I am compelled to the conclusion that the noble Viscount is unaware, how vitally the sectional differences of prerogative of the firms within the aircraft industry are affecting the task to which he has put his hand. As a result of the policy the Air Minister has embraced, a courageous policy which, I repeat, does him credit, there is a lamentable though perhaps inevitable hiatus during which production is slowed down. The new designs of aircraft which have been decided upon necessitate a vast amount of preliminary drawing office work, and the drawings have not been available to ensure the full concentration on production of the approved firms, particularly in regard to airframes, and the, sorry spectacle is to be observed of certain firms within that category coming to the unapproved firms to ask them to give them work in order to keep on their skilled personnel. The unapproved firms, who might be busier with civil production had they received more support, in fulfilling requirements of British air line operators who are purchasing with Air Ministry approval foreign equipment, are no better placed. Your Lordships will be surprised, when it has been so emphatically stated in this House that there is a dearth of skilled labour, to know that hundreds of skilled men are being paid off weekly by the combine as well as the non-combine aircraft-producing firms.

I desire to state most definitely that I am, as I am sure your Lordships will realise, not merely suggesting the introduction of measures to harmonise the domestic differences of the aircraft industry, but that steps should be taken to eliminate any weakness which is calculated to clog the machine, the efficiency of which is so essential for the purpose in view. It would be absurd to minimise the difficulties the noble Viscount has had to surmount and still has to surmount. Let him therefore first insist on putting the house in order so that all concerned may give of their best in the gigantic task which lies ahead. The noble Viscount has taken a bold line in the right direction in trusting certain experienced designers in the aircraft industry in this emergency, and they have not let him down. In this he has broken the shackles of tradition; let him continue the courageous course and be determined that he will use all the aircraft administrative, managerial, technical and skilled personnel in this country, irrespective of precedent, together with all the specialised manufacturing resources, and their capacity for expansion, of the approved and unapproved firms. The Treasury have already approved financial grants to approved firms for the extension of plant, which, I submit, should be extended to unapproved firms. If this is not enough then bring the shadow scheme into full operation.

The noble Viscount has a momentous rôle to fill. Of all those who are responsible for the defence of this country he, as the Secretary of State for Air, stands closest to the great problem this country has to solve. On the decisions he may make the destiny not only of this country but of the world may depend. The noble Viscount has a great opportunity, nay, an inviolable duty, to ensure that nothing is left undone which will secure the safety and welfare of this country. If he does this, he will deserve and obtain the lasting gratitude of present and future generations. We have a Royal Air Force with splendid personnel, of the utmost efficiency, being rapidly augmented by the cream of our young manhood. I suggest to your Lordships that this magnificent arm of defence should not suffer a shortage of the necessary aircraft and equipment which is seen to be the result of that most un-British policy of relying on a "ring" or combine of one section of the manufacturers concerned. Your Lordships will be under no misapprehension of the urgent need for the pilots of our Air Force to become familiar with new types of high performance machines, and how necessary it is that no stone should be left unturned which will ensure the required equipment being available at the earliest possible moment. May I therefore seek the assurance requested in the Motion I have submitted and trust that if this cannot be given, as I am sure your Lordships will realise that it cannot be given unequivocally, His Majesty's Government will assure your Lordships that steps will be taken to co-ordinate the whole aircraft industry of this country and utilise it to the full extent without further delay? I beg to move.


My Lords, I have listened with great attention and interest to the speech which the noble Lord has just read; I gather that he was not in his place in your Lordships' House on June 17 last. I wish to take the opportunity to-day, however, of asking the noble Viscount the Secretary of State a question of which I have given him private notice, and which is not alien to the Motion on the Paper. That is, if he can give us some information as to the work, and the progress of the work, which is being done by Sir Hardman Lever's Committee. A reference has been made from time to time to the work of this Committee, and I am sure that your Lordships will agree that the noble Viscount was very wise in availing himself of the advice and the assistance of men of such experience and knowledge as Sir Hardman Lever and his colleagues. As the House and Parliament are adjourning almost at once, I think it would be of some interest both to Parliament and to the country if the Secretary of State could tell us on this occasion what is being done by that Committee.


