AIRPORTS AUTHORITY BILL

HL Deb 02 March 1965 vol 263 cc1046-91

3.47 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Beswick.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Lord MERTHYR in the Chair.]

Clause 1:

The British Airports Authority

1.—(1) There shall be a body corporate to be called the British Airports Authority (in this Act referred to as "the Authority") to which shall be transferred the Minister's aerodromes at Heathrow, Gatwick, Stansted and Prestwick and which shall manage those aerodromes and any other aerodrome provided or acquired by it under the following provisions of this Act.

(5) The Minister in appointing the members of the Authority shall have regard to the desirability of ensuring that there is at least one member of the Authority who is familiar with the requirements and circumstances of Scotland.

THE EARL OF SELKIRK moved, in subsection (1), to leave out "British Airports Authority (in this Act referred to as 'the Authority')", and to insert "Airport Management Corporation". The noble Earl said: In the course of the Second Reading debate I tried to elicit two points from the Government in regard to their intentions in this Bill. The first was whether this Authority was to have any general duties in what might be described as airport policy. Probably very wisely, the Government did not give me any information on that point. I dare say they were perfectly correct not to do so. The second point I tried to elicit was whether they intended that this Authority should be an independent body capable of fulfilling what I believe most of us regard as the task of a public corporation—that is to say, that it would exercise sound commercial judgment, efficiently carrying out its duties independently and subject only to general instructions from the Government in regard to policy; and that is included, I think I am right in saying, in Clause 2 (4).

In the course of the Second Reading debate, however, there was a considerable difference of opinion as to whether this Authority would have that degree of independence which would enable it to carry out its duties with proper commercial efficiency. The noble Lord, Lord Beswick, will be aware that he said he wanted it to; but this view was, if I may say so, strongly opposed by the noble Lord, Lord Reith, who speaks with at least considerable authority on this subject. I have read the Bill through again, and I have a good deal of sympathy with the point of view which the noble Lord, Lord Reith, expressed. If your Lordships go through the Bill, you will see mentioned the need for the con- sent or the authority of the Minister almost as many times as there are clauses in the Bill, and I wonder whether we are in fact setting up an organisation which will have that degree of independence which will enable it to carry out its duties efficiently, or whether in due course we shall in fact have to pay a very large subsidy. This is the point of most of the Amendments which I have put down, and I am therefore introducing them in this way.

May I turn to the first Amendment, which is dealing simply with the name? Whilst, of course, it is true that a rose by any name may smell as sweet, I none the less think that the present title is misleading. The words are, as your Lordships will see in the first subsection, "British Airports Authority". I think that anyone reading this for the first time might well think that this was an authority on British airports. That is not the case; it is certainly not an authority on British airports. Indeed, I question whether it is an authority on anything at all. Its task has nothing to do with the numbers of aeroplanes. It is, shall I say, the proprietor of real estate; it leases property to airway companies, Customs officials and immigration authorities. It is responsible for motor cars and, as I suggested, particularly for the parking of motor cars. But it has nothing to do with the operating of aircraft. It is really a management company. That is why I have suggested a name which quite accurately describes what it does: it manages the real estate of airports.

Anyone can tell easily how the name in the Bill arose. It was taken (and quite wisely I think; I am not objecting to the principle of the Bill) as a parallel to the Port of London Authority, and it was thought that there should be an "Airport of London Authority". That was probably quite a good idea and I see no objection to it, except that the new body will not have authority in the same way that the Port of London Authority has in its own waters. Then was added Prestwick Airport. So, instead of "London Airport Authority," the title became British Airports Authority. It is a rather grandiose name; and I think there should be justification why it should be as grandiose as it is. I asked the Government whether they intended that airports shall be taken over. The noble Lord, Lord Shackleton, said: "No, for the time being; but one does not preclude the possibility in the future." Are the Government not sure? For a very small percentage of the public airports in the country (I think, four out of the 30 to 35), is this not an unnecessarily grand name and slightly misleading?

I am aware that this matter has been discussed in another place. My chief impression from those discussions was that nobody very much liked the name in the Bill. I do not think anyone cared for it; I think that a good many people would have preferred a name more descriptive of what we are trying to do. I have thrown out the name in my Amendment because it accurately describes what this authority does. I am particularly concerned about this: why call it the British Airports Authority unless it has wider purposes of policy? If it has, will the Government say what that policy is? I think we should know just what the intention is. I beg to move.

Amendment moved— Page 1, line 7, leave out from beginning to ("to") in line 8 and insert ("Airport Management Corporation").—(The Earl of Selkirk.)

LORD BESWICK

The noble Earl, Lord Selkirk, is quite right. As this Bill has progressed through the other place—and indeed, also when we discussed it on Second Reading in this House—many criticisms were made of the proposed title of the new body to be established. I confess that I shared a good many of the doubts and criticisms put forward. I agree that "British Airports Authority" may be thought a little pretentious. I was not very happy about that. I am even less happy about the inevitable contraction, B.A.A. or "Baah" as some people may call it, though possibly B.A.A. may sound a little better. But of the arguments put forward none has been so compelling, to me at any rate, in favour of this title as the alternative names put forward. I must say that in each case when I have considered or read of the alternative name suggested my doubts about "British Airports Authority" have begun to melt; and I think, with all respect to the noble Earl (and I sympathise a good deal with what he says), that the final, conclusive argument in favour of keeping "British Airports Authority" is the Amendment which has now been put before us.

It is perfectly true that the noble Lord, Lord Reith, criticised this name and, during the Second Reading debate, showed that he has a real feeling for words; but I fancy that if he were here and were asked his opinion about "Airport Management Corporation", or its contraction A.M.C., he would acknowledge that this was an awkward and ugly alternative. If it had the merit of precision—and I agree with the noble Earl that it would be desirable to have a title which would describe precisely what it was that this body was going to do, what its functions were going to be—if we could have a name which had quality and precision, we could overlook the unpleasing appearance; but this present amendment to "Airport Management Corporation" does not state accurately the functions of this body. Clause 1 does not simply transfer the responsibility of airport management; it tranfers the airports themselves; it vests the ownership of the airports in this new Authority If the Minister were just putting in a manager and reserving to himself the responsibility for future development or the rate of development there might be something to be said for this Amendment. But under this Bill the Authority is empowered to provide additional aerodromes—acquire additional ones—if in its own judgment it thinks the course desirable and if it can make out a suitable case to the Minister. These powers are not consistent with the rôle of a mere manager.

When the noble Earl went on to list those items which he said would be the responsibility of this new body—real estate, leasing of properties, as well as the handling processes of some 9 million passengers a year, the number which went through last year—I must say that he himself was making a considerable case for giving the new body a title like "Authority". As I said during the Second Reading debate, to the best of my knowledge there were 20,000 people working on this one piece of real estate in London. I gather since then that I was underestimating the number; there are between 35,000 and 40,000 people working on Heathrow itself. The property would be the responsibility of this Authority. It will have to decide all the problems of traffic on the ground; it will have to decide how best these expanding numbers of people are to be handled—and this is only at Heathrow. There will also be consideration of the problem of a third airport for London, and the possibility of a central helicopter station as well. I do not think, with respect to the noble Earl, that the title he suggests is a better one. But the really strong argument, which I hope he will accept, against his proposed new title is the fact that both he and other noble Lords, and we on these Benches, want to give this new Authority a sense of responsibility and a sense of independence; we want them to acquire character themselves. And we do not think this kind of title, this belittling of their status, this dubbing them as "managers", is likely to give them the extra confidence we want them to have.

Of course the noble Earl is quite right in that there are limitations and restrictions attaching to the powers which the Authority will have as a result of this Bill. But I do not think that we should overrate those restrictions or exaggerate them. After all, private companies have restrictions and limitations placed upon them, and local authorities have restrictions placed upon them in this day and age. It is necessary to have certain restrictions on all large organisations.

Let us consider, for a moment, just what these restrictions are. First, there will be a limitation on matters of a general character affecting the national interest. This limitation is placed upon all Corporations, not simply the Airports Authority. All the Corporations have a form of words which relates to direction of a general character on matters affecting the national interest. There are limitations in respect of navigation services. I understand that the noble Earl and other noble Lords accept that the navigation services are best supplied by the Ministry over the whole country. There are very good technical reasons why this service should be restricted to the Ministry.

Then there is the question of noise. Here I think that the wishes of Parliament are being met when we reserve responsibility for the control of noise to the Minister, who, after all, is sensitive on this matter, because he is susceptible to pressures and representations from Members of Parliament looking after the interests of their constituents, if they are affected. I do not believe that taking the responsibility for noise away from the Authority and placing it with the Ministry is going to belittle the authority of the new body.

Then there are certain powers in relation to specific activities, mainly financial. Certainly the phrase "with the approval of the Treasury" runs through this Bill, but if we look at it carefully I do not think that we should really expect a public authority of this kind to engage in large capital development unless it fits into the national plan and unless the money is borrowed in accordance with the national economic interests.

