CIVIL AVIATION.

HL Deb 21 July 1948 vol 157 cc1101-71

3.14 p.m.

VISCOUT SWINTON rose to call attention to the policy of His Majesty's Government on civil aviation, including the supply and use of aircraft, and to move for Papers. The noble Viscount said: My Lords, as this is, I think, the first time when the noble Lord, Lord Pakenham, has appeared in full array to do battle in defence of his Ministry, I am sure that the whole House would like to take this opportunity of congratulating him on his elevation. He has, of course, many natural advantages, but in this post he certainly has one adventitious advantage—he is buying in at the bottom of the market, for the stock of civil aviation, I regret to say, could hardly stand lower.

That leads me naturally to ask, as my first question, what are the financial results of these three nationalised Corporations—since we had their last accounts before us? I have given the noble Lord notice of the few questions which I propose to ask, and I think this first question is a very reasonable one to ask. If these had been public companies which had lost what would have been the equivalent of a large part of their capital, a receiver would have been appointed, and he would, of course, have made his report promptly and regularly to the creditors and shareholders. We, the taxpayers, are both the creditors and the shareholders, and therefore we are most anxious to know what are the latest financial results. I would observe that I hope the noble Lord and the Corporations will not lag behind the National Coal Board. The Coal Board, by raising prices of coal by many shillings, has got out of the red and has hastened to assure us that' it is not only paying interest on its capital but is hoping for a small surplus in addition. I do not know whether the air companies will be able to say the same, but I hope the noble Lord will be able to tell us what the position is.

I would like to ask him also what is the position of the charter companies, and what is his policy to be vis-à-vis those companies. If the three Corporations are unable to carry out services on various routes which the charter companies are willing to undertake, are those charter companies, in the interests of the public, to have a fair field and a free run on those routes which the Corporations cannot cover? In that connection I would ask this further question. If the charter companies are to have such opportunities, I hope that they are not going to be called upon to pay a commission or a "rake-off" to the nationalised undertakings. I have heard about something of the kind but I am not sure whether I am right. I have heard that something of the sort has sometimes been done in the past, and that charter companies have been charged such a commission or "rake-off" All I can say is that if that were done in free enterprise, in private business, it would be called a "racket."

Now I want to ask one more question, and that is about the Aer Lingus Agreement. Your Lordships have commented upon that Agreement before now. It certainly is a very odd one. Under it, we subscribe half the capital and the Eire Government subscribe half the capital. We have, as I understand it, only 40 per cent. of the voting power and representation on the board. Therefore, we have no control. But we have to carry 50 per cent. of the loss, if loss there be. I would like the noble Lord to tell us what profit or loss has been made out of the services run under that Agreement up to the present time, whether the Agreement is still in force and, if so, whether it is running us into a loss, and whether we have power to cancel it.

Before I come to the main theme which I wish to develop to-day—that is, the supply of aircraft and the nature of the aircraft—I want to put to the noble Lord one or two questions about airports. First I want to ask: Is the policy which was laid down by Mr. Churchill, when we were all together in the National Government, that there ought to be as much common user as possible of Service aerodromes for Service and civil needs, being carried out? I announced what seemed to me a very wise directive by Mr. Churchill in March, 1945. It was as follows: … It is essential, in the interests of economy, that we should make the maximum combined use of airfields. We have got to spend a great deal of money, in any case, in making airfields right, providing equipment which is necessary for blind flying, and so on. It stands to reason, however, that after the vast amount of money which has been spent on airfield in this war, if we can have an airfield which can be a Service airfield, made use of by either the Royal Air Force or the Fleet Air Arm, and can also be made use of for civil aviation as a civil airport, then obviously there will be a very great inducement to use that airport. I should like to be assured that that policy is in fact being carried out. It will not prejudice the Air Force in the least, because in the event of war the Royal Air Force and the Fleet Air Arm would take over complete control of all airfields and all flying.

I have one other question, about congestion at airports. This is not a criticism of the courtesy of the officials of any Department. I have to travel a good deal by air and I find the officials admirable, whether they are officials of of the Department, the Customs or the security staff. Nobody could be more tactful or more helpful. But I did encounter this the other day. Four or five aeroplanes had come in at the same time, and there was a great crowd of people to be passed through. Although there were a number of people dealing with passports and currency questions, there was a bottleneck of one young lady who had to deal with all the tickets. She did not deal with the tickets like the fellow at the top of the Tube steps; she had to take them, mark them, give back the return portions and then fill up the usual, and I am sure necessary, form, I think in duplicate. When the tickets of one load of passengers had been collected, she had to put them together and tie them up. The result was a great deal of congestion and delay, although she was certainly doing her best. Perhaps that could be remedied by having another collector. I am sure that out of the staff he has now assembled in his "Empire building," which is nearly at the 6,000 mark—it was well over 5,500 in the last return—the noble Lord would be able to spare one or two for that purpose. Because it is delay before getting in the air and after coming down from the air which makes air travel less popular than it ought to be. It is that which gives rise to the somewhat cynical slogan: "If you have time to spare, travel by air" We really ought to speed it up in any way we can.

I want to occupy the rest of the time at my disposal with the question of aircraft. First, I am going to turn to the hardy annual: Who is to order the aircraft? Is it to be the Minister of Civil Aviation? Is it to be the Minister of Supply? Is it to be the Ministers in their joint and dual capacity? Or is it to be the Corporations which have to use them? Is that yet decided? The decision may be a little academic if, in fact, all the orders have been placed. But the principle that the companies who have to use the aircraft should be the people who order them must be right. The Government can give all the necessary general directives—directives as to "Fly British," how the principle is to be applied and how many dollars they are to spend. The Government could and should still place orders for experimental prototypes, working closely with the Corporations and the aircraft industry. That would not in the least prevent the normal arrangement which is always applied in these matters, that when a machine goes into commercial production, the appropriate amount of development charge can be recovered in the selling price of the aircraft.

I come to the question of types of aircraft. I shall have to deal with both the short-term and the long-term policies. Whichever we are dealing with, I venture to put to your Lordships three principles which I think would command general acceptance: first, the aircraft should be efficient and economical; secondly, we should seek to avoid in any Corporation a multiplicity of types; thirdly, so far as practicable, we should fly British. The corollary on Commonwealth routes is that it is of enormous advantage in operating and maintenance costs if we can fly the same aircraft. I hope to-day that the Minister will tell us that decisions have been taken both on short-term and long-term policies. These decisions are long overdue. When we contemplate the great armies of the Ministry of Supply and the Ministry of Civil Aviation engaged in a friendly, but internecine, combat, one is almost tempted to exclaim with the minor prophet, "Multitudes, multitudes, in the valley of indecision!" I should like to commend to the noble Lord a letter which I received last week while still winding-up a few of the final commitments of a not unsuccessful corporation called The United Kingdom Commercial Corporation. I will not specify the country, but the letter came from our agent in that country. He said this: In fact, when our case was put up to the Under-Secretary of State at the Ministry of Finance, the latter, after keeping the file a month, returned it to the competent office for futilities, showing thus a spirit of unsolvency and tergiversation.

Bearing in mind the principles I have ventured to lay down, may I offer some observations and suggestions, first of all, on the short term and the aircraft at present in use? When we look to the European routes, the position is fairly satisfactory. The Viking has proved a valuable replacement of the Dakota. It is in great use, although ordered only in 1945. I had some share in ordering it, indeed, in forcing it perhaps more than, strictly speaking, was within my Ministerial powers. However, I pushed it and it is doing extremely well, not only on our air routes but in export business to several continents. The Tudor is a much less happy story. The original Tudor orders go back to 1943 or the beginning of 1944, long before there was any Ministry of Civil Aviation. When the Commonwealth Air Transport Council met in May, 1945, the estimated dates for the Tudor I were that the first prototype would fly in June, 1945, and the production of the aircraft would begin between September, 1945, and May, 1946. For the Tudor II, the first prototype was due to fly in November, 1945—it actually flew in March, 1946—and production was to start almost concurrently. A very large number—85 were ordered—were scheduled to be produced between November, 1945, and the end of 1946. Of course, those dates wore very important, not only to B.O.A.C., but also to the Commonwealth partners, because the whole essence of the transaction was that we should use the same planes if we could get them out in time. Neither Tudor I nor Tudor II have materialised as aircraft which are accepted for service.

But the remarkable thing is that another Tudor aircraft, the Tudor IV, which was ordered much later (ordered, I think, late in 1945), was produced much earlier and operated successfully by the British South American Airways on the South Atlantic route. I cannot resist the conclusion that this, was because the airline company and the manufacturers worked harmoniously and intensively together to reach practical finality. I may add that this was the only Corporation which did not make a loss on its first year's working. That close relationship between the airline and the manufacturer is fundamental; there must be give and take, and real cooperation on both sides. In saying that, I am not just being wise after the event. I venture to repeat what I said to your Lordships last January: …during the short time that I was at the Ministry of Civil Aviation, I impressed upon the makers the importance of these aircraft both to the Commonwealth air partnership as a whole and for the Atlantic, and the importance of recognising that producing a civil aeroplane (derivative from a bomber though it was) was quite a different thing from building a fleet of bombers. At the same time, I impressed no less forcibly, and perhaps more forcibly, upon B.O.A.C. that they really must take rapid, firm and practicable decisions as to the layout and equipment of the plane.

We have just received (I do not know how many of your Lordships have had time to look at it) the second Courtney Report on the Tudor II. It is dated June 23 and, in view of this debate, perhaps we might have, hid it a day or two earlier. It certainly bears out what I said in January. There has been—I am sure your Lordship will agree with me if you read the Report—unbelievable delay and vacillation by B.O.A.C, and I think by the Ministries, over the modifications to Tudor II. A new colour scheme was introduced. They did not like the colour of the hangings. That held it up six months. I am not exaggerating. If your Lordships will look at paragraph 25 of the Courtney Report, you will find it says this: Unfortunately this latter undertaking was not carried into effect. That was to get on speedily with the co-operation between B.O.A.C. and the makers. The Report then says: For instance, in October, 1945 a new colour scheme and a re-arrangement of the layout of the dressing rooms was proposed by an industrial designer introduced by B.O.A.C. The former requirement"— that is, the change in the colour scheme— entailed the purchase of new materials in the delivery of which there was a six months' delay. That is on an aircraft which it was absolutely vital to get out and test in use. The Report continues: Again, in December, 1945, B.O.A.C. put forward a request for a new type of chair, convertible into a bunk, which had to be designed, developed and approved before production could be carried further. The net result was a deadlock over modifications and as to who was to carry the finance. The Report says, in paragraph 30, that the deadlock went on from the middle of 1945 until January, 1948. The Ministry, or Ministries, certainly had difficult decisions to take, but those decisions would have been easier, and could have been taken more quickly, if the Ministry had exercised pressure on B.O.A.C. and the manufacturers to work together in the way in which the B.S.A.A. and the makers were doing. Time was vital, because the justification of the Tudors was delivery in time to fill the gap. If there was—or if there is to be—a decision to switch and cut losses, that ought to have been taken sooner. We shall hear to-day what decisions have been taken.

I think your Lordships will agree that there must always be a right and strong desire to buy British and to fly British in these nationalised lines. If the Tudor IV—that is the Tudor which is flying so successfully on the South American route—was economic on the South American route, why is it not economic on the Commonwealth routes? This is an entirely different question from the North Atlantic route. I want to know what consideration was given to using the Tudor IV on the Commonwealth routes to East Africa, South Africa, India and Australia. Was the Tudor IV flown over those routes? As soon as it was known that Tudor IV was a suitable aircraft for South America, and acceptable to B.S.A.A.—and acceptable to them on a highly competitive route—why did not the Ministry and the B.O.A.C. concentrate on seeing whether Tudor IV was not suitable on the Commonwealth routes? They could have done that very rapidly. All the data on the Tudor IV accumulated by A. V. Roe, the makers, by B.S.A.A. and by the Ministries, was available. If the trial showed that the Tudor IV was suitable for the Commonwealth routes, A. V. Roe could have concentrated on making that type. If my premises are correct, is there any reason why this should not still be done? The North Atlantic presents features and problems peculiar to that route. On the North Atlantic route it must have been clear long ago that Tudors could not do the job. Was not the real issue there—but only there, on the North Atlantic route—to use American aircraft, or not to fly at all?

With the full approval of the National Government I laid down the policy of flying British. That has a two-fold advantage. It occupies and trains the aircraft industry; although the numbers in the larger types of aircraft which civil aviation can give to an aircraft industry can never be great. The backbone of the aircraft manufacturing industry must be the large Service orders. That is certainly true about the larger types. Fortunately, that is not so with the small types, like the Dove and others that are coming forward, and I think we are doing very well in those. The occupation and training of the aircraft industry is the first advantage. The second advantage is that it advertises British aircraft to foreign buyers, and holds goodwill in overseas markets. But, speaking for myself, I am bound to say that these advantages are subject to these considerations. It is no good advertising an aircraft if it is unfitted for the job which it is required to undertake. You do not give to design staffs, or workers, valuable experience to put them in the van of progress by putting them to work on obsolete or obsolescent aircraft. I will return to that point in a moment when I deal with the vital importance of concentrating on the new types.

If the policy of flying British is subject to these limitations, as I am bound to say I think it is, it does not mean that, because one particular British type does not fulfil the requirements, we ought to abandon the policy. On the contrary, it makes it all the more important that the Ministry, the Corporations and the aircraft industry should devote all their energy and combined endeavour to produce an aeroplane that will do the job. That is where I find the Tudor story so baffling and so unsatisfactory, and where it seems to me there is such an unhappy contrast between the successful evolution of Tudor IV as the result of the practical co-operation of the manufacturer and British South American Airways, the user, and the apparent lack of real co-operation between B.O.A.C. and the makers of Tudor II.

I return now to the North Atlantic route. What has happened? B.O.A.C. bought, and have now in use, a number of Constellations. I understand that recently they have taken over more from Eire, or are about to take them over. Is that right?

THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)

Yes.

VISCOUNT SWINTON

I do not know how many that makes, but I am told it is something like eleven. You will have now eleven Constellations, and I think it must be accepted that for the Atlantic the Constellation is the aircraft' which can carry much the biggest payload; it is much the most effective aircraft at present in use over that particular route. But then the Ministry have done the most extraordinary thing. One of the three conditions of successful operation—and it is very important—is that you should not multiply types. Now they started with the Constellation for which they had to pay dollars.

THE LORD PRIVY SEAL AND PAYMASTER - GENERAL (VISCOUNT ADDISON)

Not the Irish ones.

VISCOUNT SWINTON

I am delighted to think that they get some without paying dollars, but they have to pay dollars for the others. The noble Viscount will follow what I am going to say in a moment. They appear also to have placed an order for Boeing Strato-Cruisers. I simply cannot understand that. I do not know, but it may be that when the Boeing Strato-Cruiser comes out—I do not know whether it is yet flying—it may be a very good aircraft. But surely there can be no sense in buying two sets of American aircraft for this route. You have the Constellations, so why add another type with all the extra expense of maintenance I and spares? It docs seem to me a most curious policy.

