§ 2.50 p.m.
§ THE EARL OF GOSFORD rose to call attention to the problems affecting Civil Aviation; and to move for Papers. The noble Earl said: My Lords, it is almost four years to the day since your Lordships last held a debate on this subject, civil aviation. The last debate took place in fact on December 11, 1957, on Motions by the noble Lord, Lord Ogmore, who, I am glad to see, is able to take part to-day, and by the late Lord Winster. Much that was foreshadowed in that debate has now come to pass. First of all, we now have a Ministry of Aviation; secondly, the large number of small, or comparatively small, aircraft firms have by amalgamation become a small number of large firms—a tendency which I am sure will continue when one thinks of the large 863 cost of development and manufacture of modern aircraft. I will return to this subject later. Thirdly, the airports now administered by the Ministry of Aviation are to be handed over to a new airport authority in the case of international airports, and to certain local authorities in the case of others. Incidentally, the noble Lord, Lord Balfour of Inchrye, foreshadowed many years ago the coming of this airport authority. I am indeed sorry to see that he is unable to take part in the debate to-day—in fact, that he is debarred from doing so, as are other noble Lords whose advice would have been of great value to your Lordships. Fourthly, and finally, jet aircraft are with us.
§ It is the manner of the arrival of the jet aircraft which has, to my mind, brought with it and foreshadows in the future problems of immense complexity. When your Lordships last discussed the question of civil aviation your Lordships were concerned with the delays and the teething troubles of the Britannia turbo-prop. Now, not six years later, this aircraft has been superseded by turbo-jet aircraft on most of the long haul routes. The same thing is happening on the shorter hauls, although I am happy to see that the Vickers Vanguard performance is equal to that of the jets on these shorter runs. Incidentally this aircraft, the Vanguard, with its dual purpose passenger-freight capacity, is, to my mind, a magnificent example of the imaginative thinking of the British aircraft industry.
§ It is the almost forest fire-like success of the Vickers Viscount, followed by that of the Comet, and the Caravelle, and by several larger jet aircraft, which is responsible for one of the major difficulties of the world airlines—forced re-equipment. The general public, quite naturally, want to travel in the latest and most up-to-date aircraft. A new type of aircraft that only exceeds its predecessor or competitors by twenty or thirty miles per hour, and is otherwise of the same type, does not make much impact on the travelling public. But if an aircraft has some radical difference in design and therefore in performance, such as the jet-engined aircraft, then airlines are forced to re-equip whether they are ready to do so or not, or else 864 they go out of business for lack of passengers.
§ This giant step, if I may call it so, has happened only twice so far, the first being when the monoplane and the retractable undercarriage were introduced, and the second, as I have already mentioned, being the arrival of the jet engine. We are now faced with the possibility of three similar steps in the not too distant future. I consider that the first step will be the use of the large helicopter for short runs up to, say, 300 miles which, if landing grounds near centres of cities can be found, will cut the overall travelling time to a point where normal aircraft will be quite out of the question. The next step is the aircraft designed for vertical take-off, which will make airports with long runways unnecessary. Incidentally, in this connection I was interested to read in the newspapers on Monday that an agreement has been signed by seven British, American and continental firms to co-operate on a vertical take-off fighter for the N.A.T.O. air force. The last step, as I see it, before we get rockets, is the supersonic aircraft. I should imagine that when each of these new types of aircraft comes on the market the world's airlines will be forced to re-equip whatever the state of their existing aircraft.
§ As for the helicopter, I understand that B.E.A., and no doubt some independent companies, are ready for this change when it comes. The vertical take-off aircraft would have to be phased in on a world basis because of the air control problems involved. Nevertheless, it will mean that air lines will have to re-equip again, in some cases before they normally would do so. Finally, there will be the supersonic aircraft, which will be a headache indeed both to the manufacturers and to the air lines, and the cost will be enormous. Only aircraft corporations and companies with very healthy financial positions will be able to stand re-equipment of this sort at what I would call abnormally short intervals. Furthermore, I doubt whether any of them will be able to buy supersonic aircraft without Government assistance. I hope that Her Majesty's Government have this problem well in mind.
§ I come now to the problem of the Corporations and the independent air lines. 865 I regret that, owing to the fact that I had to make a visit abroad at short notice, I have not been able to have the consultations with both sides in this question that I should like to have had. I shall therefore in no way go into detail. But, with your Lordships' permission, I should like to set out the position as I see it. Applications have been made by Cunard Eagle, British United Airways and other independent companies to operate in parallel with B.O.A.C. and B.E.A. on certain of their routes. It was announced in June that the Air Transport Licensing Board had granted a fifteen-year licence to Cunard Eagle Airways for a daily transatlantic service between Britain and the East Coast of the United States, but that they had turned down Cunard Eagle's other application to operate to the West Coast and to Canada. This was the new Board's first decision on a major application by a British independent airline. The Corporation appealed to the Minister against this decision, and it was announced only yesterday that the appeal had been upheld by my right honourable friend.
I myself consider this to be a wise decision in the present situation on the North Atlantic route which B.O.A.C. say is a route which was profitable for them last year but is now showing a considerable loss. Hence, this would be the worst possible moment to introduce a new carrier. Furthermore, they also say that their 1958 order for Vickers VC.10 aircraft, worth about £100 million, was based on the assumption that they, B.O.A.C., would be carrying all the passengers using British aircraft. The Corporation could place such orders for now British aircraft only if they believed that the passenger traffic would be sufficient to fill them. On the other hand, Cunard Eagle maintained at the inquiry that there would be—here I quote:
No material diversion of passengers from B.O.A.C.
if their application were granted. They said they could get more passengers through their own network of Cunard offices throughout the United States of America.
§ The applications by British United Airways and other independent companies to operate certain scheduled services in competition with B.E.A. are 866 still under consideration by the Board, though I have just read on the tape that the British United Airways have walked out of the Inquiry—they say, until they know more about what the Minister has in mind. British European Airways say that any British operator working in parallel with them on the continental routes can only have the effect of taking passengers from them. As B.E.A. work in pool to most of the countries in Europe, any new British operator would be able to take passengers only from B.E.A.'s share and not from the indigenous airline—at least not for long, as the latter would see to it that this did not happen at the next pool review which takes place every six months. B.E.A. contend that they have to operate unprofitable services such as the social services in Scotland, and that they have had years of working at a loss while building up their present routes. Both Corporations argue that the independents, who have no obligation to run in off-peak periods, should not now be allowed to operate at peak periods only, thus skimming the cream off the trade. It is this profit to which the Corporations were looking to help them finance the future re-equipment which, as I have told your Lordships, I consider to be a very difficult problem indeed.
§ The Corporations say that there are plenty of other activities open to the independents, such as charter, trooping and air-coach services, and, not least, that they could pioneer new routes not already served by the Corporations and which they could develop to their own profit. Finally, the Corporations point out that they are not monopolies without competitors; on the contrary, they are in a highly competitive international industry, which the noble Lord, Lord Mancroft, acknowledged when he replied for the Government in your Lordships' previous debate. I must say that I find some sympathy with these arguments.
§ I understand that the independents, on the contrary, say that their participation in these particular routes would have the effect of producing more traffic. I can only say that I hope that, if they do participate, this turns out to be so. But it seems to me that what really matters is that the criterion for the added British entry into airline markets 867 should be that the British share of the passengers is additional, and not that the newcomer takes away from what the existing British carrier is already carrying.
§ I will now turn to our aircraft industry, which has been second only to the United States in supplying world aircraft, and I hope that it will continue to be so for many years to come. If we are to sell these aircraft abroad, there must be a substantial home market for them. As your Lordships know, a substantial home market is the basis of a successful export trade. The export trade in aircraft in the last few years has been running at a level of about £150 million per year, which this year represents about one-third of the industry's total sales. This can be sustained only by a Government policy of continued support for the industry, particularly in the field of research and development. The Corporations and the independent companies have loyally supported our industry, except when B.O.A.C. were forced, by circumstances beyond their power, to buy American after the Comet disasters, which happily have now been fully overcome by de Havillands; but I cannot see how they can continue to give their support if the Government do not alter their present policy.
§ In the U.S.A. much the greater part of the cost of development is written off against development and production for the United States Air Force. Furthermore, the United States Air Force Transport Command usually have the task, if I may put it in this way, of taking the "bugs" out of new aircraft. It is not so with us. B.O.A.C. had to endure the teething troubles of the Britannia, as in fact was mentioned in your Lordships' previous debate, and B.E.A. have recently done the same thing, though happily on a minor scale, with the Vanguard. No commercial airline, particularly when it is competing with the world's best, should be forced to do this. If the industry is to be able to compete in the world and home markets, prices charged must not bear anything like the cost of research and development that they do now. Furthermore, the Government must reduce or abolish altogether their present substantial levy charged on Government- 868 sponsored aircraft when sold abroad. I am informed that the United States Government charge no such levy on their aircraft. Furthermore, exporters must be able to obtain more generous credit facilities.
§ My Lords, to come back to the importance of a substantial home market, the size of a production batch or batches is an important factor in bringing down the price. The Government can be of considerable help here by placing substantial orders for R.A.F. Transport Command and by not placing them in penny packets. But the airline companies must equally be in a position to place large initial orders rather than in dribs and drabs. The aircraft industry while fully supporting private enterprise, fear lest the competition between the Corporations and the private airlines may have the effect not of increasing the total goods and passengers carried but, indeed, of diminishing the business of the Corporations to an extent where they would find themselves obliged to cancel or reduce orders for new types of aircraft.
§ I now come to the problem of supersonic aircraft. I understand that a British Aircraft Corporation design study for a British supersonic airliner is expected to be completed and handed over to the Ministry of Aviation somewhere about now. Dr. Russell of the Bristol Aircraft Company has stated that this project calls for a Mach-2 aircraft—as your Lordships know, Mach-1 is the speed of sound—with a high-altitude speed of 1,400 miles an hour. Now if Her Majesty's Government decide to go ahead, a prototype might be flying by 1966 and an airline service by 1970. In France, according to a report in the Press, Sud Aviation in co-operation with Marcel Dassault, are planning to fly a Mach-2 supersonic prototype late in 1966, and to begin production in 1967. Sud Aviation and the British Aircraft Corporation have, I understand, been discussing supersonic co-operation, and the French project is expected to receive Government financial support which might take the form of a public loan. In the United States a special committee, set up by the President to consider the future of the American aircraft industry, has called for Government help to develop a supersonic airliner flying at Mach-3, at speeds in excess of 2,000 miles an hour. It is argued that this 869 type could be ready by 1970 and would give the U.S.A. a big advantage if it were first in the field.
§ Experience to date has shown, as I have already mentioned, that the travelling public go for the fastest aircraft provided that the cost of the ticket is somewhat the same. If we decide to go for Mach-2, and the Americans and maybe the Russians go for Mach-3 and are successful, will not the money that we have spent on Mach-2 be wasted? There have been occasions in the past where our sights have been set too low only to find that someone else has got there first. But our skill and our imagination are as good as any in the world, provided that we do not let them leak away to America and Canada, as we seem to be doing at present. If others are aiming at Mach-3 should we not do so, too? The research and development will need and is receiving Government help, but what about the problem of financing the manufacture of these supersonic aircraft and the equipping of the airlines with them? Only a few such aircraft will be needed because of their greater speed. This very fact will cause problems of financing beyond the resources of private industry, and I hope the Government are already thinking ahead and will not be caught napping.
§ Now I come down to slightly more technical details. There have been a number of accidents to British aircraft this year. Figures quoted by the Parliamentary Secretary to the Ministry of Aviation in another place on November 6 last indicated that, in terms of passenger miles flown, the record of those companies operating charter flights is not as good, or anywhere near as good, as that of those operating scheduled flights. Here I should like to congratulate B.E.A. on being awarded the Flight Safety Foundation Award for distinguished service in achieving safe utilisation of aircraft. This, I believe, is the first time that the award has been made to a non-United States airline.
