Lords Sitting of 1 August 1939

Preamble
The House met at three of the clock, The Lord Chancellor on the Woolsack.
COTTON INDUSTRY (REORGANISATION) BILL.
Returned from the Commons, with the Amendments agreed to.
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
LONDON BUILDING ACTS (AMENDMENT) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
WEST GLOUCESTERSHIRE WATER BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
SHEFFIELD CORPORATION BILL.
Returned from the Commons, with the Amendments agreed to.
ABERDEEN HARBOUR (SUPERANNUATION) ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
DUNBARTONSHIRE COUNTY COUNCIL (KIRKINTILLOCH STREET IMPROVEMENT) ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
LANARKSHIRE COUNTY COUNCIL ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.
MOTHERWELL AND WISHAW ELECTRICITY, ETC., ORDER CONFIRMATION BILL.
Read 3a (according to Order), and passed.

SENIOR PUBLIC ELEMENTARY SCHOOLS (LIVERPOOL) BILL.
Order of the Day for the Second Reading read.
3.7 p.m.
THE PRESIDENT OF THE BOARD OF EDUCATION (EARL DE LA WARR): My Lords, this Bill is of great importance to education in Liverpool, but I can present it to your Lordships in quite a few words. It comes to your Lordships with the complete agreement of all the interested parties. I think any one who knows the position in Liverpool knows that the state of their denominational schools, particularly in the dockside area, is extremely serious. He knows also that certain factors in Liverpool have made it always extremely difficult to arrive at any compromise hitherto between the parties concerned. The result is that the state of the schools has for many years been quite lamentable. In considering this question the factor that has influenced me has been that whatever the merits on one side or the other it has been the children who have had to pay the price. There is no point whatsoever in looking back or attempting to allot the blame as between the Corporation, the denominations, and the Board of Education itself, but the quite obvious and outstanding fact is that there has been, and is in fact still at the present moment, no solution of this problem on the accepted lines—that is to say, on the lines generally accepted throughout the country. The object of this Bill therefore is to end the deadlock by facilitating the provision of voluntary schools in Liverpool on the basis laid down in the Bill.
The plan, put quite briefly, is this, that the local education authority, instead of making grants of money towards the provision

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of school premises by voluntary bodies, as they might have done under the Education Act of 1936, should themselves provide the premises and lease them to those bodies, but only in relation to proposals which have already been submitted under the Act of 1936 and within the time prescribed by that Act. The amount of school accommodation to be provided by the authority under this plan is estimated to be about 15,000 school places. This will approximately cost £900,000, which will be met by loan. Your Lordships may ask why the authority, having declined to operate the 1936 Act, have now put forward the scheme which is embodied in the present Bill. I think that the answer is a twofold one. In the first place, their unwillingness to operate the 1936 Act was, in large measure, due to the fact that they were not prepared to subsidise the property of denominational bodies—property which might in time appreciate considerably as a result of the Council's housing operations. They avoid doing so under the terms of the present Bill since the reversion of the freehold remains with the authority. The second, and much more important reason, is that Liverpool has finally recognised the urgent need for remedying the conditions of the denominational schools, particularly those in the dockside area, and has placed the interests of the children before sectarian and political differences. In this connection, I am able to inform your Lord-ships that the present Bill comes to us with the support of every political Party and every religious creed in the City.
It will be seen that the Bill involves no permanent or continuing alteration of the law since its provisions apply only to the building of schools in respect of which the denominational authorities have already submitted proposals under the 1936 Act within the time limits prescribed by that Act. Moreover, the proviso to Clause I makes it clear that the measure of assistance to be given to denominational bodies under the Bill can be no greater and no less than they could have received under the 1936 Act. The only other provision of the Bill to which I need make specific reference is that referred to in the latter part of subsection (3) of Clause 1. The effect of this is that the terms of appointment of teachers in schools to be built under the Bill will be precisely the same
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as in the case of schools to which a building grant has been made under the 1936 Act.
Those of your Lordships who have occupied my post at the Board of Education, and indeed anyone who knows the condition of many of the voluntary schools in Liverpool, will appreciate the weight of responsibility involved in allowing the continuance of schools that are bad not only in terms of education, but of the simplest amenities of life including even the most primitive sanitation. Such a state of affairs cannot be allowed for a day longer than is necessary, and that responsibility would be greatly increased were a scheme for its solution, which commands unanimous local assent, to be rejected. I hope, therefore, that your Lordships will show a like unanimity in supporting this measure. I hope, also, that your Lordships will agree with me in feeling that all concerned are to be congratulated on having found a solution to a problem that has been little short of a scandal for a generation. It is a triumph for tolerance for which future generations in Liverpool should be profoundly thankful. I beg to move.
Moved, That the Bill be now read 2a.—(Earl De La Warr.)
On Question, Bill read 2a, and committed for to-morrow.

BRITISH OVERSEAS AIRWAYS BILL.
Order of the Day for the Second Reading read.
3.14 p.m.
THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND): My Lords, the circumstances which have determined His Majesty's Government to sponsor the scheme embodied in this Bill will no doubt be known to many of your Lordships. The burden of maintaining British air lines overseas rests at the present time with two companies, Imperial Airways, which operates, broadly speaking, upon the Empire lines, and British Airways, which operates, broadly speaking, over the Continental lines. These two companies have done much to maintain British overseas air lines, but they are now faced with an almost impossible task, even with the subsidies

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which they are drawing from the Government. It is quite clear, I think, that if the goal which we are placing before ourselves is to have any chance of being reached, financial resources will be required which it would be quite beyond the capacity of these two companies to raise except upon the most onerous terms. I have referred to the goal which we are now placing before ourselves. That goal can be denned in a single sentence—namely, as being the fullest development of efficient overseas air transport services at reasonable charges.
That being the goal, what are the means by which we seek to achieve it? They are actually the acquisition by a public corporation of both Imperial Airways and British Airways. May I enlarge a little upon the reasons which have driven the Government to the conclusion that this is the best way of dealing with the problem? I spoke of the need for greatly increased capital, which the existing companies could not hope to raise except upon exorbitant terms. The actual additional working capital which it is estimated is required for the efficient discharge of the duties which will devolve upon whatever body is set up to operate the air lines is something like £3,000,000, possibly rather more. In this connection the Government have expressed their agreement with the principle which is implicit in the Report of the Committee which was presided over by my noble friend Lord Cadman—namely, the principle that public money should not be used for raising dividends to undue levels. It is quite clear that public money will in any case be required in order to finance any organisation which hopes to achieve the goal we have now set before ourselves. The only satisfactory method of applying this principle in this particular case is, in our view, through the issue of fixed interest stock, guaranteed as to both principal and interest by the Treasury.
In our view, a non-profit-making public corporation, set up by Statute, will offer greater possibility of advancing British civil aviation than a limited liability company which must, of course, quite properly, watch its shareholders' interests and also be sure of its subsidies and contracts before it can embark on a far-sighted development programme for the
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operation of new air services with up-to-date and increasingly costly aircraft. We are likewise satisfied that the rapid expansion of overseas air services, coupled with the great technical advances which are being made in this sphere, call for the pooling of experience and equipment, ground organisation, and technical resources generally and the strengthening, by unification, of administrative and operating organisations to the fullest possible extent. Centralised control of the fleet, centralised training of personnel, concentration of management, forward planning, publicity, and so on will all, in our view, bring substantial advantages.
The new operating organisation will not, of course, be a Government Department. It will be a public corporation, though, so long, at any rate, as money is provided from the Air Votes for the Corporation's needs, and so long as the Corporation is dependent upon a Treasury guarantee for its capital and interest, it will be subject to a very large measure of control by the Air Minister. Nevertheless, it is intended that, so far as may be possible, the stimulus to enterprise which is one of the most valuable characteristics of private enterprise shall not be lacking, and we are satisfied that commercial incentive and stimulus to competition will certainly be present in this case. Incentive to commercial enterprise is provided by enabling the Corporation to place to the credit of its own general reserve account any savings in expenditure resulting from efficient administration, or any increases in revenue produced by enterprising publicity and achievement. Competition will be provided, as indeed it is at present, by the heavily-subsidised air lines of foreign countries operating over most of the routes to be serviced by the new Corporation.
I should like to say a word with regard to the terms of acquisition of the two existing companies. The Government, of course, accept the view that the State should pay neither more nor less for assets of this kind than would be paid by a private purchaser, and that being so, the only question with which we were confronted was how best could the value of the two undertakings to a private purchaser be arrived at. Our view was that the only true basis was an assessment of the net tangible assets, plus a figure for the