It is true that there are these four limitations placed on the responsibility of the Authority but, by and large, we want this new body to act as a commercially-minded organisation. We want them to have independence. We want them to feel that they will have the responsibility for developing not only London Heathrow but the other airport which will come under their authority. And it is because I know that the noble Earl agrees with this objective that I hope he will agree that the cause of independence, commercial-mindedness, the ability to make decisions and accept responsibilities, is not forwarded by this new form of words, and that he will see his way to withdrawing the Amendment.

LORD HAWKE

My noble friend has raised the question of title in its aspect of status, which is a big question. I do not know whether he is going to be satisfied with the explanation of the Government, but I would ask the Government, in a rather minor key, to beware of this particular use of initials. We live so much on initials that in setting up new bodies we should be careful that we do not give them ridiculous initials. For example, if we call this BAA, one can imagine seeing the headline one day, "BAA bleats again" and that sort of thing. Can we not supply more virile initials for this body? I have not had time to think of any, but it might be something like Airports of Great Britain—anything but BAA.

THE EARL OF SELKIRK

I am grateful to the noble Lord, Lord Beswick, for the answer he has given. I appreciate the point he has made about not belittling this Authority. Certainly it is not my intention to do that. On the other hand, we ought to be careful not to over-exaggerate what it is supposed to do and what it is not supposed to do. I suspect that the "Overlord" is putting tasks on this Authority which is really above its strength—the buying of additional airports, the rate of development and things of that character. With great respect, how is that going to happen, unless it is with the Ministry's subsidy? On the evidence I have here, I doubt whether the Authority can have any real independence unless the Minister positively supports it and decides the policy on which it is going to act.

I think that my noble friend Lord Hawke has made a perfectly good point. We could call it the National Airports Authority, which would be a rather less pretentious title. It is a form widely used by corporations, like the National Coal Board. British European Airways is all right, because it goes abroad, but for a purely national organisation I think that this other title would be rather more suitable. I do not wish to press this point and I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD BESWICK moved, in subsection (5), to leave out the words after "shall" down to and including "with", and insert: ensure that there is at least one member of the Authority who has special knowledge and experience of".

The noble Lord said: This Amendment is put forward in the belief that it meets the point which several noble Lords raised on Second Reading. The noble Lords, Lord Selkirk and Lord Polwarth, in particular, I remember, criticised the original words. I agree with what was said on Second Reading, that it is absurd even to give the impression that if we have one individual on the board of this new Authority who is familiar with Scotland we could leave Scotland in its place up in the North and the rest need not even know about it. Of course, that was not intended. What I understood the noble Lord, Lord Polwarth, wanted was one member of the Authority to have special knowledge of the needs of Scotland. This Amendment eliminates the jargon about having "regard to the desirability of ensuring …" and replaces it with a straightforward duty. I hope that the Amendment, which is a genuine effort to improve the Bill along the lines sug gested by the noble Lord opposite, will be accepted. I beg to move.

Amendment moved— Page 2, line 5, leave out from ("shall") to second ("the") in line 6 and insert the said new words.—(Lord Beswick.)

THE EARL OF SELKIRK

I have been asked by my noble friend Lord Polwarth to thank the noble Lord for this Amendment, and I also would thank the noble Lord. This is a great improvement on what we had before and I am grateful to the noble Lord for what he has done.

EARL JELLICOE

Having also pressed that there should be a similar Amendment, I would add my thanks to the noble Lord.

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clause 2:

The Authority's functions

2.—(1) It shall be the duty of the Authority to provide at its aerodromes such services and facilities as are in its opinion necessary or desirable for their operation, but the Authority shall not provide any navigation services except with the consent in writing of the Minister.

4.9 p.m.

THE EARL OF SELKIRK moved, in subsection (1), to leave out all words after "their" and insert: proper management; this will not include services in connection with the navigation or movement of aircraft unless authorised by statutory instrument.

The noble Earl said: We had an interesting answer from the noble Lord. Lord Beswick, a minute ago, in which he emphasised the need for the Authority to be independent. If it is to be independent, it must know where it stands. It must know the extent of its responsibilities clearly. If it does not, it cannot possibly have any degree of independence or exercise sound commercial judgment on the matters for which it is responsible.

Having made those general remarks, may I ask your Lordships to turn to subsection (1)? In many ways, this is the most important part of this Bill. It gives in essence the responsibilities of the Authority, except that I do not think it is at all clear what it is and what it is not responsible for. I should like to ask your Lordships to look more closely at this clause to see what is intended here. With great respect, I do not believe that this is the way that draftsmen with clear instructions would have drafted this Bill. Either somebody changed his mind halfway through, or alternatively—which is hardly believable—people wished to leave it vague. I do not know whether that is true or not. but I can find no other explanation for how this is drafted. It says: It shall be the duty of the Authority to provide at its aerodromes such services and facilities as are in its opinion necessary or desirable for their operation, but the Authority shall not provide any navigation services except with the consent in writing of the Minister. Let us look and see what navigation services are. If your Lordships would turn to Clause 22, the Interpretation Clause, you will see navigation services dealt with there. It says: 'navigation services' includes information, directions and other facilities furnished, issued or provided for the purposes of or in connection with the navigation or movement of aircraft … I should like to give an abbreviation of this definition: 'Navigation services' includes facilities provided for the purpose of the movement of aircraft. Would that include a runway or not? I should like to ask the noble Lord the specific question: Is this authority responsible for runways? If it is, then it is absolutely essential that it should be clearly stated in the Bill. To leave the matter in uncertainty—and, frankly, as I read it, that is what it does (the noble Lord may say that I am quite foolish in reading Acts of Parliament)—is wrong. Is it the intention that the responsibility for runways should lie with the Ministry of Aviation? I guess that it is not the intention. But if it is not, then I think this clause should be more clearly worded.

There are other matters in connection with this provision which strike me as being misleading. The word "operation" does not, I think, properly apply to an airport authority unless it operates aircraft. The Authority has nothing to do with aircraft except when they are stationary on the tarmac and are being serviced or cleaned. The moment an aeroplane moves it comes under the authority of the Ministry of Aviation. Therefore, it is quite unnecessary in the following subsection to speak of "safety of operation". This is misleading because no aircraft is in any way under the responsibility of the Authority when it is being operated.

I feel—and this is the point I am making—that we should be absolutely clear just what it is that the Authority is reponsible for. To my mind, the Bill as drafted is far from clear on this point, and as this is a matter involving public safety it is a matter of some concern. I am not going to pretend that what I have drafted is anything more than an effort to make explicit (I am certain that the noble Lord, with all the wisdom he has behind him in the matter of drafting, could do it much better), what the Authority is supposed to do. If that is not clear, then nobody can be expected to exercise efficient management. However many people pass through the airport, that is simply managing the airport: it is processing, giving accommodation to airlines, organising the circulation of motor cars, if you like but it is not the operation of an airport. I think it is of great importance that the dividing line between where the Authority stops and the Ministry of Aviation starts should be clearly laid down.

There is nothing that I dislike more than the last two lines of subsection (1), where it says: except with the consent in writing of the minister. As I read that, it means that the Minister can write a letter any day to the Authority and say: "You will take over this, and do that"; and the next day, or a month later, he can write and take away that duty again. This depends on nothing more than the consent in writing of the Minister. I do not think a statutory division should be on such fragile grounds as this. This is loose drafting, and it is in the interests of public safety that it should be laid down who is or is not responsible for any matters dealing with aviation. I beg to move.

Amendment moved— Page 2, line 22, leave out from ("their") to end of line 24 and insert the said new words.—(The Earl of Selkirk.)

LORD SOMERS

I am a little confused about this. I wonder if the noble Lord, when he replies, will make it clear whether it is intended under this Bill that the Authority or the Ministry of Aviation shall be responsible for such services as providing radar beams for aircraft about to land, radio communication with pilots and so on.

LORD WALERAN

I should like to support my noble friend Lord Selkirk in all that he has said. I think it is most important that it should be most strictly laid down where the division lies between the Authority (or, as one hopes it will be, a body called by a new name) and the Ministry of Aviation for the operation of aircraft when they are flying, taking off, approaching to land or moving on the runway.

4.16 p.m.

LORD BESWICK

First of all, I will answer the direct question put by the noble Lord, Lord Somers, about who is responsible for what he called radar beams and the control of aircraft in the air. The answer to this is quite simple. It will be the responsibility of the Ministry, who are, in turn, responsible for the air traffic control services. There is no difficulty there. But I agree that as the aircraft comes into the airport, and as it starts taxi-ing along, there is a point of time at which it passes out of the responsibility of the air traffic controllers and comes within the responsibility of the Airport Authority.

As I understand the noble Earl, Lord Selkirk, who made an impressive case, what he wants to know is precisely the point at which the aircraft on its taxi way leaves the one sphere of responsibility and comes into the other. It would be very nice if we could get these technical points laid down in an Act of Parliament, but I do not think it is possible; and I do not even think it is desirable. It certainly is not necessary. The noble Earl, I believe, quite accepts the fact that in Manchester, Liverpool and Birmingham we have in this country three very efficient and safe airports. There at the present time there is a division of responsibilities. The respective municipalities are the owners, the operators, of the airport. At the same time the responsibilities for air traffic control remain with the Ministry. At those three airports none of the difficulties envisaged by the noble Earl is actually encountered. The movements of aircraft are safe, and they are efficiently conducted.