Now the Minister will tell us to-day of the new decisions. Are we to have the American aircraft, the D.C.4, which is being manufactured in a United States-owned factory in Canada? The Press has been full of this topic and anticipates that we are. If the Ministry do propose to buy those aircraft, I would ask these questions. How do those D.C.4s compare competitively in payload and performance with Constellations on the North Atlantic route? What proportion of the Atlantic traffic could B.O.A.C.'s existing Constellations and the ones, they are acquiring from Ireland carry? What justification is there for introducing another American type of inferior performance, with all the extra cost of maintenance and spares? Has the Strato-Cruiser order been cancelled? If the D.C.4s are to be bought, how many? What are the firm delivery dates which are being offered and guaranteed? Are they to be used exclusively on the North Atlantic? Then, what happens to the Tudors I and II? If the Tudor IV is suitable for the Commonwealth routes to South Africa, India and Australia, will it not be sound policy to convert the Tudors I and II—upon which so much money has already been spent—into Tudor IVs and to use them on those routes? Finally, what is the position about the Hermes? What is its capacity and performance; what is the expected date of delivery, if any have been ordered, and is this to be used on the Commonwealth routes?

So much for the present, the short-term policy. I have only a few words to add about the long-term policy. I hope the Minister will give us definite information about the new British types, the jet aircraft, upon which our hopes of achieving equality, if not ascendancy, are based. From the point of view of the aircraft industry and civil aviation, every effort should be made to concentrate on the new jet planes, and it is enormously important that airframe construction should keep pace with engine progress. That, of course, carries with it all the problems of pressurisation at the very high altitudes at which these jet aircraft will fly in order to give their maximum efficiency. Here rapid progress and firm decisions are vital. I think the last statement in this House on the matter was that made by the noble Lord, Lord Nathan, in November 1946. I cannot find that we have had one since. He said this: As to the jet successors to the Tudors, I assume the reference is to be types known as the Brabazon III and IV. The Brabazon III is the subject of a contract with Messrs. A. V. Roe and much work has been done in the design stages. It is becoming increasing necessary; however, to ensure that the type shall be so designed as to take advantage of the rapid progress in power plant development made during the last two years. The arrangements have recently been reviewed from this standpoint and the design is being actively reshaped on that basis. I am not sure what "actively reshaped" means. The noble Lord went on: The Brabazon IV is, of course, the De Havilland 106. Much work has been done in the research and development necessary to determine the basic information against which the design will proceed… Messrs. De Havilland are now giving definite shape to the basic features of the design, and the Ministry of Supply is negotiating a production contract to ensure that the whole project moves forward as rapidly as possible. We are similarly pressing forward with the big Saunders-Roe flying boat, for which a production order has been placed. Then, in the shorter term picture, we have the Hermes IV as well as the successor to the Vickers-Viking. I fancy that other statements have been made in another place—in fact, I know that they have. I am speaking only from memory, but I seem to recollect that in another place the date was suggested of 1951 or, it may be, very early in 1952, when these jet aircraft would be in use.

I would ask: What is the story since the noble Lord, Lord Nathan, told us that? What further orders have been placed? What are the estimated delivery dates, and what aircraft is it proposed to assign to what particular route? I would just add this. The dates of the first trial flights of these aircraft are vitally important, because with new types there should be the maximum of flying hours so that teething troubles may be eliminated before the bulk deliveries are made. The Minister has not been long in the saddle, and I have deliberately avoided raising a large number of detailed questions to-day. I have tried to confine myself to the outstanding questions of policy, which must have been engaging his attention from the moment he took over, and to certain matters of fact, all of which must be continuously under review by his Department. We always hear the noble Lord with pleasure, and I hope that to-day we shall hear him with profit. I beg to move for Papers.

3.50 p.m.

LORD PAKENHAM

My Lords, the noble Viscount has said some very friendly words about me, and wished me luck. I am grateful to him. I do not know what I this House would be like without the noble Viscount. To my mind, on many occasions the whole place revolves round him—and sometimes he makes our heads revolve; but this afternoon he has been in a very mellow mood. I will not say that in my Department there will be a sigh of relief, but at any rate he has been generous and friendly. I would thank him, in addition, for having given me notice of a number of the points that he has raised. I will try to answer a good proportion of them in the course of my speech, but others I will leave to my noble friend who leads the House and who is to reply at the end. There are various matters to which I should have liked to devote attention, because already, although I have been in the saddle only a short time, I take a keen interest in them. I hope that if I do not do more than touch on them it will not be thought to be due to lack of appreciation of their importance. The whole question of flying clubs is one; and if there is anything I can do to help them I will gladly do it, so far as I am permitted by an all-powerful Treasury. I should like also to refer to the National Joint Council for Civil Air Transport, which brings together the Corporations and the trade unions and which has made notable progress during the last year.

Before coming to the main line of my argument, perhaps I may say one word about aircraft purchasing machinery, a subject to which the noble Viscount devoted considerable attention. He naturally raised the question of the Courtney Report, and I agree with the implication in his speech that it makes sorry reading. I hope and believe that nothing of the kind will happen again. We must make sure that it never does. But I would point out to the noble Viscount that we feel that he is, to some extent, a comrade in misfortune: we are glad to remember that we took over the Tudor from him.

VISCOUNT SWINTON

It was even before me.

LORD PAKENHAM

I did not say the noble Viscount was the father, but he was the nurse, in its early days, of this unfortunate aircraft, and he, like his successor, I am afraid, was very much mistaken about the date when it was likely to come forward. It is on record that most of the troubles and problems that led to the delays, indirectly or directly, were concerned with the all-up weight. The first and greatest increase, from 70,000 lb. to 76,000 lb, became apparent by November, 1944. The noble Viscount was certainly in this, for it was before the date he mentioned this afternoon—the spring of 1945, when he was still in office; if he was wrong he was wrong in good company. I expect that noble Lords remember the old story of Labouchere and Mr. Gladstone. Labouchere said that he did not mind the "Old Man" always having the ace of trumps up his sleeve, but was somewhat irritated when Mr. Gladstone claimed that the Almighty had put it there. I am sure that none of us objects very strongly to the noble Viscount, our comrade in this unfortunate venture, turning "King's evidence," but it is a little hard when he climbs into the pulpit and preaches to us as the prison chaplain. But let us turn from the past and proceed to better things.

We must make sure that this ordering machinery is improved. Various steps have been taken. A little while ago an important step was taken by the Corporation, in close consultation with my Ministry, when they set up an Aircraft Requirements and Contracts Co-ordinating Committee. There was a widespread feeling, however, that something more fundamental might be needed, and some time ago the Government sought the advice of Mr. Hanbury-Williams and other leading persons in industry on the whole subject of the procedure of the ordering of aircraft. I understand that Mr. Hanbury-Williams and his colleagues have now completed their inquiries and are on the point of submitting their views to the Prime Minister. The decision of the Government on the whole matter will be announced as soon as possible. The issues are admittedly complex. I feel certain that, whatever the machinery, we must secure much more intimate human relationships between all parties concerned in these; Corporations, manufacturers, Ministries or whoever they may be.

I now proceed to try to reply to the main lines of thought developed by the noble Viscount. I would say at the outset that in discussing civil aviation we are in some danger of overlooking the positive achievements since the war. Indeed, we are apt to overlook them altogether. Those achievements are very considerable, as perhaps a few simple figures will show. If we take the three groups together, we find that in 1947–48 the volume of passenger traffic carried compared with that of 1946–47—including, in the earlier year, the figures for the independent operators on scheduled services—increased from 419,002 to 628,000—an increase of 50 per cent. in a year. I am sure your Lordships will agree that a business that increases by 50 per cent. in a year is doing extremely well. The passenger miles flown increased from 365,000,000 to 470,000,000—that is, by 29 per cent. Moreover, the total number of passengers carried by the Corporations in 1947–48 was almost three times as great as the number of passengers carried by the pre-war British companies, operating scheduled services; and the passenger miles flown were eight-and-a-half times as high as the comparable figures for 1938. So here we have a picture of an industry which has been expanding rapidly. So much for quantity. In terms of commercial efficiency we find that in 1947–48, as compared with 1946–47, there has been a reduction of 22 per cent. in the cost per revenue ton-mile. Whatever the finance of it, the British Corporations, operationally and technically, are by common consent throughout the world right on the top line.

But, your Lordships will no doubt ask me, what about tie deficits? We shall naturally hear a good deal about them here this afternoon. The only point in which I thought the noble Viscount, Lord Swinton, was less than fair was in stating that if these had been private companies a receiver would have been put in by now. There is in fact no question of the Corporations' being bankrupt or near bankruptcy; the words simply do not apply. The noble Viscount naturally asks what has been the financial result of the last year. A really adequate discussion in your Lordships' House of the results of last year—I am speaking of the year which ended on March 31, 1948—is hardly possible until the published reports of the three Corporations become available, and I am afraid that will not be until the autumn. I share the slight impatience of the noble Viscount as to the emergence of these reports and accounts, but I can assure him that they will be a good deal earlier this year than they were last. The Chairmen hope to present their reports and accounts to me by September 30, which is three months earlier than last year. But I still feel that, although such a delay is undoubtedly in accordance with commercial practice, in the case of the socialised industries we must try to have a report earlier than that. I am devoting my thoughts to seeing whether, next year, we can obtain the reports earlier than we do now.

Although final figures have not been cleared, I must inform the House of what I think is fairly well known, that in the year 1947–48, the total losses were slightly larger than in the preceding year when they amounted to £10.3 million. The Corporations have therefore incurred a loss which slightly exceeds the amount payable to them by way of subsidy. I have no intention of shirking the fact, nor do I desire to shirk it. I want to place all the facts before the House as soon as I can. My predecessor explained very clearly, as it seemed to me, on the last occasion that we discussed this topic, the main reasons for these losses and the steps that were being taken to reduce them. He explained that we had adopted a system of accounting which is conservative (I know that that will appeal to noble Lords opposite!) to the point of being Puritanical—but I do not know that that will appeal to them! He emphasised, and I repeat, that losses of this character were foreseen all along, and were publicly foreshadowed by Government spokesmen as the price we would have to pay during the development period for building up a great industry—an industry, I may add, that, for reasons of which noble Lords are well aware, is essential to our national life and contains a strong element of social service. To give only one instance of that I may mention the services to the Western Isles, in which I am closely interested.

In my opinion, the account given by my predecessor completely covers the past. But as regards the year through which we are now passing, although there appears to be some reduction in the losses, it is nothing like so large as one would have wished; and on present prospects, whatever steps are taken now, we shall have the greatest difficulty—I emphasise this—in bringing down the deficit for the year 1948–49 to keep within the £8,000,000 figure which represents the limit of subsidy for this and subsequent years. The subsidy this year drops from £10,000,000 to £8,000,000, and we shall have the greatest difficulty in bringing down the deficit to keep within that figure.

Before turning in detail to the aircraft issue, which is the biggest single factor in those losses, I should like to say a few words on a special and very important topic—the internal services of B.E.A.C. During the year 1947–48, the direct operating loss of B.E.A.C. was close on £1,000,000. The striking fact is this: that the direct operating loss on the European services amounted to only a few thousand pounds—£24,000 on present calculations—while all the rest—between £900,000 and £1,000,000—was lost on the English and Scottish services, including the services to the Channel Islands, the Isle of Man and Northern Ireland. I am now talking simply of the direct operating losses; to them must be added overheads. The same relationship appears to prevail between the internal and European services during the current year, although during this year we hope to see a direct operating profit on the European services. In fairness to B.E.A., who are of course acutely alive to all these points, I must make it plain that it is a tremendous task, during this period, to avoid relatively heavy losses on internal services in a fairly small country such as ours, well served by surface communications. Even in the case of services with commercial possibilities, they take time to develop and in the initial years of buildup we cannot expect to see them pay their way quickly. Again, many of these services satisfy the social needs of remote and outlying areas, and are inherently uneconomical. None the less the Government rightly attach great importance to these services and to the general principle of public need for air services in Britain.

The facts that I have mentioned this afternoon, and which I will not at this moment pursue any further, will set many of your Lordships thinking, as actively as they have set me thinking during the last few weeks. I will mention now only one step that I have taken. I invited my noble friend Lord Douglas of Kirtleside to carry out an investigation into those parts of the Civil Aviation Act which are concerned with the appointment of agents and associates to the Corporations. That is a partial answer to the question put to me by the noble Viscount. My noble friend who has kindly consented to undertake this duty will have all the technical and commercial assistance that he requires. He has already begun his inquiry, which is warmly welcomed by B.E.A. and B.O.A.C, and he will report to me as soon as possible. My noble friend will conduct his inquiry with judicial independence of mind.

VISCOUNT SWINTON

If I may interrupt for one moment, what does the noble Lord mean by "agents and associates"?

LORD PAKENHAM

That is the terminology of the Act. The Corporations have the power to appoint agents and associates—that is, charter companies—for certain purposes denned in the Act. My noble friend is looking into all those parts of the Act to see how they are operating.

LORD GIFFORD

Does the noble Lord mean to include booking agents—because they are agents? I myself am an agent to the Corporation. Do the terms of reference include those people, or simply charter companies?

LORD PAKENHAM

The terms of reference are as I have given them. If I appoint anyone to be a Chairman, I always allow him to interpret his terms of reference as widely as possible. In order to avoid any possible misunderstanding, I may say that the very last thing I have in mind in asking my noble friend to undertake this inquiry is to retreat from the policy of the 1946 Act—the policy of treating the Corporations as the chosen instruments. I could never agree that a socialised corporation, properly organised, is incapable of successful pioneering. On the contrary, I believe that their possibilities in this respect will become increasingly and abundantly plain.

It is time to turn 10 the aircraft issue as it affects B.O.A.C. and B.S.A.A.C.B.E.A. are not involved to anything like the same extent. Their Vickers-Viking is settling down into a thoroughly useful type which will have a number of years of competitive service ahead of it, while the Airspeed Ambassador, which is planned to succeed it in due course, will not, we believe, be equalled by any competitor that we know of in its class. This is in accordance with what the noble Viscount said, and he has the best of ail rights to speak in this is matter. So far as aircraft goes, the nature of B.E.A. is distinctly bright.