My Lords, before the noble Viscount replies—to which reply I look forward with keen anticipation in view of the very strong statements by the noble Lord on the Cross Benches—may I say a few words on behalf of the Opposition? I want to apologise to the noble Lord for missing the first few minutes of his speech, but I shall have to read the whole of it to-morrow in order really to grasp its full significance. It was so packed with statements and facts and attacks and compliments to the Air Ministry and other details that, unlike the noble Viscount who has just spoken, I did not grasp the whole meaning of it; but I heard enough to make me reluctant to intervene in this pretty quarrel. In speaking from this side of the House I must not be taken as endorsing everything that fell from the noble Lord, if I had managed to appreciate all he was saying. I have known the noble Lord for many years now from the hectic days of 1916 and 1917 and I have always regarded him as knowing this particular subject very intimately indeed. I understand from such information as I have been able to gather, as I ventured to say on the last occasion when we had a full dress debate on defence, that the shadow scheme gives us an enormous potential which can be put into operation at very short notice when the occasion arises.


We are actually in production.


Yes, but the new shadow scheme factories themselves will not be built for some months yet. They are in the process of formation. They will have a sort of trial run, and will be put into part production, but then they will be able to multiply that production to an enormous extent when required. The criticism I ventured to make on the last occasion—not a very serious one—is that it might have been started rather earlier. I think I am right in saying that the shadow scheme, the factories and plant, are being paid for by the State. How is it proposed to amortise the capital expenditure of that great undertaking? That is a matter that more affects another place, but it would be interesting to know what the finance of the scheme is. It seems to me that the problem before us is to obtain an answer to this question: Is there sufficient emergency to-day to justify using every possible means of producing parts of aeroplanes, parts of engines, planes, etc.? Some people say there is, that the situation is very critical and that we ought to be acting with tremendous energy to utilise every possible man and machine and tool and jig that we can lay hands on for aeroplane construction. Or is our rate of actual production now sufficient? I do not know; that is the Government's responsibility.

But I think one is right in asking this: Is there free competition in design? I do not know. I have heard the statements which were made by the noble Lord this afternoon repeated outside, and I know there is a certain amount of criticism, but I have no means of checking its accuracy. That, however, is one question that needs clearing up. Do the Air Ministry allow open and free competition in producing the best possible types of engines and machines for certain particular purposes? And I think also that the noble Viscount might consider answering that question put by the noble Lord, Lord Sempill, which has been repeated several times, twice at least, by the noble Earl, Lord Halsbury, and which is repeated in certain circles continuously: Is it a fact that we are behindhand in large monoplane designs compared with other countries?


I will answer that at once. Certainly not.


I am very glad to hear that. That is, at any rate, a very useful intervention that I have drawn from the noble Viscount. On this side of the House—I must repeat this on every possible occasion because I do not think it can be said too often—we are in favour of nationalising the war aircraft industry, and we are in favour not only of nationalising but of internationalising all civil aviation, and if our policy could be adopted we would have none of these difficulties.

Having said that, I want to make a suggestion to the noble Viscount. In the case of the world's Navies, we are given very full information about the exact strength of all the principal Fleets of the, world. We know how many warships there are, of all types, their speed, their armament, their tonnage, the horse power of their engines, and other details of that kind. We have laid on the Table of Parliament every year a most useful Return known as the Dilke Return, which gives all these details of the seven or eight principal naval Powers. I wonder if it would be possible to issue some sort of return of that kind, not giving away secret information, but stating the relative strengths as far as can be ascertained, of the different air Powers. I quite appreciate the plea of public interest and the need for secrecy, but there must be some more information that could be given. Deliberate attempts are being made by certain newspapers to alarm the public as to our alleged weakness in the air and the tremendous strength and lead other Powers have over us, both in numbers and design. I do not know if there is any justification for these alarmist statements or not. I think the Government might consider—I do not want an answer from the noble Viscount to-day—the advisability of issuing some statement once a year, if possible, showing what the relative strengths are. If it is possible to do that in the case of Navies, is it not possible to have more information than we have at present with regard to Air Forces?

