Lords Sitting of 15 May 1956

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
  LONDON NECROPOLIS BILL [H.L.]
  Read 3a, and passed, and sent to the Commons.

PROPOSED NEW OIL INSTALLATIONS
2.35 p.m.
LORD TEYNHAM: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her 'Majesty's Government whether they are aware that the Southampton Harbour Board have approved in principle the construction of oil jetties on the shore near Warsash for the use of a proposed new oil refinery, and whether they consider that in the interests of defence such installations should be spread rather than have two refineries in the same area; and further, if they are aware of the congestion of shipping in the deep water approaches to Southampton already caused by tankers awaiting discharge at the Fawley Refinery; and if they will state what steps have been taken to consult the large and important shipping interests in that area, and whether, and when, a public inquiry is to be held to enable the substantial opposition to these proposals to be heard.]
THE MINISTER WITHOUT PORTFOLIO (THF EARL OF MUNSTER): My Lords, since the noble Lord's Question was tabled, my right honourable friend the Minister of Transport and Civil Aviation has been informed that the Southampton Harbour Board have agreed in principle to the establishment of a new oil jetty in Southampton Water, subject to the necessary consents being obtained. Any proposal for the erection of a new oil refinery requires an industrial development certificate and planning permission.
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Up to date, neither has been applied for. If applications were made all the important matters which are raised in the noble Lord's Question would be taken into consideration.
LORD TEYNHAM: My Lords, while thanking the noble Earl for his reply, may I remind him of the large quantities of oil fuels which are already found on the beaches in the vicinity? Does he not think that an additional refinery would certainly increase them?
THE EARL OF MUNSTER: My Lords, I think that that is a question which must ultimately be decided when an industrial development certificate and planning permission are applied for.

TOURIST ALLOWANCES FOR DOLLAR AREA
2.37 p.m.
LORD TREFGARNE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have in mind any measures to redress the balance of cultural and tourist travel between the United Kingdom, on the one hand, and the United States and Canada; how many years have passed since a United Kingdom resident could, in normal circumstances, obtain a tourist allowance to the United States; and whether any statistics are available showing that such travel facilities, especially among young people, are almost entirely unilateral.]
LORD HAWKE: My Lords, Her Majesty's Government attach great importance to the fostering of personal and cultural contacts between this country and Canada and the U.S.A. Unfortunately, our balance of payments difficulties compel us to restrict dollar expenditure to essential purposes only. For this reason there has been no basic travel allowance for the dollar area since this was withdrawn in August, 1947. But special allowances are available for businessmen, for persons wishing to attend conferences, for post-graduate education, and for certain compassionate cases. Finally, a small allowance is given for the incidental expenses of people visiting close relatives. Statistics of the

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number of United Kingdom residents visiting the U.S.A. and Canada are not available. The Government do not at present contemplate making any change as regards private travel to North America, since the cost of doing so would be substantial. But the position will be reviewed as soon as our circumstances permit some relaxation.
LORD TREFGARNE: My Lords, whilst I should not wish to press the noble Lord for a further extempore reply in detail, perhaps I can properly ask him this question. Would the Treasury take the views of the Board of Trade and the Commonwealth Relations Office on the subject matter of my Question, and thus acquaint themselves more fully with the strength of the case which I have ventured to bring to the notice of the House?
LORD HAWKE: My Lords, I am answering on behalf of Her Majesty's Government and not merely of the Treasury. Before an Answer on these matters is given, the full views of the Departments of the Government are always taken into account.
LORD TREFGARNE: My Lords, while no doubt the full views of the Departments are taken into account—and
I thank the noble Lord for clearing up that point—may I draw his attention to the fact that the statistical information upon which a decision should be based has evidently not been ascertained by the Treasury? Could he not at least give me an assurance that that information will be ascertained?
LORD HAWKE: My Lords, I do not know on what grounds the noble Lord says that the Treasury lacked some statistical information. To the best of my knowledge, the Treasury have the most abundant and accurate statistics available to them.
LORD TREFGARNE: My Lords, I must have misunderstood the reply of the noble Lord. I thought he stated that figures were not available. If they are not available, they can easily be obtained. The number of visas granted can be obtained from the Embassy concerned, and similarly from the High Commissioner's Office.
LORD HAWKE: My Lords, if the noble Lord is referring to the number of United
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Kingdom residents visiting the United States of America, I admit that those figures are not available, but I do not see that they are relevant to the noble Lord's Question.

ROXBURGH COUNTY COUNCIL (ALE WATER) ORDER CONFIRMATION BILL
Considered on Report (according to Order).

HOUSE OF LORDS OFFICES
Order of the Day for the consideration of the Third Report from the Select Committee read.
The Committee reported as follows:
1.—LIBRARY
A Report from the Sub-Committee on the Library was laid before the Committee.
The Committee were informed that the Librarian was due for retirement in October next and invited the Library Sub-Committee to make a recommendation as to his successor and matters arising in connection with his retirement.
The Earl of Home and the Earl Attlee were added to the Sub-Committee.
2.—WAR MEMORIAL
A Report from the Sub-Committee on the War Memorial was laid before the Committee. The Committee recommended that the question of the site for the re-erection of the statue, which previously stood in the Royal Gallery as a memorial for the 1914–18 war, should be deferred for future consideration; that the War Memorial Sub-Committee should be dissolved and that the balance of the funds held by the Sub-Committee, after all outstanding accounts had been paid, should be transferred to a special account in the names of the Chairman of Committees, the Lord Great Chamberlain, the Gentleman Usher of the Black Rod and the Clerk of the Parliaments.
3.—HOUSE OF LORDS' CHAMBER.

(1) Ventilation. The Committee considered the question of the ventilation of the Chamber which had been referred to them by the House, and approved new arrangements for the use of the fans by which ventilation will be improved.

(2) The Committee were informed that further experiments were being made for the exterior floodlighting of the windows.

4.—PRINCE'S CHAMBER

(1) Statue of Queen Victoria. The Committee expressed general approval of the proposal to remove the two supporting figures, which would be stored with a view to subsequent re-erection if at any time the House desired to restore them to their existing position.

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(2) Lighting. The Committee were informed that new lighting of the pictures in the Prince's Chamber had been installed.

5.—REFRESHMENT DEPARTMENT
The Committee gave general approval to plans submitted by the Lord Great Chamberlain for improved accommodation for the Refreshment Department. The Lord Great Chamberlain was asked whether he could prepare a scheme for carrying out the work in stages according to its urgency.
6.—'REVISED ESTIMATE, 1956–57
The Committee authorised the increased cost of Police services for the year ending 31st March, 1957.
7.—D EPARTMENT OF THE LORD GREAT CHAMBERLAIN
The Committee were informed of the return of Mr. L. A. Ketcher from prolonged sick leave. As a temporary expedient, the employment of Mr. Ketcher on the establishment of the Custodian Staff (Subhead J) on his present scale of salary as an Office Assistant was approved. The continued employment of a shorthand typist in the Lord Great Chamberlain's Office, instead of Mr. Ketcher, was approved.
8.—RETIREMENT OF PRINCIPAL DOORKEEPER
The Committee sanctioned the payment of a pension and an additional allowance under the Superannuation Act, 1909, to Mr. Sydney Charles Pitt, who attains 65 years of age on 6th March, 1956.
9.——RETIREMENT OF A SENIOR CUSTODIAN
The Committee sanctioned the payment of a pension and an additional allowance under the Superannuation Acts to Mr. Robert Calvert, B.E.M., who attained 65 years of age on 10th February, 1956.
10.—CUSTODIAN—DUE FOR RETIREMENT
The Committee sanctioned the payment of a pension and an additional allowance under the Superannuation Acts to Mr. Frederick George Steele, who attained 65 years of age on 5th February, 1956.
The Committee were informed that Mr. Steele is being re-employed as an unestablished Custodian.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, in the absence of the noble Earl the Lord Chairman of Committees, who I am sorry to say is not well, it falls to me to move that this Report be now considered.
Moved, That the Report be now considered.—(The Marquess of Salisbury.)
On Question, Motion agreed to.
THE MARQUESS OF SALISBURY: My Lords, I beg to move that this Report be now agreed to, and in doing so I think perhaps I ought to say a few words on
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one or two of the items. Your Lordships will have seen the Report and will know, therefore, that on most of the items little comment is necessary. However, as to item No. 2, the War Memorial, your Lordships will have noted that the three Memorial Books containing the names of those who lost their lives in the two wars have now been placed in the embrasure in the Royal Gallery, in accordance with the original intentions. That involves some further consideration of what is to be done with the statue, which was originally there, or, at any rate, has temporarily been there. As your Lordships know, the statue did not meet with universal approval in the position in which it was, and it has therefore been necessary to give that matter further consideration. I can only assure your Lordships that when some conclusions have been reached you will have a further opportunity of approving whatever is then proposed.
There is then the rather important question for us all of the ventilation of the House. That is a matter which has been the subject of comment, and indeed of complaint, during the whole time that we have been back in this Chamber since the war, and a great deal of thought has been given lo it. Eventually, as your Lordships know, the matter was referred by the House to the House of Lords Offices Committee. I am glad to be able to report that arrangements have now been, made by which the fans in the roof can be accelerated and operated from Black Rod's Box. The present arrangement is that the fans are kept working at full speed throughout the morning and reduced in speed for the afternoon's sittings. The reason for the reduction in the afternoon is that when they are working at full speed they are audible. The speed can, however, be increased during the afternoon's sittings if the atmosphere in the Chamber becomes oppressive. Your Lordships will be glad to hear that some efforts, at any rate, are being made to improve the atmosphere.
I am also glad to be able to report that the Lord Great Chamberlain is carrying out experiments in lighting the windows from the outside of the House. I do not know whether your Lordships noticed it, but one afternoon earlier in the year one of the windows was lit for that purpose. It certainly improved the

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appearance, and should be of great use later on in the year when it is dark earlier.
Then I come to item 5, which deals with the accommodation in the refreshment department. There have been some projected plans for improving this, which consist of the conversion of some of the rooms on the Terrace front, underneath the Library, into additional dining rooms. This idea has been considered by the Committee and has been given general approval, subject, of course, to the approval of the House. But there are other authorities who have to be considered, and it is possible that these plans cannot be carried out for some time yet. Apart from everything else, I think the present economic situation will not make it a particularly appropriate moment for spending large sums of money on an object of this kind. But there is no doubt that if and when these improvements are made they will be of great value to noble Lords and their guests.
Finally, there is one item about which I think I ought to say just a little more, and that is item 4. It relates to the Prince's Chamber, and a proposal with regard to the statute of Queen Victoria there. As your Lordships know, that statue is flanked by two other figures which are large and have often been thought rather to dwarf the central figure. They, I understand, were not part of the original design, but were brought in rather as an afterthought—at the time, but as an afterthought. Further consideration of this question, in which noble Lords with great authority and experience in these subjects took part, led the Committee to the conclusion that there was at least a case for removing these supporting figures temporarily, so that noble Lords should have the opportunity of judging how the central figure looks alone, as was the original design of the sculptor. The Committee recommend that proposal to the House in their Report.
I would emphasise that there is no suggestion that these figures should be removed from the precincts of the House. They would be taken downstairs and kept over such period as was necessary to enable noble Lords to look at the central figure without the supporting ones, and see which they prefer. I hope very much, if I may say so, that the House
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will agree to this proposal, which is put forward merely to give the House an opportunity of judging between the two alternatives. The House will notice one other improvement in the Prince's Chamber, and that is the illumination of the pictures on the wall by special lighting thrown from the chandelier. I think there is no doubt that that has greatly improved the appearance of the room.
These are the only comments which I wish to make upon the Report, and I should once more like to move that it be approved.
Moved, That the Report be now approved.—(The Marquess of Salisbury.)
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I am obliged to the noble Marquess the Leader of the House for the care he has taken in expounding the Report. I know all about the matters he has so carefully put before your Lordships, and I hope that the House will adopt the Report.
On Question, Motion agreed to.

TRANSPORT (DISPOSAL OF ROAD HAULAGE PROPERTY) BILL
2.47 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Selkirk.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair]
Clause 1:
Disposal of property to companies remaining under Commission's control
1. For subsection (1) of section four of the Transport Act, 1953 (which relates to transfers of property to companies under the control of the Commission, otherwise than with a view to the sale of their shares) there shall be substituted the following subsection—
"(1) Subject to the provisions of this subsection the Commission may make over to any company under their direct or indirect control any property held by them for the purposes of the existing road haulage undertaking and any of their rights and obligations, whether under contract or otherwise, being rights and obligations connected with the property transferred, and in that event subsections (4) and (5) of the last preceding section, section six of this Act, and the First Schedule to this Act shall have effect as if

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the transaction had been a purchase resulting from an invitation under the last preceding section to tender for the purchase of that property on conditions providing for the purchaser taking over the connected rights and obligations, as if all such things had been done as would have fallen to be done if the transaction had been such a purchase and as if any vehicles specified by the Commission to the company as additional vehicles at the time when they are made over had been so specified under the said subsection (5), and, without prejudice to the generality of the preceding provisions of this subsection, references in the said provisions of this Act to transport units, to purchasers of transport units and to additional vehicles shall be construed accordingly.
Provided that—
(b) the total number and the total weight unladen of the vehicles made over to companies under this subsection which belong to each of the three following categories, that is to say—

(i) vehicles (whether motor vehicles or trailers) specially constructed to carry abnormal indivisible loads;

(ii) motor vehicles (of whatever character) which in the opinion of the Minister ought to be regarded as special vehicles constructed for special purposes other than the carriage of abnormal indivisible loads; and

(iii) other motor vehicles,

shall not exceed, in the case of the first category, three hundred and twenty-five vehicles and two thousand seven hundred and fifty tons, in the case of the second category nine hundred and eighty-nine vehicles and three thousand three hundred and thirty tons, and in the case of the third category seven thousand seven hundred and fifty vehicles and thirty-six thousand tons, and, of the vehicles so made over which belong to the third category, not less than three-fortieths, in number, shall be specified as additional vehicles;
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in paragraph (b) of the proposed new subsection (1), to leave out "thirty-six" and insert "forty" [thousand tons]. The noble Lord said; The first Amendment which stands in my name on the Paper is of an exploratory character. I wish to ask the noble Earl in charge of the Bill if he will tell your Lordships the significance of the additional words in this clause which set out not only the number of vehicles which are to be made over to companies, but the tonnage of every one of the three categories. Perhaps I may say a word by way of explanation. This provision deals with the companies
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under Section 4 of the Transport Act, 1953:
"Transfer of transport units to companies under control of the Commission."
As I read it—and I know the noble Earl, Lord Selkirk, will be kind enough to correct me if I am wrong—the figures in this clause have significance only upon the day that the Bill becomes an Act of Parliament. There are three categories—I am now quoting from subsection (1) of Clause 1. Category 1 consists of the big vehicles which cumber up the roads of the country and which carry these abnormal loads. The second category is vehicles which carry special loads, and the third is the 7,750 general haulage vehicles which are to be transferred to the company—I suppose it will be called "British Road Services General Haulage, Limited," or something like that—which I understand is already in existence, on the day after this Bill becomes an Act.
I want to ask the noble Earl whether it is the number of vehicles or the weight of vehicles which will be transferred. What is the significance of putting these figures in all these three categories? If your Lordships will read from line 31, you will see the words:
"shall not exceed, in the case of the first category, three hundred and twenty-five vehicles and two thousand seven hundred and fifty tons, in the case of the second category nine hundred and eighty-nine vehicles and three thousand three hundred and thirty tons, and in the case of the third category seven thousand seven hundred and fifty vehicles and thirty-six thousand tons".
I have done some mental arithmetic and can understand the first category, because I have worked out the average weight of the 325 vehicles making up the 2,750 tons. I have clone the same with the second category, but when it comes to the third category—that is, 7,750 vehicles and 36,000 tons—my practical experience of this industry prompts me to say that there must be some mistake. Perhaps the noble Earl can give me a simple answer. Either it is a mistake or, if it is not a mistake, it is a very serious matter. I estimate that with these 7,750 vehicles which are to be transferred to the company which is formed to carry on the general long-distance haulage, the average vehicle will be more than four and a half tons unladen weight. If I divide 7,750 into 36,000, I get about four and a half. As these vehicles range from about three tons to

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ten tons in weight, I would hazard a guess —it can be only a guess—that the average unladen weight throughout the whole fleet would be somewhere in the region of five tons. I want to ask the noble Earl this question. Does this Bill transfer 7,750 vehicles, or a number of vehicles aggregating 36,000 tons in weight? Because, if the latter is the case and the average weight is five tons per vehicle, it means that the company will have transferred to them not 7,750 vehicles but 7,200 vehicles, which will be 550 vehicles short. I am certain the Government do not mean that. I cannot understand the significance of putting in a tonnage figure at all. I work it out that, if the average is five tons per vehicle unladen weight and the number of vehicles is 7,750, the 36,000 becomes nearer 40,000. I am not seeking to increase the number of vehicles—the noble Earl understands that, does he not?
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): Oh, yes.
LORD LUCAS OF CHILWORTH: I am not seeking to do that, because, of course, the day after these vehicles are transferred these figures will have no significance. The noble Earl will appreciate that, because this is only the figure of vehicles to be transferred by British Road Services to the company formed under Section 4 of the 1953 Act. From that day onwards the number can be increased if the company are able to persuade the licensing authorities of the country to grant them licences, and can be decreased if commercial or any other considerations dictate that they shall sell the vehicles, because the vehicles then become the property not of British Road Services but of the company formed, as I say, in accordance with Section 4 of the 1953 Act. I hope I have made the point clear.
It should be a simple question to answer, because this fleet of 7,750 vehicles is in existence. It is not a "ghost" fleet: the vehicles are actually there. I feel that there has been a slip, a mistake, because I am sure the noble Earl does not want to see these vehicles transferred upon a tonnage basis. I want them transferred on a vehicle basis, as we have all along understood they would be. This is, in fact, the first time that tonnage has ever
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entered into it. If I may just recall the history of this matter, this was the number which the Chairman of the Disposals Board recommended should be given to general road haulage. Sir Malcolm Trustram Eve said the figure was, as near as he could ascertain and guess, 7,750. He did not say 36,000 tons' weight of vehicles; he said 7.750 vehicles. I believe that, if the noble Earl could walk round the British Road Services depôts and add up all the unladen weights of those 7,750 vehicles which are there now, the aggregated unladen weight would come to more than 36,000 tons; it would come nearer to my figure of 40,000 tons. That is the reason why I have put down this Amendment. Perhaps the noble Earl can give me the answer. I beg to move.
Amendment moved—
Page 2, line 38, leave out ("thirty-six") and insert ("forty").—(Lord Lucas of Chilworth.)
THE EARL OF SELKIRK: The noble Lord is not quite right when he says that these figures have no significance except on the day on which the Bill is passed—because, of course, these are the vehicles which are retained and are licensed specially. He is, however, right in saying that subsequently additional licences can be granted under the 1933 Act in the ordinary way. The significance of this provision is that, in the first place, the 1953 Act was based entirely on tonnage; there was no mention at all of numbers. In the second place, I think the Report of Sir Malcolm Trustram Eve mentions specifically 7,750 vehicles. It also suggested that it is fairly clear that the weight factor would need to be included. So, if I may say so, it was clearly envisaged that some measure of tonnage would be put into that Bill. What it amounts to is this: that the Commission may not retain more than the number which is specified or a total greater weight than the tonnage mentioned. They could, of course, retain fewer numbers with a greater weight, but I do not believe they could get up to 40,000 tons if they wanted to.
I have some figures of various sizes and average weights of the fleets of the British Transport Commission. The original retention under category (iii)—that is, general haulage, which the noble Lord mentioned—was 2,341 vehicles. Their average weight was 4·1 tons. The noble Lord will remember that the question arose as to disposal of the trunk

