ADMINISTRATION OF CIVIL AVIATION

HL Deb 02 February 1949 vol 160 cc461-522

2.42 p.m.

VISCOUNT SWINTON rose to call attention to the administration of Civil Aviation and the Reports of the Corporations; and to move for Papers. The noble Viscount said: My Lords, the Motion standing in my name gives us the opportunity to consider the Reports of the three Corporations charged with the operation of air lines, but I think your Lordships will agree that we ought also to embrace in our review the general policy and administration of civil aviation, and not confine ourselves to what is in the Reports. I have, therefore, framed the Motion in wide general terms.

The first question I would like to put to the Minister—and I have given him ample notice of this—is one which I do not think has ever been answered, although it is of fundamental importance. It is this': What is it all costing? It seems often to be assumed that the cost to the taxpayer of civil aviation can be measured by the deficits on the working of the Corporations and the consequent subsidies which have to be given to them. If that were true it would be serious enough. The deficit of these Corporations in the past year is very nearly £11,000,000—I think, to be exact, it is £10,820,000, though I am not sure whether that figure covers all the losses of associated companies. If it does not, then some other sum has to be added. That is the figure in the Reports which have been presented to Parliament for the year ending March 31, 1948.

Just before Christmas, the Minister—and I am grateful to him for this, because we have asked in the past that we should be kept up to date as to how these matters progress—gave to the Press a statement of the results of the working in the first half of the current year. On that period, the deficit is down to £4,000,000, but the Minister warned us that the spring and summer half of the year was much the better half, because of the summer seasonal traffic, and that the loss would be far greater in the second half of the year. Indeed, he warned us that it was certain that the loss would exceed the statutory limit of £8,000,000 which, your Lordships will remember, is the limit of loss which Parliament imposed under the Civil Aviation Act.

But that heavy loss of £11,000,000 in the accounts which we are now considering is only part of the cost, and before I come to the much larger items of cost I would put one small point. There appears to be a concealed subsidy in the Corporations' accounts. Your Lordships will see that there is an item of loaned or leased aircraft against which no sum is put. Your Lordships will also see from the accounts, and it is familiar knowledge, that the life of an aircraft is five or six years. When a Corporation buy an aircraft, they write it off in five or six years, making allowance in the accounts for that depreciation; hut, obviously, if an aircraft is not bought by them, and is merely on loan to them, they do not write off anything, and the depreciation must be borne by somebody else, presumably by the Ministry. Similarly, if the aircraft is on loan to one of the Corporations, unless the rent which the Corporation pay is more than the annual depreciation which ought to be allowed, then the deficit must be carried by the Ministry. In both cases, there is something in the nature of a concealed subsidy. It would be useful if the Minister would tell us what that amounts to.

I now come to a much larger figure in the accounts—namely, the expenditure on development and research, all of which is carried on the Vote of the Ministry of Civil Aviation. At least, I presume it is all carried on this Vote; there may be something more carried on the Vote of the Ministry of Supply. Some of the work of development and research is no doubt common to both military and civil aviation, but a large part of it is purely civil; and in the Estimates for Civil Aviation for last year a figure for research and development of over £10,000,000 is given. There is, in addition, the cost of airfields, all of which is borne by the Ministry of Civil Aviation. I think it would be useful if the Minister could give us figures for capital cost and for maintenance, distinguishing, if he can, between international airfields used by the traffic of all countries and airfields used only by our internal services. The cost must already be very large, there is a great deal more to come and I would like to know what are the future prospects.

Then there is the cost of the Ministry itself, which has increased greatly. I think the figure for staff alone (if we take headquarters staff, the staff at out-stations and travelling expenses)exceeds £1,000,000. I wonder whether all that is necessary, and whether some of the work could not be eliminated. I think your Lordships will agree that in assessing the real cost of civil aviation all that has to be taken into account, and I would ask the Minister to give us the real aggregate figure. I think your Lordships will be surprised at it. I have tried to calculate a figure from the Estimates, and, allowing £6,750,000 for appropriations in aid, I calculate that we have to add at least £16,000,000 to the Corporations' deficit of £10,000,000 or £11,000,000. If I am right, that means that the true bill to the taxpayer for the year is not less than £26,000,000, and may well be more. It would be interesting to compare the cost to the taxpayer of the services rendered to shipping, which brings in a great income to this country, and which to-day, I suppose, is the largest of our invisible exports. I cannot say what it is, but I hazard a guess that the cost to the taxpayer of shipping services is not one-twentieth of the cost of civil aviation. I think I have said enough to show that the question of cost is of paramount importance and that it should have a profound effect upon the matters which we shall be discussing in this debate.

I would turn to the Reports of the Corporations, and their operations. I am glad to say that there is one matter upon which I can congratulate the Minister—I may find something else in the course of my review—and it is that at long last the Government have taken the obvious decision that the Airways Corporations are to be allowed to buy their own aircraft from the makers. In company with many of your Lordships, I have been pressing this point upon the Government for the past two years, and each of the three Corporations pressed for it in their reports to Parliament last year. Obviously it is the only way to get the right contact between the user and the maker. It in no way hampers the Government in giving general directions to the Corporations. They can give directions to the Corporations as to how far they are to buy British, and they can give directions as to how far they are to be allowed to use dollars—I am sure the Treasury give them a very strict direction.

It does not in the least interfere with the Ministry of Supply—if that is the Ministry which conducts the research and development work. Indeed, by this means you will probably get a better and closer liaison between the Ministry of Supply and the Corporations in regard to research and development. But why was not this done sooner? I believe the Minister himself was converted quite a long time ago. It is common knowledge that the obstruction has lain with the Ministry of Supply. I do not think anybody on the Front Bench will seek to deny that. It is extraordinary how successfully the Ministry of Supply impedes the economic progress of this country.

I now come to the policy with regard to aircraft. I feel sure we all agree that the general aim should be that the Corporations should fly British aircraft, but that those aircraft must be efficient. The three Corporations are not in the same position in this matter. As regards B.E.A.—that is, the European line—I do not think there is any serious problem. In their report the Corporation pay a deserved tribute to the Viking aircraft, and say how very suitable, economical and comfortable they are. They tell us that they have decided upon its ultimate successor, and upon Dakota replacements, all of which will be British. It is very difficult to say anything about B.S.A.A.—that is, the South American line. That line suffered a grievous loss in the unfortunate death of Air Commodore Brackley. The Corporation told us that they looked forward with confidence to the modified Tudors—I think the Tudor IV and V. It is fair to say that the Minister was absolutely right to ground the Tudor aircraft pending the exhaustive tests which are taking place. I would further say that, from the information I have, he appears to have undertaken those investigations in an expeditious and practical manner. I think that all one can say to-day—I do not know if the Minister can give us any information—is that we sincerely hope that the result of those investigations will be satisfactory.

B.O.A.C. have had a difficult problem. If, as I hope, we have now on the stocks really good aircraft, using jet engines or gas turbines, and which are well designed to be the most economic size and type, then we ought to press ahead with them with all speed and in the closest consultation with the Commonwealth countries who operate reciprocal services. That, it seems to me, is the practical way to combine the policy of flying British with economical operation. It is certainly the right training for the designers and the craftsmen in the aircraft industry. No benefit is really derived from either the designers or the craftsmen if they are kept at work on obsolete machines. We may have to use foreign machines in the meantime on some of the longer routes, but if we know we have the right kind of British aircraft coming along, that, I feel, will be only a temporary disadvantage. That temporary disadvantage is countervailed by the importance of the British air lines retaining their clientele and goodwill. If a line gives inferior service, whether it be in aircraft or in administration, travellers will get into the habit of travelling by foreign lines, and it will be all the harder to get them out of that habit when the good new machines are in service.

I stress the importance of immediate and continuous consultation with the Commonwealth countries, because I think it is so important to get back to the parallel partnership and to the use of the same kind of aircraft, which we all envisaged in 1945. We not only envisaged that partnership, but we had worked out in great detail—as my successors know—just how that policy and that principle were to be applied. It broke down only because we, alas, were not able to produce the right aircraft. The policy itself is so sound and economical (I do not have to argue it now; it has already been expounded here) that it is most desirable that we should return to it as soon as we have the right types of aircraft. That is why I said at the start that we must proceed with those types in constant and close consultation with our Commonwealth partners.

In all these Corporations the administration costs are high. I am not just jobbing backwards when I say that I cannot help once again regretting most profoundly that, pressed by some doctrinaires behind them, the Government insisted on discarding the partnership with the shipping lines. The shipping companies would have brought into this business great experience, a tremendous knowledge of transport and existing organisations all over the world. Those organisations would have rendered unnecessary the creation of all sorts of new booking offices, and the like, and could have taken in their stride the booking of fares. In addition to their experience, the shipping companies have tremendous good will all over the world. I must say it is a great pity that they were not brought in. Not only is it a great pity, but the bill which the taxpayer has to foot to-day would have been less if that doctrinaire step had not peen taken. In my view, it would be very useful if, in the case of B.E.A., we could have a comparison with other European companies which publish their reports and full accounts and, I think, supply extensive details to I.C.A.O.—that is, the International Civil Aviation Organisation, the international U.N.O. for this business. I should like to see a comparison between the number of hours flown per month by the individual aircraft of foreign lines and those flown by our lines, because it is the number of flying hours obtained from an aircraft which makes all the difference between profit and loss.

Any of your Lordships who has read the B.E.A. Report—and, indeed, the recent statement of the Minister—must have been struck by the enormous deficit upon the internal services. I think I am right in saying that in pre-war days these internal services were operated without any subsidy at all. As your Lordships will see from the Report, in the last full year the operating deficit of B.E.A. on its internal services—that is, the services operating inside this country—was over £2,000,000, although the operating deficit on the Continental services was only £1,250,000. It is not as if a great deal more flying had been done on the internal services. On the contrary, in round figures the passenger miles flown were 50,000,000 miles on the internal services and 73,000,000 miles on the Continental services.

Returning to the figures which the Minister published in the Press for the first half of this year—the better half, certainly, for both—the contrast is even more striking. The deficit of the internal services, even in the good seasonal time, was £720,000, whereas the deficit on the Continental services was only £143,000. But here again, that is only part of the cost. To these figures should be added the net deficit on airfields—and the cost of the airfields is millions—of which the greater number, though not the most costly, are maintained for internal services only. I think it would be an advantage if we could have the combined losses on the services and airfields apportioned to the different routes. The Minister probably could not give me that information to-day.

THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)

No.

VISCOUNT SWINTON

However, I think it would be useful if he would publish those figures to Parliament in a Written Answer. Obviously, the figures must be there. Adjustment about overheads can be made; every company must know roughly the loss on each of the services it runs; and the Minister knows with complete accuracy what is the cost of the airfields which accommodate those services.

I wonder whether some of these airfields could not be run more cheaply. I have had supplied to me, by one of its users, particulars about an airfield at Islay. There, the B.E.A. Corporation have one person, but the Minister has twelve. There is a traffic controller who acts as meteorological officer; two wireless operators; two girls as teleprinter operators, four airport hands, for baggage and operation of crash tender, and one clerk. I do not know what the airfield had before the war, but I am sure it was not as much as that. But then it had something else; it had more services than the Minister is giving it to-day. Before the war there were three services daily during the summer months, and two daily during the winter months. My informant adds: "Since nationalisation, the most we have had has been a double service during the summer and a single service during the winter,"—and, I gather, not going by such a convenient route as used to make the connections. The number of staff seems a lot for one service a day.

That leads me to the great importance of co-operation between the Ministry of Civil Aviation and the Royal Air Force over the use of airfields. When we were in office in the National Government, Mr. Churchill gave a wise directive in which he laid down that there must be the greatest possible common user of airfields between the Royal Air Force and Civil Aviation. Obviously, that is good sense. It would be nonsense to keep one airfield going for the R.A.F., with one or two squadrons upon it (I hope it has one or two), and a few miles away a separate airfield kept for civil aviation, on which there were only a few machines landing. There is no question of security in this; to raise the security bogy here would be just nonsense. I say that dogmatically, because I think I know as much about security as most noble Lords in this House. If war came, the Royal Air Force would take over every one of the airfields. I would like to ask the Minister categorically: How many airfields are there now where there is common user between the Royal Air Force and his Ministry, and (what is even more important) how many cases are there where the uses of an airfield could be combined but where that combined user is not taking place?

I want to say a word or two about the charter services, in which your Lordships have always taken a keen and friendly interest. The Minister has been forced by circumstances to give a wider opportunity to these charter services. Your Lordships pressed him a good deal upon that in a debate which took place six months or a year ago. He has given in, but I feel that he has given in rather grudgingly. He has conveniently published for us, in Hansard of January 26 this year, the explanation of his intention and the directive which he has issued to the Transport Advisory Council. Your Lordships will observe that the Council is to be strictly advisory the Minister is to retain all the powers. I would like to make some comments on this directive, and ask some questions. In the first place, I am not clear whether this use of charters is to be confined to the United Kingdom, or whether it is to apply outside. I cannot for the life of me see why it should not apply outside the United Kingdom, in the other services and in other territories, if the Corporations cannot do the job or cannot give adequate service.