Returning to B.O.A.C. and B.S.A.A.C, let me begin by distinguishing the history—and I am afraid I shall have to detain your Lordships' House for a little while—the present situation, the prospects, and the policy decisions to be taken. The brief history is that during the Second World War, all progress in production of civil transport aircraft was completely suspended in this country where we concentrated, by agreement with our American friends, on bombers and fighters while American transport aircraft—particularly the Constellation and D.C.4 Skymaster—passed through many of their development stages in the United States Army Air Transport Command, At the end of the Second World War, therefore, they were a long way ahead of us in civil aircraft, and were bound to remain so until our real peace-time types came along. Nevertheless, for reasons familiar to the House and accepted by all political Parties, the policy of "Fry British" was adopted; and since the war we have made every effort to fly British aircraft on British routes. We have, however, qualified that policy on important occasions when there were no adequate British aircraft available. For instance, we permitted B.O.A.C. to order Constellations and Strato-cruisers for the highly competitive North Atlantic route. The noble Viscount who is exceedingly well informed is, I think, under a misapprehension here. The Strato-cruisers were ordered in 1946. This is not a recent development——

VISCOUNT SWINTON

Before the Constellations?

LORD PAKENHAM

The Constellations were also ordered in 1946. They were delivered at the end of the year, but the Strato-cruisers will not be available until 1949.

VISCOUNT SWINTON

I know the noble Lord was not responsible for it at the time, but I should be grateful if he could explain why, when there is an order for American aircraft for the Atlantic service, as I understand, instead of concentrating on the Constellations the Ministry or the Corporation ordered one lot of Constellations and one lot of Strato-cruisers? It seems to me most extraordinary.

LORD PAKENHAM

As the noble Viscount has said, I was not very closely in touch with these matters at the time, but I understand that the reason was that the Strato-cruisers were then thought to be the best and most promising aircraft in the world. That view is still held but, of course, it has taken much longer to obtain them than the Constellations. The Constellations were immediately available; the Strato-cruisers, although better, were not to be forthcoming until 1949. Recently, B.O.A.C. have received five additional Constellations from Eire for the Australian route to match the Constellations which our Australian partners on that route already have in service. The noble Viscount seems to assume that one would naturally put the five Irish Constellations on the Atlantic route, but this "backing-up" with the Australians is something which I think will appeal to him; and we think it appeals very much to the Australians. So much for the history, which I have covered, I am afraid, in a rather cursory fashion.

The present situation is that both B.O.A.C. and B.S.A.A.C. are facing on major trunk routes intense and growing commercial competition which with existing equipment they are unable to meet. I would stress that. Apart from the aircraft I have already mentioned, we are still having to use on our main trunk routes stop-gap types of converted military aircraft, such as Yorks, Lancastrians, and so on, against competition from modern commercial types such as Constellations, Skymasters, D.C. 6s, and so on, operated by foreign airlines, whether American, Dutch, French, Belgian or others. To put the matter quite bluntly, through no fault of their own, the Corporations are at present under a very serious competitive disadvantage on many of their main routes, both in the payload which their aircraft can carry and in the attractiveness of their aircraft to the public.

This first point I would stress. Where-ever they are competing on equal terms, as B.O.A.C. are competing on the North Atlantic with Constellations, they are doing at least as well as their competitors. Let me make that plain, in fairness to B.O.A.C. This year, B.O.A.C. Constellations have attained the highest utilisation rate for any operator across the Atlantic with 8.3 hours a day, which is equivalent to over 3,000 hours per annum. Where they can wage the competition on equal terms, they can hold their own; and, if anything, come out best. But elsewhere, and over the field as a whole, their competitive traffic position is disquieting. The Corporations are sustaining heavy losses (which are really not their fault, but for which they are widely blamed) which cast a cloud over many of their activities and for which the hard-pressed taxpayer has to foot the bill. So much for the present situation.

The prospect is that, unless something drastic is done, we cannot even begin to disperse the present troubles until the British Handley Page Hermes enters into service in 1950. The noble Viscount asked when that was expected. I have already had time in my present office to acquire a great regard for Sir Frederick Handley Page, and he hopes that the Hermes will be produced next year. To be on the safe side, however, I think we ought to say that they should be in service in 1950. We believe that the Hermes will turn out to be the finest product of the interim phase. I stress that it still belongs to the interim phase, but it is right at the top of the class. It is not one of the real post-war British types. Twenty-five of them have been ordered, but we cannot hope to get on level terms, and to begin to assert the superiority which we firmly believe will eventually be ours, until the real British post-war types come into service in the era beginning 1953—remembering always that it apparently takes a new civil aircraft about seven years to progress from the design stage to commercial service.

Here I want to mention an important decision which has been reached on one aspect of this long-term programme, which I hope will appeal to the House. The Government have decided to support British South American Airways' plans for concentrating their long-range services largely upon the 140-ton Saunders-Roe 45 10-engined flying boat. The first of these machines is likely to be flying experimentally in 1951—I stress the word "experimentally" Provided that all goes well, it should afford accommodation superior to any competitive type, and should make possible a 26-hour service between the United Kingdom and Buenos Aires. Three of these very large flying boats are now on order and, under the new plan, will be put into service by B.S.A.A. from, about 1953. All being well, an order for a further four boats is contemplated, giving B.S.A.A. a unified fleet of seven fast, long-range flying boats, far superior in passenger-attraction and in lifting capacity to anything which is likely to be set against them.

Of course, as the House knows, there has been a long-drawn-out problem of where to find an adequate marine base. It is a problem with which I first became acquainted in 1946, when I was Chairman of a Committee looking into the matter. I am glad to say that it has been provisionally settled, subject to detailed surveys. The SR-45 boats will normally operate from Southampton Water, making use of existing facilities and, when conditions make it necessary, will operate from the Solent, with the active co-operation of the Royal Air Force at Calshot. That problem seems nearly to have been solved, and I want to pay a tribute to the co-operation of the Service Ministries in reaching what we hope will be a satisfactory solution to a most difficult problem. Through their help, the United Kingdom flying boat base is likely to cost only a small proportion of what otherwise would have been needed. That is the first decision. We go on with the SR-45 for B.S.A.A., and we look for great things from it. The SR-45 will, I trust, maintain British leadership in flying boat operation, which has been so much a feature of British commercial flying for so many years.

We are also looking forward to the arrival in service in due course of other new and advanced types of British air- craft—the De Havilland Comet, the Bristol Brabazon and the Bristol Medium-Range Empire Type—and, as I have already mentioned—;he Ambassador, for B.E.A.'s routes, in addition to the Handley Page Marathon. With all of these, work is being pressed on intensively. With the permission of the House, how-ever, I will leave to an occasion later in the year—if a debate is raised, as I hope it will be—a detailed report on their individual progress. I would merely stress in passing that at present the three British Corporations have orders with the British aircraft industry for some 100 new civil aircraft, to the value of about £25,000,000 including spares.

Apart from the Hermes, I repeat that, until these new types come along, we are faced with a black prospect over the next four or five years. It must on no account be glozed over. By 1953, if we went on as we have been doing, not only would the losses of he Corporations have considerably exceeded the subsidies voted by Parliament (they will be £8,000,000 a year from now on) but the British flag might well be driven off the world air routes; many of which we have pioneered. Clearly, quick and strong action is necessary.

That brings me to the policy question. The policy decisions reduce themselves to this. Are there any British aircraft which can fill this gap between now and 1953? And, if not, are there any aircraft which can be acquired from abroad in the immediate future without loss of dollars, and without damage to our aircraft industry and to those engaged in it? As the House already knows, our hopes, from 1943 onwards were placed on the Tudor as the main United Kingdom interim type to tide us over the awkward period until the real post-war types, the Comet, the S.R.45 flying boat, the M.R.E., the Brabazon, the Ambassador, the Marathon and the others, arrived. I need not give this kind of instruction to the noble Viscount opposite, who is really much more qualified to give it to me, but for the benefit of those who are comparatively uninstructed, as I was until a few weeks ago, I would emphasise that the two main varieties of the Tudor are the Tudor II, with it; variant the Tudor V, designed to carry 44 passengers—the "fat" Tudor—and the Tudor TV, designed to carry 32 passengers—a development of the "thin" Tudor. I must ask the House to keep clearly in mind that distinction between the Tudor II and the Tudor IV: on no account must the "thin" Tudor IV suffer from being confused in the public mind, here and abroad, with the "fat" Tudor II.

The story of the Tudor II, as has been brought out earlier this afternoon, is a sad one. The noble Viscount referred to the Courtney Report. I do not think he mentioned the Supplementary Note on the Khartoum and Nairobi trials, which was published separately and is not in the Report. It was published at the same time as the Report, but was not physically attached to it.

VISCOUNT SWINTON

Was it published as a White Paper?

LORD PAKENHAM

It was communicated officially to the Press but not, I take it, as a White Paper.

VISCOUNT SWINTON

We ought to have it as a White Paper.

LORD PAKENHAM

Perhaps I will look into that. It was published officially yesterday, and is reported in all the newspapers this morning. As the noble Viscount will be aware, the trials themselves will take quite a long time, and the Supplementary Note is not a full report on those trials. It is simply a preliminary Note indicating the way in which the trials have been going. The full Report will be much more lengthy, but will not be available for a very long time. The simple fact is that the Tudor II, which it was hoped would fly on scheduled routes in 1946, is still not ready for that purpose. And no one knows when it will be. It is clear from the Khartoum and Nairobi trials that considerable further delay would be inevitable before the Tudor II could be brought into service. Further modifications appear to be necessary, and how long it would take to complete them cannot be estimated.

When I came into my present office, at the beginning of last month, it was possible to meet well-informed people who still thought that the Tudor II ought to be persevered with, in spite of the strictly commercial advantages of making purchases of aircraft from abroad—although, even then, the balance of argument seemed to me to be strongly in favour of purchasing competitive types from abroad. Since the result of the Khartoum and Nairobi trials has become known, I have not heard any serious voices raised in that sense, and the Government are reluctantly but solidly convinced that the Tudor II, as such, must be abandoned; that we must cut our losses on it; that to persevere with it would simply be throwing good money after bad. I must re-emphasise, however, the distinction between the Tudor II and the Tudor IV. The Tudor II is a disappointment. The Tudor IV, an adaptation of the Tudor I, is a tried and proved aeroplane. Three machines of the Tudor IV type are already in service, and sixteen are being completed. Following the disappointments with the Tudor II, which leave B.S.A.A. in an even more difficult position than B.O.A.C, the Government have approved the rearrangement of the Corporation's fleets under which all nineteen of the Tudor IV machines will pass to B.S.A.A., to give them a unified fleet, and represent a big improvement on their present Yorks and Lancastrians. Mainly through its smaller payload, the Tudor IV—and I think this covers a question which the noble Viscount put to me—could not compete in straight commercial rivalry with the Constellation or Canadair, but that it is an excellent aeroplane we feel sure, and on the B.S.A.A. routes, to which the aircraft is more suited, we believe it will do exceedingly well.

Still the big gap remains between now and 1953, apart from the Hermes. The financial leak still confronts us. In these circumstances, the Government have clearly had the duty of examining with the utmost care every possibility of purchasing aircraft from abroad and of seeing exactly what will be involved in it. After the most elaborate investigation and deliberations, the Government have decided to authorise B.O.A.C. to purchase twenty-two Canadair IV aircraft, built at Montreal and powered with Rolls Royce Merlin engines built at Derby. The aircraft in question will be the D.C.-4M.-4, which is the latest and improved version of the Canadair North Star aircraft. The North Star has been in service for more than a year on the North Atlantic route, operated by Trans-Canadian Air Lines, and has shown a high degree of regularity of performance—and even a profit—during more than a thousand Atlantic crossings. So it is essentially an excellent machine for transatlantic work. The Canadair is a pressurised aircraft, with full air-conditioning equipment, including refrigeration, and has a capacity for 40 passengers. Under the Government's plan, the twenty-two Canadairs that we are acquiring will be operated on the main Empire routes. Fifteen of them will be on the routes to India and the Middle East, and seven of them on the North Atlantic route to Canada. Fifteen out of the twenty-two will be available within twelve months and the remainder shortly afterwards.

The House will wish to know about the financial aspect, so what I have to say now has been drawn up rather carefully. Thanks to the good offices of the Canadian Government, these aircraft will not cost us dollars which otherwise would have been available to us for current spending in Canada. The necessary dollars will be found through the postponement of certain obligations to the Canadian Government for the redemption of debt, thus enabling dollars that would have gone towards meeting those obligations to be applied to the purchase of these aircraft. Consequently, no immediate dollar outlay is involved. The net dollar earnings will be available to supplement our dollar resources. The House will, no doubt, wish to read in Hansard this part of my speech, and to ponder upon it carefully. I am bound to say that it seems an excellent arrangement, both from our point of view and the point of view of the Canadians.

It may be suggested—indeed, the noble Viscount mentioned it as something which might be the subject of discussion—that if we were going to make a substantial purchase of aircraft abroad, we should have done as well, or better, to buy Constellations from the United States. I do not think that any of our American friends is likely to accuse us of overlooking the merits of their aircraft in general, or the Constellations in particular. We have already acquired eleven Constellations. We are awaiting six Boeing Strato-cruisers. Therefore, our American friends will not mind my saying that in the view of the Government the Canadair possesses two great attractions, apart from its commercial merit. First, its engines are British, and secondly, although it is founded on and draws its experience from American design, it has itself been developed in Canada and is built in Canada by Canadian labour.

I may be asked whether there is any rational alternative. I reply that there was only one that made any real sense. I refer to a proposal, which was carefully looked into, of converting as many as possible of the unsatisfactory Tudor II's into proved Tudor IV s, and using them instead of Canadairs on the main passenger routes. The Government went into that proposal thoroughly but rejected it as imposing a damaging financial handicap on the Corporations and an unacceptable burden on the taxpayers. About the relative attractiveness to passengers of the two aeroplanes there may be argument, but about the superior payload that the Canadair can carry, and that without extra cost, there can be no dispute at all. We start off with 40 passengers in the Canadair against 32 in the Tudor IV. That is a 25 per cent. higher earning capacity. And over long distances, with full tanks, the relative advantage of the Canadair is somewhat greater. In technical language, the superiority of payload varies according to distance between 3,000 and 3,500 lb.

There is an additional fact of critical importance, which I think will answer one of the doubts in the mind of the noble Viscount. Because the Tudor has been developed from the Lincoln bomber, it uses practically the same under-carriage with large single main wheels. The weight of the aircraft has grown, and, as a result, the heavy loads imposed on runway surfaces by the single wheels mean that the Tudor IVs could not be operated regularly through certain Empire airfields without danger of breaking up the surface or even of "going through" The noble Viscount will appreciate the significance of this. Such prospects would seriously limit its operations. The Canadair, on the other hand, spreading its load over four main wheels and a nose wheel, requires much less strength of runway and has no such operating limitations. But, leaving aside these operational considerations, looking at it in financial terms and making all the necessary adjustments for the higher cost of buying Canadairs as compared with converted Tudors, the upshot of it is this. It is estimated that at the very least the country will be saved £5,000,000 over five years by buying Canadairs.