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services and they were, in fact, more or less put up for sale in a body in two substantial lists, S. 4 and S.C. (iii). If I take the 6,115 vehicles put up under S. 4, I find that the average weight is 4·4 tons. Taking the 691 vehicles under S.C. (iii), the average weight is 4·3 tons. I think it is fair to say that these two lists substantially represent the trunk services. What we have done here is to take the figure of 7,750 and we have given an average weight of 4·64 tons, which is higher than any of the figures that we have given now. I think that is broadly reasonable and, as the noble Lord has said, in certain circumstances the member can be increased. That is really the basis of it. I think it is necessary to have some weight figure, and I think this weight figure will broadly represent what is required. I would make only this one further point. Of course, the trunk services are not entirely identifiable; had they been, it would not have been necessary to have Sir Malcolm Trustram Eve's Report. They are not the precise figure, and therefore this is a broad estimate of what we consider reasonable. I hope that that meets the noble Lord's point and that he will not press this Amendment.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Earl for explaining the matter, but I am afraid that he does not quite satisfy me. This is a very serious matter. The noble Earl has said that, on a basis of 4·6 tons unladen weight per vehicle, the tonnage of 7,750 vehicles amounts to 36,000.
THE EARL OF SELKIRK: I hope that my mathematics are correct.
LORD LUCAS OF CHILWORTH: Yes, they are; I have worked it out. One must look at the significance of this point. I have got no basis, except guesswork, but I say that the average weight of the vehicles is nearer five tons. If I am right, and the noble Earl is wrong, it means that on the transfer, the General Road Haulage Company will get 550 fewer vehicles. That is a serious matter. If your Lordships will do a simple calculation and will divide five into thirty-six, you will see just how many they get. Five tons into 36,000 tons means 7,200 vehicles, instead of 7,750 vehicles. That is a substantial difference. Fortunately, I think it can be, easily proved whether
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I am or the noble Earl is right, because the 7,750 vehicles that are to be handed over on the day when this Bill becomes law are in existence—they are all being used on the general long-distance haulage services of British Road Services.
If it meets the convenience, of your Lordships, who I am sure will be impressed with the seriousness of this matter, I will withdraw this Amendment for the time being and will put down a starred Question for the first Sitting Day after the Recess, to ask whether Her Majesty's Government will tell your Lordships the exact unladen weight categories of the 7,750 vehicles and the number of vehicles in each category; and if it mounts up to an average of 4·6 tons and the number is 7,750 I will apologise to the noble Earl for causing all the trouble. If it does not—if it adds up to five tons unladen weight—I feel certain that he will then accept my Amendment. If I may use the vernacular, I do not want to "pull a fast one" over the Government—I should be clever if I succeeded—in getting more than 7,750 vehicles; but I want 7,750, not 7,200, vehicles. If your Lordships will give me permission to do as I have suggested, the facts can be ascertained. This is a question of fact it is not a question of guesswork. I am satisfied with category (i), I am satisfied with category (ii); but I am not satisfied with category (iii), and I want to make sure that 7,750 vehicles are handed over to the General Road Haulage Company and not 7,200, as I fear may be the case. With your Lordships' permission, I will now withdraw this Amendment, and will put down a Question on the first Sitting Day after the Whitsun Recess. Then on the Report stage, having had the benefit of the Answer, I can decide whether or not again to put down this Amendment.
Amendment, by leave, withdrawn.
3.5 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in paragraph (b) of the proposed new subsection (1), to leave out all words after "thirty-six thousand tons". The noble Lord said: This is a simple Amendment. I now return to the question of what I call the "mothball fleet". For some reason, when it was found that Her Majesty's Government, via the Disposals Boards, could not sell any more of these vehicles, they decided that the

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British Road Services had better keep them, after all. The number which they thought British Road Services should have in order to carry out the splendid service which was being given to the industry of this country—and industry and chambers of commerce throughout this country were the principal agitators that no more disposals of the general haulage fleet should take place—was not arithmetically decidable, and outside opinion was asked. Sir Malcolm Trustram Eve, who was the chairman of the Disposals Board, stated
"to the best of my knowledge I would hazard the opinion that the correct number is 7,750 vehicles",
and, as the Committee will see in Clause 1 (1), 7,750 was the number of vehicles put into the Bill.
When the Bill was printed, the trouble started. I do not know where it started —it may have started in an outside organisation, or on the Back Benches in another place. But a way had to be found to placate the Opposition if 7,750, instead of 2,000-odd, vehicles were to be retained by British Road Services. This unruly section had to be placated and a way had to be found to reduce the number. Somebody thought of the excellent political expedient of saying, "In the average road haulage fleet in this country, 7½ per cent. of the vehicles are always under repair, and so 7½ per cent. of any fleet is sterilised. What we had better do is to sterilise 7½ per cent. of the 7,750,"—if my arithmetic is right, that comes to about 582—"and we will say that they cannot have A licences." That means that British Road Services will have 582 vehicles fewer than the number of 7,750. The Minister said on Committee stage, and I think also on Third Reading, in another place, that, in spite of the fact that the Chairman of the British Transport Commission, Sir Brian Robertson, had protested that he could utilise, in the national interest and the national economy, every one of the 7,750, he had, by force majeure, to agree to this, as I think, rather foolish bargain. I want to bring back that 7½ per cent. That is the sole object of this Amendment.
May I put it simply in this way? We are now talking about A licences, without which a vehicle cannot run on the roads for hire or reward. If the vehicle is under
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repair, it is immobilised in any case, of course. If British Road Services, or the company which is now to be formed, are clever enough and are so efficient that they can reduce to 4 per cent. what is supposed to be the usual 7½ per cent. of vehicles under repair, why should not they have the benefit of their efficiency? If they can put 3½ per cent. of their vehicles back on the roads why should they not be encouraged to reduce to the smallest possible percentage their "mothball fleet" or the number of vehicles under repair? Let us make no bones about it; this is really political expediency and it is one of the most ridiculous things that a Government has put in any Bill, for it means only that British Road Services are to be put to a lot of trouble and will have to do a lot of paper work applying for these A licences when they want to use the vehicles. I hope that, in this last despairing effort of mine to get some sense into this matter, the noble Earl will concede my point and accept this Amendment. It purports to achieve only this: to provide that the 7,750 vehicles shall all have A licences; that they can be used at any time for the whole of the services of the British Road Services fleet, and that 7½ per cent. of the number shall not be immobilised under the guise of the suggestion that 7½ per cent. is the usual proportion for vehicles under repair and that that percentage should therefore be immobilised anyhow. I beg to move.
Amendment moved—
Page 2, line 38, leave out from ("tons") to end of line 41.—(Lord Lucas of Chilworth.)
THE EARL OF SELKIRK: I believe your Lordships are generally familiar with the way in which this matter has arisen. Her Majesty's Government decided to permit the British Transport Commission to retain the trunk services. The question then arose: what were the trunk services? As the noble Lord, Lord Lucas of Chilworth, said on speaking on the first Amendment there was no specific answer. Sir Malcolm Trustram Eve was accordingly asked to examine the point, because as chairman of the Disposals Board he was in a peculiarly good position to do so. He did so with his customary skill, and he made a report. He was then asked whether these 7,750 were vehicles on the road or included those necessarily to some extent under repair.

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Those of your Lord3hips who are familiar with the Royal Air Force organisation will know the difference between immediate reserves and immediate equipment—that is to say, aircraft. It is obvious that in that sphere one can never have al] the aircraft flying at one time, because there will always be some under repair. The same situation applies to road haulage.
Here Her Majesty's Government were fortunate in being able to take a wise course. Again through the medium of Sir Malcolm Trustram Eve, the chairman of the British Transport Commission and the chairman of the Road Haulage Association were brought together and were able to reach an agreement. The noble Lord, Lord Lucas of Chilworth, has suggested that that agreement was reached by force majeure, but the argument applies just as much one way as the other. The two gentlemen who came together did not know what decision might be taken by Her Majesty's Government, should they be unable to come to a decision; and accordingly both had considerable interest in reaching an agreement which was, broadly speaking, reasonable to them both. That is what they have done and that is what we have incorporated in the Bill; and I suggest to the House that it would be a great pity to disturb that now.
The Commission are now able to retain up to 7,750 vehicles, and if they wish to put one of these additional vehicles into operation they can do so either by getting in touch with the licensing authority, or, alternatively, as the noble Lord, Lord Lucas of Chilworth, suggests, they have only to apply for an A licence under the 1933 Act. There is nothing unusual about the additional vehicles. A number of transport units were sold with additional vehicles, in exactly the same way as is provided here. I believe that every fleet has additional vehicles. I very much hope that the noble Lord will not press this Amendment. This agreement has been reached, and if Her Majesty's Government were to go back on it, whichever side it took, the other side would feel that it had been roughly treated. This matter has been thoroughly threshed out, and, while I do not feel that this is a strong reason, I would point out that there have already been two Divisions in
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another place and I do not think the other place is likely to come to a different decision should we send the matter back to them again.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The decision was a very stupid one, and while we will not go to a full Division on this we will certainly negative the decision by voice.
On Question, Amendment negatived.
Clause 1 agreed to.
Clause 2:
THE EARL OF SELKIRK: This Amendment is really a piece of machinery which does two things. First, it ensures that the Transport Commission continue to retain Part II licences: that is to say, licences granted under the first Schedule of the 1953 Act, for companies formed for sale. Originally these Part II licences lasted only for five years. Now the period is extended until the company ceases to be under the direct or indirect control of the Commission. Secondly, it also ensures that a special A licence under Part 1 of the 1953 Act will be granted to the purchaser of any or all of these companies which have been formed for sale, and the Special A Licence will remain valid for five years from the date on which that control passes to the purchaser. I beg to move.
Amendment moved—
Page 4, lire 15, at end insert—
("(4) As respects any vehicles which, immediately before the expiration of the five year period mentioned in Part II of the First Schedule to the Transport Act, 1953, are—

(a) owned by a company to which vehicles have been transferred under the said section five; and

(b) authorised to be used under a licence granted to the Commission under the said Part II,

the said licence shall be deemed to have been granted for a period expiring with the end of the said five year period or with the date when the company ceases to be under the direct or indirect control of the Commission, whichever last occurs:
Provided that if, after the expiration of the said five year period and before the company ceases to be under the direct or indirect control of the Commission, a:1y of the vehicles authorised to be used under the licence are disposed of by the company to the Commission, the licence shall thereupon cease to have effect with respect to those vehicles.")— (The Earl of Selkirk.)
On Question, Amendment agreed to.
3.18 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to add to the clause:
"(7) Notwithstanding anything in this Act or in the Transport Act, 1953, if all or any of the securities of a company to which property has been made over under the said section five remain unsold on the thirty-first day of December, nineteen hundred and fifty-six, the Commission shall be released from the duty of selling the said securities."
The noble Lord said: This Amendment is put down in order to give Her Majesty's Government the opportunity of showing how sincere they are when they keep telling us that they really want to take politics out of the road haulage industry. In his Second Reading speech the noble Earl spoke of coming to the end of a chapter and said that he hoped this Bill would be the end of a chapter. We want to come to the end of the book, then shut it and lock it away. The drafting of this simple Amendment may be bad or loose for, as I am always confessing to your Lordships, I am no Parliamentary draftsman. But it seeks to provide that on December 31, 1956, we shall come to an end of disposals for good and all. We believe that that is the most sensible course.
This Amendment really affects the parcels company and the meat company. The parcels company, which conies under Section 5 of the 1953 Act, is a company whose shares and securities can be sold. The Minister has often stated in another place that he does not intend to sell the shares in this company until such times as this company has been put upon a real profit-earning basis. Is it not a marvellous thing? Here is a Minister of Transport who is the custodian for the shareholders, the taxpayers, in the British Transport Commission, as well as in the British Road Services and in the parcels company, and, on the one hand, he is denying the British Transport Commission the right to cover their costs. I would not saddle the Minister of Transport with the whole of the responsibility, but by not accepting the advice given him by the Transport Tribunal he has prevented the British Transport Commission on their railway side from reducing the deficit of £13 million. On the other hand he says: "I am going to sell the most profitable asset of the British Transport Commission"—that is, the parcels company,
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which is now making, according to its directors, £1 million a year. "I am going to sell that at an opportunity which will present itself in the years to come. I am going to sell it to the public."
We say that that is wrong. It is fundamentally wrong. It is commercially wrong. I do not think it is too harsh an expression to use to say that it is playing ducks and drakes with the taxpayers' money. We on this side of the House are going to resist it right up to the last. We say: "Let us call a halt to this. Let us take politics out of the transport industry." This parcels company and the meat company will be the only two companies that were formed under Section 5 of the Transport Act, 1953, which do not come under control of the British Transport Commission. Here is a business that has been built up until now 100 million parcels a year are handled to the satisfaction of the whole business community of this country. I ask the Committee to remember Lord Hurcomb's plea to the Government. I hope that I am not doing the noble Lord any injustice when I say that he is certainly not moved by political ideology in this; he is moved by something which I would describe as "horse sense." He says it is a tragedy that this company should be sold when it is a profit-earning concern, one which is well run and which has built up a national network. And it can never be as profitable hived off from the operations of the British Transport Commission, because already there is integration between the parcels services and the railways, and a lot of the 100 million parcels are trunked on the railways. If we want integration for industry, here to hand we have the whole benefit of this valuable parcels service, which will go on making money for the taxpayer and go some way to alleviating the great difficulty with which the railways will be faced for years to come in meeting their costs and reducing their deficits.
Here in the Bill is a suggestion that this company shall be sold and that the Sword of Damocles shall be suspended over the heads of Major-General Russell and his colleagues (who have done such an outstanding job of work) for two or three years until someone has been conditioned to come along and buy the undertaking. I have argued this matter

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at length before and I do not intend to waste your Lordships' time by going into more detail to-day. I conclude by saying that this Amendment offers a chance of doing the sensible thing, of acting in the national interest. Let us close the book of nationalisation. As Lord Hurcomb told your Lordships in the Second Reading debate, this big business has been built up on public money at public risk until it is earning profit at the rate of £1 million a year, and now it is going to be sold off to the private speculator and the private investor. So far as we on this side of the House are concerned, we feel that we must do what we can to resist this policy, and any sensible Government that comes into power must reverse this decision at some future date, because it is taking the guts out of an integrated organization, tearing them out, just for the sake of pandering to private profit-makers. The State has taken the risk; the taxpayer has money at stake right the way through in the British Transport Commission—and the money was guaranteed in principal and interest. We ought not to allow one of the most valuable assets to be taken out of this organisation. My Lords, I have explained the purpose of this Amendment. I beg to move.
Amendment moved—
Page 4, line 39, at end insert the said new subsection.—(Lord Lucas of Chilworth.)
3.26 p.m.
LORD GLYN: I rise to support the Amendment moved by the noble Lord, Lord Lucas of Chilworth, for a very particular reason: that is that in another place, I think in 1933, it fell to my lot to invite the House to pass the permission for private enterprise—namely, British Railways at that time—to take over Carter Paterson & Co. That was done because, after considerable inquiry, it was found that the four railway companies, in those days of private industry, could greatly help the trading community if they were able to take over Carter Paterson & Co. and, almost simultaneously, Hay's Wharf, so as to provide a service which would cover the country. The noble Lord in moving this Amendment talked about nationalisation. The proposals that are under review at the moment were carried though by private enterprise, by the railway companies, before nationalisation. I hope noble Lords wilt forgive me for saying this, but
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I personally feel that it is a great pity that the railway industry, which was a great industry, should be perpetually upset by political circumstances. It is obvious that if matters stand as they are now, then some day another Government will come into power and will reverse the whole thing.
I take it that it is possible to speak on this Amendment in rather general terms. I think it is worth remembering that one of the reasons why originally these proposals came into force in August, 1933, was that it was then possible to convey goods by trunking and so relieve the roads by putting such goods as could be accumulated for passage to the North, or any other pars of the country, on the rail. It seems to me that in these days the roads are already frightfully congested, and it is an extraordinary proposal that anything should be brought into force which would divorce that close association between rail parcel traffic and the delivery by road when the goods get near their destination.
Many people have no doubt studied the effect on the principal trading industries which utilise these services if the system is changed in any way, and I believe there is a feeling that it will do great damage to industry. With all respect to the individual road haulier, it seems to me rather foolish, as the nation is interested in the railways, that any action should be taken which would not only be to the detriment of the traders but remove valuable traffic from the railways. I fail to see how there can be any advantage in this to private enterprise, road hauliers or anyone else. It used to be the boast of the four railway companies in the old days that if any trader handed in a parcel it would be delivered at any destination within thirty-six hours. That is the ideal we ought to aim at and, if possible, we should try to reduce the time. I have not heard it said, in any argument for an alteration in the present system, which, as the noble Lord says, is making a profit of £1 million a year, that there are not some devoted people operating the parcels service, who have done a great deal to make it efficient.
There is another aspect which I do not think has been mentioned: that is, that traders are much more likely to insure their goods if they know who is going up handle them throughout the journey. It is a matter of great importance that that

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should be recognised by the public. We had a system which was called "company's risk"—I suppose now it is called "Commission's risk". In the old days it meant that the companies took full risk for the safe arrival of articles sent, but the right to insure always remained to persons sending goods. I do not know whether it will be so easy to carry out insurance if the transit of goods is divorced from the control of one authority—namely, the Transport Commission. I beg noble Lords to realise that this is a matter far transcending Party politics. I think it is unfortunate that one service which under nationalisation is so successful should be left in a state of doubt about its future, because it is neither fair to the public nor to the men who are operating that service.
LORD HURCOMB: I am not going to repeat what I have already said on the Second Reading of this Bill, but I should like to reinforce what the noble Lord, Lord Glyn, has just said. On transport merits, surely there can be no argument against leaving this service with the Transport Commission; but that means going back on what was done some three or four years ago, and I realise fully all the difficulties of doing that. Apart from that, I do not yet understand—and no answer has been made on this point—why, if it was right and proper in the public interest and in the interests of their shareholders that the old railway companies should own Carter Paterson & Co. and Pickford's 100 per cent., it is not equally in the public interest and right and proper that those concerns should be owned by the nationalised transport system, including the railways. I realise the length to which the Government have already gone in the proposals contained in this Bill, though I feel that it would be more expedient and wise, in the interests of a permanent settlement, to put an end forthwith to the doubts about this particular service. Surely there is a great deal to be said for putting a time limit upon the period during which this undertaking is to be left lying about, for someone or other to accept or reject or be induced to make some offer colourful enough in appearance to enable it to be accepted. I admit that it would be too much to say: "Put an end to that period now." But,
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surely, there is a great balance of advantage in putting a short time limit upon the period during which this service is to be left in doubt; and I hope it is not too late for the Government to consider the matter from this angle now.
THE EARL OF SELKIRK: I am sure that we shall all weigh carefully what the noble Lords, Lord Glyn, and Lord Hurcomb, have said to us, but the Amendment is not the way of doing what they have in mind. Indeed, it is almost the worst possible way of trying to do it. The Amendment means that if this company is to be sold, it has to be sold before next December. Clearly, that means that it would be sold at a very bad time and, if I may repeat the term so graphically used by the noble Lord, Lord Lucas of Chilworth, if we sold it then, we should be "playing ducks and drakes" with the taxpayers' money. For that reason I cannot commend this Amendment to the Committee. Moreover it is contrary to the Minister's intention. He intends to run the company for a term of years so that there will be some continuity in the future. If he attempted to sell the company before the end of the year, it is obvious that it would be sold below its true value. If the Minister does sell it, he wishes to get the full price.
The noble Lord talks about its being a profitable undertaking. No doubt it is, and so we may expect to get a very good price for it. By this Amendment the Minister would have only two choices: either to sell below price, or not to sell at all. What the Minister wishes, and what I think is a fair way of doing it, is to keep this company together: whether the shares are owned by the Commission or outside should not affect the continuity and structure of the company itself. We recognise the value of its work. The integration which has so far been attempted by the railways has not been entirely successful in itself. There may be other ways of doing it. In this Bill we are trying to get the balance on a difficult subject. We are trying to supply, in the first place, good public service, and secondly, an arrangement which is not regarded as fundamentally unfair by either side. Plainly, if that balance is overturned then one side or the other will consider that they are being treated unfairly. That is an important question if the future of this industry is

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to be maintained and proper competition is to be maintained by the public service. This subject has been thoroughly ventilated already and there have been two Divisions in another place, and I would ask the noble Lord not to try to force us to send back something which I cannot believe the other place could possibly accept. Therefore I should be glad if he could withdraw his Amendment.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Listening to the noble Earl, I must say I feel convinced that my noble friend is right in putting down this Amendment. It is perfectly clear that the Government are trying to keep a provision for selling a valuable part of what is owned by the nation, a part which pays a profitable return to the Transport Commission and helps the general work of the Commission. There
Clause 2, as amended, agreed to.
is no possible sense in it. We have listened to one of the members of the body which originated the linking up of the parcels service with the railways—the noble Lord, Lord Glyn—who ably stated the case. It only remains for us to say this: the Government plead with us not to send this question back to another place, because there will be no difference in the result. The warning must be repeated now, at this stage of the Bill in your Lordships' House. If this is put into the Statute Book, it will certainly be repealed when there is a Government of another kind, because this is merely carrying out a political dogma against the interests of the nation.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided:—Contents, 23; Not-Contents, 56.

CONTENTS

Cork and Orrery, E.

Chorley, L.

Lucas of Chilworth, L.

Lucan, E. [Teller.]