§ It is for the Minister to allay the fears which these facts have produced. This can be done either by showing, as a result of investigation, that these accidents, though tragic and lamentable, need give no grounds for public distrust or anxiety, or that such shortcomings or failings as may be discovered are to be adequately remedied. While these 870 accidents are under investigation it would probably be unwise for me to hazard any particular theory not based on known facts. However, it may be that these older-type aircraft which the charter companies use, while in every way complying with the provisions of the law, are not entirely suited to the job which they have to do. They are operating in competition with modern, high-performance aircraft operating over an air traffic system far more complex than was the case when these aircraft were themselves the best in the air. If that is so, then the legislation relating to the equipment to be carried by, the performance characteristics required of, and the operating limitations to be applied to, these aircraft must be reviewed urgently. Furthermore, before passengers can be carried on scheduled services the crews must have made route training flights. This is not required in the case of non-scheduled flying. It is considered sufficient for the latter crews to be familiar with the radio aids at their destination. It is here, I think, that improvements can be made. Scheduled flights and non-scheduled flights must be equally safe: in other words, the same standards must be applied to both types of operation. If route training is not feasible for charter flights, then the aircraft should by law be fitted with some suitable automatic aid. As to air safety generally, there still seems to be evidence of sluggishness and procrastination within the Ministry of Aviation in matters concerning flight safety.
§ I will now come for a moment to navigational aids. The installation of V.O.R. beacons in the United Kingdom is far below the standard already operating in all other Western European countries, while the provision of landing aids at many of the airports serving our provincial cities often falls far short of the standard required for operation in bad weather. The absence of a satisfactory long-range navigational aid is already restricting optimum operations on the North Atlantic route.
§ I will not myself go further into the subject of air traffic or air traffic control, as noble Lords following me will be doing that. I should like, if I may, to congratulate my right honourable friend the Minister of Aviation on his announcement of a Bill to permit the 871 setting up of Euro-control. Simplicity is the secret of good flying control and of safety, and to my mind the word should be written in large letters in the offices of all who deal with this vital subject. I should like here to say a few words about the Guild of Air Pilots and Air Navigators who, to my mind, do a wonderful job for air safety in this country. They have committees of pilots who are operating every day, and they advise the Ministry on the latest devices and the latest ideas. I only hope that the Ministry of Aviation will find that it can take up these ideas quicker than it does at present.
§ As to airports, a Government White Paper issued in August of this year announced the formation of a new airport authority to take over the management of the four international airports—Heathrow, Gatwick, Stansted and Prestwick. The Minister of Aviation is to discuss with local authorities proposals that they should assume responsibility for seven State-owned airports in the Provinces. The Government agree that local authorities might reasonably expect some Exchequer assistance in cases where the financial burden would be heavy. The Government also propose that nine airfields in the Highlands and two others at Land's End and the Scillies should be run by agencies on the Government's behalf. This is all to the good. It seems to me that "decentralisation" is the keyword here. I should like to add a few words on the subject of the situation at London Airport in a few years' time. What is going to be done? I understand that Gatwick is going to be doubled in size. Who is going to go there? B.E.A. have all their maintenance at London Airport. In France, the French insist that they remain at Orly, and anybody else can go more or less where they like, preferably to Le Bourget. It seems to me that we could take a leaf out of their book, but perhaps the noble Lord, Lord Mills, will be able to enlighten us on that matter.
§ Finally, my Lords, might I say a few words about helicopters, which are already an accepted form of transport? It seems to me that here we are in a poor way over sites for helicopter landings. The heliport at Battersea is a private venture by the Westland Aircraft 872 Company, and, with a lease of only seven years, is scheduled to close in 1964. In any case, it is too far from the centre of London to be considered suitable for a permanent heliport. It seems to me that it is imperative that urgent attention be given to this problem in spite of the reported objections of various local authorities.
§ My Lords, I have sketched only in outline the problems confronting civil aviation as I see them. Other noble Lords will, I know, be filling in many of the details and will be mentioning subjects on which I have not touched. This country, though not having produced the first heavier-than-air aircraft, has been in the forefront of civil aviation, in the vanguard, if I may say so, ever since the Wright Brothers first flew. Alcock and Brown were the first to fly the Atlantic non-stop; we held the air-speed and height records for many years, and Sir Frank Whittle invented the jet engine. Our airlines and our aircraft industry can continue to be world beaters if the Government give them the help and encouragement they need and use the imagination of which I am sure they are capable. My Lords, I beg to move for Papers.
§ 3.15 p.m.
§ LORD SHACKLETON
My Lords, I am sure that your Lordships have all been impressed, as I have, by the immensely thorough and balanced survey of the civil aviation position in this country to which we have just listened. I hope that the speech of the noble Earl, Lord Gosford, is one which will be read very widely, because it sums up not only the prospects but also the problems that confront us. He made his speech in a way which was entirely free from any Party political or other prejudice, and I shall try to continue the debate in the same way as he has initiated it, happily conscious of the fact that, because so much of the ground has already been covered, I shall not have to deliver as much of my speech as I originally thought I should have to.
Of course, the main question confronting civil aviation (as was apparent from the noble Earl's speech) is the survival and development of the great British Flag carriers, British Overseas Airways Corporation and British European Airways. When I say that, assure your Lordships it is not due 873 to prejudice. Even if I am for it, I can assure your Lordships that the remarks I make are not intended to suggest that there is not a future for the independents. But it was apparent from our debate on the subject of air licensing, when the Bill was before this House, that it was the view of both sides of the House—of the Government, of the noble Lord, Lord Mills, and of those of us who in some respects were critical of the Bill—that the position in this matter was well established and that the object of that particular Bill was to provide some proper place for the independents without in any way damaging our national carriers.
Before I go on to that, there are a few matters to which I should like to refer first, some of which have not been dealt with by the noble Earl, Lord Gosford. He has already discussed, in a way that made the position very clear, the problem of aircraft safety and the need for raising standards, particularly on charter flights. I think it rather follows that charter flights are, if anything, likely to call for greater experience and greater skill than do scheduled flights, whereas, unfortunately, I think the situation tends to deal with a position which is the other way round. There is obviously a greater risk in flying a route which is not so familiar, and it is for this reason, perhaps, that some accidents have been caused. They have not necessarily been due to some basic fault in the aircraft or, indeed, in the operation of aircraft—although there have been instances of that—but there is obviously a greater risk involved.
I should like to turn now to the question of airport facilities. We did discuss this matter at great length in the summer; and we are now promised legislation, which the noble Earl, Lord Gosford, has already explained, so I shall not go into it in great detail. I should, however, like to urge the Government to press on with this as quickly as possible. There is no doubt that there are growing difficulties, growing troubles, and, if I may say so, a growing irritation amongst the travelling public. We know that the situation at Heathrow to-day can be absolutely chaotic. There is the need for the development of better facilities; there is the need for the development of the pier system, which was advocated a long while ago; and 874 there is also the need to be able to get to London Airport more easily, notwithstanding the opening of the Hammersmith flyover. The only effect of that is that, instead of spreading the jam more evenly along the length of the road, it concentrates it at some point. We know that the departure of aircraft is being held up by the non-arrival of buses; and if one wants to go out to the airport by private car, one has to leave very early for fear of being caught in a traffic jam.
One of the main attractions of air travel in the past has been its relative simplicity and its freedom from the irritation and frustrations of other types of travel. Incidentally, although this is not strictly a problem of air travel, it certainly is a problem for the travelling public, and may perhaps even add to the confusion. Could not the Government bring some pressure to bear, even if they have to go to I.A.T.A. on it, in order to allow those who wish to do so to book their tourist seats? It is really a ridiculous spectacle, to watch people rushing madly out to an aircraft, walking, as they hope, at a dignified but fast pace in order to choose what they think is the safest seat, or, if they happen to have a slipped disc, to choose an aisle seat so that they can put their right leg out, and so on. I suggest that this really is a reasonable request to make. After all, if you travel on a railway you can book your seat if you go second-class, and I do not see why you should not be able to do the same in an aeroplane.
We have already discussed the serious effect of the high cost of British airport charges. This is a matter on which we get very little satisfaction from the Government, who defended the position on a reasonable ground, as it seemed to me, by saying that it was wrong, in their view, that the British taxpayer should in this way have to subsidise the airlines. But the consequence of these very much higher charges—the figures have been given and really cannot be disputed; the noble Lord, Lord Ogmore, gave them at length and compared London Airport with Idlewild—is to penalise our own British operators, whether they are publicly or privately owned, because they are the greatest users of our airports. Although they 875 are competing with foreign airlines, they have the greatest number of landings in this country and therefore the cost is the greatest to them. This is a penalty which I hope the Government will take very seriously. This is not just an attempt to get a concealed subsidy, but to enable us to compete on equal terms with other operators.
My Lords, a particular point about airports which I would mention again is that the British, in the shape of the Ministry of Aviation and the Government, are, I think, being a little too fair-minded in regard to foreign operators concerning the use of Heathrow and Gatwick. The French make no pretence about reserving the best facilities for themselves, for Air France, at Orly Airport. Yet we are all the time suggesting that we must be fair to the foreigner, that they must have the same chance as we. If they are going to have to use Gatwick at some time, then so are we going to have to use Gatwick. It really is a nonsense, because the greater part of the maintenance of our aircraft is, not surprisingly, done in this country, and it would be very much more convenient if the aircraft which have maintenance and repairs to be done at Heathrow were always allowed to use the airport facilities. It is a much greater problem for them, and the split in these operations entails an additional charge and an additional complication for British European Airways; and, indeed, the split in the use of certain facilities at Heathrow itself is a problem for B.O.A.C. So I hope that on this matter we can follow our more basic instincts and pursue a purely British policy.
I should now like to turn to another aspect of civil aviation which has not, perhaps, received enough attention either from the Government or, indeed, from Parliament. This is the need for developing private flying, and particularly flying by executive aircraft. At the moment, the general impression is that flying by private individuals or by businessmen, and the manufacture of these small aircraft, is a matter which we tolerate but which we do not encourage. This is a very clear impression which, if I may say so, is revealed in the attitude towards private flying of the Government—and in this matter I make no distinction between 876 one Government and another—and the attitude of the officials. On the whole, the Ministry are backward in their regard to this matter. It is a complication, a frill, which is, in their view, of minor importance in comparison to the big airline operations. The classic example of this has been in the use of airports, and the refusal to allow private aircraft to use our main airports. The battle of Heathrow has now been won, I believe, and under appropriate control private aircraft can now go to Heathrow.
But the most important issue is the future of Croydon. This matter is still under consideration by the Government. Very naturally, this large open space is desired by other potential users, and it is not surprising that local authorities want it for building houses, and so on. But Croydon Airport could be a perfect and ideal airfield for private aircraft. When we consider the position in other countries, in Paris, Chicago and New York, and the amount of private flying that is done, it would be the height of folly to lose this valuable asset. At the New York airport at Teteborough there are no fewer than 400,000 aircraft movements in a year more than at London Airport and there is abundant need to ensure that Croydon should be available. Croydon may have sentimental attractions for some of us who landed there in the earlier days of flying, but it is not only on sentimental grounds but also on sheer hard national need that I claim it should still be preserved for flying.
In passing, I would urge that Air Traffic Control should perhaps be a little less restrictive. There is the impression that it is unduly restrictive on private fliers and certain prosecutions have led to very severe penalties, even though in some of these cases there has been no real risk and no one has suggested that there has been any real danger to aircraft. I realise that there is the view that anybody who flies in an area where there may be airliners is a menace, but there is only so much air space and unless we are going to rule out private flying we have to consider whether prosecutions and the imposition of severe penalties of £250 or more are comparable to the approach we make to road traffic offences. I cannot go into the case at the moment because it is sub judice, but I understand that a 877 private flyer who has lost his way, is alleged to have menaced an Irish Viscount coming in to land. I know of other cases where there has been no risk whatsoever and yet severe fines were imposed, I suppose with a sense of indignation. I think that we ought to look again at this aspect of the matter.
