HC Deb 27 October 1953 vol 518 cc2623-748

3.43 p.m.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. J. D. Profumo)

I beg to move, That this House takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March, 1953. One of the agreeable features of all civil aviation debates is that they are traditionally non-partisan, and that all parties recognise that we are dealing with a highly competitive international industry of the greatest possible importance. The fact that this is the first debate which we have had for a year is an indication of the success of the present policy, and it also shows that both the Airways Corporations and the independent operators are making satisfactory progress.

A discussion on the Reports and Accounts of the Air Corporations provides an opportunity for Parliament to take stock of the working of the first of the nationalised industries, and makes its contribution towards the important problem of accountability, which is a subject of deep concern to both sides of the House. I feel sure hon. Members would wish to pay tribute to the remarkably full and informative Reports which the Corporations have provided for Parliament and which live up to the very best standards of commercial practice in this matter.

All hon. Members will by now have been able to study the Reports, and there will be an opportunity, in the course of the debate, for the fullest possible discussion on any facets hon. Members may wish to probe. For my part, I shall not attempt to deal in any detail with the Reports themselves but rather to make a more general sketch of the main features of the results.

So far as B.O.A.C. is concerned, the year 1952–53 is noteworthy, because this is the first year in the history of the Corporation that it has operated without assistance from the Exchequer. Before charging interest on capital the Corporation made a small profit on the year's operations of £103,000. There has been some criticism of the form of presentation of this figure, but the accounts themselves do not disguise the true position. The amount required for capital charges was £942,000. This was offset by capital profits and other surpluses amounting to £545,946. The result was, as the accounts show, a net deficiency for the year of £292,000. The B.O.A.C. profit of £103,000 on operating account compares with a profit in the previous year, 1951–52, of £1,233,000; this is a direct and valid comparison. As the Report shows, this recession was due primarily to a shortfall of revenue caused by factors beyond the Corporation's control. The contraction of Commonwealth trade due to restrictions imposed by certain Commonwealth countries led to a reduction of traffic. Passenger revenue was also seriously affected by the effects of the strike in the American oil industry in May and June, 1952. Nevertheless the Corporation's output rose by just over 10 per cent. compared with 1951–52, whilst the increase in traffic was slightly less at 8 per cent.

Here I should refer to two important developments in the Corporation's services. The introduction of tourist class service on the North Atlantic resulted in a considerable expansion in the total passenger traffic, but this was not without some diversion of traffic from the standard services. The second important development was the introduction of the Comet on to the B.O.A.C. routes, initially to South Africa and later on to the eastern routes towards Singapore. We must take credit to ourselves, and pay tribute to B.O.A.C. for being the first operator of the turbo-jet aeroplane in civil airline operation. The results have thoroughly justified this far-sighted innovation. The load factors have been exceedingly high on all Comet services.

With regard to B.E.A.C., the actual operating loss, at £1,156,000, was some 7 per cent. less than in the previous year, but, after providing for interest on the increased stock issue and other charges, the net loss was £1,459,000, an increase of 2½ per cent. B.E.A.C., like B.O.A.C., were affected by a number of adverse factors over which they had no control.

The total space offered for sale by B.E.A.C.—that is, the output—increased by 22 per cent. compared with 1951–52 This was made possible primarily by the introduction into service of the Elizabethan and by the conversion of the Viking fleet to greater seating capacity. By contrast, the space sold—or the traffic—increased by 19 per cent. compared with 1951–52.

In spite of the setbacks to which I have alluded, the passenger miles flown on the services of the two Corporations increased by 16 per cent. compared with the previous year, and their total revenue increased from £44.4 million to £49.3 million. These figures are indicative of the growing importance of air transport and its substantial turnover.

It will be within the recollection of the House that the end of the war found us without suitable transport aircraft, except for some Dakotas which we retained by the generous provisions of Lend-Lease. These were only suitable, however, for short-haul services and we had no long-range aircraft. We depended upon useful but uneconomic aircraft such as the York, Lancastrian and the Hythe flying-boat, which, while serving a very useful purpose, were not designed as transport aircraft. This, naturally, presented a gloomy picture for air transport in this country, especially as our policy of building up the British civil aircraft industry precluded us from buying established foreign types with which our competitors were able to equip themselves.

During the short period of eight years which has elapsed, through the efforts of our aircraft designers and manufacturers and the far-sightedness of the Corporations, we now find ourselves with outstanding aircraft of British manufacture. Britain's share of international aviation has during this period slowly but steadily grown, and now that we are beginning to get our post-war aircraft into service we can expect to improve our position still further.

It is not without interest that during the six-year period from 1947–48, which was the first full year of B.E.A.C. operations, the output and traffic of the two Corporations has nearly trebled. For example, the passenger-miles flown on scheduled services during the period increased from 466 million to 1,253 million. This remarkable expansion has been achieved despite the fact that the number of staff employed at the end of the financial year 1952–53 was actually lower—by 12 per cent.—than at the end of 1947–48. At the same time, the cost to the taxpayer, in the form of the grants paid to the two Corporations, has been reduced to nearly one-eighth of the 1947–48 level—from about £10 million to £1¼ million.

There has also been a great expansion in the activities of the independent companies. In 1949–50, which was the first full year of operation of regular services as associates of the Corporations, the independent operators carried 65,200 passengers on scheduled services and flew 8½ million passenger-miles. By 1952–53 these figures had increased to 124,000 passengers and over 29 million passenger-miles—increases of 90 per cent. and 250 per cent. respectively.

Even more striking are the results for the summer of 1953, when the full effect of the new policy of giving greater scope to these operators began to be felt. In the four months April to July of 1953, both passengers carried and passenger-miles flown had more than doubled in comparison with the same period in 1952 Passengers increased from 53,000 to 110,000, and passenger miles from 9½ million to 21 million.

At the same time, the output of the Corporations also continues to increase in 1953; passenger-miles are up by 15 per cent. compared with 1952. The significant increase of air transport activity in the private sector under the policy of the present Government has, in fact, been made without arresting in any way the trend of expansion of the effort of the Corporations.

The achievement of all this balanced development is in no small measure due to the wise and sound judgment of the Air Transport Advisory Council. My right hon. Friend is deeply appreciative of the work which is being done by Lord Terrington and his colleagues, whose recommendations have been as expeditious as they have been creative.

The expansion of air transport is not, of course, confined to the scheduled services. Charter operations, in which I include air trooping, have shown a similar buoyancy in their upward movement. The Corporations themselves, in fulfilment of their undertakings to the Minister, have flown less hours on charter work in 1952–53 than in previous years. The independent companies during the year ended June, 1952, carried 75,000 passengers on non-scheduled flights, but during the subsequent 12 months they carried 175,000 passengers. A fair amount of this increase was due to the expansion of air trooping.

Various factors have contributed to this growth of air transport all over the world, and not the least among these are the safety standards which all airlines have now reached. The Corporations are most meticulous and punctilious in this respect, and the House may be interested to hear a statistic which I think is quite remarkable. If a man was born on a scheduled airliner and it was possible for him to go on flying without ever coming down at all, he would be 78 before he was statistically due for a fatal accident. [An HON. MEMBER: "Seventy-eight?"] Yes, 78—an age which the hon. Member and I may not live to.

In what I have said, the main emphasis has been on the international services of the Corporations. It is, however, gratifying and perhaps a little surprising that there has been a substantial upsurge within our islands. Whilst the traffic of B.E.A.C.'s international services increased by 15.9 per cent. compared with the previous year, the corresponding figure of their domestic services was 29 per cent. increase. I say "surprising" because I think one must admit that air transport in this country has to compete with an excellent service of surface communications.

The promotion of this domestic traffic was largely due to the increase of frequencies and substantial reduction of fares on services between London and Glasgow and London and Edinburgh. This improvement in the facilities for air travel between Scotland and London led to a great increase in the numbers of passengers carried. Not only has this improvement in the services between Scotland and this country taken place during the year under consideration, but the B.E.A.C. programme of replacement of the Rapide aircraft by the Dakota Pionairs wherever this has proved feasible has also led to a substantial overall improvement of Scottish internal air services. Whilst I do not want to weary the House with a lot of figures, it is of interest to note that international traffic through Prestwick increased by 32 per cent. in 1952–53 and that on the Scottish internal trunk routes the increase was over 80 per cent. in the summer months. This by any standard is quite a remarkable degree of expansion.

Any review of the Reports and Accounts of the Corporations would be incomplete without some mention of the aircraft types which have achieved these results. I have already referred to the introduction of the Comet I, and this is to be followed by the Comet II, which is planned to make its debut in the B.O.A.C. international network in the spring of 1954, on the routes to South America. This aircraft will be followed by yet another Comet type, the Comet III, which will be powered with a more powerful Rolls-Royce Avon engine and will improve both the range and economics of the type.

In the years to come the Britannia will take its place alongside the Comet, and the Corporation will have moved a further step towards its goal of complete equipment with British aircraft. We have always entertained great hopes and expectations of this aircraft, and her early trials have fortified us in our confidence in the type. She will be introduced for both first-class and tourist class services on certain B.O.A.C. routes for which she is pre-eminently suited.

Turning to medium-range types, the Elizabethan has been successfully introduced and has overcome its initial teething troubles and is proving a most popular aircraft. The turbo-prop Viscount—the first of its kind to be introduced into airline service—did not fly on the B.E.A.C. routes until the current year, but from the outset this aircraft has established itself as a very successful competitive aircraft far in advance of anything other European operators can offer on the particular routes for which it was designed. The version now in service, again, is the first of a line of this type which we think has a great future. B.E.A.C. plan to introduce a higher capacity and more powerful Viscount, at present known as the V.800 or the Super Viscount, in the coming years. I can give the House a first-hand testimony to this aircraft as I was myself privileged to fly the other day to New Zealand in the air race.

Mr. John Rankin (Glasgow, Tradeston)

In what capacity?

Mr. Profumo

A capacity which I hope will not seem too humble to suit the ideas of the hon. Member.

Hon. Members may like to know that over the entire distance of 12,500 miles the four Rolls Royce Dart engines used only half a pint of oil. In measuring the remarkable performance of this aeroplane in the race, it is most important to bear in mind that she was designed as a medium and not a long-range aircraft. I think hon. Members will agree that B.E.A.C. are to be congratulated on having had the initiative to enter this aircraft, which was provided by the Minister of Supply, in the air race, and indeed on the way in which they carried the aircraft to the other end of the world with great distinction indeed. Wherever it went it received a wholehearted and enthusiastic reception. I should not think it improbable that the result of the race and the showing of the Viscount on the other side of the world will be an increase in orders for this country. From what I have said hon. Members will, I am sure, agree that we have now reached the stage where anybody can either fly British or buy British with the utmost confidence.

In what I have said I have necessarily concentrated on the triumphs of the British aircraft industry and British airlines in ushering in the new jet age, but there is another important line of development which may have tremendous influence in the future, particularly for those of us who live in the cramped conditions of island life, as a part of Europe. I refer, of course, to the helicopter. Whilst great strides are being made in research and development in this field, I make no apology for repeating that it would be quite unrealistic to imagine that economic helicopter services can be introduced in the immediate future.

At this stage the only British helicopters carrying a certificate of airworthiness are single-engined types and, as the House will be aware, safety considerations and economics both combine to limit the possible uses of single-engined types in commercial service. We must therefore await multi-engined types, and here we have the Bristol 173 already flying in the prototype stage. I am not going to be tempted into any firm prediction as to when this aircraft will be ready for introduction into commercial service, but will only say that everything possible is being done to expedite that stage. Side by side with the development of the Bristol 173 there are other important new types under development.

Aviation has a very important role to play within the Commonwealth itself. Both Corporations, particularly B.O.A.C., have long-standing partnerships with other Commonwealth airlines, such as the Kangaroo partnership with Qantas Empire Airways, the Springbok Partnership with South African Airways, and partnerships in British Commonwealth Pacific Airways, Tasman Empire Airways, and others. These partnerships all contribute to strengthening Commonwealth air links and to the strengthening of the Commonwealth in international air transport.

It seems, nowadays, that it does not matter in what part of the world one lives; what matters more is where one lives in relation to the great trunk routes of the world. Inside the British Commonwealth we have a great family network of these routes. There is no place in the British Commonwealth today which is not accessible to any other part of the British Commonwealth by air transport. The Commonwealth Prime Ministers' Conferences and the forthcoming conference of Finance Ministers are all made more possible by the fact that these Commonwealth air communications have reached such a high standard.