Douglas of Kirtleside, L.

Milner of Leeds, L.

Faringdon, L.

Monkswell, L.

Alexander of Hillsborough, V.

Glyn, L.

Ogmore, L.

Stonehaven, V.

Grantchester, L.

Pakenham, L.

Thurso, V.

Haden-Guest, L. [Teller.]

Pethick-Lawrence, L.

Henderson, L.

Sherwood, L.

Archibald, L.

Lawson, L.

Sinha, L.

Winster, L.

NOT-CONTENTS

Kilmuir, V. (L. Chancellor.)

Monsell, V.

Hacking, L.

Runciman of Doxford, V.

Hampton, L.

Salisbury, M. (L. President.)

Soulbury, V.

Harris, L.

Templewood, V.

Hawke, L. [Teller.]

Cholmondeley, M.

Hindlip, L.

Ferrers, E.

Abinger, L.

Leconfield, L.

Grey, E.

Balfour of Burleigh, L.

Luke, L.

Morley, E.

Balfour of Inchrye, L.

Lyle of Westbourne, L.

Munster, E.

Birdwood, L.

Mancroft, L.

Onslow, E. [Teller.]

Blackford, L.

Milverton, L.

St. Aldwyn, E.

Carrington, L.

Monk Bretton, L.

Selkirk, E.

Cawley, L,

Monson, L.

Swinton, E.

Chesham, L.

O'Hagan, L.

Clitheroe, L.

Rathcavan, L.

Bridgeman, V.

Conesford, L.

Rochdale, L.

Cilcennin, V.

Congleton, L.

Sandys, L.

Crookshank, V.

Croft, L.

Teviot, L.

Goschen, V.

Dorchester, L

Teynham, L.

Hailsham, V.

Elton, L.

Tweedsmuir, L.

Leathers, V.

Gridley, L.

Waleran, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 3 [Special provisions as to vehicles used exclusively for particular contracts]:
3.50 p.m.
THE EARL OF SELKIRK: Clause 3 deals with contract A licences, and the Amendment which I am about to move is really introductory to a new clause that I shall be moving in a moment. Perhaps it would be convenient to your Lordships if I deal with that now. The purpose of the new clause is to leave with the Commission a reserve of vehicles which they can substitute for those they are retaining under Clause 3, which deals with the contract A licences. Under the Amendment the reserve vehicles will not be licensed. The Commission have two courses open to them if they want to bring these vehicles on the road. Either they can substitute vehicles by ad hoc arrangements, when required, with the licensing authority or, alternatively, they can apply for a general A licence. As a flatter of practice, for the 1,800 vehicles used for contract A work, about 99 were kept in reserve. It is expected that in future this will be roughly on the same basis. This will be a matter of adjustment between the Commission and the Disposals Board or, later on, with the Minister. I beg to move.
Amendment moved—
Page 6 line 24, after ("section") insert ("or under the next following section").—(The Earl of Selkirk.)
On Question, Amendment agreed to.
THE EARL OF SELKIRK: I beg to move the next Amendment.
Amendment moved—
After Clause 3, insert the following new clause:
Extra vehicles for companies to which s. 3 applies
".—(1) In addition to any vehicles made over to a company under the last preceding section. the Commission may, notwithstanding anything in subsection (5) of section six of the Transport Act, 1953, make over to that company such further vehicles as they may determine, so, however, that the total number of vehicles made over to companies under this section shall not exceed such number as may be agreed between the Board and the Commission or in default of agreement determined by the Minister.
(2) Where any vehicles are made over to a company under this section, any A licence under which they were authorised to be used before they are so made over shall cease to have effect so far as it relates to them. And
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the Commission shall give all such notices and make all such applications as are necessary to secure that the licences are revoked or that the vehicles are removed therefrom, as the case may require."—(The Earl of Selkirk.)
On Question, Amendment agreed to.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH had given notice of an Amendment to the Amendment, to leave out all words after "section", in the new subsection (2), and to insert instead:
"the provisions of Part I of the First Schedule to the Transport Act, 1953, shall have effect for the purpose of giving to the company the rights referred to in those provisions of obtaining in respect of those vehicles authorisations under A licences as if the transaction had been the purchase of a transport unit, and as if all such things had been done as would have fallen to be done if the transaction had been such a purchase."
The noble Lord said: I tried to follow the noble Earl closely when he was moving Amendment No. 5, but I do not think I followed him accurately. There seemed to be other and more important matters to discuss in other parts of the House, and the noble Earl's voice did not reach as far as this. The object of the new clause—the noble Earl will tell me whether I am right—is to carry out an undertaking made by the Minister in another place. This deals with Contract A licence vehicles—vehicles that are under contract by British Road Services to firms such as Cadbury's, Lyons' and people like that, who have their own painted vans. These are Contract A vans which are let on contract to big contractors.
THE DEPUTY CHAIRMAN OF COMMITTEES (THE EARL OF BUCKINGHAMSHIRE): I regret to have to interrupt the noble Lord, but I put Amendment No. 6 and it was agreed to. I do not think we can take Amendment No. 7, because it should have been moved before I put No. 6.
LORD LUCAS OF CHILWORTH: With great respect, I thought the Chair would have reminded me. I thought that before one could amend an Amendment, the Amendment had to be passed. If I am wrong, surely I may have available to me the expert and professional guidance of the Officers of the House. What am I to do?
THE DEPUTY CHAIRMAN OF COMMITTEES: I regret the mistake which has been made, and I offer my

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apologies to the noble Lord. What should have happened—and perhaps I should have explained this to him—is that after the noble Earl, Lord Selkirk, had moved Amendment No. 6 formally, the noble Lord, Lord Lucas of Chilworth, should have risen to move Amendment No. 7. I have not called Amendment No. 7.
LORD LUCAS OF CHILWORTH: Amendment No. 7 was called.
THE DEPUTY CHAIRMAN OF COMMITTEES: Yes, that is quite correct; I did call Amendment No. 7.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: The Chair called Amendment No. 7 after the new clause had been inserted. I cannot, for the life of me, see how the noble Lord can be prevented from bringing to your Lordships' notice a matter of this kind when he has been called upon by the Chair. If he cannot, he should have been called by the Chair before Amendment No. 6 was agreed to.
THE EARL OF SELKIRK: I do not know whether it is in order to go back on what we have done; but if it is possible to discuss this Amendment we shall be only too glad to do so. I do not know whether the House would consider it most improper to consider that Amendment No. 6 has not, in fact, been passed. I do not know whether the Lord Chairman will accept that.
THE EARL OF SWINTON: Ought we not to conform to the Rules of Order? As this is the Committee stage, it will be quite easy, if we have made some mistake, while conforming to the Rules of Order, to have the Amendment moved on the Report stage, when it can be fully discussed.
THE DEPUTY CHAIRMAN OF COMMITTEES: I very much regret this mistake, but perhaps it would be easier if the Amendment could be moved on the Report Stage. I am afraid I must take the blame for making this mistake.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I do not think it would be the first time in the history of Parliament if the House agreed, in the case of a genuine mistake, to reconsider the position and discuss what many people have come here this afternoon specially to discuss. It is not always possible for them
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to be here on another occasion. I should have thought that where there was a genuine mistake it could be put right.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): With the permission of the House, might I suggest that the noble Lord, Lord Lucas of Chilworth, should let us know what the points are, and then, if the matter is still of importance in his mind, he can put it down again on Report. If the House will agree to that, we shall then know the point the noble Lord has in mind. All I want to do is to help the noble Lord and to let the House know what he has in mind.
THE EARL OF SWINTON: May I make one suggestion? It is not in the least anything personal, of course, but it is rather important that we should keep to our Rules of Order in this House, particularly as we have no Speaker and no Chairman of Committees who has any authority. The House is therefore the master of its own procedure. There is a way of dealing with this matter, if I may suggest it. If the noble Lord wishes to deploy an argument upon this subject, it might well be done on the question that the clause stand part. Then if he, having deployed his argument, also desires to get a decision from the House in a constitutional manner, it would be quite in order for him to put down an Amendment on the Report Stage. He is such a regular and valuable attender in this House that I feel sure he would wish to do it in that way.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Earl. That was a suggestion I was going to make: that in fact I should pass the observations I would have passed when the Lord Chairman puts the Question that the clause stand part; and then perhaps the noble Earl, Lord Selkirk, will reply to the points I make. I can then consider between new and the Report stage whether I shall put the Amendment down.
THE EARL OF SELKIRK: This is a new clause; therefore, strictly speaking, it does not stand part. But I have an Amendment to Clause 4 which, in a sense, is consequential. If we could stretch the Rules of Procedure, perhaps the noble Lord could deal with it under Amendment No. 8.
THE DEPUTY CHAIRMAN OF COMMITTEES: I again offer my apologies to the noble Lord, Lord Lucas of Chilworth, for not putting this in the right way. Perhaps the noble Lord would like to put his argument on the question whether the clause stand part. The question is that the new clause be agreed to.
LORD LUCAS OF CHILWORTH: Would the noble Earl be kind enough to tell me what this means, because it may cover the point? As I said, I was trying hard to follow what the noble Earl said, both on Amendments No. 5 and No. 6, but my attention was distracted by noises that should not have been made. As I understand it, what the noble Earl has done by the Amendment of Clause 3 and this new clause that he has moved, is to carry out an obligation which the Minister entered into quite voluntarily in another place. As I see it, this clause deals with contract A licence vehicles, and it is necessary, to carry out those contracts, that there shall be a float of vehicles. The float has to be there because these big firms who prefer to hire their vehicles, painted in their style and in their own colour, from British Road Services, have seasonal demands. They themselves do not run a fleet of vehicles, and the contractors who supply them with vehicles must have a float. The Minister said in another place on April 16 last [OFFICIAL REPORT, Commons, Vol. 551 (No. 133), col. 734]:
"I give this undertaking. I think the point on retention is made"—
that is, the retention of a float.
"If I am satisfied that the Commission needs a certain float of vehicles to carry out properly its contract hire work and that the Bill bars it from keeping that float which is a proper commercial thing to do, I will introduce an appropriate Amendment in another place to deal with the point."
I understand that the noble Earl has now allowed the float but, if I read his Amendment correctly, he has then doubled back on his own traces and said "Yes, you can have the float but you cannot have any licences to operate the float." That appears to me to be even more nonsensical than the 7½ per cent. "mothball fleet" which will have to be a "mothball fleet" because it cannot have licences.
This is not a case of repair; this is a case of having spare vehicles ready for instantaneous operation. If you take
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away all their contract A licences, it means that immediately Messrs. Cadbury or Lyons, or any firm of a like nature, have a sudden rush of business—perhaps before Easter, Whitsun or any holiday period—when they may want four, five or more vans or lorries, or whatever they may be, British Road Services will then have to go to one of the twelve licensing authorities throughout the country and get a contract A licence. That may mean days before they can fulfil that demand. The noble Earl mentioned the figure of ninety-nine. That, I take it, is going to be the number of the float?
THE EARL OF SELKIRK: No. Perhaps I ought to make that clear. I must apologise to the Committee if I was a little brief. Ninety-nine is the number which the Commission have had on reserve of the 1,800 which they are using, and the number which we anticipate will be roughly in proportion to those figures, according to how many A contracts are taken.
LORD LUCAS OF CHILWORTH: They will come in the float; it may be ninety-nine or it may vary?
THE EARL OF SELKIRK: Depending on the contract size.
LORD LUCAS OF CHILWORTH: But they will not have any licences for them. That was the object of the Amendment which I put down and which, through circumstances, I cannot move. Really, what is the sense of giving them a float of ninety-nine vehicles and then immediately immobilising them by not giving them contract A licences? They can always go to the licensing authority and get a licence for a vehicle. Surely this float is for emergency operation. Why do you not say that the fire engines of all the local authorities cannot have a fire engine licence until there is a fire, and that they can then write and get a licence to operate a fire engine and go and put the fire out? It would be just as much sense. This is an emergency squad of vehicles to cope with industry's extraordinary demands at any particular time of its season: Now, for some ridiculous mania of ideology of some kind which passes my comprehension, it is said "Yes, we will give you the vehicles, but you cannot use them until you have applied to the licensing authority for a contract A licence for them."

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Suppose the licensing authority say: "No, you cannot have a licence"—and, after all, every application for a contract A licence can be opposed. Suppose that an application is opposed by the gentleman who insists upon having the 7 per cent. "mothball fleet." I cannot go any further to-day, but I shall put down an Amendment unless the noble Earl likes to concede my point and himself put down an Amendment. But, so that he will not tell me that my Amendment is out of order, or badly drafted, I am going to him and will let him draft the Amendment for me. I will put it down on Report stage. I feel certain that your Lordships will agree with me.
THE EARL OF SELKIRK: Perhaps I may reply to that. The noble Lord is quite right. This is dealing with contract A licences. The arrangement is that the Commission keep all the contract A licences which they are able to obtain, and in cases where they do not obtain such licences, they will have to sell the vehicles which formerly they held. This is a float which they can retain against those licences. The noble Lord has shown more than his usual ingenuousness in pretending not to understand the licensing system of this country. He is well familiar with the nature of the licensing system here, but he now pretends that he does not understand it at all. He knows that the contract A licence is an entirely different thing from the A licence. He knows that the contract A licence is given with great facility and it is always for a precise number of vehicles. Every private contractor has to carry out the contract A licence procedure when he is doing this particular type of work. But, if he wants an ordinary A licence, as opposed to a contract A licence, that is an entirely different matter.
The Amendment which the noble Lord is suggesting here is directly intended to put the Commission in a privileged position as compared with the private operators in this country. He is saying that they may have a reserve of contract A licence vehicles against their contract licences. No private operator could do that. The noble Lord knows—or I think he is aware—that, if the Commission are unable to obtain any contracts, the vehicles which they might have used for that purpose will be sold without special A licences So, when the noble Lord
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thinks it over, he will see that it is fairer not to have the Amendment which he has suggested, and that to accept the Amendment would put the Commission in a privileged position in respect of this matter. Therefore, I hope that on reflection he will not even put down an Amendment on Report stage.
Clause 4 [Reduction of number of trailers covered by licences under Part II of Schedule to Transport Act, 1953]:
THE EARL OF SELKIRK: This Amendment is consequential on the new clause which I moved. I beg to move.
Amendment moved—
Page 7, line 2, leave out ("the last preceding section,") and insert ("either of the two last preceding sections,").—(The Earl of Selkirk.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5:
Supervision and control of disposal of property, etc.
(2) The Minister may give such directions as he thinks fit to the Commission as to the exercise by them of their powers (whether conferred by this Act or not) as holders of any of the securities of any company to which property has been made over by them under section five of the Transport Act, 1953, and of any powers conferred on them by name under the articles of association of any such company, being directions designed to procure either—

(a) a reorganisation or alteration of the securities of the company; or

(b) the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof.

LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to delete subsection (2). The noble Lord said: This Amendment seeks to delete subsection (2) of Clause 5. This is about the worst piece of political—may I use the word without offence?—jiggerypokery that I have seen for a long time. This subsection gives the Minister power to direct a reorganisation or alteration of the securities of the company—I am now dealing with the parcels company. What exactly does that mean? It means that the Minister may cause a reorganisation of the finances of the company to the extent that if he wants to sell a profitable part he can do so. He can reorganise the finances so that the whole national network of the parcels company is split up into areas. He can do anything he likes

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to alter or to reorganise the securities of the company—in other words, the share capital. When I was connected with the Ministry of Transport it was sacrosanct: the Minister could never give a direction to the British Transport Commission unless it was on a matter of the highest national importance. In this Bill the Minister can alter the financial constitution of the company.
The subsection then goes on to say that the Minister may:
"procure either—
(b) the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof."
He can come along and say, "I want you to appoint Mr. Jones, Mr. Brown and Mr. Robinson to be directors of the company." In defence of this almost infamous suggestion it was stated in another place, I think by the Parliamentary Secretary, that the directors would be interested in the purchase of the company because they would have been appointed to the board as persons likely to command the confidence of investors—contact men, I suppose, to rig and arrange the takeover bids. I always thought that the first and paramount duty of a director of any company was to watch the interests of the shareholders. The shareholders of this company at the time these directors may be appointed will be the taxpayers of this country. We are going to have planted in this company the nominees of the Minister who may be acceptable to the City—spies inside the camp—so as to facilitate, and I suppose get, the best bargain they possibly can for those people in the City who are going to invest money. I doubt whether anybody has heard a more infamous suggestion.
Why should they want to command the confidence of the City? If I take the Minister literally, I should imagine that he is not going to sell this company for something like four or five years, and that he is going to sell it only when it is such a success financially that the directors who have been responsible for making the financial success will command more support and more favour from potential investors than one or two "place men" from the City, who no doubt will be far more interested in arranging take-over bids and getting commission than in running the company in
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the interests of the taxpayers, who are the shareholders.
Then, what is the new policy of Her Majesty's Government? I thought we had heard that the highest places in nationalised industries—in fact, in all industry—should be for those who have worked their way up from the ground floor. I am not for one moment going into this point in great detail, because it is something which is going to engage your Lordships at the conclusion of this stage of the Bill. What kind of incentive is there for the senior executives of British Road Services Parcels Limited to work themselves up to be members of the board when they know that "place men" from the City are coming in, appointed by the Minister? I hesitate to suggest that this is perhaps a loophole for retired, but not retiring, civil servants to find a job after they have finished their active life in the Civil Service, at about twice their pension. Is that what this is? That now seems to be rather a habit of Her Majesty's Government.
I should like some explanation from the Minister of why it is necessary in the case of a company whose whole share capital is owned by the State, by the taxpayer, for the Minister to seek to be able to juggle with the financial arrangements of the company and, in the words of the Bill, to reorganise or alter the securities of the company or procure:
"the inclusion on the board of the company of directors named by the Minister, not being a majority of the directors thereof."
I do not care whether or not it is a majority; they have no right to be there without some far better explanation than we have been given at the present time. I will not say any more. I will move this Amendment and perhaps the noble Earl can give us some far better reason for doing this than has been vouchsafed to us so far. I beg to move.
Amendment moved,
Page 7, line 15, leave out subsection (2).—(Lord Lucas of Chilworth.)
LORD TEYNHAM: In spite of what has been said in a most impressive way by the noble Lord opposite, I cannot see any infamous suggestion at all in this clause. Surely, as the clause is drawn, there are in fact a number of safeguards. In the first place, the Minister has no power to force policy on the board of the company, because he can appoint

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only a minority of the directors—he cannot appoint all the directors. Nor can there be any question of packing the board of the company—it just cannot be done. The powers asked for by the Minister in this clause are, I understand, required for a specific purpose. It is really a reserve power to assist the Commission when necessary. As I understand it, that is the purpose of the clause.
LORD GLYN: May I intervene for a moment? I think that this is liable to create misunderstanding, because in another place there was rather a Contradiction between the Parliamentary Secretary and the Minister. After all, one must take the Minister's words as meaning what he wants, and he said
"… persons likely to command the confidence of investors. They would have been put upon the board with a view to there being some degree of continuity between the administration of the parcels company while it was still owned by the British Road Services and when it had been taken over by private investment."
The position seems to be one that requires clarification, because it is difficult for the executive and senior people working in British Road Services Parcels Division to have confidence in the future of the company or in their own future if they find that people are going to be put on the board by way of a type of Trojan horse, with a distinct understanding, according to the Parliamentary Secretary, that they are there to attract investors from outside to take over the concern and alienate it from the railway. Whatever may be the political motive behind this—I quite see that the Minister may require expert opinion—if we are going to have this service run in the way that we want it run, for public service, and to help the trade of the country generally, one wants some assurance that this minority on the board of directors will not have an adverse effect upon the labour employed by the concern.
4.18 p.m.
LORD HURCOMB: May I ask for some further explanation of what is intended by the suggestion that there should be continuity between the old and the new boards? That seems to imply that the minority directors to be appointed by the Minister will in sonic way be connected with the new company after the sale. If that is intended, surely it puts these gentlemen into a most
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ambiguous position. When I read the statement to which the noble Lord, Lord Glyn, has referred, I found it exceedingly difficult to be sure that I was understanding it aright, or to see the propriety of the interpretation which can be placed upon it, if by "continuity of management" is meant that the minority directors, or some of them, are also to be part of the management or directorate of the company after its sale. Surely, as the noble Lord, Lord Lucas of Chilworth, has said, there must be some conflict of duty in such a position. That may not be the meaning or intention of what was said, but it would be in the public interest, and would avoid suspicions and misunderstadings that are floating about, if the noble Earl would make some clear and categorical statement on that particular point.
I hope I have made clear what is troubling my mind, but to make sure may I put it again. Here are gentlemen serving on the board of this company, formed under the Transport Commission and still wholly owned by it, appointed by the Minister. I should have thought that one of their first duties was to ensure that it is competently and efficiently managed; secondly, that it is properly organised, and thirdly, that sales, when the time comes, are at prices which are right and proper. But if they are also to be part of the prospective directorate of the company to which the sale is made how can they act in a completely impartial position? It places them in what I can describe only as an ambiguous position, and though it is being suggested in many quarters that that is the intention and effect of this provision, I cannot feel that such an interpretation is right.
THE EARL OF SELKIRK: I do not mind in the least what the noble Lord, Lord Lucas of Chilworth, says about Her Majesty's Government, but I feel that it is a pity that he should bring in the Civil Service, whether retired or not.
LORD LUCAS OF CHILWORTH: Surely that can be brought in. If I cannot say that, what can I say? I am not attacking tile Civil Service; I am attacking policy.
THE EARL OF SELKIRK: The noble Lord is bringing in comment, which I

