CIVIL AIR TRANSPORT (Hansard, 11 May 1944)

LORD GIFFORD
My Lords, it is perhaps with more trepidation than usual that I rise to address your Lordships today, after the magnificent speech which members of both Houses have heard this afternoon from the Prime Minister of 737 Canada. But I shall not detain you long at this late stage in the debate, because I want to emphasize only one point. It is a point which I have mentioned on a previous occasion in your Lordships' House, but I make no apology for mentioning it again, because I feel that it is of great importance. It is that whatever instrument or instruments run the civil air lines of this country after the war, service to the traveller, to the member of the public whose case has been so well put by the noble Lord, Lord Denham, is of the highest importance. That is something which is sometimes forgotten. An air line whose aeroplanes are not always of the best can compete with, and can sometimes get more traffic than, an air line which has the very latest aircraft, if the service which it gives is above reproach. The noble Lord, Lord Rennell, touched on this subject earlier in the debate. I am not going to follow him on the lines on which he spoke because I have very little experience of war travel by air, but I do feel that all concerned with travel at the present time and with travel immediately after the war, must think seriously of this question of service.
I am glad to hear that the noble Lord, Lord Knollys, has just returned from a world-wide trip of the air lines of B.O.A.C. and I know that he regards that question of service as of the highest importance. In the past those connected with civil aviation have not always got around themselves and seen how things are being operated in the desert and in those isolated rivers and harbours where British Overseas Airways run. I think that Lord Knollys has the same idea as that great pioneer of civil aviation, Sir Sefton Brancker, who was known on every aerodrome and every base in the world. Let the watchword of our postwar civil aviation, therefore, be service and attention to every detail for the comfort of the traveller by air.

§ LORD WINSTER
My Lords, I saw a report in the Press after the termination of the noble Lord, Lord Beaverbrook's conference with Mr. Berle that there was a Press conference, and that one correspondent complained that the Press were not being given one line worth printing, and walked out. I think that after several of the debates on civil aviation to which we have listened in this House a great many of your Lordships must have felt 738 rather inclined to echo that remark, but the debate which has taken place yesterday and to-day, I confess, makes me feel that the questions are now being tackled, the mist is clearing to a certain extent and we do begin to see where we are going. I have taken Lord Beaverbrook's advice—I believe it is sometimes dangerous to do so, but I have not had that experience yet; I have taken his advice and I re-read Hansard. I think Lord Beaverbrook's speech rather suffers by translation into cold print, but I recognize the difficulty. The noble Lord is the enemy of Committees and has frequently addressed your Lordships in the most violent terms about Committees, and now he finds himself the Chairman of a most important Committee dealing with air transport.
I think it must be confessed—the noble Lord, I feel sure, would be the first to say so—that he had not got an entirely exhilarating tale to tell, but, in fact, how could it be an exhilarating tale? The fact is that our representative in these matters and at these conferences has got very few cards indeed to play. He has got no quick tricks in his hand at all, in fact, he holds a Yarborough. I think we should be very grateful indeed to Lord Beaverbrook because, with such a hand to play, he does not try to bluff but faces the situation in a spirit of reality and makes the best of a very poor hand. But I thought that one passage in his speech was extremely reassuring, and that was when the noble Lord told us that Mr. Berle had said that in the interim period after the war America will be prepared to supply us with civil aircraft in order to fill in that interim period. That, I think, is a statement of the very greatest importance, but I would like to ask the noble Lord a question, although I have not given notice of it. The noble Lord did not say anything as to the terms upon which those aircraft will be supplied to us to make good our need and our deficiencies. If the noble Lord felt able in his final reply to give us some indication of the terms on which we are to have these aircraft, it would be very important and very interesting.
That undertaking by Mr. Berle is most valuable, and it should go some way to putting an end to certain mischievous statements which have been made about American intentions regarding industrial and commercial matters after the war. A statement was made in another place the other day with reference to shipping. It 739 was said that after the war America intended to unload a lot of old junk on us. That sort of statement is very unfortunate. As I see it, during the war great fleets of aircraft and merchant ships have been built up by our two nations for a common strategic purpose against our common enemy. For very good reasons, we have undertaken certain forms of construction in ships and aircraft and America has undertaken other forms of construction, and it may well be that that will work out in times of peace rather in favour of America. But I decline to believe that, these things having been done for a common strategic purpose against our common enemy, one nation would seek to turn that position to the economic detriment of its Ally in this struggle. Mr. Berle's undertaking given to the noble Lord bears that out.
As regards what has been said during the debate, I wish chiefly to reinforce the very remarkable speech made by Lord Essendon yesterday in regard to civil aviation and the shipping industry. There are just one or two points I would like to mention. I agree with those who consider that the Air Ministry should be relieved of responsibility in regard to civil air transport. The present job of the Air Ministry is to get on with the war. After the war the Air Ministry will be confronted with a tremendous task in the post-war reorganization of the Air Force. In regard to civil aviation, an authority is required which is concerned with air transport and with nothing else. Although I am very reluctant to differ in these matters from the noble Marquess, Lord Londonderry, I am bound to say I did not entirely agree with that part of his speech where he suggested that the situation could be met by civil air transport being handled by an autonomous Department within the Air Ministry. I cannot think that that would be a good arrangement or would conduce to rapid progress.

§ THE MARQUESS OF LONDONDERRY
I threw out the suggestion. I should be very sorry to have any acute controversy on this particular point. I thought by throwing out suggestions we might come to some arrangement which would satisfy everyone.