Nevertheless, if the system is to endure it must be flexible. Adjustments will have to be made from time to time so that the resources of the individual Commonwealth partners are employed to the best advantage in a way that enables each partner to make its maximum contribution to the joint effort. It is in this connection that I have just been taking part in discussions in Christchurch with the Ministers responsible for Civil Aviation in New Zealand and Australia about the future pattern of existing airline partnerships between our three countries. Although we reached agreement in our exploratory conversations, our recommendations have now to be carefully studied by the three Governments. The House will, therefore, not expect me to elaborate any further at this stage. Suffice it to say that each Government is deeply conscious of the requirement to reach a conclusion on these problems without undue delay.

Before I sit down, I must pay the warmest possible tribute to all those who have made and are continuing to make their contribution towards the successful development of British air transport. The results we see today are due to a threefold triumph of designers, manufacturers and operators. All are playing their important parts with enthusiasm and enterprise, and as far as the operators, both in the Corporations and the independent companies, are concerned, they will, I know, receive the widest possible acclamation from all sides of the House, managements and staffs alike, and, perhaps most of all, those to whom we entrust our safety in the air.

4.5 p.m.

Mr. G. Lindgren (Wellingborough)

I join with the Parliamentary Secretary in congratulating B.E.A.C. and the crew of the Viscount which played such a magnificent part in the recent air race to New Zealand. So far as my colleagues and I are concerned, the Parliamentary Secretary will certainly not get in the soup for associating himself with the day-to-day activities of all branches of aviation. The more he does it the better we shall like it. We think it an important part of his duty, and we appreciate the fact that, in the comparatively short time that he has been in office, and even at some personal inconvenience, he has shown himself to be always ready to associate himself with the day-to-day activities of those concerned with civil aviation.

These last few days have been really remarkable, because we have had a succession of Tory Ministers singing the paises of nationalised industries. Last week we had the Parliamentary Secretary for the surface side of the Ministry of Transport singing the praises of the nationalised railways, making the breast of every ex-railwayman rise, and forgetting all his Hyde Park attitude, clichés, and attacks on the manner in which the nationalised industries were run. Yesterday, we had another success story. The Minister of Fuel and Power, going well out of his way, was unstinted in his praises for the magnificent work being done by the nationalised industries in the mines, in gas and in electricity.

Today we get the outstanding success of all successes, British aviation leads the world in aircraft flown, whether it be on long-range, medium-range or short-range routes. It leads the world in safety, regularity and reliability; in passenger comfort and passenger handling, and in route facilities. It is recognised throughout the world as having the highest standard of operational efficiency and personal service. We can therefore develop this part of the debate in the utmost harmony.

I join with the Parliamentary Secretary in congratulating the Corporations, the boards, the managements and everyone on the staffs, on the excellent work they have done. My colleagues and myself are proud of the work they have done on behalf of British aviation.

The Parliamentary Secretary said that since 1945 these debates on civil aviation have been on a non-party basis. I can excuse him, as he has been away over the last few weeks and has probably not gone through the debates we had from 1945 onwards. I hope that when the Minister replies he will apologise most profusely and humbly for the jibes he made at the Corporations and the personalities in them, whom the Parliamentary Secretary has today so amply praised. I stood at that Box for four years, and I had to stand the jibes of the right hon. Gentleman and of hon. Gentlemen opposite. They were jibes which were unfair, and many of them extraordinarily cheap. Some of us cannot forget that even the Financial Secretary to the Treasury called those who are now in responsible positions in the Corporations "Quislings"—hardly nonparty language.

Do the Conservative Party Central Office remember the leaflet that they circulated in the constituencies at the last Election? I have one here that says: Messrs. Attlee and Co., General Jobbers. Telegraphic address: Squandermania, London.

Hon. Members

Hear, hear.

Mr. Lindgren

Hon. Gentlemen opposite now say, "Hear, hear." They put in the leaflet the losses which were sustained in nationalised industries. For reasons which the Parliamentary Secretary quite fairly stated in regard to aircraft availability, the civil aviation industry was amongst those having the most. Then, at the bottom of this leaflet, it is said: Unless this account is settled at the General Election further items of cost will have to be defrayed by selling your freedom and prosperity.

Hon. Members

Hear, hear.

Mr. Lindgren

That really shows how non-party these debates have been. The attitude which hon. Gentlemen opposite are now showing is the one which they used to show when they were on this side of the House and I had the very great privilege of standing at that Box opposite.

I hope that the Minister, when he winds up the debate, is going to say that the Tory Party Central Office, following the speeches of himself and his colleague on the Report of the British Transport Commission last week, and the speeches yesterday by the Minister of Fuel and Power and his Parliamentary Secretary, and the speech of the Parliamentary Secretary today—and even the right hon. Gentleman's own speech tonight—are going to issue another leaflet setting out the songs of praise that Tory Ministers in the last week have sung to the nationalised industries of this country.

Mr. Ian Mikardo (Reading, South)

Do not worry. If they do not, we shall.

Mr. Lindgren

The unworthiness of that propaganda carried on against these Corporations by hon. Gentlemen opposite lay, of course, in the fact that the airlines of other countries had aircraft which were much nearer being economic in operation than those which were available to the Corporations in this country and that other airlines throughout the world, in one way or another, received subsidies from the Government to whom they were responsible. The right hon. Gentleman, in particular, often used to quote to me the fact that the American airlines were running without subsidies. I used to reply that they were heavily subsidised through mail payments.

The Minister of Transport and Civil Aviation (Mr. Alan Lennox-Boyd)

I think that in fairness the hon. Gentleman would agree that I never disguised the fact of the hidden subsidies of the United States, and I must confess now, as I confessed then, that I prefer an open to a hidden subsidy.

Mr. Lindgren

We are going along remarkably, and before we finish I am certain we shall have the Minister agreeing to issue that leaflet of which I spoke just now. Since those days, I happened to get hold of a copy of "American Aviation" for 28th September, and I notice that now in America they are obviously following the advice which perhaps the Minister gave to them, and now the American airlines are getting their mail services paid and also openly getting a subsidy. It is interesting to note that, so far as Pan American are concerned, the subsidy is to the extent of 28 million dollars. That is for 1954. That is not for 1945, 1946, 1947, 1948, and 1949. I wonder what the Minister has to say now about some of the remarks which were made about B.O.A.C. in those early days, and the difficulties under which they operated and the deficiencies which they then incurred.

However, I, like the Parliamentary Secretary, do not want to go into too many details of the Reports of the Corporations. I agree with him that these Reports are certainly up to the best commercial standards. The experience of hon. Members opposite of commercial undertakings is, perhaps, greater than mine, but I have yet to see the private enterprise undertaking that sets out in such detail not only its accounts but explanations of its day-to-day activities as do the B.O.A.C. and B.E.A.C. They are excellently produced Reports and available for all to read. I just want to deal with a few points that arise from them.

We have at present a very negative and a very destructive Government. I expected to get a cheer for that from opposite, but it did not come. The Corporations at the present time face very heavy and very fierce competition in all parts of the world. That is not a bad thing. It is a very good thing. I agree with the Parliamentary Secretary that the standards of operation of foreign airlines, which in many cases are national airlines, have to be met by standards which are even better than theirs, and if B.E.A.C. and B.O.A.C. are really to become even more effective in this very competitive air world they deserve all the support——

Mr. Charles Ian Orr-Ewing (Hendon, North)

It is not price competition. It is also comfort competition. Prices are fixed on an international basis.

Mr. Lindgren

Because competition as competition is dangerous—and even those who believe in competition admit it is dangerous—and because competition might lead to a lowering of standards and a lowering of safety, it is perfectly true that through I.A.T.A. a fare structure throughout the world is defined, but there is much more in air services and transport than the actual fare which one pays. The standard of transport, the comfort of the passengers in an aircraft, the facilities that are available to the passengers along the route—all these things are matters that come in when a person chooses between travelling by one airline or by another.

The point I was making is that those facilities are costly to provide, and that in this competitive world the Corporations are entitled to the fullest support of the Government to whom they are responsible, irrespective of the political complexion of the Government. At the moment, in my opinion, the Corporations are not receiving that support from the Government that they really ought to have. In fact, as I shall demonstrate, the Corporations are being hampered. Not only are they being hampered, but the taxpayers' money is being wasted by the Government in their futile attempt to bolster up private enterprise.

The Parliamentary Secretary, quite fairly—and we are glad he was frank in his statement—admitted that the Corporations are being prevented from tendering for charter contracts, and the Government have made it known that even if the Corporations do tender, and a tender of theirs is less, that tender will not be accepted, but the contract will be given to a private charter operator to bolster up private charter operations. My early public life was in local government. All Governments in this country have, in order to protect the ratepayers' money, insisted that, when doing any work for the inhabitants of their area, local authorities should accept the lowest tender, or justify to the appropriate Minister why they would not accept the lowest tender.

The Government have to justify to the taxpayers why they are deliberately paying more for national trooping than they could do, or ought to do, and why they are not accepting the lowest tender because it is from a nationalised air trans- port Corporation. We had a similar instance in the Transport Act not long ago. Because London Transport were good at charter work, the independent bus and coach operators did not like the competition, and, therefore, London Transport have been excluded from that type of work.

In the field of air transport, in regard to the use of the taxpayers' money and the standard of facilities that we make available for men serving in one or other of the branches of the Services, the position is even worse. Sitting on the tarmac at London Airport are 19 Hermes aircraft which B.O.A.C. bought while they were waiting for the Comet. They had all the problems of getting the "bugs" out of the Hermes, getting rid of their teething troubles, before putting them into service. About 400 modifications were carried out, and finally the Hermes was made a satisfactory aircraft. The 19 cost B.O.A.C. and the taxpayer £250,000 each, which means that £5 million of the taxpayers' money is sitting on the tarmac at London Airport and the Government are preventing the use of the aircraft because they will not allow B.O.A.C. to use them for carrying our troops from place to place. What a scandal.

It certainly is a scandal, for there we have £5 million of the taxpayers' money tied up in aircraft which are a civil version of the R.A.F. Hastings, and yet when we have to move troops from place to place the Government refuse to use Government property for Government work.

Mr. C. I. Orr-Ewing

Will not the hon. Gentleman agree that if one makes a contract to carry out a certain number of scheduled charter flights with troops, one cannot break the contract because other aircraft become available in the Corporation?

Mr. Lindgren

I am glad to have that interjection and shall deal with it in a moment. The Government do not believe in private enterprise. B.O.A.C. have offered for sale the 19 aircraft which from their own point of view are now out of service and surplus to their requirements, on very generous hire-purchase terms, terms which in my opinion are too generous, although that is a matter of opinion. However, the Government do not believe in private enterprise, and we are getting the worst of both worlds.

Not only will the Government not allow B.O.A.C. to use the aircraft for troop carrying, thus giving the troops a better, easier and more comfortable ride than they can get in the aircraft which the charter companies have available, but they will not even give the charter companies a sufficiently long contract which would justify their purchasing the aircraft which B.O.A.C. have for disposal. In other words, not only are the Government preventing B.O.A.C., a nationalised air line, from using the nation's property for the nation's purposes, but, even though they pretend to believe in private enterprise, they refuse to give the private operator a contract which will enable him to justify to his own shareholders the purchase of aircraft at £250,000 each.

From the point of view of national security also, it would be a good thing. I am not as knowledgeable technically as I should like to be, although I know a little more about aircraft technicalities than I did at one time, but surely after an aircraft has been standing on the tarmac for six or 12 months, even if it has been cocooned, it is not easily and readily put into operation again. I have said that the Hermes is a civil version of the R.A.F. Hastings. The two types could be knitted easily together and we should then have a national asset available for use if ever we had an emergency.

It is not only a question of the Hermes. As the Parliamentary Secretary said, B.E.A.C. are—quite rightly—changing over aircraft to the Viscount and the Elizabethan. The Viking is going out of service. The Vikings are thus surplus to the requirements of B.E.A.C., and they are standing in the B.E.A. hangars and some are even standing on the tarmac. We have trooping to Gibraltar, Malta and Cyprus, and in those places B.O.A.C. have passenger route facilities and mechanics and other staff all the way along the line.

There is always the glamour attached to being a pilot, but the ground crews are the men who really determine the efficiency of an airline. Here we have a nationalised Corporation with surplus aircraft, route facilities and all the "know-how" to do the job, and yet purely for party political purposes the Government of the day waste the taxpayers' money in bolstering up charter operations. It is just not good enough. The more the country knows of the manner in which the Government are, just for party political purposes, hampering the effective use of national property, the better it will be.

In the freight service there is a further instance of the Government's interference with the opportunity for the Corporations to develop as they ought to develop. Speaking from the Dispatch Box 12 months ago, the Minister said that, in order to help a charter operator, the Government were giving the charter operator the facility to fly a freight service across the Atlantic. The Minister admitted then that he had requested B.O.A.C. to hold their hand for 12 months. Although the Minister gave the charter operator the licence to fly a freight service across the Atlantic in July, 1952, not a single service has been flown.