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think is a pity. I take no objection to the rest of what was said. I can quite understand that those who do not want these companies to be sold should take exception to this particular part of the Bill, but I would ask them to look at the matter in this way. If one wanted to sell the companies one must have powers of this kind to do so. These are really permissive powers which are to be put into use when the time comes for selling these companies. It is not intended that these powers should be used in connection with other companies remaining with the Commission. The difficulty about commanding the support of investors outside is that, in the ordinary way, the directors of this company would be officials of employees of the Commission. They would be quite likely to look to the Commission for their future and to be concerned with the Commission's work. In the ordinary way, in the event of the company being sold they would not pass, as directors, to the company in private hands. In those circumstances, obviously it would be difficult to get the best price such as could be ensured by providing a measure of continuity when the company passed from one side to the other. Their purpose is to ensure that when the company is sold the best possible price is obtained.
I can give the noble Lord, Lord Hurcomb an assurance that there is no immediate intention of appointing anyone to these boards. This is run by the Commission, who will have every incentive to make it as great a success as they can. These powers will be used only when the time comes to sell. The noble Lord will recognise that, if the companies are to be sold, some powers of this kind are absolutely necessary and that it would be impossible to float a company in the City unless powers of this kind could be put in, providing for some continuity in the board of directors. There is here no sinister intention of interfering in the Commission's ordinary work. With that explanation, I hope this Amendment will not be pressed.
LORD LUCAS OF CHILWORTH: I usually accept wholeheartedly what the noble Earl says, but I have never heard a weaker reason for doing what I believe is an infamous thing. If the noble Earl will forgive me, he is not following what
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the Minister and his Parliamentary Secretary have said. He has taken an entirely different line. Every time a spokesman for Her Majesty's Government gets up in another place, or in Committee or in this House, he puts a different construction here. Take the wretched thing out altogether! What did the Parliamentary Secretary say. He does not speak unless he is instructed so to speak, for Parliamentary Secretaries do not dare to do so. He said during the Committee stage in another place:
"They would certainly be interested in the purchase because they would have been appointed to the board"—
they would not be officials: they would have been "appointed"—
"as being persons likely to command the confidence of investors."
What does that mean? Here we have the noble Earl, Lord Selkirk, saying they would be put on the board to see that the organisation would be run efficiently after purchase. They cannot see that it is run efficiently before purchase. Surely the best persons to run things efficiently before purchase are those directors appointed by the Commission who have brought it to the state of competence and money-making which would attract the City.
I can assure the noble Earl, as he should know, that the only thing in which the City is interested, is the profits of the concern and what the shares will be worth. Pretty faces on the board, because they are officials of the Minister of the British Transport Commission, will not inspire any more confidence in the breast of the City than directors who remain and who have been there in the past to bring it to that state of efficiency which will warrant the Minister selling it. This question has to be debated at far greater length than we can do this afternoon. The noble Earl should take out this provision. It is the most objectionable thing I have ever seen put in a Bill by any Government. Nobody could get away with an action like this—putting such dictatorial powers into a nationalised concern owned by the taxpayer when he, above everybody else, should be the custodian of the taxpayers' interests. The directors ought to see that the best price is obtained in the best sale to those most likely to be interested in purchasing.

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When the noble Earl says that these powers are only permissive I must say: What crimes have been committed by Ministers under that excuse in the past few years! If it is only permissive what is it put in for? If it is not intended to be used, then take it out. I will certainly withdraw this Amendment, but I assure the noble Earl that this matter must be argued at greater length at the Report stage. Has the noble and learned Viscount the Lord Chancellor ever seen anything quite as bad as this? To me it savours of the "bucket shop. "The Government are inviting the Minister to put on the board of a nationalised organisation, when it is ripe for sale, people who will have the confidence of the City to "rig" the sale in favour of those who arc going to purchase.
THE LORD CHANCELLOR: I should not have interposed between the noble Lord, Lord Lucas of Chilworth, and his withdrawal had he not appealed to me, but as he was good enough to do so, I would ask the noble Lord to face the facts of this situation. As my noble friend Lord Selkirk said, we are dealing here with a situation where the object of the exercise is to sell this company. That is a situation with which we are faced, and this Bill makes elaborate provisions for that to occur. The effect of the noble Lord's Amendment would be to deprive the Minister of the powers conferred upon him by this subsection, first, to give directions to the Commission as to the exercise of their powers in relation to companies formed for sale, and particularly to give directions as to the reorganisation of the securities of the companies; and, secondly, to appoint persons named by him to the board of directors.
The first point I put to the noble Lord is that to take these powers away from the Minister would destroy the flexibility which the Bill seeks to introduce into the sale of companies. There can be no doubt about that point. And with respect to the noble Lord, the view that he has put so strongly to your Lordships is based not only on the ignoring of the object—which is the sale of the company —but also on the noble Lord's strongly held view, which he has expressed with such force to the Committee, that the company should not be sold. If one approaches it from that point of view, from the point of view of putting any
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possible difficulty in the way of the sale of the company, then the noble Lord's Amendment fits into that background. But if the company has got to be sold, then the Minister must have the flexibility that I mentioned. The first part of the subsection to which the noble Lord objects deals with the question of structure. Now he appreciates very well that if you are going to sell you may have to change the nature of the securities of the company from being merely shares in the company to partly shares and partly loan capital. And it may well be that a very good offer may depend on some of the securities being loan securities, and, in fact, on there being some time before the loan is paid off, however it is arranged. I cannot see, so far as that is concerned, how there can be any objection—and, in fairness, I must say that I do not think the noble Lord has deployed many objections to that part of the clause.
The second part of subsection (2) gives the Minister the right to appoint directors. Again I ask the noble Lord (I do not want to make any debating or Party point of this) to consider this as a business proposition, and to consider it for the moment from the point of view of the Government; that is, on the basis that a sale is desirable. At the moment, the company will be run by a board the members of which are all appointed by the Commission. If the board is limited to persons employed by the Commission, then it follows that, when the sale takes place, there must be an entirely new board—unless, of course, one envisages taking people away from the service of the Commission, which I am sure the noble Lord would be the last to desire. I am not going into any possibility of that. But that follows as a logical necessity. You cannot avoid that if it is to be an entirely "Commission board"—if I may put it that way. Then, after purchase, the board will either be entirely different or it will be necessary to tempt away some of the Commission's people, which is prima facie not desirable. That situation has to be dealt with.
The Minister appoints persons to the hoard. In that situation, their duties, of course, are perfectly clear, as the noble Lord has said. They are then clothed with the duties and responsibilities of directors. Their first duty is to carry on the company as successfully as possible,

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in accordance with the objects of the company as set out, and they cannot divest themselves of that duty. But a time will come—and it has been said that there is no desire to rush that time—when the sale has to take place. That happens in companies, as the noble Lord is aware. I do not know, but I should think he has probably been in a position where that has happened. And it can happen, of course, without any arrière pensée of any kind, that there is a transfer of the share capital; and in that situation the directors will have to consider what is a proper price. Again, I do not want to go into details; I know the noble Lord is entirely familiar with the various methods by which that is done. There is earning capacity, and you may have to take into account the assets at break-up value. You may follow the system known as the Cutforth system, which was invented by that very distinguished accountant, and which gives a certain weightage to both.
All these are commonplace things which every director will have considered either if there was going to be a sale or if he was going to advise shareholders as to the proper price for the sale. They are in that position, and again I say they cannot divest themselves of their duties in that position. But so long as it is fully known, and everyone appreciates it, and so long as they do not divest themselves of those duties which I have mentioned, I cannot see that it would be improper, in those circumstances, if they were asked to continue on the new board, for them to do so. Impropriety usually comes, I think the noble Lord will agree (I am trying to argue this matter dispassionately and objectively), where there has been some concealment of the position, where someone who is apparently looking after the interests of the seller shareholders is implicated with the buyers, and that fact is not known. Here, persons are put in the position that they have to carry out these duties, and it may well be in the interest of the Commission, as shareholders of the original company and therefore desirous of getting the highest price, that there will be people who will give to the purchasers that continuity which will ensure that the purchasers have the chance of carrying on the company in the most effi-
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cient way. I think the noble Lord will agree that that is the form. You do not look entirely at pre-sale matters; you look at post-sale matters, your ability to make profits which have been made before. That is the situation.
And I would remind the noble Lord of what Lord Teynham said: that it is only a minority of the board that can be appointed by the Minister. I would say to the noble Lord, Lord Lucas of Chilworth, that I cannot see, on the basis I have put forward, why men of honour should not take that position. I put it to the noble Lord that this is one of the difficulties in politics, of which he knows —I have had some "at the other end of the gun". I have had to lead the opposition to nationalisation measures when I have been defeated on the main principle, or on secondary principles, and I have tried—I am sure the noble Lord will believe me, however ineffective my trials may appear to have been—to produce after that a working piece of mechanism. I think it is the duty of a responsible politician, when beaten on a major point, not to take the position of trying to make it unworkable. All that we ask the noble Lord—and I know that he will do it, whether he agrees with me or not—is to consider this matter before Report stage from the point of view of someone accepting the policy that these companies should be sold, and sold for the best price that the Commission can get for them. I have tried to deploy the case to the noble Lord, and I should like him to think that I appreciate the difficulties, because I have been through it the other way. I want to put this final point to the noble Lord. He said that he would withdraw the Amendment to-day but if, after consideration of what I have said, he still finds other criticism, we shall be very willing to meet it on Report stage.
LORD LUCAS OF CHILWORTH: I am grateful to the noble and learned Viscount. I assure him that I am willing to use my best endeavours to make something I do not like work, but as my mind is working at the present time, the last thing I should do is to go about it by this method. To put buyers' representatives on the board before the companies are sold is as alien to getting the best price for the assets as any way of which I can think. I am not going to delay

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your Lordships longer. I will study carefully what the noble and learned Viscount has said and perhaps return to this at a later stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7:
Abolition of transport levy and winding-up of Transport Fund.
(3) The payments falling to be made to the Commission under subsection (2) of this section shall be in lieu of any payments falling to be made to the Commission under sections thirteen to fifteen of the Transport Act, 1953, and—

(a) in subsection (1) of the said section thirteen the words from "and out of which there shall he made" to the end of that subsection; and

(b) subsections (2) to (4) of the said section thirteen, and the whole of sections fourteen and fifteen of the said Act and of the Third Schedule thereto,

are hereby repealed.
4.44 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to add to subsection (3):
"Provided that, if the payments falling to be made to the Commission under subsection (2) of this section fall short of the payments that, but for the provisions of this subsection, would have been made to the Commission under sections thirteen to fifteen of the Transport Act, 1953, a sum equal to the difference between the first mentioned payments and the second mentioned payments shall be paid by the Minister to the Commission out of moneys provided by Parliament."
The noble Lord said: This Amendment seeks to make certain that the levy shall end at the end of this year when the Transport Fund is closed. It is estimated that it will have £12¼ million in its coffers. It is also estimated, by some method that I do not know, that the capital loss on the Commission's sale of vehicles will amount to £12¼ million. It may be more, arid what I want to be assured of is, that if it is more, the Transport Commission will not be the losers. I am prepared to accept the 1953 valuation of goodwill, though the Commission are not: I do not think it is any good jobbing backwards to that. But there may be circumstances which go past the date when the Transport Fund is closed down, which may involve the Commission in loss. I agree that the Transport Fund has to be
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I closed down and that the Government I have done their best to see that the revenue into that Fund is equated by the estimated loss. What I want is a safeguard so that, if something should go wrong, the Transport Commission are not the losers. That is the simple reason for this Amendment, which I beg to move.
Amendment moved—
Page 10, line 9, insert the said proviso.—(Lord Lucas of Chilworth.)
THE EARL OF SELKIRK: I am grateful for the brief way in which the noble Lord has moved the Amendment. I think I can give him the assurance for which he is asking. The capital loss estimated has been agreed by the Commission's auditors, and both compensation and expenses of sale have been specifically agreed with the Commission. The noble Lord accepts the 1953 basis for estimation. I assure him that he need have no anxiety in that respect. The noble Lord has chosen a somewhat unusual way of meeting this point. I will not go into the details, but we did not think it was a good way of doing it in 1953, and I cannot commend it in 1956. What I can say—and I believe that it meets the point which the noble Lord has in mind—is that on the basis on which we are working there is no possibility of the Commission being out of pocket unless the parcels and meat companies are sold below the price assumed on sale, which is equal to the written-down value of assets. We think that that is highly improbable and that there is every possibility, if and when the sale takes place, that it will be at a better price. Moreover, the Minister has said that he will take the best advice on how he can sell the assets to the greatest advantage. In these circumstances, I think that the anxiety of the noble Lord on this matter need be nil. I do not think he need worry about it, and I am certain that he would not expect roe to accept the way he proposes to get out of this difficulty.
LORD LUCAS OF CHILWORTH: My apprehension arises from this fact: that though the Minister has said that he will take the best advice, he is not very good at taking advice. He goes around and does not accept the advice of the Transport. Tribunal; nor does he accept the advice of the chairman of the Disposals

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Board or of other people. He does not want advice; he wants acquiescence. The only disturbing thing that the noble Earl has said was about the written-down value of the parcels companies. The parcels companies have been written down in value, but I do not know how that is done, because the companies are subject to company law and income tax, and if they are written down in value—
THE EARL OF SELKIRK: I said, "the written-down value"—that is, the book value.
LORD LUCAS OF CHILWORTH: The book value is not the true value. The noble Earl says in the next breath that they are going to make a large profit on the sale.
THE EARL OF SELKIRK: On the written-down value.
LORD LUCAS OF CHILWORTH: I do not want the noble Earl to come to the House and say that the profit we have made on the sale of the parcels companies is the difference between the written-down value and the realisation value and that that, added to the £12¼ million, will reimburse the British Transport Commission. That is just a paper transaction. I can see a lot of pitfalls here. I am prepared to accept the noble Lord's sincerity in this, and that he does not want the Commission to come off badly through any untoward happening but I do not want the parcels companies sold at a peak figure against a written-down value to make a profit to set against any losses that might be sustained in other directions. That is all I ask. This Amendment was put down only to get an explanation from the noble Earl. I do not intend to press it now, but will give the matter further thought, and it may help if I have a discussion with the noble Earl about it. It is an intricate point, but I do not think we should waste the time of your Lordships in arguing it now. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
THE EARL OF SELKIRK: This Amendment deals with quite a small point. It is really for the convenience of the Commission. The Commission are to be regarded, from the point of view of the Companies Act, as a holding company. The advantage of that is that if they wish to transfer drivers from one company to another they can do so without further impediment; or, if I may put it in another way, they can employ drivers differently in one subsidiary organisation from another subsidiary organisation. I beg to move.
Amendment moved—
After Clause 7 insert the following new clause:
Application to Commission of enactments relating to holding companies
" .—(1) For the purposes of the definition of the expression 'holding company' in subsection (3) of section twelve of the Road and Rail Traffic Act, 1933, the Commission shall be deemed to be a company, and the said section twelve (both as originally enacted and as applied by any subsequent enactment, whether passed before or after the passing of this Act) shall have effect accordingly.
(2) Nothing in this section shall affect the provisions of subsection (7) of section five of the Transport Act, 1953 (which relates to the application of the said section twelve where property is made over to a company under that section)."—(The Earl of Selkirk.)
On Question, Amendment agreed to.
Remaining clause and Schedule agreed to.
The Title:
THE EARL OF SELKIRK: This is an Amendment to cover the new clause after Clause 7 which I have already moved. I beg to move.
Amendment moved—
Line 6, after ("Fund") insert ("to extend certain enactments relating to holding companies to the British Transport Commission"). —(The Earl of Selkirk.)
On Question, Amendment agreed to.
Title, as amended, agreed to.
House resumed.

OCCASIONAL LICENCES AND YOUNG PERSONS BILL
4.53 p.m.
Order of the Day for the Second Reading read.
LORD MERTHYR: My Lords, Section 127 of the Licensing Act, 1953, prohibits the employment in bars of young persons under the age of 18, and Section 129 of the same Act prohibits the sale of liquor to those persons; and similar provisions, under different enactments, apply to Scotland. At this point an anomaly arises which has been noticed and which has so far escaped correction, and it is that anomaly which I seek to put right this afternoon. The two sections to which I have referred do not apply to occasional licences; that is to say, to dances and other small functions when an occasional licence is taken out at a special time, or at a special place, or on a special occasion. Not only is it a fact that under an occasional licence a person under 18 may be employed with impunity, but it is also a fact that that same person may order, receive and consume there alcoholic drinks of any kind; indeed, as one chief constable has pointed out in his report, if a toddler orders a double whisky the police can take no action whatsoever. This Bill seeks to remove that anomaly.
Subsection (1), of Clause 1, referring to England and Wales, and subsection (2), referring to Scotland, apply the existing law of licensed premises to the holders of occasional licences. I hope that little argument is necessary in order to persuade your Lordships to give a Second Reading to this Bill. I might mention that it is not merely an attempt to correct a small anomaly, because complaints have actually been made of recent times throughout the country. An increase of drunkenness, and of criminal offences due to drink among young persons of both sexes, has been noticeable and this at a time when the general level of crime is, happily, decreasing. This is causing concern to magistrates, to police officers and to social workers alike. May I quote two sets of figures: in the City of Birmingham in 1954 eighteen youths were convicted of drunkenness; in 1955 the number had gone up to forty-six. Complaints have been heard from Scotland on exactly the same point. In a report issued by the Economic Research Council it is stated
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that prosecutions of persons between the ages of 17 and 20 in the year 1946 amounted to 18·4 per 1,000 persons, whereas the figure for 1954 was 61·3. That is a noticeable increase in a period of eight years. I hope that what I have said is sufficient to put the case for this small Bill. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a. —(Lord Merthyr.)
THE J0INT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords, perhaps your Lordships might like a brief word from me as to the view of the Government on this small Bill. I hope I am not being in any way derogatory to my noble friend Lord Merthyr if I say that the Government do not feel strongly about it one way or the other. It is true that there is a loophole in the law, as the noble Lord has said, and that toddlers can go to a dance and order a double whisky. However, there is little evidence, on the whole, that they do. If this loophole exists, there is no reason why it should not be filled, and the noble Lord's Bill certainly fills it. Further, I feel that I must tell the noble Lord that there is no great evidence that the increase in drunkenness amongst young people, to which he has referred, is in any way attributable to this particular anomaly. Therefore, I must warn the House that if a Second Reading is accorded to this Bill—as I suspect it may be—there is no prospect of a great drop in the figures to which the noble Lord has referred. It does not seem that this is a branch of the law which has led to an increase in drunkenness among young people. Nevertheless, your Lordships may feel that this is a loophole in the law and that we can fill it. This Bill cannot do harm, and it may do good.
LORD REA: My Lords, I do not know whether speak for my noble friends on these Benches, but I should like personally to support the noble Lord, Lord Merthyr, in the Second Reading of this Bill which is intended to put in order this small anomaly. His pathetic picture of tiny tots—in both senses—is most moving, and I am sure that your Lordships will be pleased to give the Bill a Second Reading.
On Question, Bill read 2a and committed to a Committee of the Whole House.