§ LORD WINSTER
I entirely agree. I only wish to say that I feel some doubt about that suggestion. I rather prefer 740 the suggestion made by Lord Rennell that civil air transport should be handled by an autonomous Department within a Ministry which is concerned with transport and with nothing else. As regards another essential point—the freedom of the air—what are to be the conditions? It seems to me that the air should be as free as the seas, and freedom of the air ought to mean the right to carry freight and passengers to, from, in, and through any country in the world, not merely the right to fuel and to land passengers. Otherwise what becomes of the Atlantic Charter? Nothing has been said in this debate about President Roosevelt's policy of no pick-up of passengers or cargo. I understand that the Prime Minister accepts that policy and agrees with it. I can only say that I do not like that policy. It seems to me to conflict with the essential principles of the Atlantic Charter, and certainly conflicts with what in my opinion should be our conception of the freedom of the air.
As regards the vexed question of the chosen instrument and of subsidies, the Government's policy evidently is that of the chosen instrument because we know that the B.O.A.C. is reorganizing and planning the development of its European services. That certainly implies that this is being done with Government approval and assent. The B.O.A.C. would not be going forward on these lines without Government approval, and so the B.O.A.C. will alone be eligible for subsidies. We have been told that, although other lines may compete, they will never in any circumstances receive subsidies, and in consequence they will be at a disadvantage. There are, of course, opponents of the chosen instrument policy and the policy of subsidies. In theory, their objections are probably well founded and right, but as, generally speaking, commercial flying will not be able to pay its way for many years to come, I confess I find it difficult to see how it is to be carried on save by means of subsidies. Shipping services, operating in conjunction with air services, no doubt could carry on on the principle that what they lost on the swings they could make up on the roundabout. Their profits on their sea transport would make good their losses on their air services.
After all, somehow or other air services have got to be brought into existence, 741 and to do this they must be planned, and planning involves international regulation. On what basis are you going to plan except that of subsidies, since this service cannot be self-supporting? That seems to me the dilemma about subsidies however much in principle one may object to them. I thought Mr. Berle spoke very wisely before he left this country when he said subsidies should never be used to knock somebody else out of the air. That seems to me to be entirely the right line to take in this matter of subsidies and one to which we should subscribe. Looking to the future, one can see there will be certain air services which will be absolutely necessary from a national point of view, and if these are only possible with a subsidy then surely they must be subsidized. Broadly speaking, however, international trade has to be carried on at a profit and until air services can do that, until air services can carry on without subsidy and at a profit, I do not see how they are going to contribute to our national wealth.
Coming to the question of air transport in connexion with our shipping industry, I have said that it may be necessary in certain cases to subsidize air services in order to get them started; but it seems to me we are on very dangerous ground when that has to be carried to the length of subsidizing one branch of the same industry—namely, transport—against another, and that is going to be the situation if you have to subsidize air services which are running in competition with sea services. It certainly is bad enough to have to rob Peter to pay Paul, but if you are going to kill Peter in order that Paul may live that seems to me to be going too far altogether. I am sure that shipowners do not want to find themselves working in competition with Government-subsidized air lines. As regards the position which the shipping industry is taking up in this matter I see that, speaking in another place, a member gave as his opinion that shipowners were seeking to control post-war aviation in order to make up for possible losses on passenger ships. So far as I am able to judge, and I have had no communication are correspondence with anybody engaged in the shipping industry in this matter, that is not at all, as I have followed it, the attitude which is taken up by the shipowners in regard to post-war civil aviation, and if I may say so I think a great mistake in this particular 742 matter is made in always talking about the shipowners. It is not merely a matter of the shipowners. It is a matter of the whole shipping industry which embraces a great many other interests than the interest of the shipowners alone. I think it is very natural that the shipping industry, with its century-long experience of passenger traffic, should feel that it is able to make a useful contribution to the problem of air transport, and shipping companies must inevitably be concerned with civil aviation as an adjunct to their passenger ship activities.
Some of them are taking powers at the present moment to carry on air services, but they are not meeting with very great encouragement, and the longer the active participation of the shipowners in the matter of air transport is delayed the greater is the danger of their foreign rivals securing the plums of international air transport. That is why delay is dangerous. The shipping industry has more than once asked for a declaration of Government policy in these matters, and I see that the Chairman of the General Council of British Shipping has described their reception when they open up these matters as very courteous but completely non-committal. And so far they have been able to get nothing but courtesy; they have been able to get no declaration of policy at all. How can the shipping companies go ahead in such circumstances? Looking into the future and remembering the vital part which the shipping industry will have to play in the rebuilding of our export trade, I think they are entitled to have at the earliest possible moment a statement of Government intentions as regards monopolies and subsidies for air transport. The Government's statements so far on this subject have been rather contradictory. Sir Archibald Sinclair has made certain statements in another place about the position of the shipping companies as regards air transport and the noble Lord, Lord Beaverbrook, has made other statements in this House on the same subject. There seems to be a certain discrepancy between these statements. I think it is of great importance and only fair to the shipping industry that these discrepancies should be cleared up as quickly as possible and that the shipping companies should be told where they stand in this matter as soon as possible.
743 At this late hour I would only detain your Lordships with one further point in this respect. I would emphasize the very great difficulties under which the shipping industry finds itself at the present moment owing to this absence of any statement of Government policy in regard to the question of replacement of ships. The shipowners after the war will have a tremendous replacement job on their hands. At the present moment they have got very large funds indeed accumulating for the purpose. It is no good their building ships for purposes which will be better served by aircraft. The development of air transport, for instance, may quite well put a stop to the building of vast liners. That may be a commercial necessity, but it is going to be an extremely dangerous thing for us from the national point of view if certain types of ships disappear, not as a process of evolution, but because one form of transport has been subsidized as against another form of transport. From the national point of view passenger ships are extremely useful in war-time. What are the shipowners to do at the present moment? Are they to plan their replacement programme before they get a clear statement of Government policy as regards the part which they are to play in air transport?
Air transport is much more fortunate than the shipping industry in this matter. It is treated far better. The noble Lord, Lord Beaverbrook, told us, I think in the last debate, that he intends to follow the views of Lord Brabazon and his Committee regarding post-war needs and, following on that, the Chairman of an aircraft firm has stated that his company has been asked to design the large transport aircraft which Lord Brabazon's Committee has recommended to the Government should be used on the Transatlantic air service. This will involve expensive research and development. This shows the trust that is placed in the treatment of those concerned with air transport. The shipping industry is unable to plan its replacement programme of ships because it does not know what the Government policy is in regard to these matters, whereas those concerned with air transport are able to get on with the design of the aircraft which Lord Brabazon's Committee says will be necessary in future air transport.
744 Then there is the question, to which I would like to refer very briefly, which the noble Lord, Lord Essendon, mentioned yesterday. That is the proposal of certain shipping companies to operate a service to South America. I think that is a most interesting development because it shows a tendency in the shipping industry to prefer co-operation to competition. This proposal in regard to the South Atlantic will have, I hope, some effect upon the situation in the North Atlantic in the future. Here you have a number of shipping companies, of which one at least has carried mail and small and precious goods across the South Atlantic for a century. Obviously that shipping company in the course of that time has built up an enormous good will in South America. It it takes a part in operating this air service, obviously it will carry that good will forward with it into the new field. This group of five companies is the first to come forward when we are all thinking about planning post-war trade and industry, with a perfectly specific proposal of its plans. The group will certainly have to face at least Brazilian competition and it will probably have many competitors. I think the plans of that group of companies ought not to be retarded by Government dilatoriness in announcing policy. On the contrary, it should be assisted in every possible way in the framing of its policy.
Look at the present situation as regards South America. Mail, urgent freight, official passengers, all at the present moment have to go to South America via the United States. Mails are frequently delayed three months and passengers take nine or ten days to get there, whereas by air service the transport would take only two days. We have business with South America of much importance at present in connexion with the war, but there is no air service. I think the specific proposals which the noble Lord, Lord Essen-don, threw out yesterday regarding this service deserve very careful attention and I hope there may be some indication of encouragement for what he proposed. I have said before and I repeat, that if we are to have regard to the post-war period the most important task with which we shall be confronted will be the rebuilding of our export trade. Unless our export trade can be rebuilt, developed and expanded then a great many of these Utopian dreams of which we hear so much 745 in the perorations of members of the Government will fade away and come to naught. A great many of these perorations depend upon our shipping industry and I lope that in his reply the noble Lord, Lord Beaverbrook, will be able to give us some indication that that fact is recognized and that the Government do intend to have full regard to the claims of the shipping industry in this matter of post-war air transport.

