HL Deb 22 November 1961 vol 235 cc919-40

6.15 p.m.

Debate resumed.


My Lords, I was touching on some of the special difficulties which are confronting the Corporations at the present time, but I must re-emphasise my confidence in their future, which is stronger now than ever. As the Chairman of B.O.A.C., Sir Matthew Slattery, says in their Report this year, the position that B.O.A.C. had achieved on the 31st March, 1961, was basically one of great strength, though exposed by rapid expansion to the risks of traffic not coming up to expectations. The noble Lord, Lord Douglas of Kirtleside, has frequently struck the same confident note, and has again and again been justified. But, as has been said several times this afternoon, our Corporations must be given a chance, a fair chance, to overcome these immediate difficulties and to realise their vast possibilities. Such a chance would be denied them if the Licensing Board, which could be so valuable an institution, interpreted its functions in certain damaging ways.

There is no doubt that the terms of reference of the Licensing Board place a heavy and difficult responsibility on the members of the Board. I do not think those terms of reference are perfect by any means; but, whatever the terms of reference, undoubtedly a heavy and troublesome responsibility would fall on them. I hope I am right in supposing (and I should think the Minister would confirm this) that these specific terms of reference are to me understood as subject to the general development of British civil aviation: that they are not supposed to be exclusive terms at all, and are not intended to be a list of the only factors to be taken into account. I take it there is an overriding understanding that the general purposes of civil aviation are to be secured. As I see it, therefore, when they ark trying to decide what licences should be granted, it becomes not just a question of interpreting and applying certain written words, but a question of public policy. They are supposed, as I see it, to take a broad view of the public interest, adding everything up.

Of course, there is bound to be an element of speculation about the shape that future events are in fact going to take. Indeed, as I see it, there are really three types of question confronting the tribunal, or they are, so to speak, supposed to perform three types of mental operation. First, they are supposed, in a semi-judicial way, to interpret these written instructions, to apply these terms of reference; and, at any rate until those terms of reference are altered, there is nothing to be done about that. We are expecting them to exercise great care in their task. Secondly, they have the businessman's function of trying to predict what is likely to happen in a very uncertain commercial sphere. There, again, no one can give them absolute wisdom. Indeed, absolute wisdom is not given to human beings in these matters, and there is bound to be a great deal of human error. But we hope that there will be a number of correct judgments.

Thirdly, it seems to me that the tribunal and the Minister together are bound in the end to make certain value judgments of great importance to the community; and what I think many of us feel is that the scale of priorities which this Board are supposed to apply and which the Government, in the last resort, will apply has not been made anything like plain enough.

I would just take as an illustration what has occurred in the matter in the minds of all of us in the case of the Cunard application. However one interpreted the terms of reference there, no one sitting on the Board could say for certain what the effect of granting the Cunard licence would be on aviation in general or on the Corporation in particular. It is certainly with a great sense of thankfulness that we learned this morning that the Minister had allowed the appeal. A great disaster for civil aviation has been averted. But many of us feel—I certainly feel—that the scale of priorities which the Government intend to apply in the last resort has not been made anything like plain enough. Therefore, while a danger has been averted in this one case, it still hangs over B.E.A.

The House is aware of the large number of decisions which are pending, and whose settlement one way or the other will affect the fortunes of B.E.A. for good or for ill. I am not going to debate or discuss the details of this case now, but I do want to put one aspect of this question to the noble Lord. Whether or not he answers my precise formulation of it, I am sure that everyone here is hoping to have some guidance from the noble Lord about the general mind of the Government in this field.

To one looking through the terms of reference of the Air Transport Licensing Board, they convey at first sight, I think, an air of fairness, of parity between all comers, of the same kind as one might expect to find in a court of law. The Corporations are not mentioned explicitly, and if they are given any advantage in these terms of reference it is done indirectly and by implication. Yet it is surely national policy to give the Corporations a clear priority, though not an unqualified one. May I remind the House of what was said by Mr. Duncan Sandys, at the time he was Minister of Aviation, when the Civil Aviation Licensing Bill was going through the House of Commons? He said [OFFICIAL REPORT, Commons, Vol. 618, col. 1231]: In particular, I can tell the House what the Bill will not do, and is not intended to do. It is not intended to undermine the position of B.O.A.C. or B.E.A. Those two Corporations are our main flag carriers on the air routes of the world. Large sums of public money have been invested in them and they have to face fierce competition from foreign rivals. They therefore deserve, and will get, our full support and encouragement. That language, I am sure, is very acceptable to all of us on this side of the House and to those who think like us. But, of course, it is just a statement of Government aims; it is not part, as I understand it, of the terms of reference.