SMALL LOTTERIES AND GAMING BILL
5.0 p.m.
Order of the Day for receiving the Report of Amendments read.
LORD CHORLEY: My Lords, I beg to move that this Report be now received.
Moved, that this Report be now received.—(Lord Chorley.)
LORD LAWSON: My Lords, perhaps I may be allowed to say a word or two on this Bill and on this matter generally. I was extremely sorry that I could not be in my place when the Second Reading was debated. I do not wish to detain your Lordships for any length of time, but may I say that for many years nothing has pleased me more than the speech which was made by the most reverend Primate the Lord Archbishop of Canterbury against the Second Reading of this Bill and the extension of the principle by the Government as shown by the premium bonds proposal. Nothing has surprised me more than that proposal. One has no particular objection to regularising and equalising the law, but one knows very well that once one begins regularising certain actions of this kind, there is no telling where it will end.
As a matter of fact, I think that what has happened is that the Government have assumed that, because this Bill had a fairly quiet passage, therefore there was no great objection in the country to the principle of legalising gambling. Everyone knows what gambling is. It can be a personal matter that does not touch the law. But at a time when the Government are urging everybody to be serious and to increase output, a proposal is made which means getting something for nothing. That negatives the position taken up by the Government, and must leave room for thought for those who have serious consideration for the future of this country. I do not wish to launch into a speech about this matter, but few things have given me greater pleasure than the challenge to it by the most reverend Primate.
If this extension goes forward in the form in which it is proposed, I hope this country will rise to the situation. I believe that there never was a time in the
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history of this country when citizens more needed to be serious about the future. At a time when great changes are taking place in the industrial organisation, changes which need serious consideration on the part of every citizen, I believe it is wrong that the mind should be directed to gambling. That is where we are going —there is no doubt about it. It is just a "try-on" for lotteries on an extensive scale. No one knows the full effect of gambling upon the human mind. I do not mind telling the House that I have had "a penn'orth". I know its disturbing influence. I know the passion that lays hold of men and women, and I know some of the effects upon the life of the people. I wish to take this opportunity of saying that I hope the Government, before they extend this principle, will take note of the fact that the most reverend Primate the Lord Archbishop of Canterbury spoke for great masses of people in this country, and that they will never do more ill-service to the land than by prosecuting and continuing with this proposal for premium bonds.
LORD MANCROFT: My Lords, I think it would be discourteous to the noble Lord, Lord Lawson, whose views we all respect, if I were to allow his remarks to go absolutely unanswered, and also lest it be thought that the Government representative was not even in his place. On the Committee stage of this Bill, the most reverend Primate the Lord Archbishop of Canterbury succeeded in making what I then described as a Second Reading speech on the Finance Bill which has not yet been published. On the Report stage of this Bill the noble Lord, Lord Lawson, has succeeded in making a Second Reading speech on a new Betting Bill which has not yet been drafted. I should like him to know that we respect his views, whilst not agreeing with all of them, and when the time comes we shall look forward to listening to him in greater detail. In the meantime, I can assure him that his remarks have nothing whatever to do with the Bill which the noble Lord, Lord Chorley, has had so much difficulty in getting through the House, and which your Lordships may still at this late stage be pleased to see upon its way.
On Question, Motion agreed to: Bill reported with Amendments.

LOCAL GOVERNMENT (STREET WORKS) (SCOTLAND) BILL
5.7 p.m.
House in Committee (according to Order): Bill reported without amendment.

HOTEL PROPRIETORS (LIABILITIES AND RIGHTS) BILL
Brought from the Commons; read 1a and to be printed.
LOCAL GOVERNMENT ELECTIONS BILL
Brought from the Commons; read 1a, and to be printed.
NATIONAL INSURANCE BILL
Brought from the Commons; read 1a, and to be printed.
SOLICITORS (AMENDMENT) BILL [H.L.]
Returned from the Commons, agreed to with an Amendment.
PENSIONS (INCREASE) BILL
Returned from the Commons with the Amendments agreed to.

CHANGES IN B.O.A.C.
5.9 p.m.
LORD OGMORE LORD OGMORE rose to call attention to recent changes in the British Overseas Airways Corporation; and to move for Papers. The noble Lord said: My Lords, we on this side of the House are disturbed at some of the recent happenings in B.O.A.C., and. I think I can say with justice that it is not only noble Lords on this side of the House who are proud of B.O.A.C.: that feeling of pride is shared by noble Lords on all sides of your Lordships' House. We are all eager for its prosperity, and we are all anxious that nothing whatsoever shall impair its success. But the recent changes—and, I think, even mere the events which preceded the changes—have disturbed the public mind. In our view, they make a Parliamentary debate essential.
What are the changes? In the first place, there are the resignations from the old Board in recent months of the Chairman, Sir Miles Thomas, the Deputy Chairman, Mr. Whitney Straight, the noble Lord, Lord Rennell, who resigned but has since been reappointed, and the noble Lord, Lord Burghley, the Chairman of the Board's Technical Committee, who has resigned or at any rate has not been reappointed. The new appointments have been the Chairman, Mr. Gerard d'Erlanger, the Deputy Chairman, Sir George Cribbett, and the Managing Director, Mr. Basil Smallpiece. The old team, if I may call it so—that is, the old Board of B.O.A.C. and the top officials—saw a steady advance in the progress of B.O.A.C., maintaining its traffic in the face of fierce international competition and turning a heavy deficit into a modest profit; and this in spite of the severe blow sustained by the withdrawal of the Comet aircraft from service early in April, 1954 This disaster meant a loss in carrying capacity and in profit and it also required a complete improvisation so as to provide for replacements in the near future. It was, moreover, a severe psychological blow to Sir Miles Thomas himself, who had done so much to make the Comet known throughout the world.
However, the team rallied swiftly and new plans were made and carried out. I think we should not allow this occasion to pass without puling on record the fact that, during Sir Miles Thomas's eight years as Chairman, the revenue increased from £14 million to £42 million a year, and during that period a loss of £8 million a year became a profit of £1¾ million. B.O.A.C. have now on order nineteen Comets and thirty-three Britannias, as well as American aircraft. The old team was a successful one, as these figures show, and the team gives a hint as to what is required in this industry. I would say that the top men in B.O.A.C. have a vital task to perform. They can make or they can break this great airline in which so many of our hopes are engaged and so much of our money is sunk. They can profoundly affect the future of British civil aviation and the British civil aircraft industry.
What qualities, then, should they have and what type of men should we engage to provide the necessary direction? I

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would say that the men required—at all events, the top men—on the Board of B.O.A.C. must be men of vision, vision allied to a keen commercial sense founded on experience of airline work. Their eyes may be on the stars but their thoughts and hopes must also be on the ticket office. The job of B.O.A.C. is a highly competitive one. Its job is to carry the maximum number of passengers and goods swiftly, regularly, safely and punctually at competitive prices and at a profit. I constantly stress the word "competitive" because, although fares are not competitive—there are international agreements on most of the great services—yet the competition between the airlines themselves as to who shall carry passengers and goods over a particular area is keen. There are airlines all over the world, some of them subsidised by their Governments, all engaging in this particular market.
The team has to plan years ahead but also to see that to-day's paying customer is satisfied. When I first flew a great deal just after the war, it struck me then that the people who flew in air liners all had a somewhat sinister look. Maybe they thought the same about me. It was rather the "mink and champagne" customer in those days; but it is not so to-day. Today, one has to think the whole time of the ordinary passenger who wants and expects not only to get to the end of his journey but also to get there more or less at the time that he expects to. The men at the top, therefore, must have a keen business sense and a first-rate knowledge of air transportation. To fill this bill, Mr. Watkinson, the Minister, has appointed the gentlemen whom I have mentioned. May I say here and now that I do not want in any way to attack these gentlemen on personal grounds at all. Any comments or criticisms that I make are devoted simply to their capacity or their suitability for these particular posts, not to their suitability as businessmen, civil servants or accountants in some other line of business. The point I am making is that they are an odd team to choose to run a great airline such as B.O.A.C. in a highly competitive market.
First of all, let us take the Chairman, Mr. d'Erlanger. I have never had the pleasure, so far as I recall, of meeting Mr. d'Erlanger, but until 1949 he was
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Chairman of British European Airways. Previous to that he had served at one time as a member of B.O.A.C. and he then rather made himself—shall I say? —remarked upon by being the only Director who did not resign as a protest in 1943 against the treatment of the Corporation by the Air Ministry. Under Mr. d'Erlanger's chairmanship, heavy losses were sustained by B.E.A. In fact, it was calculated—perhaps somewhat unfairly, but it was calculated—that B.E.A. lost £7 on every passenger they carried. In 1947 the then Minister, my noble friend Lord Pakenham, so his Parliamentary Secretary said in another place on March 1, 1949, decided not to reappoint Mr. d'Erlanger as he felt that a change would be to the benefit of the development of B.E.A. and of civil aviation generally. He was succeeded by my noble and gallant friend Lord Douglas of Kirtleside who, assisted by Mr. Peter Masefield, has made such a success of B.E.A.
Mr. d'Erlanger will be a part-time Chairman. He will receive no salary at all but he will receive, or does receive, an expense allowance. It has been said that this will be in the neighbourhood of £2,000.
THE EARL OF SELKIRK: May I correct the noble Lord straight away? It is to be the same as before. From the official records, I understand that he receives £1,000.
LORD OGMORE: I am grateful to the noble Earl for that correction. I am always grateful to be corrected and to have one fact substantiated in this picture: that is, that Mr. d'Erlanger will receive an expense allowance of £1,000, but presumably still no salary. Mr. d'Erlanger is to concentrate on policy, long-range planning and overall financial control. The Deputy-Chairman, Sir George Cribbett, is a civil servant, a former Deputy-Secretary in the Ministry of Transport and Civil Aviation. I know Sir George very well. He served under me and I know him as a capable, far-sighted civil servant. In the Ministry he was a loyal civil servant; and for the way he served me, and I am sure for the way he served my noble friend, we have nothing but praise. Sir George will deputise for the Chairman in the latter's absence and advise him on policy, planning and financial control. He will

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relieve the Chairman of detail duties. He will deputise for the Chairman in liaison with Government Departments, supervision of the Corporation's interests in associated companies, and liaison with British independent air companies. I understand that he is to receive £5,000 a year.
Mr. Basil Smallpiece, the Managing Director, is an accountant. He has been appointed by the Board to be, I suppose, General Manager; but he is also a Director, so presumably he must have been appointed by the Minister to the Board. He will be responsible to the Chairman and the Board for the efficiency, safety and economy of the Corporation's current operations. He will have complete executive authority over operating, engineering, commercial, traffic, personnel and accounting activities. I was abroad at the time when I read of these appointments, but I thought to myself that this was an odd set-up to run a great air corporation, and I rather wondered what the hatchet-faced business men, the Americans, the Dutch, the Swiss, the Belgian, the Scandinavian and other competitors of B.O.A.C., are thinking of it.
In my view, the objections can be summed up as follows. First of all, whatever may he the right answer in other nationalised industries—I make no comment on that to-day—I am sure that B.O.A.C. calls for a Chairman who will put in the major portion of his time on B.O.A.C. duties. I do not object to his having one or two other quite minor interests, as Sir Miles Thomas had—it is sometimes a mental change; but in my view his primary occupation should be the Corporation. As we know, in this case the Chairman is a part-time, unpaid Chairman who in these days, one presumes, obviously has to earn his living, and to put in a considerable amount of time in earning his living, in other walks of life. He is deputy chairman of a banking company and he is chairman or on the board of other activities which have nothing whatever to do with flying. I know that in another capacity he is interested in a company which deals in fibres in Tanganyika—which I should say was a far cry from flying. That is the sort of thing in which he is interested, and one presumes that he has to put into these other companies a good deal of his
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time; one cannot blame him for that because, after all, they are paying him.
Secondly, the Government should never have appointed to be the Deputy Chairman of this Corporation a senior civil servant from the Ministry controlling the Corporation, and one who has himself been in constant daily touch with B.O.A.C., representing his Minister and, through his Minister, Parliament—one of our watch dogs, so to speak. When Sir Arnold Overton, the then Permanent Secretary to the Ministry of Civil Aviation, was appointed in 1953 to the Board of B.E.A. I protested on December 3, 1953, in your Lordships' House on the principle involved—that is to say, that in my view a senior civil servant should never be appointed to the board of one of the industries which he is controlling, or helping to control, as a civil servant. In reply, the noble Earl, Lord Selkirk, said—I quote from the OFFICIAL REPORT (Vol. 184, col. 971):
"I recognise that if some such appointments became a common practice it would he open to objection. This appointment was locked at carefully at the time and was scrutinised with these particular points in view. It was, however, felt that there were special reasons why it was desirable that Sir Arnold Overton's experience in the field of civil aviation should be made available to the Corporation, and in particular his experience on the financial side. Therefore, without differing from the principle raised by the noble Lord, I recognise that this is a special case and that it is the particular qualifications of Sir Arnold Overton which are the justification of this action and which make it right and proper."
It is most odd that every time a top civil servant in the Ministry of Civil Aviation approaches retiring age under this Government, it is a special case and he has to be appointed to one of the air corporations. As for Mr. Smallpiece, although he is admirable as a financial expert and accountant, yet I would say that by training and by disposition he is riot the person for the exacting task of chief executive; and I also think it quite wrong that as chief executive he should have a seat on the Board.
Who should the Government have appointed as Chairman? I would say someone from out of the industry. I cannot believe that B.O.A.C., B.E.A., and, failing them, the independent companies, have no one who can fill the bill. Failing anyone experienced in air transport, I would have sought someone experienced in transport of another kind—

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say, long-distance haulage. I should not have chosen a banker, a civil servant, an accountant, or anyone who had not had actual experience in the transport line, unless there were exceptional reasons for so doing of which in this case we have had no indication. In my view, there is already far too much stardust in civil aviation—
THE EARL OF SELKIRK THE EARL OF SELKIRK What!
LORD OGMORE: Too much looking at the dust coming from the stars—starryeyed, if you like. What is needed is a man who has run his business the hard way and, metaphorically speaking, has sold tickets on the floor.
Now we come to the curious incident of Lord Rennell. I am sorry to have to refer to the noble Lord in his presence, but I can assure him that I shall be as careful as I can and not embarrass him any more than I must. But he is a factor—indeed, almost the key figure—in this puzzle. It was a complete puzzle to me until I found that Lord Rennell was the key; then it did not remain very much a puzzle any longer. Lord Rennell is a member of the Board, and until recently was Deputy Chairman. Lord Rennell resigned because he considered it wrong to have a part-time Chairman and a full-time deputy. That is what he said in public. Drawing upon his military experience, he said that it was tantamount to having a colonel part-time commanding troops, with an adjutant in the orderly room all the time and in charge of troops. Most of us would agree with Lord Rennell. That is the criticism we on this side now make. We honoured him for resigning. Since then, however, he has rejoined the Board, in spite of the fact that the colonel is still part-time and the adjutant will run the orderly room and the troops. There has been no change in the top set-up; the only change has been in Lord Rennell.
The following, however, may explain it. I understand that the Minister stated that Sir George Cribbett had been appointed full-time Deputy Chairman and Managing Director of B.O.A.C.; and a Press statement was prepared which said that Sir George Cribbett was to be a full-time Deputy Chairman with responsibility for the administration of the Corporation. On this, the Board
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threatened to resign, and in fact Lord Rennell did resign, although, so far as I am aware, his letter of resignation has never yet been published. When the Board, and particularly Lord Rennell, threatened to resign on this issue, the Minister withdrew from an untenable position—because of course he had no right whatever to appoint a chief executive—and he then appointed Sir George Cribbett as the Deputy Chairman and allowed the Board to make their own choice of chief executive, which they did in Mr. Basil Smallpiece. The Minister then, quite wrongly in my opinion, appointed Mr. Basil Smallpiece as a member of the Board.
The facts I have outlined above are disturbing; the rumours circulating are even more disturbing and, as we know from statements that have appeared in the Press, the pilots and ground staff have obviously been upset. The Minister, Mr. Watkinson, has stated that he intends to see that B.O.A.C. follows an all-out policy of "flying British"—that is his expression. On April 23, the News Chronicle published an exclusive interview with the Minister, and said this:
"Fly British! That will he the watchword for B.O.A.C. The Corporation will pin its faith and its future on the Britannia, the Comet and other airliners which Britain must produce. The Minister's insistence on it, and his complete confidence in its ultimate success, are two of the principal reasons for the top-level appointments which have created upheaval in B.O.A.C. administration.
Mr. Watkinson intends to pursue his objective vigorously, relentlessly—and without interference. Said he, There is a ready course open to anyone who disagrees with it.'
He talked of his 'very large and ambitious plans' in the 'highly competitive' days ahead. He declared: On the success that B.O.A.C. has with the Britannia and the Comet depends much of the future of the whole British aircraft industry. We just cannot live on one successful airliner the Viscount. Our future depends on the success of B.O.A.C. as a proving ground for these new British aircraft.'
Mr. Watkinson's summing-up of his policy: we must make another great attempt to pioneer some new British passenger aircraft.
'I have never been an advocate of British airlines flying American planes' he went on 'nor am I in favour of hybrid planes with British engines and American frames.'"
As your Lordships can imagine, this interview, exclusive or otherwise, was a bombshell to the Board of B.O.A.C. and caused the utmost consternation among them and I understand that they again threatened to resign. The Minister once

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more beat a strategic retreat and showed them the gist of a speech he was proposing to make at (of all places) the Foreign Airlines Association. He toned down his previous ultimatum or Napoleonic declaration of policy to their liking, or at least to a lesser extreme.
To those of your Lordships who do not know much about aircraft—although, fortunately, there are very few in that category—this interview of Mr. Watkinson may seem highly laudable. But, of course, it is complete and absolute nonsense. The "Fly British" cry is quite an absurdity. It is no part of an airline's business to be a proving ground for any aircraft. Airlines should fly the most suitable aircraft, irrespective of nationality, as, in fact, they all do. It would be quite ridiculous to have a kind of "blood test" of nationality for aircraft that are to be used. It is a good thing for British aircraft that other airlines do not take this view, because, as we know, not only has the Viscount been very successful but some forty Britannias have already been ordered; and many more are on the way. There is also the new Conway bypass engine which is being put into aircraft and will continue in increasing numbers, in Canada, America and other parts of the world. No airline in the world could possibly be expected to carry on if it were ordered to use only the aircraft of a particular country. They could not do so and compete.
Let us take the "Fly British" statement and ignore for the moment its absurdity. Even on his own statement the Minister has let B.O.A.C. down. If the Sunday Times correspondent (a very well-informed man) is correct, in January last the noble Lord, Lord Burghley, and his technical committee recommended that a version of the Comet with Conway bypass engines should be prepared for production. The Conway is the engine now in the American airframe D.C. 8. No action whatever has been taken on that request, I understand, but in the meantime Trans-Canada Airlines, one of the competitors of B.O.A.C., have ordered four D.C. 8 air liners fitted with the Conway bypass, the Rolls-Royce engine.
In this unhappy state of affairs we on this side of the House require certain assurances from Her Majesty's Government. First, we should like an assurance that there is no intention to depart in any
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way from the principle of nationalisation of the great air corporations, and that nothing will be done to limit their development, but that, on the contrary, everything will be done by this Government and the boards to ensure their increasing prosperity. Secondly, we want to know what were the reasons for the team appointed to B.O.A.C. and what ground Her Majesty's Government have for thinking it will be successful. Speaking in another place on Wednesday last, the Minister stressed the fact that the Corporation was facing a position of great financial difficulty and that he wished to strengthen the top management so that there might be plenty of opportunity for individuals to give attention to this matter. We do not know what that Delphic utterance means. So far as we can make out, it means that finance, in the narrow sense of the word, will reign supreme and that the proper running of a great airline such as B.O.A.C. may well take a secondary place.
Thirdly, if ask: does the Minister intend to give the Board any directions as to what aircraft they shall use? He has stated:
"One clear precedent I intend to maintain is that B.O.A.C. policy shall be a matter between me and the chairman."
Will the Minister, therefore, dictate to the Board which types of aircraft the Corporation shall fly, even if, from the operational point of view, those aircraft are not the most desirable? And what is the position of other members of the board when "me and the chairman" are deciding policy? I believe that a lot of the trouble has arisen through Mr. Watkinson's foolish and bombastic statements. If he wants to be the Napoleon of the Air he had better look round and find a less important instrument to experiment with than this great airways Corporation. My Lords, I beg to move for Papers.
5.38 p.m.
THE EARL OF SWINTON: My Lords, I feel that this debate is both useful and timely. It is rather an odd thing that in this House we always seem to be able to debate the nationalised industries whenever it is useful to do so. Perhaps in that respect we are more fortunate than they are in another place. We have more time,