This safety and efficiency is ensured because there is a proper agreement as between the airport owner and the air traffic controller. But so variable is this field of operation, and so flexible has the agreement to be, that it would be quite impossible to have the line of demarcation, or have the understanding and the agreement written into statutory instruments. Certainly in some cases there are statutory instruments. The movement of aircraft on the runway, the control of aircraft to the runway and the movement of vehicles immediately before the runway are controlled by statutory instruments. There is a Rule of the Air which governs the movement of aircraft on runways and the approach to runways; and that Rule of the Air also, strangely enough, covers the movement of vehicles. But when we come nearer to the airport apron, then we are coming into a much less definite and clear situation. As I say, it is one in which it has been found by experience that agreement can best be reached in a less formal way. That is why it was set out here that, while navigation services in the main are the responsibility of the Ministry, it is conceivable that there shall be a variation at one airport but that that variation must be consented to by the Minister in writing.

The question I was asked about the movement of aircraft, I think I have answered. In the air it is clear; on the runway it is clear; and in the movement from the runway to the apron the aircraft is still under the control of the air traffic controllers. When it gets on to the apron, all the arrangements there are the responsibility of the Airport Authority. There are certain other minor cases—for example, the provision of teleprinters—which may be thought to be services in connection with navigation equipment. In most cases the siting, and probably also the maintenance, of the teleprinter services will be the responsibility of the Airport Authority—at London for example. This will be clearly understood as between the Airport Authority and the Ministry. So in short, although I can well see that it would be desirable to have this clean-cut line of demarcation as between air traffic controllers and the Airport Authority, whilst it may be desirable on the grounds of tidiness, it is, from a technical point of view, quite impossible. Moreover, as has been shown by our experience at these other airports, it is unnecessary, and I think that in this case the noble Earl might well decide to withdraw his Amendment.

THE EARL OF SELKIRK

With great respect, I think the noble Lord is asking a very great deal of the Committee. I am all for being pragmatic in these things, but to say that such arrangements will be made as seem appropriate (which is really what the noble Lord is asking), and then to ask us to accept this in an Act of Parliament is going beyond the bounds of the most considerate House of Lords one could have. I think the noble Lord must go a little further than this—what at least is the principle on which we are operating? What is the division of this? I ask the specific question. As I interpret facilities for navigation, as I did earlier to-day, under Clause 22, dealing with interpretation, it looks to me as if the runways are to be the responsibility of the Ministry of Aviation. I do not know. Are they? It is most important that we should know that.

LORD BESWICK

The provision of runways is not the responsibility of the Ministry of Aviation: it is obviously the responsibility of the Authority. But the responsibility for the movement of aircraft on these runways is the responsibility of the air traffic controllers.

THE EARL OF SELKIRK

I cannot agree with the word "obviously". If I may go back to the Interpretation clause the noble Lord will see that it says: ' Navigation services ' includes information, directions and other facilities … used for the movement of aircraft. If that does not describe a runway, what does? The noble Lord has said that the provision of runways is the responsibility of the Authority. I think we should say so specifically. Did the noble Lord not say that runways were the responsibility of the Authority?

LORD BESWICK

The provision of them.

THE EARL OF SELKIRK

Whose responsibility is their maintenance?

LORD BESWICK

The Airport Authority's.

THE EARL OF SELKIRK

I think it is most important we should know this.

LORD BESWICK

The Airport Authority is the answer.

THE EARL OF SELKIRK

Does the noble Lord not think we should put it in the Bill to make clear who has responsibility for this matter? I think this is a matter of public safety, and it is asking a lot to ask the Committee to accept a hazy division in a matter of public safety. I really do not think it is good enough. We want to know exactly who is to be responsible. I do not think the noble Lord will get a good man to be chairman of the Authority unless he knows precisely what the responsibility is. Nor can he be expected to run the airport with understanding and imagination unless he knows where his responsibility lies. I have mentioned only one, but there are a whole host of other things: navigation lights, taxi tracks, the whole organising of the movement of aircraft, and the signalling of aircraft on the tarmac. I should like to have some principle on which this operates. Let us have it before the Committee in a specific sense. I cannot accept that it is impossible, undesirable and unnecessary to have a matter which affects the public safety clearly defined. I must ask the noble Lord to think again.

EARL JELLICOE

I must confess that I have considerable sympathy with my noble friend. Before I listened to this discussion, I had assumed that the airport would be responsible for the provision and maintenance of the runways; and I understand that this is the intention of the Government. But having listened to my noble friend, and having looked more closely at the Interpretation clause of the Bill, it seems to me that there is at least considerable ambiguity on this point, so far as this aspect of the matter is concerned. I hope that the Government—I do not know my noble friend's intention—will be able to assure us that, at the very least, they will look at this matter of definition between now and the Report stage.

LORD HAWKE

May I add one point to what my noble friend has said? The noble Lord and myself have been discussing who provides the bunkering on these airports. Quite clearly it must be the Authority. It looks to us as if the Authority must get a letter from the Ministry before it is allowed to order a petrol tanker on to an airport.

4.27 p.m.

LORD SHACKLETON

I appreciate the force of the noble Earl's argument, but I must say that I think he and other noble Lords are making extraordinarily heavy weather of a very small point. My noble friend explained quite clearly that there is inevitably a certain borderline in technical matters which it is not suitable to put into legislation. It is intended to make the responsibility of the Airport Authority abundantly clear. As my noble friend has said, this is the system which already works in a number of municipal airports, where no difficulty exists. The purpose of the noble Earl's Amendment is to provide that this should be done by Statutory Instrument. We simply cannot administer public authorities, and large and important activities of this kind, by Statutory Instrument.

I ask the noble Earl to accept that, even if he may be slightly confused, I do not think anybody else, certainly at Manchester or Birmingham, is confused. They are not confused at New York, where exactly the same situation exists, and where the navigation services are provided by the Federal Aviation Agency and other facilities and ownership belong to the New York Port Authority. I would ask the noble Earl to recall his own experience in this matter. This derives from the practical consideration as to who controls aircraft safety.

It is arguable that the navigation services could be confined to navigation services in the air, to which the noble Lord, Lord Somers, referred, but, as he knows perfectly well, the control of the aircraft must continue on the ground also. This means control of movement over the runways, control of movement on the taxi-ing areas. It is only when the aircraft, so to speak, crosses a notional yellow line that it requires the exercise of direct executive authority by the air traffic control, and it is only because of this one activity that it has to remain with the Ministry of Aviation who are responsible for the air traffic control services.

If we attempt to draw the line either by Statute—and I think the noble Lord was moving a little in that direction—or by Statutory Instrument, we produce a very inflexible system. It would not be possible then for the Ministry to vary their instructions without first obtaining a Statutory Instrument. Admittedly this presumably would not be subject to Parliamentary control—at least I do not think the noble Lord was suggesting ft should be subject to Parliamentary negative or affirmative procedure; if so I should be even more horrified. Nevertheless, it seems to me perfectly proper that these instructions should be given in writing. I ask your Lordships to accept that in this matter the Ministry of Aviation have as large a stake in the success of the Authority for which they are the sponsoring Ministry as anybody else; they are as concerned as anyone else in getting clarity in instructions. We must assume that they will discharge their responsibility as sensibly in this case as they have in others.

The noble Lord put his finger on one possible weakness, and that was the use of the word "facilities" in the definition. I would say that clearly the word "facilities" is not intended to cover the runway itself, and I am sure he will accept the assurance I gave that the Authority controls the building of the runways and owns the runways. It is the movement on the runways with which air traffic control will be concerned. It is just conceivable that the word "facilities", which is permissive, could be interpreted too widely. It is, of course, very difficult to find a narrowing phrase. What is important is to establish the right powers in this matter. I fully accept that in certain respects a definition, in order to be all-embracing and cover all eventualities, may cover more than will be done in practice; but it is assumed that this will be a matter of common sense and of agreement. I agree it is for the Committee to satisfy itself that the intentions and the legislation are satisfactory, but in the last resort if the setting up of this Authority and the general arrangements by which the Ministry of Aviation discharge certain functions, air traffic control and so on, are accepted, I think it must be assumed that the job will be carried out sensibly.

I strongly object to the proposal of a Statutory Instrument, which seems to me to be totally destructive of flexibility. If it were necessary to make radical changes it might be convenient for air traffic control to hand over certain services which my noble friend mentioned, such as teleprinting and so on, to the Airport Authority. If they want to do so and if the Airport Authority are prepared to accept them, surely a statutory instrument is not needed to do this. I hope your Lordship will not press this Amendment. We take the point, and I will give an undertaking that we will look at the word "facilities", which seems to me the only possible weak point and may have given rise to some of the concern of noble Lords. But I assure the noble Earl that "facilities" was not in this case intended to refer to such matters as runways, and if he reads the whole of this definition it is quite clear what the purport was. I hope noble Lords will not press this Amendment.