Potentially there is an important market for executive and small aircraft. Your Lordships will have seen an interesting development of a new group. I think that the initiative shown and the risks taken by Mr. Peter Masefield of Pressed Steel and his associates in going into a field which for so long has largely been left to the Americans deserve public congratulation and praise on national grounds. At the present time, we import something like £1 million worth of aircraft of this type, all of which is costing us vital foreign exchange, and the developments of this group and the activities of one or two other companies have already shown that there is no reason why we should not build up a promising industry in the field of executive and small aircraft costing between £2,000 and £20,000. It has been estimated that something like 70 per cent. of output might well go to export. So there is a case on grounds of efficiency for making it possible for businessmen and others with important time to save to use their own aircraft freely in this country, and there is also a case for this industry on the grounds of earning important foreign exchange.
In view of what the noble Earl, Lord Gosford, has said about the aircraft industry, I will not go into details about these ticklish problems, beyond echoing his plea that the Government should again look at this problem of the cost of the development and introduction of new aircraft. In certain matters we have led the world and we are in danger of losing the lead. This is particularly true in regard to vertical take-off aircraft. I maintain that there are strong national reasons for doing everything we can, within reason, to sustain the British aircraft industry. Clearly we do not want to subsidise or "feather bed" an industry which is not efficient, but, from the nature of the aircraft industry, the ordinary competitive and market factors cannot apply and responsibility must rest upon the Government. I fully appreciated that the Government realise this 878 and have taken strong steps to rationalise the industry, but we also have to see that there are enough money and orders to sustain it.
I turn now to the vexed question of the position of the national airlines and the possibility of competition from the independents. First of all, I should like to say a word about the achievements of B.E.A. and B.O.A.C. It is worth while noting, as no doubt your Lordships have already done, that B.E.A. have earned an 8 per cent. return on the money which we as taxpayers had invested in the Corporation, and in a field where margins are very narrow and profits are uncertain. As the noble Lord, Lord Casey, said in an earlier debate, most big airlines are teetering on a knife edge in regard to profits, and this achievement of B.E.A. is something of which we can be proud.
The position of B.O.A.C. has been a little less happy. Even so, they have earned their 4 per cent., for, although they show a loss, this is after interest charges have been paid—that is, after what would normally have been the payment of dividends to preference shareholders. I do not need to go into the difficulties in detail, beyond pointing out that an example of the problems which an airline has to face was the difficulty created by the delay in introducing the Boeing 707. This was delayed by Government action, for perfectly good reasons—namely, safety reasons—but the fact remains that in these very sensitive markets they got off to a late start and that was enough to damage their prospects. It affected particularly the load factor, on which I shall have something more to say.
The most serious problem affecting civil aviation to-day is the question of the granting of licences by the Air Transport Licensing Board. It is not long since we debated the Bill which set up that Board. We then criticised the lack of clarity in regard to the administration of the licensing arrangements. From these Benches—and I think there were views which supported us elsewhere—we complained that the Licensing Board did not have a clear enough directive on how they were to administer their powers. The Report of the Air Transport Licensing Board says:The Act does not provide any positive guidance on policy for the Board to follow in 879 deciding whether or not to grant an application. It appears to have been the intention of the Legislature to leave the Board unfettered as regards the general policy they should pursue, and in particular free to exercise their judgment with no predetermined preference for any particular class of air transport operator or particular class of service.It would seem that the recent reversal of the decision of the Board is our fault, the fault of the legislation which was passed through Parliament. At that time, we fully accepted the assurances of the noble Lord, Lord Mills, and others that there was no intention of doing anything to damage civil aviation and the main national carriers; it was recognised that they were our main national carriers and that everything must be done to preserve them.
The issue on which the difficulty has arisen has been the question of money diversion. We tried to write into the Bill a very clear directive on this matter, but it was refused by the Government. I must say that, in my view, despite the fact that I did not like the decision, the Air Transport Licensing Board seem to have done their duty in the way that they thought Parliament intended that duty to be done. Now they find their decision overturned by the Minister of Aviation. I personally welcome the overturn of that decision, but I should be very angry if I were a member of the Air Transport Licensing Board. The news the noble Earl, Lord Gosford, gave us, straight from tie tape, that British United Airways had walked out of the Inquiry until there has been some clarification, is a measure of the confusion that has been caused.
It really seems to be folly that we should inflict this harm on ourselves. This is our own national industry. It is not something that we can allow to operate, unfortunately or fortunately, according to the working of free competition. We know that there is little in the way of free competition of a kind that once was understood to exist in all types of commercial activity. There is, in fact, complete control over prices and over the number of flights that can be flown by particular operators. These are matters of international negotiation. Therefore, the idea that people can freely move into this field and compete, as shipping lines have done in the past, is completely fallacious.
880 On the other hand, there is no doubt that there is any amount of competition with foreign countries. Those of your Lordships who have read the report of British European Airways will have a measure of the amount of competition that there is. For instance, they report that in the last yearAir France introduced all-the-year-round operations on the London-Nice route and increased its traffic by 59 per cent.; Alitalia, with new routes and new aircraft, increased its traffic to and from Italy by over 50 per cent.; Olympic Airways increased its London-Athens traffic by over 50 per cent. also; D.L.H. operated for the first time to Cologne over routes where previously only B.E.A. were operating; and T.W.A., using large jets increased its London-Frankfurt traffic 2½ times.B.E.A. then go on to describe how they intend to meet this competition. And there is no doubt that B.E.A. are highly regarded as one of the most efficient and competitive airlines in the world. Both B.E.A. and B.O.A.C. have taken the lead in pressing for reduced fares. But the margins are too small for us to play around in this vital field. We have too much at stake, both in the way of foreign earnings and in terms of national prestige. Last year, B.O.A.C. earned over £50 million worth of foreign exchange.
This is not the first bite into the national cherry. I do not propose to go through the history of Colonial Coach Services, but it was understood when Colonial Coach Services, with the disappearance of certain Colonies into independent countries, were consolidated into scheduled airlines, that the national carriers, B.O.A.C. and others, by accepting that formula were a party to a long-term settlement. Now they are threatened, as a result of this act, by the movement of new competition into a field where they already have plenty of competition. If they are to survive they have to plan ahead and have to order their aircraft. Airlines plan ahead in a way that perhaps other industries are unable to do. But if they are to order aircraft they must be able to make the best estimate they can as to where they are likely to operate and the extent to which they will be able to do so within this limited, internationally controlled field.
Both B.E.A. and B.O.A.C. have shown anxiety about their future aircraft ordering programmes. Over the past years 881 British European Airways have spent something like £130 million in buying British aircraft; and, as the noble Earl, Lord Gosford, said, they have, in addition, the responsibility of proving and developing these aircraft if they are to be brought fully into the market and if, indeed, we are to reap the considerable foreign exchange earnings of the aircraft manufacturing industry. As we all know only too well, our export usually depends on a firm and basic home market. The costs are enormous. The D.C.3 cost £20,000; now a new British European Airways aircraft costs £1 million. What the cost of these new supersonic aircraft will be nobody really yet knows.
I am sure that the noble Lord who is to reply has read the reports of the Corporations, and it may be he will say that they are excessively anxious. But I should like to draw his attention, and that of noble Lords, to the admirable report of B.E.A.—and I may say that the Air Corporations have set an example to the rest of nationalised industry, and to industry generally, in the fullness, clarity, and frankness of their reporting. This is what they say:Until now B.E.A.'s plans for the future have been based on a forecast of traffic growth which we were reasonably confident could be achieved. Now, however, the assumptions on which that traffic forecast was based, particularly the share of traffic on each route which would be carried by B.E.A., are in complete doubt.We have done this by our own legislative action. If the airlines are to succeed they must achieve a minimum load factor; everything depends on the question of load factor. As the new aircraft are introduced there is bound to be a period before enough new traffic is generated to achieve the break-even load. If we are to weaken the position in regard to load factor in the way that might have happened if the Minister had not accepted the B.O.A.C. appeal, we are in danger of pushing the profitability of these air corporations into the red. It must be against this background that the applications of the independents to move into fields where they see the prospect of profit, as they very naturally and properly wish to do, are considered.
Somehow a satisfactory solution to this conflict has to be found, and I am wondering whether it would not be possible for the Corporations and the inde- 882 pendents to co-operate a little more freely. There is already satisfactory co-operation, once it has been established. We see British European Airways cooperating perfectly well with Jersey Lines and Cambrian Airlines. But all that happens at the moment is a highly skilled slanging match in front of the Inquiry. I shudder to think what the cost is going to be. We notice in the recent Inquiry, where the Ministry of Aviation's inspector reversed a decision of the Board, that he made no award as regards costs. That is probably perfectly fair. British Cunard Eagle are obviously going to sustain a heavy loss as a result of the reversal of this decision. But somebody has to find the money. In the case of the B.O.A.C. appeal, we have to find the money. It is rather a worrying thought, in these days when there is so much bureaucracy and obstruction to action, that high-powered executives should spend their time in inquiries, fighting over competition. I would urge the Government to consider again whether there is not some simpler way in which we can settle this problem in the future.
I would only, in conclusion, assure your Lordships that this is not meant to be an appeal for public versus private enterprise. I think we are all agreed that we have reached a stage of development where there are certain fields that properly belong to one or properly to another. This was made clear last week in the debate initiated by the noble Viscount, Lord Caldecote. We can at times pay too high a price for an abstract concept of competition. I hope that we shall be able in future to approach the problems of the civil aviation industry free from some of the political prejudices which both sides have shown, but very conscious that it is the national interest that has to be served. I think the evidence is now available as to how Government policy should be pursued. Whatever Government is in power will undoubtedly come under heavy criticism. It is obviously the duty of Oppositions and all other Members who are not members of the Government to criticise the Government. But I think that on this matter the Government are in danger of incurring more than passing criticism, and I would urge them to look at the operation of the Air Transport Licensing Board—if in fact they have still 883 got one after recent events—and see whether we cannot get ourselves out of these particular difficulties.
§ 3.52 p.m.
§ THE EARL OF DUDLEY
My Lords, the few remarks which I should like to address to your Lordships this afternoon concern in the main the somewhat chaotic conditions now obtaining at London Airport which have already been touched upon by the noble Lord, Lord Shackleton. I must make it plain that I speak in no way as an expert like the last two speakers, but merely as a complaining traveller, of which sometimes I feel there is an insufficient quantity. I read in the Press that the control of the apron of this airport is to be handed over next year to B.E.A. by the Ministry of Aviation, and the control of the airport buildings and the services therein is to be vested in some kind of board. I hope the noble Lord who is to reply to the debate this afternoon will tell us a good deal more about these arrangements, because a great many people view them with considerable concern.
We had rather a rude awakening yesterday in finding that where Ministries which are in charge of State-owned undertakings have "passed the buck" to a board, those Ministries subsequently disclaim any responsibility of control, even when an important national interest is concerned. So far as the apron is concerned, I am sure that B.E.A. will run it extremely well. The sad truth is that London Airport, in spite of being a relatively modern airport, is badly designed and conceived. The buildings should never have been placed in the centre, but on the perimeter, which would have obviated the present limitations of landing and parking of aircraft and the difficulties of access to them by passengers. I think your Lordships will agree that it is essential, having regard to the increasing volume of air travel, that a long-term view should be taken about this, especially as I believe that the landing charges at London Airport are higher than at any other airport in the world, and so finance should not be the main objection. It is very important from every point of view that London should have a first-class airport and that determination should be shown by the Government about it.