Your Lordships will recollect the unsavoury story we had last year about the Nigerian charter. There, the Nigerian Government desired to enter into a contract with a charter company to run a service by the short route across the Sahara, a service which would have cost the British taxpayer nothing and the Nigerian taxpayer nothing, and which the charterer was prepared to undertake. They were forbidden by the Government here to enter into that sensible contract. In place of such a contract, which would have provided an efficient service, the Ministry insisted—I do not know whether the inspiration came from the Ministry or from the Corporation, but it was a thoroughly bad inspiration—on running a service with wholly unsuitable aircraft, every one of which made a heavy loss every time it flew on the service. Indeed, if I remember aright, it was stated in the House, and not denied, that the loss on each flight was £10,000. I do not know whether that figure was right, but there was no doubt that a heavy loss was made. When civil aviation is costing £26,000,000 or £27,000,000 per year to the taxpayer, it is fantastic; and it is piling Pelion upon Ossa when a charter company is prepared to do the job free of charge to the taxpayer. I want to know, therefore, whether this use of charters is to apply outside the United Kingdom.

As I say, the Transport Advisory Council is purely advisory. There is no independent judge. The Minister still remains the judge in his own cause. And your Lordships will observe—I think this follows a provision in the Act—that the charter companies must operate as "associates." I want to know what that means. Does it mean that these nationalised Corporations are to take a "rake-off" whenever an association is made? I have heard it stated that in some of these arrangements the Corporation have charged the charterer a commission of as much as 10 per cent. for the privilege of running the service. If that were done by private enterprise, some very rude things would be said about it; we should be told a good deal about "unearned increment," and all the rest of it. I want to know whether the nationalised Corporations receive this unearned increment; and, if they are not getting it to-day, were they getting it in the past? I saw something in one report which looks rather as if they had been getting an unearned increment in the past, but that in the future they were going to charge only for services rendered. I am sure the Minister would like to clear that matter up. I should also like to know whether this opportunity to the charterers extends to freight as well as to passenger services.

Now I come to another term in the directive which seems to me very odd and quite unjustifiable. The charter company is not to be allowed to charge less than the Corporations charge; if it does so, the agreement may be cancelled by the Minister. Let me quote chapter and verse and your Lordships will see that I am not exaggerating. If you will look at the column 352, paragraphs (iv) and (v), you will see these words: Fares and freight rates on routes operated by the Corporations, or that might be held to compete with such routes, shall not be less than those charged by the Corporations except in agreement with them.… The Minister reserves the right to terminate, without notice, any Associate arrangements made, if at any time it appears to him that the safety or other conditions laid down are not being carried out.… Your Lordships will see that I have not in the least exaggerated. Why should these monopolistic companies insist on maintaining high prices? Why on earth, if the charter company can make it pay, and at the same time offer a cheaper service, should they be forbidden by the Minister to give that service, just because it is cheaper than the nationalised service can run? It seems to me to be carrying the penalties of nationalisation further than any of us had anticipated.

There is another case I wish to mention. Quite arbitrarily, the Minister says that none of these associate agreements is to last for more than two years, unless he likes to renew it. I do not think that is right. The life of an aircraft is, say, five years. An aircraft bought for service is written off after five years. It is not giving much encouragement to these people to come in and give good service to the public if they are told "You will have this for only two years." The right thing to do is to give them at least five years. I think I know what is behind this two years' period. If one of the Corporations are not running a service, but someone is prepared to go into the venture and makes good on it, then at the end of two years the monopoly Corporation can come in and turn him out and say in effect: "You have been doing the pioneer work, you have proved that this route will pay, and we are now going to take it over." I think "dog-in-the-manger" is rather a modest term to apply to that kind of policy.

Then there is another directive—they number 13. The Minister might have been content with "Ten Commandments" or have followed the precedent of "Fourteen Points." Thirteen is most unlucky; the Minister should either have made it ten or fourteen. Paragraph (x) says that an associate agreement must not hamper the planned development of the Corporation's services. Who is to be the judge in this? Again it is the Minister. And how long are these plans to take to mature? Seriously, the public who want to use these services ought not to be held up indefinitely while the Minister and Corporations are making up their minds whether they will plan a service. Finally, your Lordships will observe that directive (xiii) is not a very good one. It says: The above conditions may be varied by the Minister from time to time. I should like to ask the Minister whether he will give an undertaking that if he is going to vary the conditions he will come to Parliament before he does so.

I have only one other matter to raise. I should like to ask your Lordships to consider what should be the future of the Ministry of Civil Aviation. For my own part I consider that the time will soon come—if it has not already arrived—when this Ministry ought to be merged with the Ministry of Transport. At the beginning, a separate Ministry was necessary; there were important international and Commonwealth negotiations which had to be undertaken, and there had to be a Minister then to concentrate on these negotiations. Moreover, there was the whole structure and plan of the future of civil aviation to be worked out and established. At that time, also, the Minister of Transport was fully occupied with the control of shipping, and had his own important international negotiations. He was also occupied with the planning of the future of British Transport.

But, my Lords, the position now is entirely different. The international negotiations, the Commonwealth negotiations, have all been completed. The international organisation I.C.A.O. has been established and is in working order. And I am glad to say that on the Commonwealth side before I left office we were able to set up the Commonwealth Air Transport Council. That is working admirably. Shipping has been decontrolled. For better or for worse, the Government have established the Air Corporations to run aviation, and the Transport Commission to run transport. Therefore, all the arguments which compelled the formation of a separate Ministry in 1944 no longer apply to-day. Aviation—I have said this so often, but it is so true—is, first and foremost, a transport business. Surely the time has come when civil aviation should come under the jurisdiction of a Minister of Transport with the necessary staff (though not an unnecessarily large staff) and, no doubt, a highly competent Parliamentary Under-Secretary of State. I must, of course, admit that such a merger would stifle and suppress the only form of competition which is encouraged in the Socialist State—namely, the civil "war," the "hot" war, which is so strongly waged between Ministers and Government Departments. However, I think that even that disadvantage might be countervailed by the obvious advantages.

Your Lordships will be interested to know that this problem has also been considered in America, where of course civil aviation has never been a separate Ministry. Mr. Tom Finletter, in that amazingly penetrating and exhaustive review of military and civil aviation, which has been published under the title of Survival in the Air Age, recommends strongly that there should be, in one of the Departments of the United States, a completely fused Transport Ministry which would embrace all forms of transport, including civil aviation. I am bound to say—the Minister knows that I, having held his office, shall not be prejudiced—that, in the interests of good planning and sound administration, the right thing to do is to merge this Ministry in a comprehensive Ministry of Transport. I beg to move for Papers.

3.23 p.m.

LORD PAKENHAM

My Lords, I am grateful, as I think the whole House must be, to the noble Viscount, not only for initiating this debate and affording us the chance of discussion but also for the spacious lines upon which he has just spoken to us. The noble Viscount possesses more than one manner and, in his various manners, he is acceptable to the House according to the House's mood. To-day, he has undoubtedly appeared in a constructive light, and it would be a raw and foolish Minister of Civil Aviation who did not benefit from the discourse to which we have just listened. The House will require from me a fairly full account of my stewardship—some kind of progress report—and, therefore, with the permission of the House, I will deal with that general aspect of things in this speech that I am about to offer to your Lordships. Later in the debate (again if the House permits me) I will attempt to reply to the detailed points, leaving over to that later stage some, though not all, of the detailed points that the noble Viscount has raised. He has been good enough to give me notice of most of his questions, although in one or two respects they have been rather more intricate than I had anticipated, and I have not all the answers available. But I think I shall be able to help him in a number of ways.

However, before reaching the main course of my speech, may I say one word, but not more at this stage, about the new announcement regarding the licensing authority? I understand that other speakers may also deal with this point, and I hope to be allowed to go into it at greater detail later. I should like to mention now the statement that was issued on the same day that my own statement was published—a statement by the charter companies, or the main Association of the charter companies—the British Air Charter Association. I will not take the House right through it now, but these sentences occur: The statement by the Minister of Civil Aviation to-day … is welcomed by the British Air Charter Association"— that is a summary of the first paragraph. A summary of the last paragraph is as follows (I will pass it over to the noble Viscount so that he may see that I am not taking these sentences grossly out of context): Although welcoming the new arrangement, the Association hopes, one day, to secure amendments in the Civil Aviation Act to give real freedom"— those are their expressions, not mine— to the independent operators, but meanwhile the Association is grateful to the Minister of Civil Aviation for the action which he has taken. So it will be seen that the charter companies are prepared, and feel that within the limits of existing legislation they have come pretty well out of these new proposals, and are not labouring under quite such a grievance as noble Lords might have supposed after the piercing remarks of the noble Viscount.

I am glad that the noble Viscount has raised this particular issue of the total cost of evil aviation. Too often, all of us, including, I am afraid, myself, are apt to talk exclusively in terms of the results of the three Corporations. By asking for the total cost to the Government of civil aviation, the noble Viscount has very properly reminded us of the Government's responsibility, in discharging which the great majority of my own officials are engaged, for providing the aerodrome facilities, the navigational aids and the control systems which in 1948 enabled 910,000 people to arrive in, or leave, this country by air—that is, five times the pre-war number. They made possible 1,000 aircraft movements to be made every day at aerodromes under my Department's control. I understand that it counts two if you go up and come down. Therefore, 1,000 aircraft movements is what some people would call 500 flights. At any rate, let us put an excellent face on it, because it is a large figure.

I will not pause to discuss with the noble Viscount—because I doubt if I am the best qualified person to do so, or the most detached thinker—whether I should continue to exist at all. That is really the main point, because the noble Viscount is mistaken if he thinks that any merger would greatly reduce the total number of staff. All these facilities, aids and aerodromes will have to be kept by a large staff, so there can be no question of cutting it down slightly. But the high-level issue is whether a separate Minister of Civil Aviation is wanted. I will not say more about that to-day, except that the existing Minister of Civil Aviation, who has held various other posts besides this one, finds his present job quite as arduous as any that preceded it.

The noble Viscount has asked for the net annual cost of civil aviation to the Government. He knows, I think, that it is practically impossible to split up the total expenditure on research and development between military and civil aviation, though the former—that is, military aviation—was of course, much the larger item of the two. Apart from that development expenditure, the total net Government expenditure on civil aviation in 1948–49 is expected to amount to about £24,000,000 (I am taking 1948–49, whereas the noble Viscount took 1947–48, but there need be no great difference between us), of which total £15,500,000 is for current expenditure and £8,500,000 for capital expenditure. The £15,500,000 includes £8,000,000, being the statutory maximum for grants to the Corporations and their associates, but, as I have previously warned the public and must now make plainer than ever to-day, the losses this year, though distinctly smaller than last, are certain to exceed £8,000,000. Therefore, if we are thinking of the expense of civil aviation to the Government and the general public, we should be prepared to add perhaps £1,000,000 to the £15,500,000 which I mentioned as being the figure for current expenditure, and that would make a total of £25,000,000 of expenditure for all purposes. Therefore, the short answer is that, leaving out development, the figure for current and capital expenditure to the Government and the general public is £25,000,000.

VISCOUNT SWINTON

When the noble Lord says "leaving out development," is that not taking into account the amount for development which would appear on his own Vote? Does he mean that over and above the £25,000,000 all development is an additional expenditure?

LORD PAKENHAM

It takes account of all development which would be met by the Corporations. All development falling on the Government would be left out. Perhaps the noble Viscount was leaving out capital expenditure. Even so, the amount would be slightly higher than the noble Viscount's figure. Be that as it may, the £7,500,000 of current expenditure, apart from the losses of the Corporations, represents the direct and indirect cost of operating and maintaining aerodromes and around facilities at home and abroad, and, of course, any headquarters expenses of my own Ministry which cannot be allocated to those purposes. As is well known—and since my Ministry has been brought under discussion this may be of interest—among our headquarters duties are regulatory and licensing duties arising from the Air Navigation Acts, and other technical functions. I would emphasise (because I do not think this is generally understood, and I certainly did not realise it before I took up my present appointment) that the number of officials in the Ministry of Civil Aviation who spend their time supervising or guiding the Corporations is really very small—not more than a few score—and that out of the 8,000 Ministry of Civil Aviation employees only 1,700 are employed at headquarters, the great majority of whom are working either on the planning of aerodromes and other facilities or on the regulatory functions that I have mentioned.