I hope I am right in thinking, although I think it could be made much plainer, that the Government intend by that language to give a clear priority to the Corporations; that in the event of either the Corporations or the charter companies being injured, in any doubtful case the Government will give the Corporations the benefit of the doubt. That, I hope, is plain enough, because although Mr. Sandys, no doubt like the rest of us, would wish well to the charter companies, I take it he would not have used this type of language at all about the charter companies he could not have used all of it, but I take it he would not have used this type of language at all—and therefore the Government really do mean to give the Corporations priority. After all, the Corporations and charter companies are not on the same footing. I quite understand someone who says to me that he believes in competition. I happen to be chairman of one of the smaller banks, and somebody might ask me how I should like it if our bank were prevented from competing with the "bit five" by entering some town in which "big five" are already established. If that were the position in aviation—and I think it is at the back of some people's minds that it is—then we should be having a very different discussion.

The truth is that there is very little similarity between that position and the position in civil aviation. The truth is, as the House is well aware, that we expect the Corporations to discharge special responsibilities, whose discharge we have no intention whatever of expecting from the charter companies. I would say, therefore, that the priority of the Corporations is fundamental in Government policy if Mr. Sandys's statement is still to be honoured. I think that to talk of parity, except in the sense that each has the right to a fair hearing, would be very misleading, and I hope the Government will accept my way of putting it.

There was just one aspect of this which I do not think has come up to-day but which I think should be placed before the House. We are all aware, when we talk of the special responsibilities of the Corporations, that they are expected to run services on all the main routes of the world, and generally are expected to provide basic and continuous services which we do not expect from the charter companies. But there is another side of it which should be mentioned. There is no doubt that B.E.A. have financed an enormous amount of development costs in recent years from profits made on international routes. If the Air Transport Licensing Board did something which really undermined B.E.A.'s profitability—although, of course, the same would be true of B.O.A.C.—B.E.A. would have nothing to meet these development costs. The illustrations supplied me are those, for example which were associated with the introduction of the Viscount and the turbo-prop engine. B.E.A. were the first airline in the world to develop this type of engine. That is something which the Corporation has performed which we certainly do not expect from the charter companies, and yet which does in fact imply a high degree of profitability in the Corporation if it is to be done at all.

Another example (and we have had a reference to it in passing) is the commercial helicopter. That seems to have been very slow to come along. I opened the first helicopter service in this country, I think, many years ago. I cannot remember when, but at any rate it was soon afterwards discontinued. But before this country can put a commercial helicopter in the air, someone will have to find large sums of money to develop it so that it is in a state to be sold to foreign airlines. The Government and the manufacturers can assist, but in the last resort the airline itself has to put an enormous sum of money into the development of commercial helicopters; and, again, if the airlines were defrauded of their profits and the Corporations were defrauded of their legitimate profits, then this sort of development would be impossible. And many other examples can be given.

I come back to the basic point, that you cannot talk of parity where the responsibilities placed on the rival parties are so completely unequal. I speak as a Labour Minister who went at least as far in his time of office as, I suppose, any Labour Minister was likely to go in encouraging the charter companies. I took the greatest interest in their welfare. I certainly do not assume that the Corporations are always right. I do not assume that every time the Corporations object to an application it must necessarily be rejected. I think they, like other bodies, probably at times take a narrow view of their own interests; they would not be human if they did not. I believe that in competition there is often a very necessary force in stimulating public service, and I think a monopoly has many dangers of its own. But, of course, on that point the noble Lord, Lord Shepherd, has very effectively explained that there is no question of monopoly on the international routes.