I want to say this in defence of the noble Viscount, the Secretary of State for Air, if he will allow me to defend him for a moment, and on behalf of the policy of his Department; and now I address myself directly to the noble Lord, Lord Sempill. If we go "all out" now and manufacture a tremendous number of aeroplanes of various types, and they are not needed, we shall find ourselves later on with a lot of semi-obsolescent machines. In other words, the longer you can hold back from your great production the better. You will thereby have more up-to-date machines. That is always the case with regard to any armaments, whether you are making a mechanised force for land fighting or warships or any type of armament, but it is particularly the case with aircraft, because the noble Lord, Lord Sempill, knows as well as anyone in the House that this is an industry that has developed and is developing with giant strides. The existing machines of to-day will be obsolete or semi-obsolete or obsolescent in twelve or eighteen months' time. The rate of progress of aeronautical engineering is tremendous, and of the Services that are holding back at the present time from building more machines than is absolutely necessary, I suggest that the Air Ministry is the one with that duty most clearly defined.

Just two other points. I must return, if I may, to a question I asked before about the cannon engine. That was the part of the noble Lord's speech with which I found myself most in agreement. I am not very happy about this cannon engine, quite frankly, and I was not altogether satisfied with the noble Viscount's reply on the last occasion. It is quite possible to build to-day armoured aeroplanes with all the vitals armoured, and machine-gun bullets will be practically useless against such machines. I, myself, for many years, even during the War have thought the large calibre gun would have the advantage. The noble Lord, Lord Sempill, knows that certain papers from my pen reached the Air Ministry, when I was on the Admiralty War Staff, urging them to go very much further into the matter of heavy calibre cannon to be carried in flying machines. The French Government have this engine. We can get the designs and the jigs and the drawings right away. If it is a fact, as has been stated in the French newspapers, that they supply these to the Russian Government, we surely can get them too. I do not want the noble Viscount to say anything that is not in the public interest, but I would like an assurance that this matter is being seriously considered.

The other question—it may sound a little cynical but it is not really intended to be cynical—is: Is there an Air Attaché in His Britannic Majesty's Embassy in Madrid? I do not want to go into the rights and wrongs of the unhappy situation in Spain, but there the latest designs in machines are being tried out in actual fighting. I had related to me a conversation by a Frenchman the other day who was saying: "Of course we Frenchmen are against any kind of intervention in Spain. We would not think of anything of that kind, but we are glad to find that our fighters are faster than the Germans." There are lessons to be learned in Spain to-day. We are not intervening in that sense. Cur intervention is more moral intervention in the wrong direction. But we have a unique opportunity of finding out a great deal about the actual performances on service of the air machines of other countries. We on this side of the House will await the reply of the Air Minister with great attention, but, apart from the one or two questions I have put and the two opinions I have expressed, we take no sides in this quarrel.


My Lords, let me deal first with one or two points raised by the noble Lord opposite. He Las asked me whether it would be possible to produce a return, year by year, of the strengths of Air Forces in all countries. I dealt with this matter rather fully when I spoke in the big Defence debate in this House. We do, as a matter of fact, give more information about Air matters than probably any other country in the world. The British Government would welcome a very wide disclosure all round of the reality of Air strengths, and I go further and say a disclosure of future programmes. I believe that would be a very, useful thing in a world which is very suspicious, as I said in the last debate, in a world where, if one does not know, one is bound to magnify, and where certainty does give assurance. But, as I said on that occasion, that kind of disclosure would be one-sided. We would welcome any wide measure of disclosure of strengths from the principal Governments of the world, and if at any time we could get that, we would be only too glad to co-operate to the full in such disclosure. But I am sure the noble Lord will realise that it would be quite true to suppose that every country possesses a good deal of information which it cannot disclose. He would not ask for that, nor certainly would he ask me to make disclosures on behalf of this country which might be damaging and unwise if one cannot get similar facts disclosed by other countries. I am entirely at one with him, that if we could get a wide measure of publicity I believe it would be a thoroughly good thing.

