§ 6.36 p.m.
§ LORD OGMORE had given Notice of a Question to ask Her Majesty's Government why a service charge of 5s. has been imposed on air lines in respect of every passenger brought to this country from abroad, and whether the air line operators were consulted before the decision to impose this charge was taken. The noble Lord said: My Lords, in rising to ask the Question standing in my name I must apologise for taking up more of your Lordships' time to-night It was not the original plan that this Question should appear on the Order Paper to-day, but at the request of noble Lords opposite I agreed to postpone it from last night and to take it instead to-night.
§ I should like to say that Lord Pakenham has asked me to apologise to your Lordships for his absence, owing to a very important engagement, and to say that he fully supports me in my inquiry. The subject of that inquiry is the imposition of a service charge on air lines of 5s. for every passenger carried to this country from abroad. I understand that the charge does not apply to through passengers, those who are not staying here and are merely in transit; and, of course, it is in addition to the rather heavy landing fees which the companies have to pay in respect of aircraft. I presume the ob- 366 ject of the charge is to obtain revenue. I am concerned about it because, taking aviation expenses and income as a whole, I believe that it may attract very little revenue, and it may result in a loss in other directions.
§ My objections to it are these: first, that it is an irritating tax on visitors. We want to encourage tourism in this country. I am always irritated if I go to another country and find that they are taxing me to come in. They may do it, but that does not mean that we should fall into their bad habits. Up to now this country has been noted for its welcome to visitors, and I want to keep it that way. Secondly, for some reason, it is particularly directed at people who are going to stay here and spend money here. For some extraordinary reason, through passengers, those who are not going to stay here and are not going to spend money here, are exempt. Thirdly, it is a poll tax. It is levied on the person who comes from Tokio, as well as on the person who comes from Le Touquet. The same amount is charged, although the person from Tokio may come once in a lifetime and the person from Le Touquet may come once a week.
§ Then I believe there is a matter of principle involved. I think that neither Government Departments nor monopolies, whether private or public, should throw their burdens on the public. If a private firm or individual in business finds that expenses are mounting up, the burden cannot be thrown on the customers. Expenses have either to be cut or, in some way, prices have to be increased. That is one of the problems of our day. Have other measures been tried? No doubt the noble Earl who is to reply will say that the decision to make this charge is due to the financial crisis facing the country. It is nothing of the kind. The Department has wanted to do this for a very considerable time. The charge is not at all due to the present financial crisis.
§ I believe that other measures should be tried, and that more attention could be paid to the business side of airport management. The Department controls something like 50,000 acres of agricultural land, but it does not get the best out of that land. I may say that it gets more out of it than does the noble Lord, 367 Lord De L'Isle and Dudley, from the Air Ministry grounds. So far as the grounds of the First Lord of the Admiralty are concerned, certain of them are in a shocking state. I do think, therefore, that the three Ministers concerned might look at that problem, to ascertain whether they are getting the best agricultural results out of the immense areas under their control.
§ 6.40 p.m.
§ THE SECRETARY OF STATE FOR AIR (LORD DE L'ISLE AND DUDLEY)
My Lords, I do not want to interrupt the noble Lord, but I feel that that statement should not be allowed to pass unchallenged. I should be delighted if the noble Lord would help us in this very important problem, but I would not like it to be thought that what he says goes uncontroverted, because vigorous efforts are in fact being made to make the best possible use of the acreage on the aerodromes which come under my Department. Nor must it be assumed that because some of the aerodromes do not provide food for human beings they are not being used to the best advantage. I would point out that they are responsible for the production of a very substantial quantity of dried grass.
§ LORD OGMORE
I am much obliged to the noble Lord. I know that he, being a farmer himself, will have this matter very much in mind, and I am certainly not making any personal attack on him. I know all about the dried grass business, for I went into it thoroughly when I was a Minister, but I do not regard it as being necessarily the be all and end all of the agricultural use which could be made of the 50,000 acres devoted to civil aviation and the much larger acreage which comes under the noble Lord's particular Department.
