Lords Sitting of 22 July 1946

Preamble
The House met at half past two of the clock. The LORD CHANCELLOR on the Woolsack.
Prayers.
  FINANCE (No. 2) BILL.
  Brought from the Commons, read 1ª, and to be printed.
WEST MIDLANDS JOINT ELEC TRICITY AUTHORITY PROVISIONAL ORDER BILL.
Read 3ª(according to Order), with the Amendments, and passed.

BRITISH NORTH AMERICA BILL. [H.L.]
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, in moving the Second Reading of this Bill, which we have before us at the request of the Canadian Government, I should explain to your Lordships that it comes to this House because under a clause in the Statute of Westminster the amendment of the North America Act providing, amongst other things, for the representation in the Canadian Houses of Parliament, was an excluded measure, and alterations therefore affecting that Act require the assent of this Parliament. An Address has therefore been presented to His Majesty by the Parliament of Canada praying that alterations in the representation in the Canadian House of Commons, as provided in the Bill, shall become effective, and, in order to make them effective, it is necessary to pass the Bill through the two United Kingdom Houses of Parliament.
The Bill deals with a matter entirely, of course, within the discretion and judgment of the Canadian Legislature, but by that simple enactment in the Statute of
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Westminster this proceeding on our part is called for. Therefore I must ask your Lordships if you will be good enough—as the Canadian Government is anxious to get the proceedings terminated—to take all the stages of the Bill to-day. I should mention that by a typist's omission, entirely on our side, there is a line omitted after line 23 on page 2, and the words which will require to be inserted, in order to bring it into line with the Address as passed by the Canadian Legislature are "Number two hundred and fifty-four shall be reduced by the." Words to that effect will have to be inserted, by an Amendment which I shall ask your Lordships to accept in Committee. The omission is entirely due to an error in typing, which occurred somehow or other. I am sure that your Lordships will excuse it. I do not expect it will be the wish of anyone to enter into a discussion or controversy on the matter. I beg to move.
Moved, That the Bill be now read 2ª.—(Viscount Addison.)
VISCOUNT CRANBORNE: My Lords, I understand that this is really a purely formal Bill, which is required. In the circumstances, I do not propose to make any comment on it.
2.38 p.m.
VISCOUNT BENNETT: My Lords, the noble Viscount who leads the House has referred to this as a constitutional amendment. In fact it is, but it is an amendment of a Statute passed by this Parliament in 1866. The question of the amendment of the Constitution of Canada has engaged the attention of legislators on a great many occasions. It was last formally considered in 1935 at a Dominion Provincial Conference, and in 1936 the law officers of Canada and the Provinces formulated a plan for the amendment of the Constitution. In the past there has been a sharp conflict between the Provinces and the Federal Parliament as to the extent to which the Provinces should be consulted when amendments are made to the Constitution. It was proposed at that time, first, that in matters affecting Canada as a whole and Canada only, there should be no consultation with the Provinces; secondly, that if more than one Province was affected by the proposed legislation the Provinces concerned should be consulted before any amendments

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were made; thirdly, that if the proposed amendments concerned the Dominion and all the Provinces it should be approved by two-thirds of the Provinces with at least fifty-five per cent. of the population of Canada and, lastly, that unanimity was necessary with respect to any interference with minority rights.
When the Constitution was given to Canada in 1867, it was intended that the population of the Province of Quebec should be the determining factor with respect to Parliamentary representation, In fact, the Resolution upon which the Constitution was framed with respect to that matter says that for the purpose of such readjustment—that is, every ten years—Lower Canada shall always be assigned sixty-five members, and that representation of other parts of the Dominion should be arrived at by applying the unit of population of Quebec to the total population of Canada. This Amendment is an entire departure from that, and provides that the population of Canada shall be divided by 254 for the purpose of ascertaining the unit on which representation shall be made. The House of Commons originally consisted of 181 members; at the census of 1871 it was increased to 200; at the following census to 211; then to 215. At the next census the number was 213, and then there was a gradual increase up to 245, which is the present number of members in that House.
One of the factors that brought about confederation was the question of representation in Parliament of Ontario—that is, in Upper Canada. Mr. Alexander Mackenzie, who was afterwards Prime Minister of Canada, during the debates that took place, made it clear that his objection was not because of the disposition of moneys, or otherwise, but because, as he said, four men in Lower Canada are made the equal of five men in Upper Canada, and therefore there must be some readjustment of representation by population. That was done by seeking a unit from which they could make the distribution. That unit was Quebec. The number was fixed at sixty-five; and sixty-five, divided into the total population of Canada, made the quota which fixed the representation in the House of Commons, which rose, as I say, to 245, largely through the increased
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representation that came to the Western Provinces and to British Columbia. The representation of Ontario at the time of the Confederation was eighty-two; that number rose to ninety-two and then fell to eighty-six. It subsequently dropped to eighty-two on the application of the rule I have mentioned.
This legislation proposes to depart entirely from the principle set by the fathers of Confederation. I make no observation in criticism of it, because I realize that this is not the place to criticize the legislation in question. We take it as it is. There is, however, one point to which I think attention should be directed, and that is that under the Statute of Westminster by Section 4 it is provided, in very specific language, that no Act passed by this Parliament shall have any effect in Canada or the other Dominions unless it is expressly declared in that Act that that: Dominion has requested, and consented to, the enactment thereof. This can be implied, but I submit it is desirable to comply with the provisions of the Statute of Westminster in order that it may be clear that this House and this Parliament assume no responsibility for the legislation, and that it is being passed at the request and with idle consent of the Parliament of Canada. That, of course, can be implied by reason of the address; but the Statute is explicit: that "No Act of Parliament of the United Kingdom passed after the commencement of this Act" shall apply to a Dominion. Therefore I suggest that the law officers should look into the matter and determine whether or not it should not be made clear that the provisions of Section 4 of the Statute of Westminster have been corn-plied with.
There has been a good deal of discussion about an amendment of the Constitution being a political measure." Canada is the only one of the Dominions in which a Party majority can amend the Constitution. They cannot amend it directly, but they do it indirectly, because we have agreed that we will consent to pass any legislation that they may petition to have passed by this Parliament. That is entirely at variance with the provisions that obtain, say, in Australia. In Australia there must be a majority of the States agreeing to the amendment of the Constitution, and after that there must be a majority by plebiscite of all the electors who have a right to vote for members

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of the House of Representatives. In South Africa it is provided that to amend the Constitution not only must there be a majority of the two Chambers of the House in favour of it, but on a joint ballot of both Houses together two thirds of all the members must approve the amendment to the Constitution, which is then signed by the representative of the Sovereign.
Canada alone passes legislation amending the Constitution by a majority vote. As I save said, that has aroused a great deal of interest from time to time, and the Provinces have sometimes come to they conceived to be grievances. For instance in the early days of Confederation Nova Scotia came here with Mr. Howe, but in his biography it will be found that he thought he was treated very badly as he stood at the Bar of the House of Lords. Then there arose in British Columbia the difficulty about the building of the railway, and they also came here without success. This was followed by a delegation being sent here from Prince Edward Island, for the purpose of placing their grievance regarding communication with the mainland before the Imperial Parliament, and that failed. Then there came the case of British Columbia again. Mr. MacBride, the Provincial Premier, came here to appeal against the words "final and unalterable" regarding the adjustment of the subsidy paid to the Province by Canada. That was successful in the end, because it is agreed in this country that one Parliament cannot bind the hand of another. The words "final and unalterable" were dropped. From Western Australia there came a case in 1935. They sought to leave the Commonwealth, and by a two-thirds majority they asked the Parliament of the United Kingdom to intervene on their behalf. It was referred to a Committee of both Houses and finally they reported that the petition was "not proper to be received." It was said that nothing but the voice which represented Australia as a whole could bring about any action by the Imperial Parliament, a principle which is recognized and continued in the Statute of Westminster.
I have no comments to make at all upon the legislation, but I did in reading it find that paragraph three, to which the noble Viscount has just referred, is wholly lacking in sense as it stands, but with the
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addition of the line he mentions it becomes understandable. The question is one solely for the Canadian people, but I do suggest that it might be well for the Government at the earliest opportunity to discuss with the Canadian authorities the question of an amendment to the British North America Act which will enable Canada to deal entirely with its constitutional changes, with such safeguards as might be desirable having regard to the fact that it is the only country at the moment in the Commonwealth in which a Party majority can amend the Constitution. But no, they cannot amend it; they can only ask that it be done by this Parliament, because what we are doing is merely amending the Statute of this Parliament. I once heard a very learned judge in the Privy Council say, "I suppose Parliament could repeal the British North America Act", to which the answer was "Yes". This Parliament could, if it so desired, repeal that Act, or any other Statute which is on the Statute Book for that matter.
The discussions are becoming rather acute with respect to the desirability of Canada enacting its own constitutional changes. I merely bring this matter to the attention of the Government because of the anxiety I have regarding observing the provisions of the Statute of Westminster and in order to direct attention to the fact that by our legislation we are changing the whole theory upon which the very vexed problem of representation by population engaged the attention of the fathers of Confederation. That is not a matter which concerns us; it is a matter solely within the jurisdiction of the Canadian people, but we shall have to accept the responsibility for enacting the legislation that did it. Therefore I suggest that the provisions of the Statute of Westminster should be observed and that it should be made clear that what was done by us was done at the request of, and with the consent of, the Canadian authorities.
VISCOUNT ADDISON: I can assure the noble Viscount that the whole case has been most carefully examined by our legal advisers, that it is completely in order and that the Petition addressed to His Majesty contained, of course, the whole terms of the Bill. As the noble Viscount says, it is within the authority and jurisdiction absolutely of the Canadian Houses of Parliament, and it is only

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by reason of the fact that under Section 7 (1) of the Statute of Westminster the amendment or repeal of the British North America Act was excluded that this Bill needs to come before this House at all. I may say that I find there was only one Amendment proposed to the Bill as introduced, and that was defeated by 108 votes to 42, so that it represents the considered and overwhelming opinion of the Canadian Parliament. As the noble Viscount says, these are not matters for us, and it is for me to ask your Lordships to adopt this procedure as is required of us at the request of the Canadian Government under the provisions of the Statute of Westminster.
On Question, Bill read 2a and committed to a Committee of the whole House.
Then, Standing Order XXXIX having been suspended (pursuant to the Resolution of July 15),
VISCOUNT ADDISON: My Lords, I beg to move that the House do now resolve itself into Committee on the Bill.
Moved, That the House do now resolve itself into Committee on the said Bill.—(Viscount Addison.)
On Question, Motion agreed to.
House in Committee accordingly:
[The Earl of DROGHEDA in the Chair.]
Clause 1:
New provision as to readjustment of representation in Commons. 30& 31 Viot. c. 3.
1. Section fifty-one of the British North America Act, 1867, is hereby repealed and the following substituted therefor:
"51.—(1) The number of members of the House of Commons shall be two hundred and fifty-five and the representation of the provinces therein shall forthwith upon the coming into force of this section and thereafter on the completion of each decennial census be readjusted by such authority, in such manner, and from such time as the Parliament of Canada from time to time provides, subject and according to the following rules:

1. Subject as hereinafter provided, there shall be assigned to each of the provinces a number of members computed by dividing the total population of the provinces by two hundred and fifty-four and by dividing the population of each province by the quotient so obtained, disregarding, except as hereinafter in this section provided, the remainder, if any, after the said process of division.

2. If the total number of members assigned to all the provinces pursuant to rule one is less than two hundred and fifty-four, additional members shall be assigned to the provinces (one to a province) having remainders in the computation
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under rule one commencing with the province having the largest remainder and continuing with the other provinces in the order of the magnitude of their respective remainders until the total number of members assigned is two hundred and fifty-four.

3. Not withstanding anything in this section, if upon completion of a computation under rules one and two, the number of members to be assigned to a province is less than the number of senators representing the said province, rules one and two shall cease to apply in respect of the said province, and there shall be assigned to the said province a number of members equal to the said number of senators.

4. In the event that rules one and two cease to apply in respect of a province then, for the purpose of computing the number of members to be assigned to the provinces in respect of which rules one and two continue to apply, the total population of the provinces shall be reduced by the number of the population of the province in respect or which rules one and two have ceased to apply and the number of members assigned to such province pursuant to rule three.

VISCOUNT ADDISON VISCOUNT ADDISON moved, in rule 4, after the words "ceased to apply and the" to insert "number two hundred and fifty-four shall be reduced by the." The noble Viscount said: As the noble Viscount, Lord Bennett, reminded us, this is essential in order to make the Bill understandable, in view of the typist's omission.
Amendment moved—
Page 2, line 23, at end insert the said words.—(Viscount Addison.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Remaining clause agreed to.
Amendment reported.
Bill read 3ª, with the Amendment, and passed, and sent to the Commons.