Thus, in an attempt to boost up private enterprise the Government have stopped a national airline from providing the service. The Minister himself stated in the House that he had required an undertaking from Sir Miles Thomas, Chairman of B.O.A.C., that B.O.A.C. would not fly a freight service across the Atlantic for 12 months. B.O.A.C. have not flown such a service for 12 months. What has happened? The only people who have been able to operate such a service have been foreign airlines. So the magnificent achievement of the Tory Government is stopping our own national asset, the Corporation, from providing a service for British industry and from earning Canadian and American dollars, and is leaving this all open to the American and Canadian airlines.

Mr. John Maclay (Renfrew, West)

Is not the hon. Gentleman confusing providing a service and applying for a licence to operate this service? I think he is.

Mr. Lindgren

No. I am surprised that the right hon. Gentleman is not more in touch with this point. B.O.A.C. had plans to fly a North Atlantic freight service, and that was known.

Mr. C. I. Orr-Ewing

What had they in which to fly freight across the Atlantic?

Mr. Lindgren

They had Argonauts and spare Constellations. They could have used those. But a charter company wanted to fly. The Minister gave it a licence to do so. In addition, the Government asked or instructed B.O.A.C. not to fly this service for 12 months. The charter company has not flown at all. The only people who carry freight across the North Atlantic are the American and Canadian operators. So the net effect of the Government's action was to prevent our own national asset from earning revenue for this country—and very valuable revenue in Canadian and American dollars.

The Parliamentary Secretary paid a tribute to the Air Transport Advisory Council, and, so far as Lord Terrington and his colleagues are concerned, I join with the Parliamentary Secretary in paying tribute to the work which they have done. They have done it extraordinarily well. They are a Government instrument and they work according to the directions given to them by the Government of the day.

The Government of the day have given them a directive which requires that the Corporations, whether B.E.A.C. or B.O.A.C., if they want to fly a new route or vary an existing route have to go to the Air Transport Advisory Council to get sanction. These variations or these new routes generally arise from new bilateral agreements or the revision of existing bilateral agreements. The net effect of the Government's policy is one of delay.

There is delay while there is argument as to whether there is a charter company which wants to do it, whether there is a charter company which has the facilities to do it, and whether or not the State Corporations should be allowed to do it. That delay is an advantage to the foreign operator, because the bilateral agreement, as soon as it is made, gives an opportunity to that service to go into operation. We are finding that B.O.A.C., in particular, are hampered because of the lack of opportunity to be adaptable to new circumstances which arise.

If, in fact, an airline is to be right on top all the time, it must from time to time change its operational pattern to meet the existing circumstances or changing circumstances. In that case, B.O.A.C. and B.E.A.C. are hampered because of the delays which arise while the Government look round to see whether or not they can push a charter company in here or in there. As I have mentioned, the foreign operator gets the advantage of that delay.

The next point to which I should like to refer is one for which, I admit, both this Government and the previous Government have some responsibility, although this Government's responsibility is much heavier than that of the previous one. I am referring to the fuel tax in respect of B.E.A.C. It is mentioned in their Report. They are the only ones who have to pay it and only for internal services. I see that this year that tax amounts to £400,000, and it is anticipated that it will be £500,000 next year. In fact, one-third of the existing deficit on B.E.A.C. arises from the fuel tax which they have to pay. It is a rather heavy liability which an operator has to carry, because the fares of the first six passengers on the aircraft have to go to pay the full fuel tax for the operation of the aircraft. This is no saving to the taxpayer of this country. It is money going out of one pocket into another, but it undoubtedly is an unfair charge upon the operator of our internal services, and I think that the Treasury should be prevailed upon to make some concession.

Another point I wish to mention relates to the social services which B.E.A.C. have to provide. The Minister and his hon. Friends used to twit the Labour Government and say that private enterprise could provide the social services for Scotland and make a profit out of them. They used to challenge us to allow Scottish companies any opportunity to run these services so that they could show how they should be run. The Minister from that Box has offered these services to any Scottish operator who would operate them. He did not even ask for any goodwill that B.E.A.C. had built up, although B.E.A.C. paid goodwill to Gandar Dower, Fresson and the old Railway Air Services.

Is it politic or polite to ask the Minister what happened to these gallant private enterprise operators in Scotland who were waiting and anxious to be let loose in order that they could could provide social services for the people of Scotland? They have not come forward. There are social services which, I think, every Scottish Member will say are run at the highest standards, but they are services which cost B.E.A.C. £80,000 a year.

Mr. Dudley Williams (Exeter)

A flea-bite.

Mr. Lindgren

That is a nice little fleabite—especially to a chap like me So far as that £80,000 is concerned, would it not be better to treat it as a social service payment? After all, successive Tory Governments before the war, because of the recognised difficulty of transport, owing to the sparse population and the rest of it, to the Highlands and Islands of Scotland, paid, and still pay, handsome subsidies to MacBrayne for providing these services. I am not criticising them; in fact, no private operator could provide these services on a basis of good service and make a profit out of them. But if it is decided to recognise MacBrayne's subsidy requirements for their social services in the Highlands and Islands, why not recognise the services of B.E.A.C. in the same way?

Major D. McCallum (Argyll)

When talking about the subsidy that MacBrayne's get and B.E.A.C. do not get, the hon. Member is surely leaving out of account that B.E.A.C. get the whole of the administrative civil aviation arrangements for landing grounds, landing staffs, directional landing aids, and so on, for which they do not pay.

Mr. Lindgren

B.E.A.C. do not pay for them, I agree; but there are such things as landing fees, and the purpose of charging an air operator a landing fee is that when he lands certain facilities are available to him, and he ought to make some contribution towards their provision.

Major McCallum

Will the hon. Gentleman admit that the private enterprise Fressons, Gandar Dowers, and so on, did everything—landing grounds, arrangements for taking people to and from those landing grounds, and so on?

Mr. Lindgren

I have tried to be quiet and modest, but the hon. and gallant Member is tempting me. He knows what happened on the Gandar Dower basis. They used to get a boy to come and chase away the sheep. That is all the facilities they had.

Major McCallum

They had no accidents.

Mr. Lindgren

I agree; they were good fellows, and did a grand pioneering job. But the types of aircraft being flown today, the number of services and the number of people, are much different from the occasional trip that was made in those days.

Major McCallum

How many services are running now to the Western Isles? There is only one flight per day on each service.

Mr. Lindgren

I do not want to go into too many details, in case I get into trouble with Mr. Speaker. There is a little difference even between a Rapide and an old Dragon, which Fresson's used to fly. I do not want to be unkind to Gandar Dower, but there were not many who knew when their machines would go, and fewer still knew when they would arrive.

Major McCallum


Mr. Lindgren

The standard of operation now is first-class, and I am certain that the hon. and gallant Member would not like either the Ministry of Civil Aviation or B.E.A.C. to take a risk with the life of a single passenger. If they did, the hon. and gallant Member would be the first, and rightly so, to criticise them in the House for doing so.

Major McCallum

Why does the hon. Gentleman include the Ministry?

Mr. Lindgren

They make a contribution towards it.

The Parliamentary Secretary referred to the new aircraft that were coming into operation for the Corporations. I am glad that the Government now recognise that the British Airways Corporations are the shop window of the British aircraft industry. That is one of their functions, and both Corporations have done it in a remarkable manner. Their development staffs and technical staffs are to be commended in every way for all that they have done. I hope that hon. Gentlemen opposite will now admit what they would not admit when they were in opposition: that not a single modern British aircraft would be sold abroad unless it were put into operation by one or other of our nationalised Corporations. The Corporations prove an aircraft, get the "bugs" out of it and get over its teething troubles.

Mr. Dudley Williams

And crash them.

Mr. Lindgren

That is an unfair comment. If experimental work is to be done anywhere, there are bound to be unfortunate accidents from time to time. Let the hon. Gentleman be fair.

But for the work which B.O.A.C. have done, not a single Comet would have been sold abroad. But for the work carried out by B.E.A.C., not a single Viscount would have been sold abroad. Any purchaser wants to know the economics of an aircraft before he buys it, and the economics are known only after the machine has been proved in service. It is the proving of the aircraft in service by one or other of the Corporations which makes a market possible for the British aircraft industry.

It would not be unfair to expect every now and again that at least one—it would be nice to have even one—hon. Member opposite would be gallant and truthful enough to praise the Labour Government for giving full effect to the Brabazon Committee recommendations and for producing every one of the types of aircraft recommended by that Committee. There are some types recommended by the Brabazon Committee which have been produced at cost to the Ministry of Supply but which have not gone into service, and yet they are good aircraft.

Mr. C. I. Orr-Ewing

Hear, hear.

Mr. Lindgren

They have not gone into service anywhere because B.E.A.C. or B.O.A.C., required, as they are—and rightly so—to operate on as nearly commercial a basis as possible, cannot have a dozen types of aircraft. I do not want to mention the types that could be flown and the possibly economic aircraft which, very likely, would come up to the standards of, say, the Viscount; but they are not going into service, because B.E.A.C. or B.O.A.C. have not flown them and have not developed them, and the world does not know the economics of those aircraft and will not take them "on spec." Not one of the charter companies, which hon. Members opposite try to boost up and parade around as private enterprise, has taken on these aircraft.

Mr. Lennox-Boyd

In fairness, mention should be made of the arrangements made by Hunting's in regard to the purchase of Viscounts. I think most people are glad to see the partnership between Hunting's and the Clan Line, bringing the two elements in transport together.

Mr. Lindgren

I agree, but Jet me put it this way. Hunting's have not taken the Apollo to develop it. They have taken the Viscount, which has been developed by B.E.A.C., who took the aircraft when its engine overhauls had to be done every 400 hours. B.E.A.C. have now got the engine overhaul frequency up to 500 hours. By the time that Hunting's get their Viscounts, very likely there will be 600 hours between engine overhauls. All the advantages of the development which is undertaken by the British Airways Corporations—I do not complain about this; it is the obvious thing to be done—are received by the subsequent purchaser, whether a foreign airline or a charter company in this country. My point is that this type of development is extraordinarily difficult and expensive.

I appreciate—and none would appreciate more than the two Corporations—the very happy relationship which they and their technical services have with the aircraft manufacturers. To take simply one example, the development by B.E.A.C. of the Viscount has cost the Corporation £1 million; according to their Report, they are spreading it over four years. As far as the Elizabethan is concerned, they must have spent a lot more. B.O.A.C. had to bear the development cost of the Hermes; they made it into a good aircraft. They have had the development costs of the Comet, and they will have to face the development costs of the Britannia.

These are heavy charges which the Corporations have to carry, and it is not unfair to suggest that they should get some contribution towards them. Whether that ought to be met by the aircraft industry I do not propose to argue today, but certainly it is not a charge which ought legitimately to be borne by the aircraft operator, because it is an unfair one upon him and it is one from which not only he receives the benefit, but from which, to a still greater extent, the aircraft industry and future purchasers get the advantage.

I appreciate that when making a statement, as the Parliamentary Secretary did today, it is impossible to mention everything, but while I am on the question of aircraft I should like to ask what is happening about the Princess. I do not want to reopen controversy about land craft versus the flying boat, but I am rather proud of the fact that the Labour Government, in very difficult circumstances, and against quite a lot of pressure from more than one direction, maintained the development of the Saunders Roe Princess flying boat. I still believe that the flying boat has a part to play in the development of air transport throughout the world.

When I was at the Ministry of Civil Aviation, the attitude of the B.O.A.C.—I suppose they still hold to it—was that they were quite prepared to put the Princess into operation, but quite rightly successive chairmen of B.O.A.C. said to the Minister for the time being, "Here we are, at your direction and under constant pressure from you, working for the day"—which has now arrived—" when we shall show a profit, and we could not operate on routes with the Princess flying boat in a normal commercial manner." But they were prepared, and stated that they were prepared, to enter into negotiations for some abnormal arrangement which would enable them to put the Princess into service.

Recently we have had trouble in the West Indies, and we have had to transport troops by aircraft, by cruiser and by aircraft carrier. It does seem to me that, having a national asset like the Princess, available to go into some sort of service, it is an aircraft which ought to be put into service. It would be available to meet national requirements on such occasions for the movement of troops or other large bodies of people from place to place. There is the difficulty of the provision of facilities in harbours, etc. I agree that it is expensive if there is only one operator. That was one of the difficulties about the flying boat service which B.O.A.C. ran so excellently, and the discontinuance of which caused so much alarm to my hon. Friend the Member for Itchen (Mr. Morley). We should like to hear what has happened and what is likely to happen about the Princess flying boat.

