HL Deb 26 July 1961 vol 233 cc1036-50

4.10 p.m.

Order of the Day for the Third Reading read.

LORD CHESHAM

My Lords, as we come to the Third Reading of this Bill, I would think that in its earlier stages, we have discussed almost every facet of the matter quite fully—indeed, almost exhaustively. I do not therefore think it is necessary for me to go into any detail again now. No one would pretend for a moment that the agreement between the Cunard Company and the Government, as set out in the White Paper, gives either side the best of all possible worlds. It could not, of its nature, possibly do so, and is certainly not special in that sense, although the whole venture is something rather special.

The agreement is not, and cannot pretend to be, a truly commercial one, because this is not a truly commercial venture either. If it were, the Cunard Company would never have approached the Government, and the Government would never have considered giving help. But we have considered the circumstances of the North Atlantic express passenger service to be quite unique because of its nature and also because of the degree and extent of the subsidised competition. The plain fact was that if the Government had not been prepared to help, the British express passenger service would have disappeared before very long. This was something, as I have said before, which the Government felt that the country as a whole would not, and could not, wish to see happen.

Within these limitations, the Government have driven a hard bargain with Cunard, and although a lot has been said, both here and in another place, about ways in which it was thought the bargain might have been made better, it is the Government's firm view that, by and large, they have secured the best possible terms and that the real interests of the taxpayer in this venture have been looked after.

Shortly, my Lords—very shortly—the tenders for the construction of the ship will be returned. All British yards who were capable of doing the job were invited to tender and, as has been said so many times already, it will not necessarily be the yard which offers the lowest price which will succeed, but that which offers the best all-round value for money. I am sure the competition is going to prove very keen, and I can only say that it is the firm intention, both of Cunard and of the Government, to make Kin that when this ship enters service she will truly represent the finest achievement of British crafts and skills which go into the construction of a passenger ship. I think one thing only now remains for me to say, and that is to express my appreciation and thanks to all noble Lords who have taken part in the various stages of this Bill, which has now come to the point at which I am asking your Lordships to give it a Third Reading. I beg to move.

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

4.13 p.m.

LORD MORRISON OF LAMBETH

My Lords, the situation to-day, when this Bill comes up for Third Reading, is different from that which existed during the earlier Stages of the Bill in another place, and, indeed, in your Lordships' House. It is true, as the Parliamentary Secretary said, that the Bill has had a good deal of discussion. It was bound to, because it is a somewhat controversial measure. But we now must examine this Bill in the light of the statement made in another place yesterday by the Chancellor of the Exchequer. He took the view that the Government, on the one hand, must encourage capital investment which led to increased productivity, but discourage it where it did not lead to increased productivity.

In relation to these great ships which cross the Atlantic—and I have crossed with the "Queens" on a number of occasions, and have enjoyed myself—the question is whether this additional capital expenditure will be so remunerative to the country that the Government are warranted in giving several million pounds of the taxpayer's money to the company—or at any rate advancing it. I must say that I am very doubtful about it. I doubt whether the Government can show that, in the existing circumstances, the amount of remuneration or "came-back" from this investment, either on the part of the Cunard Company, or on the part of the State, is going to be sufficient in the light of the circumstances mentioned and dealt with at length by the Chancellor of the Exchequer yesterday to warrant our doing this.

The Government may say, "Well, we cannot look backwards; we are committed to this; we let it happen." But they have looked backwards in relation to the teachers. The teachers reached an agreement with the Burnham Committee. The Government have looked backwards on that, and they are going to cancel their agreement or, at any rate, modify it. Therefore, if the Government were legitimate in the case of the teachers (and I am doubtful) why cannot the Government look back in relation to this, because in the light of the Chancellor's statement yesterday this Bill is not justified. It really is not justified sufficiently to warrant this subsidy being put into it by the State. Therefore, we are very doubtful whether this Bill ought to pass.

