HL Deb 05 May 1971 vol 318 cc425-45

6.9 p.m.

THE EARL OF KINNOULL rose to ask Her Majesty's Government to confirm their present and future policy towards the British hovercraft industry. The noble Earl said: My Lords, in raising to-night the subject of the British hovercraft industry, and in asking Her Majesty's Government to state their present and future policy towards the industry, I should first like to welcome my noble friend Lord Denham, who will be replying on behalf of the Government. I say "welcome" because I believe that, although he addresses us on a number of topics, this is the first time he has spoken on the subject of hovercraft. It will, I suggest to him, be a somewhat auspicious maiden, because one hopes very much that he has with him to-day a full, comprehensive, clear and encouraging brief which will help to breathe some badly needed confidence into the future of the industry.

The House will recall that Christopher Cockerell, the inventor of hovercraft, revealed to the world his unique and splendid invention in 1959, and the role of hovercraft, although principally creating a new mode of passenger transport, for amphibious, semi-amphibious and overland purposes, extends to many other applications, ranging from industrial pallets and hoverbarges to medical hoverbeds. I hope my noble friend will be able this evening to touch on some of these and bring us up to date with the developments. Since 1959 Her Majesty's Government, as the House will recall, have by no means been asleep in supporting and developing the various forms of hovercraft development through their agencies, both the N.R.D.C. and MlNTECH—and I think it would be only right to pay a tribute to the considerable effort and support that has been given in the past. In financial terms I am advised that this amounted to some £12 million of public funds, of which approximately £6 million was in respect of the purchase of hovercraft, while private investment has been running at approximately £20 million, of which £12 million has been recovered to date.

In practical terms, the Government support has undoubtedly helped to keep the British industry technically ahead of its foreign competitors. As we know, the competitors are mainly in France, America, Japan and Russia, and I am particularly advised that we are ahead in the field of skirt design, construction and methods to deal with structure fatigue, as well as having an immensely valuable lead in operational experience. Despite this technical lead, I am sure my noble friend would agree that it would be damaging if this British industry were allowed to mark time. There is undoubtedly a quickening interest abroad in hovercraft development in its many and varied forms. Indeed, I am told that the development programme in the United States of America is becoming more and more formidable. On top of this, the hovercraft has now been officially recognised at the United Nations as a vehicle which could be put to valuable use in underdeveloped countries, and it is another feather in the British cap that one of the original British pioneer operators, Anthony Brindle, has recently been appointed by the United Nations to prepare a study on the application of hovercraft in underdeveloped countries.

But, my Lords, having said all these encouraging things about the British industry, I believe it is no secret to-day that many informed people feel that the industry is at the cross roads of its future. Some may say—and it is not a view I should be qualified to comment on—that the industry faces a financial crisis unless something positive is done quickly. The reason for such a comment, I understand, is that the rate of private investment has now all but dried up. The reason for this unhappy state, which I am sure Her Majesty's Government know only too well, is that although hovercraft are now technically viable, their commercial viability for passenger carrying is still in question. Because of this, markets have proved difficult to establish-in fact they have to be created—and sales prospects have proved to be slow. It is not surprising, therefore, to learn that private sources of funds have been drying up.

If one looks at the commercial viability of hovercraft (and the noble Lord, Lord Kings Norton, will probably touch on this subject in the debate) it is interesting to note the results of the three major British hovercraft operators. The first, Hovertravel, has made a handsome profit over the last two years. The second, Hoverlloyd, purchased the large S.R.N.4 some two years ago and are now geared, I am informed, to operate at a profit on their cross-Channel services. Then we have Seaspeed, the British Rail offshoot, which seems to progress, with increasing and unwavering regularity, with substantial losses on their operations. Perhaps here I might pause to ask my noble friend a little about the future of Sea-speed. He will recall that it was set up in 1967 with specific terms of reference, approved by another place, which perhaps I may read. The first aim of Sea-speed was to evaluate the technical development of hovercraft in the hard light of transport economics. The second aim was to investigate, identify and build up a cost analysis of potential hovercraft routes. The third aim was to prepare for the operation of the first major mixed-traffic hovercraft, S.R.N.4, by gaining experience as quickly as possible with the smaller passenger-carrying S.R.N.6.