I am not going to enter into a technical argument with him on the desirability of the cannon as against the machine gun. If I may say so I do not ever intend, as long as I am Service Minister, to make the mistake of trying to usurp the whole functions of a General Staff in my own person. We must be guided in these matters by the considered views of a General Staff. I can give the noble Lord this assurance, that the last thing in the world the Air Staff of this country are doing is thinking in terms of the past. They are thinking all the time in terms of the future, of what the future aeroplane is going to be like. Whatever decision we may conic to as to the relative merits of this or that kind of armament—and whether that decision in the long run be right or wrong, nothing except the sad arbitrament of war can ultimately settle, and perhaps that will not completely settle, such argument—that decision, I can assure him, will be taken without prejudice as the result of experiment and as the considered judgment of a Staff that is looking always to the future and the possibilities of the future, and not at all relying on experience merely of the past.

The noble Lord asked a question about the shadow scheme, and I will deal with that. I know he is a keen advocate of the shadow scheme, and I think practically everybody in this House is, too, except the noble Lord, Lord Sempill. He asked what steps are being taken to amortise the cost of the Government factories of which he so fully approves. I cannot really answer that. As a matter of fact that is all bound up with the way that the whole armaments programme is paid for. As the noble Lord knows, a large part of that is being paid for out of income. Some of the cost will not be able to be met out of income, and will necessarily be met by borrowing. I think the simple thing to do is to take the whole of the armament programme together. Taking it by and large, and having in view the great contribution which is made out of national income as compared with what has to be met, and will have to be met, in future out of borrowing, the noble Lord may take it that this is not being treated as a borrowed capital charge, but probably is being paid for at a much more rapid rate than even the most liberal principle of amortisation would demand.

I come now to the interesting essay, if I may say so, which was read to the House by the noble Lord who moved this Motion. I always feel it—and I apologise for it—much more difficult to follow a read essay than I do to follow a spoken speech like that made by the noble Lord opposite. That is my misfortune, and therefore I may not have appreciated all the points which the noble Lord, Lord Sempill, read out. So far as I was able to follow it, it seemed to me that the great majority of the questions which he raised had been most exhaustively dealt with in the three days' debate on Defence which took place in your Lordships' House. The noble Lord repeated a certain number of misstatements, if I may say so, which he made on a previous occasion. I ventured, as regards those which I thought it really immediately necessary to correct, to take the rather unusual step of intervening in his reading in order to make plain that certain suggestions he was making were very remote from the truth.

He stated—and indeed he read the statement out again; I am sure it was his mistake, because he had it already written down—that we were precluded from placing contracts with any firms. That is absolutely untrue. I hope the noble Lord will not repeat that statement again. There is no agreement of any sort or kind entered into by the Air Ministry, or so far as I am aware any Service Department of State, which ties that Department up to placing orders with any particular firm. Indeed, if it were so, I should never have launched the great scheme of the shadow factories. Let the noble Lord disabuse himself of that mistake once and for all, and do not let him repeat it again either in this House or outside it. It is perfectly true that a large number of important orders have been placed with a large number of well-established firms. Is that bad business? Is that foolish policy? After all, the noble Lord said to me—and indeed I recognise it without his admonition—that I have got a very responsible job to fulfil. Believe me, my Lords, I realise that to the full. I may fail in it, but it will not be for the want of trying to do my best, and it will not be for want of getting the very best advice I can, inside the Government or outside it, in any industrial part of the great adventure on which I am engaged.

Let the noble Lord really pay some attention to great industrial opinion on what is an industrial question. Let him study the views of men like Lord Weir. I do not shelter myself behind anybody for a second. I take full responsibility for anything I do in my Ministerial career. But let the noble Lord take and consider and compare the suggestions he has made to the House with the considered, impartial opinions of a man like Lord Weir, with his unique industrial experience and his unique experience of the Air Ministry and air needs, the man, indeed, who created the Air Ministry and the Air Force in the War, the man who was responsible, I suppose, during his great tenure of office, for producing every kind of aeroplane that took the field in France. Let the noble Lord consider the considered view given in this House in our recent debates of a man like Lord Hirst, speaking with tremendous industrial experience, speaking, as he told your Lordships, not only from his own personal experience of industry but as the spokesman of perhaps the greatest of al the industrial organisations in this country, the Federation of British Industries, and also, I think, for all the chambers of commerce. He recorded as his considered opinion and their considered opinion that the course of industrial practice which we were pursuing was wise and sound. I do not seek for a moment to be a judge in my own cause, but I do suggest that when you get impartial opinions of men of great experience such as those, they are at least to be weighed in the balance against the homilies which have been addressed to me by the noble Lord.