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value of the organisation as a going concern and a further figure for development expenditure. With a view to reaching a fair estimate of these assets, an examination of the affairs of the two companies was made by a leading firm of professional accountants, Messrs. Thomson McLintock & Company, and the net result of their examination of all the relevant factors in the case was that they put the value of Imperial Airways at £2,659,086. That figure, distributed over the shares of the Company, worked out at a sum of 32s. 9d. per £1 Ordinary share.
In the case of British Airways, the figure arrived at worked out at the sum of 15s. 9d. for each £1 ordinary share. There was, I must admit, an added difficulty in the way of arriving at the actual value of the assets of British Airways since the whole issued capital had been lost. The offer finally made was examined in the light of all the documents, and at the request of the Treasury, by three independent gentlemen of great business knowledge and experience—the then Sir Frederick Marquis, Sir Andrew Duncan, and Sir Archibald Campbell. After a full examination of all the factors in this case, they pronounced their opinion that the value arrived at was a fair and reasonable one.
I know it has been said that the shares of Imperial Airways were standing in the quotations on the Stock Exchange at a figure below the sum of 32s. 9d. which was the amount determined on in the offer. That is quite true, but I cannot accept the view that the quotation of the shares of a particular company on the Stock Exchange from day to day necessarily represents the true value of the undertaking, and in this case it is perfectly easy to show that that is so. Supposing, for example, that the decision to purchase the assets of Imperial Airways had been reached two years ago. The shares of Imperial Airways two years ago were standing in the Stock Exchange quotations not at 32s. 6d. but at £3, and I wonder what our critics would have said if two years ago, in order to arrive at the value of the assets of Imperial Airways, we had merely taken the number of shares issued by the company and multiplied them by the figure at which they were standing in the Stock Exchange quotation.
LORD STRABOLGI: May I ask the noble Marquess on that point a question, because it is very interesting? Two years ago the capital, I believe I am right in saying, was very much less. It was added to for reasons we know afterwards, and that is why the price came down.
THE MARQUESS OF ZETLAND: That may be so, and that could be a relevant factor in this case. Nevertheless I still maintain that it is a fairer way to ascertain the real value of the assets of a company by having them examined by expert and professional accountants rather than by taking the quotation on the Stock Exchange and the value of the shares at any particular day, because we know that shares on the Stock Exchange always go up and down. When we have a period of quietude in the political situation and things abroad appear to be quiet the shares go up, but if one of the Dictators makes a speech probably the shares, equally, go down. It must be quite obvious, therefore, that the quotation on the Stock Exchange cannot be a true reflection of the real value of the assets of an undertaking.
Now a word as to the prospects of our effecting a great advance in British overseas civil aviation as a result of this measure. I know, of course, that some will argue that we are creating a monopoly, and that by so doing we are eliminating the incentive to endeavour which is provided by a healthy competition. I may also perhaps be told that this Bill constitutes a reversal of a policy which was recently recommended by the Committee presided over by my noble friend Lord Cadman. In so far as that may be said to be the case I am disposed to think that if that Committee had been faced with the actual situation with which we are faced at the present day their recommendations might have taken a different form, but at any rate the noble Lord who presided over the Committee with such distinction is, I understand, possibly in a position to address your Lordships this afternoon, and he therefore will be far better able than I am to express an opinion to your Lordships on that particular aspect of the case. But so far as the criticism based on the argument that competition is eliminated is concerned I would point out, as I have already observed, that the criticism over-looks

741
the fact that with the possible exception of civil aviation in the United States of America the effective competition in civil air transport is nowadays international and between national organisations.
Competition between United Kingdom subsidised air line operators has already been tried, and I think that it is generally agreed that it has failed. For example, the Hambling Committee in 1923 showed that competition between companies receiving subsidies from the same Government meant in effect that the Government was competing against itself, and it was the obvious objection to this which gave rise to the setting up of Imperial Airways in 1924. If the total volume of air transport business available were on a large enough scale to support two or more British major operating companies, each with its own ideas on the development of aircraft, and sufficient revenue—and that is a most important consideration—of its own to give effect to its ideas, then it may well be that it could be argued that there would be no case for creating a statutory corporation, but the conditions now obtaining in the British Empire are indeed very different. The total volume of air transport is still small, compared at any rate with surface transport, and consequently the revenue available for technical development must be strictly rationed. In these circumstances we are satisfied that it is more efficient to concentrate the available income in one large organisation and to rely upon international competition to provide the stimulus to progress.
There is another criticism of the proposed measure which has been made, and that criticism is that the Corporation about to be set up, being by far the most important purchaser of the larger type of civil aircraft, will be able to dictate to the British aircraft industry and require the development of types of aircraft special to the needs of the services operated by the Corporation itself, types for which there might be no demand in the world market. That is a possibility which has not been absent from the mind of the Government, and they intend to guard against the risk by setting up a Civil Aviation Development Committee, as was recommended by the Harold Brown Committee whose Report was
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recently issued as Command Paper No. 6038. With the Corporation consulting fully with that Committee at all stages during the selection and development of new aircraft types, there should, we think, be no danger to the line of development of the Corporation aircraft getting out of step with the line of development of civil aircraft in general, at any rate to such an extent as to prejudice the sale of British air liners in the world market.
Having touched upon one or two of the main criticisms which have been directed against the proposal in the Bill, let me say something of the possibility of advantages which we expect to follow from the setting up of the statutory Corporation. With a non-profit-making statutory Corporation constituted in the way proposed, financed to a considerable extent by the State, and controlled as to policy by the Air Minister, a different conception of the goal which we have set before ourselves at once becomes possible. Let me call your Lordships' attention to the difference between the mandate which was given to Imperial Airways and the mandate which it is proposed to give to the new statutory Corporation. The mandate to Imperial Airways was to use its best endeavours to make its services self-supporting at the earliest possible moment. That was the instruction. The mandate proposed for British Overseas Airways—the name which is to be given to the new Corporation—is a different one. It runs as follows:
"To secure the fullest development consistent with economy of efficient overseas air transport services,"
and given adequate finance the effect of this change upon the development of British civil aircraft should be all to the good and, I should hope, very far-reaching.
I say that for this reason. The type of aircraft needed to help forward the day when civil aviation can, as it is said, "fly by itself" is very different from the type which is at present associated in the public mind with aeronautical progress. The best hope of making civil aviation pay is, I am assured by experts, to fly at speeds of not much more than 100 miles an hour and to develop for this purpose what may be said to be the equivalent of the motor lorry. This was the line followed for many years, and followed very suc-

