HL Deb 26 May 1960 vol 223 cc1322-34

4.28 p.m.

Order of the Day for the Third Reading read.

THE PAYMASTER GENERAL (LORD MILLS)

My Lords, the time has come for me to invite your Lordships to give the Civil Aviation (Licensing) Bill a Third Reading. I have no hesitation in recommending it to your Lordships as a valuable addition to the Statute Book. The situation which this Bill sets out to rectify is, by common consent, unsatisfactory. Successive Governments have been forced to employ a plausible device to circumvent the clear intention of the existing law which was to establish a monopoly of regular services for the Air Corporations. I hope that no one today seeks to defend this monopoly or to deny to the independent airlines a chance to play their part in British aviation alongside the two great Corporations. Credit is due to all sides of the industry, and not least to the Air Transport Advisory Council and its Chairman, Lord Terrington, for the way in which the present makeshift licensing system has been made to work as well as it has. I hope that the now system contained in the Bill will place the licensing of British civil aviation on an altogether sounder basis and create a new atmosphere in the industry.

Since this Bill was introduced into your Lordships' House a special reason has occurred to underline the urgency of the reforms it introduces. Some of your Lordships may have read reports of a recent Divisional Court judgment which has the effect of demonstrating in a new way the unsatisfactory nature of the existing legislation. The principal sanction behind the existing licensing arrangements has lain in Section 24 of the Air Corporations Act, 1949, which reserved to the Corporations and their associates the right to carry passengers or goods by air for hire or reward upon any scheduled journey between two places, one of which at least is in the United Kingdom. The term "scheduled journey" was defined to indicate that it must be one of a series of journeys which together amounted to a systematic service and it must be operated in such a manner that the benefits were available to members of the public from time to time seeking to take advantage of it. The Divisional Court decision to which I have referred has now indicated clearly that it is possible, by inviting intending passengers to join so-called clubs for the purpose, for any operator to run a service, however regular it may be, without infringing Section 24. Under present legislation, therefore, this decision has opened the door wide to uncontrolled competition with the established operators. We have been able to anticipate the consequences of this decision by the introduction of the present Bill. Under the Bill, it is made clear that an air transport service—that is to say, any service for the carriage of passengers or of mails or of any other cargo by air for reward—will in future require an air service licence from the Board unless the service in question is exempted by regulations.

As my right honourable friend indicated in another place, it is his intention that the regulations should exempt from the requirement of an air service licence those cases where the whole of the space on an aircraft is chartered by one person, but that in any case where separate fares are charged for the carriage of passengers, whether those passengers are the members of a club or otherwise, the service will require an air service licence. As soon, therefore, as it is possible to bring the provisions of this Bill into effect, it will be possible to put right the consequences of the decision to which I have referred and to restore order to the industry. It is not now possible that the Bill can come into effect in time to bring under control the current plans of air operators for the summer of 1960. These plans always have to be made some time in advance of the proposed holidays and it is unlikely that the Divisional Court decision will in fact lead to any substantially greater number of uncontrolled flights this summer than had already been planned. But, as I indicated to your Lordships on the Second Reading of the Bill, my right honourable friend has made arrangements for the Air Transport Advisory Council to give him early advice as regards licences to be issued under Clause 2 (6) of the Bill to cover similar operations in the summer of 1961, by which time the Bill should be fully in effect. I hope that this Bill will go forward with the full support of both sides of this House, and I invite your Lordships to give it a Third Reading.

Moved, That the Bill be now read 3a.—(Lord Mills.)

4.35 p.m.

LORD CASEY

My Lords, I hasten to apologise for what may appear to be a deliberate double fault on my part by reason, in the first place, of my seeking to address your Lordships so soon after having taken my place in this House; and, secondly, for intervening in the debate on this Bill at such an unusual and, perhaps, awkward stage. I shall endeavour to explain my reasons for these matters. I realise, with great relief, the traditional indulgence that your Lordships have been in the habit of extending to new Members of your House who seek to address your Lordships for the first time; and I hope very much that I may have the benefit of your continued tolerance in this respect.