The other point is this—and there was discussion about this on Amendments which were moved in Committee and on Report. What is the relationship between this public money, either invested or guaranteed, in relation to the Cunard Shipping Company, and the projected emergence of a new privately owned civil aviation concern to be fathered by the Cunard Company? Let us examine this question in the light of the statement by the Chancellor of the Exchequer yesterday. Surely, in the light of that, if you have an efficient concern—it happens to be a public concern, the British Overseas Airways Corporation—which is handling trans-Atlantic traffic by air, what is the sense in the Government encouraging (as in principle they are doing, unless the Minister of Civil Aviation turns it down, as I hope he will, because that is his plain duty) another air line to come into competition with the people's air line, an air line owned by the community and an asset to the nation? It is duplicating capital expenditure. It is duplicating services, and the duplication must be wasteful in relation to the national economy. But that is what is contemplated, although it has yet to be shown that the Minister of Aviation will grant the licence to this new concern to compete with the publicly owned concern.

The Government may say, "Well, we like competition; indeed, we want to promote competition by private enterprise against publicly-owned concerns". The Government will say to themselves, if they do not say in public, "We have a prejudice against public concerns, and we want private enterprise to cut their throats if it can" as, indeed, the Minister of Transport is deliberately doing vis-à-vis the railways from the point of view of commercial transport. Indeed, his latest effort is to widen buses so that they can carry more people in competition with the railways, and to increase their speed so as to increase their competition with the railways. Now we find the possibility that the Government will be promoting competition against a very great and successful public concern, British Overseas Airways Corporation, by a private undertaking.

I freely confess that I had a hand behind the scenes, and in Parliament, in the passing of the Civil Aviation Acts which built up the public concerns, B.O.A.C., B.E.A. and British South-American Airways, which was subsequently merged in B.O.A.C. I thought at the time that they might have to be subsidised for quite a long time to come. And be it remembered that Conservative Governments had subsidised Imperial Airways earlier on and they thought they would have to go on for a long time. I was very pleasantly surprised to find that B.O.A.C. and British European Airways had found it possible, broadly and roughly, to pay their way within the number of years that that happened. It was a great achievement. But I suspect this makes the Government jealous; that their Conservative principles lead them to think that there is something wrong about a publicly-owned concern paying its way, and therefore they like to do something about its paying its way—to cut its throat, if they can, if it be the case that some of this money is going into the Cunard Company, or is guaranteed to the Cunard Company; if it be the case that directly or indirectly some of this money can be used to help out a civil aviation line, privately owned, over the Atlantic, then we ought to be told; and if it is so, it is a wicked thing to do. That is why we are doubtful about this Bill.

I know we have had some sort of answer, but we have not yet had a clear answer whether any of this money can be directly or indirectly used as financial aid to the proposed civil aviation airline across the Atlantic. Surely it is madness, when you have the eminently successful British Overseas Airways Corporation, with a great reputation here and among American citizens, to permit cut-throat competition with it, and still more so to permit public funds, directly or indirectly, to be used to aid a privately-owned undertaking as against a publicly-owned undertaking. On both those grounds we think this is a doubtful Bill.

Of course, the Government has to catch up with itself, or try to, in relation to the statement made by the Chancellor of the Exchequer yesterday, and I am sure it will find itself going backwards on a number of issues which will arise. It will find itself in an illogical situation because of the situation made by the Chancellor of the Exchequer's statement yesterday, which we shall debate to-morrow, and which I mention to-day only because of its relationship to this Bill. For these reasons, my Lords, while we do not propose to divide against the Third Reading of the Bill, we think it is a doubtful measure and in conflict with the current financial situation as described by the Chancellor of the Exchequer in another place yesterday.

BARONESS HORSBRUGH

My Lords, before the noble Lord sits down, may I ask him a question? He referred to teachers' salaries and the Burnham Committee, and I thought he said—but perhaps I did not understand him—that the Government have gone back on an arrangement with the teachers. Is it not a fact that the Burnham Committee put in a provisional scheme to the Government that has to be approved by the Minister, and the Minister has not yet approved it, and the Government therefore are not going back on it but are going to discuss it?