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cessfully, by Imperial Airways. The initiation, it is true, of what is known as the "all up" mail scheme in 1934, gave opportunity for rather more ambitious plans—an opportunity, if I may say so, which Imperial Airways and the British aircraft industry were quick to take advantage of, as witness the development of the Empire flying boat. But in spite of that the emphasis was still upon cheap flying rather than upon quick aeronautical progress. Through all these years, while we in this country were aiming at developing civil aircraft that could be operated with the smallest subsidy, a very different policy was being pursued in at least some other countries, and it is this which has led to the impression that British civil aviation has been lagging behind.
To put it quite briefly, while we were developing the air motor lorry other countries were developing the fast luxury air touring car. While we were thinking in terms of cruising speeds of 100 miles an hour, other countries were going into production with expensive machines cruising at 200 miles an hour and more. Imperial Airways, the chosen instrument of the Government, were, of course, perfectly right in following the line of development which they did, because only by that means was there any chance of making civil aviation "fly by itself." With the announcement that henceforth the aim is to secure the fullest development of air transport the picture entirely changes, and the change will quickly be reflected in the type of civil aircraft produced by the British aircraft industry. The new types of civil aircraft reflecting this new policy are already under construction. At any rate, two new types are already under construction and further types are projected. There are no grounds, I think, for any misgivings as to the ability of the British aircraft industry to deliver the goods, provided only, of course, that the basic policy of civil aviation development is sufficiently clear-cut and stable to make long-distance planning possible. The Corporation charged with so broad and imaginative a policy, coupled with the increased financial provision which is now proposed, should create the conditions needed for a big step forward, not only in the development of British civil aircraft but of British overseas air services generally.
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I have given your Lordships in brief outline the policy of the Government and the proposals which they are making for giving effect to that policy. If it were desired, I should be prepared to give your Lordships explanations of the various clauses of the Bill. It is, however, a long Bill and if I were to do that I should have to make an undue draft upon your Lordships' time. Moreover, this is what is known as a hybrid Bill, and it will therefore have to be submitted to a Private Bill Committee, and should any of your Lordships desire to raise any particular point on any clause, the opportunity will occur when the recommitment of the Bill takes place.
Let me therefore in conclusion say only this. In these days many of us, I think, must often wonder whether the individual responsible for the invention of the internal combustion engine has been a benefactor of mankind, or whether we should not rather regard the invention as a curse. Certainly by making possible the bombing aeroplane it has added to the armoury of the aggressor an appalling engine of destruction. It has equally revolutionised and made far more horrible modern war, in that it has brought the civilian population into the very forefront of the battle-line. This is indeed a monstrous and a terrible thing; yet we should not lay the blame for it at the door of the inventor, but rather must we blame the criminal perversity of mankind itself for prostituting to evil ends an invention which, properly used, is capable of advancing the interests of the world at large. We may at least congratulate ourselves upon the fact that it is with this latter possibility and not with the former that we are preoccupied so far as the provisions of this Bill are concerned. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Marquess of Zetland.)
3.54 p.m.
LORD STRABOLGI: My Lords, I am sure the noble Marquess felt some diffidence, though he certainly did not show it, in dealing with this subject in the presence of a House so rich in experience as to contain three ex-Air Ministers and, last but not least, the noble Lord, Lord Cadman, on the Cross Benches. I certainly feel very great diffidence in embarking

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on a brief examination of this Bill from my Party's point of view. The first question I should like to ask arose out of the remark which wound up the noble Marquess's eloquent description of the Bill: when is it expected that this Bill will go through? I was alarmed when I heard about the Select Committee and the stages in your Lordships' House. I do not know if the Leader of the House has any idea on the matter, but every day that is lost seems to me a pity. It seems rather as if the Government would not get it until after we reassemble in the autumn. I may have some mild criticisms to make of the Bill and the way it came about, and therefore before I make them I should like to say that after some little experience of Imperial Airways—I was one of the very first people to use it to get to India and back, and I have used it a good deal since—I have very great pleasure in paying a personal tribute to the personnel who have manned the British liners, both the pilots and the rest of the staff.
THE MARQUESS OF ZETLAND: Hear, hear.
LORD STRABOLGI: The noble Marquess might not have cheered so loudly had he known that my own life, with the lives of others, was saved by a very junior person in the Imperial Airways, who showed the typical presence of mind and courage of the English aircraftman. May I say how glad we are on this side of the House to see that next Saturday the Atlantic service will attempt a circular cross-oceanic route? We have been advocating that now for a good number of years. I should also like to hope, speaking for my noble friends, especially those who have an interest in the Colonies and the Colonial Empire, that the West Indies service will be inaugurated very soon and be successful and useful, as indeed it is bound to be.
Now may I ask a question of the noble Marquess with regard to something in the Bill, and that is on page 4, paragraph (n) of subsection (3) of Clause 2. That paragraph says that the Corporation shall have power and so on "to enter into agreements with the Government of any country." We should like to know what that means. We can understand that they have to negotiate flying rights and
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that sort of thing, but are those agreements subject to the Secretary of State? They might be of great importance, and indeed they might be onerous agreements which would hamper the development of British aviation.
With regard to the Bill as a whole, at first sight of course we are inclined to welcome it. It looks to us like a good-looking horse; but when we come to look into it a little more closely we find that it has certain defects. It is a form of Socialism, and as we advocated some time ago the nationalisation of Imperial Airways and civil aviation, we naturally welcome the Bill on broad grounds. At the same time, of course, we recognise, and the noble Marquess drew attention to it, a danger in giving a monopoly. We want to encourage also these internal air lines, and we hope that this will not discourage them. It is not only this monopoly that we are creating, but I see that the British and French air lines to Paris have been pooled. I should have thought that was a very sensible thing to do, but it is all in the direction of greater monopoly. The policy of the Party for which I have the honour of speaking is to bring all transport under national control, including civil aviation, and we therefore believe that later on, when the world recovers from its present madness and we can have an all-round measure of disarmament, which we must have if we are to escape all-round bankruptcy, as part of that measure of disarmament civil aviation, at least in the Continent of Europe, will be internationalised. For that reason I would particularly welcome the beginning, so to speak, in the Anglo-French pool for the London-Paris route.
I should not like to go any further without, if I may, paying a most respectful and humble tribute to the work and the knowledge of Lord Cadman and his Committee. Without that work we should not have had this Bill. I am sure that if the noble Lord had had more to do with the drafting of this Bill, some of the mistakes which I propose very briefly to point out would not have been made, and I hope that when the noble Lord addresses your Lordships he will apply his mind and tell us what he thinks about it.

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The noble Marquess dwelt at some length on the prices to be paid for the shares, and, as he says, that has been the subject of criticism. The criticism we make is this. On broad principles we say that it is wrong for the taxpayer's money to be used in subsidies to create a business, to create a value, to create assets and good will, and then for the taxpayers to have to buy them back again, and pay twice over. That is the basis of our objection, and we think the price of 32s. 9d. for the £1 shares in Imperial Airways, in spite of all the calculations of these eminent accountants who were put on to the job, is much too high. Before it was known that the Government were going to make that amalgamation the shares of Imperial Airways stood at 25s. 3d., and the moment the news got out that the merger was to be made under Government auspices there was an immediate rise in the market value of the shares. Even so they stood at considerably less than 32s. 9d. before the Government announcement was made. I think the shareholders are to be congratulated upon having the present Government in office. They have done very nicely out of this transaction.
As to the British Airway shareholders, I think they are fortunate to get 15s. 9d. per £1 share. That company has also been subsidised during the last two years. It is common knowledge that the company had made no profits, and had paid no dividends, and there was no market in its shares. If was, of course, a private company, and it is not unfair to say that British Airways was practically insolvent. It could not raise more capital, and had come to the end of its resources; yet now the shareholders are to be paid 15s. 9d. for each £1 share. As I have said, they are fortunate in the present Government. So much for that business. It is a pity that when the Government do the right thing they must do it in the wrong way. We advocated the nationalisation of these services two years ago, and if it had been done then a great deal of money would have been saved. Not only have there been the subsidies during those two years but the capital of Imperial Airways has been increased, and all has now got to be bought back again and, in a way, purchased twice over.
What of the future? Who is going to manage this merger? That is highly important.
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At the present time I understand that Sir John Reith, having acquired a great reputation with the British Broadcasting Corporation, is going to continue for some little time as managing director or chief executive officer; but there may come a time when he has other worlds to conquer, and he is being groomed, I understand, to go to the Bank of England as Governor. Of course we hope that it will not be for many years to come, because we hope that the present Governor will continue in office for a long time. What we would do at certain meetings of the Labour Party without him I do not know, because he and his doings often form the gravamen of our speeches in certain circumstances. But one day I understand Mr. Norman will retire, and then I understand Sir John Reith will become his successor. He is not a banker, of course, but that does not matter in these days. He knew nothing about aviation when he went to the Imperial Airways, and I dare say in a few years he will be prepared to take over office in the Cabinet. I understand that a member of the Runciman family is to understudy him, and is being groomed to take over this highly important position of chief executive or managing officer. The moment we hear the name Runciman we think of shipping, and I dare say his shipping experience will not be without value in that post.
I should very much like to ask the noble Marquess whether the Air Minister is to be consulted with regard to who is to be the chief executive officer, which is a very important position. Your Lordships will have seen from the Bill that the directors are to be appointed in the first place to the board, but that once there they have a free hand to appoint the chief executive, and do not even have to consult the Treasury about his salary. I should have thought it was essential that they should in their turn consult the Air Minister of the day as to the appointment and changes in the appointment of chief executive officer of this highly important Corporation.
The next question that I would venture to ask is this. The Bill is a little vague as to the power of changing the directors. They having been appointed, according to the First Schedule, unless they become bankrupt or lose their reason they remain indefinitely on the board,