Since 1968 no new route has been opened by Seaspeed. Indeed, in 1969 the route between Portsmouth and Cowes was closed, despite having carried in the first year of its operation some 45,000 people. The simple question I should like to ask my noble friend to-night is; what is the future of Seaspeed? Do the original terms of reference still stand? Are they, in his view, being carried out? And does Seaspeed's service, by any chance, come within the orbit of unremunerative services under the 1968 Transport Act and is it therefore likely to be axed by British Rail? As to the future of the industry, a less sympathetic person than my noble friend replying for Her Majesty's Government could remind the House of the past Government support, of the present declared policy of restraint on the public purse, and of the limited proportion of Government assistance available to any particular industry.

I believe there are a number of ways in which Government assistance could be improved without stretching the public purse to unacceptable limits. If one accepts that there is at present a hump blocking the future of the industry, the hump being the proving that hovercraft can be made economically viable, and if one accepts, therefore, that overseas markets have to be created rather than just discovered, I am sure my noble friend will agree that any assistance that can be given to helping overseas sales is of cardinal importance. With that in mind I would ask my noble friend to consider whether the Government could assist in the cost of transporting demonstration vehicles abroad to such countries as Thailand, Pakistan and Indonesia. I am sure that this would be a valuable contribution to the industry. Secondly, for British operators it would again be of assistance if, on purchasing craft, money could be made available on similar favourable terms as with the purchasing of ships. Finally, again for industry, I am sure it would be a boost if the Ministry of Defence could decide on their policy and use of hovercraft. The Service Evaluation Squadron has been evaluating now for a considerable time. It would be of general interest if my noble friend could say how these evaluation trials have been proceeding and tell us whether the Royal Navy are shortly to double their present requirement beyond the one S.R.N.6 vehicle.

Finally, may I suggest to my noble friend a matter which I believe many people in the industry feel is of great importance and one where there is apparent room for improvement? It is the agency system used by the Government in disbursing financial support. As the House will know, there are two main agencies, the N.R.D.C. and the MINTECH Hovercraft Directorate. I may be a little bit out of date in the second one; there are, however, still two agencies. It is considered that the streamlining of these two separate bodies into one would improve speed of decision and clarity of policy, which could definitely assist the industry. Perhaps my noble friend could say whether such a suggestion is being considered.

Turning briefly to the special uses of hovercraft, may I say that one of these, perhaps the most exciting special use, is the hovertrain; and this subject arises particularly now with the decision on Foulness for the Third London Airport. Perhaps my noble friend could say what is the estimated timing of the development of this project. All being well, will it be available in time to be considered seriously for Foulness, and is the present funding of its research and development programme sufficient to carry it forward to such a deadline?

May I again seek information from my noble friend on a different application of hovercraft, the hoverbed? If my memory serves me correctly, the development of the hoverbed, particularly for badly burned patients, was considered two or three years ago as somewhat of a medical breakthrough. I understand that for the past 18 months it has been evaluated by the Medical Research Council, and again it would be of general interest if my noble friend could tell us how far this evaluation has got and what axe the prospects for the future.

There are a number of matters I know other noble Lords will be raising this evening, and I am grateful to other noble Lords for taking part. I should particularly like to welcome the noble Lord, Lord Delacourt-Smith, after his marathon day yesterday. It is all too rare an occasion to have the opportunity to find a word of praise for the last Administration, but I believe that in the hovercraft field it would be justifiable, because, as the House will recall, the noble Lord, Lord Delacourt-Smith, was the Minister responsible; indeed, he set up two important committees, about which I am sure he will be asking my noble friend-the advisory committee and the policy committee on hovercraft. I am sure he will be asking my noble friend, and if he does not perhaps I may, what has happened to those committees. Have they reported and will the advisory committee report in fact be made available to the industry? I should also like to take this opportunity to thank the noble Lord, Lord Kings Norton, as I shall not have a chance to do later on. As the House knows, he is chairman of the A.R.B., which has played an immensely valuable part in the safety aspects of hovercraft. I think it is a fine tribute to the A.R.B. that over the past five years, with something of the order of 5 million passengers being carried by hovercraft, there has never been a fatal accident. Long may it last!