LORD MORRISON OF LAMBETH

My Lords, I am almost getting accustomed to being cross-examined by the noble Lady at the end of every little speech that I make in your Lordships' House, but I have no objection to that, because it is nice to meet her across the Floor or otherwise. She is right, in a sense; the Government were not committed. It is a fact that negotiations have gone on 'between the local authorities and the Burnham Committee and they have reached an agreement, and normally the Government do not upset those agreements. I think I am right—the noble Lady has been a Minister of Education and would know better than I—that the Government do not normally upset the agreements; but this time they are going out of their way to upset them. Mind you, at the time—to be fair—the N.U.T. itself, pushed by some of its Left-wing elements (that is putting it mildly), declined to accept the Burnham award, and to this extent they would have been better off to have said "Yes" right away, in which case Her Majesty's Government could not have got out of it. There is a point in what the noble Lady says.

4.26 p.m.

LORD BOOTHBY

I have no intention, and indeed have had no opportunity, of voting against this Bill, and would not do so even if there were a Division, but I should like just to go on record as saying, having regard to the present economic situation of this country as incisively dealt with by the Chancellor of the Exchequer in another place yesterday, and to the future prospects of the express passenger services by sea across the Atlantic in the years that lie immediately ahead, that I sincerely believe that this particular subvention on the part of the Government is quite unjustified. I should like further to say that it is quite wrong that any Government should subsidise any private shipping line as against other shipping lines who are carrying on work of equal importance. I believe that it will not pay them in the long run and I am bound to say that I bitterly regret it; and I am afraid that before very long Her Majesty's Government will bitterly regret it, too.

4.28 p.m.

LORD OGMORE

In case silence be taken to betoken consent, I think I must say a word on this Bill. I have been against it from the start, when it was first mooted at the very beginning of this Parliament in your Lordships' House. The reason that the noble Lord, Lord Morrison of Lambeth gave is a very valid one. Much as I was against it before, I am even more against it if it is passed now, in view of the statement of the Chancellor of the Exchequer yesterday. It is complete nonsense, to my mind, that we should be giving this subvention of £18 million to a private shipping line.

From the very beginning this whole affair has, in my opinion, had an unsavoury odour about it, to use a Parliamentary expression—if it is one. First of all, we had the suppression of the D.S.T.R. Report on shipbuilding, and secondly we had the virtual suppression of the Chandos Committee's report on this proposal. I have no doubt the noble Lord, if he is going to make another speech, will reiterate the arguments he has already put up, and if he does it is not good enough at all. What we, as Parliamentarians, want to know is what Lord Chandos said and what his Committee said, and not what the Government allow us to know they said. We were recently told by a Conservative Member, by Lord Simon, a director of the P. and O. Company, that Lord Chandos was never asked whether this was a good idea or not. What Lord Chandos was asked was, if the Government decided to do this, what was the best way of doing it. This is a very important point, and it had never before been revealed to Parliament, so I do not think that the Government in this particular regard have been really fair with Parliament. They have not given us the facts to which we are entitled and which we need to make a decision on a matter of this kind.

I hope now, even at this very late stage, that the noble Lord, Lord Chesham, will go back to his right honourable friend and, if necessary, postpone the next stage of the Bill, and ask him whether it is not possible to withdraw the Bill. Having regard to the financial situation of the country, how can we ask all those other people, as the noble Lord, Lord Morrison of Lambeth, has indicated, to forgo what they were expecting in the way of increases and emoluments in order, apparently at all events, to give a subvention to a private shipping company—not to an industry, but to a private shipping company—for a venture which, in the public interest, is highly doubtful, to say the least. I am against this Bill.

4.30 p.m.