Of the £8,500,000 capital expenditure, £3,000,000 represents the residual cost falling on the Government during the present year for aircraft manufactured in this country. That, of course, is not all loss. However, £2,000,000 of it must be attributed to the unhappy saga of the Tudor. If I may say so, the noble Viscount is probably anxious to forget more about that than I am anxious ever to know. That story was not initiated by the present Government. The remaining £5,500,000 represents expenditure on the development of runways and aerodromes, equipment for radio stations, and so on. The largest item in the capital expenditure on works is £2,000,000 for developing London Airport. This will continue to be an expensive item for many years ahead, but we all agree that it is absolutely essential. As all of you know, the future of London Airport is visibly taking shape. At present we are engaged in completing the dual parallel runway system, which means a pair of gigantic interlacing triangles enclosing the terminal area, to which access will be given by a tunnel. Much of the runway work is complete and plans for the interim terminal buildings, which should have a life of ten years or more, are virtually ready. It is planned to have the first part of these terminal buildings ready in time for the Festival of Britain in 1951.

I will mention one or two more points in connection with London Airport. The existing hangars will first be supplemented by others of a temporary type. Two of these will be completed during 1949, and this will enable B.O.A.C. to begin the process of concentrating their overhaul and maintenance at London Airport. These temporary hangars (so called, though they are very solid) will be followed later by large new hangars and workshops forming the permanent pattern of London Airport. The noble Viscount asked me to look a little way ahead in talking of total cost. The cost of the London Airport from its beginning to its completion as a dual runway airport, with all interim terminal buildings, maintenance services and the hangars so far planned, is estimated to cost in all about £25,000,000, and this expenditure should be completed by 1952. It is planned later, as traffic develops, to construct a further system of runways north of the Bath Road. I should not like to hazard an estimate of the total cost at the moment, because that would be looking a very long way ahead.

I now turn to the three Corporations, and, if the House will allow me, will discuss first of all the published reports and accounts for the financial year 1947–48 which are already in your Lordships' hands. Operations during that year resulted in a total loss of slightly over £11,000,000. I do not know a fairer adversary than the noble Viscount, because he pitched the figure rather lower than that, but thought that he may have been too generous. In fact, the loss is slightly over £11,000,000. The total loss during the preceding year, 1946–47, was recorded as £10,200,000, but in view of the fact that B.E.A. did not take over the operation of internal services from the private companies until the early months of 1947, it appears to be a fair comparison for 1946–47 to raise that figure to £10,600,000. Therefore, it would seem that the right way of putting it is that the loss in the year under discussion, the year which ended March 31, 1948, was £500,000 greater than the loss in the previous year. I possess neither the ability nor the desire to hide that fact from your Lordships.

I present instead four questions. The first is: Why were losses on this scale incurred during the year 1947–48? Secondly: What are we doing to secure an improvement during the current and subsequent years? Thirdly: Has any improvement in fact been visible? Fourthly: Can we look forward to still further improvement in the future? Let us take first the year under discussion, 1947–48. I decline to judge it principally in terms of loss or deficit—though equally that aspect of it is one that no one who represents, as I do, the taxpayer must ever lose sight of. What was 1947–48 from the point of view of the Corporation? It was a year of rapidly expanding business. The volume of operation was substantially greater than during the previous year. There was, in fact, an increase of 37 per cent. in the capacity ton miles flown over 1946–47. In other words, the total volume of services rendered was 37 per cent. greater than in the previous year. That figure alone should show us what hard work was put in and should prove—if anyone doubted it—that the men of the Corporations were not a lot of slackers and long-haired theoreticians, as is sometimes alleged, though never in your Lordships' House—at any rate not quite in those terms.

At the end of the year the Corporations could fairly claim—I speak with knowledge of this and a great volume of congratulatory correspondence, some of it from noble Lords NS ho sit on the Benches opposite, bears it out—that in technical and operational efficiency, in safety and in everything that pertains to the quality of the services rendered, their prestige throughout the world was second to none and challenged by few, if any, foreign air lines. I know that noble Lords opposite, including the noble Viscount who has initiated this debate, would be the first to pay this tribute, and they would be joined in it by the noble Lords on these Benches. They always tell me that when it is not a particularly good day they like to feel that they are on a British air line. I certainly do myself.

I would also add this. Not only were the Corporations extending their business during the year under discussion, perfecting the quality of the services rendered, but they were also, beyond dispute, increasing their efficiency as measured by a reduction in costs. In the case of B.O.A.C., costs per capacity ton mile in 1946–47 had been 76.2d. In 1947–48 they fell by 9 per cent. to 68.5d.—of course, that is per capacity ton mile. That was the cast of B.O.A.C. In the case of B.E.A C., the costs per capacity ton mile fell from 145.5d. in their initial year, 1946–47, by over one-third to 90d. per capacity ton mile in 1947–48. Nevertheless, with expanding business, and although costs were falling, more was lost than in the preceding year. It is worth asking why. An answer which is sometimes given, and which I do not altogether repudiate, is that civil aviation to-day is, broadly speaking, not a paying proposition. That is what I am sometimes told. There is a certain element of truth in it but it is not the whole truth. One can go on to support the contention by pointing to the American air lines. We can take their international air lines, their internal trunk lines, or their internal feeder lines, and however you compare them with ours, making allowances for the special American form of mail subsidy, the conclusion stands out clearly enough that American lines, which personify private enterprise in a pronounced form, are losing a great deal of money. I would not by any means scorn the use of this illustration if we were having a free-for-all political argument. But that is not the mood of the House.

Therefore, in comparing our own lines with the Americans, I will mention only one or two points in passing. First, on the North Atlantic Constellation Service, where B.O.A.C. are competing on more or less equal terms, B.O.A.C. have been obtaining higher aircraft utilisation and higher load factors than their competitors. The noble Viscount has asked for statistics relating to the utilisation of B.E.A.C., but I have not the figures handy. I am sure, however, that this fact will be of interest though it has been stated before. It proves that where there is competition on level terms, B.O.A.C. have had the best utilisation. There is this further calculation, which I think is of interest though I do not lean upon it too heavily. Had B.O.A.C.'s commercial results on this service—the North Atlantic Service, where they have been working with modern aircraft—been possible on all their routes, the losses, instead of being of the order of £6,500,000 as actually disclosed in the accounts for 1947–48. would have been of the order of £1,500,000. I do not want to start an argument to-day unless I am provoked, and I must say that the noble Viscount has not been at all provocative. I do not wish to enter upon a discussion on nationalised as compared with non-nationalised aviation. We are all equally concerned to make British civil aviation a paying business proposition, and in that spirit we must, in my opinion, on no account hide from ourselves the fact that in 1947 K.L.M., the famous Dutch air line, made both ends meet (I think their accounts showed a small profit) and I should suppose that the same was true of 1948.

VISCOUNT SWINTON

And Sabena?

LORD PAKENHAM

I can conceive an argument taking place as to whether K.L.M. is or is not nationalised. With more than half the directors appointed by the Government and more than 90 per cent. of the paid-up capital supplied from the same quarter, it seems to me rather more than half-way along that road. But do not let us bother about that, either one way or the other, at the moment. Whether it is nationalised or not, the really interesting question is this: If K.L.M. could do it, if they could make a profit in 1947–48 why should not we? And when shall we be able to do it in the future? That seems to me to be the question of paramount interest to the House. I should say in advance that K.L.M. have been steadily working, up to their present efficiency under their present management for about thirty years, and right up to the beginning of the war—if I am correctly informed—they received a subsidy themselves. I paid a most interesting visit to Holland recently as guest of the Dutch Government, and while I was there I studied K.L.M. on the spot.

I would suggest that if you compare us with K.L.M. you must bear in mind that our own air lines have been labouring under four pronounced handicaps. These handicaps are: first, aircraft; second, dispersal of bases; third, the flying of uneconomic routes especially the internal routes, which are flown to provide social services—and, fourth, excessive costs in certain directions which have grown up during the period of initial development and for which the Corporations are the first to recognise there can be no further excuse.

A word, first, about aircraft. There is no need at this time for me to justify the "fly British" policy. With one or two specific exceptions that policy has been adhered to amidst general approval. It was adopted with long-term national interest in mind, and it was always envisaged that the immediate cost in the form of inflated deficits for the Corporations would be heavy. The policy has, I think, been accepted in all parts of the House, and not least by the noble Viscount, Lord Swinton, who supported it when in office and subsequently in your Lordships' House. I think also that my friends in the aircraft industry will not mind my saying that adherence to that policy—the policy of flying British—has cost the Corporations and the taxpayer a great deal of money during the last few years. I referred to "my friends in the aircraft industry," and am rather proud to be able to do so. I cannot say that when I came into my present office a few months ago I found relations between the aircraft industry and the Corporations as happy as I could wish. I do not claim any personal credit for the improvement which has taken place, now that the big controversy on aircraft is out of the way, but I note with approval and pleasure that a real reconciliation is taking place at the present time between the leaders of the aircraft industry and the leaders of the Corporations.

The House will remember why the British aircraft industry has not been able to supply us with the best aircraft in this interim period. That is something which has been explained here so often. It was pointed out by my predecessors that the British aircraft industry was diverted from its normal work during the war and had to concentrate on fighters and bombers. This, of course, has meant that for some years we have been trailing along behind. But the House is equally aware that that position will not last much longer, and we have types now coming forward which we hope will beat anything in the world.

Let us take things as we have found them hitherto. For instance, let us take the transport fleet of K.L.M. It consists of 17 Constellations, 6 D.C/'s, 16 D.C/'s, 51 D.C/'s and 5 Convairs. It is, therefore, entirely American. Anyone who criticises us in comparison with the Dutch, or listens to such criticism, must grasp that as the starting point. The main Sabena fleet, except for three Doves, is purely American. Air France, with the exception of a number of Languedocs and some obsolete J.U.52's, are likewise substantially equipped with American types. A few figures may give some idea of what this means. The average aircraft in the B.O.A.C. fleet during the year 1947–48 had a payload capacity of only 5,800 lb., as compared with the 12,000 lb. payload achieved by the Constellation, even over the difficult North Atlantic route. In order to earn as much revenue as one Constellation, B.O.A.C. had to operate two of their aircraft. This meant practically doubling the operational cost and the staff requirements for each passenger.

In addition to the inherently uneconomic characteristics of the interim types with which B.O.A.C. and B.S.A.A. are still equipped, we must remember the multiplicity of types, as compared with their competitors. K.L.M. have only five main types of aircraft. B.O.A.C. have had no fewer than eleven. Your Lordships will readily understand what is involved in the way of multiplication of maintenance staff, accommodation, stores, and so or. Moreover, the present types are partly land 'planes and partly flying boats, with all that involves in the way of duplication of maintenance bases—though in saying that, I must not seem to disparage or show anything less than the most genuine enthusiasm for the S.R. 45, on which B.S.A.A. are concentrating such high hopes for the future. I join with the noble Viscount in his warm and well-justified tribute to Air Commodore Brackley, whom I came to know well during the short time that I have been in office and who will be a tremendous loss, as we are all bound to realise. But B.S.A.A. will go on with undiminished courage under the enthusiastic leadership of their Chairman. When present plans have come to fruition, and in the period that must still elapse before the arrival of the Brabazon, the Comet and the others, the B.O.A.C. fleet will be rationalised under four types — the Hermes, the Canadair, the Constellation and the Boeing Stratocruiser. Although it will be well into 1950 before all these types are in full service, we can fairly claim that the argument for aircraft has been settled in the sphere of policy and is well on its way to being disposed of in practice.

Secondly, there is the handicap of dispersed maintenance bases, which is almost as familiar to your Lordships as the aircraft handicap. I do not think, however, that your Lordships fully realise what it means unless you have toured round the maintenance bases of the British Corporations, and then paid a visit, as I was recently privileged to do, to K.L.M.'s headquarters in Holland, In England alone, for instance, B.O.A.C. have had to maintain their aircraft and equipment over seven bases—namely, Hurn, Filton, Whitchurch, Croydon, Treforest, Hythe and London Airport. Overseas, in addition, they have Almaza Airport, in Cairo and, until recently, Dorval, near Montreal. On the other hand, K.L.M. have the whole thing at one single airport—Schipol. There, I noticed with satisfaction the high proportion of British instructors, air crews and ground equipment, but from a strictly civil aviation point of view, the whole thing filled me with considerable envy. We all respect the Dutch achievement, but the fact remains that these facilities could not have been provided, and their concentration could not have been achieved unless the development of civil aviation in Holland had been accorded a high degree of priority in national policy.