LORD FORBES

If the Authority is going to be responsible for runways, cannot that be stated in the Bill?

LORD SHACKLETON

There are so many things that we could state in the Bill. I think we should assume that in most cases, if an authority owned the aerodrome it would own the runways, which seem an integral part of the aerodrome.

THE EARL OF SELKIRK

The noble Lord asked us to accept common sense. We are passing an Act of Parliament. We all have common sense to some degree. He talks about administering a public Authority. Is it the intention that this Authority should be administered by the Ministry of Aviation, or is it intended to be independent? I want to see it independent, and I thought the noble Lord did, but he now talks about administering a public Authority. I do not know if it was a slip of the tongue.

LORD SHACKLETON

I do not recall using the words "administering a public Authority". I think I said the Ministry were concerned for the success of it, and I may have used the word "sponsoring". Many public authorities have Ministries who are particularly concerned in their field. The respect in which the Ministry do not concern themselves with the Authority is very clearly laid down.

THE EARL OF SELKIRK

I accept what the noble Lord has said. But I have made this point from the beginning: I want this body to be independent. The noble Lord says, first of all, it works well with the municipalities; but, of course, the municipalities did not have a Statute. With a municipality, whether it be of Birmingham or Liverpool or anywhere else, the Minister goes to the municipality and negotiates a settlement. You cannot negotiate with a public corporation of this sort. We are setting it up by Statute.

The noble Lord goes on to say, "Well, it is only a borderline case". It is not a borderline case at all. Under the Clause 1 am looking at, the Minister may in writing hand over all navigation services to the Authority. There is nothing in the world to stop his doing so. It is not a borderline case. I ask noble Lords to believe that I am not in any way striking at the principle of this Bill. I accept the proposition that navigation services in the very wide connotation which is given in this Bill should be the responsibility of the Minister. What I am saying is that this must be clearly defined, and I can see no reason why it should not be clearly defined in this Bill.

Let me take the noble Lord one step further. He is no doubt aware of the trading accounts and balance sheet. If he looks at them, he will see this, under "Airports ": he will see the figures for the year 1963–64, and he will notice that all operations on the four airports here mentioned had a cost of £11½ million and an income of about £13 million. But a number of things are taken out. There are air traffic control, nearly £2 million; meteorological services, £200,000; aeronautical information services, £100,000. These amount to rather over £2 million—I have not been through this in detail. How are these to be paid for? These are taken right out of the authority of the Authority, which draws the money from passengers, from aeroplanes, and from motor cars; and presumably they fall directly on the Ministry of Aviation. Is this to be a general charge on the taxpayer, or, on the other hand, is this to be in some way charged up to the Authority? I really must ask the noble Lord to take this clause back and see whether he cannot get it drafted clearly for the public interest. I feel that to say that this is something of a minor character is misconceiving the importance of a clear responsibility.

I should like him to take it back and see whether he cannot state just what the responsibilities are. I agree that there is a border line. I will not argue about the border line. But let us have the principles put in. Let us say, if you like, "The precise border line shall be the yellow line on the tarmac" Let that be by letter. The only reason I put in a reference to a Statutory Instrument is that the Minister cannot vary Statutory Instruments every day, but a letter he can. I do not think it is fair on the Authority to have an important sphere of its responsibility varied every day. Will the Minister not say, "We will look at this again "? As drafted at present, I do not think it is fair on the Corporation or on anybody else who is asked to work so vague and fuzzy a proposal.

EARL JELLICOE

I wonder whether I could once again reinforce the plea of my noble friend. It seems to me that there is a certain fuzziness of definition here. Whether it lies in the main clause, Clause 2 of the Bill, or whether it lies in the definition, where I am inclined to think it mainly centres, I would not wish to argue at this stage. But I did note that the noble Lord, Lord Shackleton, said that he was prepared to look at one part of the definition, the word "facilities". I personally think that the whole definition needs looking at more closely. I hope that he can assure us that he will have a look at the whole definition.

LORD SHACKLETON

Let me assure your Lordships that the Government are in a quite accommodating mood. I hope that we shall be able to continue to be accommodating, and that noble Lords will not press us too hard to dot every "i". I still think that the noble Earl is making unnecessarily heavy weather of this. I am certainly prepared to agree that we shall look at this one again. I have already given such an undertaking in relation to "facilities". However, I give this warning to the noble Earl. I do not know how much experience he has of different types of business activity, but if I were to have to conduct a business between companies, including associated companies, on subjects such as inter-company rents and so on, by Statutory Instrument, I should give up entirely. In effect, this is what the noble Earl is asking us to do.

On the point of the definition, I have already mentioned that it goes wider and is to that extent an enabling clause or definition. We will look to see whether it is possible to make it more precise. Apart from the term "facilities", I will give an unconditional promise to look at the whole of the definition, but I cannot make any promise as to what the outcome will be.

THE EARL OF SELKIRK

I am most grateful to the noble Lord for what he has said. Obviously the phrase "Statutory Instrument" has got under his skin, and I apologise for bringing that about. In commerce one never uses a Statutory Instrument; it applies only in governmental spheres. So the noble Lord could not have the opportunity of using one in his private dealings in commerce. However, I am grateful to him. I hope he will think again as to this being a trivial matter. I personally do not think it is. I had quite a lot to do with many public corporations fifteen or sixteen years ago. This is not a matter to be wiped away in that sort of fashion. I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

THE EARL OF SELKIRK moved, after subsection (3), to insert: () The Authority shall have power to provide garage accommodation and parking areas, with or without parking meters.")

The noble Earl said: The intention of this Amendment is to give to the Authority power to ensure that it can provide properly for garages, parking and things of that kind at the airport, for motor cars and vehicles used generally on the roads. Of course, the noble Lord can answer quite well that this Amendment is absolutely unnecessary. There is a remarkable subSection 1n Clause 2, namely, subsection (3), which states that The Authority shall have power to do anything which is calculated to facilitate the discharge of its duty under this Act.

I do not know whether that power has appeared in a public Statute before. That is a remarkable statement.

Some of my noble friends and I feel that the provision of motor car facilities at aerodromes is a most important matter. The provision of facilities for motor cars is something in which we have fallen down in almost every aspect of our life in this country. Aerodromes are not only places where such facilities are necessary; all kinds of facilities for motor cars can be provided there comparatively easily. I should like something, not necessarily these words, to be inserted as an injunction to the Authority really to see what they can do. I see no reason on earth why Parliament should not put this suggestion to the Authority. I beg to move.

Amendment moved— Page 2, line 29, at end insert the said subsection.—(The Earl of Selkirk.)

LORD WALERAN

I should like to support my noble friend Lord Selkirk again in this Amendment. In fact, I would rather have seen an Amendment to the effect that it shall be the duty of the Authority to make such provision. It is not just the private motorist who is going to the aerodrome of whom I am thinking. London Airport, for instance, is a "town" with a lot of factories on it. There are all the maintenance works. A great number of the workers go there in their own cars. Aeroplanes do not have to be serviced merely at any set time of the day or on any particular day of the week, and a great mass of the people who work in maintenance on aircraft go there by their own private cars because that is the only way they can get there to do their work.

As regards the ordinary passenger, he does not necessarily live in a town near the aerodrome, but may come from North, South, East or West of it. It is infinitely more convenient for him to go to the aerodrome by motor car and leave his car there for two or three days, if he is going on business to the Continent or elsewhere, than to go into the City centre and go to the aerodrome by airline bus. I hope that Her Majesty's Government will see their way to support this Amendment, even if it is not so strongly worded as I should like it to be.

LORD SOMERS

I too, should like to support this Amendment. As my noble friend Lord Waleran has said, there is no doubt that the only way that many people can reach an aerodrome is by car. The railway stations may not provide any connection with the part of the country from which they come. I should also like to urge that it be a duty on the Authority to provide cover, garages where a motorist who is going abroad for, say, a week or so may leave his car, and at not too exhorbitant a charge, because that is something which affects the motorist really severely in these days.

LORD FORBES

I should like to support this Amendment. Perhaps I may give your Lordships an example. At Aberdeen Airport when the bus comes to the terminal it cannot at present turn round there but actually has to go out on to the tarmac to do so. There is a good case for seeing that in future vehicles at any airport are properly controlled by an Authority, or whatever we are going to have.

EARL JELLICOE

May I join the queue in support of my noble friend? It may seem odd to single out one particular duty in this way, and, normally speaking, I should not be in favour of it; but it seems to me that the provision of adequate car parking at our airports is really such that there is a good case for singling it out, more especially when we know how difficult our airports have always been in this respect in the past. If we insert wording of this sort—I am not myself particularly wedded to any particular phraseology—I am sure we shall be helping the Authority to give this particular matter the importance which is its due.

4.50 p.m.