§ THE LORD PRIVY SEAL (LORD BEAVERBROOK)
My Lords, yesterday I made a, speech with five agreed statements in it. I had to take very great care that those agreed statements were not extended to too great length and I exercised the greatest care in presenting them to your Lordships. To-day I have no agreed statements at all but this I will say about international relationships on civil aviation. Those relationships must be a subject of careful statement in your Lordships' House when the issues involved are considered at the international conference. For my part, I do not mean to go back today to any international issue in the answers that I give to the questions your Lordships have raised. I will, however, try to deal with the domestic question faithfully and frankly.
One question I have been asked again and again is what is the position of B.O.A.C.? B.O.A.C. was created by Parliament. It was created by this Rouse. The Bill came to your Lordships on August 1, 1939. Your Lordships passed it without amendment. You passed it after discussion. Some of you who sat here supported the B.O.A.C. measure, none of you opposed it. In the other place the Bill was passed by a considerable majority. I ask your Lordships whether it is your wish that the B.O.A.C. Act should be repealed. Is that your wish? I think you should express yourselves with great freedom. What do you think about it? Do you desire the Act to be repealed? It is a big issue and a question which must take up considerable Parliamentary time when it is presented to the House. If you are going to ask for repeal of the B.O.A.C. Act, do you want to put anything in its place? If so, what is it? Have you settled in your minds what you want to put in its place? Some of the shipping companies and railways offer to give services free of any subsidy. That is a very 746 generous offer; but what do they mean? Will they give the service the B.O.A.C. gives free from all subsidies? Is that the proposition, for if it is the proposition I am sure the Treasury will be glad to hear it. But is it? I am not sure. I think it is time the shipping companies and the railways came to the Government with their proposals instead of asking the Government about B.O.A.C. Do they want to supplant B.O.A.C.? If so, let them say so.

§ VISCOUNT TRENCHARD
The point is not what we propose to do but what the Government intend. The B.O.A.C. is one company with a subsidy.

§ LORD BEAVERBROOK
We have been asked whether the Government intend to repeal the B.O.A.C. Act. That is a very big issue. I, have made no suggestion about repealing the law. Does the noble Viscount desire it? That is what I want to know. Does your Lordships' House or the House of Commons want to repeal the law? It is an issue which cannot be settled without consideration and discussion. If the shipping companies and the railway companies make proposals that will supplant the services of B.O.A.C. and give them without subsidy, then of course the Government would be very glad to listen.

§ THE MARQUESS OF LONDONDERRY
We want the Government to announce their policy instead of asking us what to do.

§ LORD BEAVERBROOK
Should the Government have a policy in regard to the B.O.A.C. Act, which is on the Statute Book and which is bound to be defended, supported and sustained by members in this House and the other House?

§ THE MARQUESS OF LONDONDERRY
It was passed four or five years ago.

§ LORD BEAVERBROOK
On August 1939. It was very warmly supported by my noble friend.

§ THE MARQUESS OF LONDONDERRY
Not warmly.

§ LORD BEAVERBROOK
I want to know what the British shipping companies propose.

LORD BALFOUR OF BURLEIGH
Does the noble Lord really say the policy of the B.O.A.C. is on the Statute Book?

§ LORD BEAVERBROOK
I say the B.O.A.C. was set up as the chosen instrument by Statute.

§ LORD WINSTER
A specific proposal was made in this House yesterday by a representative of shipping companies to establish an economic service to South America without subsidy. What is the Government attitude with regard to that offer?

§ LORD BEAVERBROOK
Do you mean a service only for South America, or do you mean to supplant the services of the B.O.A.C. without subsidy? If you mean to supplant the B.O.A.C. services without subsidy, that is a proposal which must necessarily go to the Chancellor of the Exchequer.

§ LORD WINSTER
May I ask whether the B.O.A.C. has ever operated a service to South America?