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of course—that I appreciate—but I believe we also have a more flexible procedure, which enables us to discuss all those things which it is in the public interest should be discussed, and at the same time to abstain from a number of petty matters which are much better kept out of discussion. I must not say more about that, otherwise I may be getting into trouble with another place.
Certainly this is a matter which ought to be discussed. I agree with the noble Lord, Lord Ogmore, that B.O.A.C. is a very important entity. It is not only of national interest; it is a great national asset. It enjoys, and has for many years enjoyed, a high reputation, not only for safety—and, after all, safety still remains the most important element of all in civil aviation—but also (and I have recently been hearing about this in the United States of America and Canada as well as here) for good service both in the air and on the ground. Its prestige is important, and what is even more important than its prestige is that it is a valuable dollar earner. Therefore, it is certainly in the national interest that B.O.A.C. should prosper and should be efficiently managed; also—because the two things go together—that it should be a happy ship.
I think the important issue in this debate is this:—is what has been done sound and right? I think that is a much more important issue than whether it was done in the right or the most tactful way. I may say at once—I do not know what we may be hearing upon this point from my noble friend a little later—that there does, at first blush, appear to have been perhaps a slight ineptitude. I will not put it any higher than that. My noble friend may have something to say on it. I think the noble Lord who has spoken suggested that there may have been some ham-handedness in the handling of the matter. I should not like to say that. All I will say is that there was, perhaps, a slight ineptitude in some of the way in which it was handled. It may well be that there are some reasons which the Government spokesman will disclose to us which will clear up the point. As I say, I should not like to pronounce upon it now, but will only repeat that there seems to have been prima facie a very slight ineptitude.
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However, I do not think that that matters very much.
I notice that the noble Lord, Lord Ogmore, who is also a skilful advocate, concentrated a good deal more on the method which had been pursued than on the substance of what has been done. I should like, on the other hand, to concentrate for a moment or two on the substance of what has been done, because, after all, that is the thing which endures and the thing that matters. I suggest that we should be wise in this debate to concentrate most on whether the framework of organisation which has been established now in this Corporation is sound and whether the appointments are good appointments. It is true that one might say colloquially "This is anyone's guess," because the proof of the pudding will be in the eating and nobody can form a final judgment until we see how it works. But, at any rate, we can look at the principles now.
The main change which has been made is a change from a Chairman, a man of great ability and driving force, who combined the offices of Chairman and Chief Executive, to a separation of these two offices, so that there is now a Chairman who is a part-time Chairman and a Chief Executive who is a whole-time officer. I say at once that, as a general principle, I believe it is absolutely right to separate the functions of the Chairman and the Chief Executive, the General Manager. Particularly where large questions of policy come to the Board, I think there may be a good deal of embarrassment if the two functions are combined in one person. The Chairman of a company, like the Prime Minister, is primes inter pares; but he is, particularly if a man of strong personality, in a dominating position, and he has predominating influence. Therefore I would say that except in very exceptional circumstances it is not right to have a Chief Executive, as it were (and not only as it were, but in fact) reporting and recommending to himself as Chairman. I am delighted to see that in the other Corporation, British European Airways, after an inevitable interlude I have no doubt, there has been a reversion to this sound practice of having a separate Chairman and a separate Chief Executive. Therefore, upon the main decision and action which have been

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taken here I would venture respectfully most strongly to commend to the House the action which has been taken in separating those two functions. There was criticism that the Chairman was a part-time Chairman.
LORD OGMORE: My Lords, I did not criticise the separation of the tasks. I am not against having a separation as between Chairman and Chief Executive. I hope that the noble Earl understands that. He will recognise that the Chief Executive is also a member of the Board, which I think is a mistake.
THE EARL OF SWINTON: Of course I recognise that. I am glad that the noble Lord has made it clear that he thinks it right, or at any rate not wrong (I appreciate the importance of sitting on the fence), to separate the two functions. I do not see any objection to a Chief Executive being a member of the Board. These things vary from company to company, but I have myself a good deal of experience of companies which have a managing director (he is called the managing director because he is both manager and director) and I do not see why the manager and chief executive should not be a director. I think that in the majority of companies both in this country and in America he is so, and in fact it works very well. If that is the only criticism which the noble Lord has to advance I do not think that the Government need be unduly worried. But I understood him to say (perhaps we can go along together in this exercise still further) that he did not like the Chairman to be a part-time Chairman.
LORD OGMORE: And unpaid.
THE EARL OF SWINTON: I do not think I agree with him there, and I will tell the House why. Of course, the Chairman must give all the time that is necessary to the duties of his office. But I think that when you have a chairman and managing director, both quite properly separate in their functions, and you make the chairman a whole-time man, there is a risk of the chairman overlapping and even to some extent usurping the detailed executive functions of the chief executive or managing director. Therefore, I think it is not at all a bad thing to have a part-time chairman. It is certainly no bad thing—this is something which I know we shall differ about
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—that a chairman should have some interest outside the particular company, not because it is going to distract his attention but because of the value of wider experience, particularly when a man is a chairman. It is rather a good thing when you come to be Prime Minister—I think the noble Earl, Lord Attlee, will agree with me in this—to have had a lot of experience in a number of other Departments. It is certainly a good thing to keep in much with a lot of Departments and with the outside world. Therefore, I hope that we shall not make a fetish of saying that a man must have only a single interest. The noble Lord said that the Chairman needed to have vision, to see the stars and all the rest of it. If you are going to circumscribe the man's activities, you are not likely to get that. I think that the framework of the new set-up is good.
Now I come to the question of the right selection of men. I think the noble Lord will agree with me—and I would certainly say this if he were Minister and I were criticising the appointments he had made—that we must credit the Minister with doing his best to find the best men for the job. After all, he will do it on the lowest ground; his own reputation is at stake.
LORD OGMORE: My Lords, the noble Earl is putting; up Aunt Sallies and knocking them down; they are things I did not say. Can the noble Earl give us his considered view of the position of the third man—that is, of the full-time, paid Deputy Chairman?
THE EARL OF SWINTON: My Lords, if the noble Lord would allow me to make my speech as I and the whole House encouraged him to make his, he will find that I am not going to shirk any of these questions, and I shall do it more shortly if he allows me to do it in my own order. Tae Minister will try to make the best appointments, and any Minister has a great deal of confidential advice open to him. He can send for anybody and have confidential talks with him before he makes up his mind. Everybody he asks will advise him in strict confidence and give him the best advice he can. We all have had this experience.
Let us take these appointments. There is the Chief Executive. We agree that it is better that he should be separate from the Chairman. I am glad that the Chief

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Executive has been appointed from within the Corporation: it is always a good thing to promote "within the regiment," if one can. I do not know the Chief Executive personally, or know him only very slightly, if I do, but I understand that he is a man with wide experience who has commanded the full confidence of all his associates in the work he has done. The noble Lord said it was an odd thing to pick a man who, among other things, is a skilful accountant. I know that in some of our nationalised industries accounts do not count for much, but I should have thought that to have a man who, in addition to his other qualifications, is a first-class accountant, was a good thing. After all, these accountants have not been so unsuccessful in business, judging by some of the accounts which noble Lords on the other side criticise for their excessive profits. A number of companies which have done very well have had accountants in predominating positions—for instance, there is Unilever, which has not altogether made a loss and which certainly owes a great deal to accountants. I think it is a good thing to have an accountant.
Then there is the Chairman. I must say the noble Lord was a little unfair. I barely know the Chairman—I know him slightly. The noble Lord said that we must have a man with vision, business sense and a knowledge of aviation. Certainly Mr. d'Erlanger has all three. I know that in the war—and the noble Earl, Lord Attlee, will agree with me—Mr. d'Erlanger undertook a large creation in the running of a transport undertaking which brought planes from all over the country and ferried them everywhere. Of that I have some knowledge, and in that he did a first-class job. He knows a great deal about aviation and I understand that all those associated with him thought he did extremely good work when he was a Director. He did not agree with everybody—I am very glad that he did not. It is a good thing to be able to speak your mind. I gather that he disagreed with the noble Lord, Lord Pakenham, or that the noble Lord disagreed with him.
LORD PAKENHAM: Not on any point of substance that I recollect.
THE EARL OF SWINTON: Not on any point of substance? If it was on any
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delicate social matter, then I do not wish to try to penetrate it. If there was no difference on any matter of substance, then—the respect I have for the noble Lord is as great as that I have for Mr. d'Erlanger—obviously he did pretty well. He certainly has a good business sense.
Finally, there is Sir George Cribbett. Here I can speak with first-hand knowledge, because I owe a great deal to Sir George and I have a high respect for him. I was a little surprised to hear the noble Lord say that we should not appoint civil servants to these business positions. I seem to remember that the Labour Government frequently appointed civil servants to the nationalised industries. I am not blaming them for it. The only difference, apparently, was that they appointed civil servants into industries which they knew nothing about, and my right honourable friend has appointed a gentleman who knows a great deal about aviation to a position in aviation. I should not have thought that that was a mistake.
I was the first Minister of Civil Aviation and I was faced with the difficult job at a moment's notice of leading the British delegation at the international conference at Chicago. As my noble friend Lord Knollys knows, it was not an easy job or in easy circumstances. I cannot say how much I owe to Sir George Cribbett, who was one of my principal advisers during that long conference. Sir George was largely responsible for devising the plan of international arrangements, which commanded, not the support of the politicians of the American delegation, but the support of the people of America who really knew about aviation—men like Warner, Wright and Welsh Pogue. He was largely responsible for the plan which, with only minor modifications, was adopted at Bermuda. I can say this about Sir George Cribbett: I do not know anybody in the field of international civil aviation who has a wider knowledge, a surer judgment or, I may add, a more potent influence. I am sure that he will give valuable service.
I would add one caution on this point and here I agree with the noble Lord that it is probably unnecessary, but it is important. I gather from something the noble Lord said in his speech—I missed the announcement in another place: I was more agreeably, I can hardly say

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more profitably, trying to fish the Tweed —that it would be wise, to define clearly, if that has not been done, the functions of the Chief Executive and the Deputy Chairman. I am sure there will be plenty of work for both of them.
I have ventured to address your Lordships on this matter, not only because I am deeply interested in the subject but because I have had a good deal of experience in it, as other noble Lords have had, and I hope I can speak without prejudice. I would only say, in conclusion, that I hope that as a result of this debate the message which will go out from this House will be a message of encouragement to all those who are called upon to undertake the management of this great national enterprise and to all those who serve in it.
6.0 p.m.
LORD ROCHDALE: My Lords, one thing that we can all be certain of and agree about is that we are very jealous of the reputation of B.O.A.C., and most of us who have had the privilege of flying in B.O.A.C. aircraft have determined that that privilege shall be repeated as often as possible. Whenever I fly, other things being equal, I endeavour to fly by that airline in preference to any other, and I believe there are others who feel the same. That being so, when, for instance, at the time of the Comet disasters one heard criticisms of shortage of the right type of aircraft and so on, one was obviously sorry, because it was quite evident that those who made those criticisms did pot appreciate what a terrific disaster it was to B.O.A.C., and what a tremendous effort would be needed to surmount the difficulties created. I feel so strongly about that particular point that when I saw this matter was clown to be discussed in your Lordships' House I took some trouble to look up one or two facts as to the history of B.O.A.C. I should like to take up a few moments of your Lordships' time to paint the background against which I think we should discuss the particular appointments which figure in the Motion of the noble Lord, Lord Ogmore.
Looking back since the end of the war into some of the B.O.A.C. earlier reports, the thing that struck me was that immediately after the war the Corporation was
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saddled with an immense variety of aircraft that had not been basically designed for commercial use. They were all converted military aircraft; they all had a very low pay-load arid their maintenance system was scattered over a wide and difficult area. Coming forward to March, 1952, which was the time when the Comets first came into service, I find that the number of aircraft had then been changed from 137 clown to 72, and in practically every case the pay-load and the number of seats had been doubled; the maintenance bases had been cut from 8 to 2; the operating revenue, which is the important fact, had been increased (I think the noble Lord, Lord Ogmore, quoted these figures) from something over £14 million to over £33½ million; and the revenue per head of staff employed in B.O.A.C. had been raised from over £600 a year to over £2,000 a year. With all that, a deficit of £7½ million in 1947–48 had been converted in 1952 to a modest profit of £250,000, which the following year was to be raised to £1 million, and the year after, despite the Comet disasters, was still to be of the order of £250,000.
I suggest that these figures speak for themselves. They would not have been achieved without a tremendous amount of thought and effort on the part of all concerned; not merely thought on technical matters, but on such other matters as organisation, sales promotion, accounting, financial control; and, not least, the ability of the Board to be able to weld together a team that could not only run a public service throughout the world of a very high standard but was able to do so against tremendous competition, paying its way and showing a profit.
Such was the position in May, 1952, when the Comets were introduced, and it does not need me to remind your Lordships of the immense prestige the Corporation had durieig the following two years when the Comets were in service. The time was being, cut by half from this country to South Africa and to the Far East, and they were able to do that at a profit. When the Comets had to be withdrawn, as my noble friend Lord Swinton has just said, it was a major disaster, not only to the company who built them and to B.O.A.C., but to the country as a whole. Overnight the Corporation lost something like one-fifth of its carrying

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capacity; and it was inevitable that some services had to be curtailed and others suspended. It speaks for the inherent soundness of the organisation as a whole that, by adaptation and improvisation of one kind and another, an organisation with long lines of communication the world over, of necessity a complex organisation, was built, first, to carry on and then to make a small profit in 1954–55, even if a reduced one on the previous year. Since then new aircraft of one kind and another have had to be purchased as stopgaps; further Constellations, further Stratocruisers and so on.
I am sure that many people do not realise that the purchase of an aircraft is only one aspect of its introduction into service. There is the training of crews, the training of the maintenance staff, the provision of servicing facilities, of spares and of the appropriate centres. There is no doubt that at the time of the Comet disasters there must have been an immense organisation planned in order that these new aircraft, the Comets, to be followed later by the Avon Comets and then the Britannias, could be brought into service. All these detailed and complex plans had, overnight, as it were, to be disrupted. That it was possible at all to improvise so speedily, and with so little loss of capacity, was, to my mind, an outstanding achievement which stands to the credit of the Board of B.O.A.C. and all the staff who work under them. New types of aircraft were ordered, and further orders for the most up-to-date American aircraft had to be placed if B.O.A.C. was to hold its own pending the introduction of the long-range Britannias and what one can now regard as the new race of Comets.
That brings us to 1956. It has been said recently that 1956 could be a critical year for the Corporation. That may or may not be so, but I would say, reading as a layman what one can about the Corporation and its activities, that it has reached a position when it can go ahead with its major problems behind it to renewed success. Again, I would say that this promising position is not fortuitous: it is, surely, the result of a tremendous amount of hard work, energy and imagination from top to bottom. Here I should like to join with other noble Lords who have paid tribute to the tremendously
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energetic work of Sir Miles Thomas, the late Chairman. If renewed success is to be achieved, there is certainly not room anywhere for unfair comment from outside, or for unhappiness inside the organisation. There is no doubt that the present situation—which, though inevitable, I feel in some ways must be regarded as unfortunate—must be set against this background of real achievement.
It would be all too easy, reading some of the Press reports that have appeared over the last two weeks with regard to these appointments, for many people outside to get a false impression about the strength and soundness of the B.O.A.C. organisation. Certainly, I think this ought not to be allowed, because it could do a great deal of damage to the reputation of B.O.A.C. and would be totally unfair to all concerned who are in that Corporation. Piecing together, as I have tried to do, many of the Press reports—there have been a great number of them, some rather confusing and one, I think, a comparatively minor leakage —to my mind certain things stand out. That brings me to the particular points which are the subject of this Motion. I want to emphasise that I have worked up to this point because I wanted to try to paint your Lordships a picture of a very resilient, sound organisation, and not an organisation that was otherwise in any difficulty; an organisation that has achieved a great reputation and does not deserve to be unfairly treated.
The first point is, of course, the question of the appointment of the Chairman. One thing I am pleased about is that the appointment makes it quite clear that the Minister has accepted the view that the functions of the Chairman, on the one hand, and the Chief Executive—or, as he is now called, I am glad to see, Managing Director—on the other, are to be entirely divorced from one another. That, I am quite sure, is absolutely right. Of course, with different organisations one sometimes has to tailor the organisation to particular individuals, and it may have been that, with Sir Miles Thomas, it was best that he should undertake the two functions. There are similar cases that one could quote. I think it is generally admitted, however, that in business, these days at any rate, one sound way of running things is to divorce the executive responsibility from the chairman's responsibilities.

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If your Lordships have not already done so, I would strongly recommend you to read the leading article in The Times of March 28, which puts the case in this instance in an extremely clear and forceful way. It makes a particular point as regards B.O.A.C., and I suppose it would apply to any nationalised industry, because it makes the point that, whereas the Chairman is to be concerned with policy matters, there is also a Minister who, under the Act, is responsible for general direction of matters of policy. If he is going to talk with the Chairman, who is also concerned with matters of executive day-to-day detail, it is all too easy for the Minister, in his enthusiasm, to go a little too far and get himself tied up in executive detail, instead of confining himself to the matter of policy. That is why I think that the principle underlying this appointment of the part-time Chairman is fundamentally right. It is unfortunate that in certain quarters it has been regarded as derogatory that there should be a part-time Chairman in any organisation so important as B.O.A.C. But I share the view of my noble friend Lord Swinton in the way he has made the case for a pal-time Chairman.
LORD OGMORE: May I suggest to the noble Lord that what the noble Earl, Lord Swinton, did not do was to make a case for a part-time unpaid Chairman?
LORD ROCHDALE: So far, I have not said anything about the question of his payment, but on the question of the part-time Chairman would say that obviously I would expect him to spend as much time on the job as is necessary to do that job really satisfactorily.
The noble Lord has just referred to the question of his payment. I admit that do not much like the way that it is proposed, or we understand it is proposed, that he is to be paid. I am not personally acquainted with the individual concerned, and I am not going to comment on that—other noble Lords have already done so. But on the principle, I am quite certain that the right decision has been taken.
LORD PAKENHAM: May I interrupt the noble Lord? Would he apply that principle, of having a part-time Chairman, through the nationalised industries, coal and transport generally?
LORD ROCHDALE: My experience leads me to suppose—again depending upon the personality of the individual concerned—that in any industrial organisation there is often a great deal to be said for having a full-time executive and —I will use the term "part-time" if you like—a non-executive Chairman. I do not see why, without having considered the matter, it should not apply just as much to other nationalised industries as it does to a great many private business organisations.
Coming to the question of the Deputy Chairman, I must say that I was surprised when I read of this appointment. I do not know the individual civil servant concerned, and I am quite prepared to accept the very high regard that my noble friend Lord Swinton has for him. But, at the same time, I was rather unhappy about the appointment when I first read of it in the Press. Rightly or wrongly, I rather jumped to the conclusion that it was a first step to his being appointed chief executive. The noble Lord, Lord Ogmore, said something about that which I thought was a little more definite. I was not, therefore, surprised when my noble friend Lord Rennell resigned. The only thing I would say is that the position of the full-time Deputy Chairman, and what he is supposed to do, has now been somewhat resolved, and I am not going to say any more about him. As regards the appointment of the new Managing Director, the chief executive is the appointment of the Board, although I can well see that, in so far as he is also a Director, the Minister may come into the matter to some extent. I welcome the appointment of somebody from within the Board to be Managing Director, and from all that I can gather that appointment is generally welcomed.
Those are the three major points and the three important things. In the ordinary course of events, one would have hoped that those appointments would have gone through smoothly and that nothing need have been said about them. In my view it is unfortunate that, whilst these appointments were being made, two other somewhat confusing events took place. It appeared in the Press, at any rate, that one was an abrupt termination of the appointment of Lord Burghley, and the other was the misunderstanding that has already been referred to—the