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except that right at the end of paragraph 7 there is a proviso to the effect that the Secretary of State can remove a director—apart from bankruptcy or lunacy or having conflicting interests—if "he is otherwise unable or unfit to discharge the functions, of a member." It is going to be a little difficult. I would ask the noble Lord, Lord Cadman, for example, what in his great concern he would do if he wanted to remove somebody. It is going to be rather hard to say that you cannot remove anyone unless he is unfit to discharge his functions. He may not be unfit, but he may be a misfit, or you may have somebody better in view. I think that when so much of the taxpayer's money is at stake the Secretary of State should have power to change the board if change is required. Otherwise you get people staying on indefinitely, growing older and older and more and more inefficient. You do not want to hurt their feelings, and so they remain on the board. I think there should be some tenure of office which could be renewed in special cases.
As I have said, the board is of great importance. It is to consist of fifteen members, if required. That is too many. The other day when we were discussing the Cotton Bill Lord Templemore refused to increase the board of management because he said it would be too large. Here we are appointing a board of fifteen. I should think such a board would be too large and unwieldy, and that makes the appointment of the chief executive officer all the more important. As I have said, this board will have a great deal of Government and taxpayers' money to manage. It will also be responsible for something even more important, and that is the prestige of the nation. Our aircraft flying all over the world, and making ever greater flights, are almost part of England, and on their type and efficiency, and handling, our nation is partly judged. The same applies to British ships, of course, but particularly in this field of civil aviation, I do not think your Lordships will deny, our prestige is very much bound up. Therefore we cannot, I think, be too careful that this Corporation starts off under the best possible auspices, and we can only hope that it will be successful. My noble friends have no intention of opposing the Bill for the reasons I have given, but it
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has been necessary to make these criticisms, and I hope useful to put these questions to the noble Marquess.
3.10 p.m.
THE MARQUESS OF LONDONDERRY: My Lords, I am glad that we can congratulate the right honourable gentleman, the Secretary of State for Air on having been able to add one more success to his career, because I look on this Bill as practically already passed into law, with probably one or two modifications, which I have no doubt he will be only too glad to accept if they are necessary. The noble Lord who has just sat down has welcomed the Bill on the ground which I expected—because he feels that it has some elements of Socialism in it. I will venture to say a word about that later on. But I felt myself in some measure of agreement with him about the number of directors. That seems to me a very important point, because I somehow feel that the duties of these boards are best discharged by the smallest possible number of directors. Yet one must remember that this service is a very large one, that it will comprise many committees, that these directors sit on those committees, and that the number of directors of a company is usually based on the number of committeemen required to carry out its manifold duties. But I am sure that that is a matter on which the noble Marquess can give us information when he rises to reply at the end of this debate.
Speaking for myself, I need hardly say that I welcome this new departure with the greatest possible satisfaction. I feel that at long last there is some definite policy in connection with civil aviation. So far—and I have seen that this criticism was made in another place—civil aviation has had to be considered in what I may call military terms, and what we have all desired has been to be able to separate the two branches and let civil aviation have a free run on its own. I feel that in this measure a long view is being taken, and will continue, though at the present moment nearly the whole attention of the Air Ministry must be concentrated on those defence measures which we are compelled to undertake. The criticisms of the measure which I read in the reports of the debates in another place did not appear to me to have any very constructive character, and therefore I feel that

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this is one of those measures, of which I have had much experience over a great number of years, that pass into law almost in the form in which they are put before your Lordships.
Civil aviation, as we know, has had a very chequered, and I might say in some respects disastrous, career. In many respects it is a gloomy narrative. We know that America has spent vast sums of money on civil aviation, and now can claim to possess a truly magnificent service, probably the best service in the world. America possesses great advantages which we in this country do not have. The people of this country are only sporadically air-minded. Many of us have done all we could to make them more air-minded and to realise the great possibilities and potentialities of the development of civil aviation in this country. But this country is not really adapted for civil aviation. It is possible for the railway services to compete, and to compete successfully, with aircraft, and though I would like to pay a tribute to what the railway companies have done by means of the railway air services, nevertheless I do not feel that that association between aviation and the railway companies has been altogether for the benefit of civil aviation.
We all of us must recognise that there is no possibility, in any country of the world, of civil aviation, to use a phrase we know so well, "flying by itself." It is natural that the Government should have had these matters before them for a considerable time, and that they are only gradually arriving at a position in which they can concentrate their views and follow out some definite line of policy. The position of this country as regards civil aviation is naturally a very important one. Its honour and prestige are very closely bound up with progress in civil aviation. Other countries have really come to this conclusion sooner than we have done, and have lavishly spent money on developing their civil aviation. But it seems to me that it is vitally important to the British Empire that we should have the best aviation in the world; in fact, we cannot accept any position of inferiority if we propose, as we do, to maintain our national position throughout the world. The shipping of this country secured that position for us
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in the first place. Now this new mode of communication and transport must maintain for us the same position.
But the question is, what is the best method to pursue? I say without hesitation that I much prefer private enterprise. I would like to see all these great companies, the results of private enterprise, carrying on their work, not only in this country but throughout the Empire, but we know quite well that that is impossible. At the present moment there is no private individual or private company which can operate successfully and so make some return on the expenditure which has to be incurred. Having said that, I can go on to state that I object to nationalisation, and I certainly fear bureaucracy. If I might digress for one moment, I think your Lordships will probably agree with me when I say that the whole world evolution runs along the lines of vast State-aided corporations, and we have to accept this modern development. It is very easy to criticise these great corporations, which have been brought into existence comparatively recently. There is the National Transport Board, there is the B.B.C., and there is the Electricity Commission. They are great instances of the evolution which is taking place all around us, and I am not certain that the Government realise the tremendous changes which we are witnessing at the present moment.
I do not feel that we have appreciated the portent of what I would call the disappearance of the individual. In the case of shipping, for instance, the individual tramp steamer no longer exists. If we speak of trade unions, after all they are great corporations in which the individual does not exist. If we take all our trade organisations in this country, they all imply the elimination of the small man, and at the present moment the Government are trying to force amalgamation upon the coal industry. I would say that all these movements are really a very definite and obvious process of evolution, and we should appreciate exactly what they mean. I do not wish to digress from the subject that is before your Lordships, but I would say that, if we consider the whole field of international life, we would see that the world is resolving itself into great national corporations. If we consider the future from that point of view, it may enable us to unravel those