884 As regards the services provided by the Airport, an up-to-date and carefully thought out plan should be made. A vastly increasing number of people now want to travel from A to B at the minimum cost and with the maximum degree of safety and comfort, and it should be the duty of the Ministry to ensure that this is done. There is no need nowadays to encourage passengers to fly, as was the case when air travel was in its infancy, by giving them free drinks, unnecessarily lavish meals, and so on. I should like to draw attention to a few of the irritations which they now have to endure at London Airport, and which are well-known to most of your Lordships. If bona fide passengers arrive at London Airport in a private car—which they have to do if coming from a country district—they are not allowed to pull up at the main entrances, but are diverted to a parallel road from which everyone, including the aged and infirm, have to walk across the main road at the risk of their lives, and maybe during bad weather. The porters run the same risk of discomfort, and this factor has probably contributed to their present dissatisfaction. I asked a Question in your Lordships' House on May 3 last, urging that some form of protection should be provided, and that until then bona fide passengers should be allowed to draw up at the main entrances. But nothing so far has been done.
The next discomfort is the long queue while the process of ticket scribbling is carried out by an inadequate staff. Obviously, this is something that has to be simplified for the future volume of traffic, and I should like to know whether anything has been done to try to improve this. Then there is the payment of the Airport fee in another queue. Why this should not be embodied in the price of the ticket, I do not understand. Then the harassed passengers go up on the escalator to the main lobby, passing a notice, saying that beyond this point only they and their friends are allowed to go. But there is no one to enforce this regulation, and the lobby and all the shops, restaurants, bars and other amenities which are presumably provided primarily for them are swamped by a milling crowd of sightseers and outsiders, so that sometimes it is almost impossible to move and it is difficult to find a seat. I am told that at night the bars are 885 crowded with local people who are able to drink there long after their own licensing hours. Can we be assured by the Minister to-day that something will be done about this and that outsiders will be kept within specified limits?
Then, after the passenger has passed through the channel door and awaits the loudspeaker call to the aircraft, there is again considerable discomfort, especially if there has been a hold-up due to bad weather. There are not enough seats, and the tables are filled with dirty teacups and litter of all kinds, and the ashtrays are loaded with smelly debris. The catering services are insufficient. All too often the forecasts are mistaken and erratic, and passengers are told that their aircraft will leave one or two hours late. After frantic telephoning to put off engagements, they are subsequently told that their aircraft after all is only a few minutes late, and sometimes the aircraft call is missed by passengers whilst they are still telephoning. I am quite sure that passengers realise very well all the difficulties with which the airport authorities and air lines have to contend, especially in bad weather, but in spite of this there seems to be great lack of imagination and organisation.
Possibly in the future all the accommodation in any aircraft will be of one class, and no one would have any objection to that, especially if fares can be cheapened by virtue of lower costs in running the larger and up-to-date aircraft which we shall get as time goes on, and a little more room is allowed for a bulky person. But a system of allocation of seats would obviate the present ugly and undignified rough-and-tumble which takes place in the case of tourist travel and which can be particularly hard on the weaker sex.
In conclusion, I should like to congratulate the noble Earl, Lord Gosford, upon initiating this debate, and for his excellent speech, particularly as I understand that he was suffering from the hardship of having caught some fall-out or virus during his visit to Russia last week. I trust that this debate will lead to many of the inadequacies in civil aviation being again carefully examined by the Minister.
§ 4.0 p.m.
§ LORD SHEPHERD
My Lords, I would first of all follow the noble Earl, Lord Dudley. I suppose I travel through 886 London Airport as much as any noble Lord, and I frankly did not recognise his description. It sounded more like Dum Dum Airport in Calcutta. Undoubtedly at London Airport North the situation is not what any of us would wish, particularly as a main gateway into London for overseas visitors. This is soon, I hope, to be a thing of the past. But undoubtedly the Government cannot take much credit over the fact that it has taken so long for the abolition of London Airport North. London Airport Central, I think, in the main is a good airport. It has good facilities although, as I shall point out later, I think those facilities will shortly be so strained that something drastic and radical will have to be done by Her Majesty's Government.
The speech that we had to open this debate from the noble Earl, Lord Gosford, was one which, in some ways, will leave later speakers requiring sympathy, because he covered the ground so well that he has left for the rest of us only the crossing of "t's" and the dotting of "i's". But from the Opposition point of view, while we thoroughly agree with all the views the noble Earl expressed, we have some quarrel in this matter with Her Majesty's Government.
When one looks at civil aviation one has also to take into account the position of defence and military policy, because this is a matter that has a great impact upon the viability of aviation, in particular on the manufacturing side. Undoubtedly we can have pride in the achievements of our aircraft industry, but I have a feeling in some ways that that pride is becoming a little tarnished, certainly the pride of the old days. It is true the aircraft industry makes considerable contributions to our overseas balance of payments. I believe in 1959 the aircraft industry exported merchandise worth £156 million; in 1960, £142 million; and, I believe, up to September of this year it is a figure of £118 million. But it was during this period that there was a remarkable expansion in the aircraft industry throughout the world. All major airlines were re-equipping themselves with modern aircraft, and it is regrettable that we did not see during that period a rise in our exports.
I do not think it is right to compare our progress with that of the United States because they have a large internal 887 market. But when we compare our own progress with that of France, which is perhaps our biggest European competitor, I think we should have feelings of disquiet. My figures are that in 1959 the French exported £40 million worth of aircraft, spares, or engines. In 1960 it had risen to £83 million and in 1961, the last figure, it was £107 million. These figures will show that whilst Britain's exports remained relatively stagnant, or about the same, the French had been able to boost their exports to the tune of nearly £67 million.
Why is this so? Is it a question that our designs were wrong? I do not think that is in fact the case. The Comet was an aircraft well in advance of anything in any other country. It is to be regretted that its early models had such faults that we lost the great advantage that de Havillands had given us. The Vickers Viscount has been a major success in all markets. There are other aircraft which have sold in smaller numbers, but when one looks at the aircraft that we have produced and which we are able to sell (I direct this word to the Independent Overseas Board, which is not an associate of B.O.A.C. or B.E.A.) we get a very small figure—and I talk of aircraft and not of engines.
I do not think it is a question of design. There is some case on the question of delivery, and perhaps we could have sold many more Viscounts if the manufacturers had been able to produce the aircraft more quickly. I believe many overseas airlines bought the Lockheed Electra because by the time they could have obtained the Viscount the model they had ordered would have been out of date. As to the question of price, here, my Lords, I am not too sure. I believe, though, that in general our prices compare favourably with the French, and possibly with the American. However, of this I am quite convinced: that the major reason why we cannot sell our aircraft is the question of credit.
To me it is a remarkable thing, when we consider the Far Eastern route, the route from the United Kingdom to Australia, where we have a combination of Qantas, the Australian airline, Air India and B.O.A.C., that Qantas and 888 Air India bought Boeing 707s. They were prepared to fly their old Super-Constellations until they obtained their Boeing 707s. And yet B.O.A.C. were flying Comets. I should have thought from an economic point of view that it would have been an advantage to both Qantas and Air India to have run a service on Comets, because then they could have pooled not only their maintenance staff but their equipment, which is a great advantage, because we know from B.O.A.C. that the Comet is a money-winner on the Australian service. And yet Qantas and Air India bought Boeing 707s. I have it on very good authority that the aircraft companies were able not only to offer the credit but to re-purchase the old aircraft of these airlines and to offer such terms that these friends of ours reluctantly had to say, "We cannot take the Comet; we cannot enjoy the gain that would come by having a pooled service. We must buy these American aircraft."
I think the story may be very true, even when we get down to military aircraft. The fact is that Australia, a country that is intertwined with us in S.E.A.T.O., is not buying a British fighter; it is buying a French fighter. And yet, as I understand it, there is nothing basically different between the Mirage fighter and, I think it is, the Lightning. I think this is something which the Government must go into. It is no good—I will not say doling out £7½ million to £9 million a year— supporting an industry if you fail to give it the real thing that will make the article that it produces saleable.
I will turn now to the position of the airline operators and the Air Transport Licensing Board. My noble friend Lord Shackleton spoke in the last debate on this subject. The noble Lord, Lord Mills, and the noble Earl, Lord Bathurst, speaking for the Government said that the point of the Bill was to break the monopoly of the public corporations; that it was to create an element of competition.
Let us again consider monopoly, because although the B.O.A.C. position has been saved at the very last moment by the action of Her Majesty's Ministers, the position of B.E.A. is still at stake. Therefore let us examine the Government position on monopoly. There are 889 eighteen different ways by which you can leave from London to go to Rome; there are fifteen ways from London to Frankfurt; there are seven ways to Hamburg; there are fifty-six ways to Amsterdam — by competing airlines. Therefore, B.E.A. is in no position of monopoly on those routes. It has to fight for every piece of business it obtains. What has B.E.A. in fact done? In 1949 B.E.A. carried 44 per cent. of passengers coming into or going out of the United Kingdom; 56 per cent. were carried by twelve airlines. In 1959-and it is so for 1960-B.E.A. had uplifted their share of that business to 56 per cent. and the others had been reduced to 44 per cent., but—mark this—that was then shared by twenty different airlines, twenty different airlines operating into the United Kingdom.
How can the Government then say that B.E.A. are in a monopoly position? Both on Second Reading and on the Committee Stage of the Bill the noble Lord, Lord Shackleton, leading for the Opposition, took the view that if the independents were brought on to these routes this must affect in a major way the position of these two public corporations. I am sure that most of your Lordships know that on the London to Paris route the number of services in and out is agreed between the British and the French Governments, and they designate who shall be the carriers. If, as the Government said, there was an increase in passengers which the independents could share, that increase itself would be shared between the carriers of France and the carriers of the United Kingdom. That would mean that the independents would have to share in half the expansion. If the independents were to make this service profitable there would have to be a marked increase in passengers, and that is not the case to-day.
But B.E.A., like any other commercial enterprise, must consider the future and its capital investment. B.E.A., as I understand it, have been budgeting for a 22 per cent. increase in sales; they have in fact achieved in this year an increase of 14 per cent., while the world average is 12 per cent. Their aircraft capacity is increasing and will increase very considerably when they get their Tridents. If the independents come on and are to partake in this business, un- 890 doubtedly B.E.A. will find themselves unable to obtain their load factor on these new aircraft. If you bring in the independents you will undoubtedly have a major effect, not only on the present position of B.E.A. but on its future policy. And, again, its future policy may have a grave effect on the manufacturing side of the aircraft industry, because neither Corporation can sensibly go ahead with their major purchases of aircraft and equipment unless they have a consistent policy which they can follow.
I should just like to say one or two words on the Report of the Air Transport Licensing Board. First of all, I think we should acknowledge our regret at the death of Lord Terrington, who was first Chairman of this Air Transport Licensing Board. We have already paid our tribute to his services, not only to this House but to the air industry in general, but I think we should remember his name in this debate. The Board are undoubtedly worried on a number of aspects: first of all, on the financial status of operators, and here, obviously, they are considering the position of the independents. Here one wants to pick one's words carefully, because undoubtedly among the independent airlines there are a number of very worthy organisations. But we must remember that during this year there have been three failures, and when an airline company gets into economic difficulties we must recognise that there is considerable doubt as to the airworthiness of its aircraft.
I should like to put this to the noble Lord, Lord Mills. The Board say that they have had difficulty in examining the financial standing of the licence holders and that they did not wish to hold back last year's holiday business by refusing to grant licences until they were satisfied. But in view of the three financial failures of this year, I think that the Government should treat as a matter of urgency the provision of skilled staff to the Board so that by the time the next summer season is with us the Board themselves can be thoroughly satisfied that they can grant licences to these companies as they are of a financially safe standing. I think this is something that is important; I think it is urgent, and I should not have thought 891 it was beyond the capability of the Government to provide officers to carry out this investigation.