CIVIL AVIATION BILL.
2.50 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Winster.)
THE EARL OF AIRLIE: My Lords, before the House resolves itself into Committee may I raise a question in regard to the business of the House, especially as it refers to this Committee? We have got about fifteen pages of Amendments, and I received them this morning at

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eleven o'clock. I could not possibly, even if my train had been on time, have received them before ten o'clock or a quarter past ten o'clock even if I had come straight to the House. Those who live some distance away in the north and who have to go there for reasons such as County Council business leave the north for the south on a Sunday night. I suggest it is quite unreasonable to ask anybody to study Amendments such as these between ten o'clock in the morning and half-past two in the afternoon. I think the fault lies, if I might suggest it, in the fact that Bills affecting Scotland are taken on a Monday, which makes the position really impossible for those of us who have other activities—not private, but public activities. I am sure that your Lordships will wish to give every facility to those who live in Scotland.
THE MINISTER OF CIVIL (LORD WINSTER): My Lords, I greatly regret any inconvenience which may have been caused to any noble Lords in this matter. I would point out, however, that the Committee stage of this Bill was arranged last week to take place on Monday of this week. It is also the fact that Amendments to the Bill were coming in as late as six o'clock on Friday night. Owing to the necessity for getting the marshalled list of amendments printed, no other arrangement could really have been made. I regret any inconvenience which may have been caused.
THE EARL OF AIRLIE: Perhaps the noble Lord would assure the House that it will be avoided in the future if it is at all possible.
VISCOUNT ADDISON: I would like to assure the noble Earl that we will make every possible effort in that direction.
VISCOUNT CRANBORNE: My Lords, in justice to the Government, I ought to say that I was consulted on this matter. The difficulty is pressure of business. We are approaching the end of the Session and every day is full up until the very end. We therefore agreed—I think the noble Viscount, the Leader of the House, will bear me out in this—rather reluctantly to take the Committee stage of this Bill to-day. We could see no alternative. Certainly on my side I will bear in mind what the noble Earl has said, and I am sure the Leader of the House will also do so.
On Question, Motion agreed to.
House in Committee accordingly:
[THE EARL OF DROGHEDA in the Chair.]
Clause 1:
Establishment and constitution of British European Airways Corporation and British South American Airways Corporation.
1.—(1) With a view to providing civil air services in various parts of the world, and, in particular, in Europe (including the British Islands) and upon routes between the United Kingdom and South America, there shall forthwith be established two corporations to be known respectively as "the British European Airways Corporation" and "the British South American Airways Corporation."
The said corporations are hereinafter referred to as "the new corporations"; and the new corporations and the British Overseas Airways Corporation are hereinafter referred to as "the three corporations."
(3) The members of the new corporations shall be appointed by the Minister, who shall also appoint two of the members of each of those corporations to be respectively chairman and deputy chairman thereof.
2.55 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved in subsection (1) to leave out "two" and insert "three." The noble Earl said: With your Lordships' permission, I will deal at the same time with the five Amendments to Clause 1 and one in Clause 2 which stand in my name as, substantially, they hang together. I should like to prefix my remarks by saying that I think it is a great pity that both here and in another place so much time was taken up during the Second Reading in discussing the Scottish aspect of this Bill. It is very unfortunate. The responsibility for it, however, lies squarely at the door of the Minister, who has flouted public opinion—opinion which has been very clearly and definitely expressed for deep economic reasons which I mentioned during the course of the Second Reading debate. They are opinions which are held not only by the public generally, but by what I might call the informed members thereof. I will not repeat them, but I will simply say that this is not in any sense a strictly Party Amendment. It was never regarded as such in Scotland until the Government endeavoured to make it so in another place.
Secondly, this Amendment lies foursquare within the principles laid down in the White Paper. The noble Lord himself

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said: "It may well be found that additional corporations or subsidiaries of these three Corporations are desirable." It is possible that the wording of the Amendment does not reflect what the noble 'Lord intended. If so, I say here and now that it is intended to fall into line with what he had in mind as a possible fourth corporation. This is simply an extension of an existing structure, and not, as such, intended to be anything new. The purpose of this Amendment is to introduce a measure of decentralization and flexibility into an otherwise rather rigid structure. This principle is of importance not only to Scotland, but to Northumberland and to Northern Ireland. If is of equal importance to Wales and Lancashire, who have been rather upset by the decision in regard to the Cotton Exchange. It is a test case, in a sense, as to whether, within the Socialist philosophy, it is possible for a man of ambition and of talent to find a sphere for his activities outside the City of London, or whether it is our duty to tell all young men of ability that they must go, and as early as possible, to seek their livelihood in a place where they will find a measure of opportunity commensurate with their ability.
There is nothing which is administratively difficult in this Amendment. It is perfectly simple to allocate routes, as they have been and will need to be between B.E.A.C. and B.O.A.C., who, indeed, cover the same territory, and as routes are allocated in other places in the world, particularly in America. I think there are no technical difficulties. It is easy to raise technical points in aviation, because a great many matters differ fundamentally. There are no real technical difficulties in this at all. The noble Lord, in the course of his remarks on the Second Reading of this Bill, mentioned what he called "concessions" to Scotland. If I may say so, that was a most unfortunate word, and I would have preferred arrangements". Whether these arrangements have in fact been extracted from him like a winkle out of its shell by the Scottish Trades Union Congress, or whether they have come from other sources, I do not intend to comment upon, because it is entirely irrelevant at this stage.
Let us look for a moment at the nature of these concessions, as he calls them. Firstly, there is a Scottish Division, and secondly an Advisory Council with a
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chairman who is a member of the B.E.A.C. board. I will take the second point first. It is, I think the noble Lord must admit, rather a clumsy arrangement. If the chairman lives in London, how can he be competent in an advisory capacity in Scotland? If, on the other hand, he lives in Scotland, it is extremely difficult for him to take an active part in very important board meetings of B.E.A.C. as he will have to do. It is not a very happy arrangement from a purely mechanical point of view. What is the value of this Advisory Committee? To-day there are a very limited number of people who can give advice on aviation. It has not been going very long. It is not like the railways and the shipping, where one can draw upon men, old and experienced in affairs. There are comparatively few people who can give advice. In any case, there is the Advisory Council for Scottish Industry appointed by the Secretary of State for Scotland especially to give advice on industrial and economic matters. The noble Lord was quite unable to take the advice tendered to him by that Board. And what, may I ask, is the use of producing another Advisory Council? I think its value may be something, but it is very, very slight.
Then there is a Division. What is a Division? In B.O.A.C. I have seen a Division at work. It consists of the senior man who acts as the B.O.A.C. representative. He is there specifically to receive important people and he looks after their welfare and their complaints. He sees to the accommodation of the staff; and no doubt the people who sell tickets are under his direct administration. It may well be that he writes strong letters and tells his headquarters that the local inhabitants consider the service to be unsatisfactory, but he has no control or operational power whatsoever. He is merely a co-ordinator. What is more important is this. This Bill gives the Minister wider powers than has been given to any Minister in peace-time, but still it gives him no power to tell the corporations how to construct and to administer their own corporation. In other words, the noble Lord is quite unable to promise—at least, he is quite unable within the structure of this Bill to promise—to create a Scottish Division whatsoever.
When we come to examine this Bill, we find there is no reference, no word, no syllable, by which this arrangement for Scotland stands in the Bill. Do we

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believe in the rule of law, or do we not? Have we come to an age when we are dependent on personal power and we can sit back and hear the laws expounded from the lips of the Minister opposite; or do we believe that this Statute, as it will become, incorporates the consolidated will and wish of this Parliament? I should have said it behoves us to-day, as never before, to maintain and to see that we are maintaining the rule of law. These arrangements do not give what is required in the sphere of aviation, namely, a resident responsible executive management. There is one other point to which I wish to refer, and it is this. When the noble Lord is hard-pressed, he has on occasions said that he has a mandate. In this subject he has no mandate. There was nothing in the Labour manifesto last year stating that their policy was centralization. Indeed, if I may say so, being on a nodding acquaintance with Labour literature since I was a student at the feet of the noble Lord, Lord Lindsay, many years ago, I do not think that centralization has, in point of fact, been a plank in the Labour platform. In fact, I would say the reverse is the case, and that decentralization has been a point very heavily and greatly emphasized.
I wonder—and I would like the noble Lord to listen carefully to this—if he knows the degree to which his Party is committed to the electors on the subject of decentralization. There has come into my hands an election address which I think will be of interest to noble Lords here, and it runs as follows:
"It remains true that if all major questions affecting Scotland are decided in London, they will not get proper attention, and vital needs such as the Forth Road Bridge and the development of Scottish air-lines and aerodromes will be subordinated to English interests."
The date of that is July, 1945, and it is signed "F. W. Pethick-Lawrence." I could not have expressed it anything like so well myself, and he has put my case perfectly. The noble Lord, the Secretary of State for India, whom we are glad to welcome back in our midst after so strenuous a tour, could not be described as an irresponsible member of the Labour Party. He was the Financial Secretary and Vice-Chairman of the Party. I do not think his enemies could describe him as a demagogue. He was sitting for a strong Labour constituency, and he did
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not require to stretch his conscience. He is an Englishman, brought up and educated in England. He cannot be accused, for one moment, of having a sentimental interest in Scotland. I do not think that he has even had a house in Scotland.
But, what is much more important than all that, the noble Lord, Lord Pethick-Lawrence, by his very high attainments has won for himself something of a unique position in Labour councils. He is regarded, I understand, as a philosopher and guide on the subjects of economics and finance. There is no one whom I am more proud to have on my side in this Amendment. There is no one whose judgment on this matter is more valuable, and his wide experience seems to me of even greater importance. There is no one who could give me more confidence in moving this Amendment. For these reasons, I move this Amendment feeling confident that the noble Lord will agree that it is well founded in fact. It is clearly an untenable proposition for the noble Lord, the Minister, to run a service for Stornoway and Inverness from London. This proposal arises from the demand of a very large body of citizens. A time may come when the noble Lord will wish to be popular, and it is in the national interest that Cabinet Ministers should redeem pledges specifically given at the time of an Election. I beg to move.
Amendment moved—
Page 1, line 12, leave out ("two") and insert ("three").—(The Earl of Selkirk.)
LORD POLWARTH: My noble friend the Earl of Selkirk has expressed the view of those of us who come from North of the Border very much better than I can do. I wish heartily to endorse everything that he has said. On the Second Reading of this Bill the noble Lord, the Minister, said that he did not think that we who come from Scotland had brought in anything new. The reason for that is that, throughout these discussions, we have put all our cards on the table, and we now have nothing new to bring forward. The trouble was that, throughout the discussions, the Government have refused to listen or to give any, what they are pleased to call, concessions to our point of view. The line that they have taken is that this has been nothing but a political stunt. I want to assure your Lordships that that is very far from being the case

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We are not trying to wreck this Bill. We honestly believe that the formation of a Scottish Corporation will be in the interests of the Bill and that this will be the most efficient way in which the policy of public ownership can be carried out. I think that that is all I need say now; there are a number of other noble Lords who wish to speak and we have a lot of Amendments to get through. I will, therefore, end by saying that what has been said by my noble friend the Earl of Selkirk does represent the true feeling in Scotland and that this is no trumped-up political move.
LORD TWEEDSMUIR: I will take up only a minute or two of your Lordships' time. I rise merely to say a few words to support, as strongly as I possibly can, what my noble friends the Earl of Selkirk and Lord Polwarth have already said. The Earl of Selkirk has expressed the feeling of the people of Scotland absolutely sincerely, and absolutely clearly. This proposal is entirely non-political in origin. One of the most respected Scotsmen alive, Mr. Tom Johnston, agrees, I thank, with every word the Earl of Selkirk has said. There is no section of the population of these islands that is keener to develop civil aviation, with all necessary vigour and enterprise, than the people of Scotland. There is no one in this House, I know, who more sincerely hopes that the scheme that this Bill lays down will be a success, than my noble friend Lord Winster. Scotland has a very big part to play, whichever way you look at it, from a practical point of view. Putting aside all other considerations, in Scotland, more than in any other part of the British Isles, internal flying will have the greatest scope, for there there are fewer roads and railways, more water to cross, and more cross-country journeys to be made.
I say to my noble friend Lord Winster that so far as flying in Scotland goes, it cannot be a success unless he takes into account the feeling of the people of Scotland. The vigour, the energy and the enterprise that the people of Scotland are capable of putting into this cannot possibly have full scope unless there is some measure of autonomy, such as has been laid down in the Amendment which my noble friend the Earl of Selkirk has now moved. I conclude by saying that this is the acid test as to whether we are to proceed further down the road to centralization
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or, to echo the words that have already been quoted of the noble Lord, Lord Pethick-Lawrence, to have a healthy measure of decentralization by which the man of and energy can rise to heights of fame and success in his own native part of this land, without being forced to migrate to the capital of the country.
VISCOUNT ELIBANK: I would like to support the Amendment which has been moved by my noble friend the Earl of Selkirk in such an eloquent and forcible way. He represents Scottish feeling in this matter, as do also my two noble friends who have just sat down—a feeling that has grown very strongly over the past few years. I think the growth of the feeling started over Prestwick, when that port, which had proved itself of the greatest value, which had been built up to such magnitude as to be able to take the largest types of airplanes and to be of enormous use in our air warfare, suddenly found it was uncertain whether it: was going to be used as an airport or not. At that time Scotland pressed, and pressed very hard, that Prestwick should be so used. At the same time, there arose the matter of the road bridge over the Forth, and the question of Rosyth also came into the picture. All the time Scotland fell, and Scotland now feels, that this is not a question of Party. It is not a Party matter at all. As my noble friend has said, it is not a question whether you are a Socialist, a Communist, a Conservative, a Unionist, a Liberal or anything else. It is a Scottish feeling throughout, that at the present moment Whitehall is trying to take control of the whole of their affairs. The noble Lord, Lord Winster, smiles, but it is true.
Under these schemes, nationalization and others, Whitehall to-day is trying to place her palsied fingers from London right up to the North of Scotland. If we do not protest, in the other place and in this House, goodness knows what will ultimately happen. I am sure that the noble Lord, Lord Winster, believes that he is doing this in the best interests of civil aviation, but I am equally sure he is not doing it in the best interests of Scotland. We in Scotland prefer St. Andrew's House to Whitehall. We are asking to-day that the noble Lord should agree to another corporation being set up with its headquarters at St. Andrew's House, instead of in Whitehall. There is

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no suggestion that such a corporation should not work in the closest way with the other corporations, but at least it would represent Scottish outlook, Scottish conditions, Scottish customs, and Scottish demands and wishes.
What is to happen to Edinburgh? Is Turnhouse to become a second port? Are the people of the capital of Scotland not to be enabled to get into their aeroplane at Turnhouse and fly to France or Switzerland—or Russia, shall I say?—or to any other place to which they wish to go, just as here in the capital of England Londoners can fly to those places from their own airport at Heath Row? We have heard nothing about Turnhouse, and we shall hear nothing about it if everything is laid in Whitehall, because Whitehall will be the centre of everything. I make an appeal to the noble Lord, the Minister for Civil Aviation, to agree to defer to Scottish feeling in this matter—a feeling that has been accentuated and exacerbated by the fact that he is giving to the south of Ireland what he will not give to Scotland. That, at least, appears to be what he is doing, although there may be an answer to it. I have studied the routes and, having regard to the swiftness of the aeroplane to-day, I cannot see that it matters whether you go via Ireland or via Prestwick. It is a matter of whim, and it is a matter of speed. Why advantages should be given to the south of Ireland, whose people individually helped us so much during this war but which, as a country, did other things which were disastrous for us, I cannot think. And there is no one in Scotland who can understand it. I have the greatest respect for this Amendment, which I support, and I hope that the noble Lord, Lord Winster, will agree to give way to Scottish feeling in this matter.
LORD FAIRFAX OF CAMERON: The three corporations proposed in this Bill are an enormous concern and I want to say a word purely on the decentralization of these corporations. The whole art of running such a large concern, or any large concern, is to decentralize it. That is true whether the concern is an airways corporation, a huge bank, or whatever it is. Without decentralization, any directives or instructions take ages to get from the top to the bottom, where they are meant to go, and any complaints or messages from the bottom take equally
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long to reach the top. Without decentralization you will get increasing trouble the whole time. Scotland is most certainly a perfect case for decentralization in the matter of civil aviation because it does not affect only Scotland. There is a large block of land which includes England and Scotland, and trouble arises when you add Scotland to England. If there is no decentralization in this matter now, there will have to be later, because any new organization grows particularly at the top. Decentralization must increase; it can never stand still. There will always be a decentralization movement every so many years. I beseech the Minister that instead of having to reconsider this matter in several years' time he will decentralize Scotland in this matter of civil airways now.
3.25 p.m.
THE EARL OF AIRLIE: I rise to support the Amendment standing in the name of the noble Earl, Lord Selkirk. I also do not give my support as a technical expert, because I have little of such knowledge, nor do I support the Amendment from any form of Scottish pride or sentiment, or from what is known as Scottish nationalism. I speak, like other noble Lords who have already spoken, as one who earnestly believes that there is a large and growing number of thinking men and women throughout Scotland to-day who view with the utmost concern and dismay the slow but nevertheless sure tendency of His Majesty's Government to centralize all control and Government direction in London. Most noble Lords from the north—with all due deference to the Minister—entirely disagreed with him when he said on the Second Reading of the Bill that an autonomous Scottish Airways Corporation would be uneconomical in management and operation and that it would run counter to world-wide conceptions of civil aviation. I gather that a similar view is held by the noble Lord's Party in matters other than aviation. Quite frankly, we in the north doubt very much whether the Minister for Civil Aviation has the requisite knowledge of local conditions to substantiate this Bill. In fact, those of us who have had experience in trying to co-ordinate the interests of England and Scotland in various arenas—and I think I may claim to be of one them—would say that exactly the opposite is the case.