However, I believe it ought to be made much plainer—and I think this is where we all come together on this side, and elsewhere in the House—than it has been made hitherto by the Government that in the last resort the long-term interests of the Corporations are paramount. I believe intensely that in this year of all years, when the difficulties are going to be so much greater than usual, it would be more than usually dangerous to take any risks with the interests of the Corporations. If we did so, I believe we should in future undo much of the magnificent work which the Corporations have done and that work which they are doing for the prosperity and convenience of our own people and for the freedom of communication between people everywhere. So what we are really asking the Government for to-night is, in the first place, clarification, and then reassurance, not just to enable us to sleep more soundly at night, because that must look after itself, but because unless we can get a satisfactory reassurance, we shall not be encouraging but discouraging those splendid men on whom the major burden of British civil aviation depends.

6.30 p.m.


My Lords, in the first place, I should like to thank my noble friend Lord Gosford for giving us the opportunity of debating the problems of this intriguing, exciting and important air transport industry. The debate has ranged far and wide. It has gone from supersonic aircraft to dirty teapots; but it has been none the less interesting and useful for that. I think that the four main things of which we have to take account are the Corporations, the independent airlines, airports and traffic control and the aircraft industry. They have all been touched on this afternoon. The noble Earl, Lord Longford, has just given us his views of what the outlook of the Corporations should be. I do not think there is any need to remind your Lordships that my right honourable friend the Minister of Aviation has stated repeatedly that the Government regard the Corporations as our main flag carriers. Indeed, the noble Earl quoted my right honourable friend Mr. Duncan Sandys when he specifically said that in another place. And the Corporations should continue to be our main flag carriers.

The intention of the Civil Aviation Licensing Act, 1960, which has been touched upon by so many noble Lords, was to further the development of civil aviation. The noble Earl, Lord Longford, pressed me to say that the Corporations should have priority. I do not quite know what is meant by the word "priority". I am certain that in whatever we do we should take care that we in no way undermine, or allow to be undermined, the position and well-being of the Corporations, which have done such magnificent work and in which so much money has been invested.

The Corporations—and the independents, too—have to deal with an industry which has been developing, technically and in every other way, at a very rapid rate. Competition has been, and will be, very severe, and plans have to be altered continually to deal with new types of aircraft which are coming along. I have little doubt that in due course the Corporations will expect to operate all-jet fleets. This will probably mean, among other things, that obsolescence provisions will prove inadequate, because of the need to finish with aircraft which are quite capable of carrying on but which are forced out by technical advance. That was a point which the noble Lord, Lord Ogmore, made, and a very important one, but I gather that he would like to see us stand still where we are and not pursue these great and costly developments. I do not think that that is really possible.

In consequence of these great developments, the civil aviation industry is one where profit margins are small. In fact, in some countries much of the industry has had to be subsidised by the Government. Originally, the industry of this country was carried on under subsidy. While there is no subsidy to-day, B.O.A.C., for example, has had to rely on the Government's carrying their deficits. Competition compels expansion of capacity and over-provision of capacity is disastrous from a profit and loss point of view, but I do not see that it can be avoided. This year has been a particularly unfortunate one. World trade has become less. The Americans have been advised, in some measure, to stay at home, and in any case the political troubles in Europe, and particularly our relations with the East, have all had their effect on air travel. B.E.A., who have done so well, have been able to keep competition within bounds but are not unaffected by it. I should like to pay a tribute to a Member of your Lordships' House, the noble Lord, Lord Douglas of Kirtleside, who, I think, has done a very great job, one of which he can be very proud.

It is interesting to note that the preliminary figures for the airlines of all I.C.A.O. countries for 1960 show an operating profit, before payment of interest, of only 1 per cent. Last year, the introduction by B.O.A.C. of Boeing 707s and by B.E.A. of Vanguards and Comets meant a very large increase in capacity, which coincided with the year of recession in civil aviation; but I believe—and I am sure that most of your Lordships will share this view—that there is no need to be despondent about the future. Civil aviation has advanced by some 12 to 15 per cent. annually, and any improvement in world conditions generally could mean an upsurge of travellers and freight that could well surprise us.

A lot has been said about the Civil Aviation Licensing Act, 1960. I see no reason to alter it because the Minister has reversed a decision of the Air Licensing Board. After all, those were the safeguards we put into the Bill when it was before your Lordships' House. It was intended to provide a more liberal régime for the regulation of air transport services in this country and abroad by United Kingdom aircraft. I was very glad that your Lordships welcomed the Minister's decision in this case.