To conclude, I believe that the industry has reached a vital stage of consolidation of its existing projects. It is facing, I believe, the hump over the next few years of proving itself commercially viable, of going out and creating markets—and there are obviously many potential markets available to it. We know of the aircraft crash tenders, for instance, in use in New Zealand, the Arctic patrols in Canada, the possibility of relief work in underdeveloped countries and the possibility of further work for military purposes. Even to-day there is evaluation on the Thames. If any noble Lord was looking at the Thames this afternoon he would have seen the small CC7 being evaluated by the G.L.C. for firefighting purposes. The task of meeting this hump I believe warrants Government support and there will be a need to attract further private investment. What my noble friend is able to say to-night as to how far the Government are confident as to the future of the industry, how far they are prepared to back that confidence and what further proposals they have in mind to encourage both manufacturers and operators, is, I believe, fundamental to the successful future of this industry.

6.27 p.m.


My Lords, the House is indebted to the noble Earl for. having put this Question to Her Majesty's Government, and I hope that the noble Lord who is to reply will be able to make a comprehensive statement covering the ground to which the noble Earl has referred. As he said, of course over the past ten years there has been a considerable public investment in the development of hovercraft, and really there has been a quite remarkable degree of development, when one looks back at the relatively short time since this invention was first made.

There is no doubt that there is continuing scope for research and development in this field, but equally the stage has certainly been reached where the question of commercial application has become an important one, and I think it is desirable that we should as soon as possible know the Government's intentions in this regard and have an indication whither in fact they have clear lines of the possibilities of application and the priorities in application. I sincerely hope—and I think I might fairly claim that this was the implication of what the noble Earl was saying—that this is not a case where the Government are disposed to a policy of disengagement, for the amount of effort and money which has already been applied and the possibilities here are both too substantial for a negative policy to be anything like good enough.

I hope that the noble Lord, when he replies, will be able to touch upon the question of the experience of cross-Channel operation, to which the noble Earl referred. It is here, of course, that a record of operating success will be a helpful element in stimulating further sales of hovercraft, both in this country and abroad. So far as the S.R.N.6s are concerned, there has, I think, been a good deal of success in solving some of the problems that were initially the most serious, the problems of skirt wear for example, and I think it would be helpful if the noble Lord, if he is in a position to do so, could bring us up to date with any information in respect of the same problem in the case of the S.R.N.4s. It is a curious fact, but it does seem to be a fact nevertheless, that the success achieved in tackling these problems with the S.R.N.6 did not seem to give as much guidance as one would have expected in dealing with what would appear, at first sight to be a similar problem in the case of the S.R.N.4. Perhaps the noble Lord can also make some reference to the degree of commercial success which has attended the cross-Channel operations. Perhaps, too, he could say a little about the latest position of the B.H.7 and the V.T.I. Are these still in their respective periods of evaluation, or can anything further be said?

The noble Earl referred to some of the possibilities of hovercraft in overseas fields. There is this most stimulating and valuable possibility of use for United Nations purposes. Of course a great deal in this regard was learnt by the activities of the Trans-Africa Hovercraft Expedition, which showed that there were what appeared to be a number of applications for hovercraft in fields of the United Nations Specialised Agencies, and that indeed the amphibious character of the hovercraft, or of almost all types of hovercraft, really opened up possibilities which did not exist in the case of any other existing form of transport.

Naturally, in the minds of all of us—and this again is a point to which the noble Earl referred—is the question of the hovertrain. Is it possible to say anything more about tie experimental track which is being laid? How near is this to completion? What are the prospects of experiments upon it? This question is given a new degree of urgency by the decision about the siting of the Third London Airport at Foulness. There is a good deal to be said for the point of view that technological advance is at its most rapid and most fruitful when there is an urgent and large problem to be solved, which is immediately confronting the people who have to make the decisions. When such a condition exists, technological progress is likely to be more rapid than if it is taking place in the abstract—if, as it were, it was an invention, a possibility, looking for forms of application. There can be no doubt that the decision to site the Third London Airport at Foulness presents a most challenging problem to all those who operate in the field of surface transport, and certainly focuses attention upon the possibilities of using the hover principle as a contribution.

Perhaps I may briefly refer to some of the agencies which are still at work in this field, and whose work merits the support, the interest and the encouragement of the Government. There is the continuing importance of the work of the National Physical Laboratory in this regard. I want to emphasise that I regard the research work that is going on as of great long-term importance, notwithstanding the emphasis which I have put upon immediate commercial and other civil applications. There is, too, the work of the Inter-Services Hovercraft Unit. I have never been quite sure whether the valuable operating experience gained by the members of that Unit has been as fully spread as might have been the case. It is a point which I think is worth the attention of members of the Government who are concerned with this problem.

