HL Deb 02 August 1966 vol 276 cc1234-40

3.48 p.m.


My Lords, with your Lordships' permission, I should like to intervene to repeat a Statement which is being made by my right honourable friend the Minister of Aviation in another place about aircraft purchases by the two Air Corporations.

"After a carefulinvestigation, the Government have authorised B.O.A.C. to acquire six Boeing 747 aircraft for delivery in 1969 and 1970. These will be very large aircraft with about 400 seats suitable for the busiest long-haul routes, on which they will give very economical performance. B.O.A.C. needs them in order to be able to match its main competitors after 1969. No British aircraft will be available that could fulfil the role. These American aircraft will earn in foreign currency far more than they will cost.

"I have asked B.O.A.C. to ensure that, so far as is practicable, the aircraft it buys should have the maximum British content in equipment and that the contract contains guarantees about noise levels at landing and take-off.

"To meet B.O.A.C.'s needs in the expanding air freight market, I have also authorised B.O.A.C. to acquire one further Boeing 707/320C aircraft bringing its fleet of these aircraft to three. It will be delivered in late 1967.

"British European Airways needs to plan for the replacement of the propeller aircraft it is using on certain routes and also for increased capacity to meet expected growth over the next decade. It is a complex matter to settle just what aircraft should be bought and when. British European Airways will buy British aircraft. Discussions are in progress to settle the exact numbers and types of aircraft and the phasing of orders. Aircraft under consideration are developed versions of the VC 10, the Trident and the BAC 1–11. The Government are prepared to give launching aid for the types selected. I should add, however, that as part of our measures to reduce the volume of investment in the short term, I have told B.E.A. that it will have to hold over such part of its approved orders as will produce savings of £5 million in the investment planned for 1967–68.

"These British aircraft should provide seat mile costs broadly comparable with those of American alternatives on which duty would have been payable. But they will be larger and their profitability will depend on their attracting high load factors on these routes. For these reasons B.E.A. would have preferred on purely commercial grounds to buy American aircraft. The Government, however, have informed B.E.A. that they will take steps to ensure that B.E.A. is able to operate as a fully commercial undertaking with the fleet it acquires."


My Lords, I should like to thank the noble Lord for repeating that Statement which has been made in another place. We know that the Government have undertaken to buy a very large quantity of United States military aircraft, and we are now to buy what are presumably very expensive American aircraft for B.O.A.C. Can the noble Lord give us some indication of what the cost of the six Boeing 747s and the one Boeing 707/320C will be? And are we to understand that this is all that B.O.A.C. wanted at the present time? Did they wish to buy more aircraft, or does this meet their full requirements?

Turning to B.E.A., I am sure all your Lordships are delighted, naturally, that B.E.A. is to buy British aircraft. Nevertheless, we must be concerned to hear that, on strictly commercial grounds, B.E.A. would have preferred to buy United States aircraft. I had always understood that the principle of British Governments was that the Corporations were allowed to buy whatever aircraft they thought to be commercially most suitable for them. Apparently there is to be a new policy; and I wonder what is the precise meaning of the last sentence of the Statement, which says: The Government…will take steps to ensure that B.E.A. is able to operate as a fully commercial undertaking with the fleet it acquires". Does this mean that Her Majesty's Government are going to give some kind of a subsidy to B.E.A. if its new fleet is less successful in operation than it would have been if it had bought the U.S. aircraft that it desired to buy? This, of course, would be a subsidy in addition to the one that I understand it will have to pay under what is called "launching aid for the types selected".


My Lords, I, too, am grateful to the noble Lord, Lord Shackleton, for this Statement. First, with regard to B.O.A.C., in view of the fact that by 1970 we shall presumably have these large aircraft, may I ask him what extended facilities the Government propose to make available at the various airports in this country, particularly at London Airport, Heathrow? Will it not be a fact that these aircraft, coming in with 400 passengers, will completely submerge the existing facilities which are based on less than half that load per aircraft?

The second question I should like to ask is on the same lines as that asked by the noble Lord, Lord Harlech; that is to say, on the end of the Statement made by the noble Lord, in regard to B.E.A. Is this not another case of a big hand-out from public funds, from the taxpayer, in this case to a nationalised industry and not to a private undertaking? Will it not mean an unknown subsidy to B.E.A. if they are to be ensured—that is the word used, "ensure"—that they will be able to operate as a fully commercial undertaking with the fleet it acquires", when in their own minds they would prefer American aircraft on commercial grounds? I think the House is entitled to know what limit the Government propose to set on the hand-out which they will undoubtedly have to give to B.E.A.


My Lords, in reply to the first question asked by the noble Lord, Lord Harlech, I may say that the total cost of B.O.A.C.'s American purchases—and this includes support costs, spare engines—will be in the region of £50 million to £60 million. The noble Lord also asked me whether this was all that B.O.A.C. wanted at the present time. So far as I know, yes, but, if he will forgive me, I should not like to be dogmatic on that. Perhaps the most surprising question was the noble Lord's last one. I think that perhaps he should have spoken to some of his noble friends before he asked it. He is at a disadvantage, perhaps, but he has failed to recall that during the days of Mr. Amery's occupation of the Ministry of Aviation the Government of the day intervened in a most startling way with the commercial decisions taken by B.O.A.C. Honestly, I think the less said about that the better.