B.O.A.C. has an enormous amount of competition on the Atlantic route. If that factor, in the opinion of the Minister and his advisers, is not fully taken into account, we expect him to alter it. It was suggested that the Board might feel aggrieved, but I do not think they should. The Act is very clear on this point, and I think it is a good thing that early on we have had an example of what can, and should, happen. It is true that the main functions of the Corporations lie in scheduled work, while the independents still largely specialise in charters, but I do not think that any proposal to confine both of them in that way would be a good idea. The idea is that they should operate wherever they can, always keeping in mind (and I fully agree with this) that the position of our two main airlines should not be prejudiced.

I should like to deal with one or two points raised in regard to the aircraft industry itself. I would remind your Lordships that the industry, on the strength of pledges of Government support announced on February 15, 1960, has organised itself into two fixed-wing aircraft groups, two engine groups and one helicopter group, and is busy on streamlining these organisations to get the full benefits from this plan. Unfortunately, there are bound to be some redundancies—this was referred to by the noble Lord, Lord Stonham—but the Government will, I am sure, keep in mind, as they always do, the needs of those who are affected. I do not think we should be surprised or dismayed, however, that for a time we shall have to grapple with this problem of redundancy. It is something that the industry must work out and with which they are competent to deal. The Government are still convinced that a substantial aircraft industry is necessary in the national interest, and that Government help is essential for the launching of new transport aircraft and aero-engine projects. In addition to helping specific projects, the Government are maintaining a substantial programme of aeronautical research. At the same time we are not losing sight of the opportunities of international co-operation.

We have heard a lot this afternoon about the supersonic machine. The noble Lord, Lord Ogmore, spoke as if the Government had come to a decision on the matter. The Government are doing what the noble Lord, Lord Waleran, reminded us we should do—namely, looking ahead with the intention of being ready if and when the time comes. Here, again, we are having studies made of the possibilities; we are seeking what international co-operation there can be; and I hope that, if and when we see the necessity of having supersonic aircraft in the air, we shall be ready.

With your Lordships' permission I will take the points as they were raised and try to answer them. The point was made by the noble Earl, Lord Gosford, that we need an adequate home industry and that initial orders, wherever possible, should be placed in support.


My Lords, may I interrupt the noble Lord? I said "home market."


I should have said "home market," and I apologise. That point was also made by other noble Lords in the debate. The noble Earl, Lord Gosford, also referred to the question of air safety, and I should like to say a word about this, because I think everyone recognises that it is vital to the aircraft industry. In every way—by international co-operation; by the measures we take here at home; by the men who are checking continually the condition of the aircraft and performance in the air—I am sure everything possible is being done in this field by the Minister of Aviation. I was a little surprised when the noble Earl, Lord Gosford, said there was a certain amount of sluggishness in the Ministry of Aviation in regard to safety. All I can say is that if there is any such sluggishness, which I do not believe, the noble Earl's words will spur them to get rid of their sluggishness.


My Lords, may I interrupt the noble Lord again? I am sorry if I conveyed a wrong impression. I did not mean there is any sluggishness on the part of personnel concerned. I merely agree with what other noble Lords have said, that the Civil Service system works too slowly for the air transport industry.


There may be a certain amount of truth in the statement that the Civil Service system is not designed or is not the best system to conduct a business. But I want to assure your Lordships that on this particular issue of safety, everybody in the Ministry of Aviation is fully seized of its importance.


My Lords, might I say, in defence of the Civil Service, that I am not such a keen critic as some people. I have observed over the years in many respects that when outside industry or financial corporations want really able men, they turn to the Civil Service to get them. When we are dealing with questions of policy or the direct administration on a particular matter, I do not think we ought to involve the Civil Service.


I heartily agree, but my object was to counter the suggestion that in this matter, of such importance and concern to us all, the Civil Service Department was sluggish. The noble Lord, Lord Shackleton, in a co-operative and helpful speech, referred to the desirability of more co-operation between the Air Corporations and the independent airlines. On behalf of my right honourable friend the Minister, I can say that he would welcome it. It is to some extent in operation to-day.