LORD CHESHAM

My Lords, I had felt all through the stages through which this Bill has passed that there was something missing, and I now realise what it was: it was the presence of the noble Lord, Lord Morrison of Lambeth, and the contribution which I had been expecting from him and have now received. I am very glad that his work and other engagements have enabled him to be here. If I may be allowed a very small remark (I hope that it will not be taken as a gibe), it has occurred to me that he is the only person who can give, as a perfectly valid reason for being absent, that he has gone to the cinema. It occurred to me that he is about the only person in this country for whom that is a valid reason. He did range, of course, quite wide; and I was not particularly surprised by what was said by the noble Lord, Lord Ogmore. In fact, I might almost say I had anticipated that something of the kind might be said, because from the Benches on which both the noble Lords sit no opportunity has been lost of any point which can be used as criticism against this Bill, of which both noble Lords have so clearly demonstrated their dislike right from the beginning.

The noble Lord, Lord Morrison of Lambeth, in criticising the proposition in relation to the economic situation and yesterday's statement, made a passing reference to what my right honourable friend the Chancellor of the Exchequer had said. I think that we need to look at his words—at any rate, so far as they are applicable to this Bill—a little more closely, and with your Lordships' leave I will quote them. He said [OFFICIAL REPORT, Commons, Vol. 645 [No. 1551 Col. 219]: In my view, therefore, our aims art the present time should be as follows: First, we should maintain investment in productive industry with a view to the long-term growth of the economy. At the same time, we must make ourselves more competitive. Both are vital for a long-term improvement in the balance of payments. My Lords, what does that do if it does not describe the situation regarding the building of this ship? It certainly maintains an investment which is likely to be productive, because otherwise the investment would never have been helped by the Government. It is a worthwhile investment: that has been the position all along. I am going to give some figures; they are not conclusive, I know, bat they are at least indicative of what are the contributory possibilities of this service.

These are figures that I have obtained from the Cunard Company. I understand that in each of the years 1958 and 1959 the two "Queens" together earned the equivalent of some 25 million dollars; that is, in foreign currency, the net contribution being 19½ million dollars. Their estimates for the "Q.3." indicate that she should earn gross some 15½ million dollars, the net receipt being about 12½ million dollars; and of course there are other rather less visible and perhaps unassessable benefits from the service. That, surely, is not "chicken-feed". Surely that is worth the investment now or at any other time. Surely it is not thought that the Government are simply going blindly to support with capital a proposition which is not worth doing at this time, or very much less worth doing than at any other time.

LORD LATHAM

My Lords, do I understand the noble Lord to say that the "Queens" earn net 12½ million dollars a year? What happens to it then, because they reduced their dividend? Has it gone to subsidise the other traffic? The other point is if the "Queens" are so profitable where is the need for this subvention from State funds?

LORD CHESHAM

My Lords, it may conceivably have come to the noble Lord's attention that the "Queen Mary" is wearing out and has to be replaced. That is, of course, the abject of this Bill.

LORD LATHAM

Surely the depreciation allowances are available to replace her. If not, what kind of accountancy system has this company?

LORD CHESHAM

I think the noble Lord is drawing something very strange from the figures I have given.

LORD LATHAM

They are such odd figures.

LORD CHESHAM

I do not think they are odd at all. I do not think the noble Lord has any right or justification for drawing the conclusions that he has drawn immediately from the figures I have given without seeing a lot more figures as well. I am simply trying to indicate to your Lordship what is the foreign currency earning capacity, largely in dollars, of these ships.

LORD LATHAM

If there are other relevant figures, can we have them; then we can consider them in relation to the figures the noble Lord has already given.

LORD CHESHAM

That is entirely another matter, about which we are not talking at the present time; at least I did not think we were. I was trying to indicate the amount of foreign currency earnings. That is what I have indicated, and I do not think I am going to allow myself to be led off by the noble Lord on a discussion of that kind.