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difficulties and solve those problems with which we are now confronted. All these are great changes, and I feel that the measure which is before your Lordships to-day is thoroughly in keeping with, and thoroughly expresses, the modern movement with which we are faced.
The noble Marquess, who so eloquently and so lucidly explained this Bill, told us of the duties of the Corporation which is now being set up. He told us that the Corporation was to secure the fullest development, consistent with efficiency, of overseas air transport services, to be operated at reasonable cost. That explains in a very few words exactly the object of the Bill which is before your Lordships. I do not wish to enter into those details which the noble Lord opposite mentioned—the prices of the shares of these undertakings. That is a matter which is important, but I am bound to say that the Government have satisfied me on that: particular point, and I hope they will be able to satisfy the noble Lord. Both these undertakings have great schemes which naturally entail the purchase of very expensive aircraft. Both these undertakings, by themselves, can only raise money on very expensive terms. By this arrangement of a Corporation on a modern basis that capital can be raised on the most economical terms. Your Lordships will realise also that a public corporation has much more freedom and much more opportunity of embarking on a long-range programme. Your Lordships will realise that in aviation, with all its difficulties, it is vitally important to have a long-range programme and to look as far ahead as one possibly can.
I am not sure it is not a truism to say that every one of these great civil air liners is obsolete the moment it takes the air by reason of the inventions which are coming up every day. The new proposals, the new ideas, which are developing with regard to aircraft are making all these great liners practically obsolete, as I say, when they take the air. I know your Lordships will realise the great difficulties with which Imperial Airways were faced when, in accordance with economic principles to which they had to conform, they had to take something like four years' life for their aircraft, which meant that after they had been in the air for a short time these
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aircraft were out of date. Other companies in other countries were able to produce aircraft of far more comprehensive, far more efficient type, with greater speed and greater comfort and all those facilities which placed our civil aviation in a very difficult position. I have heard it said by many of my own friends that they would sooner travel by K.L.M. That is a criticism which, I hope, we shall never have to undergo again. I hope as a result of this far-reaching proposal, which may possibly be extended, we shall find that everyone in this country is wishful and anxious to travel in British machines because they are better than the machines of any other country.
To return to this amalgamation, I would say we do require, as the noble Marquess mentioned, this pooling of experience and pooling of equipment. We want this centralisation of the fleet, centralisation of training personnel, and concentration of management. I have spoken of forward planning on a long-range view, which is also vitally important, and there is also the question of publicity, which is of the highest importance. That is why I feel that this amalgamation brings with it enormous advantages and does not produce any of those disadvantages which some of us might say are associated with a policy which has some element of nationalisation and some element of bureaucracy.
I have only ventured this afternoon to deal with the general plan and the general policy of the Government. I do not propose to go into those details which no doubt will be considered by the Select Committee, which I understand will be set up. There is one point on which I do not feel any doubts myself, but which I believe has exercised the minds of a great many people. It is said that the absence of the profit motive will destroy incentive on the part of the board. I do not feel that that is a suggestion which should carry any weight whatever. My experience of all these independent people who are called in by the Government is that they are even more anxious, if possible, than the directors of private companies to fulfil the national object which is their responsibility. I do not feel that any of those who are likely to be placed on this board will lack incentive or energy in putting forward the best proposals for the

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development of this magnificent service which will shortly come into being.
The noble Marquess who introduced this measure allowed himself to lapse into a somewhat reflective frame of mind, and gave us an expression of those thoughts which naturally come into all our minds on many occasions. We have often heard the question asked, to which the noble Marquess referred to-day, whether the world would have been better if the internal combustion engine had never been invented. I am quite sure that if the noble Marquess, with his splendid record of Empire service and the great contributions he has personally made, had had foreknowledge of all the terrible potentialities of the internal combustion engine, he would have felt that the wisdom of Man was strong enough to overcome all these terrible potentialities and that in the end, as one hopes, the time to which we are looking forward would come when the great benefits which have come from the internal combustion engine would develop for the benefit of mankind all over the world. I have great pleasure in supporting the Bill now before your Lordships' House.
4.30 p.m.
LORD AMULREE: My Lords, I should like to say a few words upon this Bill. First of all, I should like to congratulate the Secretary of State for introducing it, and the Government for giving it their support. The Bill introduced a change in civil aviation which is long overdue. At last we have reached the position of being able to look at civil aviation in its true light. Since 1924 our aim has been to encourage civil aviation both external and internal to "fly by itself." In this respect we are apparently endeavouring to follow the examples of our canals and railways. After the War various companies started on their own competing with one another. They made little progress, and were soon in difficulties. The Report of the Hambling Committee in 1923 recommended that instead of a number of competing companies there should be one company, that it should be given a subsidy, but the subsidy should be so arranged that it could be discontinued as soon as possible. Imperial Airways was accordingly established, and, as the noble Marquess pointed out, its mandate was "to use its best endeavours
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to make its service self-supporting at the earliest possible moment."
Your Lordships will observe that the object of the new company was in the first place not to make the institution a success but to secure that it should become self-supporting at the earliest possible moment. It is obvious that in a scattered Empire like the British Empire one of the main objects of the new company should be to organise routes throughout the various parts of the Empire. Accordingly this duty was imposed upon Imperial Airways (the new company). The duty, therefore, put upon Imperial Airways was two-fold—to link up the various countries of the Empire and to do this work in such a way as to become self-supporting at the earliest possible moment. It has linked up this country with the Near East, with India and the Far East, with the Cape and with Australia, and presently a new link will be forged with Newfoundland and Canada. This is a great achievement accomplished under great financial difficulties, for the State subsidy was unduly low. Imperial Airways might have succeeded in "flying by itself" had it been met with the competition of foreign concerns upon an equal footing. This, however, was not the case, for all its foreign competitors were heavily subsidised. The policy thus failed, and that chapter of civil aviation is now closed.
A new chapter opens with this Bill. The mandate, if I might read the important words in Clause 2 to which the noble Marquess called attention, is
"to secure the fullest development, consistent with economy, of efficient air transport services."
These are pregnant words, and in them are concentrated all the considerations of public policy which have made the establishment of this Corporation imperative if civil aviation in this country is to take its proper place. The new Corporation thus enters upon its duties with a different object in view, and, backed as it is by sufficient financial support, it ought to be able to place British civil aviation in a good position amongst its competitors throughout the world. A great deal has been said about the new Corporation being a monopoly, and that it will have no competition. Well, one knows perfectly well, as has been pointed out in the course of this discussion, that com-

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petition in the air is international, and one knows also, as we have been told this afternoon, that the competing organisations are national organisations. The objection therefore, to this proposal that it is creating a monopoly is thus met. As has been pointed out by the noble Marquess, Lord Londonderry, there will be an admirable opportunity now for the new Corporation to gain new experience and to bring about improvements in equipment and various matters of that kind, so that I am looking forward to the new Corporation under this Bill succeeding in placing British civil aviation in its true position. I have great pleasure in supporting the Bill.
4.36 p.m.
LORD MARLEY: My Lords, I only intervene for a moment or two in the discussion upon this Bill because it seems to me that now is the time, when these great services are going to amalgamate, to make certain suggestions so that the amalgamation might result in improvement and not in a diminution of efficiency and comfort. I think the noble Marquess, Lord Londonderry, has drawn attention, in his very interesting remarks, to what I might call the inevitability of amalgamation, the inevitability of coagulation, a joining together in all aspects of public life. I only want to deal with a number of the smaller matters at this time so that when, as I understand will be the case, this Bill goes to a Select Committee these points will not be lost sight of.
In the first place I must say I do not like the Title of this Bill. It was discussed at the other end of the corridor and suggestions were made with regard to varying that Title. I see that Colonel Moore-Brabazon pointed out that these organisations are very often known by their initials. The noble Marquess, Lord Londonderry, used the initials K.L.M. in the course of his remarks, and he pointed out that we have the B.B.C. We have K.L.M. and I.C.I., and Colonel Moore-Brabazon suggested that this would be known as B.O.A., which rather gives, in his words, the impression of a sort of snake which surrounds and crushes us. There is, I suppose, something in that, and it may be possible to improve on that Title. I notice that the speaker for the Labour Party also supported a change in Title, as did a considerable number of
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Members of Parliament. The Secretary of State himself said:
"I should be only too glad if honourable Members could agree upon a name, and if there is a general consensus of opinion between now and when the Bill goes to another place, I shall be always glad to consider any suggestion."
He added:
"I do not pretend that my own selection of a name is by any means the best, and perhaps we may at some future stage have an informal talk about it."
He went on to say that in all probability the service would be known as British Overseas, or B.O. I cannot help thinking that that is a connotation, particularly to those who have been in the United States of America, that it would be undesirable to attach to British air services. I rather hoped that we might get over the difficulty of the Secretary of State in connection with the use of British Airways—or B.A.—by registering the new title as British Airways, 1939, Limited, which would secure that it did not get mixed up with British Airways, one of the two companies which are being amalgamated.
The only other point that I want to raise is the question of the services provided by the companies. I see that under Clause 2 (3) the Corporation is empowered to engage in transport and so on and that it must do all that is "calculated to facilitate the discharge of the functions conferred" upon it. The noble Marquess, Lord Zetland, mentioned the possibility that there might be some form of monopoly involved which might destroy competition. I suppose there is that possibility. The noble Marquess, Lord Londonderry, wanted everybody to go British. Well, I can only say that I think there is considerable room for improvement in many of the services which are available. When I compare the position with the United States of America in regard to minor points which make for the comfort of passengers, I cannot help thinking that there is great room for improvement.
We are told that there will be no danger of monopoly because there is competition with other flying lines, but I would remind your Lordships that most of these flying lines starting from England have to use Croydon, and Croydon leaves a very great deal to be desired in regard to comfort and