§ LORD BEAVERBROOK
The B.O.A.C. has already services throughout the world in many directions.

§ LORD WINSTER
South America?

§ LORD BEAVERBROOK
The B.O.A.C. has projects, and necessarily the B.O.A.C. is under the necessity of protecting those routes that will give it an adequate income and lighten the burden on the Treasury. But if the services with the highest measure of remuneration, such as those to South America and Paris—there were many proposals that the Paris service should be taken over by the railways—are only to be taken over then necessarily the B.O.A.C. would suffer a considerable decline in -revenue. I am not defending the B.O.A.C., the chosen instrument, or any monopoly in air transport, I am asking what are the proposals of the shipping companies and the railway companies.

§ VISCOUNT TRENCHARD
My Lords, I do not like interrupting, but perhaps the noble Lord will forgive me.

§ LORD BEAVERBROOK
Certainly.

§ VISCOUNT TRENCHARD
By what you have said, are we to understand that you, speaking on behalf of the Government, mean that they are only going to keep on the B.O.A.C. as one chosen instrument and have no subsidy to any 748 other company or any other chosen instrument?

LORD GIFFORD
May I, too, be forgiven for interrupting, but is not the noble Lord, Lord Beaverbrook, rather assuming that there are throughout the Empire and throughout the world a number of services in being run by B.O.A.C. when, in fact, there are only very few such services at the present time, and we are informed that certain shipping companies are prepared to run services on specific routes not in competition but where none now exist?

§ LORD BEAVERBROOK
There was a proposal that the Paris route should be run by the railway companies.

LORD GIFFORD
Surely there is no service to Paris by air now?

§ LORD BEAVERBROOK
The proposal has been made that the railway companies should take over the route to Paris after the war. I am putting the question to the shipping companies and the railway companies, without hostility and not in any critical spirit, what do they mean? Do they mean that they will take over B.O.A.C. services or will only take over certain selected services? This is no attempt on my part to resist claims but to obtain information as to the basis on which they suggest they should take over services of B.O.A.C., and operate them without subsidy. Do they want to take all of them over, or do they want to take over some services, leaving a residue to B.O.A.C.—in other words, taking the eyes out of the carcase? I repeat that I ask this question in no spirit of hostility or criticism. Surely we are entitled to know what they propose.

§ LORD KENNET
May I answer that question at once on behalf of the railway companies? Their idea is certainly not to take over selected portions of the services. I thank the noble Lord for his invitation to clarify the attitude of the shipping companies and we will take an early opportunity of giving him an explanation

§ LORD BEAVERBROOK
Thank you very much. I think that I have spoken sufficiently on the subject of the B.O.A.C. at the moment. Perhaps I may deal with the B.O.A.C. monopoly when I come to discuss the speech of the noble Viscount. That B.O.A.C. is a chosen 749 instrument and has the benefit of subsidies goes without saying, but I think I can elucidate what that subsidy means when I come to discuss the speech of the noble Viscount. As to the shipping companies and the railway companies, suppose that the proposal is not a proposal to take ever the services of the B.O.A.C. Suppose the proposal of the shipping companies is to run a line to South America. Then I have to say to the shipping companies: present your proposals to the Foreign Office. This is the answer I give you now, it is an answer which I received from the Foreign Office. The Foreign Office will be glad at any time to consider applications in consultation wits the other interested Departments of His Majesty's Government, but, of course, no useful purpose would be served by applying so long as applicants cannot provide the necessary aircraft and personnel.

§ VISCOUNT ROTHERMERE
May I ask how they are going to provide aircraft or personnel without the consent of His Majesty's Government? They are not allowed to order any aircraft, either in this country or anywhere else, and it is quite obvious that the Minister of Labour, until after the war, would not agree to their having the necessary personnel.

§ LORD BEAVERBROOK
Viscount Rothermere has pointed out the weakness of the situation. Quite clearly there are not any aircraft, there is not any personnel, there is no ground staff. Do you want to take away any aircraft or any personnel from the war effort? Is that the desire of any member of this House? I should very much doubt it. So what is the use of this shadow-boxing with the Government about the line to South America? It is just sheer waste, of time. For two days this House has been discussing a line to South America when we have not got aircraft, personnel, or grouted staff available.

§ LORD DENHAM
Is not the whole purpose of this debate to discuss what will happen after the war, not during the war? If there are to be great plans for civil aviation many of us want to know what is going to happen after the war, not during the war.

§ LORD BEAVERBROOK
Your Lordships see the sort of difficulties that confront me. One moment I am told: 750 "These are lines that do not exist now" (I refer to the Paris line which of course does not exist now). Then I ask, what is the project? Do you want to lay down certain lines to be run after the war? Do you want every shipping company and every railway company to be able to say that these lines are reserved for these companies until after the war? If the shipping companies and the railway companies want to go into aircraft transportation, why do not they lay down their plans? There is no reason at all why the shipping companies and the railway companies should not do so. It would not be expensive or difficult. When decisions have been reached on their proposals, then the moment they know that they can start after the war they can go ahead and operate these services, they can go forward with their projects. We can deal with them and if we fail we shall be subject to censure. There can be no justice in any censure until that time comes.

LORD BALFOUR OF BURLEIGH
My Lords, I hope that the noble Lord will forgive me, but this is very important. He asks why the railway companies do not make their plans. You cannot make plans for post-war aviation services without knowing that you are going to have the support of His Majesty's Government in your negotiations for landing grounds, and without knowing that His Majesty's Government are going sympathetically to consider giving you after the war the aircraft which you need. We cannot make our plans now unless we know that this idea which we put forward, and which seems to us to be a good one, commends itself to His Majesty's Government, and that we shall have the help of the Government in carrying it out.

§ LORD BEAVERBROOK
I understand the position perfectly, but that is not quite the proposal put forward by the shipping companies and by the railways. The shipping companies have said "Let us now make plans for a line to South America," and the railways have said "Let us now make plans for a line to Paris." Those are two very definite propositions which have been put forward, as I understand it, in the speeches of the noble Lords who have spoken.