Perhaps I may make the suggestion to the noble Lord, or his right honourable friend who is concerned with these matters, that if he has not already done so, he would find a visit to the Inter-Services Hovercraft Unit an interesting and stimulating experience. Is the placing of research and development contracts continuing? I trust that it is. I hope that in this field the problem of the development of the most suitable engine for hovercraft purposes will not get overlooked. Indeed, anything that the noble Lord can tell us about plans for future development will be welcome.

I think a good deal of our interest at the moment is bound to be focused on the degree to which the Government have a clear line upon the possibilities and the priorities in the field of current application, and the kind of machinery which they feel is going to be the best machinery for ensuring that these possibilities are realised. They are considerable possibilities; they are varied possibilities; and we are all of us bound to have, at the back of our minds, the fact that there are, as the noble Earl said, a number of other countries which are showing a great interest in the development of the application of the hover principle. One sees reports of very large sums of money being earmarked in the United States for development in this field. We have a considerable contribution to make in the field of hovercraft in this country. We have (and I endorse what the noble Earl said) a great deal of experience both on the technical side and on the operating side, and I hope that the reply from the noble Lord will indicate that the Government are fully alive to these possibilities and are intent on seeing that they are realised to the full.

6.37 p.m.


My Lords, those of us who admire the ingenuity of the hovercraft, and who truly believe in its potential, are undoubtedly disappointed with the rate of progress of our hovercraft industry. The hovercraft has, as the noble Lord, Lord Delacourt-Smith said, still some technological problems to overcome. It has a noise problem—an external noise problem rather than an internal noise problem: it has a controllability problem. But these are not problems which prevent the hovercraft being used in commercial operations. They are simply problems, my Lords, the solutions of which will make the hovercraft even more attractive as a vehicle than it is now.

Its chief problem, as I think has already been indicated this evening, is an economic problem. The operators need cheaper hovercraft, and hovercraft which are less expensive to maintain. If there were more of them being made, if there were more of them being used, economic operation would be easier; but until there is an improvement in first cost and maintenance cost, it is difficult to see a significant commercial expansion in the numbers used. We seem to have the classic "chicken and egg" problem—or is it perhaps the vicious circle? I do not know. But whichever it is, it is a situation which will only be resolved by faith in the economic future of these vehicles.

The hovercraft seemed for a long time to be a sort of duck-billed platypus among vehicles. Those operating over the water did not appear to be ships, nor did they appear to be aircraft, and the Hovercraft Act 1968 recognised the hovercraft as sui generis. But its initial development had been undertaken by aircraft constructors, and this has had effects which must be recognised in planning its future. One effect is that many features of the design and construction are clearly related to aircraft practice—light structures, aircraft engines, aircraft propellers. This has led to much higher performance, no doubt, than if conventional marine practice had been followed, but it has led inevitably to higher costs which must attach to refined design. It also led to the constructors turning to the Air Registration Board, as long ago as 1959, for consideration of the certification of the new vehicle. Soon after, the Government decided, as a temporary measure, that hovercraft should be dealt with under the Air Navigation Act, thus regularising the function of the Air Registration Board as an appropriate body to investigate safety and recommend certification of hovercraft.

The Hovercraft Act 1968 stated, in effect, that a ship was a ship, an aircraft was an aircraft and a hovercraft was a hovercraft. This Gertrude Stein-like pronouncement was indeed most sensible. Subordinate legislation was needed to give effect to the provisions of the Act. This has taken quite a long time to arrive, but I believe that there will soon be an order which deals inter alia with safety, and delegates the safety certification function to the A.R.B. There has never been much argument that, as regards rules for operation and navigation of hovercraft over water, an adaptation of marine regulations is the most common sense approach. Nevertheless, it has been felt that, rather than begin with the total array of marine regulations which have accumulated over the centuries for ships and remove or change some, it was preferable to begin with a clean sheet and to adopt those which were clearly seen to be necessary for hovercraft operation.

But regulation of the design and construction of the vehicle is an entirely different matter. Some hovercraft embody features which, as I have already said, are aircraft-like; others-such as the sidewall hovercraft—closely resemble fast boats. Some have airscrews, some have water screws. For the wide spectrum of possible designs which this implies, any attempt rigidly to apply either aviation rules or marine rules would be detrimental. In other words, the decision to define the hovercraft as a hovercraft, and so permit creation of the most appropriate rules for its design and construction, appears to be fundamentally sound.