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The Minister paid what I am bound to call nothing but mere lip-service to the desire of His Majesty's Government to study the interests of Scotland. He assured Scottish members of your Lordships' House that Scotland would have ample opportunity to make her wishes known. That opportunity has been with us ever since the Union of 1707, but how often are we listened to? The scats on the boards of the corporations in England which are offered to us, and the fact that the Minister has met deputations in Glasgow and Edinburgh, do not meet the feelings of those of us in the north. These problems must be studied on the ground, and they must be dealt with by men who live in the north, year in and year out, winter and summer. You cannot study these problems from a distance. Much the same thing is going on over the rationing of bread and oatmeal. I was rash enough to put down a Question, not for oral answer, about this. The conditions in those glens of Scotland are not considered. I do not want to go into another subject, but that is an instance of this sort of thing. To deal with another one; why did they set up that very controversial Board of which I had the honour to be chairman—the North of Scotland Hydro-Electric Board? Did not they appreciate the big problems which had to be dealt with by Scotland? You cannot have Scotsmen running down to attend the meetings of the Central Electricity Board.
As the noble Earl, Lord Selkirk, said, it is not mechanically possible to get efficient service from a Board in London three hundred to five hundred miles away. Service cannot be given or received at such distances. That is pure commonsense. We in the north are so bold and rash as to think—I hate to use the word, but it is the only one to describe it—that the chaos of the country's affairs to-day, although a certain amount is due to world conditions, is largely due to the endeavour of the Government to run everything from the centre, when it is obvious to every thinking man and woman, and especially to those who have business-trained brains, that the only hope of dealing with the very complicated problems of to-day lies in decentralization, and not in centralization. This Amendment is designed to correct this mistake so far as Scotland is concerned, but of course it does not only concern Scotland. As the noble Earl,
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Lord Selkirk, has said, it will affect Wales; it will affect the north of England, and the north of Ireland. This Bill, as far as Scotland is concerned, is, we surmise—I believe correctly—the forerunner of much of the future legislation of this Government, not only for Scotland, but for England, and others too. That is why I hope that noble Lords from every part of the country will accompany the noble Earl to the Division Lobby where I hope he will lead us.
I had not the opportunity of addressing your Lordships on Second Reading, and I have no desire to make a Second Reacting speech now, but I want to say one thing. Can we not awaken the country to a realization of the dangerous and perilous position into which we are drifting? I am quite sure that noble Lords opposite are not desirous of dealing death-blows to Scottish industry, but slowly though surely we are being mesmerized into the same state of mind as that into which Germany and other parts of Europe were mesmerized, so that eventually there was an absolute state of inertia and no power to express the will of the people. We are slowly but surely, through centralization, being bound hand and foot. This is not Socialism. Many of your Lordships on all sides of the House will have a great deal in common with some of the tenets of Socialism. This is not Socialism. It is National Socialism. It is Nazism—the complete and absolute control of the lives of the people, spiritually, socially and economically. By this measure we are beginning to tread the path which the Germanstrod. And where has it led that poor country? England may desire to tread that path, but I am confident that in trying to defeat this tendency, of which the Bill is an example, I am representing the feelings of the great majority of my fellow-countrymen in Scotland.
A warning which I would take this opportunity of repeating has already come from many quarters in the north, from responsible men who have held the most responsible positions, such as that of Secretary of State for Scotland, and if ignored it will lead to a conflict, I trust not physical, but so bitter that the Government will find themselves fought on every occasion and in every arena—in your Lordships' House, in another place, in the local authorities and in the district committees—until we free ourselves from

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this throttling and suffocating hold on the freedom of our country. I repeat that we in Scotland do not want centralization, but if you do not give us freedom to develop our own initiative and to run our own domestic affairs of which this is one—in my humble opinion you will drive us to that separation. It is wise to speak fearlessly and freely in order to prevent, if we possibly can, this creeping paralysis which is besetting and killing our country. I have very much pleasure in supporting the Amendment of the noble Earl.
THE MARQUESS OF ABERDEEN AND TEMAIR: In case the noble Lord, the Minister of Civil Aviation, may bring out the argument that most of the Scottish Peers who have spoken this afternoon come from the south of Scotland, let me inform your Lordships that the north of Scotland, both mid-north and far-north, is just as keen about Scottish control of civil aviation. The great fault of Whitehall is that it is in the south of England and not in the north of England. If the people in Whitehall were a little nearer the border of England and Scotland, they would hear even more than they hear now of the determination of the people of Scotland to have a large say in the management of their own affairs.
The noble Lord has favoured me with a letter as a result of the few words I said on Second Reading. He informs me that an offer is to be made to a company, which operates from a place called Dyce, to buy it out—at a price. Is not that absolute proof that it is wrong to say that Scotland cannot put up even an economic proposition? Aviation is carried out in the north-east of Scotland with great success, and on an economic basis. It seems to me that the argument that Scotland cannot carry out civil aviation on economic lines is proved to be absolutely false. Why should an offer be made for a concern which is not economic?
The Minister has made an enormous mistake if he thinks that we in Scotland are going to barter away our economic position. I believe I am speaking the minds of many noble Lords when I say that they will find it a matter of hard bargaining if they try to buy a concern which is in first-class order. My object in speaking to-day is to impress upon this House that not only in the south of Scotland, not only in mid-Scotland, not only in north Scotland, but even in the
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Hebrides and Orkneys and Shetlands, we are united. The Scots hang together. Here is an example of how little Whitehall knows about Scotland. We all know that there has been a great deal of talk about the rationing of bread. The Minister who was responsible for that in Whitehall forgot that in Scotland we eat oatmeal, and forgot to include oatmeal in the Order. Is that not absolute proof of how little is thought of Scotland in Whitehall? We are determined to make our voice heard, and to let it be known that Scotland does desire to manage her own affairs in accordance with the best traditions of any member of the British Empire.
THE EARL OF CRAVEN: I also support the noble Earl, who, if I may say so, made an admirable speech, which has certainly stirred up a lot of feeling. Only half of me comes from north of the Border, but that half I believe is my better half. I pay frequent visits to Scotland. I was brought up in the north of Scotland—in the far north, if I may say so, where people's blood is thicker because it happens to be much colder. I know the people of Glasgow very well indeed. I think I can claim to know the Press of Scotland, and I know what their feelings are. I suggest to the noble Lord opposite that he must take them into consideration as well as all these other people.
LORD REITH: The speech of the noble Earl, Lord Selkirk, was one of the most impressive I have listened to in your Lordships' House. It has, I submit, an application far beyond the present subject of discussion. One might perhaps sympathize with the Minister of Civil Aviation in that the storm has broken on his head, but there is no doubt that the noble Earl, Lord Selkirk, gave expression to discontents which have been brewing for a long time, and as to which His Majesty's Government will now, if not half an hour ago, realize that something has to be done. I also am a Scot, but I can look at this particular matter from the other point of view. I was associated with the B.B.C. for many years and a similar problem presented itself there. I was also the first chairman of B.O.A.C. I am not going to express myself now on the particular terms of the Amendment. I have no idea what the Minister now feels about it, but I suspect he will not agree with it. I listened carefully to the noble Earl, Lord

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Selkirk. It seemed to me that he made a particular demand and that if that were granted by the Minister he might possibly for the Moment be content. I do not know. He asked for resident, responsible executive management in Scotland. The Minister of Civil Aviation might be able to promise him that, and procure or direct that it should be given in some way or other by British European Airways Corporation.
LORD SEMPILL: I rise to support what has been said by the noble Earl, Lord Selkirk, and by the other noble Lords who have spoken. I hope the Minister will take special note of what has been said, and I particularly recommend to him the desirability of doing what has been suggested on technical grounds. Technically there is every argument in favour of the suggestion, and in addition there is the question of equity that has been stressed by previous speakers.
THE MINISTER OF CIVIL AVATION (LORD WINSTER): The noble Earl, Lord Selkirk, moved his Amendment in a very forceful speech, with very many shrewd thrusts in it. If I may say so with great respect, I very much admired the spirit of the succeeding speeches. But those speeches dealt to a great extent with matters outside the scope of these Amendments and of the Bill, and indeed with matters far outside the province of my Ministry. I think I shall best be serving the convenience of your Lordships if I address myself to the Amendments themselves and the reasons which inspire the Government in dealing with those Amendments. The Government policy is that there shall be three Corporations, each with its own very large area of operations, inside which the Corporation will be responsible for the great routes which have to be operated for a very vital air service. Each Corporation is restricted to its own area and does not compete with the other two Corporations. It would be anomalous to have three Corporations competing with each other and each using public money. The noble Earl's Amendments, if accepted, would set up a fourth Corporation to operate a small area internally with the power to use public money to compete with the other three Corporations.
Such an arrangement would have many objectionable features. It would entail that the Government in negotiations with
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other Governments and other airlines would have to take account of rivalry between our own air-lines. A most invidious and almost impossible task would be imposed upon the Minister if he had to decide between the competing claims of four Corporations. This is not simply a demand that Scotland should run her internal services. If it were, the answer would be that such services could be developed more effectively if linked with wider spheres of operation. To separate this small island into parts and to operate those parts separately would be economically and operationally inefficient. My noble friend behind me, in making a most forceful and valuable speech on the Second Reading of this Bill—if he will allow me to say so—referred to the fact that in civil aviation we are attempting to integrate and not disintegrate. While it is the Government's policy to work for internationalism in these matters, we cannot divide up the United Kingdom upon the basis of nationalism.
We are offering Scotland a full share of services which will be comparable with any service in the world. The Scottish division, to which reference has been made this afternoon, will be a reality. It will have a large share in planning Scottish services. I noted what the noble Earl said about residential executive management in Scotland. The Scottish division will have a large share in planning Scottish services. The Scottish Advisory Committee will advise the Minister and the Corporation, and will be represented on the board of British Overseas Airways Corporation. Scotland will have its full share of air services. Scotland will quite rightly more services in relation to population than any other part of the United Kingdom.
The Government does not resist a fourth corporation for Scotland out of any wish to flout Scottish sentiment or to ignore Scottish feelings in this matter. The proposal is resisted because we believe that a separate Corporation would not be in the true interests of Scotland, and not one operational or economical argument has been advanced in contradiction of that. It has been quite clearly stated in another place by the Lord President, and here by myself from the very beginning, that the Government cannot accept a proposal which cuts right across a fundamental principle of the Bill which we are considering. On the other hand the Lord

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President and myself, and other Government speakers, have made it equally clear that our arrangement in respect of Scotland will be implemented in a large spirit with every desire to meet Scotland's needs and wishes. In those circumstances I venture to ask the noble Earl, with great respect, not to press proposals which, I must tell him, the Government cannot accept, but to accept instead arrangements sincerely conceived in the interests of Scotland and which, if carried out whole-heartedly by all concerned, can inure to Scotland's great advantage.
VISCOUNT SWINTON: I should like to say a few words in reply to the Minister. I wish to address myself to the economic arguments in favour of the proposal which my noble friends have put forward and to suggest an alternative which may, I think, meet with their approval and which will, I am convinced, completely answer the Minister's allegation that any such proposal as this would be uneconomic. Before I do that, may I say that I have been asked by the noble Marquess, Lord Londonderry, to make his sincere apologies to the House for not being present at this debate? He has for years taken the most intense interest in the subject of civil aviation, and few have done more than he has to establish a separate Ministry. He asked me to explain to your Lordships the circumstances which prevent him being here. He is in Northern Ireland, engaged, at the request of the Air Ministry, in undertaking A.T.C. inspections there, he being the Commandant. He was extremely anxious to get over here in time for this debate and he applied for a seat on one of the corporation's aircraft, but he writes to me that unfortunately, although he was over there on Air Ministry business, he was unable to get one. I will quote from his letter.
"Notwithstanding what Ivor Thomas"—
I apologize for using a familiar expression, but he refers, of course, to the respected Parliamentary Under-Secretary in another place—
"said about accommodation in the air being plentiful between England and Northern Ireland, I cannot get a seat on the plane until some date in the far distant future."
I am sure the noble Marquess would not presume on his position as a former Secretary of State, but I think it is unfortunate that one who can contribute perhaps
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more than anyone, and certainly as much as anyone, in this House to this critical debate on aviation, should not be allowed to have a seat on a Government aeroplane to enable him to attend. I hope we shall get better service in the future, and I hope the Scottish Peers will be able occasionally to get a seat on an English aeroplane.
Let me now address myself to the arguments which were advanced by the noble Lord, Lord Winster, as to why any proposal to have a separate Scottish Corporation is impossible. The Minister said he was sure it was not in the interests of Scotland. It may be, however, that the Scottish Peers and the Scottish people—and in this I think they are at one—are as good judges of what is in Scotland's interests as the Minister and his Department. He said, "We could not possibly set up a fourth competing corporation," but he himself has said repeatedly to this House—and indeed the Bill makes provision for it—that he wants the power to set up more corporations. Sometimes they are called "associates," sometimes "allies" and sometimes "new corporations," but he takes power in the Bill to set up another corporation or any number of corporations if it is desirable to do so. There is nothing sacrosanct in this blessed trinity to which he adheres, with such dogmatic faith.
Why should it be a competing corporation? That is entirely begging the question. It is going to be owned by the State. You might as well say that the European Corporation—which is not yet born, but which is going to be born at some time—the South American Corporation, and B.O.A.C. are competing corporations, but the Minister says "No, they are not competing corporations because they do not run along the same routes." If the Minister will read the Amendment, he will see that my noble friends have not suggested that their corporation in Scotland should compete with the European Corporation in running on the same routes; they propose that they should run routes entirely on their own. If the Minister will read the Amendment he will see that careful provision is made to see that they shall not run competing services between England and Scotland and that those services should be left to the English corporation. What is proposed here is that this corporation should