The other matter which I wished to speak about was the question of insurance. The Board are uncertain on this question. They note that under the Air Navigation Act, 1936, powers were taken to introduce compulsory third-party insurance. But they recognise the nature of accidents that occur to-day and the difficulty of insurance companies in giving full policies, and that where accidents have happened in the past there has been no difficulty over insurance. One does not want to visualise a terrible tragedy such as that which took place some time ago in New York; but it is possible; and I do think that the Government should consider the whole question of third-party insurance.
That is all that I wish to say in this matter, except on the question of air control. A Bill is being introduced into another place this week concerning Eurocontrol; but what worries me is that this control is still a year or so away. One repeatedly hears of near misses. Cannot something be done to speed up this control or to increase the present control to prevent these near misses? We have been fortunate in this country in that we have not had collisions, but we are still getting reports of near misses. I ask the Government to consider this matter.
In conclusion, I ask Her Majesty's Government to make clear, both to the Corporations and to the independent companies, what is the official Government view so far as future licensing is concerned. I think it is most unfair for an independent company to have been given the hope that they had a future on the Atlantic service. That they should have bought three Boeing 707's, with all the expenditure involved, and to be granted a licence but then to have it rescinded is, I think, unfair to the independent company. But, more important, I believe, is that we must have a known and consistent policy from Her Majesty's Government towards the public Corporations.
§ 4.22 p.m.
§ LORD MERRIVALE
My Lords, earlier in the course of his speech the previous speaker referred to the rise in 892 exports of the French aircraft industry, which we can only deplore as, to some extent, it adversely affects our industry. But I think that in the main this rise has been due to a firm directive on the part of the President of the French Republic to the aircraft manufacturing industry. One recalls that only a few years ago France was producing mainly prototypes which were not going into the production stage. They now have successful aircraft in the Caravelle, the Mystere and the Mirage. I feel that a firm directive on similar lines from Her Majesty's Government may possibly be of assistance to our aircraft industry.
I should like to comment on the decision of the Minister yesterday to uphold the appeal by B.O.A.C. against transatlantic air services by Cunard Eagle. During the last six years the combined Continent-United Kingdom air traffic on the North Atlantic route to and from the Eastern seaboard has increased at a yearly figure of just over 19 per cent. This year, at the start of the summer season, round about April, the United Kingdom-United States traffic decreased by 11.8 per cent. whilst the Continent-United States traffic increased by 3 per cent. This shows that although there was a fall in the overall North Atlantic traffic, the Continent was attracting many more air passengers.
Without wishing to weary your Lordships on the matter, I should like to quote one or two percentages. International competition on these routes was as follows: during 1961 (that is, the winter period) if one takes in the jet and the propeller aircraft, 12 B.O.A.C. services terminated in the United Kingdom, whilst only 5 foreign services terminated here. On the other hand, B.O.A.C. had only 7 services in transit through this country, against 38 services provided by foreign competitors. In the summer of 1961, B.O.A.C. had only 9 services in transit through this country, but international competition provided 51 services.
That brings me to some remarks contained in this year's B.O.A.C. Annual Report and Accounts, from which I should like to quote two paragraphs, as follows:The results of 1960–61 were achieved despite further evidence of the extent to which B.O.A.C.'s competitive position on the Atlantic suffers from the Corporation's inability for a variety of reasons to offer 893 through services from North America into any of the main Continental gateways, such as Park, Rome and Frankfurt.All the other major Atlantic carriers—P.A.A., T.W.A., K.L.M., Air France, S.A.S., Alitalia, Sabena and Lufthansa—can offer either direct services into the major cities of Continental Europe or at least through services with the same aircraft. As B.O.A.C. is unable to offer the North American market the advantage of a single carrier network to and within Europe, it tends to be regarded in the market as operating only to Britain, with other carriers, connecting services available thereafter.As I understand this problem, with regard to Paris, at any rate, the French Government are agreeable to allowing B.O.A.C. aircraft to continue on to Paris, providing a balance is maintained between the French and English capacity between London and Paris. I feel that B.E.A. in this respect are absolutely unyielding in their attitude. I should therefore like to ask my noble friend the Minister whether he is willing to exert his influence, and whether his right honourable friend is also, to get B.E.A. to extend to B.O.A.C. its policy of commercial co-operation with foreign airlines operating on parallel routes, as mentioned in B.E.A.'s Report. This might well be in the nation's interest.
I should now like to turn to this question of excess capacity over demand. As your Lordships are well aware, in the main this is the result of wishing to provide a better service and of perpetuating a policy of lower fares. Jet aircraft, with their increased capacity, are cheaper to operate than piston-driven aircraft, and now that the evolution has started there is no other alternative but to see it through to the end. Therefore, my Lords, to cope with the present situation, as I see it, an aggressive sales policy is required by all airlines—or at least by British airlines.
That is why I was a little disappointed by the words the Minister used yesterday, when he said:The Minister fully accepts the picture of too many seats chasing too few passengers which a witness for B.O.A.C. presented.For I feel, my Lords, that if the Minister had entered into negotiations which would enable B.O.A.C. to offer through services from North America to the Continent, and if Cunard Eagle had been given the opportunity to provide a North Atlantic service, this country (I am talking of this country as a whole 894 and not of any specific airline) might in the future be carrying a larger percentage of passengers than it is at the present time. I say this, my Lords, because I was interested to read some remarks, which I believe to be true, which were made by the Air Transport Editor of Flight in the issue of November 2 this year. He said:Two impressions stand out most strongly.This was when he visited Cunard Eagle's Western Hemisphere Division.One was the reputation and wide currency in this hemisphere of the name Cunard; the other was the invigorating American idiom in which this British airline handles its selling and marketing.My Lords, with regard to the position of our main independent operators vis-á-vis our aircraft and manufacturing industry, I feel that the major operators have a part to play in providing the essential home market for new aircraft, because it has been stressed by other speakers that, in effect, no manufacturer can expect to receive an order from abroad until one, at least, has been received from an operator in this country. Naturally, the Corporations must play the foremost rôle, but I think we should not forget the important part that British United Airways, for instance, played in this context in enabling firm orders to be received for the BAC 111, because they were the first ones to place an order for this aircraft, and due to that fact other orders for that aircraft were placed.
B.E.A. have ordered twenty-four DH.121's—which is the Trident—built to their specification, and I understand that they have an option on a further twelve. But, so far, no other orders have been received for this aircraft, and it leads one to think that, possibly, when the specification was laid out for this aircraft, insufficient attention was paid to possible international demand. If one considers the VC.10, which has been ordered in reasonable quantities by B.O.A.C., one sees that orders from abroad have been received for this air-craft. In fact, I am very pleased to say that the R.A.F. ordered five. It is a considerable achievement, my Lords, that, in all, fifty-seven aircraft `Nye been ordered straight from the 895 drawing board, because, as your Lordships are aware, as yet no VC.10 has flown.
Finally, I should like to say a few words on an important question to which most noble Lords have referred to-day, and that is the question of safety in the air. On November 14 last the honourable Member for Barnsley initiated an Adjournment Debate on the independent airlines and safety standards. I agreed with the Parliamentary Secretary when he said in reply [OFFICIAL REPORT, Commons, VOL 649 (No. 11), col. 332]:I think it fair to say that exactly the same standards apply to the independents as to the Corporations.That is what he said on the question of safety standards. Apart from that, my Lords, I found his speech rather disappointing in so far as on this question of safety in the air he referred only to the air operators' certificate, and, so far as I can gather, it lays down only that certain aircraft may be used in certain zones in the world. How that is going to play a leading part with regard to air safety, I fail to see at this stage. His second point with regard to air safety was a reference to a private publication which draws the attention of operators and pilots to certain aspects of safety in flight, but not to any navigational aids or any equipment which would be of use to them.
However, last Friday in another place a most useful and timely measure was given a Second Reading, and I refer to the Civil Aviation (Eurocontrol) Bill. I believe that several of your Lordships have given this Bill a strong welcome, and I should certainly like to include mine. The Eurocontrol specification is fairly stringent, I am glad to be able to advise your Lordships, and I understand that this organisation have stated that the American international short-range navigational aid will not meet their requirements. I trust, therefore, that Her Majesty's Government will press for the adoption of the Decca Harco system, which is a logical development of the Decca system and which uses the same ground stations. Without wishing to weary you with technical details, my Lords, I understand that the equipment will provide an accuracy of not less than 896 a quarter of a nautical mile by day and not less than one and a half nautical miles by night under the worst conditions from ground level to 80,000 feet and above.
Regarding the Decca system, I should like to quote, if I may, two short excerpts from letters of users, particularly concerning operations where limited facilities are available. I do so, because I think that this type of equipment could be of considerable assistance to independent operators, who are particularly liable to fly charter flights. One letter from Ferranti Limited says:The particular benefits we have found from Decca over other navigational aids are as follows:1. The ability to operate into airfields which are located outside the airways pattern and which very often have limited facilities themselves.Another letter says:We fitted Decca because we operate into many small ill-equipped airfields all over Europe, and we must be able to fly in any weather, day or night, with the same regularity as from any major airfield.So, my Lords, I feel that the development of this form of navigational aid would be most useful. I am therefore wondering if Her Majesty's Government would be willing to look into this question of seeing whether our charter aircraft are fitted with the appropriate air navigational aids consistent with the flights they may be called upon to make, which, in the main, are outside the main trunk routes. I think, too, that possibly an extension in the use of films and devices to simulate approaches—that is, prior to a particular flight—should be encouraged with a view to familiarising the pilot with the approach, particularly to the less commonly-used airfields. Some films are already available, but it is probably something which could be extended even more.
I should like to say a few words on the question of automatic landing. I think an important point here is that there is a different outlook on this problem between us and the Americans. The Americans believe that all-weather landing can be achieved safely by developing existing single-channel automatic pilot systems, and with new types of instrument display the pilot can take over in case of a failure. On the other 897 hand, the British approach to this problem—and I think it is a wiser one—is not to believe in pilot participation, and therefore to concentrate development on the lines of multiple-channel auto-pilots. This brings me back to the new aircraft, the VC. 10, which is to be fitted with such equipment. At the present stage of development these aircraft will be able to descend (to use a technical term) on a glide slope beam. Pitch guidance—that is, in altitude—would be provided in the latter part of the approach by a radio altimeter, but the pilot would still have to take over for Azimuth or direction control.
So, as development is at the present time, a completely automatic aid is not available. For it to be available, further research and development is required. For that, further funds are necessary, because this is not a military requirement; it is a civilian requirement, and a very important one because it affects the safety of passengers. But the contract for this equipment was on a fixed basis and was granted by B.O.A.C., and therefore the firm concerned have to work to a fixed price. I fear that the development of this essential equipment could be held up through lack of funds for research and development, and I am wondering whether Her Majesty's Government would carefully look into the matter to see whether or not they consider it a venture worth supporting, for I feel that this equipment, when fitted to the VC.10 and other new aircraft, has a large part to play in developing our export of civilian aircraft. Here, I should like to pay a tribute to the fine work in this respect of the blind landing experimental unit. A fair amount of money has gone into this organisation for development of equipment, but their equipment is mainly for military aircraft. The experience they have gained has naturally been of great assistance to private industry, but the safety standards of a military aircraft are lower than the safety standards of a civilian airline operator.
To end, I should like to echo the words of the B.O.A.C. Report, which state:In particular, the Corporation hopes that in Britain the Minister of Aviation will ensure that the installation of ground aids for automatic landing does not lag behind the certification of the airborne equipment.898 I think it would interest your Lordships to know what ground system is to be used in the future at London Airport. Perhaps my noble friend, when he comes to reply, can tell us that. Is it to be the new type of I.L.S., or is it to be the blind landing experimental unit leader cable system? Also, would my noble friend confirm that adequate funds are being provided for research and development to solve the problem of rapid automatic change-over for duplicate installations, which must reflect the same degree of safety as the airborne equipment, with regard to blind landing? I understand, without wishing to weary your Lordships with technical details—I have already spoken for too long—that, in aircraft, the change-over time, should there be a failure, is one-tenth of a second, while a change-over on the ground can be effected only in two seconds. I wonder whether my noble friend could say something on that matter when he comes to reply.