I do not imagine that many members of your Lordships' House will argue, against the background of our national struggle to build up our exports and restore our shattered economy, that we ought to have given quite the same priority to civil aviation as the Dutch have given. Be that as it may—and it would have been helpful to any Minister if that could have been done—this priority is obviously the reason for the Dutch success. What I have said earlier about London Airport shows that the struggle for concentration goes steadily forward. I should add that, after consultation, through the National Joint Council machinery, with the trade unions, B.E.A. have decided to close down their maintenance base at Speke and to concentrate their maintenance at Northolt and Renfrew. That is the kind of decision which has to be taken at this stage. It is not a pleasant decision to make, because it involves, or appears to involve, some local unemployment in Merseyside, an area in which unemployment is already worse than in most parts of the country, although it is not so bad as it was before the war. But I am sure that B.E.A. are doing the right thing in concentrating at Northolt and Renfrew, and every possible effort is being made to mitigate hardship round Liverpool.

The third handicap is the uneconomic, or non-commercial, services. In the first place, the Corporations have been expected to get going a world-wide network of services very quickly without considering at every point whether they are following commercial principles which might dictate a greater concentration of effort on selected routes. But, further, we must try to draw a distinction, because that certainly helps a fair appraisement, between two kinds of route. First, we have routes which possess commercial possibilities—I do not mean that they show profit to-day, but they are routes which can be regarded as potentially profitable. Under this head we can put almost all B.O.A.C.'s routes (assuming an eventual transfer to land 'planes), all B.S.A.A.'s routes, all (or almost all) B.E.A.'s European and some of B.E.A.'s internal routes. The great majority of routes fall under that head. On the other side, we must quite clearly, and with open eyes, face the fact that there are a number of routes operated for purposes of social services, where the possibility of commercial success at any time is slight, and to which no counterpart exists in the case of, say, our Dutch friends.

The contrast between the results of the European and the internal services of B.E.A. has already been pointed out by the noble Viscount. In the most recent period—that is, from April to November, 1948, which takes us to two months later than when I issued the statement before Christmas—the European services yielded a route operating surplus of £170,000, before taking into account the general overheads, while on the internal services there was an operating deficit of £580,000. The contrast is certainly very marked. If one adds the overheads, the Continental services show a deficit of £290,000, and the internal services a deficit of £840,000. To avoid misunderstanding, I will only pause here for a moment to say what I think is obvious, namely, that while I have the highest regard for those who are running the European services of B.E.A., I have an equally high regard for those running the internal services. It is the same Corporation, with roughly the same methods, and with men, I believe, of the same high calibre. Therefore, we must not assume from this contrast that the European side of the business is being conducted with acumen and energy, while the internal routes are in the hands of dodderers who would be better employed elsewhere. I will also say, in passing, that the noble Viscount seemed to be under the impression that no subsidy was paid on internal routes in pre-war days. The only figure I have readily available is for 1939, when a subsidy of £100,000 was paid on the internal routes. Further study would be required to ascertain what the losses were in those years.

The internal routes, of course, have a very short average stage, even including those to the Channel Islands, to Glasgow and to Belfast—which are officially classed as "internal." With an average stage of 113 miles it is always going to be difficult to secure a balance of profit on the internal routes, but it is what I call the social service routes that represent the intractable problem, although I see no reason why they should not eventually make profits. When I talk about the social service routes, I have in mind the services to the Scottish Islands; or the services between Land's End and the Scilly Isles, and between Guernsey and Alderney. To illustrate the point a little further, what I call the social service routes have recently accounted for only 11 per cent. of the total capacity ton kilometres provided—that is, only 11 per cent. of the total volume of service—but they have incurred a loss of 36 per cent. of the whole of the losses on the internal services. I do not think any noble Lord—least of all noble Lords from Scotland—will suggest that the social service routes should be eliminated or seriously tampered with; and I do not think any one will deny their cultural and humanitarian justification.

If I am not detaining your Lordships too long, I would like to say a special word about Scotland. It should be understood that 90 per cent. of the total capacity operated on social services throughout the United Kingdom is devoted to services in Scotland. I would add that the services, social and commercial, operated into, out of and within Scotland (including of course the Scottish Islands), account for 40 per cent. of the total internal services, and for 60 per cent. of the route deficits.

LORD SHERWOOD

Can the noble Lord give it in money instead of percentages?

LORD PAKENHAM

I have no doubt that I shall be able to put it into money. I may be able to do so during the course of this afternoon, but I cannot conjure the financial figure out of my pocket at the moment. I mention these facts with no particular purpose in view, except to indicate that Scotland has been far from neglected under the present dispensation, and that the Scottish Advisory Council, whose next meeting I am attending in Edinburgh on Saturday (fortunately it coincides with the Rugby International match between Scotland and Wales!) have been most active, and have proved that, for all their complaints, the Scots are still able to look after themselves effectively, whatever Government are in power.

VISCOUNT SWINTON

To get us to look after them, rather.

LORD PAKENHAM

There may be something in that.

LORD HAWKE

It would be illuminating if the noble Lord could give us the loss per passenger ton mile of bringing Scots to England, and sending them back again.

LORD PAKENHAM

As I have already said, there are these cultural and humanitarian considerations to be put on the other side.

LORD HAWKE

They were always great hikers!

LORD PAKENHAM

I thought the noble Lord said they were always great hankers. I know that many great hankers come from Scotland.

LORD STRABOLGI

All the best people come from Scotland.

LORD PAKENHAM

The suggestion that all the best people come from Scotland seems to me to be elaborating the truth to a point where it passes into exaggeration. I speak as one who is Irish, English and Welsh, but have no other blood of which I am aware.

The aircraft, the dispersed maintenance bases and the elements of uneconomic services have been handicaps imposed on the Corporations from outside; but, like the rest of us, and more particularly like every other rapidly expanding business that I have ever heard of, they have had troubles of their own making. I am grateful to the noble Viscount for speaking in such a sober, balanced way, because when the Corporations are attacked, their spokesman (as I am bound to be) is inclined to come to their defence with statements indicating perfection, where one would be justified in pointing only to great virtue. That is not my purpose this afternoon. The Corporations were told to get on quickly with the job of developing and building up this world-wide network and, as I say, they have built up an enviable reputation among the travelling public in so doing. There is no doubt that in the case of the two larger Corporations—I do not think it would be fair to say this of B.S.A.A., who have had difficulties of a different kind—their costs have hitherto been too high; at one point, and in certain directions, they were much too high.

As the Reports in front of your Lordships show, the Corporations were already bringing down their costs in the year that ended last March—that is the year before I took office—and in subsequent months they have redoubled their efforts, naturally with every kind of encouragement and assistance that I and my officials have been able to provide. As was announced on October 26, 1948, B.O.A.C. and B.E.A. have put in hand a thorough and fundamental reorganisation of their undertakings. B.E.A. have invoked the assistance of a well-known firm of industrial consultants, and as the House is aware, I, accepting (as any Minister for Civil Aviation should) a high responsibility for the general efficiency of the Corporations, have made arrangements for higher officers of my Ministry to be actively associated with these overhauls.

The House will expect some account of how these overhauls are going, but I say at once that it always seems to me difficult to describe reorganisations until you see the results, when it is easy to see whether those reorganisations are good or bad. It is too early yet to apply that test effectively to the overhauls in question, though there are some distinctly encouraging signs. I would mention, however, that the new organisation of B.O.A.C., which was originally worked out by Mr. Whitney Straight, the Chief Executive—a "live wire" if ever there was one, as I expect many of your Lordships know—was brought into full effect at the beginning of the present year. Sir Miles Thomas, who was charged with the responsibility for implementing the reorganisation, has shown his proverbial energy and drive in his inspections of the establishments of the Western Division, in North America and in Eire. At the moment he is in Africa. He has personally reviewed the duties of all the main departments so as to ensure that the functions are clearly laid down and avoid overlapping and duplication. As was announced recently, he becomes Chairman of B.O.A.C. at the beginning of July, in succession to Sir Harold Hartley, whose fine record of public service over a long period of years requires no testimonial from me, as I am sure the House will be ready to endorse.

Let me give your Lordships a few figures to illustrate how things are going under the reorganisation. The numbers of staff of all grades employed by the Corporation—that is B.O.A.C.—were reduced from 24,464 on April 1, 1947, to 21,844 on April 1, 1948. That was before the present reorganisation began. By December 30 last, the numbers had been further reduced to 19,146, so that in the last eighteen months or so there has been a reduction of over 5,000 of the staff of B.O.A.C. during a time when business was expanding very rapidly. These reductions apply to all grades, and they represent the substantial first fruits of the drive for economy and organisational adjustment. I would mention here that the transfer of the North Atlantic overhaul base from Dorval to Filton has now been completed—I have been down myself and I was much impressed with the drive that was being shown—and the Corporation's engineering staff employed at Montreal will be reduced as a result from 556 in September, 1948, to 21 in March, 1949. I would emphasise to the House that this is a dollar saving rather than an economy measure, but a very valuable dollar saving nevertheless. I would emphasise also that the closest attention is naturally being given to the maintenance system, to the possibility of closer integration of services common to the three Corporations, such as the bus services, and the passenger handling at the airports (where, in the past, there has been criticism at times) and to the possibility of combining the functions of the Ministry and the Corporations at the airport—a very important point to which attention has rightly been invited.

Sir Miles Thomas has been very properly anxious to ensure the fullest consultation with the trade union side of the National Joint Council, and he has invited them to come forward with suggestions to assist him in his task. I am sure he is absolutely right and he has earned a great reputation in the past. We must regard the trade unions as partners capable of producing the most valuable suggestions. In the case of B.E.A.C., the crucial decisions are now in the process of being taken. Here, as in the case of B.O.A.C., there is full recognition of the need for the most drastic scrutiny—indeed, I say frankly, for a sharp reduction of overheads (I think the noble Viscount approves of that)—and for the liberation of the men on the spot from undue headquarters' interference. Again I shall carry the noble Viscount with me if I say that when we do that we must make sure that there is sufficient budgetary control over the man on the spot to prevent his becoming a little emperor in his turn, as has happened before.

VISCOUNT SWINTON

That is the only kind of empire you should liquidate!

LORD PAKENHAM

I have no idea what the noble Viscount—who is usually so relevant—could possibly be referring to! During the early stages of their life, B.E.A.C. were expanding their staff at a rapid rate, but they have now taken a tight grip on themselves and to-day the stall employed by the Corporation numbers under 7,000 compared with over 7,500 five months ago. That is the reduction in five months and more reductions are in sight, although a further expansion of traffic is expected this year and the business is growing the whole time. A thorough investigation of methods is in progress. For example, during the first six weeks of its operation, the bonus incentive scheme, introduced in the middle of November last in the overhaul shop at Northolt, has resulted in a marked reduction in costs and a 50 per cent. reduction in man hours per task. This increase in productivity has been accompanied by an overall increase in the hourly earnings of the staff so employed.

VISCOUNT SWINTON

Was that the matter about which there was a strike?

LORD PAKENHAM

There was a strike, but all that happily is forgotten. Of course, there is another side to all this, as will be passing through many minds while I am speaking. I am absolutely certain myself that these increases in efficiency are necessary—I should be disgracefully shirking my duty if I did not insist upon them. But when we come down to brass tacks, what do they mean from the point of view of the man who is trying to earn a living for himself and his family in the Corporation at the present time? Given certain outside conditions of demand for air services—and admittedly there is an expanding demand—given a certain supply of aircraft, and a correct or substantially correct arrangement of services, in that case when we talk of increased efficiency, reduced deficits and all the rest of it, we mean increased productivity per man employed. That is what we mean, and it cannot be anything else. Now that does not mean overworking the man or scamping the job, but it does mean that, by greater individual effort and a mare efficient disposition of resources and layout of the process, a bigger volume of service must be rendered with a smaller number employed. That may mean, and in some cases must mean, that jobs are lost at all levels, from the highest to the lowest, by men who are excellent citizens and in no possible sense blameworthy, but who must clearly be regarded as being able to serve the country more effectively elsewhere.

If these words of mine reach the employees of the Corporations, I do not want to meld to any existing feeling of insecurity or suggest that a new purge is on the way. I am repeating what I have said before in this House and elsewhere. But I cannot emphasise too often that this business of securing the maximum efficiency in the Corporations cannot be conducted without an occasional element of local hardship, as I am afraid has arisen at Spoke, although we are doing everything we can to mitigate it. At a time like this of full employment nationally, I am sure that we shall pull through without undue dislocation or controversy, so long as the Corporations take the trade unions into their fullest confidence and so long as it is made clear to all that the reorganisation is being conducted impartially, with even handed justice at all levels, and not just falling on the weakest vessels alone.

With B.S.A.A. the problem is rather different. If anything, the staff has been too small and there has been some necessary increase in recent months. I have already alluded to the heavy loss they have suffered in the death of Air Commodore Brackley. I know the House will sympathise with the Corporation, and will wish them well under the new blow that has befallen them in the disappearance of "Star Ariel." So much for the four obstacles which stand between the Corporations and what I may call their dream result. The aircraft position is being cleared up. The dispersal of maintenance bases is being tackled, but that handicap—let us face it—will endure for some years. The expenditure on social service routes must be accepted as a contribution to national, and particularly Scottish, well-being. Finally, any excessive costs are being rigorously investigated, with a view to reduction.