VISCOUNT SWINTON

Does that include the cost of the Tudors to be scrapped, and compensation for scrapping? What the noble Lord is saying may be right. To get a fair comparison you have to take the whole expenditure incurred in scrapping the Tudors, plus the whole expenditure on Canadairs, and compare that with the cost of converting the Tudor IIs to Tudor IVs.

LORD PAKENHAM

I think I have already answered what the noble Viscount has in mind in his question. Of course, I am not saying that the money spent already can be recouped by this method. Taking the two things as practical contemporary problems, it is impossible to give a firm figure, but the figure I would give for illustration would be of the order of £60,000 for conversion of the Tudor. Taking the two propositions, and comparing that kind of expenditure with the cost of buying Canadairs at considerably higher figures, and including the capital difference, there is still this net gain of £5,000,000 by buying Canadairs. What about the "Fly British" policy? "Fly British" remains our ultimate objective—I reassert it vigorously on behalf of the Government this afternoon. But "Fly Commonwealth" is a pretty good supplement in the meanwhile.

There remains the important question, what is to be done with the Tudor IIs of which 32, ordered for the Corporations, as I mentioned earlier, are nearly complete. It is clearly important to preserve continuity of employment in the famous Avro works which contributed the Lancaster and the Lincoln to the war, and which occupies such a prominent position in the vital aircraft industry. At the same time, few of us would support a policy of simply making work, giving employment that is on an uneconomic basis, and I should imagine that the men themselves would be the last to welcome any such idea. We have, I think, found a reasonable solution. Negotiations have been opened for the purchase of 21 Tudor IV pressurised freighters for B.O.A.C. and B.S.A.A. These aircraft would be conversions from redundant Tudor IIs. Pressurised freighting is something of which your Lordships are not aware, because it is an entirely new-business which offers important prospects as a valuable addition to our air trans- port services. The development of a freighter with large doors and pressurisation naturally raises many technical problems of a new kind which may take some time to work out. While negotiations and technical studies are proceeding, the Government are giving instructions to proceed with the conversion of 10 of the Tudor IIs to Tudor IV freighters, so that there will be no delay in the commencement of the work. In addition, the Ministry of Supply will require a further number of Tudors for research purposes. So that, in one way or another, we may reasonably look forward to 24 of the Tudor IIs. being converted for useful service, and a distinct possibility of a larger number being used.

LORD BALFOUR OF INCHRYE

HOW long does conversion to freighter take?

LORD PAKENHAM

I would not like to give the noble Lord an estimate. This problem is not an aerodynamic one; it is a technical problem and perhaps it would be unwise to make any date. I hope it will not take too long. Of course we want to get on with the job. At any rate, all the work put into this aircraft will not be thrown away and there will be work of an economic and valuable character to reduce to a minimum any dislocation of labour.

I would stress that these converted Tudor IIs which will be rebuilt as Tudor IVs will be additional to the 19 Tudor IVs complete or nearing completion, which will be used on the main passenger routes of B.S.A.A. I think it will be clear from the fact that B.S.A.A. intend to build up a unified fleet founded almost entirely on the Tudor IV that this aeroplane is considered by them and by my Ministry and the Ministry of Supply, to be an excellent aeroplane. The decision to buy Canadairs is a decision reached with reluctance, which adversely affects a single product—the Tudor II. It would be grossly misleading, therefore, to represent it as showing a lack of confidence in that particular firm, let alone the aircraft industry as a whole. The prestige of the aircraft industry and of the Tudor IV are not in question. Coupled with the firm and imposing orders I have mentioned for the Hermes, the SR-45 and the others, amounting to £25,000,000, the attitude of the Government should be regarded as a clear evidence that we do recognise that the fortunes of the British aircraft industry and the British airline operators are in-dissolubly linked. But unless we took drastic action to fill the immediate gap, the Corporations would be ruined and discredited before the British aircraft manufacturers could give them the tools to enable them to do their job.

It is far from my intention to give the House the impression that simply by taking this decision we unlock the door of Paradise. The future of civil aviation is still very obscure. Economically it is still a very chancey business. The losses on the American internal routes last year of about £5,000,000 proved that, if proof is needed. The men and women of today are anxious to purchase speed, but only a small percentage of them can afford to pay for it at present. Then, again, so much depends on international political problems and world economic recovery, and on the extent to which nations directly or indirectly subsidise their airline operations. There are many other factors outside our purely British control. Yet it does seem certain that over the next decade there will be an enormous increase in the amount of travel by air, which should lead to a great reduction in the price of such travel. I feel convinced—although I have not been in this business long—that within these islands we possess the ability to design aircraft, to manufacture aircraft, to fly aircraft and to organise civil aviation in such a manner as to enable us to benefit to the full from the great developments that certainly lie ahead.

In conclusion, I am not suggesting for one moment that the Corporations are perfect, or anything like it. In my dealings with them I hope that I shall never forget, or let them forget, that, in addition to my responsibilities for fostering civil aviation, I am the watchdog for the public and, above all, for the taxpayer. But I do say that there is every sign that many of the taunts levelled at them are cruelly unfair. I do say that they have already many achievements to their credit. I do say that they are labouring hard to improve their organisation, and they are only asking for a chance to wage their battle on level terms. I am grateful to the noble Viscount, Lord Swinton, for enabling me to explain how the Government propose to give them that chance, and I hope that the policy which I have unfolded this afternoon will seem to your Lordships to be in accordance with the true interests, not only of civil aviation, but of the British people as a whole.

4.42 p.m.

THE DUKE OK SUTHERLAND

My Lords, we have listened to a most interesting exposition of the future of civil aviation in this country and that Empire. We are very glad to sec the noble Lord, Lord Pakenham, taking charge of the situation. But may I be permitted to raise a few points that seem to me to be doubtful or obscure? I was in Jamaica when the terrible news arrived of the complete disappearance of the British South American Airways Tudor plane which was bringing a number of distinguished people to the island, some on official business aid some on holiday. Apart from the tragedy to many, the psychological effect seemed considerable, and many who had come out by air cancelled their return passages and returned via New York and the "Queen Mary."

Nothing does civil aviation more harm, or does more to undermine public confidence in air travel, than do these terrible air crashes that occur from time to time. That is why I put (I am sure the Minister of Civil Aviation does as well) safety first as the number one priority in any further civil aviation plans. Speed comes second, though it is very important, because naturally people choose flying rather than other means of transit for that reason. Many of us in the past, through these terrible accidents, have lost very close and dear relations and friends, sometimes cut off in their youth. I maintain that the risks of these great tragedies must be reduced. Whatever the cost, radar should be compulsory in all large planes, and all other safe-landing devices should be fitted. The cost of fitting radar is, of course, one of the problems, but, in my opinion, it must still be fitted.

It was the combination of these circumstances that determined me in early April to put down a question on civil aviation, and ultimately enabled me to persuade my noble friend Lord Swinton to consent to initiate this debate. As we all know, there is no man in your Lordships' House who has a greater experience of things aerial than the noble Viscount, first as Secretary of State for Air at a critical period, and then as Minister of Civil Aviation. There is very little he does not know on these matters. That is why we are so grateful to him for initiating the debate.

Now I will turn to the main purpose of the debate. Are these twenty-two Canadair planes to be ordered by the Government at the cost of all these millions of dollars really necessary for the future of civil aviation in this country? I cannot help thinking that things might have been done very differently. For instance, if the improved Tudor IVs could have been used on the Empire routes, and a few new Constellations ordered for the Atlantic route in addition to those taken over from the Irish Government, what an immense saving in materials and dollars this arrangement might have effected! Certainly very few Tudors would have been wasted. I am told that the Tudor IV is a very different machine from the Tudors I and II, and will, in fact, be used considerably by B.O.A.C. until the Canadairs are ready in 1950 or 1951. Millions of dollars have to be paid, in any event, although they happen to be Canadian dollars in one case and American dollars in the other. I should have thought that it would be better to buy the best type. I think the consensus of opinion is that the Constellation is undoubtedly a better machine than the Canadair, both as regards payload and performance. The name "Canadair" is, I have been informed, a misnomer which misleads the public, because the Canadair is not really a Canadian machine. It is really an American machine throughout, with the exception of the engine, which is a British Rolls-Royce Merlin. I know it is made in Montreal, but I understand that it is manufactured by an American company, with American capital, and that American parts are used. Therefore, I should say that it is, on the whole, more American than Canadian.

It is true, as the noble Lord, Lord Pakenham, said, that American civil aviation, with all its advantages over our own, has been losing money at a great rate during the last few years. We are also losing money, and perhaps rather more than they are, but it does show that we are not the only people who are losing money. They have many advantages over us, and they should be less likely to lose money than we, who have started since the war in a new industry.

There are a few questions which I should like to ask of the noble Viscount the Leader of the House, who, I understand, is going to reply. First, I would like to ask: How soon can B.O.A.C. expect to have a central maintenance base? I ask that because the cost of dead flying to and from the maintenance base is enormous. I understand that there is a maintenance base in Montreal, and the aircraft have to fly there every time after setting people down in New York. I am informed that there is no maintenance base at Heathrow, and B.O.A.C. planes have to fly to their maintenance base and back to Heathrow to be serviced before and after each flight. All that entails a great waste of money, wear, tear, petrol and time. I hope we shall hear that a central maintenance base can be built at Heathrow. I understand that it is proposed to build it there. Secondly, I would like to ask: Are the Corporations doing all they can to develop freight carrying? We have heard a great deal about that subject already, and I hope that freight carrying will be developed in the way the noble Lord, Lord Pakenham, has told us it will be. Thirdly, I would ask: In view of the success of admitting private companies as associates of British European Airways on home routes, will this principle be extended to continental routes?

Fourthly, what does the Minister propose to do about private flying and flying clubs? I have the fortune, or the misfortune, to be one of the trustees of the £100,000 Kemsley Trust, founded to assist aviation and flying clubs. We have done as much as we can to help, but we receive very little co-operation from His Majesty's Government. The amount required to tide the flying clubs over the bad times is infinitesimal compared to the amount which has been spent by the big air Corporations. For instance, the Kemsley Flying Trust offered to provide £3,500, if the Ministry of Civil Aviation would do the same, spread over two years, in order that grants might be paid to the gliding clubs. This was turned down at once by the Ministry of Civil Aviation, in a very sympathetic letter in which they said they could do nothing whatever. Surely there is a way of providing a small sum, set off against these gigantic losses incurred elsewhere, which would not be noticed.

Again, is any notice being taken, or will it be taken, of the Report of the Special Advisory Committee on Private Flying, of which 'Whitney Straight is Chairman and which were appointed by the Government? Is it realised that a great many R.A.F. Reserve schemes have to use these flying clubs for their training, since there are no other places available? The flying club, therefore, is extremely valuable to the R.A.F. Reserve schemes—in fact absolutely essential. I would like to quote an article which appeared in the Sunday Times on May 30 of this year. It said: Recent decisions have made it clear that the Government has no intention of giving the slightest financial help to the private flying movement to enable it to weather the present financial difficulties. Apart from shelving the large scale plan to develop and popularise flying as outlined by the Whitney Straight Committee Report, the Minister of Civil Aviation, Lord Nathan, has rejected a 'first aid' proposal that would have cost the public only £3,500 over two years. Other Government Departments and the Treasury have opposed indirect aid, refusing, for instance, to ease their high charges for the use of stores, airfields and hangars. Although many are derelict, apart from the activities of the local flying club, the Treasury has rejected, all appeals for nominal rents, and insists on charges being based on full commercial rates. The reason for the rejection of all appeals appears to be that the Government regards gliding as nothing more than a sport, and that even if a case could be made out in favour of Government help there was still the question of whether man-power and material resources involved might not be better used elsewhere. The Kemsley Trust, which was estiblished to make £100,00 available on loan to clubs, offered to make a £3,500 grant if the Ministry of Civil Aviation would do the same. This help would not have been sufficient to lower flying rates, but would have enabled clubs to close the present gap between income and expenditure. That proposition has now been rejected by the Ministry and the refusal to allow such a sum out of its £26,314,783 budget for civil aviation this year—which includes £7,650,000 in subsidies to the three nationalised airline corporations—throws into sharp relief its attitude to private flying. I had to quote that, because I think it puts the whole case very straightly and truly.

Does the Minister believe, therefore, that private flying should be killed by new regulations, or is he prepared to tide the movement over this period of adjustment? If the clubs and private flying generally are to be sacrificed to commercial flying, can the Minister in view of the enormous losses which are being incurred by the corporations justify the present neglect? Must we kill the flying clubs, in order to leave the Corporations free to lose their millions? I come now to the last question I wish to put. Does the Minister believe that when we get the Canadair liners into service in 1950, B.O.A.C. will then be able to operate at a profit?

4.55 p.m.

THE MARQUESS OF WILLINGDON

My Lords, £22,000,000 loss—that is nationalisation over two years. These Corporations are the first of the many nationalised industries, and I therefore rest assured that your Lordships will give your serious attention, not only to-day but from now on, as to how that loss can be prevented, and whether, under nationalisation, it can be prevented. I have thought how unsatisfactory a result like this must be in private industry to the shareholders, to the consumers and, above all, to the employees. I can assure your Lordships, through personal knowledge, that in these Corporations you have the greatest, the most loyal and the keenest of all employees of any merchant service, in this country or any other. To saddle them with these enormous losses calls for the most careful inquiry. I have therefore taken the liberty of giving private notice to the Minister of my intention to ask for certain figures, which I think are so simple that it would not bore your Lordships if you made a note of them when they are given.

The first question is: How many aircraft of the Corporations, on a particular day in this month, were in the air carrying a commercial load? That rules out all aircraft used for training, demonstration or experimental purposes. My second question is: How many employees, in every part of the world, in all grades, are in the employment of the three Corporations, the Ministry of Civil Aviation and the Ministry of Supply as it affects civil aviation? We all know that an aircraft should carry about three crews, and that the average number in a crew is five. The remainder, therefore, are purely service and administrative personnel. I think that figure will give food for thought. The other question is: How much surface transport of all kinds is used by the Ministry and the three Corporations controlled by the Ministry in all parts of the world, not only for passengers, not only for the carriage of goods, but by the administrative staff themselves? I would then beg your Lordships to compare the figures in the replies with the figures you would use in any of your private enterprises.

I am wondering whether double the number of aircraft could not be run with half the staff. On the other hand, I pray that this wonderful staff, willing to work for the rest of their working days to make British aviation a magnificent enterprise, should be given a chance to run the concern themselves. Time after time now, we see boards of directors, part-time directors, and, with possibly one exception amongst the twenty-five or thirty directors, none has been promoted from service in the Corporation. As a commercially-minded man, I do not quite understand a set-up which comprises five or six general managers, a chairman and his staff, a managing director and his staff, an executive board of directors—although not actual members of the Corporation—a directorate, a Ministry of Civil Aviation, a Ministry of Supply and then a Cabinet meeting. I cannot see how such an undertaking can satisfy the British taxpayer, the British shareholder.