I want to go to the other point raised by the noble Lord, Lord Morrison of Lambeth, about air services. He has had, as he always 'has, quite a bit of fun having a "crack" at the Government and gat my right honourable friend the Minister of Transport about attacking the people's airlines, or something of that kind. He ended up somehow on a long discussion about the Burnham Committee. I cannot follow him into those realm's, because I do not see how, within the rather tenuous Rules of Order we have in this House, the Burnham Committee and how to run nationalised airlines, and that sort of thing, really come within the framework of the Third Reading discussion of this Bill.

On his other point, about whether the money which was being loaned to Cunard (I think this was the gist of his point) made it easier for them to buy aeroplanes, I think he said that there had been no answer. But the noble Lord was not here. I have dealt with this business fully twice, on Second Reading and in Committee—and I am extraordinarily surprised that anyone could say that no answer had been produced, because it has. I stood at this Box and argued it. I have said that the loan and the grant to Cunard did not make it any easier, and I do not know whether anything could be clearer than that. I do not know Whether your Lordships would like me to argue the Whole thing again, 'because no point has come up this afternoon that has not come up at previous stages and which I, or my noble friend, Lord Mills, have not fully argued.

LORD MORRISON OF LAMBETH

I um sorry to interrupt the noble Lord. I admit that I was not here. I meant to be here, because I wanted to have a go. That is why I am here this afternoon, to have a go this time. But I read the OFFICIAL REPORT, and the point I am not satisfied about is whether any of these financial assets can be, directly or indirectly, of advantage to the concern it is proposed to promote if the Government permit them to run trans-Atlantic airways as a private concern. Can it happen?

LORD CHESHAM

I must not be too short about this. As I tried to explain, there was not any connection; there is certainly no direct connection. If the noble Lord means, can any of this money be used, obviously it cannot. The Bill says right as the beginning that it is: For the purpose of the construction of a large vessel for the North Atlantic shipping trade… That is quite clear; money cannot be advanced by the Government for any other purpose whatsoever.

LORD MORRISON OF LAMBETH

I am sorry to intervene again. If the Government advance money to enable a shipping line to do this and that, will the noble Lord tell me whether or not that may enable the shipping company to use for the airline assets which could not have been so used if the shipping line had not received this assistance?

LORD CHESHAM

I was just corning to that when the noble Lord interrupted me. The answer to that is: No; it will not. The reason, as I have explained before, is that the money for the purchase of these aircraft is coming from collateral provided by certain Cunard property in America. Instantly, someone may say, "Why do not they put the money into the ship?" But nobody has ever said at any time that Cunard had not got £30 million, if that is the sum that proves to be necessary. They could raise money on various assets that they have. They could rob the depreciation fund they have collected in respect of their other ships. They can, in a variety of ways, raise £30 million to build a ship. I am trying to sum up a Second Reading debate as briefly as I can. But nobody could reasonably expect them to do that, faced with the heavily subsidised foreign competition on this route. To raise the money they need, which is somewhere in the neighbourhood of £5 million or £6 million for these aircraft, is much easier than raising money for a ship. The noble Lord, Lord Latham, does not think so—he said so before; but it is in fact so. The collateral required is not so great; the length of the loan is not so great, and in any case at any given time the aircraft can be sold, if need be. So the two are not the same at all.

I would ask the noble Lord to remember this point, too. It is quite possible (I have no authority to say this, but it is my own personal view) that if they felt like it, and if a "Queen" was not going to be replaced, they might well decide to put into the air as well the £12 million which Cunard have available for replacement of a "Queen". Therefore, on balance, I think the answer is that the making of this loan and grant only to build this ship is probably making it less rather than more easy for them to go into the air.