The privilege of a place in your Lordships' House is no small thing for an Australian subject of Her Majesty, and I am deeply conscious of the honour of being the first Life Peer from Australia. Your Lordships may care to know that the awarding of a Life Peerage to an Australian has been widely and greatly appreciated in Australia. In fact, a widespread public-opinion poll taken in the last month has shown that the granting of a Life Peerage to an Australian has been endorsed by a very strong majority, both among those who profess to support the Opposition in the Australian Parliament and those who support the Government of which I was, until quite lately, a member.

My reason for seeking to speak so soon after having been introduced in your Lordships' House and before I can be said properly to have become acquainted with the forms and procedures is that the subject matter of this Bill—international civil aviation—has always been of great interest to me. And since opportunities to address your Lordships on relevant matters within my compass may not frequently recur, I can only hope that you will excuse my intervening so early in my time here and at such an unusual stage in the consideration of this measure. In fact, this Third Reading is the first opportunity I have had since taking my place in this House to speak upon this Bill.

I happen to have travelled no less than about half a million miles on international air routes over the last ten years. Moreover, I have had a personal interest in flying in less ambitious aircraft. I have, of course, read the speeches that have fallen from the right honourable gentleman, the Minister of Civil Aviation in another place and from the noble Lord, Lord Mills, who has been conducting this Bill in your Lordships' House. If I may say so with respect, I welcome this Bill as a flexible, common-sense measure to bring order and uniformity into the structure of British civil air transport. My concern is not with the details of this Bill—on which, in any case, I am hardly qualified to speak—but on one or two aspects of the Bill in what may be regarded as a wider sphere.

The principal reason for my interest in this Bill stems from the fact that the British Overseas Airways Corporation, the principal flag carrier of the United Kingdom on international routes, and Qantas, the Australian flag carrier or chosen instrument, are in partnership in what is known as the "Kangaroo route" between London and Australia by way of the Middle East, Asia and Singapore. If may boast a little, as an Australian, the fact is that apart from American air lines, Australian air lines fly the highest number of passenger miles per head of population of any air transport company in the world; and although most of these miles are on Australian domestic air routes we have in Qantas an international air carrier of consequence. Its route mileage is of the same order as that of B.O.A.C. In terms of revenue ton-miles it is over one-third that of B.O.A.C. This gives Australia, as a partner of B.O.A.C. and a member of the Commonwealth, a keen and lively interest in the future pattern of British civil aviation. The B.O.A.C.-Qantas partnership, to which lately has been added Air India International, is not, I believe, the least of the integrating factors in the Commonwealth. The partnership is of long standing. It started in 1934 when Imperial Airways and Qantas pioneered the "Kangaroo" route not far off a generation ago.

My Lords, the field of international civil aviation, as you all know, is a highly competitive one; and it is likely to become even more competitive in the years that lie ahead, when the last of the pistoned aircraft will be replaced by jets on all medium and long distance routes, and when the industry will be in course of making plans for the supersonic era, which may be within ten or fifteen years in coming about. I believe that in the era of even more intense competition in this field that lies ahead, if we are to maintain our positions among the great air carriers of the world, we must seek to promote Commonwealth co-operation in every relevant field: in the integration of air services; in the matter of safety provisions; in avoiding overlapping; in the pooling of revenues; in repair facilities; in development of new aircraft, and in new techniques of air navigation and air traffic control, as well as adhering, I would hope, to a common policy in respect of more controversial matters, such as those of fares and exchange of air-traffic rights. In short, I believe that the Commonwealth must work together in all these matters even more in the future than has been the case in the past. As the Commonwealth's senior partner, in status and in stature, in aviation and in a very great many other matters, a great responsibilty in all these matters falls on Great Britain.

This Bill seeks to bring order and clarity into British civil aviation to replace what the noble Lord, Lord Mills, has described as previous "makeshift arrangements" (these are his words), but without adding rigidity to the system. When I first became aware of this Bill I had some fears that the B.O.A.C.-Qantas partnership might be exposed to harmful and unfair competition at the hands of independent air operators. These fears were laid to rest by the statements of the right honourable gentleman the Minister of Aviation in another place and by the noble Lord, Lord Mills. The Minister of Aviation has said in another place [OFFICIAL REPORT, Commons, Vol. 618, col. 1232]: … the Bill will not … break up the partnership agreements the corporations"— I think that there he meant B.O.A.C.— have concluded with Commonwealth and foreign airlines … I shall certainly take care to see that nothing is done to upset these arrangements. I imagine that this protection which the Minister promises in respect of B.O.A.C. must also give similar protection against unfair British independent air operators' competition to Qantas and, for that matter, more recently, to Air India International. The encouraging statements of the Minister of Aviation as regards protection to be given to B.O.A.C. derive their importance from the fact, which I think is apparent from the Bill, that, particularly in international matters, the Minister reserves to himself the last word on civil aviation policy and, as I read it, is not obliged to accept any recommendation of the Board of which he does not approve.