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Press quotation of the report in the News Chronicle as to what took place between the Minister and a reporter on the question of the purchase of British aircraft or otherwise. That position was substantially resolved in a subsequent speech which the Minister made in another place, but it did seem to me that the first statement, as reported in the News Chronicle, could all too easily, rightly or wrongly, have been taken by the existing Board as being an implied criticism of the way they had handled affairs and a suggestion that perhaps they had not put sufficient stress on the purchase of British aircraft. It seems to me that, if that was a criticism, it was most unfortunate seeing that the Board had gone out of their way in the early days and had taken a gamble over the Comet. The Comet disaster was evidence itself of that.
The position now, of course, is fairly clearly resolved, but the fact remains that these misconceptions, shall we say, have obviously had a somewhat unfortunate effect on the staff of B.O.A.C. I can only hope that, now the new Board has been appointed, that disturbance will be soon forgotten and the Corporation will be allowed to go ahead and forward. I was very glad indeed when I saw that my noble friend Lord Rennell had agreed to rejoin the Board, because that in itself shows a measure of good will to try to get these unhappy events healed so that progress can once more be made. In many of these sorts of difficulties, one hears it said: "Least said, soonest mended," but I am inclined to agree with the noble Viscount, Lord Swinton, that this debate had to take place in order that misunderstandings of one kind or another could be aired, and that any misconception as to the strength and soundness of B.O.A.C. itself could be killed once and for all time.
I should like to end by saying to my noble friend Lord Selkirk who is to reply that I very much hope that he will be able to give us certain assurances. First of all, I hope he will underline what, in effect, the Minister himself has already said by his appointments: that he has no intention at all of departing from the accepted practice that the Minister does not concern himself with executive matters. That is important, to be underlined. Secondly, I hope the noble Earl
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will make it clear that nothing the Minister said in connection with the purchase of British aircraft was intended to be in any way derogatory to the then Board of B.O.A.C., because I think it would be unfair if it was. Thirdly, I hope it will be made clear that, whilst we shall all obviously applaud the policy of "Buy British wherever we can," it must be left to the Board and their technical experts to decide from time to time which are the best aircraft to purchase, so that the Corporation can fulfil the duties laid down for it by Parliament and can carry on a service which is a credit to this country and also pays its way.
6.24 p.m.
LORD GIFFORD: My Lords, the noble Earl, Lord Swinton, has said that he does not so much object to the substance of what has been done, but he dislikes the way in which it was done. I should like to follow him in that view. One of the reasons for these rather unfortunate events which led up to what may be a perfectly correct decision in the end may well be the fact that the Minister, who had not been long in his appointment, was not in as close touch as possible, and did not know well, the members of the Board and the senior people in B.O.A.C. I know there was much feeling among certain people in the Corporation that that was the case. There is no doubt that these events have been bad publicity for B.O.A.C. Good publicity is most important for any airline competing in the world's markets. As an agent of theirs, I work closely with the Corporation, not perhaps at Board level but a little lower down the scale. One senior executive said to me at a travel function the other night—and I heartily agree with him—"For Heaven's sake, leave us alone and let us get on with our job of running an airline." There is no doubt that, by and large, the story of B.O.A.C. in the last few years, in spite of setbacks with the Comet, has been a success story. It has been turned from an organisation making tremendous losses to a substantial profit-earner. I should like to join with other noble Lords in paying tribute to Sir Miles Thomas and Mr. Whitney Straight for what they have done in the past.
We ought to be able to say that B.O.A.C. is now a stable and a going

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concern. A very wise man, who is the head of a great textile and clothing industry, once said to me: "The most important thing in business is to get your chain of command worked out so that promotion can be made from within." I think that for the future that should be given most careful consideration, because it is undesirable, unless absolutely necessary, to bring people in from outside over the top of those who have grown up in the company. I am not saying that these appointments were not quite right and proper, but, for the future, I hope that this will be the cardinal principle. I think most noble Lords who have run businesses of their own will agree with me. The other thing I should like to ask— and it is something on which the Government have to make up their minds—is whether the Chairman of B.O.A.C. is to be treated as the head of a big business whose views are normally accepted, or is to be more in the position of the Director-General of the Post Office, under the direct orders of the Minister. In my view, the Chairmen of our great Corporations should be given a much freer hand, as is the case in K.L.M., Air France and other nationalised or partially nationalised corporations of foreign countries.
I should like to say a little about the ordering of aircraft. In that regard, I think that the Chairman and the Board of B.O.A.C. should be given as free a hand as possible. We all want to order British aircraft, but, as a user and as someone whose organisation sells a great many tickets for airlines, I think that when once an aeroplane is flying in the colours of a certain country, in the colours of B.O.A.C., people think of it as a British aircraft, whether or not it was, in fact, manufactured in this country. I give the instance of the Danish cross-Channel packet which was built in Newcastle. It operates under the Danish flag and, quite irrespective of where it was constructed, it is regarded as Danish.
I am a little worried about the delays in ordering new aircraft and the delays due to "teething troubles" before these aircraft get into service. I often think it is unfortunate that the Corporation should have to do so much, riot exactly on proving a plane but in regard to early flying, when so many modifications are bound to crop up. In the United States a large amount of this preliminary flying
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of new types of aircraft is done by Transport Command first in the carriage of freight and later with trooping, so that by the time the aircraft gets into the airline it is much mire reliable than it otherwise would be. This point applies particularly to engines which can be tried out by Transport Command. Indeed, I see no reason why the Ministry of Supply should not lease aircraft to the charter companies, so that experience on long-distance routes can be obtained before they go into the Corporation. This might mean some delay but I think it would be well worth it.
My Lords, I would add only this: that B.O.A.C. and, to a lesser extent, B.E.A., are in a quite different position from any other nationalised industry. We have got to order our coal from the National Coal Board; by and large we have got to travel by British Railways and we have got to send our freight by British Railways—there are alternate routes by road, but we cannot avoid patronising British Railways. But, if we wish to do so and if their reputation is not good, we can avoid flying either by B.E.A. or by B.O.A.C. Believe me, there are many airlines of every nationality with excellent high-powered salesmen, fighting for more traffic at the expense of our Corporations. I am glad to say—and I am sure that all noble Lords are fully aware of this—that B.O.A.C. and B.E.A. have more than held their own in the world up to date, and I hope and believe that they will go on doing so.
6.33 p.m.
LORD PAKENHAM: My Lords, we are all anxious to hear the noble Earl—himself a practical airman and a Minister well accustomed to dealing with difficult themes—reply to this debate. We have not had a long discussion, but the speeches have been forceful; and certainly, in the case of my noble friend Lord Ogmore, I would say most damaging to the Minister of Transport and Civil Aviation. I do not think that he will have drawn much comfort from other contributions, even from the generous paternal effort of the noble Earl, Lord Swinton, who dismissed him with a caution on the ground of slight ineptitude. I feel that this hard-pressed Minister is most fortunate—and I think he needs his good forture—that he does not find himself on the opposite side of this House

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to the noble Earl, Lord Swinton. I have had to face the noble Earl and have tried to do it without quailing at the thought. But if I came forward with a case such as that with which Mr. Watkinson has equipped himself, I think I should run away and hide, rather than stand up to Lord Swinton. But the noble Earl has done all he can for him—and a very good best it is.
At the risk of some repetition I feel that there are four aspects of this matter upon which we want to dwell, and on which we hope the Minister will say more than a word or two. There are the merits of the individual changes; there is the wisdom of the new set-up; there is the attitude of the Minister towards his relationship with B.O.A.C., and in particular towards its aircraft programme; and there are the intentions of the Minister and the Government towards the issue of nationalisation in the field of civil flying. There is also, of course, the whole conduct of these affairs by the Minister, including his handling of so-called public relations in recent weeks. There, I think, there has been general condemnation. I think we all give the poor Minister an Omega mark and can let it go at that; because I do not think anybody has come forward to say that he has presented his case, whatever it may be, to the public with any skill.
I say one other word of sympathy for the unfortunate Minister whom, to my knowledge, I have not so far had the pleasure of meeting: I feel sympathetic towards a young Minister of Civil Aviation who wants to "go places and do things." I had not been Minister of Civil Aviation for much longer than the present occupant of that position when I had changed two of the Chairmen, amalgamated one of the Corporations with another, rejected a great many aircraft that were on order, and grounded a great many of the remaining aircraft. So I quite understand that any young active Minister should want to beat that record. We can make many allowances for a man in the prime of life, who is certainly human, if a little hubristic, so far as we can see. But if we set aside these minor points of procedure and presentation, we must, of course, come to the merits of the individual changes. Whilst the disappearance of Sir Miles Thomas may admit of a perfectly sound
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explanation, it is a little surprising. We have had many tributes paid to Sir Miles. I join in them, and even try to bask in them in a little reflected glory, because I had the honour to appoint him. I certainly join in the great tributes which have been paid to his work and to the progress made by B.O.A.C. during his period of office. He has now left us. It is not quite clear why. I understand that he has talked somewhere of "frustration." I do not know whether the noble Earl will be able to explain why Sir Miles left at this particular juncture. It may be that there is nothing more to be said.
Coming to the new appointments (I am dealing now not with the set-up, but with individuals), I sympathise with the bold, public-spirited gentlemen who come forward as Chairmen of nationalised industries. We are bound to discuss and to criticise the appointments, because, after all, the appointment of a chairman is one of the most important things—indeed, almost the most important—that a Minister for a nationalised industry does; and obviously Parliament must discuss the appointments. I realise, however, that we must show a discretion in these discussions, otherwise we should find it impossible to persuade gentlemen of eminence and outstanding repute to apply at all, and I think everyone has to-day borne that fact in mind.
As regard Mr. d'Erlanger, I am particularly anxious, as everyone will realise, to say nothing which would make harder his already difficult task. As many Members are aware—it was referred to earlier in the debate—it fell to my lot to inform Mr. d'Erlanger early in 1949 that it would not be possible for me to reappoint him when his time came to an end a few months later. In those circumstances, he preferred, understandably, to resign forthwith. I would emphasise that, in spite of what the Press have said, there was no question of dismissal, which would clearly have argued some grave disagreement between myself and the Chairman or, alternatively, a very low opinion on my part of his competence. And I have never regarded Mr. d'Erlanger as any other than an experienced and capable man, who is, possibly, still more experienced and capable to-day than he was seven years ago. Certainly in recent years, to the best of my belief, he has proved himself

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a success in business. That is why I intervened earlier to correct an impression which I think had been formed in the mind of the noble Earl.
Nevertheless f formed the opinion at the time when I intimated that I should not be able to reappoint him, and that I could find a Chairman still more suited to the task in hand; therefore it was not a disagreement—there was nothing at which one could point. But I formed that opinion and it is the duty of a Minister to give effect to an opinion which he reaches in those circumstances. On such matters every Minister must make up his own mind. I will add something more. It is now seven years ago. I do not think I have met Mr. d'Erlanger since, but in his recent work at the A.T.A.C. under the distinguished chairmanship of the noble Lord, Lord Terrington, Mr. d'Erlanger has shown a devotion to aviation, and in his assumption of these new duties as Chairman of B.O.A.C. he has shown a moral courage which any fair-minded person must add to the credit side of the calculation. I say that because it is my candid opinion, but I am bound to add that I am not retracting any view I formed in earlier days.
The House will be interested to know what was thought by the Opposition of that time about the prospects of the Corporations, not specifically B.O.A.C. or B.E.A., but both. In the debate on March 1, 1949, which followed Mr. d'Erlanger's resignation, the first spokesman for the Opposition in another place used language which looks rather remarkable to-day (OFFICIAL REPORT (Commons), Vol. 462, col. 209):
"I do not think these Corporations will ever pay their way. I am trying to be quite unbiased, and I think that any man who comes in to run them as they are at present, will find that it is only a question of time before they break him."
The two gentlemen then coming in to run the Corporation were, of course, the noble Lord, Lord Douglas of Kirtleside, and Sir Miles Thomas. The speaker went on:
"I do not think that any man can run a business under a Minister who is, perhaps, going to interfere, exert his will and upset the smooth running of that business organisation."
He concluded (col. 210):
"When the Conservative Party comes back to power, we shall make drastic changes to see that the business is run efficiently, and
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we shall have the courage to 'unscramble' it, where we think it is necessary."
I feel bound to give that recollection of the view taken in 1947 by one of the leading Members in Opposition: that these Corporations could never pay their way. That was the situation taken over by the noble Lord, Lord Douglas of Kirtleside, and Sir Miles Thomas, and, as we have heard, in the case of the B.O.A.C. a loss of nearly £8 million has been transformed into a profit; and in the case of B.E.A. a less of £3½ million in 1947–48 has also been transformed into a profit. So those who had any responsibility at that time are not coming to this House to-day to stand in a white sheet. Having said that, I say, with all seriousness and rather special warmth, that I wish Mr. d'Erlanger well in the work that he has undertaken in these arduous circumstances.
In relation to Sir George Cribbett I feel very much as the noble Earl, Lord Swinton, does, whether we are discussing his merits as a man or as an expert on civil aviation. He was for three years one of my two closest advisers. I should not claim to know very much about civil aviation but, so far as I know anything, it is mostly due to Sir George. Throughout that time—and it is still more true to-day—there was no-one in this country, unless it was the noble Lord, Lord Brabazon of Tara, who stands apart, upon whom foreigners concerned with civil aviation were more anxious to draw than Sir George. He has a wonderful position in word civil aviation, in this country and abroad. Personally, I not only hope but believe that he will do remarkably well in his new job.
I am bound to side, however, with the principle so clearly stated by the noble Lord, Lord Ogmore, that there is grave danger. Though we must learn as we go, for a Minister one almost feels that it is contrary to constitutional practice to appoint to a leading position in one of the nationalisect industries a man who has been one of his closest advisers. The practice is too open to abuse. It is open to grave misunderstanding to start with; and taking the long view, I think the country would be safer without appointments of that kind. I say that with great reluctance in this case, because I defer to Sir George; I admire him so greatly as a figure in civil aviation, and I have

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so many personal grounds for gratitude. We cannot ignore such warnings as those given, for instance, in the Daily Telegraph which said:
"There have been instances since the war of civil servants taking up high positions in nationalised industries but they have been rare."
The Daily Telegraph goes on to say that this is a most dangerous precedent.
Then we come to the set-up—the part-time Chairman and the full-time Deputy Chairman. It seems to me that that particular combination has been universally condemned, and, so far as I know, it has not received any defence in your Lordships' House to-day. The noble Earl, Lord Swinton, was interrupted by the noble Lord, Lord Ogmore, and asked if he would care to defend that particular combination; and though on these Benches we listened very carefully we did not hear any defence forthcoming; and I shall be astounded if the noble Earl, when he replies, is able to defend it. If we were to put only one question this would be the first, or at least the second, most fundamental that we should wish to put: how can the noble Earl defend this particular set-up of a part-time Chairman and a full-time Deputy Chairman? In my experience one can defend almost any organisational arrangement, but that one seems to defy even the greatest ingenuity in defence.
We have had a long discussion so I will not spend much time on the question of whether the Chairman should be full-time or part-time. I decline to get into any theological frenzy on the issue. The requirement varies from industry to industry and I seriously put to the noble Earl the point on which I ventured to interrupt the noble Lord, Lord Rochdale. Would the noble Earl be happy to see Sir Brian Robertson become part-time? Quite seriously, one cannot brush aside a question of that kind, and I ask whether he is advocating part-time Chairmen generally in nationalised industries. If not in the others, then why in this particular nationalised industry, which we are told is to go through a time of great difficulty and which certainly involves more travelling than any other industry? With regard to B.O.A.C. I would line up behind the noble Lord, Lord Ogmore. He argues, and I agree, that the Corporation should have first and over-riding
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claim on the Chairman who ought to attend the office every day except when on tour. I agree with the noble Lord that some outside contacts are possibly desirable; but, speaking for myself, I should suggest that he be paid full-time salary, whatever you like to make it, from this point of view: that these outside contacts ought to be justified on the ground not that they detract from his contribution but that they actually add to it; and he should be paid as a man who is rendering the equivalent of full-time service.
I am not, therefore, very clear or happy as to what time Mr. d'Erlanger is going to give to B.O.A.C. I have seen various statements attributed to him, though they may not all have been correct. There has been a plethora of statements buzzing about in recent weeks from almost everyone in this field. I do not know whether Mr. d'Erlanger has, in fact, said anything at all on this matter. I saw one statement which implied that he was going to give nearly all his time to B.O.A.C. at the beginning and then perhaps half his time, or not much more, to it. Can we have any enlightenment on how much of his time he is to give to B.O.A.C., because we on this side of the House are convinced that unless he does give over-riding priority to B.O.A.C. he will be unable to do justice to the job?
I am also sure, and I should have thought that almost everyone in the House would agree, that the plan of taking no salary is a serious mistake. I go about daily, meeting people of different Parties and different occupations, but I have not heard anyone defend that particular arrangement. I accept it, as coming from Mr. d'Erlanger, as a well-intentioned and public spirited gesture; I am ready to look at it from his point of view in that way. But I am sure that the Minister has made a serious mistake —for it is the Minister's responsibility—in allowing Mr. d'Erlanger to waive his salary. It tends to create the impression that he is not taking the job seriously, and that he has other occupations to which he has to devote himself in order to earn his living. I wonder, even at this late hour, whether on that point a serious misunderstanding and a source of suspicion could not be removed by making an arrangement under which he received a salary. Let us concede—following the suggestion made during an earlier debate by the noble and learned Viscount, the

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Lord Chancellor, that when the decision has gone against one in politics one should try to offer a constructive amendment to whatever is contemplated—the principle of what is called a part-time Chairman (though I am very sorry to see it) and give to this Corporation this part-time Chairman and full-time Deputy.
We have been told to read The Times of March 3—Lord Rochdale instructed us to read The Times of that date. I read at the time the article to which he has referred, and I shall be delighted to go back to it when this debate is over. May I, in turn, suggest to Lord Rochdale that he reads The Times of April 20? There he will find these memorable words:
"By appointing a full-time Deputy Chairman the Minister seems to have pre-judged not indeed the question of the chief executive job itself, but at least the conditions under which that job will have to be performed, and pre-judged them quite wrongly."
So if I am to take my guidance from The Times of March 3, perhaps the noble Lord will back me up in making this serious criticism. The noble Lord, Lord Ogmore, quoted the military metaphor used so pungently and effectively by the noble Lord, Lord Rennell, about the colonel and the adjutant. We are very glad that Lord Rennell has rejoined the Board. I hope that, without being offensive, I may say that a little sanity there will not do any harm, and I am pleased to think that Lord Rennell will be maintaining that tradition. I realise that he will be only a part-time member, but that seems to mean nothing in these times; it may be that he will be devoting 90 per cent. or even 99 per cent. of his time to it. As Lord Rennell now has Lord Tweedsmuir so closely associated with him, they can always make forceful representations to the Minister. This idea of part-time members making representations to the Minister is some-thing we have been reading about. I am sure they will form a powerful and enlightened little bloc.
The criticism which Lord Rennell made seemed to me to be unaffected by the explanations since offered on the part of the Minister, and I really cannot understand how this absurd set-up was arrived at, except on the hypothesis which has been put forward with a good deal of authority by Lord Ogmore. It seems to me that the Minister intended to appoint
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a part-time chairman, Mr. d'Erlanger, and a full-time Deputy Chairman, who would also in effect be Chief Executive; but then the Board, by threatening to resign, stopped that So the Minister was left with Sir George Cribbett on his hands, and this new set-up was arrived at. I should say that it is not a set-up which, on its merits, anyone in the House is likely to defend. I hope that as time passes means of adjustment will be found.
I will riot say much to-day about the very important question of aircraft. No doubt when we debate civil aviation as a whole next month that is a matter which will come up. The Minister again seems to have upset people, or to have given rise to a slight misunderstanding—that is how his friends spoke of it. The Times at one point said that:
"relations between the Minister and B.O.A.C. Board members were strained for a period after one of Mr. Watkinson's statements about the assignment to fly British which he was going to give the new Chairman and his colleagues."
I should have thought that when that happened people would have been more agitated, but now a period of strain between a Department and a Minister seems to be accepted as all in the day's work. Later the Minister was understood to have "clarified the position" and explained that his general attitude would not be different from that of his predecessors, so the whole thing was a misunderstanding. So that particular mess is now understood to have been cleared up, leaving no more than a certain amount of confusion and suspicion behind, and we must not linger too long over it when we nave so many other messes to consider.
Finally, I come to the question of the attitude of the Minister and his colleagues to the nationalisation of civil aviation. Members of the House will have read various official and unofficial statements on behalf of the staff of B.O.A.C. which make plain a grave anxiety that the appointment of Mr. d'Erlanger is itself a symptom of an intention to impair the position of B.O.A.C. and to favour its private enterprise rivals, or, alternatively, to inject private capital into B.O.A.C. itself. It is right for me to say that during my association with Mr. d'Erlanger, now seven years old, nothing occurred or was ever said by him to lend special colour