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efficiency. There is no means, apparently, of warning would-be passengers that there may be a delay of an hour or two hours in the departure of the 'plane by which they intend to travel. It would be very simple to notify booked passengers that if they telephone some half an hour before the time at which they are due to depart from the excellent air office at Victoria they can be told whether there is a delay of one or two hours owing to weather or other conditions, and that therefore they need not sit in that undesirable place, a waiting room. Again, the transport services provided between Victoria and Croydon leave a very great deal to be desired. When it is realised that in a journey between Paris and London more than half the time occupied in travel is spent in a motor omnibus at one end or the other, and not in a 'plane, I should have thought that this road conveyance should be as comfortable as possible, and not a vehicle about five years old, hopelessly out of date, most uncomfortable and making a noise like a machine which makes holes in the road and known, I believe, as a pneumatic drill.
Then, again, I would like to point out the condition of Croydon airport itself. The floors are dirty, the lavatories are really insanitary, there are no clean towels, and there is a general lack of supervision—a state of affairs which I very much hope monopoly will improve as competition does not seem to have been able to deal with this problem. Finally, I would like to remind your Lordships that there is a distance to be traversed from the office at Croydon in order to get to the 'plane, which means that in the variable climatic conditions under which we suffer in this country we may get very wet in moving from the office to the 'plane. There is no reason whatever why we should not do what has been done in America, that is, arrange for the 'plane to run in a vast covered shelter immediately opposite the office or else provide a covered passage on wheels in which passengers can go straight from the office to the 'plane without getting wet. It seems to me that when we are considering the larger aspects of this amalgamation the Select Committee might well consider whether something can be done in regard to the perhaps less important aspects of this matter, but
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nevertheless aspects upon which the competitive power of British Airways depends—that is to say, the attractiveness of the services they offer to passengers in competition with Air France, K.L.M., or other services, because only by providing that comfort which passengers have a right to demand will this amalgamation be anything like the success that we all desire.
4.45 p.m.
LORD CADMAN: My Lords, the Bill which is before your Lordships' House to-day is a further testimony to the indefatigable energies of the Minister for Air and to his determination that British aviation, whether military or civil, shall be second to none. I should like to congratulate him on having produced this measure; and, if I may interpolate a more personal note, I should like also to congratulate him on his fortunate escape in the accident of last week. There will be no dispute, I think, over the statement that he is one of the men whom we cannot spare at this juncture of our national history. I have, naturally, a considerable personal interest in this Bill. It had its origin, as your Lordships are aware, in the recommendations of a Committee of Inquiry into Civil Aviation over which I had the honour to preside. Those recommendations were to a very large extent adopted by His Majesty's Government. The translation of recommendations into legislation, however, necessarily required further thought, discussion, and inquiry. Those, understandably enough, have resulted in certain instances in deviations from the recommendations of the Committee. I am very glad, however, to notice from Clause 2 of the present Bill that the insistence of the Committee upon the need for a vigorous civil aviation policy has been handsomely recognised by the Government.
The members of the Committee were unanimous in feeling that a much more vigorous and less niggardly policy was required. Wherever British aviation operates abroad, it does so in the face of competition from air lines which are heavily subsidised, as well as being supported in other ways, by the Governments of the States to which they belong. No British line of a commercial or semi-commercial nature, restricted always by the need for economy, could possibly offer

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services comparable to those of foreign subsidised air lines. I welcome, therefore, the charter of the new Corporation contained in Clause 2; and I sincerely hope that the Corporation will fulfil the duty imposed upon it of securing the fullest development of efficient overseas air transport services. It is wise, nevertheless, that the charter should require the services to be developed consistently with economy and to be furnished at reasonable charges.
It will not, I am sure, be regarded as prejudice on my part if I express a slight regret that the development of our overseas air services is to be entrusted to one Corporation alone. The view of the Civil Aviation Committee is well known to your Lordships. We favoured the continued existence of two companies—Imperial Airways and British Airways. The former, we thought, would find its natural role in the development of the long-range Empire air services, of which it already had wide experience, and of other comparable services. British Airways had proved itself in the shorter flights to the capitals of Europe. We thought that a pooling of managerial experience (not necessarily competitive) by these two would be stimulating, and we recommended that on one very important service—the London-Paris route—they should collaborate. By this means we hoped to get the best of both possible worlds. I have no doubt that the recommendations of the Committee in this respect have been adequately weighed in the discussions that have subsequently taken place, and that the plan now devised has the full approval of those best qualified to judge.
I was glad to learn from the debate in another place that the Government had accepted the recommendation of the Committee on the Production of Civil Aeroplanes that civil types of machines should be used by the Royal Air Force for transport and allied purposes. This, I am sure, will be of considerable assistance to the manufacturing industry. I should, however, like to suggest to the Government that they should consider also the adoption of the converse of this policy. Would it not be possible for certain types of R.A.F. machines to be used on long-distance mail-carrying services? If this were done, we should gain experience of the operation of these machines in the
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arduous conditions of civil aviation. The cost would doubtless be greater than that of normal operation, but the experience gained would be invaluable. Any such practice might perhaps be regarded as an undesirable innovation in British civil air services. I believe, however, that it is not without precedent. In fact, I understand on reliable authority that at least one foreign nation uses machines on its overseas air services which are in reality bombers, and that these machines are flown by the pilots and crews who will man the bombers in the event of war.
My interest in the present Bill is directed more to its operational than to its financial aspects. I notice, however, that in Clause 31 of the Bill it is provided that the new Corporation shall, when required, carry the servants and freight of His Majesty at reduced rates. At some future time the Corporation may change from its contemplated status to that of a normal commercial undertaking. If that should happen, it would be very desirable that the accounts of the Corporation should accurately reflect the results of its working. I hope that the Government will consider this factor and will make arrangements so that, although the benefit of reduced rates is secured, the accounts of the Corporation will show the results which would be obtained on a basis of full rates for all.
Although I have permitted myself some minor criticism of the provisions of this Bill, I am nevertheless whole-heartedly in favour of the policy which it represents; and I congratulate the Government upon having evolved a wise and far-sighted measure. The passage of the Bill into law will, I am certain, be regarded in the future as a great turning-point in the history of British civil aviation. Having said that, I feel that no umbrage will be taken if I again confess that I should have preferred to be standing here to-day supporting the Government at the christening of the twin offspring which the Civil Aviation Committee had hoped to propagate. Not all expectant parents, however, are gratified by securing precisely the results for which they had hoped. If, therefore, instead of twins there is only one infant—and that of a slightly different complexion from what I had expected—I still feel satisfied. The infant offers