Whether the Air Registration Board, with its predominantly aviation background, should be the body to build up this structure of regulation is less obvious. It is a body which, through having an aviation background, is used to dealing with innovation and making rules which allow for rapid technological development. I think up to now, and for some time longer perhaps, it has been the most appropriate body to develop a system which regulates safety without hindering development. But we in the Air Registration Board—and may I thank the noble Earl for what he said about my colleagues in that organization—view our role as a temporary one. When the Government of the day presented the Hovercraft Bill, they made it clear that in the long term a hovercraft board or authority would probably be set up to deal with hovercraft affairs. For this desirable end to be reached, the industry—that is to say, constructors plus operators—needs to be of such strength and size that it can support, financially and technologically, such a body.

Certainly, when this time comes, the A.R.B. will not seek to retain the task of hovercraft certification, and when the Civil Aviation Bill becomes law, and if as a result the Air Registration Board is replaced by the Airworthiness Requirements Board, then I think that the new A.R.B. will view the matter in precisely the same way. But, as I have indicated, this quite elaborate provision for the regulation of safety in the future will not come to pass unless the industry reaches an appropriate magnitude. In the meantime, it looks as if the A.R.B. will continue as the temporary custodian of hover-worthiness, and it will be necessary to make quite clear what duties it has and what duties are retained by the Department of Trade and Industry.

It must be admitted that, at the present time, there is some dissatisfaction in the hovercraft industry about the function of the A.R.B. I believe that this derives from the fact that the A.R.B. seeks to support itself by fees related to the duties which it performs. These fees appear to hovercraft people to be high, particularly when they compare them with fees charged for the survey of ships of similar carrying capacity. The fees are high when compared on this basis, partly because the hovercraft with its particular form of construction requires exacting rules to be applied to it; and partly because the lower fees charged by the Government for such functions as the renewal of certifications for marine craft are on a more arbitrary basis, and are not closely related to the amount of work which has to be done. And, once again, the small size of the hovercraft fleet tends to increase the cost of the certification of individual hovercraft. The situation would certainly improve if the fleet were bigger.

The conventional ship is supported by displacing water. I suggested, when we discussed these matters in your Lordships' House in November, 1969, that the arrival of the hovercraft board might be brought nearer if its scope were widened to cover all those over-water craft which are not necessarily supported by displacing water, and which can proceed with their hulls mainly out of the water. That is the case with the hovercraft, which proceeds on a cushion of air; it is the case with the hydrofoil boat, which proceeds hydrodynamically on planes or on foils; it is the case with those fast boats which hydroplane on their stern surfaces. While around this country hydrofoil operation is on an even smaller scale than hovercraft operation, one sees the industry developing, partly in competition with, and partly in parallel with, hovercraft operation, and I think that the Government might begin to consider whether a board more broadly based than the one we now think of as the hovercraft board should be the objective to be aimed at in the next few years.

The declaration of such an objective might not be a tremendous stimulus to the development of either the hovercraft or hydrofoil operating industries, but it would help and it would be a step in the right direction. Apart from that, progress at an accelerated pace, which seems to be necessary, appears to depend, as I said when I began, upon faith, and the only expression of faith which can possibly do any good is in terms of money from public sources, from private sources or from both. Without more money invested, it is difficult to imagine a rate of expansion which would justify bringing into being a separate hovercraft authority, or indeed a high speed over-water craft authority, for a long time to come. Only further investment can bring the hovercraft into the position in the world of transport which many of us believe it deserves. Consequently, I believe that the positive financial ideas which the noble Earl, Lord Kinnoull, put forward deserve the very careful attention of Her Majesty's Government.

6.48 p.m.


My Lords, I am neither a technologist nor am I otherwise involved in the industry. Speaking after noble Lords who are much more expert than I, I shall confine my remarks to fairly general points and to some questions that have occurred to me. But my interest in hovercraft is more than general. It has its origins in the fact that some years ago I was involved in the transportation side of a major communications construction project in Northern latitudes overseas, and had hovercraft then existed many, if not all, of my problems would have been solved. It is because of this interest that I was particularly pleased recently to have the opportunity of visiting the industry and seeing some of its operations, and I am glad to have the opportunity this afternoon of making some general points.