Let us now, from the collective standpoint, take a look at what has been happening this year. In the current year 1948–49 the volume of operations, as measured by total capacity ton miles flown, which had increased by 37 per cent. in 1947–48 as compared with the previous year, showed a further increase of 39 per cent. in the first eight months of 1948–49, compared with the corresponding period of 1947–48. In the year which the House has been considering, the increase in the volume of services was 37 per cent., and so far this year it has been 39 per cent., which I feel sure will be recognised as encouraging progress. Operating costs, which fell by 10 per cent. between 1946–47 and 1947–48 from 76.4d. to 68.5d. per capacity ton mile, showed a further fall of 21 per cent to 54.2d. in the first six months of the current year. Costs, therefore, have fallen a great deal faster in the present year than in the year which the House has been studying. In the first six months of the current year, the total deficit per capacity ton mile flown, which had fallen by 20 per cent. between 1946–47 and 1947–48, has been cut by 38 per cent. as compared with 1947–48. These figures are encouraging, though they are regarded by the Corporations as only a beginning.

Meanwhile, productivity per employee has also been improving rapidly. I gave one or two figures just now for individual employees. The total number of staff employed by the Corporations as a whole had fallen by the end of 1948 from a peak of 31,300 in March, 1947, to just under 28,200—a reduction of just over 3,000—though B.S.A.A. had in recent times found it necessary somewhat to increase their staff. Productivity, measured in terms of capacity ton mile per employee per month, had risen from 230 in 1946–47 to 268 in 1947–48 and to 380 in the first half of 1948–49. I know it is difficult to take in all these figures, but I think they create a clear impression of the way things have been going, and they show that progress has, if anything, been accelerated in recent times. I think that is good going; and yet, as I have warned the House and the country before now, there has never been much prospect this year of keeping within the £8,000,000 to which the statutory subsidy drops from £10,000,000 this year. In fact, the aggregate deficit of 1948–49, which by the end of November was £5,600,000, will probably be about £9,000,000 for the year—£1,000,000 on the wrong side.

Let me emphasise, on the other hand, that that is £2,000,000 less than in the year the Reports of which your Lordships are studying. It represents a real improvement. We have at least passed one significant turning point. In 1947–48, business was expanding and costs were falling, but it was still true that the more we flew the more we lost. That no longer holds good to-day. Business is expanding, costs are falling and the deficit is falling with them. Henceforward, the more we fly the more we win. But I readily confess that, as Minister of Civil Aviation, I shall be able to hold my head a little higher only when the deficit is well inside the statutory maximum; and I am determined—we are all equally determined—that that time shall not now be long delayed. There, then, is the progress report whose keynote is steady progress. Your Lordships will naturally expect me to say something about the future. I am confident that during the year 1949–50 we shall begin to see the visible effects of the great efforts which have been made by the Corporations to improve their overall efficiency. It falls to me as Minister, with the agreement of the Treasury, to approve the annual plan of services submitted by the Corporations and to secure them the appropriate subsidy.

Before I close, may I ask the House to consider with me for a moment the problem presented to the Minister? On the one hand it is his function, as I see it, to reduce to a minimum the charge on the taxpayer. On the other hand, he would be seriously misconceiving his function if he became a Minister of Civil Aviation to end civil aviation, and achieved economy by drastic reduction of services and, in the extreme case, by bringing all internal flying to an end. Civil aviation is, on any showing, at an early stage. We must foster it and develop it, and nurse it through these difficult years. But we must do all that, at a time of persistent national stringency, without wasting one single penny of the taxpayer's money. All that has been much in my mind when drawing up the plan and the directive for the Licensing Authority to which the noble Viscount, Lord Swinton, alluded and on which we may have further discussion later.

In that matter three principles guided me. The first was that we must look to the time when the Corporations run all the internal scheduled services; secondly, that there is a limit to the burden that can be imposed on the taxpayer during the period while they are cutting down their costs and actually developing their network; thirdly, that it would be wrong in the meanwhile to deny the public any facilities that can be offered under reasonable conditions by private companies. If nationalised air transport is the only conceivable form of air transport in this country—as I believe it is—then it is the worst possible service both to nationalisation and to air transport to pursue a "dog-in-the-manger" policy. By that I mean a policy that says "We cannot and you shall not." I am not asking or encouraging these charter companies to step in. I am not certain whether the noble Viscount, Lord Swinton, appreciated that. If they come in it is their own affair. When they are in they must be given proper conditions. When I say that I am not pursuing a "dog-in-the-manger" policy, I mean that we can do certain things now and other things later, and that meanwhile we must not deprive the public of facilities offered elsewhere if there are people ready to take a risk themselves.

In the last resort, the scale of services authorised must represent a balanced and empirical judgment arrived at by the Minister, in which the considerations which would animate a private operator must be blended with those of the wider national interest. It was strongly represented to me, for example, that the 5,000,000 people of the Midlands area would be greatly benefited if Elmdon, the Birmingham airport, could be provided with a European service. As the House may be aware, after prolonged discussions we have decided to link Birmingham to Paris with a daily service starting at Manchester and run on alternate days by B.E.A. and Air France. It is reckoned that the service will break even if a Dakota can achieve a 70 per cent. load factor on the route—that is to say, if seventeen or eighteen people will travel daily each way to Paris. I have told the Midlands that it is up to them to justify the service by using it, and they seem convinced that they can meet the challenge successfully.

I would like to take this, the first public opportunity, of informing the House of our plans for a service in Wales. At present, there are no scheduled services in Wales; in fact, it is pointed out to me by my Welsh friends that, apart from an associate ferry service from Cardiff to Weston, there is no civil aviation in Wales at all except a Civil Aviation Advisory Council. I am the first to pay tribute to their enthusiastic advocacy of the cause of their country, but these gentlemen of the Advisory Council do not regard themselves, and are not anywhere regarded, as an adequate substitute for actual flying. After careful investigations, again on the spot, I have decided to authorise an experimental Welsh service. As at present plan-led, a D.H.89 will run Liverpool/Hawarden/Cardiff/Hawarden/Valley one day, and return Valley/Hawarden/Cardiff/Hawarden/Liverpool the next day. What Mr. Gladstone would have said about this service which keeps stopping at Hawarden I do not know, but it is a suitable point, as those who have made pious pilgrimages to that shrine will recollect. I like to think that if Mr. Gladstone had been alive to-day he would have been in the Labour Party, although of course he was Liberal at the time. At any rate, I know that the grounds there were used recently for a most successful Conservative fôte. All of us can visit Hawarden with equal enthusiasm!

I ought to warn the House that even if this aircraft is filled, B.E.A. advise me that the service will be uneconomical. I want to make that plain, in order to remind your Lordships that that is the sort of problem which must be settled one way or the other. Nevertheless, I feel that the experiment is worth trying. The cost of providing it should be capable of reduction. It seems to me a duty to discover whether or not there is in fact a demand for civil aviation in Wales—a country which pays its own share of taxes and where internal communications are very inadequate. The service is being run as an experimental service. I admit to the keenest personal interest in the enterprise, but it will be continued after a trial of six months only if it proves to be of sufficient value to the general life of Wales to justify any loss that may be incurred, while I repeat that every effort must and will be made to see that the calculated loss is brought down well below the figure hitherto put forward.

Finally—and this, I know, will be of considerable interest to the House—I have decided to set the Corporations a definite target for the year 1949–50. I have called on them to reduce their deficits from the figure of £11,000,000, as shown in their accounts for the year 1947–48, and from the £9,000,000 or so which we anticipate for 1948–49, to £5,500,000 in the coming financial year, 1949–50, without retarding the normal expansion of services. I am approving a programme of services involving an increased capacity of about one-third over the current year, and looking for a reduction of about one-fifth in costs per capacity ton mile offered. Within that framework, I visualise a revenue of about £27,500,000, and an overall expenditure of about £33,000,000. As this is perhaps the last debate on civil aviation that we are likely to have for some little while, unless the House wishes it otherwise, I have felt it right to give your Lordships these figures and targets to-day. I say at once that I hesitated some while before doing so, in view of the shadow which the tragic disappearance of the "Star Ariel" has cast over our thoughts and plans.

What the inquiries now on foot will reveal I cannot say. I am glad to say they are under the noble Lord, Lord Brabazon, whose authority the whole House appreciates. I feel sure that the House will not expect me to pursue the matter of the "Star Ariel" further this afternoon, or deal with any implications of that disaster. The figures that I have just given your Lordships, to cut down to £5,500,000, were drawn up before the "Star Ariel" disaster and were presented to the Corporations some while ago. What, if any, qualifications will require to be made remain to be seen. Even apart from the Tudor mishap, there are bound to be factors beyond the control of the Corporation which may well affect this target being reached. There may be delays in the delivery of aircraft, running-in troubles, reductions in fares due to world competition, or failure of world traffic to live up to expectations. Any of these may make a big difference to the net financial result.

But I believe that civil aviation, like other industries, is all the better for knowing what is expected of it. I believe that the targets I have mentioned are capable of attainment, given reasonable luck and, I may add, the great energy which I am looking for and which I believe will be shown. I am a profound optimist about British civil aviation, and never more so than when I go abroad and find what foreigners think of it, or visit at home the men on the ground, the men who are doing the job, the men whose enthusiasm, whose good humour in the face of misunderstanding, and whose determination to put Britain on the top are, I respectfully submit to your Lordships, deserving of your highest praise.

4.38 p.m.

VISCOUNT TEMPLEWOOD

My Lords, I am sure that every noble Lord who has listened to the two speeches that have started this debate will agree that we owe the noble Lords who made them a debt of gratitude, in the case of my noble friend Lord Swinton for having raised a number of important questions which elicited from the Minister so interesting and comprehensive a speech. I do not rise to follow either of those two noble Lords into a discussion about the Corporations. I will say only this: that, whilst we have heard from the Minister certain facts which seem to show that the position is improving, I still remain unconvinced whether it is wise for any Government to undertake the full responsibilities for a new service like civil aviation that is subject to so many uncertainties and that needs so much the spirit of personal adventure.

But I do not rise to follow that line of argument. I rise for one purpose, and one purpose only: to call attention to one of the other responsibilities of the Minister of Civil Aviation—his responsibility for encouraging what we call private flying and what the Americans call "personal flying." I do not apologise to the House for raising this question. I suppose I have been connected with it for almost longer than anybody else in the country. It so happens that I started the flying clubs as long ago as 1924. Since then, I have for many years been President of the Norfolk and Norwich Flying Club, and I know at first hand a good deal about the difficulties of flying clubs, such as the need for further encouragement from the Government in the considerable part that they can play, not only in the field of air defence—a field that does not directly concern the Minister—but generally in fostering an air sense in the country.

Let me in a sentence remind your Lordships of the history of these clubs. They started in 1924, as an experiment. The experiment answered, and eventually a plan was operated under which they were given grants for their machines, and were paid by results for the number of pilots who took flying licences. The plan answered, and it was eventually extended to include in its scope the training of the Civil Air Guards. When war started the Government were finding about £100,000 a year for these two purposes—namely, for the members of the clubs and the members of the Civil Air Guard. The war came. I do not think there will be any question as to the valuable contribution that the clubs made to the Air Force and air defence in the early days of the war, when a pilot and an instructor counted a great deal. The personnel of the clubs was absorbed for the greater part into the Air Force, their machines were transferred for training and their instructors were, according to the records, invaluable to the Air Force in those early days when there was a great shortage of instructors. Since then, while a number of clubs still exist, they have received no Government support. At the same time flying has become much more expensive, air defence has in recent months become much more urgent and, indeed, upon the civil side, the speech just made by the Minister himself shows how very important it is to stimulate the air sense of the country generally.

I speak from personal knowledge when I say that one of the great advantages of these clubs was to bring the provincial cities, and particularly the provincial municipalities, into direct contact with aviation. I take the case of Norwich, where a club of which I am still President is located. There the effect of starting a flying club was at once to make the City Council and the county generally interested—in those days for the first time—in flying. The result was that a municipal aerodrome was started in Norwich and flying became one of the keen local interests. My Lords, I ask whether it is not even more necessary to stimulate that keenness at the present time, when, to take only the instance of air defence, it is so important to stimulate recruiting into the Air Force. Recruiting is bad. I read in the paper only this morning that Cranwell, the training college for permanent Air Force officers, is 25 per cent. empty. That is very unlike the state of affairs before the war.