I have two points to make about the Ministry of Civil Aviation, or perhaps I should now say the Department of Civil Aviation within the Ministry of Transport. I should like to express my appreciation and to congratulate the Minister on agreeing to remove, withdraw, abolish—or whatever he likes to call it—the five-shilling passenger tax. It was a bad tax and an irritating one, and it is a good thing that it has now been withdrawn. But because it has been withdrawn landing fees are to be increased.

Mr. Lennox-Boyd

I hope that the hon. Member will pardon me and permit me to intervene again; he has been very good in giving way. I hope that it will not go out that from now on people have not got to pay. That will not be the case. I have had negotiations and have stated our position, that we will withdraw it and add it instead to the landing fees, the same amount of money to come to the Treasury. If, however, a system is found whereby by national and international agreement it can be absorbed in the fare, that may be an equally good solution. I was anxious to get rid of the irritation to the individual passenger.

Mr. Lindgren

My information was that the Minister had withdrawn the tax and was contemplating putting in on the landing fees. I agree with him that it was a most irritating tax, and everybody will be happy that it has gone.

Putting it on to the landing fees, however, does mean that the fees which the Corporation and all operators have to pay are getting a little higher, perhaps a little too high. I noted that the general secretary of I.A.T.A., at their recent conference, referred to the fact that British fees were well above the world average. I am not one of those who think that the operator, whether nationalised or charter, should have these facilities made available to him without payment. The provision of aerodromes and aerodrome facilities is very costly, and operators should be prepared for the State to charge them a sum which represents the reasonable cost of those services. In view of the statement of the general secretary of I.A.T.A., however, we should be assured by the Minister that the charges which are now being made, or which are in contemplation, are considered by him and his Ministry to be reasonable ones.

I have a comment to make in regard to an appointment to the Board of B.E.A.C. I shall not follow the example which was set me by the Minister and hon. Gentlemen behind him when they were in opposition of stooping to personalities and making personal attacks on individuals. I wish to deal with a question of policy. I read in the aviation Press that Sir Arnold Overton has been appointed to the Board of B.E.A.C. The Government, by their policy, abolish the Ministry of Civil Aviation and make a Permanent Secretary redundant. It does not strike me as the best of arguments for the appointment to a board of a nationalised industry that one is compensating a civil servant for loss of office and giving an addition to superannuation by placing him on the board of one of the nationalised industries.

There is at least room for feeling that there is almost a danger of there being some Civil Service patronage in the appointments to boards of nationalised industries. That would be a pity. Perhaps the Minister will make some comment as to why in this case a civil servant is being made an extra member of the Board of B.E.A.C.

We accept the Reports of the Corporations with pleasure. We compliment the Corporations and their staffs on the excellent work which they have done and on their remarkably fine achievement. I would add a word of congratulation to the Civil Service staff in the Ministry of Civil Aviation. Many of them, over a period of years since 1945, have worked loyally with successive Ministers, and in conjunction with successive chairmen and executives of each of the Corporations, to give effect to Government policy and to assist the Corporations to reach the stage which they have reached today. To them it must be, as it is to me, very pleasing that the work which they have done so excellently is now showing such excellent results.

Today the success story which has been begun by the Parliamentary Secretary is a success story of the policy of the Labour Government from 1945 to 1951, and I am delighted to have played some part in that from 1946 to 1950. I urge the Government, however, to be British in the real sense of the word, to give up or drop their party, doctrinaire slogans, and to give the fullest possible support to the two Corporations, which are worthy of it and which will, if given that support, take British aviation to an even higher stage than it has now reached.

5.0 p.m.

Mr. W. R. D. Perkins (Stroud and Thornbury)

The hon. Member for Wellingborough (Mr. Lindgren) appears thoroughly dissatisfied with many aspects of British civil aviation. I am delighted because I hope he will support me in my request for an inquiry into the state of British air transport. I believe that an inquiry is very much in the public interest at this moment. The right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison), when he was Leader of the House, announced, in October, 1950, that in his view and in the view of his party there should be an inquiry into all the nationalised industries roughly every seven years.

I agree with him. B.O.A.C. has now been in existence nearly 15 years, approximately half of which has been under peace-time conditions, and no public inquiry has yet taken place. It is true that in 1948 there was a hole-and-corner investigation, held in secret behind closed doors, but there has been no full-scale public inquiry into the activities of these two Corporations. I believe the time is ripe for that; in fact, I believe it is long overdue.

The hon. Member for Wellingborough is under some slight misapprehension about B.O.A.C. He seems to imagine that he and his party set it up. In fact, they did not. We, on this side of the House created B.O.A.C. I myself voted for it. It is our baby. We wish it well, we want it to thrive, but we also want it to be thoroughly efficient. That is why I am asking for an inquiry. I do not want a muck-finding inquiry, but one into the broad principles which governed the setting up of this concern.

Is the organisation which we set up in 1938, 15 years ago, the ideal one today? Perhaps times have changed. Are two Corporations the best possible number? It might be advisable to amalgamate the two into one. It might be advisable to do what was done in the case of the gas industry, to decentralise somewhat instead of having two, three, four or five chosen instruments. B.O.A.C. is rapidly growing. If we keep it as now constituted, how big is it to be allowed to grow? Lastly, the most important question of all, is it efficient today? Is it as efficient as its main rivals? I have my doubts.

Figures published by the International Conference for Air Operations in October, 1952, which I think are the latest ones published, suggest that B.O.A.C. is not as efficient as its main rivals. I have in my pocket the figures of the seven main airlines which run international transport. It would be unfair to compare B.O.A.C. with any one of those except Pan-American Airways because these two concerns alone of the big seven operate only international services. They alone have four-engine aircraft only, they fly side by side, they charge the same fares, they operate in the same manner all over the world. Therefore, as far as it is possible to make a comparison between any two airlines, that is as far as it is possible to go.

According to the figures, Pan-American have 136 aircraft. They employ just under 15,000 people to service, fly and look after those aircraft. This works out at roughly 110 people per aircraft. The corresponding figure for B.O.A.C. is 68 aircraft and 16,000 employees, which works out at approximately 236 people per aircraft. If we take the accounts we are considering today, it is even worse than that, because it comes to 266. In other words, B.O.A.C. is employing two and a half times the number of persons to keep one aircraft in the air as compared with their nearest and most serious rival, Pan-American Airways.

Mr. Lindgren

Surely the hon. Gentleman, with his knowledge of aviation, will admit that B.O.A.C. is in an entirely different position from Pan-American? It is developing jet aircraft and must have ground and workshop facilities for the development of the jet aircraft as well as maintaining the piston engines still in use.

Mr. Perkins

I do not agree with the hon. Gentleman and I was just coming to that point.

We must see where this big increase is. He will remember, because he was Minister at that time, that four years ago B.O.A.C. made a drastic cut in its own staff and dismissed 6,000 or 7,000 people, which represented a cut of one-third. In spite of that, today its general and administrative personnel are up by about 50 per cent. as compared with their nearest rival and B.O.A.C. is flying roughly half the time. It is not on the maintenance side or on the aircrew side; it is purely on the administrative side that this big increase is taking place.

I will give the hon. Gentleman one more simple illustration. I do not know whether he has had the opportunity of reading the report of the Director of Civil Aviation for Bermuda? The last one I had was for 1951, which, I think, is the most up to date. From that one can see what is happening. Pan-American have a permanent staff there of 32 while B.O.A.C. has 37. Also, the number of movements for Pan-American for 1951 was 1,704 compared with only 212 for B.O.A.C. Therefore, it has a substantially bigger staff while doing only about one-eighth of the flying done by Pan-American.

Mr. Edward Shackleton (Preston, South)

If the hon. Gentleman will allow me to interrupt, surely he is aware that the only real standard of comparison is in capacity ton miles per member of the staff. Has he got those figures for Pan-American?

Mr. Perkins

No, the only figures I have for Pan-American are those I have given the House. As I have said, those figures were published by I.C.A.O. and I would be delighted to send the hon. Gentleman many more figures published by them in connection with all the other airlines. I promised, Mr. Speaker, that I would speak for only five or six minutes and I have said what I wanted to say. In view of those facts, which suggest to me that B.O.A.C. is not as efficient as perhaps it should be, I ask the Government to give us an inquiry on the lines of the Cadman Committee into B.O.A.C., into B.E.A.C., and into the whole set-up of British aviation.

5.9 p.m.

Mr. Cledwyn Hughes (Anglesey)

I wish to join the Parliamentary Secretary and my hon. Friend the Member for Wellingborough (Mr. Lindgren) in paying tribute to the magnificent work accomplished by the two public Corporations, although I wish to make one substantial reservation which I shall develop as I go along.

The hon. Member for Stroud and Thornbury (Mr. Perkins) said that he would like a public inquiry. Neither I nor any of my Friends would object to that, because I am confident that it would show beyond doubt that the Labour Government of 1949–51 laid the sure foundation of the success story which is contained in the two reports before the House today.

Twelve months ago I drew the attention of the Minister to the way in which I thought Wales was being neglected in the sphere of civil aviation. Today, I want to protest even more forcibly, if I can, because in listening to these debates and hearing of the vast sums of money which are being expended elsewhere I am driven to the conclusion that Wales is being very badly served. We know that Cambrian Airways are operating in South Wales and are fulfilling an important function there. But that is not enough. They only operate on a very narrow fringe touching three counties. The rest of Wales is untouched—forgotten and unsung.

A few years ago the Government set up the Welsh Advisory Council for Civil Aviation because they recognised that Wales was a national unit, but Wales has certainly not been dealt with as a national unit. If B.E.A.C. sustain losses, as they have done in the past, we in Wales contribute our share towards the cost of those losses through the Exchequer, and B.E.A.C. have routes to all parts of Britain, including the Isle of Man, except Wales. The Principality is the only country in the British Isles which contributes towards the cost of existing services but obtains no direct benefit from its contribution.

I can visualise that if Scotland were excluded in this fashion there would be an outcry that could be heard as far away as Nova Scotia, and when he opened the debate the Parliamentary Secretary went out of his way to describe the progress that is being made in Scotland. We are not impressed with the arguments which are put forward from time to time against an internal service in Wales. There is, for example, the economic argument. I am certain that Wales has contributed more towards the cost of the losses that B.E.A.C. sustained between 1946 and 1950 than would be the cost of an internal service operated in the Principality. I know from a speech which he made last year that the Minister shares my view that there are social as well as economic factors to be taken into account.

Neither is it any use at all saying that Wales is not air-minded, and I have heard that argument advanced from time to time. The Welsh people were not railway-minded until railways were put down. We have to have experience of an internal air service for quite a while before the people assimilate the idea of air transport. I should like the Minister to tell us what specific plans he can envisage for Wales in the way of internal services and airports. At one stage, about three or four years ago, 23 aerodromes were planned for England, 16 aerodromes for Scotland and one airfield only for Wales. We are indeed a long-suffering race.

We realise that the ideal type of aircraft for a service within Wales would be the helicopter, and today we have heard something from the Parliamentary Secretary about the progress that is being made. In 1950, the first world helicopter passenger service was operated on the Cardiff-Wrexham-Liverpool route. This was experimental, but I think that the Minister will agree that it was a great success and that valuable information was gained from it. Can the Minister now say how long he thinks it will be before a safe and economic helicopter service will be operated as a commercial proposition in this country, and particularly in Wales?

I understand that the Bristol 173 is thought to be rather too large a helicopter for economic service in Wales or in the North of Scotland. Can the Minister therefore say what plans there are for a smaller type of helicopter which could serve Wales, the North of Scotland and Northern Ireland, because if the Bristol 173 is too large then surely there must be plans for a smaller type of aircraft. Is there a blue-print even of this smaller type of aircraft that could operate successfully in the Principality?

In the meantime, I hope that the Minister can say when in Wales we can expect an internal fixed wing aircraft service—not a temporary expedient, but a permanent service, because it seems to me that very many years will elapse before we can expect a permanent helicopter service. What plans has the Minister for us between now and then? I have a feeling, which I only mention in passing, that the existence of an Aer Lingus monopoly of air routes between the United Kingdom and Eire is damaging the development of Welsh air transport. Can the Minister say whether anything can be done to amend the bilateral agreement between the two countries so that routes may be opened which will not of necessity compete with the routes which Aer Lingus are now operating?

I turn now to two problems of two airfields, one in South Wales and the other in North Wales. The first is that Customs facilities are badly needed at Haverfordwest aerodrome, in Pembrokeshire. Cardiff, 100 miles away, is the nearest aerodrome with these facilities and in the past year at least three flights have had to be abandoned because of the absence of facilities at Haverfordwest. There is a very good case for making Haverfordwest a Category C Customs airport. I should be glad to hear what the Minister thinks about it.