I may be stupid, but I can see no reason why British South American Airways and British Overseas Airways should not be combined with one full-time board and allowed to run this concern for five, six or seven years. I cannot see why the Ministry of Civil Aviation should exist at all, and why it should not be part of the Ministry of Transport. As regards the purchase of aircraft, I am stupid enough not to understand the procedure. I was pleased that the Minister mentioned some of the difficulties that he was already up against, and particularly I am glad that he mentioned the Berth 50 at Southampton. In all seriousness and with every sense of fair play, knowing the question of Berth 50 as well as anyone, I would ask why it could not have been used three years ago. Was it necessary to have an inquiry? Under private enterprise, an inquiry would not, I assure the noble Lord, have been necessary. What went wrong and delayed the use of Berth 50? Finally, I would make one simple plea for the people who are doing mil-time jobs. May their difficulties be made easier from now on! May their instructions as to how to sell a ticket to an ordinary passenger become a little simpler! May the ordinary passenger find-that his purchase of a ticket is easier; and may British European Airways, with a monopoly to fly completely satisfactory machines to every part of Europe, pay the dividend that I am perfectly certain they could pay under the management of any strong, industrial full-time board of directors!

5.2 p.m.

VISCOUNT KNOLLYS

My Lords, the main problems facing civil aviation have been already so fully covered by the opening speeches of both the noble Viscount, Lord Swinton, and the Minister, that there is little left on broad principles on which I can make any useful contribution. But there are one or two points which, out of my experience, I put forward, so that they may be helpful in filling in the picture. May I say a word on what the noble Viscount said regarding Strato-cruisers? The reason why these were contemplated and recommended so long ago was in order to be sure that there would be no further gap as newer, better, larger and more economical aircraft were developed. The Constellations must be developed, if we are to be able to increase traffic with the latest aircraft, but the former supplement them and follow on to be sure that there is no gap later.

VISCOUNT SWINTON

Is their capacity very much greater than that of the Constellation?

VISCOUNT KNOLLYS

The all-up weight of the Constellation is up to 90,000 lb., with all that that means in additional pay-load and accommodation. They were of intermediate size, which there was no possibility of obtaining anywhere else at the time. I would remind your Lordships, however, that I am not completely up to date—though what I have said may make clear the main purpose.

Some of the decisions which have been announced to-day by the Minister are regrettable, particularly as regards the Canadair. It is much to be regretted that we have to go overseas to get these aircraft, good though they may be. From what I have seen during this year, it was an inevitable and necessary decision. It goes back a very long way, and the project of examining and possibly considering the purchase and development of that aircraft (then known as D.C.—4M.) was proposed so long ago as September, 1944, in conjunction with a whole programme—as the noble Viscount will no doubt remember. It is nothing very new or very startling, because it has passed through the hands of no fewer than five Ministers, whom I had the privilege of serving; and it is quite "ancient history" in its original inception.

So far as the practical side of running air lines is concerned, I should like to congratulate the Minister on having produced a definite policy which will give a firm basis to the British Overseas Airways Corporation in planning development in the future—a firm basis on which I hope they can depend for many years to come. I hope they will have the opportunity of operating known and proved aircraft. This is really the first time that that has been possible, and some of the problems of the British Corporations—apart from the normal ones of running airlines—arose from the difficulty of not having a firm foundation on which they could plan for the future. The wheel has turned full circle, for many of the recommendations and ideas were put forward a long time ago. I would merely express my regret at the cost in wasted money, time and energy before we decide on a long-term fleet policy which is so essential for the proper and economical development of any line in any part of the world.

I am sure we all regret the decision regarding the Tudor II, after so much thought had been put into it. But I have always wondered whether it is indeed a great credit to the British aircraft manufacturing industry that British airlines should fly all over the world aircraft which, unfortunately—for reasons beyond most people's control—are not, competitive, either technically or economically. I wonder whether we are giving the best possible chance for the development of the aircraft manufacturing business in this country. There is one vital fact which was mentioned to-day; and that is the procedure for ordering aircraft and the method of procuring them. I am convinced that even now we shall not get one type of aircraft at the time we want them unless the present method is radically changed. There is no chance of getting "winners" under the present methods. With the opportunity to get together which has been presented, both by the system and because of personal relations or contacts, I am convinced that we shall be successful in the future only when the methods are changed and are put on more normal business lines.

There are very fine—I almost said exciting—new aircraft on the stocks in the British aircraft industry. I think that under the policy which has been announced to-day, if the procedure is right, there is every chance of these aircraft being not only successful but outstanding when they come into operation. We obviously must not be impatient about the time. As these aircraft get more and more complex, much more time is needed to bring them into service. Nothing is more fatal to aircraft and to the reputation of the industry and of the airlines than to rush an aircraft into service before it has been fully tried in every part of the world for the duty it has to perform. The high standard of careful preparation which we all feel that our airlines in this country adopt is a point of which we must never lose sight. I am sure your Lordships will agree that there must be no lessening of those standards which I think we can feel have been reasonably successful so far.

In the future, we are going to "Fly British." In my experience it has always been the desire to see how far it is practicable and justifiable to "Fly British" We have an opportunity to do so in future; but it is no credit to do it when the suitable aircraft is not available. However, we can do it now. I am convinced that the British aircraft industry can prove to the world that in the field of civil aircraft it can be as outstanding as it has been in the field of military aircraft in the past.

5.11 p.m.

LORD WALERAN

My Lords, I was a little disturbed to feel that at one stage in the debate we were congratulating ourselves on making a loss. I am reminded of a time during the Second World War when the United States Government paid a subsidy for not raising hogs. Two men issued a prospectus asking for capital. In the first year, they estimated that they would get a subsidy for not raising 10,000 hogs. They stated that, if the shareholders would be patient, in another year they would have achieved a subsidy for not raising 15,000 hogs, and would be able to pay a dividend and employ a manager!

I took the liberty of giving notice of three points which I wish to raise this afternoon. My first point is this. I have asked if His Majesty's Government will inform the House whether they consider that the Brabazon I will be flown in service as a passenger airliner, and whether they consider that it may be operated economically as such. I ask that because, although I have the greatest respect for the work of the Brabazon Committee, I feel that we are barking up the wrong tree if we look for very large land aircraft to operate economically. For such aircraft we must then go into the question of suitable aerodromes and, at the moment, I believe that there is only one aerodrome in New York and one at Heathrow and the home base of the Brabazon I on which it can be landed at full all-up weight. The cost of these aerodromes is enormous, and I do not believe that countries will be willing to pay money to build such aerodromes. I personally do not want to be in an aircraft arriving over New York in fog and to find no diversionary aerodrome to come down upon, but have to try to come home again. Either you can carry so much petrol and you do a round trip each way, or you have "had it."

Therefore I plead the cause of the large flying boat. Divine Providence gave us five-eighths of the globe in the form of an aerodrome—to wit, the sea. I believe that, when we turn to big aircraft, we should think in terms of the large flying boat. When I say "large" I mean twice the size of anything now built, and I include the Howard Hughes flying boat when I make this remark. I think that our conception of flying boats has been conceived the wrong way. We have looked at an aeroplane that will alight upon smooth water. Let us look at a craft that will ride the sea and yet take to the air, and let us think in terms of landing our flying ship in the Channel in the worst weather and then motoring it up the Solent. We send our ships coastwise to ports, and no one complains about going in a train to his destination.

I think that we should first go for the high-speed, high-frequency aircraft, which we hope to see in the form of the De Havilland 106, although there is not a great deal of comfort. No high-speed aircraft can ever be comfortable, because, in the case of "jets," you have to go at high altitudes, at high speed and through turbulent conditions. Let us have the high-speed and rather uncomfortable aircraft, and then let us have our slow old lady, travelling at 250 knots instead of 25, crossing the Atlantic in twelve hours, carrying a great number of passengers, with its aerodrome at the door. Not very long ago, a fairly old flying boat was forced down in the Atlantic through a series of blunders and, after four days of an Atlantic gale, it had to be sunk by gunfire before it would disappear. Let us build our flying boats stronger and bigger: I feel that that is the right way to approach the question of the big aircraft.

The second point is the question of proper ground control and blind-landing aids. I am sure your Lordships are well aware that one of the difficulties of the jet aircraft, in which we undoubtedly lead the world, is that they become extremely uneconomical at low altitudes and when flown slowly. It is uneconomical to have them waiting around an aerodrome in conditions of bad visibility. It is essential that we develop the blind-landing aids so that these fast jet aircraft do not have to be stacked up, waiting for perhaps one hour, or one hour forty minutes, for their turn to land. I once waited two hours to get in, circling all the time. Jet aircraft should be down in about a quarter of an hour. They have to come straight in. I would like to ask this—and again, I have given notice of this question. What progress has been made in blind-landing aids, and is it not now the time to take development away from T.R.E. and hand it over to the radio industry? I only wish that the noble Lord, Lord Douglas, under whom I had the privilege to serve during the Second World War when he was Air Officer Commanding in Chief Fighter Command, was speaking this afternoon, because I feel certain that he would support me on this point.

The third plea I have to make is this. Again I have given notice of this question. I want to know whether, in view of the increasing complexity of modern aircraft, the Government will not set up a Committee of three people (under the chairmanship, shall I say, of a barrister or a K.C.) to see whether we cannot simplify our designs and avoid duplication of parts and accessories. It is reaching the stage now when the A.R.B. will turn round one day and say: "You will certainly have to go back to the old biplanes and have two wings, one on top of the other, because one might fall off!" The matter is getting as desperate as that. If we have to have an essential accessory, do not let us duplicate it; let us make it slightly larger, and at a lower rating, and we will save weight and cost and the thing should be perfectly satisfactory. In the case of many aircraft we have a great number of general arrangement drawings. As some of your Lordships may be aware, there are forms of construction which reduce the number of drawings. You can divide them by ten—in other words, if you have 3,000 drawings, you can reduce them to 300. I beg the Government to look into this matter, to see whether we cannot simplify our aircraft, because the more we complicate them the more difficult it is to service them, and ultimately the stage is reached when the time wasted in servicing becomes a very important factor in the cost of running an airline.

5.20 p.m.

LORD SEMPILL

My Lords, I would like to join with others who have spoken in saying how very much Lord Pakenham's frank approach to the heavy problem he has inherited is appreciated; to wish him all possible success in the running of his new Department, and to congratulate him on his appointment of Lord Douglas of Kirtleside, whose great experience of military and civil aviation will be a very good thing indeed for the Department. I was glad to hear a specific pronouncement from the noble Lord to the effect that the policy which had been much discussed within his Ministry, of "scrapping" the Saunders-Roe 45 flying boat, has been put on one side; from what the Minister says, these boats are not to be scrapped, but are to be used by British South American Airways. The suggestion is that four more should be ordered, and I hope that plan will be proceeded with.

But, my Lords, might not the noble Lord be asked to consider suggesting to the military authorities; that a number of these boats should be ordered for military purposes, so that instead of only four another six or seven could be ordered, thereby spreading the development costs over a larger number, and gaining experience with the operation of these boats in the military as well ass the civil field? In regard to the question of their operation, I was glad to hear that he proposed that they should be operated in the Southampton district, and I would like to press that he should consider seriously the question of arranging for the taking over of Calshot from the R.A.F. as a base for the operation of these Empire boats. It has facilities adjacent to it and, since these boats do not require launch hangars and all the paraphernalia normally associated with land machines, the acquisition of Calshot as a civil base would be fully justified.

May I now say a word with regard to what the Minister termed the unhappy story of the Tudor—as surely it is? The factor that these machine; are to be operated as a stopgap by British South American Airways until such time as the flying boats are ready is certainly a good one, and one would hope that the size of the fleet might be raised to, say, twenty-five, of which five might be pressurised freighters. I was very glad indeed to hear Lord Pakenham say that the pressurised freighter is to be ordered, as certainly that type of machine is required for the specialised cargoes that are on offer to-day. Then a word with regard to the B.O.A.C. situation. At the moment, in the circumstances, perhaps the best answer to their problem until other craft are available, is the ordering of these twenty-two Empire constructed Canadair DC4MS. But the history of British air transport is a sad one. On occasion, when help was required none was given; and very often when help was given, it was wrongly directed. Surely the trouble is that we have lost faith in ourselves, and have not given the designers and constructors of this country the opportunities which they have earned. We were the pioneers in certain directions, particularly of the flying boat. I feel sure that your Lordships will agree that so far as the British side is concerned, the best era in air transport on a global pattern was the last three or four years of Imperial Airways operations before the war, when they were operating an Empire boat. And it is good to hear that, after this lapse of time, we are now to come back to the use of the Saunders-Roe boat designed by Sir Arthur Gouge, the same designer as of the Empire boat.

My noble friend Lord Waleran has referred to the very large aircraft, the Brabazon, which is being constructed at Bristol. I feel sure that in so far as design and construction is concerned, if it is required, it will be carried out in the best manner; but I fully agree with him that large aircraft of that type are not suited to our requirements. The fantastic size of the aerodrome is a most important matter. At the moment there is only the aerodrome at Bristol, Heathrow, when finished, and Idlewild, when finished, that will accommodate this particular machine. It is therefore far better that we should concentrate on the development of the flying boat—in addition, of course, to the services performed by land machines, which can carry the main bulk of the British services. I hope that my noble friend Lord Pakenham will take a keen interest in the rapid development of flying boats, in the taking over of Calshot as a base for these boats, and in an endeavour to persuade the military authorities to order a number of boats for military purposes. I feel sure that if we go back to a far greater development and use of that type with which undoubtedly we have scored a success, we shall be doing the right thing. Instead of having to lean all the time on our splendid friends in the United States—I am referring to the designers, like Douglas and others, whose machines are absolutely first-class—if we can do something for ourselves, with our own aircraft designers, in the realm of the flying boat and of the Hermes, we should certainly do it. I am glad to hear that the new Minister of Civil Aviation intends to promote the interest of British air transport and is not going to turn around and buy only from other countries.

5.28 p.m.

LORD GIFFORD

My Lords, I should first like to say how much I welcome the noble Lord, Lord Pakenham, in his new guise. I think it is fair to say that I, and I know many other noble Lords, have asked Lord Pakenham a great many questions on all sorts of subjects, and certainly so far as I am concerned he has always shown the greatest courtesy and given considerable help in regard to all of them. The noble Lord, Lord Waleran, has made an excellent speech in support of the flying boat, and he was followed by the noble Lord, Lord Sempill. I regard the subject as of such importance that I make no apology for also speaking on behalf of that type of aircraft, although possibly taking a slightly different standpoint. I was delighted to hear what Lord Pakenham had to say about the Saunders-Roe machine operating on the South American route, and I am sure all of us who are keen on the flying boat will welcome it. But he did not say anything at all about the use of flying boats on the Empire routes, both in the interim period and on a long-term basis. I am wondering whether he could tell us something about future proposals for the use of flying boats on the Empire routes.