I shall not weary your Lordships with a very long speech, because I really dealt with so many of these points at great length on a previous occasion. Let me turn to one or two of the things that the no ale Lord suggested. Let me take in the first place something that appears as part of his Question. I am asked to do this by the Minister for the Co-ordination of Defence because of the words that appear in the noble Lord's Motion. The words are: whether, in view of the statement recently made by the Minister for the Co-ordination of Defence that he is not satisfied with the output of airframes for the Royal Air Force re-equipment programme… I am asked to say by the Minister for Coordination of Defence, who cannot be in this House to speak for himself, that he never made any statement to that effect at all. So far as he has made a statement, or I have made a statement, neither of us has ever said that programmes have been up to original forecasts, but so far as he has made a statement he has said that he was reasonably satisfied with the progress which has been made. Do not let us, therefore, frame a Motion by representing a Minister, who is not here to answer for it, as saying something he has not said. I am here to answer, and I answer both for him and for myself when I say that is a misrepresentation of the attitude of the Government.

Let me put in a few sentences really what is the answer to the noble Lord. What we are engaged on is a programme. It is not a case of going to this or that firm and saying: "Could you produce something for me?" As I ventured to say on the last occasion you cannot buy aeroplanes as you buy a box of mixed chocolates. My noble friend Lord Hutchison, with his great experience in the War, knows that there is nothing more hopeless than to try to go into great military preparations with a mass of different types of material. To do that is asking for trouble. My sole job, and the job of all of us, is to get a particular programme carried out in the most effective way. It is a very large programme. It includes a vast number of aeroplanes and a vast number of air engines, but the design of the aeroplane in every case governs the engine. Those aeroplanes which have been selected for the programme are those which in the considered opinion of the Air Ministry are the best type which can be produced within the period of the plan, the best types for their work. We have to take great care, while seeking to get really good types, to reduce the multiplicity of types as much as possible.

I am going to speak quite frankly to the noble Lord. He has talked about a lot of firms and suggested that it would be a very good thing if we could buy this or that product. But if those products are not of the least use to the programme I would not say "thank you" for them, and I should be wasting public money if I ordered them. It rather reminds me of the divinity student who, when asked to give a list of the minor prophets, said that here it would be well to give a list of the Kings of Israel and Judah. He did not reach a very high place in the divinity paper. It is no satisfaction to me to be offered bits and pieces which we do not want. It is essential that all who can play a part should come in and be willing to play that part, but not to play a part in producing what they would like to produce: they must produce what is required to meet the national need and produce what the programme of the Services requires. If the noble Lord can tell me of a firm which is prepared to take a sub-contract for a particular type of machine that forms a part of the programme, a firm that is efficient to produce it, and that cannot get a subcontract from the main contractors, I or my director will take up the case to-morrow. Let him give me particulars if he has them, but do not let him, directly or indirectly, try to divert us from the main object of getting this programme through, or ask us to substitute something quite different which would not be of the least value for our purpose.

I was not very clear whether the noble Lord was congratulating me or not upon ordering off the drawing board. On a previous occasion I thought he said it was very unwise. I have no doubt that it was wise and right. We could very easily have ordered machines of an older type, as I said on a previous occasion, and we could have got them in large quantities. That would have been wrong. When we saw the chance of getting production of machines of new type of high performance, although the prototypes had not been proved, we deliberately took the risk. We placed orders for those machines. It is true that that has caused, some delay, but that is being made up. There is not a country in the world that has not had that kind of delay. But observe what happens. A big production order is placed ahead of the proof of design. Material is ordered, the factory is laid out, jigs are provided, and all the work is carried forward to such a point that the moment you have overcome the difficulties which you always get in a new type you can go ahead with production. You do not have to wait years to get the big mass of machines coming forward. You have got a big contract there swinging forward. You may have had a delay of months, but you will have saved years in the case of some of the important machines. What is wanted in air programmes and in other programmes is that firms should do the job that is required of them.