Lastly, but not least in importance, I want to refer to Valley airport, in Anglesey, and press its claims, not merely as a link in internal British services but as a trans-Atlantic airport and, if possible, as a national airport for Wales. Perhaps the Minister will remember that soon after the end of the last war it was stated that it was intended that Valley should be a reserve airport for Prestwick. We took that with good grace and with the modesty characteristic of our race, although formidable arguments could be advanced then and can be advanced now to show that Valley is second to none as an airport on the Western seaboard.

Mr. Rankin

Except Prestwick.

Mr. Hughes

I put it on a level with Prestwick. It is at least equal to Prestwick from the point of view of climatic conditions. Admirable facilities exist in Valley. Runways are of an adequate length, the approach is satisfactory, the subsoil is excellent and I believe that operating pilots say that no difficulty has ever been experienced there in handling the heaviest aircraft.

Mr. Mikardo

Are the natives friendly as well?

Mr. Hughes

The natives are charming and hospitable, as is well known on both sides of the House.

I should like to ask the Minister why no use has been made of Valley for diversionary purposes, for that promise was specifically made in 1946. How many diversions have been made to Valley since then? Where do aircraft go from Prestwick if they do not go to Valley when they are diverted? We have heard of the millions of pounds that have been spent on Prestwick.

Mr. William Ross (Kilmarnock)

No, not for a long while.

Mr. Hughes

We do not object to that. We are delighted that our Celtic friends in the North enjoy these facilities, but we do not like to feel that we in the South are being neglected in his way.

Do diversions from Prestwick go to Shannon in Eire? If they do, it is inexcusable because Valley was officially scheduled as a reserve airport some years ago. Millions of pounds are being spent on other airports. We do not cavil at that, but we in Wales are not unmindful of the cavalier way in which we are being treated in the matter of civil aviation. These are days of immense advance and progress in the air. We in Wales are interested in that progress. We want to participate in it and we are determined that we shall not be left out in the cold.

5.20 p.m.

Mr. Dudley Williams (Exeter)

The first thing I wish to say to the House is that in reading the two Reports presented by B.O.A.C. and B.E.A.C. I cannot help but feel that the air of complacency running right through them bears no relation to the serious financial position existing in these two Corporations.

The B.O.A.C. Report starts its introduction by stating: The year under review was marked by impressive progress. On the same page the profit is shown before paying interest on issued capital as £103,000 compared with the profit in the previous year of £1,233,000. Progress does not mean standing still. I have heard that it does not only mean going forward. It may mean going backwards and I think that has happened where B.O.A.C. is concerned. Even this state of affairs is only maintained by excluding any reference to the payment of reasonable interest on the capital employed by the Corporation and there is £33 million worth of this. It is provided, fortunately, under Government auspices at a very low rate of interest, something like 2½ to 3 per cent.

In the case of B.E.A.C., they are a bit more frank and disclose early on that they lost £1½ million in spite of the fact that the capital of the Corporation in the year under review was increased by about £6 million, having regard to the bank loans, and so on, existing previously. In my view, this state of affairs is not entirely due to world conditions. If one examines the competitors of these Corporations in other countries one does not find that the same thing exists. I shall deal with what the hon. Member for Wellingborough (Mr. Lindgren) said about the United States airlines being unfairly subsidised toward the end of my comments——

Mr. Lindgren

No, I did not say they were unfairly subsidised. They have previously been heavily subsidised but now they have split the subsidy. There is the mail service payment and a new subsidy, of which 28 million dollars goes to Pan-American.

Mr. Williams

I have only the one balance sheet of this company and I will deal with the question of mail payments, compared with B.O.A.C. toward the end of my remarks on the matter.

First of all, may I draw attention to the Report of the Trans-World Airlines which happens to be the only one I have been able to obtain in the last 24 hours. This, in my view, is a very stimulating and simple document to follow. May I suggest to my right hon. Friend that abridged editions of these full Reports could be made available to the general public. That would be a great advantage. It would also be convenient for the House if there was a similarity between the methods by which the two Reports are drawn up. In many cases it is difficult to compare the two.

This report of Trans-World Airlines is a very simple one to follow. I suggest to the House that that is because the people in charge are very proud of the results and do not wish to cover up anything. On page 3, in huge letters, we see the expenses and taxes paid by it and also the profits——

Mr. Lindgren

Would the hon. Gentleman tell us what subsidy it gets from the American Government?

Mr. Williams

I shall deal with that point——

Mr. Lindgren

It is 4,800,000 dollars.

Mr. Williams

I shall deal with that point later.

The taxes paid by the Corporation are something like £10 million, including £7 million paid in respect of Income Tax. Incidentally, at the same time they made a profit of something like £7½ million. Far from disclosing any tendency for business to fall off in the 12 months under review—this balance sheet is for the period ending 31st December, 1952, which is as close as I could get to the period under review regarding the two corporations we are considering——

Mr. G. A. Pargiter (Southall)

The hon. Gentleman gave an amount in pounds. Is that actually pounds or dollars?

Mr. Williams

I beg hon. Members' pardon; I should have said dollars. It is 7,660,000 dollars which is the same within 1,000 dollars of the profit made in 1951, and there was a dividend paid on the equity capital of this Corporation of something like 10 per cent.

In the case of Pan-American the profit was something like 6½ million dollars and the dividend paid was 50 cents a share. Unfortunately, I have not been able to get the Pan-American balance sheet so I cannot analyse it as I did the Trans-World Airlines report.

The hon. Member for Wellingborough implied that United States airlines have been unfairly subsidised in the past——

Mr. Lindgren

Heavily subsidised.

Mr. Williams

Heavily subsidised in respect of mail contracts. In the balance sheet in this Report is shown the operating revenue of the company. It was 135 million dollars in respect of passengers and in respect of the mail carriage it was 11½ million dollars. That represents in percentages approximately—I have had to work this out in my head—about 9 per cent. of its total operating revenue.

I should now like to refer to British Overseas Airways Corporation, which, on page 33, discloses the revenue it receives—the total operating revenue and also the mail revenue. The total operating revenue is about £35 million and the mail revenue is about £8½ million, which is very close to 25 per cent. of its total revenue. I think it unfair to say that American airlines make these profits because they are so heavily subsidised in respect of mail contracts.

Mr. Shackleton

Can the hon. Gentleman tell the House the respective tonnages of air mail carried?

Mr. Williams

I have not that figure readily available. But those are the percentages that are paid by the United States Government compared with the percentages paid to B.O.A.C. and I think it unfair to say that because of this the United States are operating unfairly against B.O.A.C.

The point should have been emphasised at the start of the B.O.A.C. Report that the load factor on the company's traffic services has fallen dismally in the last 12 months under review from 65.7 to 64.5. It is serious in the case of an airline supposed to be still developing when the load factor falls in this manner. It has fallen off while the break-even point at which the company can make a profit is actually still rising owing to rising costs.

On page 22 of the B.E.A.C. Report one sees a reference to the total percentage of carryings effected by B.E.A.C. of the total available for the European services. They proudly say, as rightly they should, that they carry 31.9 per cent. of the total available. But I should like to ask the Minister why it is that the load factor on British European Airways is less than the load factor on Air France. It is 69 on Air France and 65.7 on British European Airways. Load factor is the most important question that has to be watched in the future when competition will be stronger than now. If we do not ensure that our aircraft are adequately loaded, then I think we shall get into serious financial trouble with our air lines.

I should like to ask my right hon. Friend to say something about the operating accounts as shown on page 33 of the B.O.A.C. Report. I think that the cost in respect of certain of the services provided is extremely excessive. For instance, I see that on sales, advertising and publicity about £2,600,000 has been spent. That represents about 8 per cent. of the total revenue, whereas the cost in other world airlines is 3 per cent. It should be possible to effect some reduction on this item.

Again, I think that the charges for central administration are excessive. They are shown as over £1¼ million in spite of the fact that some of the items are probably included in the two heads shown above "Central Administration", namely, "General Supplies Organisation" and "Technical Training and Development." On page 66 reference is made to certain subsidiary companies of the Corporation. I notice that one of these, Aden Airways, Limited, has made a profit, but the other three have made losses, although they have been somewhat reduced during the year under review.

I should like to ask my right hon. Friend whether he has been told by the Corporation when these subsidiary companies might make a profit. My belief is that, with the increased competition which the Corporation is likely to meet, there is a great risk of it continuing to make a loss. It may well be desirable for my right hon. Friend to consider giving advice to the Corporation to the effect that it should dispose of its interests in some of these subsidiaries.

I should like to raise one or two points on the Report of the British European Airways Corporation. First of all, I want to refer to the new base which is being built at Heathrow at a cost of £2½ million. I am a little worried as to how long this base is expected to be suitable for the purpose for which it is now being built. On page 14 of the Report there is a statement about it in quite amusing terms. It reads: No crystal ball can foretell what aircraft types might be operating from there by 2053. The design is such, however, that the buildings, with their uninterrupted floor space, could eventually be employed for a wide variety of industrial or other uses. I presume that the last phrase refers to the time when the aerodrome will no longer be used as an airfield.

On page 41 there is this statement: The move from the old hangars at Northolt—some dating from the 1914–18 war—to the new base at London Airport—designed for a 100-year peace—has not been entirely peaceful. But can that be said? We cannot forecast with any certainty what sort of aeroplanes will be used in 100 years' time if we are saying that the aerodrome will be effective in 100 years' time. I have always held that the most important thing about aircraft is to maintain the utmost flexibility. If we are not very careful, before one type is properly developed another one is off the stocks which cannot possibly make use of some of the facilities provided for the first.

Mr. Pargiter

But is this new aerodrome not highly adaptable to any type of aircraft?

Mr. Williams

I question that statement, because none of us knows what type of aircraft will be used. It may be very large or it may be more compact. I do not know what will happen, nor does my right hon. Friend. We have no idea What will be developed in 20 years' time.

Mr. Pargiter

Does the hon. Gentleman suggest that there should be no buildings at all?

Mr. Williams

No, but I would not build such substantial buildings. I would have cheaper buildings, so that the capital loss, if they were no longer effective, would not be as heavy as may have to be faced by the Corporation under this scheme for Heathrow.

I should also like to ask my right hon. Friend whether the capital of this new base is to be covered by payments from the Corporations which are going to use it. Is there to be a rental and is it to be based on a commercial rental, because if so, I cannot see how any rent can be charged less than 7 per cent. on the capital employed in the base? That seems to me to be a heavy charge for the British European Airways Corporation to meet, for it will have to be about £175,000 a year if there is to be any chance of writing off the cost of the base within a reasonable time.

On page 115 there is a reference in the table which I do not understand. It reads: Interest capitalised in respect of London Airport Engineering Base, £24,662. As I say, I do not understand what this item refers to, and I hope I can have an explanation.

In conclusion, I should like to say that I believe that our chances in civil aviation have never been so bright as now. We have first-class aircraft and first-class designs coming along. There is no question that we have the men who can operate airlines, but I am very worried indeed whether we have the right men at the top to drive the Corporations along. It is extremely difficult, for various reasons, to get the right men to go into them.

There is a political flavour about them which many people do not like, and a feeling that if one goes to these Corporations one is not closely identified with them when they are successful. They are not looked upon as one's own business, and, naturally, such a person is operating as a trustee for the public. I sympathise with any Minister who has to find effective heads for these Corporations in those conditions.

I think it is time it was stated quite firmly to both these Corporations that in the future they will have to pay the strictest attention to financial matters. It is not right that they should go on feeling that they can always fall back on the taxpayer if they fail to pay their way. As a result of this debate I hope that my right hon. Friend will make that clear to both of them.

5.39 p.m.

Group Captain C. A. B. Wilcock (Derby, North)

The Parliamentary Secretary, in opening this debate, had a very pleasant task and he did it very well. He was able to introduce accounts of the Corporations which showed that both had really had an excellent trading year. What is important is not only did they increase their mileage and carry a greater number of passengers, but that the prestige of B.E.A.C. and B.O.A.C. increased throughout the world. That was accomplished in the face of very fierce competition from foreign airlines, and foreign airlines which, notwithstanding what has been said by the hon. Member for Exeter (Mr. Dudley Williams), received much greater support from their Governments than did our Corporations.

The hon. Member for Stroud and Thornbury (Mr. Perkins) was making a rather adverse comparison between Pan-American and B.O.A.C. in the West Indies. I think that, inadvertently, he missed the whole point. The question of staffing is always very difficult in aviation. Sometimes it is necessary to have as many staff as would be necessary for twice the number of aircraft and passengers. I am sure the hon. Member must know that. It is quite unfair to compare the situation in which, say, 57 men may be required to handle 20 aircraft yet precisely the same number may be needed to handle two or three aircraft as they work in shifts. I am sure that, on reflection, the hon. Member will agree with me on that.