§ LORD KENNET
My Lords, there is really no special emphasis on the line 751 to Paris. The proposals were entirely general.

§ LORD BEAVERBROOK
I shall come to the question of the railways very shortly, but for the present I think that I have outlined the Government position in this respect quite clearly. It is perfectly open for the shipping companies to go to the Foreign Office now. The shipping companies must show where they can produce their aircraft and their personnel, and if they can; persuade the Foreign Office to make arrangements with them for the release of aircraft and personnel, that will be all to the good.
I want to spend one more moment on internal policy. Internal air lines do not concern the Committee over which I preside, but are the concern of the Air Ministry. I am authorized to say that after hostilities in Europe have ceased it will be necessary to continue these services on their present basis for a certain time, the length of which will be dictated by military exigencies. So far as long-term policy for internal civil aviation is concerned, the Air Ministry have under review the form of organization, the planning of routes, and questions of aerodromes, equipment and ground organization. These questions are now in an advanced stage, and my right honourable friend the Secretary of State for Air will have something to say on the examination of these matters in the not-distant future. That is in relation to the internal air lines and the desire of the railway companies to take part in the internal air services, in which they already play a very considerable part.
I hope that I have dealt with the question of the B.O.A.C., though I shall return to the question of the nature of the B.O.A.C. monopoly when I deal with the speech of the noble Viscount, Lord Trenchard. I want to say a word on the vexed question of cabotage. My noble friend Lord Rothermere said that the definition which I gave yesterday was not quite clear, and that he thought that if I looked at the Official Report I should see that I had given an obscure definition. I am bound to say that I have looked at the Official Report and it seems to me that the definition is perfectly clear. It is the only part of my speech which I have studied, but it seems to me that there is not a flaw in the 752 description of cabotage; it is exactly what I intended it to be, and it suits me perfectly. I am willing, however, to discuss cabotage again if that is desired.
Cabotage is the right to carry traffic—not the right to fly—within the boundaries of a country. For instance, the French would claim the right to carry traffic (since it is conceded that the Empire forms the boundaries of a country) from Paris to Timbuctoo, and they would describe it rightly as cabotage—a French word, as the noble Viscount says, but none the less with a meaning which I should have thought the noble Viscounts, Lord Trenchard and Lord Rothermere, would have known all about, for it is laid down in 1919 in the Paris Convention in the language which I used in this House yesterday. It is also laid down in the Havana Convention, and it must have been a commonplace in all the consultations in relation to the air transport industry over the last twenty-five or thirty years. I must confess I am surprised that noble Lords do not know the meaning of the word. I can quite understand that those not concerned with air transport are not familiar with it, but those who are familiar with the industry and those who come here and speak to this House again and again on this subject should surely be familiar with it. It is plain in its use and plain in its meaning. I have written down the words used in the Paris Convention to which I have referred: "Traffic between any two points within that territory." There was a proposal to exclude from the definition journeys involving an intermediate stop, but that proposal never came to anything.
We were greatly concerned about cabotage, because we wished to know whether it was conceded to us by other countries that cabotage embraced our Empire. I must say that I rejoice that cabotage is recognized as a right applying to the Empire as well as throughout Great Britain. We must not confuse cabotage with freedom of the air or with the right of innocent passage, neither of which arises in relation to cabotage. The right of innocent passage is something quite different, and has no bearing on cabotage at all. I was a little confused by the question put to me by the noble Viscount, Lord Trenchard, when he referred to a straight line. If I had known what he meant I should have tried to give a sincere answer; I was not joking about it at all. The 753 answer depends on the circumstances. France, for instance, will have a right to claim to take part in issues relating to innocent passage. France may say: "We are not going to give innocent passage; we will not allow it." They have said that before. Germany said: "If you want to fly over Germany you must come down when you enter Germany and submit to inspection and investigation; you must have your engines checked and spend hours on a German airfield being overhauled." I myself had that experience again and again. They also said: "You roust come down at the end of your flight over Germany." All that was done before the end of the war and may be done again.

§ VISCOUNT TRENCHARD
I quite agree, but will you say whether the Government are going to recommend that policy at the international conference, because it is reciprocal?

§ LORD BEAVERBROOK
One of the proposals at the international conference is, of course, innocent passage. There are four freedoms, and innocent passage is one of the four freedoms. But I do not want to go into the four freedoms to-day. If I digress any further we may be here all night. I want to answer the question addressed to me. I say cabotage has nothing to do with innocent passage, cabotage has nothing to do with freedom of the air. Cabotage is what we have talked about ever since 1919—in the Paris Convention and in every part of the world where the air transport industry is—and cabotage is something we greatly desire for our enterprise.

§ VISCOUNT TRENCHARD
Really, this matter is most serious. This question of cabotage, you say, has nothing to do with innocent passage. If there is no innocent passage it makes cabotage senseless as you define it.

§ LORD BEAVERBROOK
Well, it is the noble Viscount's opinion that if there is no innocent passage cabotage is senseless, but I cannot see that myself. For instance, take flight from here to Jamaica. I cannot see that refusal by any country in Europe to permit innocent passage would interfere with flight from here to Jamaica. Now perhaps I may pass on from cabotage unless there are any questions your Lordships wish to ask me on my interpretation of cabotage. I say it 754 has no relation to innocent passage, it has no relation to freedom of the air or sovereignty over the air. It is something else. It is the right of the aircraft of Britain and the Empire to carry the traffic originating in Britain to various portions of the British Empire. It is the protection of our own traffic and the reservation of it for ourselves. And we admit, of course, that others are entitled to the same privileges.
Now may I pass on to the chosen instrument? It is not really a monopoly. I do not object to the interpretation of those who regard it as a monopoly, but it is not a monopoly. It is a monopoly of subsidy and of subsidy only, and you cannot say that a monopoly of subsidy is an operational monopoly. It is not. Operational monopoly does not exist. There is no monopoly of operation, but there is a monopoly of subsidy. There is really a difference; I assure the noble Viscount there is a great difference. There is nothing clearer than our complete freedom in relation to operations. There is no monopoly whatever so far as operations go. That is the only definition that I can give of the chosen instrument.
Then I am asked by the noble Viscount, Lord Trenchard, about the President's declaration about innocent passage. Of course his declaration about innocent passage will have a great influence, art immense effect, and is bound to be the subject of much discussion at the international conference. But the President cannot guarantee innocent passage over France or Spain or Portugal. Only France, Spain and Portugal can settle the issue of innocent passage there. That must be settled by those countries. We are trying to bring them to an international conference and to get them to sit down round the table with us and to say, "Yes, we give you the right of innocent passage." That is what we are trying to achieve.