I apologise to your Lordships for repeating so much that I have said before, but exactly the same points have been raised by the noble Lord. If you had control, every one of these firms would be taken over to-morrow and told to do exactly what is required for the programme. I do not believe for a moment that it is beyond the good will and capacity of industry in this country—of which I have seen so many evidences—without control, to get co-ordination so that firms will do what is required of them. When the shadow factories policy was put before your Lordships' House I did not think that any member of the House had any doubt about the wisdom of that policy. The noble Lord has talked about lack of experience. What does he mean by that? I have not asked these firms for designs. The designs are there, the machines are laid out, and what I want now is production, big production. Does he really suggest that certain firms which he has talked about, small firms, have a greater production experience than vast motor manufacturing companies like the Austin, Standard, Daimler, Humber, people who are in this shadow scheme? Could he suggest such a thing? I think that aircraft production as this shadow scheme works out may learn not a little from the great production knowledge of these vast motor firms. I am quite sure that we should have been very foolish not to take this step.

What has been the anxiety which has been expressed? Noble Lords sometimes sit on the Cross Benches who have great experience of strategical needs. Their questions always are: "What are your plans? Are they paper plans or are they real?" Those are pertinent questions. By the shadow scheme, under which you take great firms which in war would be diverted to war use, give them experience of the kind of production that will be required of them in war and set up the State-owned factories side by side with their own, managed by them with all their experience, are you not doing exactly the thing that our critics have told us, and rightly told us, hat we ought to do: not only to be planning the war potential but also to be making sure that the war potential can be an effective reality if ever the time of danger comes? The shadow theme is the considered policy of His Majesty's Government. I do not apologise for it for a single second, and I tell the noble Lord that there is not the faintest chance that we shall abandon that scheme in favour of any of those which he has put forward to-day.

The noble Lord asked whether we were going to abandon our scientific work at the Air Ministry, and if not, how we were going to use it. Of course we are not going to abandon it. Incidentally, I had the experience, only a week or two ago, of a very difficult manufacturing proposition which had defeated the manufacturers of two countries being solved by a technical member of the Air Ministry staff. It is now going into production in both countries—this and the friendly country of origin. How is the whole of the work done at the great research establishment at Farnborough, where the greatest of the designers come, I was going to say, almost day by day? It is done in the only effective way in which research is applied: it is done, of course, by the day-to-day contact of the technical branches of the Ministry, of those engaged in the technical research which goes on at Farnborough and places like that absolutely all the time, with the manufacturers who are engaged in production. That is the only way in which such a plan can work.

I do not want to say more about the noble Lord's speech and the problem that he has raised, but the Motion he has made and this occasion lead me to make some observations from a national point of view about the formation of new companies. The noble Lord was not for a moment advocating anything of that sort; I am not suggesting that; but I think that certain events have made it desirable that I should take this opportunity—a convenient one—in your Lordships' House to make a considered statement on the part of the Government on this subject. If a company is launched purely as a speculative enterprise, that is not my concern, except in so far as I share with other Service Departments a natural anxiety that the limited resources of skilled labour should not be unnecessarily dissipated. But when suggestions are made in a prospectus on the lines that the formation of a particular company would put it in a position to undertake Air Ministry work, or words of that sort, then I think have a duty to speak, for such vague phrases might well lead investors to suppose that there was some connection between such a company and the Air Ministry and they would be gravely mistaken in making any such assumption. Where a company is engaged on Air Ministry work, or has been invited to undertake such work, the company is fully justified in stating the facts, and would, I am sure, do so with perfect accuracy and fairness; and great extensions have been made by a number of firms in their factories to enable them to undertake their work under the programme. But a case such as I have referred to, of a new and speculative concern, is wholly different.