It has already been said by my noble friend Lord Kinnoull and others that the industry appears to face certain difficulties. I do not feel that these should be exaggerated, because the craft now being produced are extremely versatile and we are certainly—let us be proud of it— world leaders in this field. But if there are certain difficulties, it is not surprising that the industry might look to Her Majesty's Government for some form of support. Before one characterises such an attitude as being merely another special plea for financial assistance, it should be remembered that here we are talking about an industry which produces a product which, so far as I know, cannot be bought anywhere else in the world to-day, and which perhaps has a very considerable export income potential, and certainly a great prestige value.

I cannot help but feel that on the "help-yourself" side there are some things which perhaps the industry might well think about. Ideas which occur to me are perhaps a joint marketing and sales effort around the world to overcome, in certain measure, the difficulties and costs of the necessary demonstrations which must precede or be part of any sales drive. I feel, also, that perhaps it is not as widely appreciated as it might be how versatile these craft are, and how, in the case of true hovercraft, in particular, constructions of terminals are relatively inexpensive compared with those for conventional vessels.

If I may, I should like to ask my noble friend who is to answer for the Government some questions which occur to me. The first is: have Her Majesty's Government sought from the Government of the United States of America any evaluation of their military experience of hovercraft with a view to supplementing what we have ourselves learned from trials? Other noble Lords have mentioned Foulness, and the prospects that this may represent for the industry, both in terms of hover-rail transport and other hovercraft uses. It is perhaps not without point to note here that, for instance, certain destinations on the Continent would be reached possibly as quickly, or even more quickly, by hovercraft from Foulness than by changing aircraft. I wonder whether, apart from specific trials by, for instance, the G.L.C., the emergency services at large have undertaken any evaluation programmes, or have made approaches to the Government regarding equipment. I have in mind air-sea rescue services, the police and so on.

Lastly, mention has already been made in this debate about the United Nations interest and the study which I believe is to be undertaken. I wonder whether the Minister of Overseas Development might perhaps not be able to co-operate in that programme, and what assessment the Department have made so far of the vehicle, not only as a useful tool in the work which they seek to do overseas but also as a flag-carrying investment. With those few words I should like once again to thank my noble friend Lord Kinnoull for putting his Question this evening.

6.54 p.m.


My Lords, I must apologise for not having put my name down to speak this evening, but I did not think I was going to be here in time. I should like to thank my noble friend Lord Kinnoull for putting down this Question for us to discuss, enabling us to hear Her Majesty's Government's view and what they have in mind regarding this very important industry for now and for the future. My Lords, there is not much that I can add to what has been said already. The field has been debated so well by people with far more experience than I. I should just like to take up one point and re-echo the words of the noble Lord, Lord Delacourt-Smith: that I hope we do not hear words of discouragement from my noble friend who is to reply, but words of realism, reality and hope, with a capital "H", for this industry.

6.55 p.m.


My Lords, when my noble friend Lord Kinnoull asked his previous Unstarred Question in this j House the noble Lord, Lord Delacourt-Smith, was able to reply with great authority as the Minister with particular j responsibility for hovercraft, but your Lordships will not expect any startling revelations from me this evening. Of all the activities of your Lordships' House, it is my personal opinion that Unstarred Questions are perhaps the most useful. They bring together in a short debate the most expert available views on limited though important subjects, and this particular debate on my noble friend's Question has been a notable example. But, paradoxically, the value of such debates lies in the views put by the questioners rather than in the answers given from this Dispatch Box. I can assure your Lordships that everything that has been said this evening will be studied very carefully by my right honourable friend and his advisers.

Your Lordships will not wish me to reiterate in full the history of hovercraft. It is already in the OFFICIAL REPORT for November 18, 1969. During the last decade the hovercraft has really emerged as an effective means of transport. The industry has reached the stage when it can exploit the new technology to which both the private and the public sectors have contributed. The noble Lord, Lord Delacourt-Smith, asked about the hover-train programme. Tracked Hovercraft Limited are hoping to have two experimental vehicles running on their test track this summer. A special track is being built for development purposes by them near Cambridge. One mile has been completed, and a further two miles are expected to be completed before the autumn. The running of these two experimental vehicles on the track is expected to start this summer. But we need more information about hovertrain's performance and economics before we can see the extent to which it, as compared with other means of transport, might help to meet the particular requirements of London's airports. It is not possible to predict the date at which hovertrain will be sufficiently developed for particular applications. The programme is at a relatively early stage, but airport to city transport is certainly an application that Tracked Hovercraft Limited have very much in mind.