Mr. Perkins

I entirely agree with the hon. and gallant Member if it is a case of doubling the number of aircraft, but in this case it was eight times the number of flights.

Group Captain Wilcock

My experience of the Corporations operating in the West Indies is that, for efficient operating, they had to keep full staffs, notwithstanding the fact that there was not the traffic to justify the expense.

Now, may I be permitted to say that I have noticed a very great improvement in the deportment of crews of the British Corporations during the last year or so. That is a most important factor, which cannot be too highly stressed. The crews and traffic staffs of our Corporations are probably the best advertising media for British aviation. On this side of the House, we are, to say the least, a little suspicious of the treatment by the Government of the public Corporations.

The comments made by the Chairman of B.O.A.C. relating to operating permits—very properly made, and I thought he was very moderate in his comments—require an explanation by the Minister. We on this side of the House are not in any way opposed to private enterprise in aviation. [HON. MEMBERS: "Oh."] No, I have always advocated private enterprise; I have not only advocated it and preached it, but I practise it. I think that the only difference between hon. Members opposite and hon. Members on these benches regarding private enterprise is that we consider private enterprise can better prosper and be developed in a Socialist State, where there is intelligent planning.

Mr. Profumo

Is the hon. and gallant Member speaking for himself or for his party because, if I understood the hon. Member for Wellingborough (Mr. Lindgren), the whole purport of his argument was that the private enterprise injected by the present Government was, in fact, acting to the detriment of the Corporations? The hon. and gallant Member now says that hon. Members opposite are not against private enterprise in civil aviation. Would he explain whether that is a general view, or his own personal view?

Group Captain Wilcock

I can Certainly give it as my personal opinion and I sincerely believe that my political party are not opposed, and never have been, to private enterprise in aviation, provided it is never at the expense of the public flying Corporations. That is where we have always taken our stand. We have always contended that in civil aviation the public Corporations must have priority. After the war it was the public Corporations who were to carry the British flag, not the private charter companies. I am quite clear in my mind on this matter and—although I have no authority to speak for every member of my party—I think I am also expressing their views.

It is serious indeed if B.O.A.C. are to be discouraged from expanding their services as, for instance, from the example given regarding freight services. Undoubtedly, passenger travelling has developed, but so far as the Corporations are concerned that has possibly developed at the expense of freight carrying. Yet it is in the carriage of freight in my opinion that the prospects are quite unlimited. From our point of view—our existence depending upon our prosperity as a manufacturing nation and on our exports—I think it is to freight carrying that we must look for the greatest expansion in aviation. I hope that the Minister will comment on this aspect of the problem when he winds up the debate.

I should like to support the suggestion made by my hon. Friend the Member for Wellingborough who for many years was Parliamentary Secretary to the Ministry of Civil Aviation, that the petrol tax and cost of social services could be shown separately in the Report. I make a similar plea. I think it should have been done under a Labour Government and, speaking from this side of the House, I cannot go further than that. I think it should be done now. I ask the Government to give authority for these extraneous payments—social services, and petrol tax and varied other things which B.E.A.C. have now to bear—to be omitted from the balance sheet. There is a psychological point in this. As chief executive of B.E.A.C., I should strongly object to having to show a deficit which was outside my control. I know that it is a case of taking money out of one pocket and putting it in another, but I commend the psychological aspect of the proposal to the present Government.

Following the not very generous remarks made by the hon. Member for Exeter about the chairmen and chief executives, I wish to say that I have the highest regard for the leadership of these two corporations—Lord Douglas, Sir Miles Thomas, Mr. Whitney Straight and Mr. Masefield—quite apart from political consideration. I think they are doing a fine job. I have seen it stated that the chief executive of B.E.A.C. does not agree with or approve the suggestion that there should be one Corporation. He not only thinks there should be two, but even three Corporations. I do not go so far as that. I think that, eventually, there should be one, but this is not the right time to make the change.

If there were to be three Corporations, there would be something to be said for a helicopter Corporation. My criticism—which may be a little unfair as I have not full information—is that I do not think we are as active on the question of helicopters as we should be. It is not quite good enough to say that they are not yet serviceable or safe. They are being operated outside the Corporations commercially in this country by a concern which is doing very good work in pest control and they are also operated by a national airline on the Continent. We do not want to be behind in these matters.

We are ahead with the Comet and the Viscount; let us keep ahead in helicopter development and training of crews for helicopters. Let us keep in the forefront, particularly as in this country we face ever-increasing difficulties of road transport and vexations of that kind and goodness knows where they will lead us. In the development of the helicopter we have something which is especially adaptable for use by us as a nation. If there was to be a third Corporation then it should be for helicopter development and operation. From my fairly close contact with aviation, both with the Corporations and with private operators, I believe that the spirit is better today than it has been for many years. There is very good feeling in the Corporations. The leadership is inspiring and the maintenance staffs and crews are excellent. I associate myself with what the Minister said about the good work done by them.

5.50 p.m.

Mr. Charles Ian Orr-Ewing (Hendon, North)

I am glad to have the opportunity of following the hon. and gallant Member for Derby, North (Group Captain Wilcock) as I should like to take up one or two of the points he made. I am not sure that he is representative of all the feeling on his side of the House, but it would summarise the feeling between him and my hon. Friends on this side of the House if I said we believe that there is a place for both Corporations and private enterprise in this most important field. We wish to see both interests protected and both horses running as hard as they can to pull the wagon of civil aviation and to uphold the prestige of the country in this sphere.

I would also support the hon. and gallant Gentleman's plea about a social services payment being provided for B.E.A.C. There is not quite the same case for his argument about the tax on petrol. If we made an exception it would be difficult to know where to stop. Suppose we say that B.E.A.C. should get their petrol without taxation, then why should not the local ambulance services, the fire services and other local authority services which are doing a social job also get petrol without taxation? But there is a case which I hope the Minister will examine on social services. I note that many Scottish Members wish to speak and it may be that they will stress this point.

Group Captain Wilcock

My suggestion is not that there should be no tax on petrol but that the tax should be reduced, as it has been in other cases. On the first point about what I said about private enterprise and the Corporations, I entirely agree with the hon. Gentleman. We all know that there is a place for both. The hon. Gentleman will remember that it was a Labour Minister who introduced the associated agreements for private companies to come into the field.

Mr. Orr-Ewing

I am glad that there is a measure of agreement between both sides on this important subject. It was said by the hon. Member for Wellingborough (Mr. Lindgren) that we had criticised when in Opposition; but surely it is the job of an Opposition to examine the Reports of these Corporations and to criticise. We should not have been doing our job as an Opposition if we had said nothing during the important formative years of 1947 to 1952. If hon. Members will look at page 26 of the B.O.A.C. Report, they will see the justification in the graph which shows how staff economies have been made over the years. I think that it is fantastic and a great credit to the Corporation that there were 21,000 people on the staff in 1949 and that that number, with vastly greater operations and commitments and a much bigger fleet, is down to 17,000.

Of course we have to examine the Reports and when we are the Opposition or the Government we may have to criticise them. That does not mean that we are averse to or in any way against the Corporations. We realise that they have a vital part to play in the development of civil aviation and in carrying our flag all over the world.

I should like also to take up the point made by the hon. and gallant Member for Derby, North about helicopters. I would not go so far as to say with him that we should at this juncture set up a special Corporation. On page 54, the Report of B.E.A.C. says: The Bristol 173 in prototype form is, in any case, unsuitable for the operation of scheduled passenger services. The Bristol 173 Mark 3, with the more powerful Leonides Major engines and stub wings is the version required for serious scheduled operation. Unfortunately, helicopters of this type are now unlikely to be available for airline service before 1958. That is five years hence. I hope that it is not intended to shelve for five years the whole question of operating helicopters on a commercial basis. One also suspects that when a new aircraft is being developed the designers, development engineers and production staff tend to be optimistic when they fix a date for the aircraft to come into service. If they say 1958, it might well be 1960. I hope that the Corporations, B.E.A.C. in particular, will have a look to see whether there are not other helicopters on the market which may be used for certain specific services, instead of waiting until this aircraft arrives in many years' time.

The third point I wish to raise is the question of passengers' travel from airport to the terminal. We have seen in recent months the enormous progress made in the development of London Airport. I seriously wonder whether we are justified in continuing to duplicate and quadruple the number of buses carrying passengers back to the London terminal. It is stated in the B.E.A.C. report that 65 new "Regal" coaches are being added to the existing fleet and that they will slowly replace them. Ought not we to give serious consideration to the running of a spur line from the Southern Region railway right into London Airport so that passengers after disembarking from their aircraft can get straight into the railway coaches where Customs facilities and other procedures can be carried out?

It is no good speeding up all our operations, our travel in the air and our block speed if we find this fearful traffic bottleneck on the ground and spend 45 minutes getting from the airport to the centre of London. I hope that the Minister will promise to look at this problem of travel between London Airport and the capital's centre.

My last point is about the amalgamation of the two Corporations. Some hon. Members may have seen Sir Miles Thomas when he was interviewed on television in the programme, "Press Conference." When we came to the last question, the 64 dollar question, someone said, "Sir Miles, is it true that certain economies might be made if the two Corporations were amalgamated?" He replied, "Ah, yes. That is a very big question. Immense economies could be made by both Corporations."

I do not believe that considerable economies could be achieved if the two Corporations were amalgamated. I hope that we may have an assurance from the Minister at the end of this useful debate that no such step is contemplated. Of course, anyone who wants to expand a business or who wants perhaps to amalgamate the two Corporations, advances the argument that we can have economies if we make it bigger. That is not true in many spheres. It is least of all true in the sphere of air transport. Air transport is dealing with the most perishable commodity of all. It is a perishable commodity because we are selling moving space in an aircraft. If we do not put a person into that moving space at a certain time on a certain day, that space goes off and we cannot use it again. If we have a commodity of that type we must have flexibility to achieve a high state of efficiency.

I believe that our Corporations may be too big even today. If we amalgamate them we shall pass the point of no return. Instead of getting greater efficiency we should get less efficiency. I was greatly impressed by the comments of Mr. John Ivimy of the Ministry of Civil Aviation, who travelled for many months in the United States of America and who considered most carefully the proper size which an air transport company, or indeed a trucking company, ought to be for maximum efficiency and flexibility. He writes in the Commonwealth Fund Fellowship Report and summarises the results in these words: As a general principle bigness of size is a positive obstacle for the majority of transport undertakings. Compared with manufacturing industries there is little scope for the economies that result from standardisation of equipment or processes. I believe that was a sound conclusion, and certainly we ought not to contemplate amalgamating these two Corporations.

Moreover, the more we study these Reports the more we realise the totally different jobs they are doing. We have only to see the average fares—£80 2s. for B.O.A.C. and only seven guineas for B.E.A.C.—to realise that it is a different type of passenger who wants a different form of service and is travelling a totally different distance in respect of the two Corporations. It has been argued that some economy could be effected in the maintenance organisation and in the spares organisation. These Corporations do not use a single common aircraft and I refute the suggestion that economies Can be made in that sphere. I believe that the strongest argument for amalgamation rests on the basis that if the two Corporations were amalgamated and were called a British Corporation, the new Corporation would be able to carry passengers through London and on to the Continental capitals. But if we want similar and reciprocal arrangements with national airlines which operate for other Western European countries, we snail not get them by this amalgamation. We have the right instrument for negotiation on behalf of Her Majesty's Government—the Ministry of Civil Aviation. I feel sure they would fight for our Corporations to have a fair and reciprocal treatment in that sphere.

Lastly, B.O.A.C. has already swallowed British South American Airways. That must have meant a considerable amount of internal re-organisation. I believe it is time we left these two Corporations to a steady period of development, and I hope the Minister will give an assurance which I am sure the staff must want, because nothing is more disturbing than to hear rumours of re-organisation or amalgamation within one's own company—an assurance that he does not contemplate amalgamating these two Corporations.

6.3 p.m.

Mr. Ralph Morley (Southampton, Itchen)

I shall not inflict myself on the House for more than a short time, but I should like at the outset to add my tribute to those which have already been expressed to those very able men, with their very able staffs, who have organised and developed our civil aviation services. I have not the technical knowledge to controvert the criticisms of nationalised aviation which have been made by the hon. Member for Stroud and Thornbury (Mr. Perkins), but I have read very carefully the Reports of the two Corporations and they seem to me to be a remarkable success story, one of which all of us can very rightly be proud. Indeed, I imagine that no right hon. or hon. Member opposite, even in his most Carlton Club mood, would advocate handing back civil aviation to private enterprise.