LORD BESWICK

Let me say at once that there is absolutely nothing between us on this point, so far as the provision of adequate parking facilities is concerned. Of course, we are all agreed that on airports there must be proper provision for cars: there is no argument about that at all. The question is whether, if one puts such words as these into the Bill, one is going to get the Authority to perform its obligations more satisfactorily than if the words are left out. I agree with the noble Earl, Lord Jellicoe, that it would be a little odd if one were to say that this Authority should provide car parks. Why should we not say that the Authority should provide passenger catering facilities, for they also are important? Why should we not put that into the Bill? The fact of the matter is that the Authority is required to carry out—

EARL JELLICOE

I apologise for interrupting the noble Lord, but he is praying me in aid in rejecting this Amendment, which I think he is about to do, but I think he could not have listened to my argument. I said that, normally speaking, I would not wish to single out any particular facility, but I went on to give my reasons why I thought it was sensible to single out this particular facility.

LORD BESWICK

It is true that the noble Earl did say that. He also said that it may seem a little odd, and I was going out of my way to agree that it did seem a little odd that we should put this one requirement in the Bill. In fact subsection (3) of Clause 2 says that The Authority shall have power to do anything calculated which is to facilitate the discharge of its duty under this Act. The noble Earl, Lord Selkirk, is right in thinking that under that subsection the Authority will be able to provide all the car parks it wants to provide, subject to the physical limitations. It is thought—and I hope your Lordships will agree—that that overriding power will be adequate. The only criticism made of that wording by the noble Earl was that it appeared to be too comprehensive, too sweeping. He seemed to think that we are arming this Authority—which we want to be independent, which we want to have armed with sufficient powers—with too many powers. In fact, the words are taken from the Air Corporations Act, 1949, Section 3 (2). So there is a precedent, in that Parliament has agreed to it before. It gives the Authority power to provide car parks, and I hope that it will provide all the car parking that is required. With that undertaking, that subsection (3) does not confer some exceptional power but that it is adequate for this particular purpose, I hope the noble Earl will see fit to withdraw his Amendment.

THE EARL OF SELKIRK

If I may ask one question, I put in the words "parking meters". There used to be a strong difference of opinion about parking meters. I was notably defeated in this House when I first introduced the matter. Does the word "anything" include parking meters, the introduction of which usually requires statutory authority?

LORD BESWICK

I am sorry; I should have dealt with that point. It is true that if the British Airports Authority wishes to provide parking meters, there is no reason why it should not do so. The reason why there have been no parking meters at the airport so far is not that there are inadequate powers, but simply that they are not thought to be necessary. The policy has been not to have cars parked on the roadway, but to provide proper car parks. That may well be the policy of the new Airports Authority, but if the Authority, in its own judgment, wants to provide parking meters there is no reason why it should not do so.

LORD WALERAN

If, with the leave of the Committee, I may speak again, I would draw the noble Lord's attention to the fact that no one in industry, certainly in the United states, would put up a factory without laying out car parks for workers. When I spoke earlier I said that one of the great points is that provision must be made for maintenance men coming to work in their cars. In this country we always do things too little and too late. Remember the time it took to get just reasonable facilities at London Airport for all the workers there, and for passengers—and even now it is not all that good; the motoring organisations have battled with this problem for years. I fear that, unless we put something in the Bill, nothing will happen.

LORD SHACKLETON

I do not think the noble Lord is on the right Amendment. I think he wants to make it compulsory. This is purely an enabling one, and I think my noble friend has answered it. Incidentally, the noble Lord does not have to have the leave of the House to speak twice in Committee.

LORD WALERAN

It is a matter of courtesy.

THE EARL OF SELKIRK

I am not going to press this Amendment. I think that we have emphasised clearly the im- portance that we attach to it. I can say on behalf of a number of noble Lords that if the Authority fails in this task, the matter will be one of sharp criticism in this House in the future.

LORD SHACKLETON

Hear, hear!

THE EARL OF SELKIRK

I hope the Authority will take note of these words, and see that it makes a real effort to do something better than has yet been done in this country. With these thoughts in mind, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clauses 3 and 4 agreed to.

Clause 5 [Borrowing powers]:

On Question, Whether Clause 5 shall stand part of the Bill?

4.56 p.m.

EARL JELLICOE

I should like to refer to a matter which was touched upon by the noble Lord, Lord Reith, and myself during Second Reading—namely, whether the proposed Authority's initial working capital is adequate. I raise this point because there is some danger of our asking the Authority to work within too tight a financial margin. The position, as I understand it, is that under Clause 5 the Authority is given total borrowing powers (apart from short-term borrowing powers) of £70 million. But the initial capital debt, if that is the right expression, which the Authority will inherit may be as much as £56 million, or perhaps even more (I will come back to that point in a moment), so that the margin for new capital expenditure open to the Authority in relation to its borrowing powers may be as low as £14 million, or perhaps even less.

The noble Lord, Lord Shackleton, argued on Second Reading that we need not worry unduly about this; that at least for the initial five-year period, up to 1970, the Authority would have adequate borrowing powers. He said that this had been carefully looked into, and he gave us some interesting figures, which were new to me. Then he went on to say that if the Authority needed more money and wished to extend its borrowing powers it could come back to Parliament in the normal way, and that this in itself was a safeguard of Parliamentary control. I do not wish to dispute for a second the need for Parliamentary control, but I hope that the noble Lord can assure us that the Government are not proposing to put too tight a financial straitjacket on this fledgling Authority, clipping its wings before take-off, so to speak. I am reinforced in what I feel about this by what Lord Beswick has said about the need to give this new Authority confidence to build up its independence and to give it a real measure of responsibility over its own affairs.

There are a number of points on the financial side on which I should like to have more explanation. First, there is the £56 million, the commencing capital debt. I note from paragraph 4 of the Explanatory Memorandum that the amount of the initial debt is estimated to be "of the order of £50 million". Is it to be £50 million, or is it to be £56 million? If it is to be £50 million, why provide the figure of £56 million? This margin of £6 million is no light matter. After all, whether we are saddling this new Authority with £6 million more or less of initial debt is quite a considerable point.

I asked on Second Reading—and I hope it is in order to refer back to Clause 4—whether the authority given to the Minister in subsection (3) of Clause 4 could override subsection (2); whether under subsection (3) the initial capital debt could be raised to more than £56 million. I do not myself know the answer to that, not being a lawyer. I do not think I had an answer on Second Reading, and I am not quarrelling about that, but I should like to know what the experts think on that particular point.

Then there are the Authority's likely capital expenditures and the resources available to it. The noble Lord, Lord Shackleton, explained on Second Reading that until 1970 the total capital expenditure which the Authority was likely to incur was estimated at £34 million. We had his assurance—and I always value an assurance from the noble Lord, Lord Shackleton—that this figure of £34 million was carefully arrived at. I should like to inquire a little as to the basis of this estimate of £34 million. Does it, for example, provide for any possible expenditure within this period on a third London airport, which might be very heavy indeed; and what guarantee have we that these estimates will not escalate? We all have a certain amount of experience, not least in the Ministry of Defence which the noble Lord is now in, of escalating expenditure.

Finally, we were told by the noble Lord that of this, to me, rather mysterious £34 million, some £23 million would be found by the Authority from its own resources. At the present time, to judge by that part of the Explanatory Memorandum which was given to another place but which your Lordships were not judged adult enough to see, the expenditure and receipts on these four aerodromes are at the present time roughly in balance. Over the five-year period up to 1970 there is apparently going to be a favourable balance of some £23 million. That is how I read the noble Lord's explanation. Is it really reasonable to budget for a surplus of this sort when we are dealing with a medium of air traffic, and when there are a vast number of variables? I should like to have a further explanation on this point.

Incidentally, I should like to know how this ties in with the taxation position of the Authority. I note from subsection (7) of Clause 1 that the Authority is liable to tax. Will this £23 million be liable to tax, and, if so, are we really certain that the Authority will have this full £23 million available to it? I hope that I have made it clear that I am not in any way challenging the principle of ultimate Parliamentary control over the expenditure of this Authority, and I have certainly no desire to see the Government establish a spendthrift Authority. Yet there is one thing of which we are absolutely certain, and that is the vast growth which we are likely to see in the air traffic through the airports for which this Authority will be responsible.

We know only too well how at present the facilities are greatly overstretched. We know that the future needs in this respect have been constantly underestimated in the past, and I think we can be quite certain that the Authority will need to incur very sub- stantial capital expenditure in the future. I think we are all agreed on the need to establish this new Authority on a sound financial basis and to give it a real measure of independence. I have some doubts, and I have attempted to express them in this intervention, whether we are establishing the Authority on a really sound financial basis if we impose this ceiling of £70 million. I should be grateful for any further explanation which the noble Lord can give us.

THE EARL OF SELKIRK

May I add one further point to what the noble Earl, Lord Jellicoe, has said? I think it is desirable that we should have a picture of what the future finance is likely to be. I should like to ask, particularly, how this saving of £23 million in, I believe, seven years is to be made, in order to be available for capital expenditure on behalf of the Authority. I have the trading accounts and balance-sheet for 1964, and I notice that these four airports made what is called an operating surplus of £1½ million. Even if they had the whole of that amount, I do not see how in a reasonably short time they could have available from their own resources capital of £23 million. I do not understand this, unless an enormous expansion of traffic is expected.