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run the internal services in Scotland, of which there are quite a number, and services emanating from Scotland and running to Northern Ireland or to certain places on the Continent. The argument that that is going to be uneconomic and that it will result in some strange form of competition which will militate against the Minister's international arrangements is entirely untrue. The number of services which are going to be run will be a matter for international agreement.
Let me first of all dispose of the question of the internal air services of Scotland. There can be no possible question that that involves any international difficulty or any competition, because it obviously does not. Nor is a service from, say, Glasgow or Edinburgh to Stockholm or to Oslo going to compete with an English service; it is going to run quite separately, and the Minister will have to make an agreement with the Norwegian Government, or whoever it is, to run that service. In fact, he is going to do so. He has a number of such services down on his schedule, the greater part of which, incidentally, he inherited from his predecessors. If he is going to make this arrangement, what earthly difference can it make to his international arrangements if Service A is run by the Scottish Corporation and Service B by the European Corporation? I challenge him on this. In the form of agreement he has entered into with these foreign countries he leaves himself complete freedom to decide and to name the corporation which shall run the services. Therefore there is nothing whatever in the argument about this being contrary to some international arrangement.
I make this proposal. Let him agree to establish a subsidiary in Scotland, the whole of whose capital will be owned by the European Corporation. In any event the Government is going to own everything, whatever happens. I daresay that some of my noble friends do not like it, but they do not challenge it; they agree that the Government shall put up the money. Let that be a wholly-owned subsidiary. What is the story about the thing being hopelessly uneconomic? I suppose it is in regard to the use of aircraft. I agree that it is very wise to draw aircraft from a pool, but if this is a wholly-owned subsidiary, then the aircraft can be owned by the main corporation and the subsidiary can draw upon them. There can be any amount of common services.
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There can be a common training for the pilots and so on. The whole of those arrangements can be used and there will not be a penny of extra expense.
But there would be effective local knowledge, and I venture to say that if there is a Scottish board—this Scottish subsidiary as I suggest it should be—there will not be wasteful working in Scotland, but a great knowledge of what Scotland needs and what is the most economical way of running these Scottish services. I am not talking theory, and, as a matter of fact, I challenge the Minister on this. Actually at the present moment Scottish Airways which now operates—and I believe successfully—a number of the air-services in Scotland, is in fact a separate company. It has an entirely Scottish board of people who know all about Scottish needs. Its capital, I understand, is largely owned by the railway companies and the shipping lines. It has a local Scottish board. That is the whole essence of this proposal—that effective management shall vest in a local board of Scotsmen, or predominantly of 'Scotsmen, who know their own business and know what they want. It really is for the Scotsmen to say how far the Minister has met them.
There is all the difference in the world between a Division set up in Scotland—whether they have Scottish names or English names—but responsible in fact to Whitehall, sub-functionaries of the company in London or sub-functionaries of the Minister in London, and a Scottish subsidiary company with Scottish directors. It was said to my noble friend, "But you really ought to be completely satisfied. Look at this nice English board. It is going to have a number of distinguished Englishmen upon it, and one Scotsman shall come and sit on the board in London." With great respect, would it not be rather better, and more consistent with Scotland's interests, if you established this subsidiary company with a Scottish board and with one or two Englishmen coming down from your Ministry in London to sit on the Scottish board?
I do, with real sincerity, put forward this proposal. I think the noble Lord, Lord Reith, was putting forward very much the same suggestion in what he said to the House. It is not just Scottish sentiment. Even if it were, these are things to be taken into consideration; but this is much more than Scottish sentiment, it is

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Scottish commonsense, and I believe that good sense and good reason are in favour of this. I believe Scottish sentiment is perfectly prepared to accept—as they have to do, in any case—the subsidiary company with the Government owning the shares, and drawing upon the pool. But the real test is where the management is going to be. Will you give us a Scottish board with effective management of the services in Scotland, and the services radiating from Scotland? I believe it is economically sound to do this and I believe it would make the progress of this measure much easier. I do beg the noble Lord not to be too hide-bound in this trinitarian attitude which is adopted, and to take a reasonable line which will bring together the goodwill of Scotland and the good sense of administration.
4.4 p.m.
THE EARL OF ROSEBERY: I will detain your Lordships for only a moment or two, because you have had many Scottish speeches this afternoon, but I would like to urge upon my noble friend, the Earl of Selkirk, as well as on the Government, to accept this compromise. Personally, I should have liked to have supported the noble Earl right through, but this is a compromise which I think the Government really ought to accept. Whatever they may think about us in Scotland, they cannot for one moment disagree with the fact that every single speaker here this afternoon has spoken earnestly of what he believes to be right and for the best, not only for Scotland but also for aviation. There is no question of Party politics in this. The noble Lord, Lord Winster, said that some of the speeches were outside his province. That may be, but this happens to be the first Bill we have had which absolutely demonstrates the fact that we consider that the government of things to do with Scotland ought to rest with Scotland to a much larger degree. This is felt not only by all the Parties in Scotland but by everyone in Scotland, and I must confess that I am astonished to see no representative of the Scottish Office on the Front Bench to-day. The noble Lord, Lord Westwood, I believe, represents the Scottish Office. They must have known that this was arising. Only last week in another case I was able to say that we felt—apart from all politics—that we should have a greater say in what happens in Scotland.
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My noble friend, the Earl of Airlie, talked about the difficulties he had when he was head of the Hydro-Electric Board. I can also say that when I was Regional Commissioner for Scotland for several years during the war, time and again things came up which we were told to do—not in the way of actual defence, but in other respects—and I had to telephone down at once and say that some things which were workable in England were not workable in Scotland. Time and again things were put forward for England which were no good for Scotland. You cannot imagine, if you do not live in Scotland, the little things which crop up between the councils, the different local authorities and the Government, that must be really dealt with by the Secretary of State for Scotland or St. Andrew's House. The noble Lord, Lord Winster, is one against five million when he says, "I know what is right for Scotland, and the Scots do not." We all want better and, so far as possible, perfect administration for civil aviation in Scotland. We know perfectly well that we will not have it if it is done from Whitehall—it is absolutely impossible. Whitehall is unwieldy enough as it is, and to bring more and more to Whitehall simply means less and less proper functioning in Scotland.
I may say I was not very much convinced by the statement of the noble Lord, Lord Winster, that four corporations were impossible, whereas three were quite possible. Surely a subsidiary company would meet the case all round. In the last Government the noble Viscount, Lord Swinton, and myself arranged, as we thought, a method in which Scotland, so far as I recollect, dealt with Scandinavia and Norway without any competition from England. I see no reason why (except for this wild desire which nobody really interested in aviation wants, that everything should take place in London) we should not have control of our civil aviation in Scotland. I appeal to the noble Earl, Lord Selkirk, to accept the view of the noble Viscount, Lord Swinton, instead of his own, and I also appeal to the Government to do likewise.
LORD BEVERIDGE: I had not intended to intervene, but I hope your Lordships will allow me to do so, not to make a speech but to ask two questions

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of the noble Lord, the Minister of Civil Aviation, which would guide my vote if there should happen to be a Division upon this matter. My reason for intervening is that, like another noble Lord who has spoken, I come half from Scotland—I forbear to say whether it is the better half or the worse half; I can only say it is my name which comes from Scotland. My questions are these. The noble Lord, the Minister of Civil Aviation, spoke of a Scottish Division. I want to know how definite he is about that Scottish Division. I think the Minister spoke also of a Scottish Advisory Council. That, so far as I know, is not in the Bill. May I say that, perhaps because I come both from Scotland and England, I start quite frankly with a feeling of wanting something British and not Scottish or English to meet this. But because I come from Scotland, so far as my name is concerned, whether it is the better half of me or not, I am acutely conscious of the fact that Scottish interests do not get adequately regarded unless you have quite definite machinery for regarding them. Merely saving that there is to be a Scottish Division, when there is nothing about it in the Bill, and merely saying there is to be a Scottish Advisory Council is not enough. May I suggest that it would be very difficult for me to follow my natural inclination to support a British corporation in this matter as against either a Scottish or an English one, unless what the Minister says makes it certain that Scottish problems will, in fact, be locked at from the Scottish end in this matter, in so far as there is a Scottish end, and that that is in the Bill and not merely embodied in a statement of intention.
4.11 p.m.
LORD WINSTER: If the noble Viscount will excuse me, I will answer the two questions which have been put to me by Lord Beveridge at once. It has been announced several times on behalf of the Government in another place, and by myself here, that a Scottish Division will be set up, to which there will be a generous delegation of management in regard to Scottish civil aviation. It has similarly been announced that a Scottish Advisory Committee will be constituted, the chairman of which will be a member of British European Airways Corporation. It has further been announced that the management of aerodromes taken over by
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the State in Scotland, and also regional arrangements which Will be made for these aerodromes, are to be under Scottish management. The full details of all that is implied in these arrangements have not yet been announced because they constitute part of the functions of management, and, by the terms of the Bill, I, as Minister, am bound to consult the chairmen of the corporations upon precisely such questions of management.
Until this Bill has received the Royal Assent, the British European Airways Corporation cannot be constituted, nor can the board of that corporation be appointed. Until the board has been appointed and the chairman installed, I cannot discuss with him these matters of management involved in the Scottish Division and the Scottish Advisory Committee and the aerodrome arrangements. For that reason, details of what is involved have not yet been promulgated. It has been stated, clearly and definitely, that the intention is that there shall be generous delegation of managerial powers to Scotland, and the whole object of these arrangements is to ensure that Scottish wishes and interests are fully met. I hope that that answers the question which has been put by the noble Lord. Now, if I may, I will refer to what has been said by the noble Viscount, Lord Swinton. I join with him in most sincerely regretting that the noble Marquess, Lord Londonderry, is not able to take part in our deliberations to-day. There is no one whose views would be of more value, but I am a little puzzled to understand how Lord Londonderry's inability to get a seat on a plane from Northern Ireland to London becomes an argument in favour of a fourth corporation for Scotland.
VISCOUNT SWINTON: I was explaining to the House why the noble Marquess cannot be here; I Was not using his absence as an argument in that way.
LORD WINSTER: I am also explaining why I do not understand how Lord Londonderry's absence, through inability to get a seat on a 'plane, can be adduced in any way as an argument in a debate about the setting up of a Scottish Corporation.
THE EARL OF ROSEBERY: There are other Amendments in discussing which the noble Marquess would have been of use.
LORD WINSTER: No doubt. As regards my having power to set up other corporations, I have taken no powers in this Bill to set up other corporations. I have no power under the Bill to do so. The noble Viscount asked how would the corporation be a competing corporation; and he implied that I had not read the Amendment or I should not think it could be. I have read the Amendment. The Amendment proposed to Clause 2 by the noble Earl would clearly confer upon Scotland the power to provide regular air services between any two places both of which are in Scotland or between any two places one of which is in Scotland and the other of which is not in England or Wales. In other words it would give the Scottish Corporation power to run services between Scotland and any part of the world outside the United Kingdom, and consequently of competing all over the world with the other three corporations. As regards the noble Viscount's remarks about forming a subsidiary to B.E.A., I am of course dealing with what is in the Amendment. While it may be true that services can be segregated as the noble Viscount has suggested, in my opinion and that of my advisers the English and Scottish services must be operated as part of an integrated plan in the best interests of England and Scotland as a whole.
The noble Viscount's proposals might have a tendency to drive a wedge in the Amendment. They might even lead to the need for some superior body to co-ordinate the activities of English and Scottish services. My proposals are simpler and, I believe, form a far more effective way to achieve the result which the noble Viscount has in mind. I believe that the object which he has in mind in making his proposal will in fact be met by our proposals for a Scottish Division, a Scottish Advisory Committee, and what is proposed in regard to the management of aerodromes. I believe that these proposals will give a proper share of control and management to Scotland. It is because I so believe and because I wish Scotland to have her proper share in the management of her airlines that I have made these proposals, and for no other reasons. I believe that they will meet the needs of Scotland, and I believe that it is essentially inherent in them that they will in a very great measure effect that degree of decentralization which so many noble Lords have
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spoken of as being desirable. I believe it is inherent in the proposals that a great measure of decentralization will be effected. That being so, I can only repeat the appeal which I make, with great respect, to the noble Earl and to his supporters, to whose speeches I listened with close attention, that as it is impossible for the Government to accept the Amendment which he has brought forward he will consider how far he is able to accept the proposals which the Government is putting forward in respect of Scottish needs, and to assist in working them out.
4.20 p.m.
VISCOUNT CRANBORNE: I feel a certain diffidence in intervening in this debate, because I am ashamed to confess I have not a single drop of Scottish blood in my veins. But that ought, at any rate, to ensure my taking up a fairly impartial attitude. In any case, I think our debate has reached a point when the whole House is concerned, and this is not merely a question of Scottish Peers or non-Scottish Peers. I am very sorry that the noble Lord, the Minister, has taken up such a very uncompromising attitude in his second speech. In the first speech which he made to the House he developed at some length an argument about competing corporations. He will forgive me when I say that I thought it very great nonsense when I heard it; and that view was strengthened after I had heard the speech of my noble friend, Viscount Swinton. After all, as the Minister himself said in his second speech, although a fourth corporation would have power to compete all over the world with the others, all these corporations will be entirely owned by His Majesty's Government. It is inconceivable that His Majesty's Government, who are ultimately the complete authority, would allow these corporations to compete with each other. If that is what State Socialism is to mean, it is a melancholy commentary on that system. But I cannot believe that that will ever happen. It is a question of these various boards getting together and working out a modus vivendi; and that has always to be done in business.
It appears to me rather characteristic of the general attitude of the Government that they seem to see nothing between what may be called despotic monopoly and anarchy. Yet the whole basis of our social