I think everyone must concede it as an axiom that civil aviation will not be a success and pay its way unless it can attract passengers. Speaking as a travel agent, I would like to say that nearly all my clients prefer the flying boat to the land plane. If they can get a passage by flying boat they are happy. A certain noble member of your Lordships' House nearly blew my head off the other day when he heard that his booking for a flight to Singapore on a flying boat had been changed for a passage in a Constellation. Surely, if it is the flying boat that passengers want, that is what we ought to try to give them on the routes for which the flying boat is suitable. The noble Lord, Lord Pakenham, quite rightly stressed the fact that there had been an increase of 50 per cent. in the number of passengers carried in the past year. But I think it is only right to point out to him—and I am sure that he will himself appreciate it—that part of the reason for the increase is to be found in the present shortage of shipping. Because many people have been unable to get passages by sea, they take to the air. That supports my contention that people will travel by air in large numbers only if they are given real comfort. People who make a long and expensive journey by air usually do so, partly at any rate, for business reasons, for in a great many cases they cannot afford to pay air fares purely for pleasure purposes. But they like to enjoy themselves en route. So let us face the question: what does the Constellation give us? It merely gives us, what one might almost say we have been given in the air for the past twenty years—a seat and a lavatory. I would suggest that we can offer a great deal more than that with the flying boat, even to-day.

I should like to ask the noble Lord, Lord Pakenham, what is the viewpoint of the Dominions with regard to the use of the flying boat. I know, of course, that there are difficulties. Operators say that if they have to use flying boats as well as land planes it means duplication of bases and extra expenses of various kinds; it means engaging extra staff, and so forth. Nevertheless, I think we ought to press on with the use of the flying boat, in spite of those disadvantages. I will not weary your Lordships by repeating what the noble Lord, Lord Waleran, has said about the difficult subject of diversion in case of bad weather, but, of course, you can divert a flying boat much more easily than you can divert a land plane—particularly one of the larger land planes which can descend safely on, possibly, only half a dozen aerodromes in the whole world. The noble Viscount, Lord Knollys, said that the Corporations had been hampered because they had not been able to use known or tried aircraft. Surely, in their Empire flying boats they have had tried aircraft which have proved themselves successful for many years. Lord Waleran spoke of the flying ship—which is something that I, too, visualise. Perhaps we have not reached that stage yet with the Saunders-Roe. But there is no reason why we should not get there very quickly. We should then be able to give the passenger a small single-berth cabin, equivalent to a first class sleeping car on a railway train, a dining saloon, and a comfortable lounge, so that he would be brought to look upon a voyage in the air as a source of pleasure and enjoyment, and not as a necessary evil, endured simply in order to get from one place to another as quickly as possible.

Many people regard air transport as very helpful in enabling them to reach places which they could not get to otherwise, but not many people really enjoy air travel in an ordinary land aircraft. I had a letter a short time ago from a naval friend of mine who had travelled with British South American Airways. At one time I had intended to put some of his complaints before your Lordships, but I do not think it would be fair to do so now. These complaints were made at the time of the old régime, and I feel sure that Air Commodore Brackley, who I was delighted to hear had been appointed General Manager, will do much to improve the service and to abolish the causes of such complaints. But I think I may summarise some of these causes. First, I would refer to the failure of ground staff and air staff to take passengers into their confidence. I suggest that it cannot be too strongly emphasised to all employees that unless they take passengers into their confidence the reputation of their services will suffer. Members of these staffs are apt to get into the way of considering passengers as mere parcels. Surely, if passengers have to sit about at Heathrow for three hours, it is only right that they should be told why. For Heaven's sake, let them be given the reason! Again, if a passenger aircraft is to be diverted because of weather conditions, or something of that sort, let the captain at once get on the inter-com and tell the passengers about it. Even if the news is unpleasant, the passengers will face up to it. Nothing irritates passengers more than being kept hanging about and not being told the reason.

As another instance of the complaints made by my friend, may I just cite this? Returning to this country by air, and being landed at Prestwich at 4 a.m., the passengers were told by a sleepy constable that there were no Customs or anything else available for two hours. As has already been said during the course of the debate this afternoon, that sort of thing is greatly to be deprecated, because such delays on the ground do much to nullify the advantage of the speed of air travel. I will not weary your Lordships by repeating any more of my friend's complaints, except that I think I may end up by telling you what he called "the last straw." A lady passenger sitting near him felt extremely air-sick. She informed the air hostess, who said "You're telling me," and dashed to the lavatory, beating the lady passenger to it by a short head.

5.38 p.m.

VISCOUNT SAMUEL

My Lords, your Lordships' House has held many debates on civil aviation in recent years. I think I have listened to all of them, or almost all but I have not ventured to take part in any of them. To-day, my noble friend the Marquess of Willingdon has spoken for noble Lords on these Benches on the matters that have hitherto been under discussion this afternoon, and he did so from his own experience within the industry. That discussion, I think, has now been nearly completed, and I would venture to invite your Lordships' attention to an entirely different aspect of the matter covered by the wide terms of Lord Swinton's Motion which is now under debate. The point to which I wish to refer is less technical than the matters to which your Lordships' attention has hitherto been invited, but much more fundamental. I desire to ask whether the time has not come when there should be a fundamental inquiry into the right form of ministerial and commercial organisation of civil aviation—whether the present plan is the best that can be devised. It may be that it will be found that it is not essential to have a Ministry of Civil Aviation at all. It seems an unfriendly greeting to the noble Lord, Lord Pakenham, on his first taking up an appointment which is cordially welcomed by the whole House, to ask in terms of the notices with which we used to be familiar in railway stations during the war: Is your Ministry really necessary?

There is no doubt that the present plan is extremely complicated, that responsibility is divided, that the working of the system is dilatory, that it has often been proved inefficient, that it certainly is very costly, and that British aviation is gravely handicapped in its world-wide competition against the air fleets of other countries. The noble Lord, Lord Pakenham, told us to-day that we are not on a competitive level and that the position is disquieting. He even went on to say that unless drastic measures were taken by 1953 it was possible that British aircraft might have disappeared from the main air routes of the world.

LORD PAKENHAM

My whole point was that where we have equal machines, we can beat everybody. It is not a fault in our set-up which is causing the handicap to which the noble Viscount referred.

VISCOUNT SAMUEL

The question is whether the form of the set-up is responsible for our not having as good machines as other people. That is the essence of the whole matter. It is easy to see how this present complicated organisation has come into existence. We are living, unhappily, in an era of great world wars and of threats of war. This astonishing invention that has enabled mankind to navigate the air, which had been dreamed of in ancient times, and again by Leonardo Da Vinci during the Renaissance, has become actual. And naturally, having become actual in such circumstances, its first uses were military. It was at once seen that flights through the air might exercise not merely an important but indeed a decisive influence on these great world conflicts. For that reason, the Air Ministry was established in this country, not to promote civil aviation but to provide the military and naval forces with, air support. The Ministry of Supply was established to provide the Air Force and the armies with the necessary planes and munitions. Later on, between the two wars, private enterprise became busy, both in manufacturing aeroplanes and in managing air transport of passengers and, to some extent, of goods.

Gradually, there came about, step by step, the present plan, which includes three elements—the British Air Corporations, the Ministry of Civil Aviation and the Ministry of Supply. The consequence has been that a great many things are being done three times over. We are accustomed in our Civil Service system to fill up triplicate forms; now we have government by triplicate, and that is carrying the system much too far. The consequence has been a great deal of dissatisfaction among all those who are actually engaged in this scheme, as well as amongst the public generally. It is being carried out at an immense financial loss. We are being beaten in competition by other nations. We all feel, and especially the Government, I think, that matters cannot be left as they are.

What kind of change is necessary in the organisation? I do not think any of us in your Lordships' House is in a position to arrive at an informed opinion. The matter is far too complicated and technical for any of us to say this or that ought to be done. There may be one or two experts in the House who are entitled to form a definite opinion. Certainly I myself would not for a moment venture to suggest what would be the right organisation. But I would suggest to your Lordships that what is needed now is a fundamental inquiry of such a nature as the Government and public opinion generally may think to be the best. It is not a matter for a committee of business men like the Hanbury-Williams Committee, who are no doubt admirably suited to the function asked of them. It is a matter for fresh minds who would look at the whole question, not only from an immediate technical standpoint but also from what might be called the political side of organisation.

While I would not venture to suggest particular requirements, I would observe that there ought first to be a great simplification of the whole organisation. Secondly, if the Corporations are to continue (and, for my part, I see no reason why they should not; I do not suggest any change in that regard), they should be allowed to adopt freely the methods of private enterprise, including competition between themselves, so that each may emulate the others and so discover, by experience, what methods are found to be best. Included in the principles of private enterprise is this simple rule: that responsibility for finance and responsibility for management must be in the same hands. If these two are divorced, the enterprise will not succeed. The noble Viscount, Lord Knollys, who spoke a short time ago, and who knows everything about this matter from the point of view of the working of the industry, said that the users ought to be left free to make their own arrangements for the supply of the machines they need. He spoke of the present system as involving a great waste of time, energy and money.

Probably the right system would be that the Corporations should be left at least as free to conduct their own operations as London Transport, the Port of London Authority and the B.B.C., and as the British Railways are intended to be. If the three Corporations we now have were continued, it might well be arranged that they should form a joint authority for the execution of common purposes, such as the establishment and operation of airports, research and other matters of joint interest. It would certainly be necessary that a Government Department should have a general supervision of the industry, and represent it at the ministerial level. Clearly, that could not be the Air Ministry, which must remain a military Department. If the Air Ministry were to control civil aviation, it would be as if we set the Admiralty to control British merchant shipping and shipbuilding. But the strategic needs of the country must always be borne in mind in the development pf our civil air strength, for its strength is a part of our war potential in any further international conflict. Just as the Royal Navy is strong in proportion as the Mercantile Marine is thriving and vigorous and expanding, so the Royal Air Force will be strong in proportion as civil aviation is thriving and vigorous and expanding. It can be that only if it has a proper degree of independence, and if it succeeds through its own efforts and through the development of its own resources.

Several other Government Departments have an interest in this matter—the Department of Commonwealth Relations, the Board of Trade, the Foreign Office and various others—and, therefore, it is necessary that there should be some Government Department to exercise a general superintendence. It might be found, in the case of civil aviation, as in the case of railways and in the case of British shipping, that that Department should be the Ministry of Transport One can well imagine that an important branch of the Ministry of Transport might perform any of the functions of the present Ministry of Civil Aviation, so far as it is necessary to continue them. I do not suggest that any such change could be carried out immediately, or as a means of solving the technical problems to which attention has been drawn this afternoon. Those present problems are urgent and could not be delayed by any fundamental change of this kind. That would be to make confusion worse confounded.

In any case, such a change could not come about immediately, because it ought to be preceded by a careful and thorough study of the whole matter which, though it would have to last for more than weeks, I would hope might last less than years. What form that inquiry should take is, as I say, a matter for His Majesty's Government and for public opinion in general. It may be that it should be a ministerial Committee; it may be, since many questions of national policy are involved, that it should be a Joint Select Committee of the two Houses; it may be that it should be a Royal Commission; or possibly a form of inquiry which was frequently adopted in earlier times, but which has now fallen largely into desuetude—namely, a Committee of the Privy Council. I have long thought that far too little use is made of that ancient institution, the Privy Council. An inquiry such as this might well best be placed in the hands of a Committee of the Privy Council. The Privy Council includes Cabinet Ministers and ex-Cabinet Ministers, leaders of all Parties, and authorities on political, technical, commercial and financial matters, and such a Committee would exercise a great deal of authority and carry much prestige. I would venture respectfully to suggest that from time to time the Government of the day should consider making fuller use of that Government machinery.

Let me say, finally, that in this new province of human activity this country has great qualities that should lead it to succeed in the air, as on the sea. Half the shipping of the world has been British in earlier years, and not far short of half is British to-day. At this very moment, as many ships are being built in the United Kingdom as in the rest of the world put together. Just as we had in relation to the sea the captains, the seamen, the adventurers and the shipbuilders, so we have, in relation to the air, the airmen, the inventors, the engineers, the adventurers again and the commercial managers who can make this industry and this service wholly successful in this country. The aim should be, therefore, to simplify the present complicated and clogging machinery, and to liberate the native energies of the people. Then, and only then, will British civil aviation, like British shipping, be not only second to none, but the first of all.

5.56 p.m.

LORD BALFOUR OF INCHRYE

My Lords, we have had a wide and interesting debate covering many points, and I venture to think that the speech to which we have just listened has raised great fundamental issues to which it will be well for His Majesty's Government to pay due regard and consider very seriously. I would like to join in the general welcome that has been extended to the noble Lord, Lord Pakenham, on his first appearance at the box as Minister of Civil Aviation. I listened to his speech with great delight and also with a good deal of admiration and envy for the skilful way in which he presented his case, and, as it were, picked his way round the Courtney Report, being careful not to throw any mud in any direction in case some of it got on his own clothes. I think he divided his speech very well into five different parts. I took note of them. First, he tried to make my noble friend Lord Swinton an ally in misfortune. He had to admit that there was great misfortune, but, with good debating skill, he first said, in effect, "If we are in the soup, so are you" When the noble Lord tries to draw my noble friend Lord Swinton into the dock as far as any blame exists at the present time, let me remind him that the time when my noble friend was administering was, first, before Germany was defeated, and afterwards while the war was still going on with Japan, when, naturally, conditions and systems appertaining to war had to prevail. I do not think it is fair to take the situation in those days and, because it embraced a large amount of Government control which was necessary in war time, to say, "You are in this equally with us." It is not fair to use that as justification when this too great degree of Government control continues in peace time.

The noble Lord then passed rapidly on to points from which he felt some satisfaction could be derived. Of course, there are points of great satisfaction to be found from our civil aviation effort. But I do not think the figures which the noble Lord gave, rather too quickly for me to note, were very convincing. I think the figures concerned the increased volume of traffic and the increased mileage. Any of us could sell pound notes for nineteen and sixpence; there would be no limit to the number of pound notes for which we could find buyers. The real point is whether the increased volume is economic, or becoming more economic as it increases. We have calculated that last year it would have paid the Government to give £50 to every air passenger to induce him not to make his journey; it would have been more economic from the taxpayers' point of view. If you try to make the point that we are improving our position because of increased mileage and greater passenger volume, you must at the same time show that your losses are steadily going down. That brings me to the third point of the noble Lord's speech—namely, the financial position. He told us that in 1947–48 our losses were going to exceed £10,000,000, and in 1948–49 we were going to run at a loss of around £8,000,000. There is little hope for the taxpayer there. I suggest that we should not look too much upon the satisfactory side of our civil aviation effort, until we are quite sure that every possible step has been taken to reduce the losses which have to be borne eventually by the taxpayer.