The statement I have ventured to quote of the Minister of Aviation is of added significance when read in conjunction with the B.O.A.C.-Air India International-Qantas Tripartite Partnership Agreement, a section of which contains a stipulation by Air India International and by Qantas to the effect that they will regard the Agreement between them as valid only so long as B.O.A.C. remains the only United Kingdom airline authorised by the United Kingdom Government to operate in or out of the United Kingdom on the main routes covered by the Agreement.

My Lords, although my fears have been removed so far as any threat to the B.O.A.C.-Air India-Qantas Partnership is concerned while Her Majesty's present Government in the United Kingdom are in office, I do not find in the Bill any longer-term protection for the more distant future. I realise very well that no one Government, of course, can legislate and bind its successors. However, I would believe that the United Kingdom interest in B.O.A.C.—and so, inferentially, in the B.O.A.C.-Air India-Qantas partnership—would be an unspoken guarantee for the future, whatever might be the colour and policy of any future Government in this country.

What I have said may sound as if I were afraid of competition on the air route from the United Kingdom to Australia by way of Singapore. This is hardly the case. There is already very strong competition with B.O.A.C. and Qantas on this route from scheduled operators of other nations. But B.O.A.C. and Qantas have built up over the years a legitimate vested interest in this route so far as Commonwealth interests are concerned—a vested interest which has been supported by very substantial investment in maintenance and servicing establishments and in amenities along the route, which they are, I imagine, reluctant to share with others who have not borne the heat and burden of the day over a generation. So I maintain that what I should imagine is the anxiety of B.O.A.C. and Qantas to have their interests protected is reasonable, and it should not be regarded as improperly selfish.

If any noble Lords should be concerned with the possibility of inordinate profits being made by reason of the protection given to B.O.A.C. and Qantas, I would remind them that there is no air operator, international air operator, in the world that is doing other than teetering on a knife-edge as between profit and loss, and occasionally (I think all our memories will support this) suffering very grievous losses. There is no international airline I know of in the world which is making other than a quite unappreciable profit, and frequently it is a loss of some consequence.

In what I have endeavoured to say, my Lords. I need hardly say that I am not attempting in any way to add to or subtract anything from this Bill, which in any event would be quite inappropriate at this stage. All I would say is that if I am wrong in any of the things I have been trying to say, or in any of the inferences I have drawn, I hope that the noble Lord, Lord Mills, will be good enough to let me know. I will not detain your Lordships longer. I am grateful for your consideration and patience, and I repeat my apology for speaking so early in my time in your Lordships' House and at such an inconvenient stage in the consideration of this measure.

4.48 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I had not intended to take any part in the debates at any stage of the progress of this particular Bill through the House, but I find it to be more or less a duty that the Leader of the Opposition should be present to hear the maiden speech of our newly-added Member to the Life Peers' List. It is a particular pleasure to myself to welcome him on the occasion of his first speech in this House, because we have seen a good deal of each other in far more difficult days even than these. The noble Lord, Lord Casey, comes to our Membership here not merely as a tried statesman of the Australian Common wealth but as one who was one of our Imperial Ministers and servants, not only in Downing Street in the war but in Washington, and afterwards as a Governor in India, and connected with all our early discussions, not merely upon diplomatic matters but on defence. So I felt I had a personal duty, as well as a very great pleasure, in coming to-day to listen to his speech, which has been delivered with his usual capacity and, if I may say so, the forthrightness we knew and which may, we hope, be brought to bear upon our proceedings in the future.