729
system is ordered liberty, which is halfway between the two. And such a system is achieved by the willingness of everybody to compromise in the common interest. It is inconceivable that the difficulties to which the Minister refers could not be settled under such a system. If not, it is always open to the Government to make some re-arrangement at a later date. There is some force in the argument that there might be overlapping. We have a limited number of aeroplanes being drawn from the pool, and there may be competition from the four corporations to obtain these aeroplanes, which are in short supply.
For that reason, the proposition of the noble Viscount, Lord Swinton, seemed to me a valuable one, and if noble Lords who come from Scotland would agree to the Scottish Company being a subsidiary of the main English Company I should have thought that would meet the principal problem which we have to face. But, rather to my surprise, the noble Lord said that he cannot accept even that. I do not think that we can leave the matter there. I do not imagine that the noble Earl, Lord Selkirk, would wish to press his original Amendment to-day, and I suggest that he might withdraw it, on the understanding that he may give notice, if he wishes, that he will propose at a later stage an Amendment that a Scottish corporation should be established as a subsidiary company. Perhaps the Government will agree to that. If they do not, I think that we on this side of the House will feel obliged to press this matter to a Division.
4.22 p.m.
THE EARL OF SELKIRK: I would have been pleased to accept the modification suggested by the noble Viscount, Lord Swinton, for one reason, if for no other. The noble Lord, the Minister, was very poorly armed. He has explained that this does not cut across the fundamentals of the Bill, but he says that it is uneconomical and inefficient. Under the Government's own scheme it is proposed to spend £8,000,000 of Government money in subsidy. Yet a very much better scheme, which is operated in America, makes a profit of £10,000,000 a year. How can it be said that my proposal would lead to an uneconomical and inefficient situation when the Government scheme carries with it that £8,000,000 subsidy? The noble Lord said that the
730
best interests of Scotland will be served by allowing the services to be run from London. Might I ask why that argument was not used with Mr. Sean Lemass of Southern Ireland? The noble Lord said that he was a man of business, a man you could talk to, and I am surprised these arguments did not carry more weight. I am asked to withdraw this Amendment and to put it down on the Report stage. I do so now. I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause I agreed to.
Clause 2:
Functions of the three corporations.
2.—(1) Each of the three corporations shall, subject to the provisions of this Act, have power to provide air transport services and to carry out all other forms of aerial work, and may provide such services and carry out such work, whether on charter terms or otherwise, in any part of the world; and it shall be the duty of each of the said corporations to exercise those powers so as to secure that the air services which they may provide are developed to the best advantage, and, in particular, to exercise those powers so as to secure that the service provided by the corporation are provided at reasonable charges.
(2)Each of the three corporations shall have power, subject as hereinafter provided, to do anything which is calculated to facilitate the discharge of their functions under the preceding subsection, or of any other functions conferred or imposed on the corporation by or under this Act, or is incidental or conducive to the discharge of any such functions.
(3) The Minister may, by an order relating to any of the three corporations, define the powers conferred upon the corporation by the preceding provisions of this section so far as he thinks it desirable so to do for the purpose of securing that the public are properly informed as to the general nature and scope of the activities in which the corporation may engage; but nothing in any such order shall prejudice the generality of the powers conferred by the preceding provisions of this section.
Save as may be expressly provided by an order made under this subsection, none of the three corporations shall have power to manufacture air-frames or aero-engines or airscrews.
(5) The Minister may, by an order relating to any of the three corporations, limit the powers of the corporation, to such extent as he thinks desirable in the public interest, by providing that any power of the corporation specified in the order shall not be exercisable except in accordance with a general or special authority given by him.
4.24 p.m.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved in subsection (3) to leave out "may," where that word first occurs, and insert "Shall." The noble Lord

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said: I beg to move the Amendment standing in my name. This Amendment is linked with the next, which also stands in my name, and perhaps it would be convenient if I speak on the two together. The effect of these Amendments is to make it incumbent on the Minister to define the orders which he has made as to the powers of the corporations, so that the public shall understand what are the powers of the corporations. Secondly, my Amendment would ensure that the public will always be informed of these orders. I can think of only one instance when the public should not be informed about the civil airways in this country. The only instance that comes to my mind is in the case of a war. But we are at peace now, and when a war comes, measures are always taken to meet the new situation.
After all, the Corporations are the servants of the public. The public are always to be associated with the Corporations and it is in the interests of those who are to use the aircraft that they should know exactly what the Corporations can do for them, and should know their power and extent in the country. It has always been one of the bulwarks of the constitution of this country that the functions of any large body, such as the three Corporations will be, should be fully known and understood by the people so far as possible. In the particular subsection of the clause in question, the preceding provisions are mentioned. They are the powers which the Minister must define in the order that he issues to the Corporation. Those powers are fairly wide and certainly no ordinary member of the public would understand them, even if he had a copy of the Bill; and I doubt if he would have. The issuing of orders for the information of the public is important, and it will not be done in any way except that which I am proposing. It is in the Minister's interests that the public should have as much confidence as possible in the Corporations. That is only possible by having the public thoroughly familiar with the Corporations. Therefore, I hope that the Minister will feel that he is able to accept this Amendment.
Amendment moved—
Page 2, line 31, leave out ("may") and insert ("shall").—(Lord Fairfax of Cameron.)
LORD WINSTER: I fully appreciate the point which the noble Lord has in mind in moving his Amendment, but I hope that the explanation I shall give will satisfy him that the point is already met. As they are at present drafted, the clauses give to the Minister discretionary power to decide what should be published. If this Amendment and the next were accepted, it would deprive me of that discretion to decide what powers should be defined in any order which I am empowered to make under subsection (3) of the clause. The purpose of an order under that subsection will be to decide for the information of the public the principal powers of the corporations which are included in the general words of subsections (1) and (2).
Since it will clearly be quite impracticable to prepare a complete list of these powers, it must be left to the discretion of the Minister to decide how far an order should go in detailing such powers. But in reserving that discretion to the Minister, the idea is not for one moment to conceal anything from the public which it is right that the public should know. On the contrary, I assure the noble Lord I am most anxious that the public should have full information on these matters. In view of the fact that the noble Lord's Amendment would compel me to publish a great deal of matter which would be of no interest to the public, and as it is only sought to provide me with discretion as to what shall be published, I hope that that explanation will meet the point the noble Lord has in mind, and that he will not find it necessary to press his Amendment.
LORD FAIRFAX OF CAMERON: I am grateful to the Minister for his explanation, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved, in subsection (3), at the end to insert "or to provide hotels except where reasonable accommodation would not otherwise be available for passengers." The noble Lord said: I beg leave to move the Amendment standing in the name of the noble Earl, Lord Bessborough. I think the intention of this Amendment with regard to hotels is that the Corporation shall not extend their activities into other fields than their flying operations, and those activities which are necessary for flying

733
operations. The corporation are, I think, fully protected in this Amendment by the word "reasonable." I am sure that this Amendment does express what is in the mind of His Majesty's Government with regard to this side of its activities. I hope the Minister will see his way to accept this Amendment, and, if that is the intention of His Majesty's Government, to put it into the Bill. I beg to move.
Amendment moved—
Page 2, line 41, at end insert the said new words.—[Lord Fairfax of Cameron.]
4.36 p.m.
LORD WINSTER: Again I am happy to say that I find myself in general agreement with what the noble Lord has said, and in sympathy with the object of his Amendment. The fact is that I shall certainly not want the Corporations to go into the hotel business in a competitive way. Let me make that clear at once. I want to have these powers only in certain cases where suitable accommodation is not available for passengers, and in certain other cases which may arise where, although accommodation may be available in a certain spot, nevertheless it is operationally desirable that the Corporations should have accommodation in another place. Only in such circumstances as those would I wish to see the corporations going into the hotel business. As there is no intention of their going into the hotel business in a competitive manner, I hope that the noble Lord will not seek to press his Amendment.
VISCOUNT SWINTON: I must say that is a reasonable point of view. I have a good deal of experience of this matter. To give an example, I may point out that the 'planes often have to start very early in the morning. Therefore you must have the people on the spot. The 'plane may not start. Something may be done in these days of wireless telegraphy to get information through, but it becomes extremely difficult if you have to deal with people at a number of different places. I know of a good example of that kind of thing. In West Africa there was a certain amount of hotel accommodation, but we did not know whether it was going to be available or not. Some of it was quite good, and some of it was quite bad. We did not know sometimes how many people were coming in an aircraft until perhaps a few
734
hours before, with the result that it might be extremely difficult no accommodate the passengers. They were put up in a large number of places. It involved a great deal of transport, and sometimes putting them up in very undesirable places. In that sort of case, it is much more convenient to have a hostel on the spot. This is a case where commonsense has to be used. Anybody why started to run a hotel business in Paris or anywhere where hotel accommodation is available would be a fool, but in these border-line cases I think there ought to be discretion. I am bound to say that it has always been exercised very reasonably in the past, and I think we should be wise to leave it as it is, with the undertaking that has been given.
VISCOUNT ELIBANK: I should like to support what the noble Viscount, Lord Swinton, has said. I have had experience of these rather long flights. I know what it is to arrive—as indeed occurred on two occasions last autumn—and find no accommodation available at all. There are places where it is quite impossible to find hotels, and hostels must be put up as a substitute. As I oppose the Government sometimes, I rise in this particular case to support the noble Lord. Although I do not want to oppose my noble friend Lord Fairfax of Cameron, I do want to support the Government on this matter. I hope that, without any competition, they will, wherever necessary, put up hostels for the convenience of the passengers on their various lines.
LORD FAIRFAX OF CAMERON: I am grateful to the Minister, to the noble Viscount, Lord Swinton, and the noble Viscount, Lord Elibank, for making the position so clear. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
4.39 p.m.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved to leave out subsection (5) The noble Lord said:. This Amendment proposes to leave out a subsection which gives the Minister power to make- certain Orders which will limit the powers of the corporations. It raises the whole basic question of the powers which the Minister requires for the administration of his duties under this Act. I trust that your Lordships will agree that it will be for the convenience of the Committee and

735
will shorten the proceedings if I speak also upon the next Amendment to Clause 4. The issue there is the same as that raised by the Amendment I now move—the question of general powers possessed by the Minister as against particular powers. The Minister has framed this Bill so that it gives him particular and detailed powers. At present Clause 2 enables the Minister to take away from the corporations by order that which Parliament has granted and has defined in subsection (2) in Clause 2. At present Clause 4 gives the Minister detailed powers to tell the Corporations to stop doing anything they are doing, or to start doing anything he wishes them to do. On many occasions the Minister has assured us of his wish to have remote control only of the activities of these Corporations, and he has often declared that he only wishes to interfere on broad policy lines. We say that if that purpose is to be fulfilled, it should be done not by a definition in particular terms, but in general terms as was done in the Coal Industry Nationalisation Act.
The Minister put forward on the Second Reading of the Bill the argument that there is really no similarity between the general powers in the Coal Industry Nationalisation Act and the powers he asks for in this Bill, because under this particular Bill public money is going to be spent and he must have eventual control. We agree with him. It seems to me however that that argument is a fallacious one, because public money is going into the coal industry. If I remember rightly, the Coal Board are to have an Exchequer grant of £150,000,000 and we know that public money is going into the civil aviation enterprise in respect of capital sums and Exchequer grants to make up deficits. We also know that the coal industry and the civil aviation industry are to be self-supporting and are not to be burdens on the taxpayer. That is the declared object of the Government. Both in the measures of nationalization which are coming before Parliament, and in the particular case we are now discussing, we would ask the Minister to accept the view that his powers for control which he wishes to possess should be interpreted in more general terms. I beg to move.
Amendment moved—
Page 3, line 13, leave out subsection (5).—(Lord Balfour of Inchrye)
LORD WINSTER: I would like to deal with these two Amendments in the reverse order. As to the Amendment to Clause 4, I am very happy to be able to inform the noble Lord that I am completely convinced by his argument and I accept that Amendment. I shall in consequence accept a consequential Amendment which stands in the name of the noble Lord, Lord Fairfax of Cameron, on Clause 5. With regard to the Amendment now moved I do not think there is very much difference between us. The purpose of subsection (5) is to enable me by an Order which will be published to inform the public which of the powers of the Corporations are to be exercised only in accordance with the general or special authority given by the Minister. Any such limitation of the powers of the Corporations would only be imposed if considered to be in the public interest. I do consider it desirable, however, that the Minister should have power to make such an Order. It will be remembered that any such Order made under subsection (5) will have to be laid before Parliament and will be subject to a resolution. Subsection (3) says that I may define the powers and in that way I am able to inform the public of the powers. But the powers referred to in this subsection are not unlimited. Some of those powers will have to be regulated in the light of experience, and subsection (5) gives the Minister that power of regulation. Without that power of regulation the Minister would have to rely on subsection (4). I think it is preferable to be specific in this matter. As I say there is not a great deal between us on this matter, and if the noble Lord feels able not to press his Amendment I should prefer to have it that way
LORD BALFOUR OF INCHRYE: An Oliver for a Roland. The Minister has entirely convinced me, and therefore with the leave of your Lordships I beg leave to withdraw my first Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 agreed to.
Clause 4:
General powers of Minister in relation to the corporations.
4.—It shall be the duty of each of the three corporations to exercise the functions of the corporation in accordance with such directions as may from time to time be given to the

737
corporation by the Minister after consultation with the chairman of the corporation, being directions which the Minister thinks necessary in the public interest; and, without prejudice to the generality of this provision, the Minister may in particular, if he thinks it necessary in the public interest so to do, give to any of the three corporations, after consultation with the chairman of the corporation, directions to undertake or discontinue any activity which the corporation have power to undertake.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved to leave out Clause 4 and insert:
"The Minister may, after consultation with any of the three corporations give to such corporation directions of a general character as to the exercise and performance by each such corporation of their functions in relation to matters appearing to the Minister to affect the National interest and each such corporation shall give effect to any such directions."
The noble Lord said: I beg to move the Amendment standing in my name.
Amendment moved—
Page 3, line 38, leave out from beginning of section to end of line 6 on page 4, and insert the said new clause.—(Lord Balfour of Inchyre.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5:
Use of aircraft registered in His Majesty's dominions.
5. Without prejudice to their general duty to comply with directions given by the Minister under this Part of this Act, each of the three corporations shall in particular comply with such directions as may from time to time be given by the Minister, after consultation with the chairman of the corporation, for securing that, to such extent and in such cases as may be specified in the directions, aircraft used by the corporation in connection with any service operated by them shall be registered in some part of His Majesty's dominions.
4.45 p.m.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved to leave out "the chairman of." The noble Lord said: As the Bill stands at the moment the Minister only consults with the chairman of the Corporation, and the effect of this Amendment is that he should consult with the whole Corporation. The only thing the chairman can do when he is in consultation with the Minister is either to pass on the views of the majority in the Corporation or to pass on his own views. I am sure the intention is that the fullest of discussions should take place, and that the matter should be gone into as deeply as possible in every instance which affects
738
any of these Corporations and any of their doings. Just consulting with the chairman of the Corporation is not the same thing as a full discussion with the whole Corporation. Furthermore, each of the members of the Corporation is responsible individually. It is not just the chairman who is responsible; the members have a fairly heavy responsibility on their shoulders. It does seem right that each individual member of the corporation should have the fullest opportunity of letting the Minister know his own particular views. In this way the Minister can obtain a much better idea of the feeling of the Corporation as a whole and of the general situation. I hope the Minister will be able to see his way to accept this Amendment. I beg to move.
Amendment moved—
Page 4, line 11, leave out ("the Chairman of").—(Lord Fairfax of Cameron.)
LORD WINSTER: I am happy to accept this Amendment, especially as under the amended Clause 4—which has just been amended—consultation is to be with the corporations and not with their chairmen.
On Question, Amendment agreed to.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved at the end of Clause 5 to insert:
"(b) persons employed by the Corporation as officers or members of the crew of aircraft and such other classes of persons employed by the Corporation as may be included in any direction shall be given facilities to become members of reserve formations of the Royal Air Force and that such persons shall be given leave of absence for the purpose of attending training courses required by the said formations, without prejudice to the annual leave to which persons of those classes may be entitled under their contract of service."
The noble Lord said: The purpose of this Amendment is to ensure that officers or members of the aircraft crew, or other categories of men in the employment of the corporations, shall be given the opportunity of joining the auxiliary forces of the country, and in particular of joining the Royal Air Force; that having joined, they should be given such necessary leave of absence for training purposes as may be required, and that that leave of absence shall be granted without penalizing them in respect of the normal vacation that employees can expect to enjoy. The purpose of this Amendment is not to force anybody into any of the auxiliary Armed Forces, but merely to encourage that. I am sure the Government will wish to be the first body as an employer