§ VISCOUNT TRENCHARD
And you are going to back it?

§ LORD BEAVERBROOK
That is the purpose of the international conference in part. The British Government are entirely in favour of that principle. Another question is whether cabotage extends to the Dominions. No, because the Dominions are self-governing. Cabotage in India also is the affair of India. These 755 Dominions come to the international conference, and they come there with the intention of taking part in the deliberations with full authority and full power, and, of course, they will look after their own cabotage. Necessarily, they will protect their own cabotage. Then I am asked whether a plane can fly from Great Britain to Spain and there put down passengers and take up passengers again for Great Britain. Yes, certainly, if there is an arrangement with Spain. We are trying at the international conference to bring Spain into an international agreement that will cover that very situation and provide for that very condition.

§ VISCOUNT TRENCHARD
Inter-national or national? Between two nations?

§ LORD BEAVERBROOK
Between two nations. We will try at an international conference to provide for flight from nation to nation.

§ VISCOUNT TRENCHARD
That is very different from international. That is what I want to be certain of.

§ LORD BEAVERBROOK
I read Hansard this morning. I read the passage the noble Viscount refers to on an international conference. I do not know what it means. Now I come to the speech of the noble Viscount, Lord Rothermere. He asked me a question about the situation in relation to aircraft production. I assure my noble friend I never gave any indication of hope or expectation in relation to aircraft production in Great Britain during the war. I have examined Hansard. I have Hansard here for the 19th of January the occasion when I addressed the House on the subject—the only occasion when I addressed the House on the subject. Speaking of the Brabazon I said: Of course years must pass before a type so completely new can be brought from the drawing-board to the traffic route. Years must pass. I do not know of any delay in the preparation of the Brabazon type, but, oh dear! it is slow. Then I say of the Tudor just the same—a very fine plane. Its design is already in hand, but only its design. A long time must elapse between design and production. And I said that even if production were achieved before the war was over—because we do not know how long the 756 war will last—still the Tudor must be made use of for military purposes and could not be disposed of for civil aviation. I made that position quite plain. I want to say that the delay over the Tudor is not exactly an unexpected delay.
But I will not be optimistic about the preparation of civil aircraft during the war. I see no hope of civil aircraft until the crisis of our strategy in this war has been brought to a conclusion. If we are to have any aircraft for civil purposes during the war I shall be very glad, but I am sure that not a single member of this House wishes me to go to the Government and make any plea for civil aircraft at the expense of military machines. I am sure such a proposition would be utterly reprehensible to the members of this House. We must confine ourselves wholly to military purposes until we know what is to be the decision in the great battles confronting us.

§ VISCOUNT ROTHERMERE
Does that apply also to development? Of course about production we know, but what about development?

§ LORD BEAVERBROOK
There is no question of developing civil aviation at this moment, except by a happy adventure. A little advantage here and a little advantage there might be seized and made use of, but it can be nothing more, and I know the House does not want me to present to the Government any other picture. You speak of the Tudor. This is a political decision as I understand the meaning of your words. It is a political decision, and it is due to the need for special and particular equipment for the Royal Air Force at this crisis in war strategy. That is the reason. We know what we want and we hope to get it, but what we want is by no means any interference in the remotest degree with war production. I am asked by my noble friend Lord Rothermere how long will civil aircraft be held up. If he will tell me how long the war with Germany will last, I can answer his question. The next question my noble friend has asked is about bases. If we are successful in the international conference the international authority will control the user of bases.

§ VISCOUNT ROTHERMERE
Will it make the rules.

§ LORD BEAVERBROOK
I think I shall be able to make the position quite 757 clear in one moment, if I can only lay my hands on a document amid the confusion I have brought on myself. It is a declaration by the Governments of Australia and New Zealand, and it is a declaration to which toe British Government adhere subject of course to individual instances which must be affected by special bargains. There are special bargains. This is the declaration, that the two Governments—that is, the Government of Australia and New Zealand—accept as a recognized principle of international practice that the constriction and use in time of war by any Power of naval, military or air installations in any territory under the sovereignty or control of another Power does not in itself afford any basis for territorial claims or right of sovereignty after the conclusion of hostilities. I think that answers my noble friend's question to his satisfaction.

§ VISCOUNT ROTHERMERE
And the British Government agree entirely with that resolution?

§ LORD BEAVERBROOK
That decision is accepted by the British Government subject to certain individual instances which must be affected by the terms of the arrangements made at the time—arrangements made with Newfoundland or somewhere else—which do not conform entirely to that situation. They are only individual instances.

§ VISCOUNT ROTHERMERE
Can we have any information about these instances? Are they many or few?