I have tried on several occasions, and again to-day, to make the position plain. We are committed to a very large programme. That programme is represented by a great number of aeroplanes and engines of approved types. Our job is to get that programme produced. The direct orders are placed. Both the firms with whom the direct contracts have been placed and their sub-contractors will have plenty of difficulty in securing the necessary labour, particularly of the skilled labour and personnel. They are also making great demands on the machine tool industry, which is being most helpful. The Defence programme must be carried out. We are, however, most anxious that these programmes should be executed with the minimum interference with the regular flow of civil industry. But, after consultation with my colleagues and with their full approval, I feel it my duty to say that the Defence programmes and the work of the great civil industries of this country will not be helped but hindered at this time by an unnecessary and speculative dissipation of the labour and manufacturing resources of the country.

My noble friend Lord Mersey asked me a specific question about the work of the Hardman Lever Committee, and I am very glad to have the opportunity of making clear the work on which they are engaged. We at the Air Ministry are very deeply indebted to them for much valuable work, and for work which at the outset of our programme was quite invaluable. At the outset I invited Sir Hardman Lever and his colleagues to help me as regards the general principles which should govern our contractual relations with firms, the data which should be afforded by contractors, and the application of those principles in a number of specific cases to the detailed work of our Contracts Department. In regard to the latter class of work I should like to say how much we are indebted to Mr. Reeve, who has very wide experience and who in liaison, with the Lever Committee gave our Department great help.

At that time—and I go back to the time shortly after I took over—the Air Ministry was engaged on an expansion programme in advance of the programmes which have since been authorised for the three Services. The development of these programmes, the programmes of all the Services, has led to the establishment of a Treasury Inter-Services Committee, which is working regularly to ensure co-ordination and common action in the field of Service contracts. That Committee is continuously at work. Of course, individual contracts are and must be the responsibility of the Minister concerned, but in certain special cases of particular importance and novel character, as, for example, the agreements with the firms managing the shadow factories, the terms of those agreements have throughout received the special consideration of the Treasury and of Ministers. These particular agreements have been altogether outside the purview of the Lever Committee. In the light of altered circumstances I considered how I could best utilise the experience of Sir Hardman Lever and his colleagues, and I entirely agree with my noble friend that it is of the greatest value. It appeared to me that there were two functions which they could perform, and perform, indeed, better than anyone else. The first was as advisers on questions of principle, and the second was as arbitrators in cases where the Air Ministry and a particular firm were unable to agree on the terms of a contract.

The detailed day to day work of a contracts department, the fixing of prices in particular contracts, must be the responsibility of a Minister and his staff. Nor, indeed, would it be possible to ask the same people to act as advisers on the detailed terms of a particular contract, and subsequently to act as arbitrators on that contract in case of dispute. It is the latter position, that of arbitrators, which the Lever Committee will occupy in relation to individual contracts. At the same time I am glad to say that I shall have their valuable advice on questions of principle. I am glad the noble Lord raised this, because it gives me an opportunity of making that position plain, and it gives me also an opportunity of saying, on behalf of myself and of my staff, how much indebted we are to the Committee for their work. Anybody who knows, as some members of your Lordships' House can recollect, the remarkable work which Sir Hardman Lever did at the Ministry of Munitions in the War will, I think, agree that we are fortunate to have the assistance of a man like that. I apologise in one sense for having gone again over the ground which I covered in an earlier debate, but I think it was necessary in the circumstances, and I am glad to have had an opportunity of making certain statements which I think it was really desirable should be made.


May I ask before the noble Viscount sits down whether he can answer the question which I put to him, as to the presence or otherwise of a British Air Attaché at Madrid?


No, we have not got an Air Attaché at the moment in Madrid, but that does not prevent us from knowing a certain amount about what is happening.


My Lords, I have listened with very close attention to the remarks which have been made to your Lordships by the noble Viscount, and I should like immediately, if I may do so, to apologise to the Minister for Coordination of Defence through the noble Viscount, for having inadvertently misrepresented the views which he expressed in the House of Commons with regard to the hold-up of air production. I gather from the noble Viscount that he is doing all that is possible to bring about the fullest possible use of all the facilities in this country for aircraft production. I gather that the noble Viscount said in his remarks that he had not been fully able to follow some of the pints that I raised, but I hope he may be able to take the opportunity of doing so upon another occasion. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.