739
to ensure as a matter of major policy that nationalized corporations play their part where suitable in their national enterprises. It is peculiarly appropriate that this should be the case in the air service. If my memory serves me correctly, in the legislation bringing Imperial Airways into being there was a provision that pilots and other members of the aircrews should in fact be members of the Reserve of the Royal Air Force. Times have changed, and I am not proposing such a strong provision. At the same time, I am sure your Lordships will agree that much of the success of the Royal Air Force in the last war was the result of having a fine Auxiliary Air Force and Air Force Reserve at the outbreak of hostilities.
The Imperial Airways pilots played a great part in active and non-active flying operations with the Royal Air Force, in addition to many of them continuing in their work in British Overseas Airways Corporation, as it became. Whether it be for Imperial defence or whether it be for the fulfilment of our international obligations under the United Nations Organisation. We shall need the most efficient and the most economical forces that can be provided, of the size which the Government of the day considers necessary to fulfil those commitments. I hope that the Minister will be sympathetically disposed towards this Amendment. I will be quite frank and say that it is perhaps not in the best place in the Bill. I would be very willing to see the position of such an Amendment in the Bill altered if the Minister felt it was more appropriate to insert it elsewhere, but I ask the Government most earnestly to ensure, by putting this into the Bill, firstly, that the Corporations encourage their personnel to join these Reserves, and secondly, having encouraged them, that they give them opportunities for training which will not penalize them in respect of their normal leave. I beg to move.
Amendment moved—
Page 4, line 15, at end insert the said words.—(Lord Balfour of Inchrye.)
LORD POLWARTH: As a member, be-for the war, of the Territorial Army, may I heartily endorse what the noble Lord, Lord Balfour of Inchrye, has said? It was a very great discouragement to those who would otherwise have joined the Territorial Forces to find that their employers
740
would not give them full leave of absence for the period of their training in addition to the normal leave to which they were entitled. I know that that discouraged a great many would-be officers and men from joining the Territorial Forces and I very much hope the noble Lord will see his way to accepting this Amendment.
LORD WINSTER: I regret having to offer any resistance to this Amendment because I am fully in accord with what it suggests. I only resist it because I am not quite sure that its inclusion in the Bill would be entirely appropriate to the Bill. I would like to deal with the matter in this way. I will ask the Corporations to give facilities to their employees to join the Royal Air Force Reserve formations and to grant additional leave of absence for the purpose of attending the appropriate training courses. As a matter of fact, I have endeavoured to have consultations with the chairmen over the week-end on this point. For physical reasons it has not been possible to consult them fully, but the communications which I have already indicate that there is no reason to anticipate that the Corporations will not concur in what is proposed. Leave of absence would, of course, be subject to the requirements of the Corporation services. It might, for example, not be practicable to allow a trans-Atlantic pilot to attend a particular training course.
The Amendment makes no mention of pay during training courses, and that matter is complicated by the possibility that Royal Air Force pay may be drawn during such courses. This question of pay is one which I shall examine with the chairmen of the Corporations. I think it is perhaps unlikely that aircrews will wish to join other Reserve formations of the Armed Forces, but other employees may wish to have facilities and leave to join Reserve formations of the Armed Forces, including the Royal Air Force. Possibly a corresponding assurance might be given to meet their case. That is how I would like to deal with the matter. I would like to have further consultations with the chairmen, and perhaps on some future occasion, either the Report stage or the Third Reading, I would be able to assure the noble Lord that what he seeks to achieve by his Amendment will in fact be done as an administrative matter by the Corporations.
LORD BALFOUR OF INCHRYE: I am grateful to the noble Lord for his assurance. As regards the difficulties of leave of absence, I quite appreciate that the Corporations on the one hand and the Service Departments on the other must reconcile the position. I know it was done very comfortably before the war as regards Royal Air Force training. The Minister kindly offers to see whether the Corporations' chairmen, and prospective chairmen, will give an undertaking. I would ask him—because this is a very important matter—whether he would go this far. If we do not put this provision into the Bill, will he give an undertaking that, having got the agreement of the chairmen, as I am sure he will, he will regularise the position by the issue of an Order under the Bill, which he has power to do? If he tells me on the Report stage that the chairmen are fully with us in fact and in spirit and that they are willing to receive an Order issued under this Bill, I will be happy indeed. Meanwhile, in the hope that the Minister will give that undertaking, I withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 5, as amended, agreed to.
Clause 6:
Corporations not to be exempt from taxation, etc.
(3) Without prejudice to the generality of the provisions of the last preceding subsection, nothing in this Act shall be construed as exempting any of the three corporations, or any person employed by any of those corporations, from compliance with the provisions of any Order in Council made under section five of the Air Navigation Act, 1936 (which relates to the licensing of air transport and commercial flying); and accordingly, where the Minister directs any of the three corporations to undertake any activity which would require the grant or variation of a licence under any such Order in Council, the direction shall in the first instance be a direction to apply for the necessary licence or variation.
LORD WINSTER LORD WINSTER moved to leave out from "flying" to the end of the clause. The noble Lord said: This Amendment is consequential upon the acceptance of the Amendment to Clause 4 moved by the noble Lord, Lord Balfour of Inchrye, this afternoon. I beg to move.
Amendment moved—
Page 4, line 30, leave out from ("flying") to end of clause.—(Lord Winster.)
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7:
Borrowing powers of the new corporations.
7.—(1) Each of the new corporations may, will the consent of the Treasury, or in accordance with the terms of any general authority given by the Treasury, borrow temporarily, by way of overdraft or otherwise, such sums as the corporation may require for meting their obligations or discharging their functions under this Act.
4.58 p.m.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved, in subsection (1), to leave out "with the consent of the Treasury, or in accordance with the terms of any general authority given by the Treasury." The noble Lord said: I beg to move this Amendment on behalf of my noble friend, Viscount Swinton. I think the Minister is quite cognizant of the issue raised, and I propose to say no more at this stage.
Amendment moved—
Page 4, line 36, leave out from ("may") to ("borrow") in line 38.—(Lord Balfour of Inchrye.)
LORD WINSTER: Under the circumstances I will reply to this Amendment as briefly as possible. The Government must have reasonable powers to supervise the borrowing operations of the Corporations and be responsible to Parliament for their borrowing activities. These are public Corporations, with the finances of the State behind them, and the Treasury must in the final resort be responsible for their borrowing. Moreover, the Treasury can be of very great assistance to them in their borrowings, in advising appropriate terms and in many other matters. But the Corporations will not have to go to the Treasury every time they want to borrow from the bank; the Treasury will approve a maximum figure, and an ample figure, up to which Corporations may borrow at approved rates without consultation with the Treasury. This has in fact been the practice with B.O.A.C. and it has worked satisfactorily. The Treasury have the final and over-all power, but there is no petty interference. The Corporations can borrow for temporary purposes without going to the Treasury. As there will be no interference and no limitation on ordinary day-to-day commercial transactions only an ample, generous upper limit beyond which they may not go in order to preserve the necessary Parliamentary control, and as experience has shown that no inconvenience is suffered by the Corporations

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under these arrangements, I hope the noble Lord may not feel it necessary to press this Amendment.
LORD BALFOUR OF INCHRYE: I think the Minister has given the assurance which it was the purpose of this Amendment to secure, namely, that the Corporations shall have what I call the usual overdraft banking facilities which we ourselves find so hard to obtain but which we are now granting to the Corporations. Provided the corporation is not interfered with in its day-to-day borrowings, and provided the Treasury approve an ample sum, I think the purpose of this Amendment is satisfied. On behalf of my noble friend, I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clauses 8 to 13 agreed to.
Clause 14:
Exchequer grants to associates of the three corporations.
14.‱(1) The Minister may, with the approval of the Treasury, make grants to any associate of any of the three corporations in consideration of promises made by the associate with respect to the performance, at any time before the first day of April, nineteen hundred and fifty-six, of functions similar to those which any of the three corporations have power to perform.
(2) It shall be a term of every agreement made by the Minister to make grants in pursuance of this section that no grants shall be payable under the agreement unless the associate comply with such requirements as may be imposed by the Minister for securing that one or more directors of the associate shall be a person or persons nominated by him.
(3) After the passing of this Act, no agreement shall be made by the Minister under section twenty-seven of the British Overseas Airways Act, 1939.
(4) In this Act the expression "associate", in relation to any of the three corporations, means any subsidiary of the corporation, or any undertaking which—

(a) is constituted for the purpose of providing air transport services or of engaging in any other activities of a kind which the corporation have power to carry on; and

(b) is associated with the corporation under the terms of any arrangement for the time being approved by the Minister as being an arrangement calculated to further the efficient discharge of the functions of the corporation.

LORD WINSTER: The next Amendment is a drafting Amendment. I beg to move.
Amendment moved—
Page 9, line 27, leave out ("comply") and insert ("complies").—(Lord Winster.)
On Question, Amendment agreed to.
5.1 p.m.
LORD POLWARTH LORD POLWARTH moved to leave out Clause 14. The noble Lord said: My object in moving this Amendment is merely to ask the Government to elucidate the position a little on this clause. As I understand it, it empowers the Minister to make Exchequer grants to any associate of the three corporations in consideration for services to be rendered by them. Who are these associates to be? Are they to be subsidiary companies, either taken over or to be newly formed, in which this country has a controlling interest? If so, it is good news, as it means that the Government envisage some sort of decentralization of control by the Corporations. On the other hand, are they to be companies based outside this country, such as the Anglo-Eire Company or the proposed Anglo-Italian Company, companies in which Britain is only to have a minority holding and the real control is to be in foreign hands? If that is the case, then I think we should be very chary of subsidizing these concerns with British money.
After all, every taxpayer in this country will be in some sense a shareholder, albeit an involuntary one, in each of these concerns. What guarantee will he have that his money will not go down the drain merely because of the incompetence of the particular foreigners who may have the controlling interest in these companies? I think your Lordships will agree that there are a number of foreign countries in whose skill of management we should not be wholly confident. The activities which these associate companies will be able to perform will be very wide. They have the power to carry out any of the functions which the Corporations have power to carry out, that is to say, any functions concerned in any way with the carrying on of their air-services. We might even find, for example, that our money was going to subsidize a chain of hotels in Ethiopia or a bus company in Morocco. In view of the uncertainty of these circumstances, I hope the noble Lord will be able to give us a little more satisfactory information. I beg to move.
Amendment moved—
Page 9, line 19, leave out Clause 14.—(Lord Polwarth.)
LORD WINSTER: The noble Lord has raised important matters in what he has said, and I will endeavour to give the

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explanation and elucidation for which he quite rightly asks. Especially in connexion with overseas operations, the corporations may wish to join with other operators as associates in running scheduled air-services under arrangements which would have to be approved by the Minister. Normally, associates will be undertakings in which a Corporation and an air-line of a Dominion or a foreign country are jointly concerned. For example, under the Anglo-Greek and Anglo-Egyptian agreements, associates may be so formed, or the Minister may approve of a Corporation taking up stock in an existing undertaking or entering into an agreement which would make it an associate. Clause 14 empowers the Minister, with Treasury approval, to pay grants to such an associate.
Section 27 of the British Overseas Airways Act, 1939, enshrines this principle, That section is not being repealed, but no more agreements will ever be made under it after this Bill has passed. When the Bill is passed, the position will then be that only one agreement made under that Act of 1939 will be in force, and that is an agreement with Tasman Empire Airways, in which the shares are jointly held by the United kingdom, Australia and New Zealand, who have agreed between themselves to pay Tasman Empire Airways a subsidy in proportion to their shareholdings. At Wellington early this year I myself concluded an agreement for the operation of trans-Pacific services in which the three countries are partners. This Amendment would destroy the power to make grants to this organization, and I am sure the noble Lord would be the last person to wish to do that.
Clause 14 (1) gives the power to make grants with Treasury approval to associates up to the 31st March, 1956. These grants will not increase the global figure of grants which is fixed by Clause 15. Clause 14 (2) resembles the British Overseas Airways Act, 1939, inasmuch as it provides that if grants are made to an associate, the Minister may nominate one or more directors. Subsection (3) provides that no further agreement will be made under that Act, although it will continue to apply to Tasman Empire Airways. Any future agreements to pay grants to associates will come under Clause 14 of this Bill. Subsection (4) defines the word "associate" as any subsidiary of a Corporation, or an undertaking in which the
746
Corporation owns the majority of the shares or can appoint a majority of shareholders, or an undertaking constituted for purposes similar to those of the corporation, and which has an arrangement with the corporation approved by the Minister, calculated to further the efficiency of the corporation.
If the noble Lord's Amendment were carried, it would deprive the Minister of the power which he may exercise, with Treasury approval, to make grants to associates in consideration of undertakings by associates to provide services similar to those which the corporation are empowered to provide. The powers which are conferred by Clause 14 are really essential to the development of our airlines, and I hope that with the explanation which I have given to the important points raised by the noble Lord, he may now not wish to press his Amendment.
VISCOUNT SWINTON: Of course the object of the Amendment was not to make this impossible, but to elucidate the position. Parliamentarily it is the only way in which we can do that, and the Minister has made a clear statement. These associate grants divide themselves into two classes. There are the ones in the Empire partnership, and about those we may all be perfectly happy and confident. Then there are the ones with foreign countries. I agree that it is absolutely necessary to have these arrangements in a number of places; it is most desirable. On the other hand, one is in this difficulty: that very often the British partner need not be more than a 50 per cent. shareholder, and in many cases he will be less. He may well be less than a 50 per cent. shareholder in the management, and the company is probably initially, and certainly may be progressively, more and more in the hands of the nationals of the country concerned. That, again, I think is inevitable. But it does make it very important that we should be careful in such a case that we enter into wise agreements, and, so far as we can, into limited agreements.
For example, it may be a reasonable thing to say: "We will go into this partnership and we will underwrite it to the extent of £50,000." If you do that, then you know the limit of your commitments. On the other hand, if we go into a foreign partnership on a basis of 60–40 and say: "We will underwrite the losses of this