I think the noble Lord, and also the noble Lord, Lord Ogmore, asked me about the question of enabling B.E.A. to operate as a fully commercial undertaking with the fleet it acquires". This is a difficult problem which confronts any Minister of Aviation, and has confronted previous Ministers of Aviation: the extent to which they should influence a commercial decision. I think, on balance, the Government were right in this case. There are ways of doing it, as was the case with B.O.A.C. I should not like at this moment to say how it will be done, but I think a solution along the lines that were applied to B.O.A.C., in which a special form of capital is created, might be one of the ways; in which case, undoubtedly, there would have to be legislation. But I am afraid I cannot at the moment go further, beyond undertaking that, of course, the House will have an opportunity to discuss any such arrangement. The noble Lord, Lord Ogmore, also referred to airports. I agree with him that it will be necessary to ensure that there are the facilities. So far as the flying facilities are concerned, I think this may ease the task; but his concern was with passengers, and I have noted his point.


My Lords, may I ask my noble friend, first, whether he can tell us the speed of the six Boeings that are to be purchased in 1970; secondly, the range they will have; and, thirdly, whether we are to understand that they will be used mainly on the transatlantic route?


My Lords, the speed will be comparable to the existing 707s. They are of the same order. The range, with a full load, will also be designed to match that particular requirement, which is, of course, mainly the North Atlantic route, although it is conceivable that patterns might change and that they might well be usable on other routes, too. But I am afraid I am not closely enough aware of B.O.A.C.'s planning to be able to go further. There was a third question—


My noble friend has answered that.


My Lords, could the noble Lord say whether these B.E.A. aircraft are going to replace the whole of their existing fleet? Is this an entirely new aircraft which has been designed in co-ordination by the firms he mentioned? It seems to be an extremely important development if that is so.


My Lords, could I ask the noble Lord two questions? Does he not think that rail access to and from London Airport should be considered, in view of the large number of passengers—400 at a time—which will be entering or leaving the Boeing 747s? Secondly, while welcoming very much the noble Lord's statement regarding B.E.A., could he assure the House of the Government's high esteem and complete confidence in the chairman of B.E.A., Sir Anthony Milward, for whom all concerned have the highest regard, in view of to-day's regrettable leader in the Daily Express to the effect that Sir Anthony should go?


My Lords, in reply to the noble Earl, Lord Selkirk, these are developments of existing aircraft. Of course, there may be a considerable amount of development involved and the different aircraft are at different stages, but they are in no sense new aircraft. The noble Earl, I thought asked another question; but I am not sure what it was.


My Lords, I was asking whether this would replace the whole fleet.


My Lords, on the matter of the replacement of the whole fleet, this is, of course, a continuing process. It does not rule out in due course the possibility of purchasing air buses if agreement is reached. It will certainly, I think, replace most of the Vanguard fleet. But B.E.A. will have to take into account the investment policy which they are required to fulfil. It may or may not happen in one fell swoop. I should like to be kind to the noble Lord, Lord Merrivale, but I think his questions go a little beyond the statement.


My Lords, I wonder whether the noble Lord will be kind enough to say that it will still be possible to fly the Atlantic in smaller aircraft. Is it really wise, despite the lower operating costs, to risk 400 people in a single aircraft?


It will be possible to fly the Atlantic in small aircraft; indeed, in very small aircraft. But this is a matter of economics, and as air safety continues to improve we hope we shall all be as safe in the 747 as in any other aircraft. But I do not really know whether the danger statistically is all that much greater. Three crashed smaller aircraft could equal one Jumbo jet. Statistically, presumably the risks might be the same. I do not think I shall allow myself to get drawn further into that question.


My Lords, may I ask the noble Lord why, when a Statement is made in regard to the purchase of aircraft for B.E.A. and when there has been a statement in the Press detrimental to one of our finest executives in the aircraft industry, Her Majesty's Government's spokesman does not feel it his duty to comment on it?


My Lords, further to my noble friend's reply to the noble Lord, Lord Merrivale, may I say that when one is making arrangements to receive at an airport 400 to 500 passengers and to handle their arrangements through Customs, immigration and the rest, it is surely sensible at the same time to consider the question of providing for the outflow from the airport to London or elsewhere of those passengers, particularly as there is now congestion from the aircraft arriving with 60 to 70 passengers?


My Lords, I referred to this in my reply to the noble Lord, Lord Ogmore. I am very willing to fit in with the wishes of the House; but I thought there was a general feeling that one ought not to extend Statements or replies to questions which could really "cover the entire water front". I entirely agree that the matters raised by the noble Lords, Lord Merrivale and Lord Lindgren, were important; but I do not think it is appropriate for me to go into them now. If the noble Lord wishes he can put down another Question. Of course this is a matter for urgent consideration.


My Lords, was it not a fact—


My Lords, may I point out that we are not debating this question. There has been a Statement, and a number of questions have been asked and answered. I think we ought now to go on with the next business. Therefore I move that this House do now resolve itself again into Committee on the Bill.

Moved accordingly, and, on Question, Motion agreed to.