I should like to repeat a question which I have already asked. What about these services of a navigational character which have been undertaken by the Ministry of Aviation? Are they going to be paid for by the Authority or are they going to be paid for by general taxation? In other words, should they be deducted from the operating surplus stated in the accounts of these four aerodromes or must they still be included? If they are deducted, then I am bound to say that there really seems to be quite a reasonable opportunity for the aerodromes to have a fair surplus. There is one other question on these accounts about which I should like to ask. I have No 1dea what allowance there is for depreciation. There may be a full allowance or there may not be, but I think it is very important for the future financial position of this Authority that we should know how it stands.

5.7 p.m.

LORD SHACKLETON

The noble Earl, Lord Jellicoe, was good enough to give me notice that he was going to raise this fairly technical matter, and I should like to answer one point straight away, though I should have liked time to check it. So far as my reading of the Bill is concerned, the £56 million limit is an absolute one. The powers of the Minister to vary the amount of—dare I say?—the commencing capital debt, or the initial, starting or beginning capital debt, are in relation to the debt which is determined on vesting date, but it seems to me that subsection (2) provides an absolute limit as to the amount. The noble Earl has questioned whether the present limit of £70 million on the Authority's borrowing powers is adequate to give the Authority power to do what is necessary, and I gave a general assurance on Second Reading that it was considered that this was so. I should like now to go into a little more detail, and even to answer some of the points of the noble Earl, Lord Selkirk.

The maximum figure contains two elements—and I may say, in the absence of the noble Lord, Lord Reith, that on this particular point he consulted Sir Ernest Gowers, who advised him not to tangle with Parliamentary draftsmen—the commencing capital debt and further borrowings. These figures have been arrived at in this way. The commencing capital debt which is set in Clause 4 (2) has a maximum figure, as we know, of £56 million. This has been assessed by taking the present written-down book value of the assets of the four aerodromes—and this may be of interest to the noble Earl, Lord Selkirk—as certified by the Comptroller and Auditor General and published in the official trading accounts and balance sheets for 1963-64. We further adjusted this figure to take account of the additional capital investment and the incidence of depreciation and obsolescence between March 31, 1964, and the vesting date of the British Airports Authority.

Deductions from these figures have been made to take account of the value of assets which form part of the navigation services which will be retained by the Minister and additions have been made to provide for working capital, that is, stock plus cash, which is not shown in the trading accounts. The maximum figure of £56 million used in the Bill had to allow for a possible slip in the proposed vesting date. The later the date the higher the figure for the commencing debt. This might be caused by delays in the progress of the Bill through your Lordships' House, or other reasons. If vesting date is on October 1, 1965, which is the earliest possible date, the commencing capital debt will be £53 million. If it is on April 1, 1966, the figure will be £54 million. Our advice, as I have already said, is that the adjusting power in Clause 4 (3) cannot override the maximum of £56 million, so if the noble Earl wishes to give the Authority the maximum leeway in these matters we must clearly hurry this Bill through the House as quickly as possible.

The total operating limit of £70 million has been arrived at by estimating the revenue, the operating costs (and I think that in these remarks I can pick up most of the noble Earl's points), the interest charges, taxation, reserves and capital requirements of the British Airports Authority for the first five years. The Authority's capital requirements during this period have been estimated to amount to about £34 million. This includes, for instance, at Heathrow the provision of a new passenger building and the development of a freight area. Of this amount the Authority can be expected to finance £23 million from its own resources; and perhaps I should say this is not simply the trading profit, but it will do it out of what in the commercial world is known in short as the cash flow of the undertaking, and this takes into account depreciation.

The limit of £70 million will not affect the British Airports Authority for the first five years or so, but it is perfectly true that the limit will not—and this is intentional—allow the financing of a major development such as the third London airport or the central London heliport. This Treasury policy, and I think I might also say Parliamentary policy, is in accordance with the policy for other nationalised industries in that every five to seven years—and, if necessary, at shorter intervals, if there is some important new project which will involve a great deal of national resources, such as a new airport—the practice is for the authority, in this case the Airports Authority, to be obliged to make a fresh approach to Parliament. This enables Parliament to have a special look at the specific progress as well as the general progress and performance of the authority. Your Lordships will recall that this has occurred on a number of occasions. We have had such Bills introduced by the previous Government with regard to the airlines, and at that time people queried—I may have done it myself—whether the amount of money laid down was enough. But the purpose is quite clear: the Authority should not go beyond a limit without Parliamentary consent.

According to the best estimates which have been made (and we can do no more than make these estimates) the figure of £70 million is not too low and it should not restrict the proper capital development. Indeed it provides quite a substantial margin for the estimated expenditure of £34 million over the next five years. This may be necessary for all sorts of reasons, including, as the noble Earl said, escalation. I apologise for again giving a business analogy, but this is in a sense the equivalent of setting the authorised capital of the company. To increase the authorised capital it is necessary to proceed by means of an extraordinary general meeting of shareholders. These analogies are always dangerous because they are never quite perfect, but £70 million is considered to be the best figure.

It is difficult for the Opposition, or indeed for the members of the Government, to examine it in too much detail, but we have inquired into this, and my right honourable friend the Minister of Aviation is satisfied that this is right in accordance with our established Parliamentary practice; and certainly another place, which is particularly concerned with expenditure, was satisfied with it. I appreciate that this is a very proper matter for the noble Earl, Lord Jellicoe, to raise. If there is more information I can give, either to him or to the noble Earl, Lord Selkirk, on particular questions which I have not covered, I shall be happy to do so, either in writing or at a later stage. Possibly, if it is not a suitable matter to raise in an Amendment on Report stage we might take the opportunity of a Third Reading debate.

THE EARL OF SELKIRK

There is one question which I have already asked twice, and I should like to have it answered. Who is going to pay for the navigation services? They are covered now by the receipts from the airport, but since the Authority will be separated from the airport, and the services will be undertaken by the Ministry of Aviation, the charge for them will no longer fall on the airport and should increase the Authority's overall surplus. Are the Authority going to be charged with this figure or will it fall on the general taxpayer? I see that last year the Ministry had a surplus of £½ million. How can the noble Lord say that in five years they will have a reserve of £23 million? It does not seem to me to add up.

LORD SHACKLETON

I do not think now is the time to embark on a lecture on financing arrangements, but I used the expression "cash flow" which is an established commercial phrase covering such subjects as depreciation. I think we should not take up the time of the Committee by going into minutiæ, but I am very willing to explain it to the noble Earl in more detail on a suitable occasion or, as I have already suggested, on the Third Reading. On the subject of navigation services, these, of course, will ultimately be paid, except if there is some element of subsidy by the Government, by the airlines. The net position of the airports should remain the same in this respect. There should be an offset equivalent to what they lose. I hope that answers the noble Earl's point.

EARL JELLICOE

I thank the noble Lord for his very careful exposition of the position. We certainly have a great deal more information now than we had at Second Reading or, indeed, than was given to another place. The noble Lord referred to another place and its overriding responsibilities in these matters, but, so far as I can recall, the question of the adequacy of the Authority's borrowing powers was barely touched on in the other place.

I have one minor question to pose. The noble Lord talked of the £23 million being derived from the cash flow. Am I right in assuming that that will not be subject to the provisions of Clause 1 (7), the taxation provisions? I assume this is so but perhaps we could go into that at a later stage. The noble Lord ended his remarks by saying the Minister was satisfied that the £70 million borrowing powers were adequate. The Minister may be satisfied, but what is important is whether the Authority when it is set up will be satisfied, because we all wish the Authority to have a large measure of autonomy and independence in these matters. On that, I should like to read very carefully what the noble Lord has said, but I should like to reserve the right. as it were, to come back to this if necessary at the Report stage—or perhaps we can have a further discussion on Third Reading, as the noble Lord has himself suggested.

LORD SHACKLETON

First of all, the £23 million is, as I understand it, the net figure, and it therefore takes account of the taxation point—and, of course, the Authority is liable to tax. The second point is that it is of course very difficult to ask whether the Authority is satisfied when it does not exist. We must just do our best for the unborn child, but we are endowing it in a fashion which we think is suitable for the station it will occupy in life. We have given it a bit of a margin to take care of escalation in the course of its life, but, if it is not satisfied, it can always come back again and ask for more, although it will have to ask Parliament.

Clause 5 agreed to.

Clause 6 [Exchequer Loans]:

5.22 p.m.

THE EARL OF SELKIRK moved, in subsection (2), to leave out "with the approval of the Treasury". The noble Earl said: We have had some discussion about the nature of the control which the Ministry of Aviation will exercise over the Authority, and in point of fact it appears that the Ministry of Aviation is not trusted, either, because there is placed over it the Treasury. In fact, it appears that the Treasury do not trust the Ministry of Aviation one little bit. I always imagined that we were governed by what is called collective Cabinet responsibility and that it was not necessary to regulate by Statute the relative responsibilities of different members of the Cabinet. I really think that this sort of thing in a Bill is quite unnecessary. May I read subsection (2) of Clause 6: Any loans which the Minister makes under this section shall be repaid to him at such times and by such methods and interest thereon shall be paid to him at such rates and at such times, as he may with the approval of the Treasury from time to time direct".