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transaction to the extent of 50–50" (which is I think, what we do in the case of the Eire agreement) we take a minority position but apparently we bear an equal share of the losses. It seems curiously altruistic—to use a modest expression to describe that transaction. But it is a very different proposition if we say: "We will go into this and, whatever the losses may be, we will take 40 per cent. or 50 per cent. of those losses." The extent of the loss depends entirely on the efficiency of the management, and in the management again we may be in a minority. This may be inescapable. You have to make up your minds whether or not you are going to take part in a transaction of this kind, which is the way you get your influence in a country—it helps feeder services to your main trunk lines, and it may be a very useful way of introducing British equipment. I am fully alive to the imponderable advantages. At the same time, the risks are proportionately greater.
It would have been a wise thing to provide that the financial arrangements under any such agreements should be presented to Parliament. I do not mean that they should not be entered into before Parliament has assented to them—I do not think that is practicable. But I am rather a stickler for Parliamentary control. On the other hand, when you are doing a deal with a foreign Government or air line there comes a moment when you have to close. Unless you can close on the spot, you are probably done; for it may well be that somebody else steps in and closes while you are havering about. This question of devolution of authority may be argued in other connexions—we shall bear that in mind—but I do not think you can say that there must be prior Parliamentary approval.
I think it would be reasonable—and perhaps the Minister would consider putting this into the Bill at a later stage—that where financial commitments are made which involve us, with foreign countries, in paying out subsidies either of a defined amount, or, still more, of an undefined amount, a White Paper should be presented. There have been forty or fifty White Papers already presented to us, and perhaps the Minister will consider whether it might not be useful to add to that library by tabling yet another White Paper when he enters
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into an agreement which involves us in financial liability to a foreign country.
LORD WINSTER: I will certainly consider that.
LORD POLWARTH: In view of the assurance which the noble Lord, the Minister, has given, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 14, as amended, agreed to.
Clause 15:
Limitation of Exchequer grants.
15.—(1) The total amount of the grants made by the Minister under the preceding provisions of this Part of this Act in respect of any period ending with the thirty-first day of March, nineteen hundred and forty-seven, shall not exceed ten million pounds.
5.16 p.m.
THE EARL OF CRAVEN THE EARL OF CRAVEN moved to leave out subsection (1). The noble Earl said: I rise to move the Amendment which stands in my name. It is most important that your Lordships should know the estimates of the Corporations in respect of future financial commitments and revenues. I cannot understand why £10,000,000 has been specified as the limit of grants to be made for the period between the passing of this Bill and the end of next March. Lord Winster assured us, during the debate on the Second Reading, that it was his intention to scrutinise the expenditure of this £10,000,000 most carefully. I must point out to your Lordships that we are already half way through the present financial year. I ask your Lordships to turn to Page 13 of the Bill and look at Clause 22 (3) (a) and (b). You will see that the three corporations are committed to lay before the Minister before each planning period:
"a programme of the air transport services which the corporation propose to provide during that period and of the other activities in which the corporation propose to engage during that period."
At the same time, they are to furnish the Minister with an estimate of the receipts of the corporations, covering, again, the same period.
Now bear in mind that these considerations are laid down in the Bill and that they are among the fundamental obligations of the Corporations to His Majesty's Government when their administrative machinery is in full working order. Surely, it is just as important, at

749
this juncture, for the Corporations which are now in operation to furnish a similar report for the financial period between now and next March. The Minister may have some such report in his possession at the moment which he intends to give to us. I do not know. I would suggest that other corporations have been in a similar position to the three Corporations which are now going to be set up and put into operation, but—" no names no pack-drill—there have been considerable problems and troubles in connexion with them. Any layman like myself will fail to understand why the Parliamentary Secretary to the Ministry of Civil Aviation has such grave doubts as to the future of the revenue of the three Corporations, when it is more than obvious that the future of air travel, from the point of view of revenue, is almost a gilt-edged investment.
I invite Lord Winster to inquire into the prospects of obtaining an air passage to the United States, South Africa or even to places in such close proximity to this country as Paris or. Switzerland. If he does that—provided he does not mention that he is the Minister of Civil Aviation—he will find that to secure an air passage to the United States, for example, will necessitate waiting until, at the very least, next October, and probably a good deal longer than that, and he will have to make his reservations now. This does not take into consideration the grounding of Constellation aircraft; it does not take into consideration the conditions which would have existed in any case, whether Constellation aircraft were grounded or not. I am impressed most forcibly, also, by the fact that this grounding of aircraft may affect the amount of the grants which the corporations may ask for in the period under review. How far will B.O.A.C. be committed by the grounding by the Aeronautics Board of the United States of these aircraft? How far will B.O.A.C. be committed by the subsequent suggestion of the United States Government for the use of the Douglas C.4—an air-liner of the military type? If current reports are correct, conversion of this type of aircraft for normal passenger services will cost a considerable sum. Is this expense to be borne by the British Overseas Airways Corporation, in addition to the extremely high financial obligations which the corporation have already entered into with the manufacturers
750
of Constellation aircraft? I beg to move.
Amendment moved⁁
Page 10, line 1, leave out subsection (1)—(The Earl of Craven.)
5.22 p.m.
LORD WINSTER: I cannot accept this Amendment, but at the same time I am very much obliged to the noble Earl for affording me the opportunity to make an explanation on the point which the Amendment involves. Clause 22 (4) expressly provides for the financial estimates to begin on April 1, 1947. This gives time to shape the programmes; in the meantime the organizations and services have to be built up. The expenditure for 1947 will accrue for the whole year, and cannot be forecast during a period of such active development. I would ask to be excused from going into the question of Constellations and Sky-masters. As the noble Earl will agree, I think, they are a little wide of the Amendment. The effect of the noble Earl's Amendment would be to deprive the Minister of the power to make grants to any of the Corporations during the period between the passing of the Bill and March 31, 1947. That is a most important matter for the Corporations. During this period the two new Corporations, B.E.A. and B.S.A.A.C., will be establishing themselves, and B.O.A.C. will be expanding. It will be a period during which it is very important indeed that the Minister should be able to help them by making good any losses which are incurred on revenue account.
The sum involved is a maximum of £10,000,000 for the first year. I cannot be certain that it will not all be required, but we shall certainly try to ensure that the aggregate deficiencies of the three Corporations are below this total maximum of £10,000,000. It is necessary to fix a fairly high maximum to cover unforeseen contingencies, although it is very difficult to arrive at a reliable estimate of what the deficiencies will be. We cannot forecast the schedule of routes to be operated, or the volume of traffic which will be offered, or what will be the operating costs of new aircraft. Converted military types, for example, may be uneconomical to run, but we hope that future types will be economical and that their introduction will reduce the necessity for grants. Another point is that international

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fares have to be settled by agreement. Mail rates, too, have not yet been fixed. The period when grants will most probably be required is between now and March 31, 1948—a period in which there will be fewer modern aircraft available than one would like, and when routes will be in process of development and traffic will be built up. The maximum of £20,000,000 has therefore been fixed for this two-year period. In each of subsequent years the maximum will be £8,000,000. I hope that these sums will not be expended but it is necessary, for the reasons which I have given, to have the maximum fairly high. I beg the noble Earl to remember, also, that all the financial transactions involved will be dragged to the light of day. Under these circumstances I hope that the noble Earl may not wish to press his Amendment.
THE EARL OF CRAVEN: I thank the noble Lord for his kindness and his explanation. I note his remarks about Constellation aircraft—a subject which must have embarrassed him very considerably. I beg leave to withdraw.
Amendment, by leave, withdrawn.
LORD WINSTER: The next Amendment is a drafting Amendment. I have to apologize for my grammar.
Amendment moved—
Page 10 line 3, leave out ("any") and insert ("the").—(Lord Winster.)
On Question, Amendment agreed to.
5.27 p.m.
LORD STRABOLGI: I understood from my noble friend the Minister of Civil Aviation that he hopes to be rather below his "ceiling" of £10,000,000 in each of the first two years and of £8,000,000 subsequently. I gather from that that if he makes a saving in any one year he will not be able to carry it forward to the next year. As many of your Lordships know, this is a very old subject of controversy. The old system with Estimates—which I think are comparable—has been that you cannot carry over what you save in one year. As a result of this, the Departments concerned have made sure that they spend the money in the current financial year. That is a very bad system. I have seen several attempts made to alter it, but I am sorry to note that it persists here. I wonder if my noble friend could not in future make
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some better arrangement with the Treasury whereby a saving one year is carried forward to the next.
VISCOUNT SWINTON: I had not intended to intervene again, but I cannot resist the temptation offered me by the noble Lord who has just sat down. He talks about saving. It is really a terminological inexactitude. What we are discussing here is the expectation that the Government-run Corporations, instead of operating like the free corporations, who are prepared to operate without any subsidy, will make a loss of £10,000,000 a year for two years and £8,000,000 a year ad infinitum—or until this Government come to an end. The noble Lord says he is quite horrified because the Minister of Civil Aviation says "I am not quite sure, in my first year, if I shall manage to lose £10,000,000. It will be better next year, when Socialism gets into its stride. Then I shall lose the full £10,000,000. We have been a bit slow getting to work. The companies are not yet formed, and I do not think I shall quite hit my target of losing £10,000,000." The noble Lord, Lord Strabolgi, is horrified—
LORD STRABOLGI: Will the noble Viscount forgive me—I think he is mixing up capital expenditure and calling it losses.
VISCOUNT SWINTON: No, I am not. I am talking of Clause 15, which has nothing whatever to do with capital expenditure. Clause 15 relates to Exchequer grants which are going to be given each year in the form of subsidy because the Socialist Corporations have lost £10,000,000 a year. The noble Lord says that if you do not lose £10,000,000 this year, if you fail to reach the £10,000,000 target loss this year, you ought, at any rate, to be able to carry over anything you fail to lose, and lose £12,000,000 next year; that, if your loss is only £8,000,000, you may do better next year and lose not merely £10,000,000 but £12,000,000 next year. I remember that Sir Michael Hicks-Beach once said that the most awful form of wasteful Government expenditure was voting a sum of money as if you gave a man a biscuit and he went round everywhere looking for a dog to give it to. This is a good example of that. It is not only a yearly biscuit, but there is to be a carry-forward of the biscuit.

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Some of us might like to carry forward the bread ration from one week to another. That is perhaps the kind of biscuit we would like to carry forward. I do hope that the Minister will stand firm and exercise a self-denying ordinance in this matter, and say for these great enterprises to lose £10,000,000 each year is enough.
Clause 15, as amended, agreed to.
Clause 16 agreed to.
Clause 17:
Reserve funds.
17.—(1) Each of the three corporations shall establish a reserve fund, and shall, at such times as the Minister, with the approval of the Treasury and after consultation with the chairman of the corporation, may direct, carry to the credit of that fund out of their revenues such sums as he may so direct.
5.32 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved in subsection (1) to leave out from "fund", where that word first occurs, to the end of the clause and insert:
"(2) The management of the said fund, the sums to be carried from time to time to the credit thereof, and the application thereof, shall be as each corporation may determine:
Provided that—

(a) no part of the said fund shall be applied otherwise than for the purposes of the corporation; and

(b) the power of the Minister to give directions to the corporation shall extend to the giving to them, with the approval of the Treasury, of directions as to any matter relating to the establishment or management of the said fund, the carrying of sums to the credit thereof, or the application thereof, notwithstanding that the directions may be of a specific character."

The noble Viscount said: This is a more serious matter. I am sure that the Government will accept this Amendment, because it is on the lines of the Amendment which the Lord Chancellor was good enough to devise for us on the Coal Industry Nationalisation Bill. On that Bill we all agreed that, in the matter of reserve, all the initiative must rest with the Board of Management, that that was their function, but that there must be an overriding power of the Treasury. Therefore, the noble and learned Lord on the Woolsack was good enough to design this form of clause, which said that the management of the fund and the sums to be carried to it and the application thereof, should be as the Corporation
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determined, and he added two provisos: one in the interest of the public, that no part of the said fund should be applied otherwise than for the purposes of the Corporation; and the other that there was an overriding power of the Minister and the Treasury to give direction.
I need not go into the Amendment in detail, because I have followed, I think with complete exactitude, the drafting of the Lord Chancellor. The cases are, I think, absolutely on all-fours. I feel sure that the Government will accept the Coal Industry Nationalisation Bill precedent with regard to the creation and management of the reserve fund. I beg to move.
Amendment moved—
Page 10, line 21, leave out from ("fund") to end of Clause and insert the said new subsection.—(Viscount Swinton.)
LORD WINSTER: I am much obliged to the noble Viscount for putting down this Amendment. I am in general agreement with what he has said. There are so many Amendments to be discussed that I am sure the noble Viscount will forgive me if I do not at length go into the argument which he has advanced, but merely state at once that I accept the Amendment.
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18:
Application of revenues.
18.—(1) Any excess of the revenues of any of the three corporations for any financial year over the total sums properly chargeable by the corporation to revenue account for that year, including in such sums (without prejudice to the generality of that expression) sums credited under the last preceding section to the reserve fund of the corporation, shall be applied by the corporation in such manner as the Minister, with the approval of the Treasury and after consultation with the chairman of the corporation, may direct.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved on page 10, line 31, after ("year") insert ("of the Corporation").
The noble Lord said: This is a drafting Amendment in order to distinguish the financial year of the Corporation from any other financial year. I beg to move.
Amendment moved—
Page 10, line 31, after ("year") insert ("of the Corporation").—(Lord Fairfax of Cameron.)
LORD WINSTER: If the noble Lord will be kind enough to look at Clause 49, he will find that "financial year" is

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defined as meaning, in relation to any of the three Corporations, a period of twelve months beginning on the first day of April. The expression "financial year" occurs several times in Clauses 9 to 22 of the Bill. In view of that, I think that the noble Lord will agree that his Amendment is, in fact, unnecessary, and perhaps he would wish to withdraw it.
LORD FAIRFAX OF CAMERON: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clauses 19 and 20 agreed to.
Clause 21:
Accounts and audit.
21.—(1) Each of the three corporations shall keep proper accounts and proper records in relation thereto, and shall prepare in respect of each financial year a statement of accounts in such form as the Minister may, with the approval of the Treasury, direct.
5.37 p.m.
LORD WINSTER LORD WINSTER moved at the end of subsection (1) to insert
"being a form which distinguishes between the provision of air transport facilities upon scheduled journeys and the provision of other air services."
The noble Lord said: This Amendment concedes much of what is contained in the Amendment put down by the noble Lord, Lord Balfour of Inchrye, to Clause 21, page 12, line 29, and perhaps the noble Lord will agree that I might discuss the points with regard to that Amendment in what I have to say on the Government Amendment. Foreign operators are under no obligation to publish information of their profits and losses for each main route. I am sure the noble Lord would not wish that we should publish figures which might be helpful to our competitors. The Provisional International Civil Aviation Organization will collate statistical and financial returns from all those countries which have agreed to supply them. But they make no provision for dividing of expenses of each particular route. In fact, the division of costs under specified routes has not yet been discussed, and, until all operators agree to give information with regard to their separate routes, I feel that our Corporation ought not to be required to do so.
Moreover, the proportion of these general overhead expenses which a Corporation should allot to each item of its expenditure is largely conjectural, and, until a reasonably uniform system of such allocation has been agreed upon, I think that comparison between one route and another will inevitably be very largely fallacious. The Corporation will be able to make a sufficiently close working approximation of the cost of each route, but to some extent it must be guesswork, and guesses would be inappropriate in an Act of Parliament. I should like to make it clear that I am not endorsing guesswork. We must have the most accurate figures possible for the operation of a scheduled route and for the operation of chartered services. The figures, of course, can be challenged when the Ministry of Civil Aviation Estimates are presented, but I agree completely with the noble Lord that it is desirable to distinguish in the presentation of accounts between scheduled and chartered services. I move my Amendment accordingly. "Best commercial standards," however, is rather a vague phrase for inclusion in this clause. I hope the noble Lord will agree that I have endeavoured to meet what I feel to be is his main point, and that being so, I hope he will not wish to press the whole of his Amendment.
Amendment moved—
Page 12, line 29, at end insert the said words.—(Lord Winster.)
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE had given notice to move at the end of subsection (1) to insert:
"being a form which shall conform with the best commercial standards and which shall distinguish the air transport services in connection with each of the main scheduled routes and the charter services and other form of aerial work of the Corporation."
The noble Lord said: The noble Lord has met me to some extent on the points raised in my Amendment but there are nevertheless three differences between the noble Lord and myself. The first is as regards the omission from his Amendment of "best commercial standards"; the second is the omission of detailed accounts of individual scheduled routes, and the third is that in my Amendment I put "charter services and other forms of aerial work of the corporation," and the Minister has put in, as an overall provision, "of other air services." As to those three

