Air Corporations (Select Committee's Report) (Hansard, 29 July 1959)

§ Mr. Watkinson

Yes. I have read the Select Committee's Report with great attention and the greatest of interest. I should like to take this opportunity of complimenting the Committee upon a Reports of quite exceptional thoroughness and value.

The views and recommendations of the Committee are now being studied in detail and with the greatest care by my Department and by the Corporations. I am not in a position as yet to give the views of the Corporations upon them, but meanwhile it may be helpful to my hon. Friend if I set out briefly my own views on the principal points on which the Committee expressed concern.

1. I was pleased to note the Committee's opinion (para. 216 of the Report of the Select Committee) that relations between my Department and the Corporations were clearly good: I am confident they will remain so.
2. I agree it may seem unsatisfactory (paras. 23, 217–18) that certain functions I exercise in relation to the Corporations and independent airlines lack statutory force although, as the Committee says, this in itself is the strongest evidence of the trust and co-operation between the Department and the Corporations.
3. Adequate control over the Corporations' capital expenditure and investment must remain a Ministerial responsibility since the Treasury either provides the Corporations' capital or guarantees it.
4. I agree that it should always be clearly known when the Corporations act on the request of the Minister contrary to their commercial judgment, and in the one case in question (B.O.A.C.'s investment in Kuwait Airways) I took steps to this end.
5. The effect of Government policy as exercised through the A.T.A.C. has, of course, also always been entirely public by virtue of statements in the House and the A.T.A.C.'s terms of reference. The Committee's report however raised an important issue of public policy. As I said at the time I am studying the whole future of the licensing system. Legislation will however be necessary and is not a matter for this Parliament.
6. I entirely endorse the Committee's view (paras. 16, 170) of the urgency for drastically improving B.O.A.C.'s maintenance productivity; and I am glad to note that the Committee recognise (paras. 164–66) that the Board and Management has achieved definite results in dealing with a problem which goes back many years.
7. I know, too, that B.O.A.C. is well aware of the problems posed by some of its subsidiary companies, and the reviews recommended by the Committee (paras. 17, 195) have for some considerable time been energetically in hand under the personal direction of the Deputy-Chairman.
8. I note with interest the Committees views (para. 233) on the idea of merging B.O.A.C. and B.E.A. I agree that it is best for each Corporation to concentrate on improving results while neglecting no opportunity for profitable co-operation (para. 230) and I am seeking their views on this latter aspect.
9. The problems faced by the Corporations in route proving and introducing new types of British aircraft (paras. 20, 61–8) have been under examination by the Departments concerned. They are not easy to solve but the importance of them, from more than one point of view, is recognised.
10. I was greatly interested in the Committee's remarks about supersonic aircraft (paras. 21, 255, 256, 260); and I entirely agree about the serious financial dangers of a premature re-equipment race between airlines.
11. I was glad that the Committee recognised (para. 79) the efforts of B.E.A. and B.O.A.C. to promote cheaper travel and I am doing and shall continue to do all in my power to support their efforts in I.A.T.A.