§ LORD BEAVERBROOK
No, they are not important. If you wish, I shall see if I can get the information for you. It is not important. As to the bases in the West Indies, that is a different situation. There we leased the bases for ninety-nine years. We leased them as a gift to the United States of America, and the United States of America made a gift of destroyers to Grew Britain. These bases are leased only for military purposes. They cannot be used for civil aviation except with our consent. They do not pass under the general conception of bases for civil aviation. What may be the intention of the Government in the future remains to be seen, but at present the question of civil aviation in connexion with these bases has never arisen so far as I know. They are good people to deal with, the Americans.
758 Then there was another question raised by my noble friend Lord Essendon, whom I should like to congratulate on his speech yesterday. It was a magnificent, impressive speech, a very fine speech, a first-rate contribution to the debates in this House. He asked what will be the position of the international conference, when we come to it, about the chosen instrument and free competition. Any international regulatory system will permit each nation freedom of expression—State ownership, chosen instrument, private enterprise, all free. That is the condition on which we shall go to the international conference. So you will see, as far as those are concerned who hold to the system of free enterprise, that they are not being prejudiced at all by the international convention. Their principles are unimpaired.
My noble friend Lord Rothermere wants to know what are Mr. Berle's views. I do not know, but I think he favours private enterprise. I am not sure that he favours private enterprise exactly as we understand it. There are many versions of private enterprise. For instance, there is the private enterprise which exists in the Daily Mail and the private enterprise which exists in the Daily Herald—two different manifestations of the same thing! Then Lord Rothermere raised another question. He spoke of Mr. Berle's statement that "it would be very had business if we did not." That was the statement attributed to Mr. Berle in relation to the supply of American aircraft for our purposes after the war, and supplied to us, I may say here, on the basis of non-discrimination. I was asked on what terms are we to get these aeroplanes. We are to get them on the basis of non-discrimination. That is the language Mr. Berle used. I think Mr. Berle means to see that in relation to these aeroplanes we are not prejudiced in the slightest degree.

§ LORD WINSTER
Are we to pay for them?

§ LORD BEAVERBROOK
I do not want to raise that question. I do not know. We are going to be well treated. The Americans treat us well. Over civil aviation we are being treated well. We must not press for these things from America when we want military aeroplanes from America. It would be folly on our part to say, "Give us civil aeroplanes," 759 when we need every military aeroplane they are in a position to send to this country and elsewhere while the battle rages all over the world. Mr. Berle said we were to have aircraft after the war. Lord Rothermere pointed out that that would be a situation not entirely beneficial to us for We should be establishing supply depots, repair depots, spares depots, all based upon American principles and therefore prejudicial to British aircraft when we get British civil aircraft into operation after the war. I agree with all that. I made the same declaration in the lengthy speech I made yesterday—the speech of five parts I made yesterday. I made that same point for the purpose of showing that we must get our British aircraft into production and operation for civil purposes. Lord Rothermere misunderstood Mr. Berle entirely. He thought that Mr. Berle meant it would be very bad business for the Americans if they did not, because they would be securing for themselves the spares and repair market in the airfields where the American aeroplanes might fly. Nothing was further from Mr. Berle's mind. The sentence following shows that: "It would be a betrayal of an understanding entered into in good faith." His sole purpose was to say it would be bad business to break an arrangement entered into in good faith. I can assure you that Mr. Berle is a man we can trust and depend upon, with the assurance that he is going to give us a square deal. I am convinced of it.
Now I want to go on to the debate to-day. There were one or two speeches to-day that interested me very much, particularly the speech of my noble friend the Duke of Sutherland. That speech was very gratifying to me because he found favour in some of the things I have been doing. But he said he did not think the progress had been very great since the last occasion preceding the present debate when I spoke in your Lordships' House. I assure you I cannot understand how anyone can hold that view. I am confused and utterly mystified by the notion I get from many parts of the House. I think there must be something wrong with my own calculations. What have we achieved? We have achieved most tremendous progress. I should have thought we would all be grateful for the progress which has been made.
760 In the first place we have got on paper an agreement with the Dominions. It was a great achievement to get all the Dominions into an agreement providing for an international conference, all saying the same thing with one voice. It was accomplished in a very short time, as my noble friend pointed out, but we had made immense preparations before the event. We did get an agreement with the Dominions and now we have an agreement with the United States, a very wise and a very excellent agreement, an agreement to go to an international conference on lines approved by the Dominions conversations. We have had to make concessions—I understand that perfectly—but there are the two pieces of paper. I should have thought that to bring those two pieces of paper down to this House would have been enough to bring forth words of admiration. But we got more. We got an agreement on cabotage. If I had thought we could have got that matter settled on those terms six months ago I should have considered it was worth any labour that I might be asked to undertake. I am sure that is the view of those in the aircraft industry. The settlement is an immense advance and it is of great benefit to Britain.

§ VISCOUNT TRENCHARD
Have those agreements been published or are they still secret?

§ LORD BEAVERBROOK
They are published in Hansard. I gave them in full again yesterday and I should like to recommend to noble Lords that they are worth perusing. I took great labour over that speech yesterday. It was so difficult and I was so long on its preparation that if I may say so without committing an offence I became bored. But there it is; it is word perfect; and I say to anybody who will read it that it is a complete statement of the whole position. Anyone reading it will I think be satisfied with the progress that has been made in the direction of the international conference. Next I come to the dispute that was going on in America about bases. It was blowing up in such a way that one might have thought it was going to be the issue in the Presidential election. I think everybody is satisfied about bases. As to the way we stand in relation to bases there is no complaint. There can 761 be no claim to our bases except under the international agreement.
I do not think this Government could have done more. I know your Lordships will say, "You are praising yourself." I do not want to do that, but I do say that we could not well have made more progress than we have done in the six or seven months that have passed, for that, after all, is only a comparatively short space of time. My noble friend Lord Kennet yesterday suggested I was like the angel that appeared to Balaam. On the contrary, I think I have been like Agag in the way that I hive walked. And here I have the result of it. These results are worthy of your Lordships' attention, and if you examine them critically and with fair unprejudiced minds I think you will say the Government have done well in getting forward in the direction of an international conference so swiftly and in such compliance with the principles for which Great Britain strives.
I have dealt with the B.O.A.C. question and there is nothing left for me to deal with except to say one final word about the international conference. It: is going to mean a tough negotiation. We have not got all the advantages and benefits that we would like. We have some difficulties and trials confronting us. You will find reported in Hansard a structure for the international conference. Study it first and if you find that structure meets with your approval, then let sleeping dogs lie until the conference takes place. Give us a real chance to pull out something that is worth while. If you will do that I think we shall manage to get something done that will meet with your satisfaction.

