HL Deb 27 November 1968 vol 297 cc1205-7

2.44 p.m.

THE EARL OF KINNOULL

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what is the amount of financial assistance made respectively to B.O.A.C. and B.E.A. under the terms of the Civil Aviation Act 1946; by way of writing-off of debt; by way of the adjustment of capital; and by way of payment for the operation of certain aircraft.]

LORD BESWICK

My Lords, grants under the Civil Aviation Act 1946 amounted to £32 million to B.O.A.C. and £16 million to B.E.A., B.O.A.C. were permitted under the Air Corporations Act 1966 to reduce their permanent capital by £110 million which enabled them to write off an accumulated deficit of £82½ million and to set up a reserve of £27½ million.

THE EARL OF KINNOULL

My Lords, I thank the noble Lord for that reply. If I have the figures correct, he said that in addition to the £32 million that B.O.A.C. has received up to 1956 under the Civil Aviation Act, it has received since 1966 a further £110 million. Is the noble Lord aware that Flight magazine, which is normally a reliable source of information, gives a figure of £140 million? Can the noble Lord give any explanation of this difference? Secondly, would he agree that those who, like Mr. Clive Jenkins, have publicly criticised the independent companies for being less generous to their employees than the State airlines ought to bear in mind that the air corporations have been able to maintain their high standard of reward only because of the generous public subsidies which have just been mentioned? Would he not agree that such accusations and attacks are both unwarranted and to be deplored?

LORD BESWICK

My Lords, I accept what the noble Earl has said about the usual reliability of Flight magazine. It would seem that their figure of £140 million included £30 million which they had taken from B.O.A.C.'s accounts, and which is in fact included in the figure of £110 million that I have just given, and that therefore the figures I have given ought to be accepted. Nevertheless, I agree with the noble Earl that these are very substantial sums, and although one should bear in mind that the corporations have had a responsibility to the British aircraft industry which has sometimes cost them money, it remains the fact that there are many independents which would have been equally generous to their employees if they had had this kind of subvention.

LORD INGLEWOOD

My Lords, are the bank overdrafts of these corporations to be treated in the same way as the overdrafts of other large industrial concerns?

LORD TREFGARNE

My Lords, before the noble Lord replies, can he say whether the £16 million that he mentioned as having been given to B.E.A. included a subsidy for the operation of the Trident III which they are now to acquire?

LORD BESWICK

My Lords, in reply to the noble Lord, Lord Inglewood, I am afraid that his supplementary question was too esoteric for me to follow. In reply the noble Lord, Lord Trefgarne, the £16 million was paid out before 1956, which of course was before the time of the Trident. The £16 million does not refer to the Trident; but there was an additional amount promised to B.E.A. which extra to the figures that I have given.

LORD TREFGARNE

My Lords, I wonder whether the noble Lord will allow me to put a second supplementary question. Can he now say how much B.E.A. will be granted for the operation of the Trident III aircraft? Does the noble Lord realise that this is in fact a very important matter, and that this particular figure has been awaited with some anticipation by the industry?

LORD BESWICK

My Lords, the others sums that the noble Lord has in mind are really to compensate not for any inferiority of the Trident aircraft but for the difference in the phasing of the aircraft into the Corporation's services.

LORD TREFGARNE

My Lords, I am aware of that. Can the noble Lord say how much that figure is?

LORD BESWICK

My Lords, I speak without the figures before me but I think B.E.A. has been promised assistance to enable it to reduce its permanent capital by £25 million with the possibility of another £12½ million in the future. I will confirm these figures for the noble Lord.

My Lords, may I say now that my noble friend Lord Shepherd will be making a statement on the Ratification of the Non-Proliferation Treaty at a convenient moment after 3.30 p.m.