§ 4.48 p.m.
§ LORD BRAYE
My Lords, I feel that this topic has been very fully covered, and I therefore will not detain your Lordships long. However, on the subject of blind landings, as this House knows, I have several times asked the question whether something should not be done. The last answer I received was to a Starred Question about three months ago, when I was told that it would perhaps be three years before the ground radio guidance system for automatic landings would be anything like near complete. I know this is a very difficult and technical subject. If I may go back to the year 1898, and to Percy Pilcher, who was the first man to fly in England, I would point out that from then onwards men have always been dreaming of automatic landings. Many experiments have been tried out on it, and I have seen some of them myself. I can only hope that this ground radio guidance system will be a success when it comes.
There is only one other question I should like to ask, and it is this. I think it was the noble Lord, Lord Shepherd, for the Opposition, who said that B.E.A. had competition from British firms, whereas recently, as your Lordships know, the Cunard Eagle, having been almost told they would have a licence, now find it is withdrawn. But 899 the noble Lord did not imply that B.O.A.C. had any competition from English firms. I do not know exactly what the noble Lord, Lord Shepherd, meant by that statement, but if B.E.A. can have competition from English firms why should not B.O.A.C. have similar competition? My Lords, I will not say any more—it is getting late, and I know there are several other speakers—but I should be grateful if those two questions of mine could be answered.
§ 4.50 p.m.
§ LORD STONHAM
My Lords, I would add to the expressions of thanks which he has already received my own thanks to the noble Earl, Lord Gosford, for introducing this extremely useful Motion, and I should also like to thank him for a diverse and authoritative (as one would expect) presentation of the case. But, above all, I would thank him for the fact that, though it was objective, it was a truly British presentation on behalf of this very vital industry. I often have the impression that this is an industry where those who run foreign air lines play their cards very close to their chests—as they are entitled to; but they seem to have more "Jokers" handed out to them by their respective Governments than those who run British air lines.
It is right that we should speak up on behalf of this industry of ours, and I am very glad that the noble Earl did so with such knowledge and authority. I was particularly pleased at his mention of the need for a strong home aircraft-manufacturing industry, and, of course, of the need for exports. My noble friend Lord Shackleton supported him in that when he said that we should do everything possible to sustain the British aircraft industry. I could have wished that both noble Lords had said rather more on that point, because when we survey the whole aviation and aircraft picture, the really depressing and alarming feature is the impending closure of a number of famous plants. We can never bring them back again, and we can never have a really effective British civil aviation industry, in my view, unless it is based on British 'planes, designed, manufactured and built here.
It is not only a question of the distress occasioned to the workers and 900 their families, though that is bad enough. They have let down roots in these places, only to find, perhaps, that there is no possibility of work for them at all. I hope the noble Lord, Lord Mills, will be able to say something about this when he comes to reply, but I think it calls for an assurance that these workers who will so soon be unemployed should have the most favourable possible financial arrangements made on their behalf with regard to their redundancy, and the utmost efforts by the Departments concerned should be made to find suitable employment for them, with satisfactory transport and housing arrangements if they have to move to other areas. That is the personal point of view of this question of distress.
From the national point of view, it is a real tragedy that we should be breaking up teams of skilled technicians of the type of which we already know we have far too few. These teams take years to build up. They can be dispersed overnight, but it would take years, and perhaps be virtually impossible, to build them up again. It is impossible to escape the conclusion that with wise, energetic, and farseeing action on the part of the Government, this tragic waste could still be avoided. Is it necessary that 4,000 men at the famous Gloster factory should become jobless by June next year? These men are not labourers; they are skilled technicians. And what of the 1,600 men at the Christchurch de Havilland factory, who fear that their work is going to the Chester factory owned by the Hawker-Siddeley group? Yet at Chester there is a proposal from the workers that they shall work four days a week instead of five in order to avoid the dismissal of some 350 men before Christmas. Suggestions have been made by other noble Lords who have already spoken, particularly by my noble friend Lord Shepherd, as to the things the various aircraft manufacturing firms ought to be doing in order to avoid this particular situation; but I believe that the Government ought to be doing much more than they are, and, if they did, I feel sure that these slow-downs or shutdowns could be avoided.
The noble Earl, Lord Gosford, mentioned one of the possible ways to meet 901 this situation when he spoke of the possibility of a British supersonic aeroplane. I do not wish to follow him into the intricacies of whether it should be a Mach-2, 1,350 miles per hour aircraft, or a Mach-3, 2,000 miles per hour aircraft. It is perfectly obvious, of course, that the Russians can build one of the Mach-2 type almost at any moment by basing it on their existing bombers, and the Americans could build a similar type quite soon as an extrapolation of their V-70 bomber. It is also true that the Americans are said to be anxious to produce this 2,000 miles per hour type for prestige and other reasons. My Lords, I would submit that we are not concerned with what the Russians or the Americans might do. What we are concerned with is with what we are going to do. It is certainly not for me to say whether it should be one Mach-2 or Mach-3 aircraft; but what I do think we should say is that it should be one or the other, and that the decision should be made quite soon. As my noble friend Lord Shackleton suggested, this is one case where there must be, in one form or another, the support of public money, and if this were given I think it would receive general support.
But even when this decision is made, there is still one point which is worrying workers in the aircraft industry. The other day there was a very factual-seeming and authoritative statement in the Guardian that the British Aircraft Corporation are going to enter into an alliance with Sud-Aviation, which has links with the Douglas Aircraft Corporation of the United States. If that is so—and it did smell very much like an "inspired leak"—this would mean that perhaps the airframe would be built in France, and that the engines and the allied systems would be built here. I know these are only speculations, but the Society of British Aircraft Constructors did not seem to be very worried on this point, and perhaps there is the feeling that they could get a lot of the 14 million man-hours which would be needed to build this airframe rather more cheaply in France. I think we ought to say from your Lordships' House that those 14 million man-hours should be worked by British workers in our own factories, instead of allowing our factories to be closed down. If we decided on building this supersonic airplane with, 902 I should hope, at least the help of some public money it seems to me it would be utterly wrong if it were not then to be completely and absolutely a British airplane.
One other suggestion, to which, perhaps, the noble Lord, Lord Mills, could reply, is the position of the aircraft workers in Northern Ireland. As he is well aware, there is a proposal for a vertical take-off-and-landing airplane for N.A.T.O. I am sure he will be aware that the mainly Government owned Harland and Wolff plant in Belfast has been doing a great deal of experimentation on the V.T.O.L. 'plane. The point is that we ought to be putting in claims for that 'plane to be built in that factory, because if the work is not continually sent there the already bad employment position is going to be much worse and might well reach 10 per cent. again during the winter. I hope we can have an answer on these two points, or at least an assurance that where public money is concerned, British workers can be certain that they will have an opportunity of building British aircraft.
There has been some discussion on the decision of the Commissioners in respect of the appeal by B.O.A.C. against the granting of a North Atlantic route licence to Cunard Eagle. I do not want to enter into that discussion, but I should like to congratulate the Minister of Aviation on so promptly saying that he accepted and would implement the decision. Despite what the noble Lord, Lord Merrivale, just said, I think that we should always bear in mind very strongly the danger of designating an additional and, in many cases, inadequate carrier to a route of world importance. The noble Lord said how impressed he had been by the Cunard name being so well known, and that their salesmen spoke with a recognisable American accent. Indeed, Cunard is an honoured and well-known name throughout the world, but it cannot be so well-known and honoured a name as "British". I do not think that we shall sell our aircraft services any less well if we speak with a British accent.
When we are considering this point, we have to bear in mind that B.O.A.C. have to fight hard in a very competitive field, and that although the Bermuda Agreement permits the Government to 903 designate an additional carrier on the North Atlantic route, in view of the problems facing the American carriers undoubtedly there will be attempts by them through their representatives in Washington to secure a re-negotiation of the Bermuda bilateral agreement. If this should happen, we should be in a much weaker position than we were in 1946, when our Government could dispose of 'traffic rights in a number of countries which are now free and independent. Our bargaining power will be that much less. The present B.O.A.C. frequencies may thus become open to challenge. Therefore, there is all the more reason, in my submission, to be sure that we do not voluntarily water down our strength, such as was done when this licence was granted to Cunard Eagle. I echo what my noble friend Lord Shackleton said, that it is strange that we should inflict harm on our own industry. We can at times pay too high a price for an abstract conception of competition.
It is most important that we should keep B.O.A.C. as strong as we possibly can. Indeed, the next B.O.A.C. financial results are likely to bear this out strongly. My noble friend rightly said that B.E.A. had made 8 per cent. on our money and that B.O.A.C., though they had made a loss on their last complete year's figures, had in fact earned 4 per cent. But conditions this year are not going to be anything like so good as that. It may well be that they will have a deficit on this year's trading of as much as £9 million. No doubt that will provoke the usual comments which always arise when a publicly-owned undertaking makes a loss. Therefore, it is just as well to point out why this will arise and how necessary it is that B.O.A.C. should be kept as strong as possible.
The difficulty has largely come about because of the success of President Kennedy in urging Americans not to fly abroad. The important thing is that a decline of only 1 per cent. in the B.O.A.C. load factor can mean a shortfall of £750,000, and already in the nine months of the present financial year from that factor alone on the North Atlantic route there is a short-fall of something like £3 million. It may be that over the whole of the B.O.A.C. 904 world routes there is as much as an £8 million short-fall. But we are not doing so badly as other countries. The Scandinavian Airlines have had some very large losses and are now ruthlessly dismissing leading executives and going through managerial convulsions. The Deutsch Lufthansa are likely to have to reveal much heavier deficits than B.O.A.C. Some of the American airline losses will be masked by their very substantial military contracts. I submit that there is every reason to believe that this world drop in trans-Atlantic air traffic is a temporary phase and that B.O.A.C. are entitled to take an optimistic view about the future. Indeed, they must do so, though it is right that they should go on as they are doing, eliminating some of their older equipment, which is over-diversified. But I think there is a need for all of us to acknowledge that B.O.A.C. is a well-run British concern, which compares in efficiency with any other major airline in the world, and one of which we should be proud.
The noble Earl who opened this debate dealt with the relative safety margins of B.O.A.C. and B.E.A. and some of the charter companies. The accidents that have happened are tragedies which afflict and distress us all, and I am sure that we all support the noble Earl in his demand for an urgent review of the conditions under which some of these companies operate. While supporting him in this, however, I think we should take pride in the fact that in the last five years none of B.O.A.C.'s many, many thousands of passengers has so much as sprained an ankle. When we talk about British airlines and their subsidies and profits, or losses, never let us forget that what is of the greatest value is that an air company should transport its passengers with perfect safety and be known to do that almost with certainty. In this respect, British airlines lead the world. Long may they continue to do so.
§ 5.10 p.m.
My Lords, like other noble Lords who have spoken before me, I should like to add my thanks and congratulations to my noble friend Lord Gosford on moving this Motion and for the clear opening address that he made. I am a strong supporter of 905 free enterprise, but I think that one can go too far in any direction. The noble Lord, Lord Shackleton, put it very nicely when he said that there is a proper place for independent carriers without damage to the Corporations. As the noble Lord also mentioned, in the case of B.E.A. there are a lot of things over which they have no control. We must remember that the airline business is an international business and many of the arrangements are controlled by various Governments. I think it is true to say that if the independents got all the licences for which they asked in competition with B.E.A. routes, B.E.A. would lose probably 20 per cent, of their load. The noble Lord, Lord Shackleton, gave the example of London-Paris. I think it is the same with Italy. The Italian Government demand 50 per cent. for rights into Rome against a British carrier. If the independents got parallel flights with B.E.A. they would get no more than a share of the 50 per cent., to the detriment of B.E.A.