The next section of the noble Lord's speech was the welcome announcement of the investigation to be carried out by Lord Douglas of Kirtleside. I think that bringing in these associated companies is an admirable way of overcoming the deficiencies of a nationalised monopoly. Of course, I admit that the noble Lord did couple with the announcement of the Douglas Committee a brave declaration of his permanent and constant belief in Socialism as a creed for civil aviation. I noticed that when he came to that passage—and he read his notes very carefully—the phraseology rather reminded one of Departmental preparation.

LORD PAKENHAM

I resent that most unworthy insinuation. It is quite unlike the noble Lord and this House to suggest for one moment that I take my views of Socialism from a Department.

LORD BALFOUR OF INCHRYE

Of course, I had no wish at all to suggest that. The point I would like to make is that, when the noble Lord was announcing an investigation into something which is a step away from Socialism, he coupled with it—of course, as was very right and proper from his point of view—the re-affirmation of his fundamental belief in Socialism. I do not blame him at all for doing so. The noble Lord then dealt with the future. I am sure he will not mind my saying that I have heard rather similar perorations over a number of years—delightful perorations, always saying that eventually British civil aviation will triumph, and that we all have complete faith in it. But, year by year, as those perorations have gone out from different Ministers of all Parties, civil aviation has got more and more in a muddle, until we have the present position as exposed by the Courtney Committee.

I want now to deal with the future. I am glad to hear that a big flying boat is to be developed, but, apart from that, I do not think any of us, having heard the noble Lord, can say that we look to the future with any degree of satisfaction. Indeed, the noble Lord said—I took down his words—that if it had not been for the recent decision of the Government the British flag might have been driven off the world's air routes by, I think it was, 1953. But let us remember that until 1953 the British flag will have to go about to a very large degree in an American continent wrapper. When we read the Courtney Report, I do not think we can say that there has been anything except a sorry and costly muddle. That sorry and costly muddle has resulted in a final decision to modify the "Fly British" policy. The final decision, I think, may have been inevitable in the circumstances. It is probable that the Government could follow no other course than to make that decision. But the point I would like to put to the Government is that the circumstances which have grown up over the past two years should not have grown up, and it is those circumstances which have forced a position in which this final and regrettable decision has had to be taken.

All parties come out of that Courtney Report badly. I am sorry that the noble Viscount, Lord Knollys the recent Chairman of B.O.A.C. is not here. I do not think any noble Lord who read that Report can say that it is unfair to label B.O.A.C. as resistant, as uncommercial, and as insistent on is particular views and position. I need not quote the paragraphs, because noble Lords who have read the Report can fee in many places where the Courtney Report has attributed those particular qualities to the B.O.A.C. The Ministry of Supply does not come out particularly well. The "passing of the buck," as it were, to and fro, as to who is to pay for modifications and who is to be responsible, all causes delay and seems to me to show that a Government Department is functioning in commercial matters where a Government Department is a wholly inappropriate body to do so. The noble Lord's Ministry does not come out very well, either, because it has been a party to this havering, hesitation and lack of decision.

Perhaps one comes back to the point, the deep fundamental point, which the noble Viscount, Lord Samuel, made in his speech. It is not that officials are not working hard, but whether we have not the wrong set-up as regards our ordering and as regards the actual functioning of our civil aviation. As I say, the result is that we are forced to modify the "Fly British" policy. I believe, as I think we all do, in the "Fly British" policy, but I believe also in the freedom of the operator to choose what he wants, if you put upon the operator the responsibility for showing results. It seems to me that we have a conflict of design to reconcile—that is, whether we are to let the operator order what he wants to give the best commercial results, if we make him responsible for such results, or whether we are to direct the operator to use particular aircraft in the national interest. If the operator is to have freedom of choice, he has corresponding responsibilities; and it seems to me that great responsibility rests upon the operator to make sure that any recommendation he advances or pressure he exerts as regards modifying the "Fly British" policy is justified by economies so large that all other considerations must be swept aside. Such considerations are the strategic importance of civil aviation to this country, and involve making civil aviation back the Royal Air Force in time of peace and in time of war.

Another tremendous consideration is the difficulty of ever changing back from the foreign type to the British type. I do not want to go into technicalities, but going in for American aircraft means not merely laying down the aircraft but laying down the whole organisation in regard to such things as spares, wireless and many other forms of equipment, to suit that particular type of aircraft. The temptation will always be to continue with the successor of that particular type. Those are tremendous disadvantages to the British aircraft industry. The question we must ask ourselves is whether the operator is justified in pressing for this turn-over. Is what he is going to get so much better than what he might get if he did not go in for this modification of the "Fly British" policy? I cannot say, and I do not think any noble Lord on this side can. Only those who have all the technical information can say that. The noble Lord told us that £5,000,000 was to be saved over five years. Frankly, I was not impressed by that figure. If one takes into account the damage to British flying, the damage to our strategic interests, and the fact that there is no turning back once we go down this road, it seems to me that £5,000,000 is not a tremendous saving against those disadvantages.

I very much doubt whether, under a system of monopoly either governmental or of private enterprise, the operator should have that responsibility of freedom of choice. I doubt whether the national effects of a particular choice are not too great for him to be allowed to exercise his freedom of choice. It is disturbing that this monopoly, the British Overseas Airways Corporation—which does not come out of the Courtney Report particularly well in regard to its organisation (and that is making an under-statement)—should be largely the body that has the responsibility of recommending to His Majesty's Government something which will fundamentally affect our national well-being.

I have tried to make this point of the balance between the freedom of choice and the "Fly British" policy. I regret very much that we have had to modify that policy. Probably at the eleventh hour the Government had no other course open to it; but I repeat that I believe that the circumstances of the past two years have led up to that position and should not have been allowed to do so, and the reasons for it deserve the closest examination both within and without the Government.

6.12 p.m.

VISCOUNT ADDISON

My Lords, I should like to join with other noble Lords in extending a welcome to my noble friend on the assumption of his new and tantalising responsibilities. What was said made me wish that sometimes in my own past experience I had had as friendly a welcome——

VISCOUNT SWINTON

We have made it up to you in later life!

VISCOUNT ADDISON

It is kind of the noble Viscount to put it so charmingly. Before I come to the main issues which we have been discussing, I should like to say a word about some points of a relatively minor character which were raised. Perhaps the noble Viscount, Lord Swinton, will let me give him such information as I have in regard to his inquiry concerning the Irish partnership. I must read it, because it contains figures which otherwise I should have to try to carry in my head. The final results of the company's operations for the year ending March 31, 1948, are not yet available, but the loss is likely to be of the order of £600,000, of which the British Corporations, British Overseas Airways Corporation and British European Airways Corporation, are liable for 50 per cent. each. The Board of the company are responsible for policy, and with a view to eliminating losses they have decided to discontinue or reduce the frequencies of many services, and to rationalise the fleet on the basis of the Dakota, as a single aircraft type. Under this arrangement the Vikings have been thrown up for disposal. As the noble Viscount knows, of course, their Constellations have been transferred to B.O.A.C. The company confidently expect as a result of this change in policy and fleet re-arrangement, to break even on their current operations. That is perhaps not a very bright reply but it is the best I can make to the noble Viscount's inquiry.

Then there are a number of minor points which I can perhaps touch upon, which were raised by the noble Marquess, Lord Willingdon, as to the numbers of staff and machines, and so on. I have here full details of all of them, but I am sure it would weary the House if I were to read out the number of the machines and all the rest of it. I will simply tell the noble Marquess that I will answer him in the form of a letter. As to the aircraft employed, British Overseas Airways Corporation have altogether 110, British European Airways Corporation, 79, and the British South American Airways Corporation, 18. Those are the actual figures.

VISCOUNT SWINTON

There was one question which seemed to me vitally important, and that was the number of aircraft commercially employed on a given day and, in relation to that, the number of persons employed all over the world. That seemed to me an absolutely vital question. If the noble Viscount could answer that, I am sure the House would be grateful.

THE MARQUESS OF WILLINGDON

What I asked for was the number of aircraft commercially in the air on the date I gave; not the number of the fleet, which the noble Viscount the Leader of the House has just given. Also I asked the number of world-wide employees administering the three Corporations. I did not ask for any either figures.

VISCOUNT ADDISON

That is not what I have in the paper before me. I have given the number of aircraft actively employed in carrying commercial loads on July 5.

VISCOUNT SWINTON

The number which the noble Viscount gave is the total number they had in their possession?

VISCOUNT ADDISON

I have given the number employed in carrying a commercial load on July 5. That is the answer to the question I was asked. The next point is the number of employees of all grades in the employ of the three Corporations in all parts of the world on July 5. The numbers are: British Overseas Airways Corporation, 20,890; British European Airways Corporation, 7,375; British South American Airways Corporation, 1,760. As I have said, I will send the details to the noble Marquess afterwards in the form of a letter.

Now I come to some of the more important issues raised. I feel rather comforted, notwithstanding the difficult topic which we have been discussing as to the considerable losses which this industry in its early days is necessarily incurring—though we should do everything we possibly can to minimise them. I would first say a few words about the suggestion made by the noble Viscount, Lord Swinton. The noble Viscount knows that I am not one who wishes to avoid inquiries into fundamental matters. It may well be found, as experience grows, that one of the kinds of inquiry which he has suggested might become desirable, though I do not think that particular necessity has emerged at present. But so far as any difficulties do emerge, it is our duty to inquire into them and, if we can, to set them right. I will come presently to the question of the so-called business men's committee to which reference has been made.

The noble Viscount, Lord Samuel, suggests that the deficiency of machines which are as good as other people's may be due to the set-up. I utterly dispute that; it is not true. The reason that the British civil aviation industry is not equipped with the best civil aircraft in the world is that up to three years ago it was concentrating the whole of its energies on military production. And, with the exception of the machines to which I have referred, in this part of the development we had to start approximately from "scratch" At the end of the war period, we were concentrating on fighter and bomber manufacture. We had the best fighters in the world, and I have no doubt that in the course of time we shall have the best civil aircraft in the world. Anybody who has been into this question knows perfectly well that from the time you begin to think about a new type of civil aircraft to the time when the machine flies, a period of anything from six to eight years elapses. It is not any less. In the case of the Constellation, about which the noble Viscount spoke, it took eight years to develop that machine. To say that the reason we have not yet produced, by our own manufacture, the best civil aircraft in the world is that there are three separate organisations—the Ministry of Civil Aviation, the Ministry of Supply and the separate Corporations, is to say something which bears no relation to the facts. The noble Viscount is in dreamland when he speaks like that.

I will come back later to another suggestion which the noble Viscount made, with which I equally disagree—namely, that the Corporations should be left free to obtain the machines they need and, as he said, to undertake the research and (I gather) the development costs. I wonder whether the noble Viscount has any idea whatever to what he is committing himself.

VISCOUNT SAMUEL

I did not say anything about development costs.

VISCOUNT ADDISON

Very well: "research" is good enough. You cannot undertake research without indulging in development costs. It is an exceedingly costly business. How can you expect any private corporation, in view of the costs which are known at present, to encourage research into civil aviation and aviation problems generally? It would be entirely outside the possibilities of any private corporation. It would not be fair to ask them to do it.

VISCOUNT SAMUEL

Of course, I was not saying that the State should have no share in research. I have been one of those who have continually advocated it. In so far as research is necessary for the Royal Air Force, naturally the State is deeply and vitally interested. There is a good deal of research being done now by the Ministry of Civil Aviation and, if there were no research carried out by the Ministry of Civil Aviation, such research would have to be done by somebody else. The Corporations might take some part in it, so far as they were directly interested, through a joint board.

VISCOUNT ADDISON

I am not in the least saying that in course of time, as experience develops, we may not develop existing methods. But I do say that it would be entirely wrong to expect a private corporation, whatever the system, to be saddled with the immense costs which at present are, necessarily I think, being incurred in various forms of research, both for military and for civil aviation purposes. Apart from that, the I other suggestions of the noble Viscount are certainly some that have occurred to many of us at different times. It may well be—I think it is so—that, in the course of time, the machinery for dealing with these things will undergo considerable modifications. Some of it has already been modified, as I have indicated.

However, may I try to pick up the different points by taking the different sections of the services which have come under review? The first is the flying boat. The first difficulty with which we are confronted with regard to continuing the services of flying boats is not the desirability or attraction of the boats themselves. I think that everybody who has had any experience of them is very fond of the flying boats. They are very popular; they are comfortable, and people like them. The point is that these Corporations—and in particular B.O.A.C.—are involving the nation in great losses every year. Unfortunately, from that point of view, they run very unremunerative services in many parts of the world, simply because the maintenance of the flying boat bases and service falls entirely on the Corporation. In regard to aerodromes and so on, it is often the case that the different countries maintain the aerodromes or contribute to their maintenance, and the Corporations pay landing fees. But where the flying boat has to have its own base, and the other countries are not contributing (as they are not), the whole cost of the flying boat base falls upon the Corporation. You have to have conveniences ashore for the use of passengers, who may need to sleep there, have lunches and so forth. The whole cost of the flying boat base falls upon the Corporation. It was that consideration which at one time tempted (shall we say?) some of those interested to suggest the elimination, or at all events the reduction, of flying boats.

We are satisfied—and I am gratified that the sense of the House entirely supports this decision—that it would have been wrong for this country, with its immense maritime responsibilities all over the world, to abandon the use of flying boats. In saying that, I hope the House will bear in mind, when they come to discuss this question next year or the year after, that they have to face up to the fact that the SR.45 is going to cost a great deal of money before it becomes a paying proposition. That may be several years hence. We shall have to possess ourselves with as much patience as we can. I appeal to the House, in fairness, to remember that. I am very glad that this arrangement for the sharing of the base, which the noble Viscount has described, has been made, and that the British South American Corporation welcome the scheme which has been decided upon.

Of course, there may be still trouble, as there so often is in the early days of machines, with the new Solent, which I understand is likely to be very popular when it gets over the preliminary stages. Its use on the South African service is already planned. I certainly hope that it will be very successful. The real problem that we have had to consider, however, is that of filling the gap.

LORD GIFFORD

Would the noble Viscount mention the Australian service while he is dealing with this particular point? He has mentioned the South African and the South American services. Could he say what is the intention with regard to the Australian service?

VISCOUNT ADDISON

At the present moment, the plan is that our share in the Australian service shall be a shuttle service with Constellations. The new Constellations will be used for that Service. The eventual plan will be to have flying boats in use in different Far Eastern waters, but I will not go into particulars of that scheme now. Another question asked of me by the noble Viscount, Lord Swinton, concerned the order of the Strato-cruiser. The Strato-cruiser was ordered in November, 1946. As we all know, that aircraft was ordered at the same time as some Constellations. And the advice that was then given to us was that this machine, when it was perfected, when it came into the market, if it fulfilled the expectations, would be an advance even on the Constellation, and would be a further guarantee of our being able to compete successfully in the air. It was on that account that this order for these three machines was given at that time. So far as the advice which we have received up to the present goes, we have every reason to think that it was a right decision.