I was a little nervous at one point when he was talking about long-term guarantees or future promises of this Bill, but he was so clever a Parliamentarian that he immediately followed it up with the proper reservation as to what can or cannot be done in the matter not only by the present Parliament but by future Parliaments. I waited for that to come; I thought it must come, after all his experience. We on this side are grateful for the manner in which he has dealt with this particular question, and we shall always look forward with interest to what he has to contribute to our debates and consultations. I would only, then, apologise to my noble friend, Lord Shackleton, who has borne the burden of the case on this side of the House in watching the progress of this Bill, for intervening in this way before he talks later on about the Bill.

LORD REA

My Lords, the Third Reading of a Bill is usually a purely formal occasion, and therefore it is purely formally that I rise to support this Bill. But, of course, there is another duty which is much more pleasant, and that is to welcome most heartily the maiden speech of the eminent noble Lord who has recently joined us. There are maidens and maidens. I should have thought this maiden an Amazon. We have seldom heard such a fine, such an interesting and such a clear speech as a maiden speech. I am sure your Lordships will agree with me that we look forward sincerely, and not merely for the sake of saying so, to hearing the noble Lord on many occasions and on many subjects.

THE LORD PRESIDENT OF THE COUNCIL AND SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME)

My Lords, I know the House will have been delighted to hear the intervention of the noble Viscount the Leader of the Opposition and of the noble Lord, Lord Rea; and as this is a very exceptional occasion, perhaps I may be allowed to say, on behalf of everybody in the House, how delighted we are to see the noble Lord, Lord Casey, and to hear him, and how much we hope he will often take advantage of the occasions of our debates to give us the benefit of his wisdom.

4.51 p.m.

LORD SHACKLETON

My Lords, it would be presumptuous of me to make any remarks about the maiden speech of the noble Lord, Lord Casey, beyond saying, as a relatively undistinguished Life Peer, that we are very happy to have such tremendous distinction added to our ranks. I would assure him that your Lordships' House has treated those of us of our special breed with extreme courtesy, and that we have never been conscious that we are particularly different in any way.

I thought that the remarks of the noble Lord, Lord Casey, were particularly relevant to the subject of this Bill and to the Third Reading. It may well be that in our discussions, both during the Committee stage and during Second Reading, we did not pay quite enough attention to the Commonwealth and imperial aspect of the airlines that carry the flag of this country and of the Commonwealth. I would assure the noble Lord that we, too, had anxieties as to whether this Bill might in any way endanger the position of our principal flag carriers, operating, as he said so rightly, on a knife-edge when it comes to matters of profitability. The Bill is not wholly as we should have liked it, although we fully accept the necessity for it; but I would assure the noble Lord that whereas, as he knows, obviously no House can bind successor Governments, he has nothing to fear from my friends on this side of the House as to the steps we should take in regard to the strengthening of British civil aviation.

Although the noble Lord, Lord Mills, was unable to accept certain of the Amendments that we moved, we fully accept the unquestionable determination of the Government, which they have made clear, that they will do nothing which will endanger the position of, particularly, British Overseas Airways and British European Airways: and, as proof of that, we shall look for early Government action in regard to the appointment of the new Air Transport Licensing Board. We hope it will be announced very soon and will be able to take up its duties and continue to give proof, as it has in its earlier form, of its wide international interest in this matter.

There is only one small point that I would make, which I think is a Third Reading point. In regard to these transitional arrangements, I would draw attention to the fact that many of the independent operators who have operated under the old and rather unsatisfactory arrangements will of course be making their plans now, not merely for this summer but for next winter—and, indeed, will be selling some of their space under those arrangements. Therefore it is of great importance that this Board should be appointed at an early stage and that the clearest indication is given as to how these operators will be able to continue with their activities. Otherwise, it will produce precisely that degree of uncertainty which makes it so difficult for people who are planning sometimes rather risky operations, financially speaking, to take proper decisions.

My Lords, as I say, we wish this Bill and the Air Transport Licensing Authority good fortune. I should like to express my thanks for the courtesy and patience which the noble Lord, Lord Mills, and, indeed, his noble colleague, Lord Bathurst, showed at various stages of the Bill, and to say that I hope that the Bill will continue in assisting or in "furthering" (I think the word was) the development of British civil aviation. To the operators, whether they be the established flag-carriers or whether they be the independents—and I hope that there will not be too many of them—I wish good fortune, and I am sure that this House joins me in those good wishes.