I should like now to come to the final point. The noble Lord made a number of points which, quite frankly, I am not going to follow because they were rather outside the confines of the Bill. I would only just say this to the noble Lord. Lord Ogmore, who has uttered a violent protest about the Chandos Report, a protest which has been echoed from the Benches opposite. I am not going into it all again; but I would say—this is a point which noble Lords opposite are ignoring—that when the Chandos Committee were appointed it was recognised that many things needed inquiring into which carried with them a considerable degree of commercial security and confidence; and a pledge was given at the time that the report would not be published. That pledge was given to people who gave evidence before the Committee. Under a pledge of confidence they expressed themselves very freely indeed, and the Committee were able to gather a great deal more of the information they needed than they would have obtained if it had been known that their report was to be published. That is why they were able to do such a thorough and exhaustive job. Without that confidence they would not have obtained the information. It was most necessary to get it, and I, for one, would certainly not stand here and advocate the breaking of a pledge of confidence in the circumstances. I hope that is not what the noble Lord, Lord Ogmore, would have anything to do with either.

LORD OGMORE

No; I would agree with that. But I cannot see, first of all, what they have to hide. Why should it have been necessary to give this information under the great seal of secrecy? That is the first point. Secondly, I cannot really think why it was not possible for the Chandos Committee to have given us their views, or for us to have their views, without giving the evidence upon which they based them. I do not want the evidence. All I want to know is the actual report of the Committee, so far as its conclusions and that sort of thing are concerned, in their own words.

LORD CHESHAM

I was under the impression that the noble Lord had had that in the summary which was published.

LORD OGMORE

Yes, but I do not accept the summary. That is the point. We must get this clear, because there is an important Parliamentary issue here. I take advice from the noble Lord, Lord Morrison of Lambeth, who has a far greater Parliamentary experience than most of us. If you set up a Committee and that Committee reports, in the normal way it is expected, and indeed intended, that the report should be laid before Parliament which is asked to vote a large sum of money in consequence. Repeatedly in this House Ministers have referred to that report.

LORD CHESHAM

No.

LORD OGMORE

You have referred to the summary of the report.

LORD CHESHAM

Exactly. Perhaps I may interrupt the noble Lord, in my turn —it is about time I had a turn at it. That summary was published, laid before Parliament, or whatever the right term is, on June 1, I think; and therefore there is no reason why we should not quote from that. That we have done freely, but we have not quoted from the Chandos Report, which has not been published.

LORD OGMORE

That begs the question. I shall be guided by old Parliamentarians on this matter, but I understand that there is involved a matter of Parliamentary principle if Ministers constantly refer to something which in the beginning we believe is the Chandos Report, and then afterwards we are told is a summary of it. Surely the whole point of the Parliamentary rule is that if a Minister refers to a public document he has to lay it. That is the rule. I myself challenged the Minister to lay it. He said "I am not quoting from the report; I am quoting from a summary of the report". But who made the summary?—he did. At all events, this is possibly a dangerous innovation because we, as Members of Parliament, shall never know what is the true report and what is the gloss put upon it by a Minister, if he so desires.

LORD CHESHAM

I am sorry to say this. The noble Lord would be completely justified and quite correct in what he has said, were it not for one thing about which he is completely wrong, and I am delighted to tell him. This is not a summary that the Minister has picked out. This summary was prepared and published by Lord Chandos and his Committee themselves. Your Lordships may say that that does not matter; gloss that off! But I think I must say this rather seriously. If reports are to be prepared by Committees under the pledge of confidence, that pledge must not be broken. It does not seem that there is quite the respect for a pledge of confidence that one would expect. I think it should be carefully watched, and no doubt it will be.

The other point is that if the pledge of confidence had not been given I do not think the main report could have been prepared. That was recognised ahead. And, my Lords, I think there is every justification for sticking to the non-publication and publishing, by arrangement with the committee and its chairman, who produced the summary, a summary of their conclusions without all the detailed and confidential evidence upon which they came to those conclusions. I stick to that point, and I think it was perfectly right. I will certainly tell the noble Lord, Lord Ogmore, that we have been particularly careful for those reasons to refer to the summary and not to the main report itself. To sum up, so far as I am concerned, despite the criticism of the noble Lord opposite, I think that this is a Bill which should proceed and a project which should earn the support of your Lordships; and I believe that the Bill should go ahead and receive its Third Reading at this time.

On Question, Bill read 3a, and passed.