I do not linger or delay upon this part of the case, because I know the Minister of Civil Aviation is not responsible for air defence, but I point to it as evidence of the need for encouraging the flying clubs that, in the years before the war, proved so useful in stimulating the air sense and generally creating in the provinces an interest in flying. I hope, therefore, that the Government are seriously reconsidering the position. I understand that three or four years ago they had a conference with the representatives of the clubs, and the question as to whether there should be Government assistance was left undecided. I have read the proceedings of that Conference, which took place I think in 1945, and what surprised me about it was that the suggestion was made by the Government representative that the Air Staff did not attach much value to the kind of training that was available in the flying clubs. I hope that that is not the case. If it is the case, I may tell the Minister of Civil Aviation that I had exactly the same objection raised in the year 1924. I think it is a natural kind of objection for any Service to raise, even though I disagree with it. A Service will always think it conducts its own affairs a great deal better than do other organisations. But here I can point to the actual experience of the last twenty-five years to show that, at any rate in that instance, the civilians were right in making that experiment, and that the work of the clubs in the end proved extremely useful to the Air Force.

I do not want to delay the course of this debate. I trust I have made the position clear, and that when the Minister comes to reply he will be able to say that he realises the value of these clubs in generally stimulating the air sense of the country, and hopes to revert to the policy that proved so successful in the past of giving them a certain measure of assistance to help them to make a valuable contribution to the country. So far as I understand, the clubs are making no extravagant demands. Their small requests seem altogether insignificant compared with the many millions we have been discussing this afternoon. It is a matter of a few thousands a year between either bringing these clubs into active operation and enabling young men and young women, rich and poor and of all classes, to learn flying, or seeing gradually fade out a movement that proved to be of great value in the years immediately before the war.

4.49 p.m.

LORD GIFFORD

My Lords, the purpose of my speech this afternoon is to ask the noble Lord opposite a very simple question—whether he and the Corporations have given sufficient thought to the wishes of the passengers who are to travel with them. As Sir Stafford Cripps has on many occasions said: "When you are trying to sell something, it must be something that the customer wants." What does the public want to-day? May I say that the public to-day are a very different public from two years ago, or even last year. I will tell you why. It is simply that most of them are paying their own fares. When people travel to-day I am sure—and I may say that this is entirely borne out by my experience as a travel agent—they generally want to combine business with pleasure. They want their journey to be an enjoyable one, and in the course of their holiday or their business trip, whichever it may be, they look forward to the opportunity of having a little rest and seeing something of the world. I am sure that to-day, with most people, speed is a secondary consideration. I do not think it matters to people, in the majority of cases, whether a journey takes two days or four days, provided that it is done comfortably. Of course, it makes a difference whether it is done in four days by air or four weeks by sea. Some people cannot afford the time for the latter.

Not being a pessimist myself, I am glad that the noble Lord, Lord Pakenham, has taken an optimistic view of a subject on which I myself am very keen. But I would sound a note of warning to the House. Civil aviation is attracting a lot of passengers to-day because of the lack of facilities for travelling by sea to certain places—particularly to the Cape. I know that well. Is an ordinary journey in even the most modern land 'planes to-day a pleasure? I do not think it is. The passengers are compelled to sit in chairs looking at the backs of the heads of the people in front of them. They are accommodated on the edges of a tunnel-like aisle and, generally speaking, conditions are little better than they would be if it were possible to fly in an omnibus. And, of course, there is no chance of a change of viewpoint. A correspondent of Flight (I would not go so far as this myself) wrote of: Passengers being hurled across the world with more despatch than decency, in order to make the ordeal as short as possible. Seriously, to my mind no passenger should ever be compelled to board an aircraft before 9 a.m. or to arrive at his destination after 9 p.m. Services should be worked out in accordance with the routes. No one wants to get up at half past four in the morning, or to arrive at his destination late at night. I suggest that the comfort of the marine aircraft affords a wonderful contrast to the discomfort of the land 'plane. And I would say, without qualification, that the Solent is to-day by a long way the world's most luxurious air liner. The flying boat has a spacious interior, and it gives silky alighting on the water. The routes on which it is suitable for use include places of especial historic interest—great ports, lakes and rivers. What is more, Britain at the moment has an absolutely unchallenged lead in this form of air transport. I do not think that any country in the world, including America, can come anywhere near us in this particular field. I would beg the noble Lord, Lord Pakenham, in considering his plans for the Corporations to have regard to the claims of the flying boat. I ask him to think of them in preference to the flying charabancs of less fortunate competitors.

There has from time to time been a good deal of criticism of British aircraft. I have read one or two critical articles recently. But undoubtedly present-day American aircraft also have their defects. Even the Constellations, and also the Convairs, which are being used on trans-Australian Airways, are having their teething troubles. I think people should remember that it is not only British aircraft which have troubles. I was very sorry indeed to hear of the possibility of the flying boat service to Australia being dropped, and that there is some doubt, also, on the long-term basis, regarding the ideal flying boat route across the Tasman Sea. I understand—and I should like to ask the noble Lord about this—that no replacement for the Solent has yet been ordered. I think this is a point which was remarked upon by Sir Frederick Timms, on the occasion of his recent mission to New Zealand. It was also mentioned at the meeting of the South Pacific Air Transport Council, at which the noble Lord's Ministry was represented by Mr. Masefield. It has been pointed out that so far as New Zealand is concerned, if they did go over to land 'planes, the fact would still remain that the existing airfields are many miles from Auckland and Wellington. As a result, either passengers would have to make a long journey by road, or the vast expense of building new airfields nearer to the cities would have to be incurred.

With regard to exports, I think it is right to say that we have had an enviable record in the past year or so with flying boats. They have been sold to Argentina for A.L.F.A., to Uruguay for C.A.U.S.A., and to Scandinavian Air Lines in Norway. The sale of a flying boat, I need hardly point out, means the addition of a considerable sum of money to our revenue from exports. I know, of course, that the great Saunders-Roe product, the S.R.45, is planned for use by British South American Airways but I think we need, in addition to that machine, a slightly smaller aircraft—one somewhere about the 100,000 lb. mark—as a replacement for the Solent on the Tasman Sea service and also for services in other parts of the world. I spoke to Lord Pakenham before I came into the House this afternoon, and told him what the subject of my speech was to be. He dropped a tremendous wet blanket upon me because he practically told me that I should be flogging a dead horse—or perhaps I ought more appropriately to say a waterlogged boat. I know that there are various arguments which can be advanced against flying boats. I suppose that I shall be told about the great cost of marine bases. But when we weigh this fact against the great cost of new airfields, the flying boats do not seem so tremendously expensive. I consider that we are making a great mistake in not going ahead as fast as we can with flying boats—a form of aircraft with which, as I have said, Britain leads the world.

That completes the main part of my remarks, but I should like now, if I may, to refer to one or two matters which were mentioned by the Minister. I should like to be associated with him in paying a tribute to the late Air Commodore Brackley. He was a great personal friend of mine. I would go so far as to say that his death was the greatest loss which civil aviation has sustained since the death of Sir Sefton Brancker in the R.101 disaster.

I was delighted to hear the noble Lord's remarks about economies in ground transport. Anyone who has been into the basement of London Transport garage near Victoria station, and has seen the airways buses drawn up there in serried ranks, will have been given cause to think. That was a point which I had intended to raise, but as the noble Lord has said it is being looked into I will not pursue it now. One thing in his speech caused me profound anxiety. He referred to the "interim terminal buildings" at Heathrow. Perhaps I am mistaken, but I imagined that it was intended to carry on with the present buildings until we could build some permanent buildings worthy of that great airfield. I would like to hear from the noble Lord why it is necessary to have a set of semi-permanent buildings before we go over to permanent ones. It seems to me that it will be like the temporary Parliament building at Canberra, which looks like being there for another thirty or forty years. I do not wish to detain your Lordships any longer, and shall be glad if the noble Lord can give me some greater assurance than was contained in his remark outside the House about the future of the flying boat.

5.0 p.m.

LORD POLWARTH

My Lords, I had not intended to take part in this debate, and I apologise to your Lordships for any imperfections in what I have to say, and also to the noble Lord who is to reply for not having given notice of any points I intend to raise. But I feel that I must say a few words, because the noble Lord—realising, I suppose, that attack is the best form of defence—has taken the bull by the horns and has raised the question of Scottish services. This is normally a function which is taken by members of this side of the House. The noble Lord told us that there are a number of internal services of B.E.A. which are run as social services and which cannot be a paying proposition, and that the majority of these services are those inside Scotland. I do not presume to have enough knowledge of the economics of civil aviation to know whether it is strictly true that none of these services can be made to pay, but if we are to have them as social services, I think it is essential that they should be run with the greatest possible economy which is compatible with safety—and safety it must be—and with a reasonable degree of comfort and convenience. I was rather amused when the noble Lord described these services as "cultural." I do not know how an air service can be cultural, unless it is considered that those great additions to London Airport which will be completed in time for the Festival of Britain are cultural.

I would like to suggest two ways in which B.E.A. have it in their hands to reduce the costs of these uneconomic services and make them less of a burden to the taxpayer and to our friends from south of the Border, who seem rather anxious about it. The first (taking the words which the Minister himself used) is the integration of jobs. The noble Viscount who opened the debate gave some figures of the staff employed at the airport of Islay. He said the staff numbered twelve, and that the number of aircraft movements a day was four in the summer and two in the winter. That seems a great many people to do nothing very much. The aircraft used on the service are D.H. Rapides, carrying six passengers. This means that the staff of twelve have a maximum daily number of passengers of twelve in winter and twenty-four in summer. Is there any reason why a number of functions, such as those of the man who checks tickets, the man who carries luggage, and the man who receives the weather reports and takes messages on the telephone, should not be combined and carried out by a smaller number of people? Is there really any reason why the man who issues tickets should not also carry passengers' bags, put them in the aeroplane and, having done that, sit on the fire tender until the aeroplane has taken off?

I should have thought that with such a small number of aircraft movements a day, it would have been perfectly possible for all these functions, which I agree are necessary in the interests of safety, to be carried out by three or four men. I hope it is not the case of some trade union regulation forbidding the man who issues your ticket also to carry your bag, on the analogy of the regulation which declares that the man who mends your burst pipe is not allowed to ride on a bicycle to do so.

The second way in which I am sure economy can be effected is in the type of aircraft used on these services. I think the noble Lord's comparison between the cost of these services and other more paying internal services is not entirely fair, when one considers that these so-called social services are being run almost entirely by D.H. Rapides, whereas most other services are being run by Dakotas and Vikings. I have the greatest confidence in the Rapide. There is almost no other aircraft in which I would rather fly. I feel extremely safe when in a Rapide. But B.E.A. state in their Report that it is a type of aircraft which can never economically cover a route. As long ago as last summer, I asked the noble Lord's predecessor what was being done about a replacement for this aircraft. I do not think we should have too big ideas about aircraft for these services. It is no use talking about aircraft seating twenty to twenty-five; the small or medium size of aircraft is best, something with a capacity at the outside of eight to ten seats. The noble Lord's predecessor informed me that B.E.A. had not decided on a specification for the replacement for the Rapide. I consider that to be sufficiently surprising, and can only say that I hope by now they have decided on a specification, because it will probably be a long time before they can get the aircraft they want.

I am not very expert on types of aircraft, but I know that the De Havilland Company in Australia are producing the Drover aeroplane, which is a small threeengined aircraft, of a similar type to the Rapide but capable of more economic operation. I hope the noble Lord will be able to give us some idea of what aircraft is intended to take the place of the Rapides. I will not take any more of your Lordships' time. I have tried to suggest two ways in which it is in the hands of the Corporation and Minister to reduce the cost of these so-called uneconomic services. I still hope and believe that these services to the outlying parts of the country will not necessarily always be uneconomical, and that in the end, when further experience has been gained, it will be found that a great part of them will be made to pay their way.

5.10 p.m.

LORD BALFOUR OF INCHRYE

My Lords, I am sure that noble Lords on both sides of the House are grateful to the Minister for his wide and very fair review of the responsibilities he is discharging in his office. If we criticise here and there, and if we ask a question here and there, it does not in any way detract from our appreciation of the matter contained in his speech to-day. I am sure he will also understand that he gave us a fairly comprehensive set of figures which we shall want to study at length. Nevertheless, it is good that we should have such a full report concerning this vital national activity. I was glad that my noble friend who opened this debate, and who was followed in the point by the Minister, raised the question of what was the total cost of civil aviation, both the direct deficits and the hidden subsidies which are provided in various directions to assist operation.

The policy for civil aviation has, for better or for worse, been decided by His Majesty's Government. There may come a time in the future when that policy is altered by another Government, but until that time, having registered as best we can our disapproval of that step, we must all bend ourselves to the task of making the present policy as efficient as possible. I believe that the ordinary taxpayer—and, after all, there are very few of the taxpayers who enjoy the benefits of civil aviation—says to himself: "£26,000,000 is a lot of money. Are we as taxpayers getting value for that expenditure?" Those who study somewhat more closely the questions of civil aviation break down that broad single question into rather more detailed subdivisions. They ask, first: Is the new equipment which is necessary for more economic operation coming along? Secondly, they ask: Is the vigour of commercial management and commercial incentive reducing the overheads and costs to the highest degree?