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every prospect of becoming a vigorous child. I welcome this latest addition to the family, therefore, as a further indication of the Government's determination to impress upon the outside world that Britain is still a great and virile Power and that we shall be resolute in upholding the traditions of overseas trade and communications which are among the principal sources of our national strength.
A point was raised regarding the speed of flying. The noble Marquess, if I did not misunderstand him, fixed 100 miles an hour as the speed for normal civil aviation. I hope that he is not serious in that point of view. I have travelled at 100 miles an hour, and have suffered considerably from the disability of being unable to get in front of a cloud. I have also had the opportunity of travelling at speeds which enable you to run round a nasty-looking flaming cloud, and felt very gratified that the 'plane had a sufficient kick to get in front of it. I congratulate the Government on having produced what to my mind will be a very important measure.
4.56 p.m.
THE MARQUESS OF ZETLAND: My Lords, I should like to express the satisfaction of the Government at the large measure of support which has been given by your Lordships in all quarters of the House to this measure. The noble Lord, Lord Strabolgi, gave it a general blessing. He saw in it an indication that His Majesty's Government were gradually travelling in the direction, at any rate, of Socialism, and in so far as that was the case he naturally expressed his warm approval. He was inclined, however, to think that the Government were not travelling quite fast enough in the desired direction. The noble Marquess, Lord Londonderry, told us that where it was possible he was all for private enterprise, but he had been driven to the conclusion by the logic of facts that in this particular case private enterprise was not capable of meeting the requirements of the situation, and he was therefore willing to accept, not a measure of full-blown Socialism certainly, but the creation of a statutory body which would be to a large extent under the control of a Minister of the Crown.
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The position of the noble Marquess is of course, the same as the position of the Government, and that fact has some bearing upon a question which the noble Lord, Lord Strabolgi, put to me. He asked why the Corporation were to be entitled to appoint their own chief executive member and to determine his conditions of service. The reason is that this is not a full-blown measure of Socialism. The Corporation, as I pointed out, will not be a Government Department. We wish the Corporation to have some at least of the advantages of private enterprise and an opportunity of managing their own affairs. The noble Lord also asked me another question: why appoint so large a board of directors as fifteen? He thought that the business of the Corporation would be much more efficiently transacted by a much smaller Board. May I call the attention of the noble Lord to the fact that fifteen is a maximum figure? If he will look at the proviso to subsection (2) of Clause 1 he will see that
"the Corporation shall be deemed to have been established when the Chairman, Deputy Chairman, and five other members have been appointed, and the proceedings of the Corporation shall not be affected by any vacancy amongst the members thereof or by any defect in the appointment of a member."
I think I can assure the noble Lord that it is not the intention of my right honourable friend, the Secretary of State for Air, to proceed forthwith to appoint a board of fifteen members. He will appoint a much smaller board, and the reason for giving power to appoint as many as fifteen members is to be found in the fact that from time to time men of great knowledge and ability in matters of this kind will come to the fore, whose presence on the board it would be of great advantage to secure. That is, in the main, the reason why power is given to appoint up to fifteen members.
LORD MANCROFT: May I interrupt the noble Marquess? There is a strong feeling growing up in this country that one of the blots on joint stock undertakings is that out-of-date old gentlemen stick on the boards, and there should be some undertaking given by the Government that gentlemen who are appointed on the board should understand that when they reach the age of seventy it is time for them to give way to younger men with newer experience. As it is, they stand in the way and no one likes

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to say to them that they should go. They stand in the way of new ideas. I hold that the time has come now when, if an undertaking of that kind is not put into the Bill, perhaps some noble Lord will find it necessary to put down an Amendment to that effect on Third Reading.
THE MARQUESS OF ZETLAND: The argument of the noble Lord is one which will certainly be conveyed to my right honourable friend the Secretary of State. Lord Strabolgi said something rather on the same lines, but shortly the answer to that is to be found in the provision to which the noble Lord himself called attention, in paragraph 7 of the First Schedule of the Bill—namely:
"If the Secretary of State is satisfied that a member of the Corporation "—
and then there are a number of circumstances in which he might be so satisfied—
"is otherwise unable or unfit to discharge the functions of a member,"
he may cause him to be removed.
LORD STRABOLGI: That is too narrow.
THE MARQUESS OF ZETLAND: I know the noble Lord thinks that is too narrow, but I think it is fair to point out that the Secretary of State has very wide powers in paragraph 7 of the First Schedule, on page 30 of the Bill. Then Lord Strabolgi asked me a question with regard to a provision on page 4 of the Bill—in Clause 2 (3) (n)—under which the Corporation is empowered "to enter into agreements with the Government of any country," and he expressed some concern as to what the significance of that might be. It is desirable at times to enter into agreements with the Governments of other countries, particularly in connection with the linking up of air lines in different parts of the planet. But the noble Lord may be quite satisfied that that power will not, and indeed cannot, be abused, because if he will turn to Clause 4 of the Bill, subsection (2), paragraph (d), he will find that
"The Corporation shall not, except with the approval of the Secretary of State, or in accordance with the terms of any general authority given by him … enter into any agreement with the Government of any country other than the United Kingdom."
So that Parliament will have complete control over the powers of the Corporation so far as this matter is concerned.
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Then my noble friend Lord Marley, by certain observations which fell from his lips, rather suggested to my mind that there might be room for improvement in the conditions of the airport at Croydon. I shall certainly be very happy to see that the various criticisms and suggestions that the noble Lord made with regard to the airport are conveyed to my right honourable friend for his very serious consideration, but in that connection I may also venture to remind your Lordships of the intention of the Government to create what I hope will be a super-standard airport at Heston; and it will not have escaped the notice of your Lordships that a Bill to give the Government the necessary powers to do that received its Third Reading in your Lordships' House only yesterday. I have little doubt that the airport at Heston will be free from a great many of the disadvantages which are attaching to the airport at Croydon.
Then, may I correct what was clearly a misapprehension on the part of the noble Lord, Lord Cadman, who thought that I had suggested that we should aim at limiting the speed of our overseas aircraft to 100 miles an hour? That was not at all what I suggested. What I did say was that under the conditions under which Imperial Airways were working and under the instruction under which they were working, to make flying self-supporting at the earliest possible date, it was inevitable that they should concentrate on an aircraft corresponding to the motor lorry on the roads, and that that type of aircraft did not cruise at more than 100 miles an hour. I pointed out that other countries were pursuing a different policy, and that as compared with the motor lorry of Imperial Airways they were constructing luxury cars which travelled not at 100 miles but 200 miles an hour. I pointed out that that was one of the very purposes which we ourselves had in view—namely, to compete successfully with the fast and more luxurious cars—in framing this Bill. I hope that clears up the misunderstanding.
LORD CADMAN: I think it was the motor lorry which gave a wrong impression.
THE MARQUESS OF ZETLAND: I said it was Imperial Airways that had up till now been obliged to adopt a type of air-

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craft corresponding with the motor lorry, but of course our whole hope with regard to the future is that we can get away from that.
Finally, the noble Lord, Lord Strabolgi, asked me what were the prospects of this Bill becoming law before the Recess, and he expressed the opinion that it was desirable, if possible, that it should do so. I entirely agree with the noble Lord, and I understand the position to be this. The Bill, as your Lordships are aware, is a hybrid Bill. After the Second Reading it will have to be referred to the Committee on Unopposed Bills, since there are no Petitions against it. That Committee will be presided over by the Chairman of Committees. It is still possible for a Petition to be presented against the Bill, but such Petition would have to be presented by three o'clock on Thursday next. If no such Petition is presented, the Bill will come before the House in Committee on re-commitment from the Unopposed Bill Committee on Thursday, and all the remaining stages could then be completed. If, on the other hand, a Petition is presented against the Bill—and I have no reason to suppose for a moment that that is in the least likely, because clearly if there had been any desire to present a Petition against the Bill it would have been presented before now, for the Bill has already been through a Select Committee in another place—if, however, that did happen, the Bill would have again to be referred to an Opposed Bill Committee, and in those circumstances I am afraid it would not be possible to complete the remaining stages before your Lordships rise for the Recess. But I hope that that may not be so. I think I have answered the main points which were raised by your Lordships in the course of this debate, and I express once more my satisfaction at the large measure of support which the Bill has met with.
On Question, Bill read 2a, and committed for Thursday next.

