§ 4.9 p.m.
§ THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON)My Lords, with your Lordships' permission I should like to repeat a statement which has been made by my right honourable friend the Minister of Aviation in another place on the arrangements for allocating trooping work among civil airline operators. The statement is as follows: "In the past, the Air Corporations have been excluded from tendering for long-term contracts. The Government have now decided that they shall be allowed to tender competitively for these contracts as opportunities arise from 1965 onwards. It will be for the Corporations to decide as a matter of commercial policy the extent to which they then seek to participate. The amount of work which future contracts will cover will of course depend upon future commitments overseas, as well as upon the growing capacity of Transport Command.
"The Corporations are already allowed to tender for ad hoc charters of whole aircraft, and they will continue to be free to do this.
"The Corporations have also asked that they may be allowed to compete for ad hoc trooping movements at reduced fares on appropriate scheduled 849 services when the seats would otherwise be empty This could offer economies all round. I have informed the Chairman of the Air Transport Licensing Board, and I am prepared to give the Corporations the necessary authority to offer this reduced fare. The Corporations and the Air Force Department are now exploring the scope for such arrangements. I should be prepared to give similar authority to independent operators of appropriate scheduled services.
"These new arrangements will give the Ministry of Defence more flexibility to carry out their trooping commitments on the best economic terms, and will also offer the Air Corporations greater scope for securing a sound and competitive basis for their future operations."
EARL JELLICOEMy Lords I am grateful to the noble Lord for repeating this Statement and, since this is my first opportunity of saying so personally, I should like to congratulate him on his arrival on the Benches opposite in his new and important capacity. I think his Statement will give great satisfaction to the Air Corporations, although I must confess to some doubt as to whether it will give quite similar satisfaction to the independent operators. Parenthetically, I feel it a pity that no opportunity was taken in the Statement to pay tribute to the outstanding work which the independent operators have carried out in the field of trooping. I am rather fresh to this aviation sphere myself, but I think I am right in saying that the policy followed by the late Government was to permit the independents a monopoly on these trooping services until they had secured sufficient scheduled rides to be able to stand on their own feet. I should like to ask the noble Lord whether this Statement implies a reversal of that policy or whether on the other hand, the Government feel that the independent operators have secured a sufficient lodgment on the scheduled services to be able, as it were, to "fly on their own feet"?
While I am on these questions of policy, I wonder w tether I could ask for clarification of one other point. I note the reference in the Statement to the growing capacity of Transport. Command, and I well remember—as I am sure do many other noble Lords—the noble 850 Lord's advocacy on many occasions from these Benches of a bigger and better Transport Command. We are also well aware of the noble Lord's energy and abilities. Am I right in taking it that these words mean that in the comparatively short time he has been in his present job the noble Lord has succeeded in persuading his colleagues to increase the size of Transport Command? Or, do they rather refer to the growth of Transport Command's capacity foreseen as a result of the enlightened policies of the last Administration?
§ LORD SHACKLETONMy Lords, I am grateful to the noble Earl for his personal remarks. I should not want him or the House to think that the omission of any reference to the independent contractors was in any way intended to be a deliberate ignoring of the value of their services. One cannot put everything in the Statement. I should not want there to be any misunderstanding on that point. The noble Earl raised a number of points, some of a slightly hypothetical nature. I think it is very difficult in a brief Statement—and we may be having a debate on aviation—to go at great length into the question of the future of all those concerned in air transport, but I should have thought that the present Government had made it clear that they were sympahetic to the contractors; after all B.U.A. have been encouraged to continue with their South American operations. Admittedly, such difficulties as lie in that field spring not from Her Majesty's Government, as noble Lords will be aware. But I think we may have the opportunity to press this perhaps further.
Perhaps I should add that it will be for the Corporations themselves to decide whether in all the circumstances they will wish to hold aircraft and air crews for long-term contracts. My right honourable friend understands that it is not their present intention to do so. It is also worth noting that the principal contracts—I believe something like four-fifths of them—are long-term contracts which have, perhaps, two years to run. The Government have the option to extend them further, and there is no suggestion at the moment that the Government have diminished their interest.
851 The concern of the Government is first of all to put the Corporations on a fair basis. It is highly desirable, in the interests of the country and economy, that we should be enabled to take advantage of places which may become vacant in scheduled flights; and I am sure that the House would welcome this. I should expect that the contractors would usefully continue to serve the country in this way. But it must be noted that there is this very considerable increase in Transport Command, and if the noble Earl had not already paid tribute to the previous Government I was about to do so in this connection. The Comet 2s, as the noble Earl knows, are being phased out, and there will be a moment, in 1966 I think, when the new aircraft do not come in. But after that we shall have the 14 VC 10s as well as the Belfasts, which. as the noble Earl knows, are due to come into service during the mid-sixties. This is a subject with which we have been familiar for many years.
§ LORD MORRISON OF LAMBETHMy Lords, is my noble friend aware that many of us welcome this Statement by the Government? It surely was wrong, but the last Government had a bias against public enterprise to such an extent that they penalised the Corporations by prohibiting them from tendering, from competing for these trooping contracts. Will my noble friend convey to the Government the view of many of us that this is an act of justice as between private and public enterprise? All that is being done is that the public Corporations are being given the opportunity to compete in tendering for these contracts. Is he aware that many of us think this is an obviously right gesture for the Government to have made?
§ LORD SHACKLETONMy Lords, as always, or nearly always, I am at one with my noble friend. The only difference is that he puts it with more force and vigour than I do.
§ THE EARL OF SWINTONMy Lords, though I do not know that I differ from the noble Lord, Lord Morrison of Lambeth, may I, without quite adopting the same attitude, have it made clear that what is being done now, if it was not done before, is that the private companies and the Corporations will both be treated on an absolute equality and there 852 will be no preference in favour of one or the other; but that the contracts will be placed wherever they can be placed to the best advantage?
§ LORD SHACKLETONMy Lords, the whole object of this decision—and the Defence Department attaches great importance to it—is in getting the best bargain for the nation. In this matter, as my noble friend Lord Morrison of Lambeth made clear, we had handicapped ourselves by an unfortunate prejudice against the Corporations. This Government, with its fairer approach, is treating all alike.
EARL JELLICOEMy Lords, I do not wish to bandy words on this matter, either with the noble Lord, Lord Morrison of Lambeth, or the noble Lord, Lord Shackleton, but I thought I had made it clear that there was no bias against the Corporations on the part of the past Government. I am at one with those noble Lords who have questioned the noble Lord, Lord Shackleton, in feeling that what is needed is justice all round and a fair balance. With that in mind, may I ask the noble Lord two further questions? The first is this: can he assure the House that tenders by the Corporations will in fact be genuinely commercial? Secondly, if the independents are to lose their trooping monopoly, can he assure us that they will be enabled to secure a reasonable slice of the growth foreseen on scheduled services, both at home and abroad?
§ LORD SHACKLETONMy Lords, I think I ought to emphasise that the object is not only fairness, all round, but the policy which best serves the public interest in this matter. In regard to competing for contracts, there is no question of the existing contracts, which, as I mentioned, expire in 1965 and 1966, not being fulfilled. Once again the noble Earl has attempted to raise rather wider questions. I think that these are better explored in debate, and I do not want to be drawn too far, beyond saying that it is of paramount public importance that the Corporations should be enabled to operate successfully and profitably, and, in deciding these difficult matters, the Government must have regard to that primary need. I do not wish to go further at this stage. My right honourable friend is having considerable conversations with those in the aviation 853 industry. I hope that this Government, as I know they have already shown, will have high regard to the needs of the country as a whole in these matters.