Then there is the business side of the airports themselves. A great number of business activities could be carried on, and what I want to know is whether all these methods have been tried or considered. It is just too easy to impose extra charges on the travelling public or any other section of the public. It is much harder for a Department to go into those measures which concern business administration and the like. I would ask the noble Earl, therefore, whether his 368 Department has really tried to think up other measures of obtaining extra revenue before making this increased charge on the travelling public. Further, I wish to ask this question which is implicit in the Question on the Order Paper—were the operators consulted? I have not heard from any of them but I saw a letter in The Times from Mr. Rylands, Chairman of the Independent Air Transport Association, on the subject. I understand that it will cost B.E.A. hundreds of thousands of pounds because they will have to carry this out this year. It will cost B.O.A.C. a smaller but still a large sum. The charter companies, of course, will have to pay this amount either in connection with their own charters or where they are running associated services, and as usual the most enterprising will bear the greatest burden. It will involve many companies in heavy losses because their brochures and other literature have already been printed, and in many cases agreements have been entered into with travel companies and travel associations. It is a second blow following upon the £25 travel allowance. And, of course, we may expect that similar action will be taken by those countries which have not already imposed a charge. I know that it will be said that some important countries do impose a charge already—the United States does, for one. But do not let us follow that bad example. Let us try to do all we can to welcome people to this country, and especially to welcome tourists in the maximum numbers that we can possibly induce to visit us.
§ 6.43 p.m.
§ THE EARL OF SELKIRK
My Lords, Her Majesty's Government regret as much as the noble Lord that it should be necessary to impose these charges, but there are certain hard facts which must be faced, and they are facts which Lord Ogmore knows very well himself. It is at the present time costing the Exchequer over £2,000,000 a year net to operate the State-owned aerodromes in the United Kingdom, even excluding such charges as interest on capital and the cost of air-traffic control, tele-communication and meteorological services. In the present circumstances, it is clearly necessary to lighten this burden on the Exchequer, which is in effect a subsidy to civil aviation over and above what 369 appears in the accounts of the companies concerned. Expenditure is being cut—for example, it is hoped to reduce the staff of the aerodromes this year, although air traffic will be greater. The noble Lord said that this step will raise very little revenue, but the fact is that it is hoped that it will raise £200,000 in the coming, financial year.
The noble Lord wishes to know why this particular charge was selected. Why, he asks, if some revenue was wanted, should there not have been merely an increase in landing fees as such? There were certain definite reasons. After all, when a charge has to be imposed you can always find a number of very good reasons why that particular charge should nor be imposed. The reason this has been imposed is, first, because, frankly, it appears to be the fairest to the aircraft. That is to say, those aircraft which carry no, or few, passengers pay less. Secondly, it was deliberately intended to relieve freight aircraft from paying this extra surcharge. The Minister attaches great importance to the development of freight-carrying and to that extent he was anxious to keep it out of the charge. I am aware that this charge has been imposed at short notice, and in point of fact there must be some anomalies. The Minister recognises that, and he will be very glad to meet representative bodies who can speak of any anomalies which may arise under this scheme. It is precisely for that reason that the scheme is not coming into force until May 1, next.
§ LORD OGMORE
Will the noble Earl forgive me if I ask him this? Was no attempt made before the imposition of this charge was decided upon to obtain the views of the various airlines upon this issue?
§ THE EARL OF SELKIRK
In point of fact, the Corporations were approached and they said that on the whole they would prefer this method to any other.
§ THE EARL OF SELKIRK
The charter companies, I understand, were not approached specifically. It is always easier to make concessions than it is to make charges. The noble Lord has said it is not open to a commercial company simply to throw the additional burden on to the public. This is inevitably one 370 of the problems of monopoly. Once you get a monopoly it is open to that monopoly at any time to pass on its burdens to the public. That is one of the reasons why we particularly dislike a monopoly. I can assure the noble Lord that what he has said about the business management of airports and all such matters are very clearly before my right honourable friend. Many of us wish that more vigorous business management had been applied at aerodromes at an earlier date.
§ 6.48 p.m.