Having said that, I will now release my King Charles's head, which has already been referred to by my hon. Friend the Member for Wellingborough (Mr. Lindgren). I presume that before long a statement will be made by the responsible Minister about the future of the Princess flying boats. I want to express a very definite opinion and a very strong hope that these boats, on which something like £12 million of public money has already been spent, will not suffer the same fate as that suffered by other planes on which a great deal of money has been spent and which afterwards have been scrapped, like, for example, the Brabazon.

The Princess planes stood up very well indeed to every possible test in their operational trials. The only weakness shown in their operational trials was that the engine was not sufficiently strong for the plane, but I am informed that that could easily be remedied if the planes were fitted with Proteus III engines, which are at present being monopolised by the Britannia planes. I hope there will be a sufficient development of these Proteus III engines for them to be fitted to the Princess flying boats so that their trials may be completed and they may be ready for full operational use.

I feel quite certain that the Princess flying boats would be invaluable assets to our aviation potential, whether they were used as commercial flying boats or for military purposes. If they were used as civil aviation flying boats, they could take 120 passengers across the Atlantic and back in 24 hours and they could do for the sky above the Atlantic what the Queen Mary and the Queen Elizabeth have been doing for some years for the sea itself. It has been stated that if they were used for military purposes they could transport as many troops in one year as nine troopships and could save a great many manhours in doing so. Bearing in mind the value which these boats would be to the community from every point of view, I hope they will be proceeded with and will not be put on the scrap heap just when a better engine would enable them to be put into operation and to render considerable service to the community.

Quite apart from the Princess flying boats, I think there is a very strong case for us to consider whether it would not be a good and a wise thing to expand the production of flying boats generally. As aeroplane production proceeds, the planes get heavier and heavier and need a longer and longer runway for taking off and landing. Of course, the flying boat has the advantage that it does not need that very long runway because it takes off and lands in the sea.

We were all very pleased to hear from the Minister of Fuel and Power yesterday that before very long some atomic energy plants would be available for the production of electricity, and I presume that the application of atomic energy to civilian purposes will proceed with accelerating momentum during the next 10, 15 or 20 years and that it will not be very long before aeroplanes can be powered with atomic energy. Of course, the atomic engine, with protecting shield, would be extremely heavy, and the heaviness of the atomic engine and protecting shield would involve modifications in the aeroplane's structure which would need a longer landing stage in the case of land-based planes. There again, the flying boats would have an advantage over the land-based planes.

In the event of war, I presume that one of the enemy's objectives would be to destroy our airfields, but it would not be as easy to destroy the airfield of a flying boat, which is the ocean, for the ocean is more or less impregnable even to atomic bombardment. I noticed the other day an extract from my local newspaper, "The Southern Daily Echo"—a very excellent paper of which the hon. Member for Stroud and Thornbury is proprietor—containing some comments by Mr. John Taylor, writing in a magazine called "Air Transport." Mr. John Taylor said: In the Korean war, with the few usable airfields in enemy hands, our fighters and bombers had to operate from Japan. The only immediate help the Royal Air Force could offer was a squadron of old but superb Sunderland flying boats, which needed no acres of concrete from which to operate. Sunderlands, in fact, remained the only R.A.F. operational aircraft to see service in the Korean war, except Auster spotter planes. It was fortunate that, in the Korean war, it was possible to supply land-based planes from Japan, but how much better would it have been if squadrons of water-based fighters and bombers had been available to provide on the spot air cover and reinforcements? Is it not time that we in Britain began to take some interest in the superb designs for flying-boat fighters, patrol bombers and transports on the drawing boards of Saunders Roe and Short's? I understand that, after 1945, we discontinued the production of flying boats because the United States had discontinued their production, but I also understand that recently the United States have brought into production a considerable variety of flying boats and that they are now in use for various purposes in America. It seems to me, therefore, that with all the advantages which a fleet of flying boats would have, both in peace and war, it would be reasonable if we were not only to ensure that the Princesses were put into operation but also that other flying boats are developed.

Our far-flung Commonwealth is linked by the seven seas of the world, and in former times the only communications between our ancient Monarchy and our various Dominions was by sea. Now we have communications both by sea and by air. It seems to me to be reasonable that we should use a plane like the flying boat, which can use both media of communication between the Motherland and the Dominions.

6.13 p.m.

Air Commodore A. V. Harvey (Macclesfield)

As is usual, I wish to make known to the House at the outset my own personal interest in civil aviation. I think it is already well known, but I mention it again.

I concur entirely with the remarks of the hon. Member for Itchen (Mr. Morley) about flying boats. It is quite true that the Americans have ordered a considerable number from the Martin company, and I fear that it may be that, while we are progressing with land planes, in 10 years' time we may find ourselves considerably behind our American friends with flying boats. I therefore ask my right hon. Friend to see that everything possible is done to get the Princesses into the air. All this money and effort has been spent in producing them, and if it is a question of priorities of power units for the Britannia or the Princess, I believe that the Princess should be given priority, and that, if B.O.A.C. are not prepared to operate these flying boats on a commercial basis, it should be open to others who may be interested to do so. At any rate, I should like to see the flying boats put into the air again in order that we may show the flag through these magnificent machines.

We are all agreed that British civil aviation has had a fairly good year, considering everything. The safety record has been exceptional. Does the hon. Member for Reading, South (Mr. Mikardo) wish to interrupt?

Mr. Mikardo

I only remarked that the hon. Gentleman might tell what he has just said to his hon. Friend the Member for Exeter (Mr. Dudley Williams), who seemed to me to be denigrating the safety standards of British airlines.

Air Commodore Harvey

I am fully occupied telling the hon. Gentleman's friends what is my view, and if my hon. Friend the Member for Exeter (Mr. Dudley Williams) is not here, perhaps he will read what I say in HANSARD tomorrow.

We have had a good year on safety. There were two unfortunate Comet accidents, one in which no one was killed, and the fatal one in India. In developing new aeroplanes of this type, there is not a general appreciation of the enormous problems with which designers, manufacturers and operators are confronted, and it shows great courage on the part of Messrs. de Havilland, B.O.A.C. and the Government in getting these aircraft into the air. I shall refer later on to what I think the Americans say about our progress.

Having studied the Reports of the Corporations, I believe that savings could be made. It is generally recognised that both Corporations run an excellent service, that the passengers are well satisfied, because we hear of Americans preferring to travel B.O.A.C. as opposed to their own national lines. The leader in "The Times" today mentions that some of the frills could be cut, and it is my belief that both B.O.A.C. and B.E.A.C. require to streamline their own Corporations. Could not some of the handling of the aircraft on overseas stations be undertaken by local contractors? Today we have families and children of employees travelling from this country to these stations and back on leave, which is very costly, and tremendous savings could be made in that direction.

My hon. Friend the Member for Exeter referred to advertising. B.O.A.C. spent something like 8 to 10 per cent. of their revenue on advertising and publicity, and some of it is not very good. One constantly sees the legend "Fly B.E.A." I am not an expert on the subject, but I think that people do not like being spoken down to. If B.E.A. are going to advertise, they should give a good reason for it, but I think that people are getting rather tired of it, and that the Corporation need some new ideas and more imagination in their methods in advertising and publicity.

I believe that the Government's new policy on civil aviation is a fairly good compromise, considering everything. We have said repeatedly, even when we were in opposition, that we had no intention of breaking up this nationalised industry. To do so would wreck British civil aviation completely, and any of us who are in any way interested only want to see progress. We may differ about the approach, but we believe that it is right to have these two Corporations on the world's trunk routes handling the bulk of the European traffic, while we also believe that there is scope for independent operators without in any way injuring the Corporations themselves.

To take, for instance, the Silver City Airways, with which I am connected, on their short-haul services across the Channel, it was said by a railway official that Silver City Airways had not eaten into the railway traffic handled by the cross-Channel steamers and had not taken any traffic out of their hands, but they had taken it out of the expansion of travel which had taken place. With the expansion that is going on, there is room for the independent operator, who can assist both B.O.A.C. and B.E.A.C. in having their engines overhauled at the B.O.A.C. engine depot and by paying for handling charges overseas.

The hon. Member for Wellingborough referred to the Hermes. It is unfortunate that, in ordering a new aircraft, one can never be certain when one will get it, because of modifications and delays and the timings, but nevertheless, according to Sir Miles Thomas, the Hermes is a satisfactory aeroplane, but not modern. Compared with present-day standards, it is an improvisation that arose from the years immediately after the war. Unfortunately, they have not been sold, and it may be that B.O.A.C. are asking too high a price, although I do not know what the figure is. I understand that one operator is prepared to negotiate for the purchase of the whole fleet of Hermes aircraft.

Taking the long view, it may well be that as B.O.A.C. replace this fleet with the most modern and up-to-date aircraft there will be an outlet for independent operators to take on what I call "second-line aircraft." That would be a contribution benefiting not only the B.O.A.C. but the Treasury. The hon. Gentleman who spoke for the Opposition said that the Government had not given much support to the B.O.A.C., but I think they get a lot of support. They get their capital at interest rates of about 2½ per cent., whereas the normal independent operator has to pay nearly 5 per cent. in the open market in the City. The Corporations have tremendous support in that direction, and they have nothing to fear from the independent operators.

I am concerned about the expansion that has taken place at London Airport. We all agree that the project was correct and that the money has been well spent. I am not concerned about the design; I think it is all right. I am concerned whether the Corporations are to pay a rent which will compensate for the capital outlay. A further point is whether the independent operators are to get a fair Share in the new buildings to operate their aircraft. When I look around at Lympne, Black bushe and other airfields, I observe that little money has been spent on the independents, who are still having to pay rent which is out of proportion to that which is paid by the Corporations. I hope that the Minister will give us some assurance that there will be fair play in that direction.

The point has been raised whether there should be one Corporation, two Corporations or three. My feeling is that we should have the two Corporations, thus leaving the position as it is. To disturb either of the Corporations at the present time would be wrong. It may be decided eventually that we should have one, but at the moment two are the right number. Nevertheless, much integration could take place in regard to such things as catering and advertising to bring about savings in both Corporations.

I make a plea for the reduction of the petrol tax for flying in the United Kingdom. It seems extremely hard that the tax in 1952 was 1s. 10½d. and is now 2s. 6d. per gallon. The hon. and gallant Member for Derby, North (Group Captain Wilcock) referred to this matter. Of course, it is well known that I have had Amendments on the Paper year after year since 1945, asking for the tax to be reduced, and I do not think that the hon. and gallant Member or his hon. Friends have ever come into the Lobby and supported me. We have tried every year, and I hope that the present Government can see their way clear to doing something about this matter.

The position regarding the sale of British aircraft in the United States is very serious from the national point of view. My information is that the United States have no intention of recognising the certificate of airworthiness for the Comet. I hope I am wrong. We have developed this aeroplane and are a long way ahead of other countries. I understand that we have tried our best by giving to the Americans all the information that is required. The British certificate of airworthiness meets all the requirements of the Air Registration Board which, after all, is the equivalent of the Civil Aeronautics Board in the United States. Why is this attitude taken by our American friends? Is it because they are years behind us? Is it because they are jealous, or dog-in-the-manger, or that they do not want the British to progress?

Early this year I put a question on this matter to my hon. Friend, shortly after he took office, and I understood him to say that negotiations were proceeding fairly satisfactorily. The time has now come when we have a right to be told where we stand with the Americans on this very ticklish subject. The Americans say that turbine aircraft have to be certified, but they have no requirements by which to certify them because they know very little about the subject. Aircraft manufacturers, such as De Havilland's, who are selling the jet and the Comet overseas, cannot possibly fulfil their contracts to America unless they can have their certificate of airworthiness validated by the American authorities.

It is very serious, because British money and effort have been put into a contract that we all know about. We all hope that it will not go by the board, but it might, unless a move is got on by the Americans. After the war, when the Labour Government were in power—I am not blaming them unduly for this—and when we bought Constellations with dollars which we badly required at the time, we immediately validated the American certificate of airworthiness. The mistake was that we did not ask for reciprocity at that time. Had we done so we should probably have got it, but, as a result, very few piston-engined civil airliners have been sold in America. Now the Americans can see the position in reverse. We are in the lead, and they are being extremely difficult about it. I am most alarmed. I like the Americans as a nation. I admire their skill and ability and many of their business methods, but they have to play fair on this matter.

Let us take this point a little bit further. Britain has supplied the "know-how," design data and technical information concerning jet power units to the Americans ever since the end of the war, and supplied it on a plate, the same as the Russians had it. I shall not go further than that. Nevertheless, the American public do not realise what we have given to them. The "Sapphire" jet turbine went to the Americans, who called it by another name in America. I ask the Minister of Supply to insist that in all future contracts when we sell a design in America it has to be called and known by its British name, thereby letting the Americans know what contribution we are making to present-day progress.