The noble Lord devoted most of his speech to-day to answering as fully as he could those particular questions. He told us that there were better prospects of the Corporations receiving more standard equipment in the future. That, of course, is partly due to the better system of ordering which is to rule in future. I cannot refrain from reminding the noble Lord that this question of operators ordering direct from the manufacturers has been hammered home from this side of the House for approximately three years. In the noble Lord's time, and in the time of his predecessor, we were fobbed off—I do not say that in any offensive way—and told that we were wrong; that the Self Committee had been formed; that all was best in the best of worlds, and that if only the Opposition would "pipe down" things would go on well. We have now reached the position when the very proposals which the Opposition have put forward for the last two or three years have been adopted. We are glad that that is so, and do not in any way seek to say: "We told you so." We would only say that if the noble Lord (and not only the noble Lord, but other Ministers as well) will follow rather more closely in future what the Opposition suggest we feel sure that things will be much better than they are at present.

We were also glad to hear of the better relations that exist between the manufacturers and the operators. In fact, under the heading of equipment the message was a hopeful one. On the question of the vigour of commercial management, the noble Lord cited many steps which the Corporations are taking towards this end. We must await the results of those steps to decide as to their efficacy or otherwise. But we do not in any way belittle the efforts which are being made in that direction by those responsible, both in the noble Lord's Department and in the Corporations. I would wish, though, that I could feel as happy with regard to the steps which need to be taken for infusing commercial sense into the administration and personnel of B.O.A.C., and that they were advancing at the same pace in the B.E.A. We cannot help feeling worried about this loss of approximately £2,000,000 on the internal services of B.E.A.C.

LORD PAKENHAM

For 1947–48?

LORD BALFOUR OF INCHRYE

Yes, for 1947–48. While one appreciates and accepts the need for what the noble Lord termed social services in connection with civil aviation (it is a new term, and a good term, which I expect will soon be widely adopted) we nevertheless feel that there should be a new outlook as regards their execution in the more remote parts of the British Isles. I wonder whether we can afford to try to run those services on grand, main trunk route standards, and with a main trunk route mentality. No one wants to reduce the standards of safety, but the routes could be run commercially more on a shoestring, in the way the noble Lord who spoke last suggested. The figures have been given for Islay. I understand that at Sumburgh to-day there is a staff of some twenty, where there used to be three. I believe that some time ago there was a staff of twenty-four at Turnhouse for, I think it was, one aircraft in and one out per day. I cannot help thinking that two luggage porters cannot be necessary at Islay, and that it would do no harm to return to the pre-war method, by which the mechanic, when he had dealt with the aircraft, helped passengers, many of whom carried their own luggage. If I can make the point to the noble Lord, it is this. Could we not have the mentality, as it were, of starting from nothing, and only grudgingly having any increase in the personnel on the commercial side, rather than starting on the level of the main grand trunk route and reluctantly reducing it? If I make that criticism about the internal routes, I would like, having travelled quite a lot on B.E.A. and B.O.A.C. in the last year, to add a word of tribute to the high standard of courtesy of all the ground personnel.

I feel that there is a lot of ground to be caught up in regard to ground organisation standards and efficiency, compared with air crew standards and efficiency. I came from South Africa a few weeks ago in a flying boat. In this beautiful flying boat I think we had three passengers for part of the way—in a boat that holds thirty—and only seven or eight at another stage. I could not help feeling what a lot it was costing the taxpayer. In Johannesburg there had been one lot of passengers wishing to travel, but they were told that the service had not started. I then met some people in Nairobi who were taking an aircraft back to the United Kingdom because they were told that the service was fully booked up. There are no doubt reasons to be given for this sort of inefficiency on the part of those responsible for issuing tickets; probably it was not the fault of any individual. Nevertheless, it shows that there is a need for an overhaul of the commercial organisation such as is now taking place, if it is to come up to the high standard which we all acknowledge in the air crews.

If I may say so, the noble Lord in his speech seemed to be a little unfair on one occasion. It was when he dealt with what he called the Tudor saga. He said that probably my noble friend who opened the debate was more anxious to forget that than he himself was.

LORD PAKENHAM

That is substantially right, but what I said—and I said it in a misguided attempt at humour—was that probably the noble Viscount was anxious to forget more about the Tudor than I was anxious ever to know. If the joke has fallen as flat as it appears to have done, then let us forget it.

LORD BALFOUR OF INCHRYE

I agree with the noble Lord—let us forget it, and I will not even go on with the point about who was responsible for the Courtenay Committee. I would like to join with him in his remarks about the harsh blow that has been dealt to B.S.A.A. by the loss of the "Star Ariel" but it is a blow which I am sure the courage of those both on the ground and in the air will overcome. It is a very hard blow for these people. Something goes wrong—we do not yet know what, and we may never know—and the whole prospects of a company are damned for several months to come. All the good work of building up is brought to nothing and they have to start along the hard road again. One sees so many tragedies and disappointments in aviation that I feel the B.S.A.A. are to be commiserated with, and should be supported in their future endeavours to make good the ground that has been lost, so far as we know not in any way due to any fault of theirs.

I now want to come for a few moments to the statement which the noble Lord published in Hansard on January 26, and upon which he touched to-day, dealing with the charter companies' new activities. I must say that I share the view of my noble friend who opened the debate that it is not, "Thank you for nothing," but it is, "Thank you for next to nothing." The noble Lord quoted the British Aviation Charter Association as expressing both welcome and gratitude for his action. If you pass by in the street somebody who is down and out and starving, and, considering yourself fortunate not to be that man, you give him some small donation, he both welcomes it and is grateful for it. Therefore, I think that welcoming help and being grateful for help is a comparative state of mind, and one should not draw the conclusion that these companies have, or think they have, received anything very much, because previously they had virtually nothing.

I would like to analyse for a moment one or two of the points in the declaration of the Minister. First, it is only a temporary arrangement until British European Airways can run all the internal services. Therefore, all the pioneer work which these people do is liable to be taken over and the benefit of it gained by the Corporations. The Minister said: "I am not asking these companies to come in," but he would not deny the public facilities which they could offer. I took down the sense of his words. Surely the duty of the Minister is not so narrow as that. Surely the Minister's duty is to encourage, help and invite, where a public need exists. If nationalised Corporations cannot do the job, then he should not just open the door and say, "Come in if you want to," but it should be his duty to help and encourage others to come in by an active policy of supporting them. I think the arrangement which he has put forward to these people, many of whom are economically hard-pressed and have, as it were, to take a chance now, is very one-sided.

First, his Air Transport Advisory Committee is only advisory; the Minister remains the judge. Before the war we had a licensing body under Sir Trustram Eve—the Trustram Eve Licensing Commission. The decisions of that body as regards the granting of licences were binding both upon the Minister and the applicant. There was a subsidy of a maximum of £100,000 which could be drawn upon according to an efficiency formula. That was active help. To-day, the Minister has this Advisory Council to make its recommendations to him, but he remains the guardian of his own Corporations, and can give his decisions as to whether or not the charter companies shall be allowed to function. Secondly, the licences run for only two years. My noble friend who opened the debate has dealt with that point. I hope the Minister, in his reply, will tell us how any of these charter companies could be expected to buy new equipment on a two-years' franchise. It takes five years at 20 per cent. per annum to write off equipment, and I do not believe that anybody will easily raise the finance to buy modern equipment in order to fulfil only a two-years' franchise.

Furthermore, the licences are terminable if the Minister considers any of the conditions broken. That is a sweeping power. The conditions are that safety standards must be the same as those of the Corporations, and that fares must be approved. Suppose some foolish person in a charter company charged lower fares than the Corporation. He would be breaking a condition by undercutting a nationalised Corporation, and the Minister has the power, under his Memorandum, to take away his licence. When the nationalised Corporations break any regulations they are not shut down, and it does seem wrong to put a handicap upon charter companies which he does not put upon his own nationalised Corporations.

LORD PAKENHAM

I do not want to interrupt the noble Lord, but if any of the Corporations broke our regulations in a flagrant fashion, then the Minister has the power to remove the entire Board.

LORD BALFOUR OF INCHRYE

The Corporation would be able to carry on, whereas these charter companies would have to stop flying and the public would have to suffer. Then there is a provision that no expenditure is normally to be allowed on ground facilities in respect of the lines which the new charter companies may be allowed to run. Does that mean that no fresh expenditure is allowed on meteorological and radio services in respect of routes which these charter companies may operate? If so, it makes nonsense of the next provision, which says that the same safety standards must be maintained by the private companies as by the nationalised Corporations. After all, the nationalised Corporations are constantly having increased radio, meteorological and other ground facilities. You cannot keep up the same standards as a rival if you are not given the same ground equipment. I think that needs a degree of qualification which does not appear in this Memorandum.

Finally, the Minister may vary the conditions at any time. That, again, seems to be a sweeping power. He says: "The above conditions may be varied by the Minister from time to time." The companies, having complied with all these various requirements to the best of their ability, and conforming to all the regulations which the Minister lays down, being careful not to undercut the national Corporations, any morning the Minister can walk down to his office and say: "Well, I think I will vary the conditions." I do not think you can expect people to risk life, limb and money under the terms of such a document as has been issued.

LORD PAKENHAM

Quite a number will.

LORD BALFOUR OF INCHRYE

Quite a number of them may, because they are pretty desperate. I grant that the Berlin air lift has, economically speaking, helped the charter companies immensely, but if it had not been for that, many of them would be nearly on the borderline; and the fact that you allow them to enter a field where conditions are so much against them seems to me to be bad economics and rather un-fair.

I trust that I have not delayed your Lordships too long and that I have not dealt unfairly with the controversial issues raised by this Memorandum. For my own part I, too, look forward to further opportunity of progress, because the more civil aviation becomes efficient, the greater the national benefit and the better instrument we shall have to deal with in our own good time when a change of Government takes place in 1950 or 1951.

5.32 p.m.

LORD PAKENHAM

My Lords, I echo the beginning of the last sentence of the speech of the noble Lord who has just sat down. I know well that he has at heart the cause of civil aviation and has contributed a great deal to it, as he has to military aviation in more dangerous places than this spot which I now occupy. The noble Lord expresses the hope that in 1951 there will be a change of Government. He seems to have put the election a year later than is generally expected—or perhaps he expects some development a year after the Election! He hopes that in good time we shall be able to hand over civil aviation in a flourishing state. We cannot say; but I hope that if and when the time arises, when the present Government disappears, it will be either the noble Viscount, Lord Swinton, or the noble Lord, Lord Balfour of Inchrye, who becomes the Minister of Civil Aviation—if their strenuous assaults in the meanwhile have not liquidated the position, in which case perhaps they will compete for the rôle of Minister of Transport, which at that time, I gather, will have the jurisdiction of a kind of Tsar in many fields of human activity.

I should like to say seriously that those of us whose business it is to run civil aviation at the present time do appreciate the whole spirit of the approach that has been made by noble Lords who have taken part in this debate this afternoon. I do not want to "lay it on too thick," but I cannot imagine a more constructive attitude than we have experienced; and I hope noble Lords will feel that that is sincerely meant. May I, in rather scrappy fashion, attempt to deal with the various points of interest that have been raised to-day? If I do not deal with them all, it is because time is running rather short; and I will send further replies by correspondence.

I think one strong anxiety that has emerged, and which I do not feel able to allay as I should like, is the doubt whether we are being sufficiently economical in some of these smaller aerodromes. As regards that, I should like to make further inquiries on the spot and report back in due course, rather than be too definite this afternoon. The noble Viscount, who is always scrupulously fair, may have understated the case, as I understand that at Port Ellen we employ fifteen people at the present time. I think the noble Viscount said twelve. We employ fifteen—but that includes a cook-housekeeper to look after them. I must say that I am glad that they have not acquired a larger staff.

Let us look at the actual people and see whether your Lordships think they can be easily disposed of if we are to maintain proper standards of safety. Five of them man the fire and crash tender and do baggage-handling and other work; seven are concerned with traffic control, radio, and communications; then there is also a night watchman and a clerk. That is the team. I am going there to see the place for myself; I did not realise the necessity before this debate. I will in due course report to the House as to what should be done in this case. I am sure there is no suggestion, or no idea in anyone's mind, that this is a sort of scandal; it is only that one wants to know whether we can do with fewer people and at the same time maintain proper standards. I shall investigate the matter without conveying any impression to the people concerned that we are criticising them personally, because there is nothing of that sort involved. These remarks are an attempt also to reply to the remarks of the noble Lord, Lord Polwarth, in a speech of intervention for which I am grateful.