I wonder whether the original and present Charter of B.O.A.C. is fair. They have been asked to show the Flag and to operate uneconomic routes; and when they make a loss on these routes they pay interest on those losses which is carried on in perpetuity. Is that sensible? I suggest that it is not a sensible thing to do.
The noble Lord, Lord Shackleton, mentioned landing fees at London Airport, which I think are the highest in the world. It is ridiculous that the fares of the first eighteen passengers of a 100-seater aircraft between London and Manchester pay only the landing fees of that flight. I can never understand (I should like the noble Lord, Lord Mills, to comment on this point, because I am sure he has great experience of commerce) why relief is not given to the biggest customer. I believe that B.E.A. pay 70 per cent. of the landing fees at London Airport. If you have a big customer you usually give him a considerably reduced price. As I see it, with the new charges at London Airport, next year B.E.A. will have to pay another £450,000 for landing fees alone.
Mention has been made by several noble Lords of the supersonic aircraft. This worries me a good deal, because I do not think we really know where we are going. I do not think 906 we know nearly enough about the sonic boom of such an aircraft; nor do we know about the economies of such an aeroplane. The noble Lord, Lord Stonham, said that what we must do is not necessarily what other people are going to do. I very much doubt whether any carrier in the Western part of the world really wants to have and operate such an aeroplane, or will want to, certainly within the next ten to fifteen years. I think the only reason why America is doing it is that they know the Russians will, so if they do not they will lose face. And so we all have to follow. This sort of thing is really "keeping up with the Joneses."
There was an interesting remark made by the right honourable gentleman, Mr. Menzies, the Prime Minister of Australia, when he was opening the International Air Transport Association recently. He declared himself strongly against the belief that civil aviation must inevitably be insolvent and could never live without massive subsidies, and went on to say:I do not believe it is possible to go on 'keeping up with the Joneses' whatever the cost may be. It should not be beyond the wit of man to organise the production of new aircraft with some relation to the effective use of the great assets already in operation. The people who in the long run paid would require to be satisfied that the economies of air travel were being regarded with as much urgency as its mechanics,I am sure your Lordships will heartily agree with those words.
I should like now to turn to two points on air safety, and I find myself in the position of having to be critical of the Ministry of Aviation for what I call procrastination and sluggishness. Two cases come to mind, and the first is the question of altimeters. First, let me give the history of the U.K. Altimeter Committee. This was formed by the then Minister in May, 1959, following a number of accidents in 1958 in which misreading of the altimeters was thought to be a contributory cause. This Committee was set up as a matter of urgency.To investigate the design of altimeter faces and mechanisms … and to make recommendations for the design requirements …In July, 1959, just two months later, the Design Study Committee submitted their report. In August, 1959, a trials programme Working Party was set up 907 and gave an estimate of nineteen months to complete the programme; that is to say, to March, 1961. It is now November, 1961, and the programme is not yet complete; in fact, no trial flights have yet taken place, although trials and simulations are at present being conducted. Meanwhile, the two Corporations have had to order altimeters for their VC.10's and the Tridents. I think they have chosen instruments independently produced which accord with the Design Study Committee's recommendations of July, 1959. But I suggest that there is plenty of evidence that, by ignoring the provision of moderate fees to carry out the work requested when the Committee was set up, the Ministry of Aviation have incurred the subsequent delay and what are obviously increased costs.
The other point I wish to mention is with regard to the conditions where there has been a confusion of beams, and the difficulty sometimes in knowing which radio call sign you are getting. Your Lordships may remember an accident in 1958 in which 35 people were killed. After the investigation of the accident a recommendation was made that radio call signs should bear some resemblance to the name by which the station was known. In other words, that the Wigan beam should be re-named, "Wig" instead of "MYK", which was easily confused with Oldham, which was "MYL." It is only now, after 3½ years, that a start has been made to revise these call signs.
The pace of things in the Civil Service to-day may have been very nice in the tempo of Edwardian days, but it is no earthly use in these days of supersonic aircraft. I beg Her Majesty's Government to look ahead and try to get things ready in time for when they are required, and not some years afterwards when accidents have happened and a great deal of additional cost is thereby involved.
I was going to say something about Eurocontrol, but much has already been said about that by several noble Lords, and I am glad to see what is happening in that respect. Here, again, I hope that we shall do all we can to get simplification in what is brought about, because a jet going to the Middle East, for instance, starts off under the control of the United Kingdom, and then passes to 908 France, Switzerland and Italy, and probably inside two hours it has had ten changes of frequency. There is one matter upon which I should like to congratulate Her Majesty's Government, and that is the setting up of the joint R.A.F. Civil Air Control Radar Scheme centres. This is a very good thing to have done. I have had the privilege of visiting one, and they are doing a wonderful job. Their work will become more necessary as we get more highflying jets coming into this country and more bombers operating on exercises, let alone the production Lightnings. Anything which can be done to help those teams I think should be done, and I hope the noble Lord will be able to say that they are being given enough support, not only in manpower but in equipment, which, of course, means money. If I may say so, I think Sir Laurence Sinclair is to be congratulated on the way he has got these centres working. I will say no more to-night, but again I should like to thank the noble Earl for bringing this Motion before us to-day.
§ 5.24 p.m.
§ LORD OGMORE
My Lords, I must apologise for being absent during the first part of the debate, but I have been at a ceremony of the Commonwealth Institute, of which I am a Governor. I had previously apologised to the noble Earl, Lord Gosford, for my absence. I hear on all sides that he made a most excellent speech, and it is my loss that I was not here to hear it, and to listen to those speeches of your Lordships which were made before I entered the Chamber. I hope your Lordships will forgive me for my absence during the first part of the debate.
It seems to me that there have recently been two developments in civil aviation which to a large extent I feel were not unexpected. In the first place, a number of airlines, State and others, have had a poor season from the point of view of profit, although perhaps not in other ways. Their accounts are in deficit. Secondly, there has been the decision by the Minister not to permit Cunard Eagle to be competitors of B.O.A.C. on the North Atlantic route. I say that the deficits are not surprising, because, frankly, so far as B.O.A.C. is concerned, 909 I do not see how there could possibly be anything else.
Some years ago I introduced a debate in your Lordships' House in which I forecast this development as inevitable. Of course, it was criticised at the time by Government spokesmen and other noble Lords as being defeatist, reactionary and conservative, and other abusive epithets were used. But it is inevitable. The cost of an aircraft is such, and the life of an aircraft is so short, that it is of the greatest difficulty for any airline to make the thing pay. Now we are told that we are to have a supersonic aircraft. I see in the Press that B.A.C. and Sud-Aviation are going to build a new aircraft to be called the Super Caravelle. This has been discussed in the debate. I do not agree with the protectionist sentiments of the noble Lord, Lord Stonham. I have no objection to the French and the British getting together on this project, or on any other project which is going to help aviation.
This seems to me to be the choice. You can either have a flourishing airline which uses aircraft which are speedy, safe and comfortable, and which will last for a good many years, going at a speed of 350, 400 or 450 miles an hour (and with that sort of aircraft carrying 100 passengers it will make money) or go in for these supersonic aircraft which will cost phenomenal amounts. I have seen figures like 50 million dollars for an aircraft carrying at most, say, 150 passengers, which cannot possibly pay. What is the benefit of these immensely costly aircraft? If it gets there, it will land people a little earlier at their destination than the slower aircraft would. Very often it imposes great problems by so doing. From the passenger's point of view, another hour or two often makes little difference, because if he does not spend it in the air he probably spends it on the ground waiting for the aircraft to take off, if there is some hitch or fog. An hour or two on these long journeys does not make much difference at all to the passenger, but it makes all the difference in the cost of the aircraft. That is the point I wish to make.
The reason why we are told that no company such as B.O.A.C. can afford not to have the latest and most expensive 910 aircraft is because other companies have them and, therefore, as the noble Lord, Lord Waleran, rightly said, we have to "keep up with the Joneses". Here, it seems to me, is where international agreement can come in. At the present moment, on the North Atlantic route not more than half the seats of any airline are being filled. How long can any airline, whether it is national, State or private enterprise, keep going in that way? In other words, we must get some sense into this thing. We must make these airline operators realise that what they are doing is running buses over short distances, medium distances and long distances. What the man in the bus requires is a reliable, comfortable, reasonably speedy and safe aircraft. That is what the passengers need.
When are we going to have these supersonic aircraft? Can you imagine taking old ladies and little children through the sound barrier? That is what they are going to do; and who wants to go through the sound barrier? You can just imagine, with the average sort of passenger group that you get in an aircraft, taking them through the sound barrier. Really it is fantastic. And who has got to pay? There are only two lots of people who can pay. One of the two are the passengers, and no airline dare put the passenger fare up because they cannot fill the aircraft now. They cannot more than half fill them now—I am talking of long distance journeys, not Lord Douglas of Kirtleside's journeys from Glasgow to London, where he is reducing the fare very much.
The airlines cannot bring the fares down, so what is going to happen? The taxpayers will have to pay. They will have to pay either by some subsidy or by making good B.O.A.C.'s losses, as they have to do now. So those are the horns of the dilemma, and I think we all should say to these airlines, "Cut your coat according to the cloth. Don't talk about going through the stratosphere and breaking the sound barrier and all the rest of it. Use the good aircraft which you have already and which are operating perfectly well, and use them over a sufficient number of years, when they will make a good return on the money paid for them".
911 Then we talk of national prestige. Whenever I hear anybody say "national prestige" I feel a chill in the pocket book, because I know perfectly well somebody is going to come after me as a taxpayer. Only a short time ago the noble Lord, Lord Mills, and the noble Lord, Lord Chesham, said it was essential for the prestige of Britain to have a new Cunarder. We are not going to have a new Cunarder. I have not heard of any fall in the national prestige of this country as a result. I have just been in Paris for a week's N.A.T.O. Parliamentarians' Conference. We discussed all sorts of problems—the Common Market, Russia, Berlin but nobody mentioned the Cunarder not a single soul, strange as it may seem. In fact quite a lot of this national prestige does not depend on whether you have new aircraft or new ships; it depends on whether you can pay your way as a country and whether you do the right things in international life.
Moving from that—and I hope we shall hear something from the Minister on which choice he is going to present to the airlines—may I say a word about London Airport? I was criticised last year for raising the question of industrial relations at London Airport, but when you are talking about civil aviation you cannot dissociate from it those who handle aircraft luggage, and so on, at airports and elsewhere. Why is it that London Airport—which is a very modern airport, which one would think offers an exciting career for people, with a lot of interesting things happening there—has such bad industrial relationships? That I cannot understand. It has almost continual strikes going on, strikes of one class of workers or another. Recently we have had a strike of Ministry of Aviation porters; and I must say it was highly embarrassing for the passengers, many of them old people, to have to carry their bags very considerable distances over the aprons to the waiting aircraft.
Why? I would suggest that one reason is that there are 24 different unions at London Airport. That may have something to do with it. It is quite time that all those concerned at London Airport got down to this question to see whether they cannot cut out a lot of what seem to me unnecessary stoppages and strikes 912 which so impede and upset the passengers. This is where national prestige comes in. I came on a plane from Paris only last Saturday, and when we were turned out a number of people had to carry heavy suitcases the best part of half a mile. That is where national prestige comes in. A man, perhaps a Frenchman, is very critical of the British when he has lugged a suitcase, say, half a mile; and I think he has some right to be.
I should like to ask the Minister who will reply what the position is about London Airport North. It is still being used. It looks even shabbier than it did a year ago when the promise was given that it was to be scrapped within a year. It is more shoddy than it was a year ago, and more decrepit; and I must say it is more depressing—more depressing—than it ever was, and that is saying something. Transatlantic passengers were coming in over the week-end from Los Angeles and elsewhere, and it really is not good enough to bring them into that shabby, rather sordid reception centre.