The noble Lord made one interesting suggestion about the tourist seat being bookable, which I will see goes to the proper quarter. He also spoke about airport charges. I remember we had a debate on that subject not long ago in your Lordships' House, and afterwards we fully examined the matter, which was also under review by the Select Committee of the House of Commons. It is a point which is very difficult to evaluate because there are so many other cases where charges are levied separately or are not levied at all. We shall probably see the position more clearly when we come to implement the White Paper proposals, when we have an airport authority established, when the local authorities are running their own airports, and when the navigational services are separated and are charged separately. As it is, while the charges are heavy, they are not a vital factor in the competitiveness of our industry.

The noble Lord asked us to pursue a British policy in regard to our airports, and not to be too lenient with the foreigner. I am sure that in this matter we cannot be too local—we must have regard to all the facilities we enjoy. But I am sure that the considerations the noble Lord put before us will be borne in mind.

Then the noble Lord talked about developing private flying. That is a matter in which we can claim that much is being done, both in the development of private flying and making it easy to get the right machines and the right equipment. Private flying, including business flying and gliding, is growing and the aircraft industry is now producing suitable machines. The Ministry of Aviation take a close interest in these developments, and since 1958 there has been a Committee on private flying under the Chairmanship of the Parliamentary Secretary. There has been a survey of aerodromes available for private flying, which shows a very high density of coverage. The noble Lord mentioned the question of Croydon. That is awaiting a decision by the Minister of Housing and Local Government, following a public planning inquiry.

The work of the Committee to which I have just referred has led to a relaxation of import control on foreign light aircraft and engines. There has also been an attempt to reduce the number of radio frequencies a light aircraft must use if it is to meet all control requirements. Another matter which is under consideration is the increase in restrictions imposed by air traffic control, particularly about the size of the control zone round the airports. This is a difficult problem, in which the Minister has to balance his claims for greater freedom against his responsibilities for safety in the air.

The noble Lord talked about vertical take off. It is too early yet, I think, to develop a vertical take-off aircraft for civil use. Much further research is needed to make it practical, economical and safe. Intensive research is now going on on one or two types and this work should have civil value in the longer term. I think the military use of the vertical take-off aircraft will come sooner because the economics of operation are of less importance compared to the advantage of doing without elaborate airfields. The noble Lord talked highly, as I was very glad he did, about the performance of B.E.A. and B.O.A.C. and I hope, at any rate, that he has been somewhat reassured about the operation of the Air Transport Licensing Board. I fully share his views about the improvement of the load factor because that is of the greatest importance; and I am sure it is something the airlines watch carefully.

I was interested in the point of my noble friend Lord Dudley in regard to the airport. I thought he had much more persuasive powers than he apparently has, because I did not think he would have the time to stop and see the things he described. I cannot see the noble Earl standing in a queue very quietly—but he apparently has stood in more than one queue. At any rate, there have been provided more checking desks. It is for the airlines to see that all of them are manned at the hours of peak travel. Passengers and their friends can use the concourse facilities. Spectators have other facilities on the roof garden. The difficulty, of course, is to distinguish between who is a friend of the passenger and who is just a spectator; but it is not a simple problem. I went down to see it myself some time ago and the fact is that a lot of revenue is gained from the spectators. What is more important is that there are a lot of children who go as spectators and this encourages them to be air-minded; it makes them understand something of the working of an airport, and I think that is very important.

I am aware of the point raised by the noble Earl in regard to transport facili- ties—the problem of getting your car alongside the building—but all that is being studied; there are experts working on it to see what we should do; whether the whole of that area should be covered in as it probably should be; whether there should be methods to ensure the safety of passengers as well as their comfort, and I think the noble Earl's contribution will forward that.


My Lords, will the noble Lord allow me to interrupt? What would really help would be if the Government were to carry out the recommendations of, I think, the Millbourn Committee. They were made quite a while ago and there has been any amount of study. What is really wanted is some action on this Report.


It should be the right action and there have been a great many changes. It is important that it should be done the right way and that they have consultants on the job to see that it is. What I am trying to say is that it is fully intended to get on with this job and to make the amenities of the airport more suitable.