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to a suspicion of this kind. I think it is only right for me to say that. But I have not seen him for seven years now and I do not know what his present views may be. I must tell the Government frankly that we on this side of the House have never been able to fathom the real desires and purposes of the present Government regarding nationalisation or denationalisation in civil aviation. I recall a statement made in 1949 by the first Conservative spokesman to the effect that when the Conservative Government came back to power:
"We shall make drastic changes so that the business is run efficiently … and we shall unscramble if and where we think it is necessary."
It is true to say that they have not unscrambled or tried to do so so far.
Of course the situation on paper was very bad in 1949. When the Conservative Government was formed at the end of 1951, the picture was much brighter. In December, 1951, Lord Leathers, who was then an overlord in transport, made a statement that was on the whole reassuring. I will not quote more than a sentence. He said [OFFICIAL REPORT, Vol. 174, col. 822]:
"We have no intention of undermining the existing international network of the Air Corporations, B.O.A.C. and B.E.A."
I beg the noble Earl, if he is empowered to do so to-day, and if not to-day when we debate civil aviation next month, to reaffirm categorically that statement of Lord Leathers. I know that the Minister in another place has said that he is not going to denationalise or dismember B.O.A.C., but a good deal could be done to wreck B.O.A.C. while not technically denationalising or dismembering it. I hope we can have some reassuring statement to-day, not only because it would be good for the country generally, but particularly with a view to the effect on the staff.
I hope that I have not spoken harshly of the present Minister of Transport and Civil Aviation. We Ministers and ex-Ministers of Transport and Civil Aviation are something of a trade union, and we have no desire to cut one another's throats. I am told that the present Minister did well at the Ministry of Labour, and there is no reason why he should not do well in his present office. I was recently playing golf at Portrush
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where there is a hole called "Calamity Corner." I believe Mr. Walter Haydon once took thirteen strokes to negotiate it—I need not tell your Lordships how many were required from me. This whole episode has been a "Calamity Corner" for Mr. Watkinson. There is no reason why he should not overcome it and avoid the other two holes which he will find at Portrush: one is "The Giant's Grave" and the other is "Purgatory." But, in all seriousness, he has to make up leeway. In our view, he has slipped badly in recent weeks, and he must show a more modest approach to his job before he can obtain our full confidence.
From the Government as a whole we want a clear statement of whether they are going to continue the splendid work done by the Corporations in recent years. Whatever our political differences, I agree with all the previous speakers who have said that we have at heart the future of B.O.A.C. and realise that they are facing difficult times. I join with the noble Earl, Lord Swinton, in sending out a message of warm encouragement to the Corporation as a whole and to the new leaders. We send riot only a message of encouragement, but also the profound hope that they will surpass their recent achievements in the immediate future. With all our hearts we wish them well.
7.2 p.m.
THE EARL OF SELKIRK: My Lords, I was glad to hear the last words of the noble Lord, Lord Pakenham, because, frankly, I was a little disturbed at the opening speech of the noble Lord, Lord Ogmore. I do not mind in the least what he said about my right honourable friend, but this is a delicate plant we are dealing with, the B.O.A.C. It has been emphasised over and over again that we are in a world of intense competition. My noble friend Lord Gifford said that this was good publicity for our rivals, and I think we must be careful in addressing ourselves to the discussion of this intensely competitive industry which, although I have not checked this statistically, is probably the industry which has increased more than any other in the world since the war. It is expanding at an enormous speed. I think we have to be careful in what we say, and I hope that nothing has been said to-day which may be taken as a reflection on B.O.A.C. There has been a good deal of confused and irresponsible publicity

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recently, and I am fairly confident that a good deal of it has not been directed by people who are really interested in the long-term interests of the Corporation. I am glad that my noble friend Lord Rochdale emphasised the false impression which some of this might have given. We must, indeed, be proud of the development which both the national Corporations have made over the last ten years.
I do not propose to deal with these rumours. If I did I would give increased publicity to some things quite unworthy of publicity at all. I would say to the noble Lord, Lord Ogmore, that I could not trace some of the sources at all. What I would do is to deal with the facts of the case. There has been a series of events which might spuriously give the impression of being connected. Let me deal with them. First of all, let me deal with the Deputy Chairman, Mr. Whitney Straight. He has been with the Corporation for six years and now has taken up an extremely important appointment with Rolls-Royce. Is he better employed by Rolls-Royce than by B.O.A.C.? Frankly, many of us would have difficulty in answering that question. Sir Miles Thomas resigned after being seven years as Chairman. A man cannot be expected to remain indefinitely as Chairman. The noble Lord rather ingenuously asked the reasons why he resigned. Sir Miles said a number of things at the time which I do not need to repeat to your Lordships now, about politicians and their influence over the Corporations and things of that sort. Whether they were fundamental reasons or not, that is what he said. His services were of high value to the country.
LORD PAKENHAM: My Lords, in defence of Sir Miles Thomas, for whom I have a high regard, is the noble Earl saying that the reasons which he gives might not be the real reasons?
THE EARL OF SELKIRK: I am trying to pass this lightly. What Sir Miles did say was that he did not particularly like nationalised industry or being pecked at by Back Benchers. He mentioned these things among others, but apparently he wanted to go to another job. I do not make any reflection on Sir Miles—I have already paid him a full compliment in this House. The noble Lord, Lord Rennell, resigned from the Board because he did not like the organisation. It was
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more fully explained to him and he was satisfied.
LORD OGMORE: My Lords, as a result of the noble Lord's resignation the organisation was changed. That is why he came back again. It was not because it was explained to him.
THE EARL OF SELKIRK: I do not see how it could have been changed, because it was not until the new Board of B.O.A.C. was set up that the new organisation could be laid down.
LORD OGMORE: My Lords, it was not publicly known, but the noble Lord, Lord Rennell, was told what the new organisation was. As a result of that he resigned, and when he resigned the Minister had another thought and altered the organisation.
THE EARL OF SELKIRK: My Lords, so far as I know that is a pure fairy tale. The noble Lord can tell any story he likes in this House without any authority. I am afraid I know nothing about it.
Lord Burghley served for ten years on the Board. I think it is probably the intention of Parliament—certainly my right honourable friend took it as such—that from time to time new people should be appointed to fill part-time appointments, and for that reason, after ten years, he thought it a good thing to make a change in this appointment. There is nothing the least bit abnormal in that.
Let me turn to the structure of the Board. I do not know whether noble Lords have seen the report (Cmd. 9660) published last December dealing with the structure of the various public boards operating in this country. It is an interesting document, which clearly shows that we have no sealed pattern for nationalised public boards. They take many different forms. Some members are full-time and some part-time; some chairmen are full-time and some part-time, and some are paid and some unpaid. That is the extraordinary system which exists at the, present time. The noble Lord was "laying it on" pretty strongly about unpaid chairmen, but we have already two en existing boards.
LORD PAKENHAM: Which boards are they?
THE EARL OF SELKIRK: There is Mr. Tom Johnston, who is part-time chairman of the North of Scotland Hydro Electric Board. I think it is right that we should have no sealed pattern of any kind. That is probably what the noble Lord has in mind. I have been surprised at the number of people who go on public boards not just for the salary received.
I should like to turn to the organisation that has been criticised to-day. First, let us be clear about this. A member of the Board has only one duty, and that is to attend Board meetings. That is a duty which the Minister imposes upon him; and the remainder of his duties, if any, flow directly from the decision of the Board itself—that is to say, the duties of any member of the Board are purely a decision for the Board itself. The noble Lord, Lord Rochdale, has emphasised the difference between policy and execution. Sometimes these are combined in one man, who is executive director. The Minister took the line, which my noble friend Earl Swinton has emphasised, of the strong need for separating the Chief Executive and the Chairman. He took the view that it was better to divide those two jobs and broaden out the base on which the Board was formed. He was perfectly clear about that, and that was one of the reasons why he took the course which he has taken.
I was asked how much time Mr. d'Erlanger was going to give. I am informed that he will give as much as is necessary. I cannot quite accept Lord Pakenham's picture of the Chairman turning up for routine office hours. If I may refer to an old nursery rhyme I heard many years ago, what really matters is not what hours you put in, but what you put into the hours. With a Chairman, I should have thought that that was much more the important matter.
LORD PAKENHAM: I am sorry to interrupt the noble Earl, but he is being somewhat vigorous, and I am sure he will not mind. I did not talk about routine. I said that unless the Chairman is on tour it is desirable that he should go to the office every day. I did not say how long he should stay there.
THE EARL OF SELKIRK: I understood that to mean that he should keep office hours. He certainly should be
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available, but I do not think he should keep office hours.
I turn now to the major appointment by the Board—namely, that of the Managing Director, Mr. Smallpiece. The noble Lord, Lord Ogmore, has been good enough to read out his functions, but perhaps I might repeat them, because it is important to realise that he has full charge of the whole flying operations of the B.O.A.C.—the operating, engineering, commercial traffic, personnel and accounting activities of the Corporation. I am given to understand that he is fully satisfied with that definition. I next turn to the appointment of a Deputy Chairman, which the noble Lord, Lord Pakenham, said was an absurd set-up. It seems to me that it is entirely a matter for the Board: either they think it is what they want or they do not. If the Board feel it is what they want, then I see no reason why it should not work satisfactorily.
Perhaps I might deal first with the duties, which have been clearly laid down and as to which I understand there should be no difficulty. First of all, the Chairman is undertaking the policy, long-range planning and overall financial control, and the Deputy-Chairman will advise him specifically on those matters. But, over and above that, the Deputy Chairman will undertake liaison with Government Departments, and that is a considerable task, because Government Departments consult B.O.A.C. especially on the question of foreign operators, which is of great importance. There is a large number of companies in one part of the world or another, something like a dozen, with which the Corporation are closely associated. It is important to have someone at Board level who can be a member of the Board and attend Board meetings, and can also supervise generally the relationship and policy of the Corporation in relation to their associates. There are also partners of B.O.A.C.—and Qantas and the South African Airlines are the two major ones. These are tasks which can best be fulfilled at a high level. There is liaison with British independent air companies, I believe, particularly, Skyways and Hunting's with whom B.O.A.C. have certain connections; and there is representation of the Corporation on a certain number of bodies where otherwise the Chairman himself might be a member. As a matter of interest, if we take these

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three posts of Managing Director, Chairman and Deputy Chairman, we find that twelve months ago there were three full-time people filling them, whereas to-day there are two and a half. I give that only as an example to show that there is plenty for a full-time Deputy Chairman to do.
There are special reasons why an aviation company such as B.O.A.C. requires a full-time man at a high level—not necessarily the Chairman, but a full-time man apart from the Chief Executive. The first thing I would say is that B.O.A.C. fly over some thirty countries all over the world, with the greater number of which bilateral agreements of one kind or another have to be made between the Government of the United Kingdom and the respective Governments. Under all of these B.O.A.C. have to operate, and, of course, they are closely associated with these arrangements. I think it is common knowledge, certainly to noble Lords opposite who have been Ministers of Civil Aviation at one time or another, that the freedom of the air is a different thing from the freedom of the seas. Freedom of the seas does not present the same difficulties as freedom of the air.
There is another point I should like to mention arising from the far-reaching contacts of B.O.A.C., and that is the necessity to travel. If the Chairman had to be somebody who could readily be available it would be more difficult for him to travel to the many different places in which B.O.A.C. operate. As a matter of interest, when the resignation of Sir Miles Thomas was announced, he was in Pretoria; and the Vice-Chairman, the noble Lord, Lord Rennell, happened to be in Australia. I do not think it matters very much, but it was an occasion when I should have thought it was probably desirable, if possible, that either the Chairman or Deputy Chairman should have been in this country. Moreover, I think it is desirable that a Corporation which is so much in the public eye should be able to find someone at almost any time who can take a broad view of the Corporation's interests and who has a full knowledge of its policy.
The noble Lord, Lord Ogmore, said that a civil servant should never be appointed. He voted what I had said, and of course I agree that it is a matter which should not in any way be regarded
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as a normal step in the ladder—though, as my noble friend Lord Swinton said, I could easily quote quite a number of significant instances in which precisely that was done by the Labour Government when they were in power. I refrain from doing so, because I do not think it is desirable. I submit that Sir George Cribbett has a unique experience, and indeed, in certain respects, is a figure in world aviation as perhaps no one else is in this country. My noble friend Lord Swinton referred to it when he spoke, and I am certain he is correct in what he said. One thing I would say is that the placing of civil servants on public Boards has never resulted in those Boards coming under greater control of Government Departments. In fact, experience has been of precisely the opposite character.
The noble Lord, Lord Pakenham, asked for certain assurances regarding the status of the Corporations. I am happy to be able to tell him something that I hope will satisfy him, although I know that he is very exacting in these matters. I can repeat what the noble Lord, Lord Leathers, said: that we have no intention of undermining the Corporations at all; we have no intention to denationalise, to merge or dismember the Corporations. But I should like to emphasise that, although we can stress the success of recent years, I am not in any way complacent about the difficulties which lie ahead. The Minister has warned us that there are likely to be difficulties and that continued profits are not assured. Quite frankly, I think he is anxious about what may happen. We should like to see British aircraft going back to South America; and we should also like to see the percentage of North Atlantic traffic carried by B.O.A.C. substantially higher than it is at present. I would only say that B.O.A.C. are carrying about one-third of the North Atlantic air traffic from this country, whereas British ships carry about 66 per cent. of the sea traffic. I suggest that there is a considerable margin which could be caught up.
There have not been many questions raised in regard to aircraft, though the noble Lord, Lord Rochdale, raised one or two points in that respect. I think I should remind your Lordships that one of the first things the new Chairman did

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was to set up a Committee of B.O.A.C. to examine the adequacy of the Corporation's aircraft programme. This Committee will consist of the Chairman, Deputy Chairman, Managing Director, Operations Director, Sales Director, Operations Development Director, Chief Engineer and a senior pilot. This Committee recognises the extreme difficulty and importance of the decision which the Corporation will have to make in regard to future aircraft.
I am glad the noble Lord, Lord Gifford, made his point that the Chairman of B.O.A.C. is a man, if I may use his words, whose views are normally accepted. He is not, shall I say, just a general managing director. If anyone wanted any proof of that, it is the fact that he is part-time. I think one of the advantages of being a part-time man is that it is much more difficult to be "in anyone's pocket" than it is for a full-time man, whose whole future is dependent on the position. As regards British aircraft, I do not know that we have gone a great deal further than the famous White Paper which was produced in 1945 or 1946. There it was laid down that it will be the general policy of His Majesty's Government to require the Corporations to use British aircraft types. That injunction has been somewhat honoured in the breach, I must admit. I think we should all like to fly British aircraft, but I can also say that we must recognise that these Corporations must have the best aircraft they can get.
I have not dealt at all with the personalities of these men who have been under consideration. I have sought to examine the organisation and the reasons which have actuated my right honourable friend to take the course he has done. The decision, of course, is his. It has been laid down by Act of Parliament that Board appointments are his responsibility. What I do think is worth remembering is this. Whatever his decision may be, both the Chairman and Vice-Chairman have qualifications and have carried responsibility which shows their real and lasting interest in aviation. I should like to remind the House of the record of Mr. d'Erlanger. He is by profession a chartered accountant and vice-chairman of the firm of d'Erlanger. He is a pilot of nearly thirty years' experi-
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ence; was director of Hillman Airways in 1934; British Airways, 1935; on the Board of B.O.A.C., 1940; Commanding Officer, A.T.A., from 1939 to 1945, in which he commanded some 800 pilots and delivered 350,000 military aircraft; Managing Director of B.E.A., 1946; Chairman of B.E.A., from 1947 until 1949; on the Board of the Air Transport Advisory Council and Deputy Chairman, 1954. That is the record of a man pretty deeply interested in aviation.
May I now turn to Sir George Cribbett? He was a pilot in the Royal Flying Corps from 1914 to 1918, joined the Exchequer and Audit Department in 1919, and subsequently moved to the Air Ministry at the begining of the Second World War, when he was a principal in the Air Ministry. From 1941 to 1943 he was Director of Administrative Finance, R.A.F. Delegation, Washington. On his return in 1943 he was charged with a special responsibility for formulating Britain's post-war international air policy. In 1944 he was delegate under the noble Earl, Lord Swinton, at the Chicago conference, and since 1946 has been deputy Secretary, Ministry of Civil Aviation. I should add that he was specially charged, with the noble Lord, Lord Pakenham, to reorganise B.O.A.C. during the period when the noble Lord was Minister, and who, I should imagine, was fairly competent to do that. Sir George Cribbett had intended to retire from the Civil Service to enter a business appointment at the end of this year; but at the Minister's request he did not do so and joined B.O.A.C. instead. I say without hesitation that he is in the international sphere, as the noble Earl, Lord Swinton, has said, and I find myself in full agreement. He is probably one of the most experienced men in this country.
I have sought to answer the questions which have been put, because it is important that I should do so. I think that both the Chairman and the Vice-Chairman of B.O.A.C. are men of very high experience in aviation. Indeed, they have devoted a large part of their lives to the problems of aviation, and I can assure the House that they are both enthusiastic and determined to make a success of this great enterprise. Their only concern will be that B.O.A.C. should become a greater and more important British commercial enterprise. I do not know whether the noble Lord, Lord Ogmore, wishes to ask

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me any further questions. What I do hope is that there will be an end of criticism of B.O.A.C. or the personnel, although criticism may rest on my right honourable friend or myself.
7.25 p.m.
LORD OGMORE: My Lords, I do not know that one can ever hope, in this unhappy world, to avoid criticism. In whatever sphere one is in, one must expect criticism. I think the noble Earl is being a little optimistic if he thinks that any organisation can avoid that very human activity.
THE EARL OF SELKIRK: I merely meant personal criticism. I apologise; I went too far.
LORD OGMORE: I am grateful to all noble Lords who have spoken to-day for the care with which they prepared their case and for the interest they have obviously shown in this important issue. I must say that during the years that I have been in either House I have never heard, so far as I can recollect, such a weak case put up by any Minister as that put up by the noble Earl, Lord Selkirk, this evening. That is not his fault. In fact, as we all know only too well, especially those who sit on this side of the House, the noble Earl is an extremely skilful debater. If there is any case at all he will make it. He will usually make it rather better than it is, but he will make it, and no fault at all lies on him. He has done his best.
The fact is that he has an extremely poor case to make, and that is why it has been so unsatisfactory. I go away from this debate feeling entirely dissatisfied with the result, so far as the Government's answer is concerned. Of course, the noble Earl is only the spokesman for the Minister; but he is a Member of the Cabinet, and the Cabinet take responsibility. So far as his answer is concerned, he has not really answered our main points in this debate—the point of organisation, for example; the unpaid Chairman, the full-time Deputy Chairman, and so on. He has not really answered our point on organisation, and he has not answered our point on the question of whether the Minister intends to direct B.O.A.C. to do things which a Board should never—
THE EARL OF SELKIRK: With respect, I did seek to answer that. The Minister
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does not intend to direct. He is, of course, responsible to Parliament for the Board, and that is all there is to it. The direction of policy, particularly in aircraft, is the responsibility of B.O.A.C.
LORD OGMORE: Then at some time or other he must have retracted this statement which he gave on, I should have thought, an incredible platform—that is to say, in an exclusive interview in the News Chronicle. Presumably, he has retracted that statement which he made very clearly to the reporter of the News Chronicle. But it is only at this moment that I, at least, have been aware that that is so, and that he will allow the Board to select aircraft which, in their opinion, are the most suitable.
I will not delay your Lordships any longer. In the beginning the noble Earl expressed, with perhaps somewhat pantomime fury, his concern that I had done something to make the B.O.A.C. position more difficult. I can assure your Lordships that the last thing I want to do is to detract m any way from the progress of B.O.A.C. It has my full support and sympathy, and my concern to-day is that the Government, and especially the Minister, have struck a shrewd blow at it. That is what I am now afraid of. In this instance, we are it a difficulty which Oppositions are always in. Your Lordships know that I often address you on colonial questions. Something happens. We are not implicated, and we are not consulted. The Government make a decision or fail to make a decision. A certain event occurs or a transaction takes place. We, the Opposition, object; we ask for certain assurances, and we criticize. We are then told, "You must not do that. You are making the position worse in the Colony. You are affecting the morale of the troops or the police."
Something of the sort has been said to-day. The noble Earl says, "You must not levy these criticisms; you must not raise this subject in Parliament in the way you have done because you will probably, and I am afraid have, affected the public mind. They will think that you are making some dreadful criticism about B.O.A.C., and already the rivals of B.O.A.C. are rejoicing at what you are saying." But after all, my Lords, we are Her Majesty's Opposition. It is our duty to call attention to these matters. It is

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not we who are at fault: it is the Government who are at fault. We are not at fault for criticising; it is the Government who are at fault for taking the action which causes us to criticise. With those few words, I will ask your Lordships' leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

LONDON COUNTY COUNCIL (MONEY) BILL PEOPLE'S DISPENSARY FOR SICK ANIMALS BILL
Brought from the Commons; read 1a, and referred to the Examiners.
PONTYPOOL AND DISTRICT WATER BILL [H.L.] SION COLLEGE BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.
BRITISH TRANSPORT COMMISSION (No. 2) BILL
Committed: the Committee to be proposed by the Committee of Selection.
BRISTOL CORPORATION BILL
Reported, with Amendments.
WALTHAMSTOW CORPORATION BILL [H.L.]
Reported from the Select Committee, with Amendments.

EDINBURGH CORPORATION BILL
Report from the Select Committee that it is not expedient to proceed further with the Bill; read, and ordered to lie on the Table.
House adjourned at twenty-nine minutes before eight o'clock.