The noble Viscount, Lord Swinton, raised the question of the joint use of aerodromes with the Royal Air Force. It has not been possible to do as much in this direction as was expected, because the Royal Air Force aerodromes are not always conveniently located for the needs of the internal services which we run. I am informed that airfields of the Royal Air Force are available for use as alternative or diversionary aerodromes—but I think the noble Viscount had in mind aerodromes actually used for regular services by both the Corporations and the Air Force. I should like to look into that point.

VISCOUNT SWINTON

The very fact that there are a number of airfields near enough to be alternatives suggests to me that they might be the main ones, and that those which are maintained by the cook-housekeeper and all the rest could go out of commission.

LORD PAKENHAM

I will certainly look into it again, but I am advised that I must not hold out too much hope.

VISCOUNT SWINTON

Do not take the view of the Royal Air Force about it.

LORD PAKENHAM

I will certainly look at it and will discuss it with the Secretary of State for Air. I should like to turn for a moment to a point made by the noble Viscount, Lord Templewood. He made an eloquent and weighty plea for the flying clubs. I wish I could say something definite on that subject. I think the noble Viscount knows that I have taken a great deal of personal interest in it. I very much regret that I cannot wear my badge; it is the only flying badge I am entitled, or shall ever be entitled, to wear; it is the badge of the London Passenger Transport Flying Club, which is a first-rate club. I recently went to see it, and flew round, and generally had the best of all possible times. What struck me most there was the intense community spirit of which Lord Templewood spoke. We all know the difference between going to some kind of show where no one is really interested, and going to an establishment, such as these flying clubs, where one meets with this intense enthusiasm: not only enthusiasm for personal enjoyment—though they certainly do enjoy themselves—but enthusiasm for a cause which they, and I myself, feel is of ultimate value to the country. I will gladly do anything in my power to help these clubs, as I think they know. I must not say anything more, except that they have my good wishes, and that it would have been very agreeable to be able to extend to them something much more solid.

VISCOUNT TEMPLEWOOD

Can the noble Lord tell us when he will be able to make a definite statement on this subject? It is very urgent. Several of these clubs will fade out altogether unless something is done. Will he be in a position to make a statement in, say, a month's time?

LORD PAKENHAM

I should hope to be in a position to make a statement in a month's time. A Working Party was set up—largely on my own initiative and that of the Secretary of State for Air. We have received their Report and it is under consideration. All of us, whether in office or not, have the greatest possible sympathy for this cause, but we still have to establish our claim on the national finances. That is the crucial point, and that obstacle has yet to be cleared. I must not be taken to hold out hopes this afternoon which I would afterwards have to disappoint.

VISCOUNT TEMPLEWOOD

If the noble Lord will let me know when he is in a position to make a statement, I will put a question to him.

LORD PAKENHAM

I shall be most happy to do that, but whether any assistance can be afforded this year must be regarded as an open question. Do not think that I am trespassing on the province of the Secretary of State for Air when I say that it is a matter which concerns him almost as much as it does me. If one is going to make out a case to whoever may be the Chancellor of the Exchequer of the day for financial assistance to these clubs, one has to demonstrate that they are of positive value to the national interest. I do not think that any Chancellor of the Exchequer would concede to an argument based simply on the grounds of amenity or sport. It must be put on a different footing and, therefore, the case has to be presented jointly by the Air Ministry and other Ministries.

VISCOUNT TEMPLEWOOD

I tried to put it upon the double basis to-day without embarrassing the Minister of Civil Aviation.

LORD PAKENHAM

The noble Viscount has carefully avoided embarrassing me, and I hope that what he has said to-day will strengthen the case of the flying clubs. I hope that no one will carry away a false impression from these guarded and circumlocutory statements of mine, because I do not know which way it will go.

The noble Lord, Lord Gifford, spoke of flying boats. Many people prefer flying boats, but are people prepared to pay more to travel in flying boats? If the noble Lord, Lord Gifford, will come to me and say—for he is commercially interested in travel of all kinds—that people can be persuaded to pay a good deal more to travel in flying boats rather than in land 'planes—

LORD GIFFORD

It depends on what the noble Lord means by "a good deal." I think people would certainly pay 15 per cent. to 20 per cent. more.

LORD PAKENHAM

I doubt whether that would save the noble Lord's position, and I doubt whether people would be ready to pay that. I must dissociate myself from this wet blanket which apparently descended on the noble Lord outside the Chamber. It is bad enough to be responsible for what one says inside this House, without being taken to task for what one says outside.

LORD GIFFORD

I am sorry if I misunderstood the noble Lord's remark.

LORD PAKENHAM

I was not intending to convey any definite impression except one of sympathy. As we all know, of course, the truth is that, whether or not flying boats would be nearly as commercial as land 'planes assuming that there were only flying boats, we have to face the fact that there will be land 'planes from which flying boats will have to face competition. If we are to have flying boats and land 'planes on the same routes, we shall duplicate costs at many points. Therefore, it is difficult to see what can be the future of flying boats on the long-distance B.O.A.C. routes. Of course, as we all know, B.S.A., on their routes to South America, are pinning their main hopes on flying boats. I hope that that will encourage the noble Lord—

LORD GIFFORD

Can the noble Lord say anything about the Tasman route?

LORD PAKENHAM

I prefer not to say anything about any particular route this afternoon, because all these routes are under consideration. The noble Lord will no doubt consider the great difficulty that confronts B.O.A.C. in the desire they may feel to use flying boats. The noble Lord raised the matter from what he called a commercial standpoint. I should have thought that it should be considered along other lines, along the lines of national defence. But that is a matter for his consideration. I do not want to lead him in any definite direction this afternoon.

The noble Lord, Lord Polwarth, made a number of constructive suggestions. I agree that a small aeroplane to succeed the Rapide is important, but perhaps the noble Lord could have a talk at some time with our experts in the Ministry about that most difficult problem. Then the noble Lord, Lord Gifford, asked about the interim buildings at London Airport. I think that the phrase "interim buildings" is not very happy. They are buildings of great size; they are designed to last from ten to fifteen years, so that they are not what most of us would think of as "interim buildings." It seems to be agreed by all concerned that, in a period of frequent and revolutionary changes of speed and of the general characteristics of aircraft, we should be unwise to commit ourselves to a final design for such buildings. But these interim buildings will last as long as some of those which would be regarded as permanent buildings.

I now come to the sparkling wind-up by the noble Lord, Lord Balfour of Inchrye. As I understood it, he did not put a very violent case against this statement that was issued last week, but indicated unhappiness about certain aspects. He said that these charter companies were "down and outs," and that I have done nothing better than give them a small donation. The Good Samaritan did not do much more than that, and he has been blessed ever since. I think it is the case that he found somebody "down and out" and gave him a small sum of money. I am bound to say that I feel no difficulty about looking those excellent gentlemen in the face. When I looked them in the face last week, they were not so full of complaints and did not feel so aggrieved as those who have spoken up for them this afternoon. This last clause about the change in conditions from time to time was not one, if I remember rightly—of course, they had talks with my advisers as well, and so may not have said everything to me—about which they protested. The noble Viscount has asked me whether I will come to the House when I vary these conditions. I hope he will be satisfied when I say that I will make every endeavour to come to the House, for I realise that I shall be deeply suspect if I do not come to the House; but during a period when the House is not sitting, an occasion might arise when one could help the companies by varying the conditions. If I give a binding promise to come to the House when the House is sitting, perhaps that will be something with which to go on.

The noble Lord, Lord Balfour of Inchrye, has taken what I can see is a possible line when he said that if I feel that these services are at all worth while, I should encourage them and not merely permit them to run. It seems to me that time are many services in this country which cannot be regarded as essential in the national interest, and where one simply allows a business man to step in; if he does, it is worth his while. I had better not produce particular examples, but one could easily think of some such services. It is not for me to try to persuade people to use fuel and man-power in running these services. In these cases I think it is my duty not to prevent a man from running a service. Therefore in reply to his point, I would ask the noble Lord to bear that point of view in mind.

He asks, how can any particular charter company be expected to buy equipment if the services are to be run for only two years? There again, so far as I know, they would not be buying much new equipment. But let me speak quite frankly, as I do not want to hide anything. The costs of B.E.A. have dropped sharply in the last two years, and I hope they will drop much more in the next two years. It is quite impossible for me at present to know what services B.E.A. can undertake two years from now, and therefore I feel this two years' limit, which is liable to extension, is necessarily imposed; otherwise, we could not know whether a service which was to be undertaken would compete with B.E.A. a little later. Therefore, I do not feel that it is for me to encourage these companies and give them a special inducement to acquire aircraft, when it may even be that the service will not be wanted later on.

The noble Lord, Lore Balfour, raised the question of ground installations. There, again, there is an escape clause. I can imagine a situation where a charter company wants to run a service which I regard as important in the national interest. In a case like that, it might well be that the Advisory Council would say that it was worth putting in some new equipment, and would advise me accordingly, which advice I would accept. Ordinarily, however, I would not feel justified in using the taxpayers' money to enable these charter companies to undertake their business. The noble Lord asks, "In that case, how can they do anything at all?" The answer is that in a great number of cases there will already be perfectly satisfactory equipment there.

LORD BALFOUR OF INCHRYE

The question I asked was: In that case, how could they conform to the safety standards of the Corporations which are demanded by the Minister?

LORD PAKENHAM

They will be able to use the existing facilities at airports which are already used by the Corporations or are at other airports. There are plenty of airports which are not in full use at the present time, and which these people will be able to use. But there are other airports where there are no regular services at the present time, where the facilities are inadequate for any kind of service and there I say that, in normal circumstances, I would not feel justified in authorising the use of the taxpayers' money. I am afraid I have dealt with only a few of the matters that have been raised, but I addressed the House at great length earlier. I do not know that noble Lords would wish me to speak at greater length now. I would only say, for myself, and I think I can speak on behalf of my Department, that we welcome an exchange of views of this kind, and I am grateful to noble Lords, and particularly to the noble Viscount who initiated the debate, for taking part in our discussions this afternoon.

5.54 p.m.

VISCOUNT SWINTON

My Lords, the Minister has, as we would expect, given very frank answers to a number of questions. I still remain a little surprised at this enthusiasm on the part of the charter companies. The noble Lord met them and knows what they look like.

LORD PAKENHAM

They looked very nice.

VISCOUNT SWINTON

I am sure they did, and apparently the noble Lord looked very nice, too. I know that kind of meeting. When you go away, you feel a little less enthusiastic, and distance does not increase the enchantment. The noble Lord has said that they regarded him as a "Good Samaritan." Possibly that was because last year he passed by on the other side! All these things are relative.

My Lords, I would just like to put in my plea in support of my noble friend Lord Templewood in regard to flying clubs. I do not in the least base it on getting a subsidy for private flying. I hope the noble Lord is not going to rely on having to go hand in hand with the R.A.F., and that in this matter the Chancellor of the Exchequer will not pay undue attention to the R.A.F. No one has greater respect for the R.A.F., when they are right, than I have, but in this matter they have been consistently wrong. I gather that this question is at issue at the moment, and I think we should all put our experience into the pool for the Chancellor to draw upon. My own experience, in regard not only to machines but also personnel, was that without civil assistance the task of the R.A.F. would have been impossible. The assistance given by the flying clubs, the elementary training of personnel, proved invaluable, and we followed it up by creating the whole of the Royal Air Force Volunteer Reserve which, in a sense, was nothing but an extension of these clubs. We brought the flying to the people because we could not bring the people to the flying. I am sure the noble Lord, Lord Douglas, will agree that we could not have succeeded as we did but for mobilising the civilians. The whole of the initial training was done in civil flying training schools, and it is with profound disappointment that we hear that such initial training is not considered of great value to the Air Force. The Air Force could lay down all the rules for it. It is like giving aid to denominational schools. The noble Lord would not say that that system is wrong. He would lose his hope for the present and future if he did that.

How does that system work? It works very well. Conditions are laid down under which the schools get their grants, and there is no reason why in this case the Air Force should not lay down the conditions; and, if they like, they could have their own instructors to give the training as well. That is all we are asking for. That is the right way to give this help to the flying clubs, just as I stressed the importance of having common user of airfields. The Chancellor of the Exchequer will find that if he follows that line he will not be increasing his expenditure; he will find that he is making a real and wise economy and achieving good results. I am quite sure that that is the wise thing to do, especially in a period when we know we have greatly to reinforce the Air Force, when time is not necessarily on our side and when it is difficult to get the people we need. We should indeed be most unwise not to make use of this method, which has the double advantage of giving the training and also popularising military flying at a time when we want to popularise it. On grounds of efficiency, on grounds of economy and on grounds of national defence—and I have no axe to grind in this—I would certainly give this matter as wholehearted and sincere support as I can. For the rest, we have been greatly interested in what the noble Lord has had to say to us. He has set a "Target for Tonight." I hope the Corporations will achieve that target. I beg leave to withdraw my Motion.

Motion for Paper, by leave, withdrawn.