The noble Lord, Lord Shepherd, made a very interesting contribution; he reminded us of the assistance to our balance of payments as represented by this great industry. He complained that Qantas and Air India bought American machines, and I hope his remarks will be read in the right quarters and will help to reverse that. I do not think it is for any want of trying by the aircraft industry and I do not think it is for any want of trying by Government agencies, but these things do happen, and when they do happen I think they should be mentioned, as the noble Lord has mentioned them.


My Lords, may I be allowed to interrupt? I was not exactly making a complaint that Qantas or Air India bought American aircraft. What I was trying to find out—and I wish the noble Lord would help us—was why it was that these companies did buy American? Was it a question of credit? Were the Americans able to give credit facilities so superior that these companies bought American aircraft where, probably, economically it would have been better in the long-term to have bought British and flown the same type of aircraft over the same routes?


I will gladly go into these particular cases, but, as the noble Lord has mentioned credit, I would say that we have been prepared to match any credit that was given, so I do not think that has really been a factor. The Export Credits Guarantee Department have taken great interest in trying to develop our sales of aircraft, because it is a very important contribution to our exports. As noble Lords have said, it is of the order of £150 million and we should all like to see that kept up. We should all like to see it improved, but at any rate, we should like to see it kept up.


My Lords, as that is an important point, may I ask whether the noble Lord is aware that the Germans, by a method which I can describe to him if he does not know it already, are able to give exactly double the length that our manufacturers can give on goods which cone under the export credit guarantees system?


The Government have gone much further than that, but I should be grateful if the noble Lord would give me any cases which I could go into. My information is that in almost all cases, through the Export Credits Guarantee Department, we have been prepared to match the terms of backing offered by other comparable organisations abroad.

The noble Lord also mentioned the question of insurance. It is not considered that the introduction of compulsory third-party insurance would be justified. As was mentioned, powers were granted by Parliament in 1936, but they were never exercised and there has never been any case of failure to pay compensation in full. That, of course, is one of the things that the Air Transport Licensing Board have to take into account, and they have to consider the provision made by operators to meet a liability for loss or damage. In the case of foreign operators in this country, which would be another complication, I am sure they value their traffic rights in this country too highly to jeopardise them by failing to meet any claims there may be for compensation. There would be, I am sure, practical difficulties in doing what the noble Lord suggested, but it is not a point which has been missed at all.

The noble Lord, Lord Merrivale, also referred to the Cunard Eagle decision, and, if I gathered rightly, he thought the Minister had come to a proper decision. He referred to an international service through the country and the need for co-operation between B.O.A.C. and B.E.A. to that effect. I think possibly the problem has been somewhat oversimplified in the B.O.A.C. Report, and it would not be correct to gain the impression that B.O.A.C. have little or no access to the European Market, or that all the European airlines can operate transatlantic services into European points at will. The whole problem is governed by bilateral air services agreements, and I know it is the constant desire of the Ministry of Aviation in their negotiations to try to improve B.O.A.C.'s position.


My Lords, before my noble friend leaves that point—and I apologise for interrupting—what I was trying to stress was the fact that I should have liked to see Her Majesty's Government enter into negotiations with the French, after consultation with B.E.A. and B.O.A.C., with regard to allowing B.O.A.C. to continue on the Continent, because I understand that the French Government would be willing; that is, subject to arrangements with B.E.A.


I think that is a matter which is being pursued, and I am grateful to the noble Lord for drawing attention to it.

The noble Lord had something to say about automatic landing. It is public knowledge that the Blind Landing Experimental Unit is now operating on V-bombers. There is considerable delay in applying the system to civil use, because although the military version is very reliable much higher standards must be aimed for in the civil system, and more work has to be done to see if the Blind Landing Experimental Unit system, dispensing with the leader cable, can be developed. This would be more acceptable internationally. I think full automatic landing must be introduced gradually to build up pilot and public confidence. Work on this problem is going ahead and we are co-operating with the Americans and with European countries. The Americans are going to try out the present B.L.E.U. system on one of their aircraft. The noble Lord, Lord Braye, also referred to this problem of blind landing, as he did to the problem of the Cunard Eagle licensing, with which I have already dealt.

The noble Lord, Lord Stonham, stressed that we needed a very strong home aircraft industry as a base for our exports, and he referred to the closure of plants, with which I have already dealt. In regard to the supersonic aircraft, he said the Government ought to say what they were going to do; but I think it is still too early to announce any decision on this project. The noble Lord also referred to the position of aircraft workers in Northern Ireland. That is a particular responsibility of the Government, because the Government have a very considerable share in the aircraft industry in Northern Ireland and, so far as the Government can do it, it would be their desire to keep that factory going.