LORD TERRINGTON

My Lords, before the noble Lord, Lord Mills, replies, might I say one thing which might assist the noble Lord, Lord Shackleton, who has just spoken? It is that the Air Transport Advisory Council are meeting to-morrow afternoon to consider applications for inclusive holiday tours for next winter.

4.56 p.m.

LORD MILLS

My Lords, I am sure the noble Lord, Lord Casey, must be convinced that all sides of this House welcome his presence here among us, and I should like merely to join in offering my personal congratulations to him on his maiden speech. It is particularly appropriate that the noble Lord should have found such an early opportunity of speaking on a theme so near to his heart, and one about which he is particularly qualified to speak because of his experience in the matter; and I am sure that we all look forward to hearing a lot more from the noble Lord on matters of Commonwealth and international interest, on which he is so obviously qualified to speak with special authority.

I welcome his support for what he has been kind enough to call this "flexible, common-sense measure". I am sure that any system which improves the organisation of British civil aviation in this country cannot fail to strengthen its international standing. The principal point which the noble Lord, Lord Casey, has made, and on which I feel I should say a few words in reply, is in regard to the effect of the Bill on the partnership arrangements of the Corporations—in particular, the tripartite partnership between B.O.A.C., Qantas and Air India International. The Bill has been very carefully drafted in this respect.

Subsection (2) of Clause 2 of the Bill sets out a number of matters which the Air Transport Licensing Board must consider in particular before they decide whether or not to grant any licences. Paragraph (g) of this subsection includes any capital or other expenditure reasonably incurred, or any other financial commitment or commercial agreement reasonably entered into by an existing operation. These words were deliberately intended to cover, among other things, such agreements as that to which the noble Lord has referred. In effect, the Bill requires the Board to consider the partnership agreements. They are also required, in paragraph (h), to consider any objections or representations duly made to them—and I have no doubt that the partners will not be slow to object to any proposal for a service which seems to them likely to damage their interests. In these circumstances, I do not think the Board would lightly set aside any views expressed to it by B.O.A.C. in regard to any application which would introduce new competition on the "Kangaroo" route. I do not think it would be right for me to go any further than that, since no words I could now use could bind the Board in their consideration of any particular application that they might receive. However, I again draw your Lordships' attention to the power of the Minister to consider appeals from the Board's decision.

The Minister's powers under this Bill have been carefully confined to certain essential matters. We want the Board to have the widest functions possible. The Minister has reserved to himself, as he must, the right to deal with international relations, since by their nature they are matters between Governments, and on them it is provided that the Board and he shall consult together. The Minister has also retained the last word in matters of fares or tariffs, which again are only one aspect of international affairs. But in other respects the decisions of the Board are decisions which, unless there is an appeal, will stand on their own, without approval or disapproval by the Minister. In the event of an appeal the Minister is not, of course, in any way bound to accept the views of the Board. He will consider all the evidence and reach his own conclusion on the proper course to be followed. Therefore, it is up to any person entitled to appeal to him to do so, if he is dissatisfied with any of the Board's decisions. Otherwise, the Board's decision will stand. And I suggest that it is out of these decisions on appeal that the future shape of the British civil aviation industry is likely to emerge.

It would be as wrong for me to try to anticipate the Minister's actual decisions on appeal cases as it would be far me to anticipate the Board's decisions on applications. I can only say that the Minister, as the noble Lord, Lord Casey, has already noted, has said in positive terms that he will take care to see that nothing is done to upset the partnership arrangements of B.O.A.C. and B.E.A. I hope that these remarks will relieve the noble Lord, Lord Casey, of any apprehensions he may have as to the effect of the Bill on the Inter-Commonwealth air line arrangements, the importance of which in our economy, and even more as a binding force in the British Commonwealth to-day, I most fully endorse.

I am grateful to the noble Lord, Lord Shackleton, for his general support of the Bill. I am also grateful Ito him for stressing the importance of seeing that the transitional arrangements are such as will remove any anxiety on the part of operators. I think that my noble friend Lord Terrington has given him a better reply on that matter than I could possibly give.

On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.