§ EARL JOWITT
My Lords, I must divulge an interest before I say a word on this subject. I happen to be President of the British Holidays and Tourist Association, which, as your Lordships know, derives its income partly from the Government and partly front various forms of tourist agencies and travel agencies. I should like to remind your Lordships that tourism has now become our most important industry. Take an industry like the cotton industry, and consider the gross amount we get from selling our cotton goods, and then take from it the amount paid for raw cotton, and you will find that the net balance is not nearly so substantial as the sum we are getting in this country now from our tourist trade. When you add together the amount that tourists spend in this country and the amount they pay for travel, either in British ships or in British aircraft, you will find that last year we topped £100,000.000. This year we hope to be able to reach £120,000,000. Tourism, as I say, has become our most important industry, and I hope that we shall all become tourist minded. The United States has no corresponding tourist industry at all. The face that they charge people a landing fee is no earthly reason why we should do the same.
I should like to ask the noble Earl this question. He says that the Minister is prepared to receive deputations about anomalies. Would he be prepared to receive deputations about the desirability or otherwise of this charge? I wish he would. We are doing all we possibly can, with the support of the Government, to attract visitors to this country. That is more important no than ever before because of our present difficulties. On the other hand, the Government are fining them all five shillings for coming, if they come by air—and an increasing 371 number are coming by air. I agree that the actual charge is not a large one, but the principle is a bad principle. I very much hope that this matter will be further considered. I speak on the spur of the moment, I have not been in communication with the officials of the British Holidays and Tourist Association. I am giving merely my own impressions, as President of that body. But I hope that this matter will be looked at again. I cannot think that a charge of this sort is a wise charge for us, in our position, to make, tourism being now our most important industry.
§ 6.51 p.m.
§ THE MARQUESS OF SALISBURY
My Lords, the noble and learned Earl is speaking on the spur of the moment; so am I. Therefore, he will forgive me if the views I express are not considered views. I think we should all agree upon everything that the noble and learned Earl said about the tourist industry. It is becoming increasingly important. We have neglected it in the past because we did not have to encourage tourists for economic reasons. Now we are in the sad position that we must encourage them, and certainly none of us would wish to agree to anything likely to deter tourists. I do not think it would help, however, to overstate the case. The man who is paying an air fare from the United States of £100 or more will not be finally deterred by the fact that he has to pay five "bob" on arrival. The five shillings is not being charged as a tax but for services which were formerly given free. I do not think that in itself is an argument for making an additional charge, but there are, in fact, very good reasons for it. As my noble friend has already told your Lordships, there is a heavy deficit on aerodromes at present, and this charge will go about two-thirds of the way towards making up that deficit. It will bring in about £200,000. I was delighted to hear the remarks about monopolies made by the noble Lord, Lord Ogmore, which I hope he will allow us to keep in cold storage for the future. We have always disliked monopolies, especially State monopolies, but it is a new doctrine from 372 that side of the House that it is not legitimate for a nationalised industry to put up prices because it is making a loss. At least I have never heard it expressed before.
§ LORD OGMORE
My Lords, I did not say so.
I am engaged in private enterprise, so I must declare my personal bias. What I meant was that there is a natural tendency for both the Government Department and a monopoly to thrust their burdens on the public. That tendency has to be guarded against, whether we like monopolies or not. We in the last Government were constantly guarding against it, and up to the present my noble friend Lord Pakenham and myself have refuted this idea. We always have to guard against this tendency of Government Departments and monopolies to thrust their burdens on to the public, instead of trying to make their own economies.
§ THE MARQUESS OF SALISBURY
My Lords, the fact remains that civil aviation is heavily subsidised, and we do not think that the subsidy should come from the public purse if it can be avoided. A private firm making a loss puts up the price of its products, so far as it can without putting off the public. There comes a level of price when the public will no longer buy, and no doubt the seller cannot go beyond that. But these rather wide observations go beyond the immediate purpose of the debate. To return to the Question, we are well aware of the considerations which the noble Lord has urged, and as my noble friend has said, the Minister is very ready to receive representations of any kind.
§ LORD WINSTER
My Lords, I should like to express my surprise and deep regret that the charter companies were not consulted in this matter. These companies have a useful and, in my opinion, necessary part to play in the development of civil aviation, and on that account they deserve encouragement and not discouragement. In such a matter as this I consider that they ought to have been put on an equal footing with the Corporations as regards consultation. I feel that the failure to do that was a serious oversight on the part of the Minister.