I was most interested in the speech of the noble Lord, Lord Waleran, who also referred to the landing charges at London Airport. He, too, mentioned supersonic aircraft and the problem of keeping up with the Joneses. I take the opportunity of saying that I believe that that factor does not enter into the calculations either of the air transport industry, particularly the Corporations, or of the Government. At this time we have met a certain recession, and the pace of development has not gone at the same rate as we have been used to; but I think the Corporations are right to equip themselves with the best machines they can, even though it reduces their profitability for the time being. I do not think it is a question of keeping up with the Joneses.


My Lords, would the noble Lord not agree that it means that if you discard these aircraft long before their economic life is finished, as in fact the noble Lord has admitted, the British taxpayer has to pay large sums of money every year as a subsidy? Why should the British taxpayer, in order to enable people to travel across the Atlantic half an hour faster, pay large sums out of his own pocket at this most difficult time? That is the point to which the noble Lord has not addressed himself.


My Lords, I think I can best answer the noble Lord by giving my own experience. In business we tried to keep up to date; we tried to introduce new machines to do certain jobs. As soon as we saw a better machine we replaced the comer machine.


Did the noble Lord replace the machine at his own expense or at the expense of the taxpayer? That is the point. I have no objection to the Air Corporations doing it at their own expense, but they are doing it at our expense.


The noble Lord should have thought about that when the Party to which he lately belonged decided to nationalise things.


Oh, no; they were not making a profit then.


I do not want to introduce that kind of thought, but it is a fact that if these Air Corporations are to keep on top of their job, and I think they should, then they must be able to compete through the world, and if they make a deficit the taxpayer must pay.


My Lords, may I help the noble Lord? Is it not the fact that both B.O.A.C. and B.E.A. for the last three or four years have in fact made a profit—that they have not run at a deficit, even when they have bought new aircraft?


Yes, the noble Lord is quite right. But I was referring to the statement of the noble Lord, Lord Ogmore, as to why the taxpayer should pay. If the Corporations make a deficit the taxpayer will have to meet it because of the fact that the nation owns these Corporations.

The noble Lord, Lord Waleran, drew attention to the Altimeter Committee. This point was raised By the Guild of Air Pilots and Air Navigators to whom the noble Earl, Lord Gosford, paid a graceful compliment. The Guild is represented on the United Kingdom Altimeter Committee, and these criticisms were made at a recent meeting of the Committee. The Guild complained of a lack of progress. It does not seem to be appreciated that the purpose of the Committee was to design more effective presentation for altimeters. The Committee knew from the beginning that this was likely to be a long task and unlikely to be completed for the D.H.121 and VC.10. The Committee's task was not, however, to design altimeters for specific aircraft. The Corporations have, however, taken into account the view of the Committee when choosing designs for altimeters for the D.H.121 and the VC.10. A planned programme of research has in fact been given priority alongside other important work, but necessarily it is a lengthy project, involving scientific tests on reading altimeter presentations, at the laboratory, in flying simulators and also in the air.

I was glad to hear the noble Lord congratulate the joint Royal Air Force and Civil Air Control radio centres. Of course I listened with the greatest respect to the noble Lord, Lord Ogmore, in his reference to the Cunarder. I hope he did not think that the noble Earl, Lord Bathurst, and I merely put forward this Cunarder on the grounds of national prestige, because I hasten to assure him that we did not.

The noble Lord mentioned the question of industrial relations and the strike of London Airport porters. As he says, there are a good many unions represented there. We should all like to see industrial relations improved, and I am sure that with good sense we can achieve this. It is, and always has been, important. It is now most important that the new airport authority, when it is formed, should be assured of reasonable industrial relations and should play their part in maintaining them.