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differences, I am convinced straight away by the Minister of the inadvisability at the present time of publishing profit and loss accounts if our foreign competitors do not do so. On that particular point, therefore, there is no difference between us. With regard to "best commercial standards," I would remind the Minister that this was accepted by the Government in the Coal Industry Nationalisation Act.
We set a good deal of store upon the fact that Parliament and the public should be reassured that "best commercial standards" will be followed, and that if "best commercial standards" are not followed, the Government can be challenged. The third and last difference is "charter services and other forms of aerial work." The Minister has very largely conceded the point I wish to make by saying that he feels that charter work should be separated from the running of scheduled air routes. But I very carefully put in the words "charter services and other forms of aerial work" because the corporations may be engaged for instance on tuition work. I do think we should have the three headings. First, we should have scheduled routes; secondly, we should have best commercial standards for all accounts, and, thirdly, the accounts should include scheduled routes, charter work and other forms of aerial work. If the Minister will be so good as to consider those two points between now and the Report stage I shall be happy to withdraw my amendment.
VISCOUNT SWINTON: I would like to say that this exactly follows the parallel in the Coal Industry Nationalisation Act. I am sure the Minister agrees that "best commercial standards" have been left out by an oversight. In that Act we did not go into the different districts—the analogy here would be to take route by route—but it was agreed that coal-getting and the different ancillary things would be distinguished one from another. You cannot ally charter flying with training and you certainly cannot lump the two together. Therefore we find it not only desirable but necessary to do what my noble friend has suggested.
LORD WINSTER: I think there can be no objection to the phrase "best commercial standards." In view of what has been said, we will go into that matter and come back to it again on the Report stage. I will also give consideration to what the noble Lord has said with regard
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to the other two matters, the question of detailed accounts and of chartered services. I think my Amendment should be inserted in the Bill.
LORD BALFOUR OF INCHRYE: We can do one of two things. The Minister might withdraw his Amendment now and move a later Amendment incorporating the two points he is going to consider, or if it is agreed to now it will simply be amended on Report.
VISCOUNT SWINTON: I think the desirable thing would be to withdraw the Amendment, as it will only have to be amended on the Report stage.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
Clause 22:
Annual report and periodical returns.
22.—(1) Each of the three corporations shall, as soon as possible after the end of each financial year, make to the Minister a report dealing generally with the operations of the corporation during that year.
(2) The Minister shall lay a copy of every such report before each House of Parliament.
5.44 p.m.
THE EARL OF CRAVEN THE EARL OF CRAVEN moved in subsection (1) to leave out "generally". The noble Earl said: I hope that your Lordships will be in agreement that we should leave out the word "generally" from this subsection. Surely it is hoped to achieve a more accurate report than a general one; or is the report to be more in the form of a guide to the uninitiated? Many people in the country will be most interested in a detailed report, as no doubt your Lordships fully realize from previous proceedings. There will obviously be a number of international agreements into which the three corporations will have to enter. A detailed report to His Majesty's Government will ensure that those responsible for the administration of the respective corporations have been sufficiently far-sighted to make the required arrangements from both the financial and the operative standpoint. I mention this because any general report would present the possibility of glozing over the mistakes which may affect the finances of the three corporations.
Amendment moved—
Page 13, line 5, leave out ("generally").—(The Earl of Craven.)
LORD WINSTER: I am obliged to the noble Earl. There is substance in what he has said. I realize the force of his remarks and I am happy to accept the Amendment.
On Question, Amendment agreed to.
LORD POLWARTH LORD POLWARTH moved, after subsection (2), to insert the following new subsection:
"(3) The report for any year shall set out any direction given by the Minister to the Corporation during that year unless the Minister has notified to the Corporation his opinion that it is against the national interest so to do."
The noble Lord said: Clause 4 of this Bill, as your Lordships will remember, permits the Minister to give any of the corporations, after consultation with their chairman, directions which he thinks necessary in the public interest. The object of this Amendment is to ensure that if the Minister does give any such directions, both Parliament and the public shall know about them, and the Minister will be called upon, if necessary, to justify them. Your Lordships will remember that we sought to insert an Amendment in the Coal Industry Nationalisation Bill that directions given by the Minister should be made public by him in Parliament. While the Government could not agree to this Amendment, the noble and learned Lord, The Lord Chancellor, was good enough to produce one which put a statutory obligation on the Coal Board to publish the facts in their annual report, unless, of course, the Minister declared that the publication of the facts would be contrary to the national interests. I think we must admit that there may be cases of national emergency when it would not be a good thing that these directions should be made public. We feel that the relationship of the Minister of Civil Aviation to the corporations is really very similar to that of the Minister of Fuel and Power to the Coal Board. In the circumstances we hope the Government will accept this Amendment. I beg to move.
Amendment moved.
Page 13, line 9, at end insert the said new subsection,—(Lord Polwarth.)
LORD WINSTER: I find myself in agreement with what the noble Lord has said. It seems to me quite reasonable that where in consequence of a divergence of opinion between the Minister and any of the Corporations the Minister issues a direction to that corporation that that
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direction should be included in the annual report which the corporation is required, by Clause 22, to make to the Minister, a copy of which the Minister is required to lay before Parliament. I think it right that a divergence of opinion upon a matter of substance should be so included, and I am happy to accept the noble Lord's Amendment.
On Question, Amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23:
Reservation of certain air services to the three corporations and their associates.
(2) In this section the expression "scheduled journey" means one of a series of journeys which are undertaken between the same two places and which together amount to a systematic service operated in such a manner that the benefits thereof are available to members of the public from time to time seeking to take advantage of it.
(3) Nothing in this section shall restrict the right of any person—

(a) to carry passengers for the sole purpose of instructing them in flying or the duties of aircrews; or

(b) to carry passengers or goods for the sole purpose of providing an air ambulance or rescue service.

LORD WINSTERhad given notice that he would move in subsection (2) to delete "section" and insert "Act." The noble Lord said: I put down this Amendment in anticipation of the noble Lord, Lord Balfour of Inchrye and myself being able to come to agreement upon a previous Amendment relative to "best commercial standards" and so forth. As I am now going to move an Amendment of that character at the Report stage, I will not now move this Amendment standing in my name.
LORD FAIRFAX OF CAMERON LORD FAIRFAX OF CAMERON moved, in subsection (2), after "undertaken" to insert "in accordance with a publicly advertised timetable irrespective of traffic offering." The noble Lord said: I think the effect of this Amendment is quite clear, and there are two reasons for putting it down. The first one is that as the definition of "scheduled journey" stands now it is, I venture to submit, capable of trespass on what might be the definition of "charter services." The words used to define a scheduled journey are "…which are undertaken between the same two places and which together amount to a systematic service operated …." Under that wording

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it is, I submit, not necessary to run regular services. If there was an aeroplane due to leave point A at a, certain time, and only one passenger turned up, I do not believe there is anything in that wording which would stop the operators of the aeroplane not flying it, if they did not think the journey was going to pay. What is lacking is anything about the services being regularly run each time without taking any notice of how many passengers there are. I think one must make one's comparison with bus, train and other services.
The second reason for putting down the Amendment is to protect the public and to ensure that they can look in a timetable, see there is an aeroplane leaving a certain place at a certain time, and go to that place, knowing that there will be conveyance for them and that it will not necessarily be cancelled at the last minute. If aeroplanes are to assume the same importance as a means of travel as trains, buses, ships and so on, timetables should be published to assure prospective users that a particular areoplane will leave at a particular time. I think that those must be published and that aeroplanes must be bound to leave and arrive at the times stated in the timetable. I beg to move.
Amendment moved—
Page 14, line 21, after ("undertaken") insert the said words.—(Lord Fairfax of Cameron.)
THE EARL OF CRAVEN: I wish to support the noble Lord, Lord Fairfax of Cameron, in this Amendment. I think it is most important that a timetable should be published and that aeroplanes should run to schedule. It is essential for the public safety and everything else, and also to ensure that an opening shall be allowed for charter services and that sort of thing to take any passengers which any of the three corporations are unable to transport.
LORD WINSTER: An Amendment similar to this one was moved in Committee in another place, and I am very much obliged to the noble Lord for having put it down again here, because it will enable me to make some explanations on the points involved which may be of service to your Lordships. Scheduled services are reserved to the corporations. The corporations may also undertake charter work because they must be free
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to undertake charter for anyone who wishes to use them for that purpose. Nevertheless, private operators are left with a very wide field in civil aviation, and the question arises of assisting private operators to know exactly how wide that field is. The Government's view is that the way to proceed is by defining a regular scheduled journey, leaving by implication all other services open to private operators. That the way in which we decided to proceed—to get the best definition, of a regular scheduled journey that we could, to reserve that to the corporations, and to leave everything else open to the private operators.
This Amendment seeks to base the definition of a scheduled air service on the publication of a timetable. Perhaps I may tell the noble Lord that I considered doing this when we were drafting the Bill, but I then realized it would not serve the purpose desired. It is quite possible to have a systematic series of journeys which are net advertised by a timetable. A timetable is not an essential ingredient of a systematic service, and I cannot accept the suggestion that the publication of a timetable is necessary to the definition of a scheduled service. To do so would, in my view, torpedo the Government's policy, and although I quite accept the fact that noble Lords opposite do not altogether like that policy, I am sure they will agree that I cannot accept an Amendment which would torpedo it. It would be far too easy to get round such a provision. The public would quite quickly get to know that a private operator was running a service twice a day between A and B at a particular time, without any timetable being published.
I regret that I cannot possibly accept the Amendment, which strikes at the root principle of the Bill, namely, that scheduled air services are reserved to the corporations and their associated companies. If the publication of a timetable is to be regarded as constituting a scheduled journey, then any journey performed without it; existence being notified in a timetable would not be a scheduled journey, and it would follow that any private operator could run just as many regular services as he liked provided he did not publish a timetable. I appreciate the noble Lord's wish to assist in arriving at precision, but I hope he

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may agree on reflection that the Government have proceeded in the right way by putting down the best possible definition of a scheduled air service and leaving all the rest open to private operators.
VISCOUNT SWINTON: I only intervene to safeguard the future position. I think it may well be that this Amendment is not appropriate. I can see that the test of a timetable is not necessarily the best and only test. I only wanted to intimate that if my noble friend decides to withdraw his Amendment, by doing so we do not in any way accept what is to us a quite extraordinary proposition, namely, that if an aeroplane runs with any degree of regularity, that is to say, unless it is going on a wholly unexpected and chancy journey, that service has to be reserved to the monopoly corporations. I only wanted to make it perfectly plain that in withdrawing this Amendment, we are not giving away what we certainly feel is vital and on which I hope we may make satisfactory progress to-morrow.
LORD FAIRFAX OF CAMERON: I am grateful to the Minister for his explanation of the situation, but he did mention the word "regular" several times. I can see nothing about "regular" in the description of a scheduled journey. It says, "a series of journeys … which together amount to a systematic service." I do not consider that that amounts to a regular service. I should be grateful if the noble Lord could enlighten me a little on that matter.
THE EARL OF IDDESLEIGH: If I chartered an aeroplane to run, shall we say, to the celebrations of July 14 in Paris, I understand I could do that and invite a party of friends to come, and I could do it next year and go on doing it the year after. That would not be a regular scheduled service.
LORD WINSTER: If you charter your aeroplane and take your friends with you, so long as you do not throw the aircraft open to the public it is all right.
VISCOUNT SWINTON: You may collect the money from your friends—it will not be illegal?
THE EARL OF IDDESLEIGH: It is the same dilemma as one is under when one shares a taxi.
VISCOUNT SWINTON: I should really like to get an answer from the noble Lord. He has said that a person may charter an aircraft and fill it with his friends, but what I want to know is, may he collect a quota from his friends towards the cost of the charter? I am asking a perfectly serious question, and it is very important. The noble Lord said we should all know quite clearly, as soon as this Bill was through, whether we were sailing near the wind or not. As I propose to do this form of sailing, I would like the position to be made clear.
LORD WINSTER: I wish to be extremely accurate in these matters, and as we shall be dealing with these questions in our proceedings to-morrow I prefer to look at the two points which have been put in order to furnish a completely accurate answer.
LORD FAIRFAX OF CAMERON: In view of the assurance from the noble Lord, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT SWINTON: I beg to move that the House do now resume.
Moved, That the House do now resume.—(Viscount Swinton.)
On Question, Motion agreed to.
House resumed.

PETROL FOR AIRCRAFT.
LORD POLWARTH: I beg to ask the question standing in my name.
[The question was as follows:
To ask His Majesty's Government whether, in view of the forthcoming increases in petrol allowances for motor vehicles, they propose to increase petrol allowances for private and club-owned aircraft, and aircraft operated by charter companies.]
LORD AMMON: My Lords, it is proposed to increase the allowance of civil aviation fuel for aircraft in this country, and it is hoped to make an announcement shortly.
LORD POLWARTH: I thank the noble Lord for his reply. May I ask him how soon we may expect this announcement?
LORD AMMON: As soon as ever it is possible to arrive at a decision.

MANCHESTER CORPORATION BILL [H.L.]

  RHODES TRUST BILL [H.L.]
  Returned from the Commons agreed to with Amendments; the sari Amendments considered and agreed to.
  Acquisition of Land (Increase of Supplement) Order, 1946, dated 22nd July, 1946, made by the Treasury under subsection (3) of Section 60 of the Town and Country Planning Act, 1944; Laid before the House (pursuant to Act) for affirmative Resolution and referred to the Special Orders Committee.
  House adjourned at five minutes past six o'clock.