Now let me say a word about this gap. As I say, we had not had a chance of starting properly until towards, or after, the end of the war. The several machines which the noble Viscount mentioned are now in various stages of production. I remember that when I first came to be concerned in the discussion of these matters, the time given to me as representing the end of the post-war gap was 1950–55; that is to say, it was not until then that we could put in the air British machines as good as or better than anybody else's. I may say that sad experience of examining these matters with the experts has made me, in my own mind, prolong that period by a couple of years or more. And if we can draw level or attain superiority by 1953, I for one shall be agreeably surprised. At all events, these machines take a long time. We have to think in terms of years. Unless we are prepared to think in terms of years, it is no good tackling the job at all. I did not quite follow the noble Lord opposite on this point. He was anxious to leave the choice to the Corporations, and at the same time he seemed to want to limit it. Those two things do not quite fit, and I shall have a word to say on that in a minute. The only machine that really has been sacrificed or abandoned, is the Tudor II.

I have here a complete diary of the life of this machine, and I agree that it is not a cheerful document. But we were assured in 1946, I remember, that we could expect these machines quite soon. They did come, but they did not pass the tests; and so the matter has been going to and fro. The results of the latest trials at Khartoum, I am sorry to say, were exceedingly unsatisfactory; it is no good pretending otherwise. I agree that the document to which the noble Viscount refers is rather dismal. There have been some people not working together as well as they ought, or as we would like them to; there have been cases of different persons being concerned; and very often—indeed, this more than anything else has been the trouble—the perfect has been the enemy of the good. The original design was for a machine of so many thousand pounds all-up weight. In April, 1944, I think it was to be 70,000 lb. Then somebody came along with an improvement. They wanted a more comfortable seat, or they wanted this, that or the other; and in November of that year the all-up weight had risen to 76,000 lb. It is easy to be wise after the event, and to say that the man who had the bright idea of making a more comfortable seat should have been brought into closer co-operation with the man who knew the mechanics of the engine, and the capacity of the machine to fly, since gradually the weight increases beyond the capacity of the engines to take it off the ground on a short runway.

One difficulty has led to another. I agree with noble Lords that results of that kind must be safeguarded against. I am looking anxiously for the Report of the Committee on this question of ordering so as to avoid complications between the desire of a person for something a little better than the idea of the month before and the work of the designer and the constructor of the machine and engine. The Report will be before us shortly. We have to get that matter on to a better working basis. Several of us in this House have had a fairly long experience of these things. There is nothing new about this kind of trouble. In fact, to be quite frank, I am rather surprised that it has been confined to one machine. At one time, I myself had a great experience of the manufacture of munitions of war, and I well remember how we sent out thousands of "dud" shells to the Front, how long it took to get the fuses laid, and how long it took to get the primers exactly correct—and all the rest of it. Always, there was something to be corrected. That occurs in any matter of this kind, especially with something entirely new. Therefore, I am not disposed to be at all uncharitable or unkind to any of the parties concerned in this. They were doing their best. We have had an unfortunate experience with this machine; I need not pretend we have not. What we have to do is to take great care that that kind of experience is avoided and safeguarded against, so far as is humanly possible. That we are doing. In that regard, I feel sure these business men will help us very much.

Now, let me say a word about the relation of the Corporations to the ordering; and I am not anticipating the Report at all. There the Ministry of Supply—and here I have the noble Viscount's case in mind—must have the responsibility for what are called development charges and research relating to the developing of what is called a prototype—namely, the machine before it gets into the air in the first instance. I do not see any way to avoid that. That is a highly expensive business. It involves continual changes and many alterations in manufacturing processes, and I do not see any way out of it, except that some State Department should work in co-operation with the Air Ministry. Just as it did during the war, so it must do in peace time, with this section of civil aircraft provision. Thus it is difficult to say at what particular point the Corporation are to come in. If it is to be, we will say, when the designers and the manufacturers have produced a prototype which is satisfactory, you may say "That is the time when the Corporation should come in and say whether they want it; then they will say that they order so many." But it is not quite so easy as that, because often, as this prototype is about to be put into the air, several modifications will suggest themselves, or will emerge as being necessary. I do not see how you can divide the responsibility for provision against matters of that kind.

Here, I would answer the question which I have been asked in regard to the Brabazon, which is a very good case in point. I quite admit that the ordering of this immense machine is an adventure. We were advised that it was the right thing to adventure upon. It is a risk, but unless we are prepared to take risks, whether with the Brabazon, the Comet or the S.-R.45, then it is good-bye to development. We simply have to take some risks, and we were advised that it would be well to do so with this machine. This is a great business and it is undoubtedly accompanied by a considerable number of hazards, but we have to persevere with it. So far as the immediate prospects are concerned, the first prototype is scheduled to fly within six months. As the noble Viscount, Lord Swinton, has said, it will be necessary after that to have a long series of trials before the production of the machine in numbers can really be started. If all goes well, as I have said, it is expected that the prototype will be ready for the air in approximately six months' time. The best prospect that I can suggest with regard to the future of these machines is that they will be in service in the air in 1953. To say that, gives some idea of the time that is required for dealing with the problems that arise in connection with such matters.

VISCOUNT SWINTON

Is that the prototype of which you are now speaking?

VISCOUNT ADDISON

NO, the developed machine.

One of the questions which was put by Lord Waleran in the course of the debate was this: In view of the importance of getting jet aircraft down to the ground quickly at the end of a flight, would the Government spokesman inform the House as to the extent to which progress has been made in this matter? My reply to that is that at the present time extensive work is going on upon that subject, and I understand that there is some promise that those who are engaged in it will be able to reduce what is called "stacking time" very materially. We have also been asked about the results of the work of the Hanbury-Williams Committee. I understand that information about that will be available very shortly. I have made these comments on the development which is necessary and the costs of the development period only to indicate that this business is not quite so easy as might be imagined. It is not open to the Corporations to say that they will have twenty-five machines of this sort or forty-five of that sort. It is not so easy as that. Matters will not reach a stage of that kind for a long time and whilst we have to take all possible steps to avoid delays which might postpone the delivery of an efficient and satisfactory machine, we have also to make allowance for that kind of thing. I am sure noble Lords will appreciate that it is not easy to arrive at a simple solution as to the best way of dealing with all these problems. However, I agree that we have to simplify this procedure as much as possible. I can only tell the noble Viscount, quite frankly, that that is a matter which is being pursued actively at the present time.

I think it is fair to make one other comment, and it is with regard to the question of losses. While we recognise that every possible step must be taken to secure economies, it cannot be expected that this great enterprise will not involve us in considerable loss, for a substantial time to come. If we had simply considered effecting economies, we should not have had flying boats on the Australian service now, because of the expense arising from the maintenance of bases. I have had some inquiry made with regard to the subsidisation of various other industries in their early stages of development, and what they cost. Let me tell your Lordships, for instance, that the Royal Mail Steamship Company, I understand, had a subsidy for a very long period of years, but emerged successfully at the end of that time. Subsidies or guarantees were given for those famous ships, the two "Queens"—the "Queen Elizabeth" and the "Queen Mary," which are doing so well now and which have so thoroughly justified the expenditure on them. All these new ventures involve enterprise and heavy cost, often over a considerable period of years.

We took a decision the other day that while, so far as possible, we should avoid further loss on the machines that were only disappointing us, we should try to fill the gap between now and the time when these other first-rate machines (as we hope they will be) can be put into service in the air, by organising a service which is a good competitive service. I do not think it would be creditable to our aircraft services if we were to have on routes in different parts of the world machines that were inferior to those owned by other people. I cannot think that in the long run that would be creditable to our aircraft industry. Therefore, we have decided that, for the time being, we must reinforce what we already have. Until we have something better available in the way of the Hermes machines and other types, we are going to reinforce what we already have by the machines to which my noble friend Lord Pakenham has referred.

I agree with the noble Viscount, Lord Swinton, that they may not in all respects be as likely to be as immediately remunerative as Constellations. But they are proved and satisfactory machines on Empire air routes, and they will be absolutely invaluable to us at the present time. As Lord Pakenham explained in the careful statement which he made, our concern must be to avoid extensive immediate dollar commitments. That is a matter of vital consequence to us at the present time. I am happy to find, as a result of the discussion that we have had in your Lordships' House to-day, that the decision to purchase these machines does not really seem to have been challenged. Indeed, I think that on the whole it is accepted as unavoidable. It is an instance of the fact that we have to do the best we can in the circumstances of the time. I feel sure that, although it will be some years hence, we can prove ourselves to be as competent in civil aviation as we have proved ourselves competent in war aviation.

6.47 p.m.

VISCOUNT SWINTON

My Lords, this has, I think, been a very useful debate, and of one thing certainly I am sure—the whole House is grateful to both the Ministers who have spoken for having told us frankly what the financial position is. I certainly do not want to shirk any responsibility for anything which I have done. I have made plenty of mistakes in my time, but when I do make mistakes I always take my full share of the responsibility for them. I take responsibility for the Viking. I was almost solely responsible for that. I was greatly attacked over it. I was also attacked over Spitfires and Hurricanes, but I do not think that I made any awful mistake with regard to them. I did my best to make B.O.A.C. and the Avro people run together. Perhaps I did not succeed. All I can say is that if I had not been turned out I would have continued in my efforts on that line and, if B.O.A.C. and the Avro people had not got together, someone would have gone—and it would not have been me. I always intended that the Corporations should buy their own aircraft when the war was over—I am not just saying that now. I think we announced it in the White Paper that was issued during the life of the National Government. Certainly, I announced it in the speech which I made on behalf of the National Government, expounding the policy to the House.

Let me answer once again the argument of the noble Viscount the Leader of the House that this cannot be done because of development orders, and that development orders must be given by the Government. On the latter point I agree with him. I am not sure that there was as much between the noble Viscount the Leader of the House and the noble Viscount, Lord Samuel, as Lord Addison seemed to think. I am sure that development orders must be given. But that does not in the least prevent the Corporation giving commercial orders. It was a perfectly regular thing in the Air Ministry in past days to recover all or part of the development costs in commercial sales, if they were lucky enough to do so. On a military aircraft, of which numbers may be sold at home and abroad, the whole of the development costs may be recovered. I doubt whether that can be done if it is a civil aircraft, because the number of civil machines sold must always be smaller. But whatever amount is agreed to be fair, it ought to be recovered in commercial sales. That is the common form which has been worked in the Air Ministry ever since it started.

Nor do I see any difficulty in deciding at what stage the Corporation should place the order and the maker fulfill it. The Government places the development order; the Corporation places the commercial order. While the machine is being developed and even before the prototype has flown, often as soon as it has flown, the Corporation may decide that the machine is coming out right and will order twenty or thirty of them. If they wait for further development, well and good. Then adjustments which take place on the machine after the commercial order has been placed are on account of the Corporation. That is not at all difficult in practice. I also stand by the policy that we should have had two of the Corporations constituted as I proposed, and prepared to operate without any subsidy. I stand by that and I oppose wholeheartedly the decision of the Government to upset that policy, with the consequent loss which the taxpayer is now suffering. I accept my full share of responsibility, let me assure the noble Lord.

Reference has been made to the inquiry which the noble Lord, Lord Douglas, is to undertake. The noble Lord said it would be a wide inquiry, but I am not sure what it is going to embrace. The real question is: Where the Corporations cannot give a proper service, are charter companies to be free to go in? The noble Lord was a little sensitive about his Socialism, I thought, but no one will challenge his own enthusiasm as a convert to the political faith he now espouses. The noble Lord, Lord Pakenham, made it perfectly plain that not only was he not going to make any alteration in this Act, but he was jolly well going to see that no one else did. What is the good of the noble Lord, Lord Douglas, inquiring, if he is not to be allowed to change anything in the Act and if it is more than his place on those Benches is worth—as the noble Lord, Lord Chorley, said—to come out with a recommendation that a Socialist Act of Parliament should be changed? He will have to sit upon the Cross Benches!

LORD DOUGLAS OF KIRTLESIDE

My Lords, I should like to answer the noble Viscount on that. I am going to conduct the inquiry with an entirely open mind and, I hope, as impartially as I am capable. I have no axe to grind in this matter. I think the noble Viscount may rest assured that I shall not be afraid of my place on these Benches, or of the wrath of the Minister.

VISCOUNT SWINTON

I am delighted to hear it, and I am sure the noble Lord will behave with the stout gallantry with which we have always associated him. But what I want to know is this: Is he to be allowed to do this, not because of his political faith—he will not be treated as a "Nenni-goat"—but because the noble Lord, Lord Pakenham, told us, in effect, that only over his dead body would there be any change in the Act? The real point to be inquired into is whether the Act should be changed. Unless the Act is changed, there can be no further room for manœuvre and no further opportunity for these charter companies. While I am sure the noble Lord will conduct the inquiry impartially and efficiently and, maybe, interpret the terms of his reference to say whether the Act ought to be changed, the present Minister of Civil Aviation says that no matter what is said in any quarter, he is not going to change the Act. I do not think the charter companies are going to get a lot out of that.

But we must not be too ungrateful. To-day, at long last, we have had some decision and I am really grateful for that. It is doubtful whether the main decision announced is a right decision. I do not like to be dogmatic about this, without considering evidence which may be put before us. I want to see something more about performances, dates of delivery and so on. I particularly want to study this rather complicated way in which the sum of £5,000,000 saved was made up, whether the whole of the capital cost is really taken in on one side. Assuming that we have to buy foreign machines, I am extremely doubtful whether we are buying the right machine. I do not think there is much in the argument that, while we were not "flying British," we are "flying Commonwealth," when, we are ordering an American machine manufactured in an American-owned factory in Canada. I would rather have the work taking place in Canada than in a foreign country, but what we are ordering here is an American aircraft built in an American-owned factory and powered with Rolls Royce engines.

LORD PAKENHAM

I should like to correct the noble Viscount on that point. The Canadian Government, and though it is leased to a company which is largely American, it remains a strategic asset to Canada.

VISCOUNT SWINTON

If I am told that one of reasons why this order is being placed is that there is a good deal of strategic justification behind it, and that it is desirable to give an order to factory situated in Canada in order that it may be able to go on producing because it is a valuable was potential, then I regard that as an argument which is entitled to consideration. Before the noble Lord intervened, I had not appreciated that that was one of the considerations which we must take into account. Looking at it from the commercial point of view, I should have said the right thing to do, if we are going to buy more aircraft, is to buy Constellations—which are the best aircraft—possibly with a British engine inside them. I do not think that is an impossibility. At any rate, here is a decision and we have been given a great deal of new information. It would be most ungracious of me in those circumstances not to ask leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.