The noble Lord asked me about the position at London Airport North. I am told that that will be closed about the middle of next year. Work is going on in the centre which will enable that to be done. I should like also to assure him—I have mentioned the matter myself, too—that the statue of the great pioneers Alcock and Brown will be given suitable accommodation. The noble Lord also raised the question of air connection between Heathrow and Gatwick. There is no air connection, nor at this time would one be justified. The noble Lord said that if we are not careful we should repeat the performance of the railways, when they established stations at the perimeter and made it difficult to get from one to the other. But I think we have to take into account the safety aspect. If we had two airports next to each other, then the problem of air safety would become much more difficult. But if it is right to have them far apart, it may some day be right to have a connection between the two, although at this time it would not be justified.

Then the noble Earl, Lord Longford, having talked about the financial results of the Corporations, pointed out that a good deal of the deficit of B.O.A.C. was due to associated and subsidiary companies. He asked me how has that deficit come about. I should take ,a long time, if I knew, to answer that in detail, but the fact is that some of these subsidiary companies are losing a great deal of money; hence the decision of B.O.A.C. to get rid of them. The noble Earl pointed out that America does not seem to rely on associated companies, and suggested that we were thinking of the social aspects of the matter when B.O.A.C. acquired these outside lines. I do not think that is true. I think they had in mind developing their own air services which were in the making, and preventing other people from getting there first. Very often when one does that one burns one's fingers, but I think they have benefited by their experiences and have taken the right step in getting rid of them.

The noble Earl asked me a specific question, as to whether it is to be understood that we—by "we" meaning the Government, I think—are rendering social services through these airline acquisitions. That is not so at all. I do not know whether the Corporation had in mind, themselves, to render social services in that way, but I should doubt it. They had in mind the advancement of the job with which they were entrusted, and the fact that they lost money should not be construed in any other way. So far as the Bahamas are concerned, the Government of the Bahamas has up to the present time been paying a subsidy in respect of what they considered to be the social service aspect of providing a service for the thousands of islands which are there.


My Lords, could the noble Lord help us? Is it the intention of B.O.A.C. to continue with all these associated companies? I have looked through the losses of these associated companies and they were much the same until 1958 when they rose to £2,500,000. I think this is far too great a burden on B.O.A.C., and I hope B.O.A.C. will get rid of them, if possible.


I think that is the intention of B.O.A.C., my Lords. The last time I had a word with the Chairman about it, he said that he was closely examining the results of these companies to see what was the businesslike thing to do with them, and, as you know, he has already made arrangements for the sale of two of them.

As I said at the beginning, the problems with which the Corporations and all units of the air transport industry are concerned are the well-being of the Corporations; establishing the proper sphere of the independent airlines; the question of airports and traffic control, including the right amenities at the airports and the assurance of reliable traffic control. I think our traffic control is among the best in the world. Then there is the aircraft industry and all that that means, both to air transport itself and as an aid to our exports. As I said earlier, I do not think there is any need to be despondent. I think there is every hope that this industry, which is going through difficult times, can develop into something of which this country can be proud. I am sure the noble Earl, Lord Gosford, whom again I thank for initiating this debate, would like to join with me in thanking all noble Lords who have taken part.

7.36 p.m.


My Lords, I should like to join the noble Lord, Lord Mills, in thanking all those noble Lords who have taken part for the very authoritative and wide-ranging speeches which they have made today. I should also like to thank the Minister himself for his very detailed and painstaking replies, which we have all come to expect from him. The debate has remained, as Lord Shackleton said, above politics.

I will not keep your Lordships more than thirty seconds at this late hour, but I should just like, first of all, to apologise to the noble Lord, Lord Shepherd, for apparently having covered too much ground in my opening speech, but it does not seem to me to have inhibited or inconvenienced any of your Lordships who followed me. I would thank Lord Stonham for his kind remarks and support his plea that the design and research teams should, where possible, be kept together. The noble Lord, Lord Mills, said that he would look into the question of reserving seats for the tourist class passengers. I should like to help him by saying that, in fact, K.L.M. do this.

My Lords, we have had a good debate, and I would just say that I do not agree with Lord Ogmore that we can keep back progress. I am sure that grandma, when she goes through the sound barrier, will not even notice it, however fantastic it may sound. I am certain we are all assured by what the noble Lord, Lord Mills, said, that the Government consider the Corporations to be the main flag carriers, though I must say that there is obviously a very big place for the independents in the airline schemes. My Lords, I beg to withdraw my Motion.

Motion for Papers, by leave, withdrawn.