Is it really necessary for the Treasury to interfere there? Can we not rely on the Minister of Aviation to have a private talk or to send a Minute to the Chancellor of the Exchequer—or would it be to the First Secretary? If I may say so, these words in a Statute seem to me utterly redundant. I beg to move.

Amendment moved— Page 6, line 8, leave out ("with the approval of the Treasury").—(The Earl of Selkirk.)

LORD BESWICK

The short answer to the noble Earl is that the Treasury are the Government Department with responsibility for the overall control and co-ordination of public investment and interest rates, and therefore it clearly seems their responsibility to be concerned with the methods and the times of repayment of large sums of money advanced to a public authority. Treasury approval of these repayment arrangements is similarly essential; and, although I understand the noble Earl's feelings when he comes across this phrase from time to time in the Bill, I should have thought that he would agree, on reflection, that it was necessary.

In fact, of course, this provision is to be found in the Statutes dealing with the other nationalised industries—coal, the transport industry, the electricity and the gas industries and the Air Corporations. All those Acts include this provision; and, so far, Parliament has agreed that it is necessary. It sounds a little weighty as we read it, but I think it is a question of how relations between the respective Government Departments are conducted. But if it is accepted that the Treasury are the body to which we look for, as I say, overall control of our national economy, I should have thought it was eminently reasonable to say that that is the body to whom the Authority should have to go for approval when it is seeking to borrow money, when it is deciding or discussing how the money shall be repaid and at what rate of interest. I have a good deal of sympathy with the general feeling of the noble Earl, but I hope that, on reflection, he will be able to withdraw the Amendment.

VISCOUNT STUART OF FINDHORN

I have every sympathy with the Amendment moved by the noble Earl sitting beside me, but, though supporting him, I rise merely in the interests of brevity. After several years in office, I must confess to him, though I do not wish to depress or distress him unduly, that I am afraid that, whether the words "with the approval of the Treasury" are in or out of the Bill, the answer will be the same.

LORD SHACKLETON

IS the noble Earl going to test the feeling of the Committee on this Amendment?

THE EARL OF SELKIRK

I think we can perfectly well negative this one.

LORD SHACKLETON

May I suggest that he is really forcing the Committee to take a decision on something which, for the reasons indicated by the noble Viscount, Lord Stuart of Findhorn, is not possible? Frankly, he is now trying to liberate the Ministry, not the Airports Authority. Perhaps the noble Earl has painful memories, from his days as First Lord of the Admiralty and in other ministerial positions, as other noble Lords may have, of the moment when the Permanent Under-Secretary says, "This will have to go to the Treasury". But the fact is, as the noble Viscount has made clear, that it will have to go to the Treasury; it is the Treasury's job. If I may say so in defence of the Treasury, whether or not one supports the general type of control they operate, they operate it with great efficiency—and this goes right through our system. It may be that on another occasion the noble Earl will wish to raise some wider questions, and if he wants, on this occasion, to have this Amendment negatived, he may do so, of course; but he has been so accommodating up to now, and I can assure him that from now on the Government are going to be even more accommodating.

THE EARL OF SELKIRK

If the noble Lord objects to the Amendment's being negatived, I am perfectly willing to withdraw it. Personally, I think this is a bad practice which has grown up in legislation, and I am really only drawing attention to it. Of course the Treasury are in control, but why put it in the Bill? In the circumstances, however, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 agreed to.

Clause 8 [Accounts and audit]:

THE EARL OF SELKIRK

This Amendment raises a very simple point. It is a clear-cut question of how much authority the Authority is going to have. I am bound to say that I should have thought the minimum authority it should have is the appointment of its own auditors. We discussed this on Second Reading, and I do not want to discuss it again. I think it would be a sign of a certain confidence in the Authority if it were allowed to appoint its own auditors. If that is not done, it appears to me that the auditors can—not always will, but can—come into something of the position of spies, on behalf of the Minister, studying the affairs of the Authority. That would be a pity. I believe it is important that the Authority should have at least the right to appoint its own auditors, subject to the approval of the Minister. I beg to move.

Amendment moved— Page 7, line 21, leave out ("appointed") and insert ("approved").—(The Earl of Selkirk.)

EARL JELLICOE

I should like, very briefly, to support my noble friend on this Amendment. I do not wish to go over his arguments again, as I think he has put the case far better than I could possibly reiterate it. I would only hope that this is one of the points on which the noble Lord opposite will be able to go at least some way to meet my noble friend. He foreshadowed just now that he might be in an even more forthcoming mood. I hope that the umbrella of his forthcomingness will extend over this particular Amendment.

5.30 p.m.

LORD SHACKLETON

I do not know that we have been given any arguments in favour of this Amendment. I say that I am accommodating; but at least I should have liked to have some arguments for it. We have been given an argument against the existing practice: namely, that the auditors will be spies for the Minister. This seems to me to be rather an emotional way of describing the basic rôle of an auditor, which is to look closely into matters and audit the books, investigate them and find out if everything is as it should be. I defended previously the principle, which I think is sound, that the auditors are watchdogs in this matter: in the case of a company, for the shareholders and the investors and general public at large; and in this case, for the public and Government in relation to public money by which the Authority is financed. Therefore it seems logical that the appointment should be made on the initiative of the Minister and not of the Authority. The classic nationalisation Acts for coal, iron and steel, gas, electricity and transport all provide for the Minister to appoint the auditors. Curiously enough, the Covent Garden Market Authority Act, a notable example of the previous Government's legislation, is an exception to this general rule. I wonder whether the noble Lord, who was a Minister in that Government, could tell me what prompted them to that end. That Act provides for the auditors to be appointed by the Authority with the approval of the Ministers. I do not know why this exception occurred. It occurred also in relation to the Television Act. I should frankly be very interested to have views of noble Lords on the propriety of this matter. I would not strongly resist the noble Earl's Amendment, although I must do so on technical grounds; it is not suitable as it stands. But the principle that the appointment should be made by the Authority with the approval of the Government, which is what he is asking for, could be a compromise. Frankly, I find it difficult to say whether it is, in principle, right. I am still inclined to think that, in principle, the auditor should be appointed by the Government.

Again, it is arguable in the case of a company that the board of the company virtually choose the auditor and the general meeting of the shareholders confirms it; but the shareholders retain that power and, formally, the appointment is made on that occasion. In this matter, while saying that I think the Amendment is not acceptable as it stands, I should be interested to hear from any other noble Lord with experience of this matter. Frankly, the Government are prepared to consult your Lordships on this point.

EARL JELLICOE

I cannot claim any great expertise on this subject. Surely, the noble Lord was asking what was the principle behind the Amendment, and he took my noble friend to task for not explaining it. I thought he explained it briefly but adequately. We are trying to put real flesh and blood on the concept which the noble Lord's noble friend has been enunciating: to give the new Authority as much independence and sense of responsibility as possible. If we mean to pay more than lip service to that, then surely we can allow them to choose their own auditors. It seems to me that the analogy of what happens in a company, that the board of directors propose the auditors to the annual general meeting, who can then disagree with it, is close, because this is precisely what will happen if my noble friend's Amendment is agreed to. If the Minister does not approve the choice he will be able to veto it. It seems to me that given this principle, given our desire to give this new Authority as much leeway as possible, given the fact that a number of recent precedents exist for what my noble friend is asking, the Government could very well concede this relatively minor, but not altogether unimportant, point.

LORD BROWN

The principle embodied in the Bill is, I believe, the correct one and is the practice in this country and in most other countries. It is to leave the Authority to conduct the enterprise, to provide it with resources of an adequate sort, and to rely on them to use those resources with integrity. The single check is that those who provide the resources have what is no more than a spy to investigate and make certain that these resources are used with integrity. If you put the auditor in the position of being responsible to those who are responsible for the use of the resources, you are making him non-useful in the sense that he cannot report to an independent party as to whether the resources have or have not been used with integrity. This is the principle which lies behind the Companies Act and which lies behind most of the Government's Acts with regard to the auditor's appointment. I believe the Bill as it stands in respect to this principle is entirely correct.

LORD HURCOMB

When I was Chairman of the British Transport Commission, so far as I remember our auditors were appointed by the Minister. That practice never gave rise to any inconvenience; still less did it lead to any form of espionage. On the other hand, I suspect, although I cannot remember, that we probably suggested to the Minister the auditors whom he might appoint. If the Amendment were carried I should not have thought there was any risk of abuse; because if any authority proposed unsuitable auditors the Minister would reject them and refuse to approve them. He could go on refusing to approve auditors until one had worked through the whole register of chartered or incorporated accountants in the country. I should think that there is a good deal to be said for the argument that the Authority concerned should have the initial privilege of suggesting suitable auditors and that the Minister should have the right to approve them or disapprove them. I do not think that in practice there will be any very material difference. In theory, as long as the Minister's approval is required, the ultimate sanction of The taxpayers, who are the equivalent of the shareholders in the case of a company, would still be preserved. If, as I gather, the Government have an open mind, they would perhaps consider in what appropriate form a little latitude could be allowed here.