May we have an answer, too, about the statue of Alcock and Brown? This may seem a small matter in relation to those we have been discussing; in a way it is, but in some other ways it is not. When the statue was contemplated it was decided that it should be in a place where every passenger who came across the Atlantic should see it when he landed, and be reminded of those two great pioneers, the first men to fly the Atlantic non-stop. With the new central building I am not sure whether that will be possible outside, and it may be that it would be better to bring it inside the building. That is a matter for the advisers to the Minister and I should not like to give an opinion. I think that, if possible, we should retain that ideal or get as near to it as we can, and that those who have flown on what to my mind is still the great adventure of flying the Atlantic should see a statue of those two who, with incredible bravery, flew in 1919 from the other side of the world to this country.
Finally, my Lords, I would ask about the connection between Heathrow and Gatwick. Sitting in this Chamber, it does not matter so much, I suppose—one does not think of it quite so much—but if you are in the air coming in, the idea of 913 landing at Gatwick and getting across to catch a plane at Heathrow is not a comfortable one. You have to get up to London by train; you have to move your baggage; you have then to get on a bus to go out to Heathrow, and it is quite a journey. This is something which I do not think as yet the Government have really taken in hand. Unless I am unaware of what has been developing in the last month or two, there is no connection between the two airports by air. I may be wrong, and no doubt if I am the Minister will tell me, but I think there should be a connection between the two sites. If there is no connection between Gatwick and Heathrow it means that we are perpetuating a mistake that was made with the railway termini in London in the nineteenth century. The London termini were built on the circumference of London as it was then, which meant one had to get across from one side to another. What we are doing to-day with airports in fact is putting unconnected airports on the circumference of London as it is to-day; so we are no wiser than our forbears were in that respect. I think there should be an air connection between Gatwick and Heathrow. Those are all the things I have to say this afternoon. May I once more thank the noble Earl for giving us this opportunity of discussing this important subject?
§ LORD FRASER OF LONSDALE
My Lords, I intervene with the permission, which I deeply appreciate, of the noble Earl, Lord Longford, to say just one sentence, and that is to reinforce what the noble Lord has just said about London Airport North. Twice in the last year I have travelled overseas and gone away from and come in there, and although the staff do everything they possibly can to be obliging and helpful the place is really shocking, both actually and relatively. It is shocking for a great country and it must give a very bad impression. It is inferior to second-class airports in many countries of the world, as I have seen for myself. I beg to reinforce what the noble Lord said and to ask the Minister if Britain cannot do something about this.
§ 5.40 p.m.
§ THE EARL OF LONGFORD
My Lords, I wish that the noble Lord, Lord Fraser of Lonsdale, had seen fit to 914 address us for a longer period, as we should all wish to hear much more from him. It is very pleasant for me to follow, or virtually to follow, the speech of the noble Lord, Lord Ogmore, who followed me with such success as Minister of Civil Aviation. As I look towards the Liberal Benches I cannot help thinking of the noble Lord, Lord Terrington, with whom I worked so closely when he was Chairman of the Air Transport Advisory Council. He was a man loved by all and with a delicious sense of humour frequently turned against himself. There is one story he was fond of telling. I do not think he ever told it in this House and perhaps the House would be glad to hear it now. When he was at a large lunch he was told by the chairman of the lunch that he was always mistaken for Lord Brabazon of Tara and this chairman was determined to get it cleared up once for all. Lord Terrington and Lord Brabazon of Tara were made to stand up at this lunch so that everyone could see which was which. That was that. But on the way out someone at the lunch went up to Lord Terrington and said, "I say, Brab, I thought that was a most frightful rib, all that talk about your being so like Terrington. You are a far better looking man. I cannot think what the chairman was about." That was one of Lord Terrington's favourite stories, and I tell it now in deep devotion to his memory.
Like other speakers, I feel that no one could have started this debate better than did the noble Earl, Lord Gosford, and other speakers have followed it up on the same plane. Naturally, I appreciated the contributions of my own colleagues most of all: those of the noble Lords, Lord Shackleton, Lord Shepherd and Lord Stonham. That may be Party loyalty or it may not. Anyhow, undoubtedly they put the points from this side much better than I can. I myself feel rather like Rip Van Winkle returning after many years to fields where I grazed for a period, as I was Minister for Civil Aviation for three years and have been quite out of that picture since. I believe that when Rip Van Winkle came back he found his wife dead and his house destroyed, but big things had happened because the independence of America had been declared. Certainly there have been very great developments 915 in civil aviation since I was Minister. I certainly pay tribute to the tremendous expansion of the services rendered by the Corporations since my time.
I am indeed glad to think that the noble Lord, Lord Douglas of Kirtleside, is a fixed point in a changing age, or at least he has moved the age forward with him. I had the honour of appointing him as Chairman of B.E.A., I think in 1949, and at that time, I am sorry to say, some infantile person in another place, though not in this House, raised the cry of "Jobs for the boys!" All that talk looks pretty silly now after thirteen years of Lord Douglas of Kirtleside as Chairman of B.E.A., in which post he has repeatedly been confirmed by Conservative Ministers, in their wisdom, and after the great services he has rendered, backed up most closely in the first place, by Peter Masefield and more recently by that very effective officer, Mr. Milward. I cannot claim to have appointed Sir Matthew Slattery to B.O.A.C., though I had taken the opportunity before he was tranferred to B.O.A.C. to appoint him a director of my own bank, so he must be thought to be close to my heart. So I think the House can take it that I am full of good will and admiration towards the leadership of the Corporations, not forgetting Sir Basil Smallpeice, who continued for a number of years in B.O.A.C. Certainly when we are reviewing the personalities we cannot fail to describe the noble Lord, Lord Brabazon of Tara, as still Airman No. 1 in this country or indeed in the world—facile princeps, if I may break into Latin for two words.
There have been these great developments since I was in any way connected with civil aviation. But I am bound to say that some of the problems which are confronting the Corporations have an unpleasantly familiar ring when I bring myself to study them again. Before I became the Minister in 1948, under Lord Winster and more particularly Lord Nathan, very high traditions had already been established by the Corporations. As the noble Lord, Lord Stonham, said, the tradition of safety, of the safest airlines in the world, had been well and truly laid. It was the noble Lord, Lord Nathan, who coined the phrase, "Safety first, safety last, safety 916 all the time". All that had been achieved by the time I arrived on the scene. In the year before I was Minister the corporations lost about £11 million; in the year during which I ceased to be Minister the deficits were down to £1 million, and the £1 million lost then was nearly all lost on the internal services of B.E.A. which included a large social service element.
We had had plenty of problems. I remember the staff of B.O.A.C. was cut from 24,000 in 1947 to 16,000 in 1951. while the total output capacity was doubled; and that was done without labour trouble, a very remarkable feat reflecting the greatest credit on Sir Miles Thomas and his colleagues and also on Mr. Jim Matthews and the other leading trade unionists. It is now, of course, some years since the subsidies were discarded. B.E.A. reached a record profit of £2 million in 1959–60, and they had a very good result in 1960–61: a profit of £1½ million. But we are told in the B.E.A. Report that much more difficult times are ahead. We are told that the financial results for the first four months of 1961–62 are causing concern; and although I am not aware of any official estimate that has been offered, it seems very doubtful whether there will be any profit at all this year, quite apart from anything the Licensing Board may do.
Indeed, it seems to me that, again apart from anything the Licensing Board may effect or anything the Ministry may bring about as a result of their operations, the experience of B.E.A. this time is likely to be the worst for eight years. But it was very well explained earlier on that they have shown a remarkably fine return throughout the period as a whole; and we were told earlier on they showed a profit of 8 per cent. on the nation's money, and that is not by any means the whole story when we think of other services they have rendered.
B.O.A.C., taking the last ten years or so as a whole, have had a more chequered experience than B.E.A., because by 1951–52, during part of which year I had still some small connection with them, and during which year the noble Lord, Lord Ogmore, was Minister for a good part of the time, they were making a profit of £275,000, and that include a loss of about £90,000 on the 917 associated companies. So about ten years ago, even including the associated companies, B.O.A.C. were showing a small profit after paying interest on the capital. They have been up and down since then, and we now find that in 1960–61 there was a loss of £473,000 for B.O.A.C. itself, and then we have to add another £2 million for the associated and subsidiary companies. That seems to give a total deficit of £2½ million, but there are various adjustments to be made, which I will not go into, so that apparently the addition to the accumulated deficit for B.O.A.C. and subsidiaries should be looked at as £1,600,000. We have been warned that the loss in 1961–62 is likely to be somewhere between £5 million and £10 million. Lord Stonham put it at £9 million; I am told that it is not likely to be any lower than £10 million. Then we have to add to that probable loss of £10 million for B.O.A.C. the loss—I do not know of how much, but presumably it will be a considerable loss unless something is done about it—on the associated companies. So presumably the total loss will be a good deal more than £10 million. I am afraid that when Rip van Winkle looks at all this, it is remarkably like the picture, in terms of deficits, that confronted him in 1947–48 or when he first became Minister. That is where we are, so far as deficits are concerned, although I hasten to repeat that, of course, the scale of operations is much greater now and all sorts of services have been rendered, and there have been reductions in fares.
I should like to put to the Minister a question or two about the associated companies. He has not been given long notice, but perhaps a few hours' notice. There was a most interesting article to which I refer him and other noble Lords, which appeared in the aviation magazine called Flight on September 28, 1961. It represents an occasion when Mr. Keith Granville, who is in charge of these associated companies, was interviewed by Mr. Frank Beswick who, along with Mr. Lindgren (as he then was), looked after me so well when I was Minister and they were Parliamentary Secretaries. This interview of Mr. Granville by Mr. Beswick, which deals with the associated companies is one which I seriously commend to the House and to the Minister, who has probably studied it already.
918 I must not put all the questions put by Mr. Beswick, but I should like to ask the Minister whether he will explain, even roughly, how this great deficit has come about. Ten years ago the deficit on the associated companies was, as I said earlier, £287,000. In the last year, it was £2 million. It has been multiplied by seven times in the last ten years. I feel that this is something that really must be pressed upon the Minister, and we must ask for some explanation, particularly when we bear in mind that it has been tackled in recent years by Sir George Cribbet in a most thorough-going way—and if he has not tackled the thing properly, I do not know who would be likely to tackle it properly.
Perhaps I can put these two questions to the Minister, arising out of that interview. Mr. Beswick asked Mr. Granville why it was that other companies, American operators, for instance, do not seem to need to rely on arrangements like this. We argue that these associated companies are in some way useful, perhaps indispensable, to B.O.A.C. "But", he asked, "why is it that the American operators do not need associated companies of this kind?" The answer given was that… much of what we have done is in colonial territories. Someone has had to help along these countries and it is reasonable to expect that it should have been Britain.I commend that spirit, and the whole interview, to the Minister.
Is it, then, to be understood that through these associated companies we are running services of a kind that might be called social services? I am not saying that we should not do that, because we run services of that kind to the Scottish Islands. But are these services to be understood in that light? If so, I think it only fair to B.O.A.C. that that should be made plain. I think special arrangements should be made to deal with those duties, and to distinguish them from others which are being undertaken on commercial lines.
The other question which I would put to the noble Lord specifically concerns Bahamas Airways. Mr. Beswick said:To many observers this seems a most odd affair. The company is sold, and with a great flourish the new owners say they are going to make it pay; yet you buy it back within two 919 years and show a loss in the next accounts of over £400,000. How can this transaction be justified?You sold it off, bought it back again and have lost £400,000 a year over Bahamas Airways. An answer is given here, but I would ask the Minister whether he would be so good as to try to justify that kind of operation to the House.
Unless I am mistaken, the Royal Commission is about to be held. I am in the hands of the Chief Whip.
EARL ST. ALDWYN
My Lords, I do not like to interrupt the noble Earl in his most interesting speech, but I am afraid that I must ask that this House do adjourn during pleasure until the Royal Commission at six o'clock. No doubt afterwards the noble Earl will resume his speech.
§ House adjourned during pleasure.
§ House resumed.