ISLE OF MAN (CUSTOMS) BILL.
Order of the Day for the Second Reading read.
5.12 p.m.
LORD TEMPLEMORE: My Lords, this Bill, as your Lordships are aware, is a
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Bill which is passed by Parliament every year after the Finance Bill in order to confirm the Customs Resolution of the Manx Legislature. It is a Bill well known to your Lordships, and I do not think I need trouble you with a speech on this occasion. I might remark that this year there are no new features about the Bill, which is certified as a Money Bill under the Parliament Act. I beg to move that it be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Templemore.)
On Question, Bill read 2a; Committee negatived.
Then, Standing Order No. XXXIX having been suspended in pursuance of the Resolution of the House of Monday, July 24, Bill read 3a, and passed.

BUILDING SOCIETIES (No. 2) BILL.
Read 3a (according to Order), and passed.

PUBLIC HEALTH (COAL MINE REFUSE) BILL.
Order of the Day for the House to be put into Committee read.
5.14 p.m.
LORD ADDISON: My Lords, it is proposed that this Bill should be amended on the same lines as the Scottish Bill which has previously passed your Lordships' House, and I have to express my obligation to the noble Viscount opposite for guidance in the matter. I beg to move that the House do now resolve itself into Committee.
Moved, That the House do now resolve itself into Committee.—(Lord Addison.)
On Question, Motion agreed to.
House in Committee accordingly:
[LORD STANMORE in the Chair.]
Clause 1:
Coal mine refuse liable to spontaneous combustion to be deemed a nuisance.
1. For the purposes of Section ninety-two of the Public Health Act, 1936, an accumulation or deposit of refuse from a coal mine which is liable to spontaneous combustion shall be deemed to be an accumulation or deposit which is prejudicial to health or a nuisance and liable to be dealt with summarily in manner provided by that Act.
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved to leave out "which is liable to spontaneous combustion" and insert "in respect of which there is reasonable cause to believe that spontaneous combustion is likely to occur." The noble Viscount said: As the noble Lord pointed out, during the passage of the Public Health (Coal Mine Refuse) (Scotland) Bill, and also during the Second Reading of this Bill in your Lordships' House, many of your Lordships expressed the hope that it would be possible to amend this English Bill so as to bring it as far as possible into line with the Scottish Bill. All the Amendments in the Marshalled List that are down in my name have this end in view, and I think that the Amendment in the name of the noble Lord, Lord Teynham, also has this end in view. This first Amendment is exactly the same Amendment as was moved by the noble Lord, Lord Gainford, during the Committee stage of the Scottish Bill and agreed to by your Lordships. It is considered necessary to substitute these words in order to discourage frivolous actions by local authorities who may know nothing about either the material in these refuse heaps, or about the effective means that might be taken to remove the nuisance.
Amendment moved—
Clause 1, line 8, leave out ("which is, liable to spontaneous combustion") and insert ("in respect of which there is reasonable cause to believe that spontaneous combustion is likely to occur").—(Viscount Bridport.)
On Question, Amendment agreed to.
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved to leave out all words after "nuisance." The noble Viscount said: As this Amendment is consequential on the next Amendment standing in my name, I will, with your Lordships' consent, deal with the two together. As the Bill now stands, an offender under Clause 1 can be proceeded against without the consent of the Minister of Health. It is considered desirable that proceedings should only be instituted with the consent of the Minister of Health, so that an additional safeguard is given to colliery owners. This, as I pointed out before, is also in accordance with the Scottish Bill, where the Scottish Department of Health have to give their permission. I beg to move.
Amendment moved—
Clause 1, line 10, leave out from ("nuisance") to the end of line 12.—(Viscount Bridport.)
On Question, Amendment agreed to.
LORD TEYNHAM LORD TEYNHAM moved to insert at the end of the clause:

"(1) provided that no application under Part III of the said Act in respect of any such accumulation or deposit of refuse as aforesaid shall be made except to a Court of Quarter Sessions and with the consent of the Minister of Health, and

(2) in any such application it shall be a defence for the defendant to prove that the best practicable means have been or are being taken for preventing the accumulation or deposit from becoming liable to spontaneous combustion."

The noble Lord said: The noble Lord who introduced this Bill has made it quite clear that he is agreed that the sense of this Bill should be the same as in the Scottish Act, and the Amendment which stands in my name is designed for this purpose and introduces the same proviso. Under Part III of the Public Health Act, 1936, proceedings are taken summarily at a court of petty sessions, and, as the Scottish Act provides for an application to a superior Court—namely, the Sheriff Court—I would suggest that any proceedings under the English Bill should also be before a superior Court, such as Quarter Sessions. I beg to move.
Amendment moved—
Clause 1, line 12, insert the said new paragraphs.—(Lord Teynham.)
LORD ADDISON: I am informed that the second part of the noble Lord's Amendment is already incorporated in the English law, and therefore it is not necessary to put it in here. With regard to the other point, I am advised that the Amendment to be moved by the noble Viscount is a preferable one for dealing with these cases. If a case has been approved by the Minister of Health, it will go through the ordinary procedure of the Courts, without specification.
VISCOUNT BRIDPORT: With regard to the first paragraph of the Amendment of my noble friend Lord Teynham, this is an alternative proposal to that which stands in my name later on the Order Paper. Lord Teynham proposes that all proceedings in respect of offences under the Bill should be taken in a Court of Quarter Sessions. This is contrary to the practice in modern Public Health enactments, where the Court of Quarter Sessions is regarded as an Appeal Court. Under the Public Health Act, 1936, proceedings would be taken before a court of summary jurisdiction with an appeal to the Court of Quarter Sessions, and this

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position would be maintained by the later Amendment standing in my name. In the Scottish case, proceedings have to be taken in the Sheriff Court, as the noble Lord pointed out. There is no exact comparison in England with the position in Scotland, but the court of summary jurisdiction in England corresponds to the Sheriff Court more closely than does the Court of Quarter Sessions. With regard to the second paragraph of the noble Lord's Amendment, as Lord Addison pointed out, this is adequately covered by the Public Health Act, 1936. This second provision was included in the Scottish Bill, which is now an Act, because that referred to an Act, the Public Health (Scotland) Act, 1897, which did not give this protection. For these reasons I hope my noble friend will see his way to withdraw his Amendment and to accept in its place the Amendment next on the Paper which stands in my name.
LORD TEYNHAM: I thank the noble Lord, Lord Addison, and the noble Viscount, Lord Bridport, for their explanations. I do not propose to press my Amendment, and would ask permission of the Committee to withdraw it.
Amendment, by leave, withdrawn.
VISCOUNT BRIDPORT VISCOUNT BRIDPORT moved, at the end of the clause, to insert:
"Provided that proceedings under Part III of the said Act in respect of any such accumulation or deposit of refuse as aforesaid shall not be instituted except with the consent of the Minister of Health."
The noble Viscount said: This is a consequential Amendment, and I beg to move.
Amendment moved—
Clause 1, line 12, at end insert the said proviso.—(Viscount Bridport.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Short title and citation]:
VISCOUNT BRIDPORT: There is a drafting Amendment to this clause
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rendered necessary by the passing of the Cancer Act, 1939. I beg to move.
Amendment moved—
Clause 2, line 14, leave out from ("and") to ("may") in line 15, and insert ("shall be included among the Acts which").—(Viscount Bridport.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Then, Standing Order No. XXXIX having been suspended, in pursuance "of the Resolution of the House on Monday, July 24:
LORD ADDISON: My Lords, I beg to move that the Report of Amendments be now received.
Moved, That the Report of Amendments be now received.—(Lord Addison.)
On Question, Motion agreed to, and Amendments reported accordingly.
LORD ADDISON: My Lords, I beg to move that the Bill be now read 3a.
Moved, That the Bill be now read 3a.—(Lord Addison.)
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

THE RECESS.
LORD SNELL: My Lords, I beg to ask the noble Marquess if he can inform the House when it is proposed that the House should reassemble after the Recess.
THE MARQUESS OF ZETLAND: My Lords, in reply to the noble Lord's question, I would say that the House will adjourn after the Royal Commission on Friday until October 3, but, as the noble Lord is aware, power has been taken, of course, to summon the House sooner should the necessity for doing so arise.
House adjourned at twenty-five minutes past five o'clock.