LORD SHACKLETON

I am grateful to noble Lords. I still think that in some respects this Amendment is misconceived. Auditors are not spies; indeed, I believe the description is that the auditor is not a sleuth but a watchdog. In private industry the appointment is made, in effect, by the shareholders; in practice it is made by the shareholders. The board, 99 times out of 100, may be responsible for choosing; although they may not move the actual motion of the appointment. This is frequently moved by the shareholders. They may be picked out to do the job. I have seen this happen. I think the Government's attitude is genuinely open-minded on this. What worries me is that the Amendment might conceivably blur the principle behind the appointment of auditors, so that in some way they become the Authority's auditors. But, of course, they are professional men, and by their qualifications they have to act professionally.

I would say to the noble Earl that the Amendment as it stands is not satisfactory; it will be necessary to have a number of consequential Amendments. But if he would like to withdraw the Amendment, I will undertake to consider the point very carefully. In the light of the appeal of the noble Lord, Lord Hurcomb, I hope that we shall be able to accept the principle. I am sure the noble Earl would agree that from the technical point of view it would be a mistake to press the Amendment. I undertake to give him full opportunity to know what the decision of the Government is in this matter, so that, if he wishes, he can put down an Amendment on Report. I do not think I can go further than that in meeting his wishes.

THE EARL OF SELKIRK

I am grateful for the way the noble Lord looked at this question. I am sorry that I did not argue at greater length; but I made the point that I think that, quite differently from the case of a joint stock company, it is important that the independence of these corporations should be clear. No one doubts the joint stock company's independence, but there is doubt in many people's minds how independent these authorities are. This is not a decisive issue but it is one issue. Firms vary a great deal in how they use auditors and accountants, but I should have thought that the best way was for the manager or chairman to work closely with them. They are not simply watchdogs. They should be of great assistance to efficient management. I assume that the Chairman of the Authority, far from wanting to hide anything from the Minister, would be anxious to present to the Minister all information about how the organisation works, to show that his organisation is working properly. If he works closely with the auditors, without in any way undermining their independence, then I believe that he can make his organisation more efficient. As the noble Lord, Lord Hurcomb, suggested, I think it is better for the noble Lord, Lord Shackleton, to initiate any Amendment which may be required. After what the noble Lord said, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

5.41 p.m.

On Question, whether Clause 8 shall stand part of the Bill?

LORD MCCORQUODALE OF NEWTON

I wonder whether I may ask a question purely for information? I am afraid that I am ignorant of the subject, though I ought to be better informed. Why is it put in, at the bottom of subsection (2), that a Scottish firm may be so appointed? Having used no differentiation between England, Scotland and Ireland all the way through, why are Scottish accountants to be different from any other body of accountants? I was brought up to believe that Scotland has the best accountants in the world and it seems to me that here they are regarded as lesser bodies.

LORD BESWICK

I understand that it is because there may well be a suitable Scottish firm, but they are not members of the bodies set out in the Bill, and in the case of Scotland an exception can be made. I will check this point.

LORD MCCORQUODALE OF NEWTON

But each of the partners has to be a member of one of these bodies.

LORD SHACKLETON

I thought that this question might be asked and I had the answer, but I have forgotten it. But it is for entirely respectable reasons.

Clause 8 agreed to.

Clause 9 [Byelaws]:

LORD BESWICK

I beg to move the next Amendment. It is a drafting Amendment, which I hope the Committee will accept. Its intention is to ensure that all existing byelaws at the four aerodromes will continue to have effect until vesting date. Under the present wording of the clause, all byelaws now in force will cease to have effect as from the coming into operation of Clause 9, which means as from the date on which the Bill is given the Royal Assent, probably about April, 1965; so there would be a gap from that day until the vesting date, which could not be until October, 1965, at the earliest.

For the majority of existing byelaws this will not matter, but there is one group of byelaws, for the regulation of vehicular traffic, which would lapse unless the Amendment were accepted and it could be serious if such byelaws—for example, that requiring compliance with traffic signs—ceased to have effect for six months or more. The Amendment ensures that that position does not arise, as the byelaws in question will remain in operation until the actual vesting date.

Amendment moved— Page 9, line 15, leave out from ("the") to ("and") in line 16 and insert ("vesting date").—(Lord Beswick.)

On Question, Amendment agreed to.

On Question, whether Clause 9, as amended, shall stand part of the Bill?

THE DUKE OF ATHOLL

Are the Government satisfied that the penalty of £25, under subsection (3), is sufficient for all the crimes that one can commit under subsection (1)? It seems to me that one gets away lightly if one can be fined only £25 when one makes a major obstruction within the aerodrome, or something like that, which I should have thought would be extremely dangerous and should certainly make one liable to a fine of far more than £25. Or could one then be "had up" under some more general law for causing danger to the public, and thereby get a much bigger penalty?

LORD SHACKLETON

It would be easier to answer this point on an actual Amendment. Clearly the matter was carefully considered, but I take note of what the noble Duke said and if by any chance, on the point he has made, there are not adequate powers we will raise the matter again. On the Question whether the clause shall stand part, as it is dealing with the control and management of aerodromes, perhaps I can answer the noble Lord, Lord McCorquodale of Newton. I understand that under Scots law, firms are corporate bodies and therefore it is necessary to bring in the individuals. I apologise to your Lordships for that slight breach.

Clause 9, as amended, agreed to.

Clause 10 [Airport police]:

THE EARL OF SELKIRK

This clause sets up a conference to deal with the constabulary, and I wonder whether the reference to "an equal number" is necessary. Suppose the conference is unequal—does that in any way invalidate it? It seems to me that these words could well be left out.

Amendment moved— Page 10, line 5, leave out ("of an equal number").—(The Earl of Selkirk.)

LORD BESWICK

This wording follows the wording of an Act passed by the previous Administration—the Transport Act, 1962—and it might well be thought that that is not a good precedent. I should have thought the tendency would be to accept the noble Earl's Amendment. When I looked at it, I was not certain whether we were protecting one side or the other, whether it was unfair to the management if they had one more than the constables or the other way round. But, on reflection, I agree that it would seem unnecessary to have an equal number. In any case, decisions are not made by a majority vote. And in the Police Act, 1964, which provides in Section 45 for a Police Council to perform functions similar to those of this conference, there is no provision for an equal number. Therefore I would suggest that the noble Earl's Amendment be accepted as an improvement to the Bill.

On Question, Amendment agreed to.

Clause 10, as amended, agreed to.

Clauses 11 to 19 agreed to.

Clause 20:

Reports and information

(5) The Authority shall, in addition to the information to be given under the foregoing provisions of this section, furnish to the Minister such returns or other information relating to the property, financial position, activities or proposed activities of the Authority as the Minister may from time to time require, and shall afford him facilities for the verification of information furnished to him under this subsection in such manner and at such times as he may require

THE EARL OF SELKIRK moved, in subsection (5), to leave out all words after "require". The noble Earl said: This is another case where I am asking whether it is necessary to have the final sentence in Clause 20, which seems to impugn the independence of the Authority. In ordinary language, the last sentence gives the Minister power to make investigation to see whether the Authority had been lying to him. Is it really necessary to put that in the Bill? I should have thought that if such a situation had arisen, it was time the Minister had got rid of his chairman. I think that this is a slightly insulting phrase to put in the Bill: … for the verification of information furnished to him … I wonder whether it is necessary to ask for this power, particularly after the emphasis which the Minister has put on the independence, the standing and the prestige which the Authority is supposed to have vis-à -vis the public. Frankly, I think this is something which could be left out. I do not think it would complicate the life of the Minister if that were done, and it would remove something of a slur on an authority which has not yet come into existence. I beg to move.

Amendment moved— Page 18, line 35, leave out from beginning to end of line 37.—(The Earl of Selkirk.)

LORD BESWICK

Here again the provisions of this subsection are largely common form. They seem to have gone through both Houses of Parliament without the scrutiny which this Bill is receiving this afternoon. For example, the wording can be found in the Coal Industry Nationalisation Act, 1946, the Electricity Act, 1957, and the Gas Act, 1948; and even the Covent Garden Market Act, which has provided such a lot of support for the noble Earl, contains the wording to which exception is now taken. I agree with the noble Earl that what these words say is that, information having been provided, the Minister should want to see whether it is truthful information. This is probably an indication of a lack of confidence as between the Authority and the Minister. I do not think this suggestion is justified, and, on balance, I should have thought that the Bill would be improved if we accepted the Amendment moved by the noble Earl. For the Record, I can say that, although this power has been in these other Acts, it has never been used. The various Ministers have never required to have verification of the information given to them. Therefore, I suggest to your Lordships that we should accept this Amendment, also.

THE EARL OF SELKIRK

I am grateful to the noble Lord for what he has said. I think I may say that this means that we have done something quite useful, because here is a useless phrase which has been put into previous Acts of Parliament because somebody behind the noble Lord (whom I will not mention) thought it necessary, and experience has shown that it is not. I should like to thank the noble Lord sincerely for what he has said, and for accepting the Amendment.

On Question, Amendment agreed to.

Clause 20, as amended, agreed to.

Remaining clauses and Schedules agreed to.

House resumed.

Bill reported, with Amendments.