As to finance, the National Research Development Corporation have committed some £3½ million to this project, and the Secretary of State for Trade and Industry is considering an application from them relating to the investment of a further sum, My Lords, the British Hovercraft Corporation, the oldest of the companies, did not rest on its established achievements of the S.R.N.6. It went on to produce the much larger S.R.N.4, of which four are in service on the Channel. Many of the initial difficulties with these large craft, which include the skirt difficulties mentioned by the noble Lord, Lord Delacourt-Smith, have been overcome, and 95 per cent, reliability—an acceptable level in transport generally —was achieved in the 1970 season. The operators, British Rail Hovercraft Limited and Hoverlloyd Limited were able to claim to have carried over 20 per cent. of the traffic in their catchment area. The services of both are fast and safe, with little inconvenience to passengers at the terminals.

The noble Lord, Lord Delacourt-Smith, asked about how these services had been paying for themselves during the last year, and what the prospects were for the future. I can tell the noble Lord that Hovercraft Lloyd were operating at a break-even point, for operating alone, during last season. This year they are expecting to operate at a profit, even including interest on capital spent. I cannot tell the House very much about British Rail Hovercraft Limited. This is part of a nationalised industry. The figures for the year ending March, 1971 have not yet been published.

I have been asked about military evaluation and about the B.H.7. The purpose is to establish the capabilities of hovercraft to meet the requirements of all three Services. The B.H.7, which is now fitted with a 21 foot propeller of special design will begin its evaluation trials within the next week or so when the installation of special equipment has been completed. B.H.7s have been ordered by the Iranian Navy and two have already been dispatched. The noble Lord will be interested in the progress of V.T.I; it is now concluding its final evaluation trials before going into regular operation. It has undergone an extensive series of sea trials including trials in the Channel Islands area. I understand that the Islanders have shown a considerable interest in a service between Jersey and Dinard in France. Two other craft are nearing completion and have begun manufacturers' trials. I am particularly pleased to report that the newest company, Hovermarine Transport Ltd., the successor to the original Hovermarine Ltd., has now incorporated a number of design improvements into the sidewall H.M.2. The first of these redesigned craft has just completed 3 months intensive operational service with considerable success especially in greatly increased reliability. It is giving a much smoother and internally quieter ride in unsettled conditions than did its predecessor and this has led of course to increased passenger comfort.

Hovermarine Transport's other production craft, the Hovercat, the five-seater designed for a multi-purpose role, has recently returned from successful trials in cold weather conditions in Scandinavia. Air Cushion Equipment is a small company specialising in the development of industrial and medical applications of the Air Cushion Principle. The company is anxious to distinguish its work from that of the companies producing hovercraft for ferry and military purposes.

My noble friend Lord Gray was not quite right in saying that Hovercraft is a product which could not be obtained anywhere else in the world. Bell Aviation, who are United Kingdom licensees, make the S.K.5, similar to the S.R.N.6. The Japanese have the P.P.5 60-seater craft under United Kingdom licence and the French are actively trying to sell their N.300 and N.102.

The noble Earl asked particularly about the hoverbed. The Medical Research Council has not yet published a report of its trials which could be an important factor in promoting the exploitation of this idea. On the question of support, no doubt if this or any other company working in this field consider a Government contribution to be necessary they will make their needs known.

I have been asked about overseas demonstrations, and in particular the United Nations interest. We have supported the S.R.N.6 expeditions on the Amazon in 1968, in West Africa in 1969 and the C.C.7 craft has just returned from Brazil. The United Nations received reports on the Amazon and as a result participated in the West African journey. Reports have been supplied to the Ministry of Defence on the use by the United States Navy and Army of hovercraft in South Vietnam which have served but to amplify the considerable practical experience of 200 Squadron R.C.T. in Australasia, Middle East and most recently in winter conditions in Norway. The Overseas Development Administration is kept in close touch with the hovercraft applications in developing countries and has contributed to one operation in Mexico.

The application of hovercraft to emergency services, usually known as paramilitary applications, is being actively followed up. The Canadian Coastguards are operating an S.R.N.5 craft in British Columbia and have found it extremely useful. This example is now being followed by the United States authority on the West Coast with similar craft made by the British Hovercraft Corporation licensee Bell Aerosystems. An S.R.N.6 craft is in service for crash rescue duties at Auckland airport and to-day and tomorrow a C.C.7E Cushioncraft is being demonstrated to the London Fire Brigade. The police authorities have shown interest in the use of the Hovercat.