§ THE MARQUESS OF LONDONDERRY
My Lords, although it is appropriate that I should make some reply to the noble Lard's speech, I feel we have traversed the ground to a great extent and your Lordships will not wish me at this late hour to go meticulously into the many points that have been raised earlier in the debate. I would have liked to argue with the noble Lord who has just spoken for a considerable time, but I should not like to begrudge him the evident satisfaction be has in what he regards as the great accomplishments made by the Government during the seven months which have just passed. I do not know that your Lordships here will put those achievements so high as the noble Lord 762 has done. Still, something has been done. We can congratulate ourselves in having had several debates in this House and on having achieved something. Personally, I by no means regret this debate. I said yesterday that we had achieved the result of having a Minister appointed to look after this particular subject. My noble friend has been selected as the chosen instrument. I am afraid he has come under as much criticism in your Lordships' House as the other chosen instruments.
I think the noble Lord will understand that there has never been any intention on our part to suggest anything that could interfere with the war effort. We have particularly asked the noble Lord to give us some idea of the policy that is in the mind of the British Government. Several matters that I raised dealt with policy, but we have certainly received no information at all on those points. The noble Lord has now turned to the House and asked us to give the Government a policy. I would suggest that if the noble Lord would hand over to me the keys of the medicine chest I would dispense the medicine, but at the present moment it is for the Government to give us a policy. I have asked on several occasions in this House that the Government's policy should be enunciated so as to give some encouragement to those enterprising people throughout the country who cannot proceed further in the direction of making their plans and entering into undertakings and commitments without knowing what the Government are going to do. As to that we really have received no information at all.
These debates have had the effect of bringing to this House my noble friend Lord Essendon. I have had a note from him and I am sorry to inform the House that he is indisposed and has been unable to, be present to listen to the reply of the noble Lord. Had he been able to attend he would probably have had some remarks to make upon it himself. But we had Lord Kennet here and I think it was a great advance that those two noble Lords, speaking for the railways and shipping, told us very clearly what is in their minds. We know quite well that they are not proposing to do anything at this moment except to make plans and they wish to receive In what encouragement they can get from the Government by the Government telling them what their plans 763 are. There is no suggestion of a line to Paris or a line to anywhere at the present moment. That is to come after the war. The noble Lord has done a great deal of planning in his business life and he knows quite well that you have to get together certain facts and figures and ideas before you can make plans. That cannot be done in this case without some encouragement from the Government and without some knowledge of what the Government are going to do.
There was a certain controversy this afternoon about the B.O.A.C. The noble Lord challenged the House. I do not know why he did so. The noble Lord said I supported the B.O.A.C. Act in 1939. It is quite true I was not a Minister then, but I would point out that that is five years ago and we know a great deal more about the speed and capacity of aircraft at this moment than we did in 1939. Although the B.O.A.C. idea was useful at the time the position at present places it in a different aspect. I sincerely hope that the Act will be repealed. The noble Lord asked me a plain question and that is a plain answer. I do not want to see a monopoly. The noble Lord tried to explain when a monopoly is not a monopoly, but of course this is a monopoly. It cannot be anything else. It is supported by the taxpayers' money, it gets all consideration from the Government, and if it is a question of landing rights the Foreign Office will give preference to the B.O.A.C. In carriage of mails the B.O.A.C. will get priority. I cannot agree with the noble Lord's explanation of when a monopoly is not a monopoly. I sincerely hope that the Act will be repealed and that we shall have an opportunity for free enterprise.
There are several other matters which I do not feel I should be entitled to go into at the present moment, but I should like to mention that my noble friend Lord Essendon, in the note he sent me, specially asked whether companies like shipping companies will be assisted by our Government and by our Foreign Office in acquiring landing rights, because they feel that other countries—neutral countries perhaps—may be able to get priority in landing rights which later will put the companies at a disadvantage.
764 There is only one final word I would like to say in relation to America. I feel that I understand exactly what the noble Lord said, and I know quite well that he has had very friendly conversations with Mr. Berle and that Mr. Berle has given him almost categorical undertakings. But I am not taking a defeatist attitude about the production of aircraft in this country and about our being dependent on America for air transport. When the war ends we shall have a lot of machines and I hope that by the acceleration of programmes we shall have the Tudor and the York and others in being. We shall have some of the finest crews, men who will want employment, and when they have employment they will discharge their duties as well as or better than men in other countries. When it is suggested that we shall have to depend on the good will and co-operation of America I would say that we shall all be dependent on each other's good will. I hope we shall not adopt the attitude that we shall be in the humble position of having to beg, borrow—not steal, but obtain what we can, and that we have not got a policy and determination of our own. I believe the proper thing on such an occasion as this is to ask your Lordships' leave to withdraw the Motion, but I have put on the Paper a Motion that an humble Address he presented to His Majesty for Papers upon certain matters of importance. I should like to see any Papers there are relating to policy. I am mistrustful to this day of the air-mindedness of the War Cabinet, and I hope that the noble Lord, having made a vehement speech here to-day, will deliver it again in equal or more forcible terms to those people who direct his effort and who, I suspect, are very sticky on air matters.

§ LORD BEAVERBROOK
I have no Papers.

§ THE LORD CHANCELLOR (VISCOUNT SIMON)
Does the noble Marquess press his Motion?

§ THE MARQUESS OF LONDONDERRY
With all due deference, a Motion having been put on the Paper it must be either accepted or not.

§ THE LORD CHANCELLOR
As there seems to be some reluctance on the part 765 of the Government to accept it, I asked the noble Marquess whether he would press his Motion. I only did so for the convenience of the House.

§ THE MARQUESS OF LONDONDERRY
I did not understand whether the Government opposed the Motion.

§ LORD BEAVERBROOK
Yes.

§ THE MARQUESS OF LONDONDERRY
I would not like to put the House to the bother of a Division, so I will ask leave to withdraw my Motion.