A range of United Kingdom hovercraft for commercial use is now technically established. They have still to establish their economic performance and some companies are operating profitably. The noble Lord, Lord Kings Norton, referred to the function of the Air Registration Board for certifying the design and construction of hovercraft. Even before the passage of the Hovercraft Act 1968, the A.R.B. had already been exercising this function for a number of years. Since then, the issue by the Board of a non-statutory Certificate of Construction and Performance has continued to be the basis on which this task has been performed. But it is now proposed that an Order in Council under the Hovercraft Act 1968 will be laid before both Houses of Parliament shortly, providing for the delegation of this function to the Air Registration Board on a more formal basis. We envisage that the task will be continued for the time being by the Civil Aviation Authority when this body absorbs the Air Registration Board, following the passage of the Civil Aviation Bill. The Order in Council will also make provision for the registration of hovercraft and contain certain operational requirements. This will in fact be the second Order in Council under the Hovercraft Act 1968 to come before your Lordships. The first, dealing with the liability of hovercraft operators towards passengers, cargo and third parties has now been approved by both Houses of Parliament and will come into effect next month.

The noble Lord referred to the intention to establish an independent Hovercraft Board in due course, to take over the certification function at present delegated to the Air Registration Board. This is still the Government's intention but it must, however, await the development of the industry to appoint where it can sustain the establishment of such a Board.

The question of whether the Board should extend its operation to cover hydrofoils is debatable. The purpose of the Hovercraft Act was to create enabling legislation to cover all applications of the air cushion principle on which we in this country had established such a clear lead. The hydrofoil deliberately does not come within the ambit of the Hovercraft Act but we will be prepared, when the establishment of a Hovercraft Board becomes a more practicable proposition, to consider whether its terms of reference should extend beyond vehicles based on the air cushion principle. The noble Lord has also referred to the comparison between the A.R.B.'s fees for hovercraft certification and those charged by the Government for safety certification of conventional vessels. I venture to correct the noble Lord. The fees now to be charged for certification of ships broadly reflect the total cost of the work involved.

My noble friend Lord Kinnoull asked a number of questions relating to the problems of hovercraft operators. First, British Rail Hovercraft Limited is a wholly-owned subsidiary of British Rail constituted under its powers to set up subsidiaries for particular purposes and under the powers of the 1962 Transport Act the Minister's consent was given to the creation of the subsidiary. The terms of reference of British Rail Hovercraft are contained in the company articles and have not been varied except in so far as this has been done by British Rail acting on its own initiative and in accordance with the Companies Acts.

There are no powers under the 1968 Transport Act for the hovercraft operation to be treated as an unremunerative service. The House will recall that subsidies for unremunerative services were restricted to the services for rail passengers and this cannot be extended to hovercraft passengers. My noble friend asked, secondly, whether the scheme for shipping could be applied. He was referring to the home credit scheme. It was introduced to meet a particular situation which does not seem to the Government to be on all fours with the situation in the hovercraft industry. The reduction of initial cost is primarily a task for the manufacturer and although, as in the case of new projects, Government are willing to discuss well-founded proposals, the introduction of a general scheme is not consistent with Government policy for industry generally.

The Government's future policy for hovercraft is not yet determined. I assure your Lordships that the most careful consideration of the valuable points made in today's debate will precede any announcement by my right honourable friend. It would not be appropriate for me to make a statement on behalf of Government to-day. I have been asked whether the Report of the Advisory Committee for Hovercraft set up by the previous Administration might be published. This would not be appropriate as it contains but a small part of the evidence now being considered by my right honourable friend. It is also being considered whether a single agency would be the most suitable means to implement Government policy.

Reference has been made to the Policy Review Committee, which, as your Lordships know, was an inter-Departmental committee of officials. They amassed a great deal of information as the basis for advice that has been offered to Ministers. While there is no diminution of Government confidence in hovercraft, your Lordships are aware that our policy is that industry must be competent to deal with its own problems. The immediate problem, as noble Lords who have spoken to-day have stressed, is to exploit the substantial investment already made by both the private and the public sectors in this new technology. The Government are always prepared to consider thoroughly considered and economically viable proposals which may be put forward by manufacturers, operators or any other interests wishing to further hovercraft exploitation in the United Kingdom.