The Americans are inclined to think they do everything. They do not realise what comes out of this little island: radar, jets, penicillin and atomic power have all come from Britain. I hope we can have an assurance that we shall take a strong hand and have this matter dealt with at the very highest level in both countries.

For a few moments I want to refer to the Air Registration Board. I speak for myself, but I think most hon. Members will agree when I say that it is an excellent organisation. It has centralised administration, it has men on it from all walks of life—manufacturers, insurers, trade unionists—and it gives real advice. I believe it can take on far more duties than it has at present, thus saving the taxpayer money and probably becoming a more efficient organisation. It should be given more work to do. I should like to see certificates of airworthiness issued entirely by the Air Registration Board, without reference to the Minister. I see no reason why the Minister should come into it at all. It could also issue such documents as permits for flying, see to the registration of aircraft and give approval to training schools for maintenance engineers. I hope some progress will be made in this direction. We have a Ministry set up, but that does not mean that nothing can be delegated. I hope that the Minister will look into this point.

I thought that the hon. Member for Wellingborough was a bit unkind in his opening remarks. He made a very long speech. He said that we used to have enormous rows in our civil aviation debates, but my impression was that the debates in years gone by were always very friendly, even when we were in opposition. [HON. MEMBERS: "Oh."] Hon. Gentlemen opposite may be touchy about this, but they must remember that when we were in opposition they never thought that we were going to be in power again. If they will re-read the debates they will find that our speeches were constructive, and they still are. I believe that the two parties are not very far apart in their approach to these matters.

I hope that we shall pull together as much as we can, because in the years to come Britain is going to earn a great proportion of its income from the various forms of aviation, as regards both manufacture and operating. Do not let any of us take a gamble. Let us be quite certain what we are doing and see that we make all possible economies and run our affairs efficiently. I believe that the Corporations, the operators and the manufacturers have a prosperous future ahead of them.

6.30 p.m.

Mr. J. Grimond (Orkney and Shetland)

I agree with the hon. and gallant Member for Macclesfield (Air Commodore Harvey) about the curious ignorance one often finds in America about our inventions, and I certainly hope that some notice will be taken of his suggestion that British aero-engines and other inventions should be sold in that country under their proper name.

My hon. and gallant Friend and other speakers have expressed certain anxieties about the inflated staffs and finance, including the hon. Member for Stroud and Thornbury (Mr. Perkins) and the hon. Member for Exeter (Mr. Dudley Williams). It was suggested by the hon. Member for Stroud and Thornbury that the solution was to have an inquiry. There is a very great problem as to how we are to control these enormous public Corporations. An inquiry may be one method, but I am not sure that it is any substitute for a certain amount of competition and a fairly continuous review in some form or another by this House, and, lastly, perhaps, by building up organisation and methods and esprit de corps within the Corporations themselves.

I can only speak as a traveller on B.E.A.C., and it is in that respect that I intend to express myself. I see an immense improvement in B.E.A.C. I represent a constituency in which air services are not a convenience, but a necessity. In the old days, we used to think that we and the rest of the Highlands were the Cinderellas, as I used to put it, and hoped we might become the Sleeping Beauty of the air operators, for we have a big potential air public Mr. Masefield has come to us more in the guise of a Prince Charming than ever before.

This year we have been very well served. We have much better schedules and much greater regularity. As a result, traffic has built up, and, as I have always recommended, B.E.A.C. are going out for greater traffic and cheaper fares. That is the direction in which air traffic, at any rate in the Highlands, should develop. We are really getting the feeling that service is being given to the passenger. There is in the North a great field of development, not only for the rich, but for the ordinary family flying as a matter of course.

Mr. Rankin

Would not the hon. Gentleman agree that B.E.A.C. have been doing that ever since they were nationalised, and have not started it only in the last year or two?

Mr. Grimond

I am not denying that; all I am saying is that they have improved a great deal.

On the question of subsidy, I agree with those who say, "Put the subsidy fair and above board." The objection to including it in the accounts of a Department is that once the Corporation were satisfied that some other Department were going to pay for it, there would be no incentive to try to cut down the loss. I believe that the loss can be cut down, and that, as traffic increases, it will disappear. Nevertheless, I agree with those who would like to see the subsidy taken out of the accounts of the Corporation and shown separately in some other account.

Mr. Shackleton

Would the hon. Gentleman apply the same argument to MacBrayne's?

Mr. Grimond

Certainly. The subsidy to MacBrayne's is already shown separately.

Mr. Shackleton

But the hon. Gentleman said that there was no incentive.

Mr. Grimond

I was only saying that that was the danger. There is no doubt an equal danger in the MacBrayne case.

I want now to make some suggestions and criticisms. If I criticise, however, I do so against my general view that the service, as far it goes, is satisfactory. But the traveller should be given more information. There is no reason why there should not be continuous information given to travellers when services are late and in other circumstances. Information does flow and reach the traveller more quickly that it did in the old days, but nevertheless the service could be greatly improved. There is no reason why travellers should be treated as children. They should be told if there is going to be a long delay so that they may, if they wish, go and have a meal or alter their arrangements at their destination.

Secondly, there does not seem to be any great co-ordination between the services and information supplied by the different nationalised transport services. Very often it is extremely difficult to find out from railway information bureaux any details about air and bus services. I see no reason why all information affecting all the services could not be kept by their opposite numbers. And the services themselves should be better co-ordinated.

Thirdly, I want to raise a very important constituency point, and that is when we may expect to get the inter-island service in my constituency. In the old days we had an air service round the Islands of Orkney, but by a curious inversion of progress we have now not got one. We are told that we must wait for helicopters, but we have had some very disturbing news about them today, and, like other hon. Members, I press the Minister to reassure us further on this question.

From the Reports of the Corporations, it does not seem probable that we shall have helicopters for another four or five years. Yet I read that the Minister himself has been taking rides in them. He is a brave man, we know. I dare say, too, that my constituents are much more valuable than is the right hon. Gentleman, but if the helicopter is safe enough for transporting the Minister and generals, when may we expect one safe enough to carry the ordinary public? I do not think that the answer "In 1958" is good enough.

I cannot believe that the general development of aircraft will always be in the direction of larger and heavier machines needing stronger and longer runways. We have neither the money nor the land to satisfy these indefinite extensions. I believe that an aircraft has been developed at Prestwick which takes off in a comparatively short distance. Why cannot such an aircraft be made available for the Highlands and Islands? Is there any aircraft that will take off from a grass field or a short runway and carry, say. a dozen passengers economically? What my people want is to get from their islands to Kirkwall and back again in the same day. The same need exists in Shetland. It would make an immense difference to these islands if we could have such aircraft.

Then there is the question of the air ambulance service. At the moment, it is kept going by Rapides, but are they not being taken out of service? I 6hould like to know what other types of aircraft are being developed. It may be, as was suggested by one hon. Member on this side of the House, that the solution lies in some form of flying boat. I want to impress upon the Government that we are not content with the present situation. We want an air service round Orkney and, if possible, round Shetland, and the assurance that we are going to have this service is a matter of immense importance.

Lastly, I want to ask a question about the remuneration of the pilots. We expect a good deal from our pilots and they give us extremely good service. Can we be assured that their rates of pay, taking into account the difference in the cost of living, compare with those of pilots in other countries? I think that is a very important matter, because the whole of these services depend on the excellence of the pilots. We ask them to spend less and less time on the ground. It is important to passengers to get off as quickly as possible and to reach their destination dead on time. The pilots are highly skilled men with a fairly short flying life. We must make sure, if we are to make these heavy demands on them, that we compensate them at least according to world standards.

6.40 p.m.

Major D. McCallum (Argyll)

In one way, I am very glad to follow the hon. Member for Orkney and Shetland (Mr. Grimond) and sorry in another, because he has taken several of my points from me. However, I am glad to have his cooperation in replying to the hon. Member for Wellingborough (Mr. Lindgren). In his opening speech for the Opposition, the hon. Member for Wellingborough referred to the wonderful progress being made in the air services in the Highlands and Islands and made some rather derogatory remarks about the Fressons and Gandar Dowers, as he called them, of pre-nationalisation years. In those days you got several services a day, not one, and the old service got you to most of the Islands in Orkney and to the larger islands of Shetland, which is not so today. It is quite true that today you get a bigger machine, but for that very reason it cannot land at all the places at which the others used to land. Is that progress?

Group Captain Wilcock


Major McCallum

No, it is not.

Group Captain Wilcock

There is nothing to prevent the private operators from again applying for licences to do the same as before.

Major McCallum

But the private operator must have the flights from the mainland to carry out the whole thing, and, from inquiries I have had, I am quite sure they would be very pleased to operate them.

While on the subject of Highland and Island services I should like to ask why hon. Members, on all sides of the House, refer to the Scottish internal services as social services. Are they any more social services than the B.O.A.C. services abroad or the B.E.A.C. services between Glasgow and London? What do you call the Glasgow—London service when flying with only two passengers—is that a social service? And what do you call a Highland service when they are running well loaded, as they do, for several months in the year? One does not call train services a social service when, sometimes in the winter, they run only a half or a quarter full.

That is the sort of derogatory attitude taken towards the Highland and Island services that we resent. They should be called commercial services as they were in the old days of the Gandar Dowers and the others. They went there and they came back—and they brought the then Member for Orkney and Shetland, Sir Basil Neven Spence, with unfailing regularity. [Interruption.]Oh, yes, they did. I like to have these things put straight.

Mr. A. C. Manuel (Central Ayrshire)

Before the hon. and gallant Member continues, I should just like to put that right. We talk about social services and the hon. Gentleman refers to several months of the year that pay. Surely when we talk of a thing paying we refer to the financial year, and he is surely aware that many of these Highland services are uneconomical over the whole year, and that many services were offered to private operators and not taken up.

Major McCallum

If that is the definition of social services, what about B.O.A.C. and B.E.A.C? They are both operating at a loss—and the Railway Executive are operating at a loss of £8 million. We resent that sort of term. However, I do not want to continue on that line.

I want to say what a tremendous difference there is in this debate today from the usual run of civil aviation debates. When one or two of us then raised the question of helicopters, we were fobbed off with the reply that they were too expensive and that we would have to wait, but I have every conviction that, because of greatly increasing interest in this House and on the part of the public we shall have helicopters in service before eight or five years, or whatever it is now. I am glad to see in the B.E.A.C. Report this interesting information of their helicopter activities. I happen to know that certain sections of B.E.A.C. would welcome a helicopter, at least for experimental purposes, in the West Highlands of Scotland, and I sincerely hope it will not be very long before we see at least one of these machines operating there.

If a social service is wanted, then there could be established an ambulance service to those Islands which have not sufficient landing space for ordinary aircraft to land. There is today in Barra a Rapide ambulance service which lands on the beach, a very risky matter because of the tides. If a helicopter, even as it is today—a single-engined helicopter—could be adapted for use as an ambulance, as it was in the Dutch floods earlier in the year, and as used in America and other countries, could not we do something of the same sort? When I put this forward previously, I was told, "Oh, yes, but the lives of Service men do not matter; if they become casualties the Government do not have to pay insurance, but there is the question of insurance with civil passengers and it is a different story."

I ask myself, as I asked some of the B.E.A.C. people in Scotland, if one were dying of appendicitis, in the middle of winter, in the Islands, and the only hope was to get to hospital on the mainland, would not one go by helicopter rather than wait for a lifeboat? I am sure the man would risk going in a helicopter and have his operation over and done with rather than risk his life by the delay of travelling by lifeboat, etc. I want to press for the helicopter as it is today. It is an expensive machine and may have to be paid for by the Health Service, but I am sure something of that sort could be done.

I should like to support what my hon. Friend the Member for Orkney and Shetland has said—if a helicopter is not available for this ambulance service, what about a Twin-Pioneer, such as is already in service in Malaya? By using a machine such as that in the meantime one would be retaining the aircraft industry in Scotland, instead of seeing the last of the aircraft industry go out of that country, as did the motor industry. I plead for the development of the helicopter at once—not in five years' time—on the west coast of Scotland, or, if it is cheaper, for the use of the Twin-Pioneer while awaiting the development of the helicopter.

6.48 p.m.

Mr. John Rankin (Glasgow, Tradeston)

The hon. and gallant Member for Argyll (Major McCallum) scarcely needs my assurance that all that he desires for the Highlands is desired just as strongly on this side of the House, but we should like to see him not so much looking back to Gandar Dowers but looking forward occasionally with us and realising that the type of aircraft, and the type of service, that was given in the Gandar Dower era is not what is now being given.

Lord Malcolm Douglas-Hamilton rose——

Mr. Rankin

Just give me a minute or two to get started. I do not mind how often the noble Lord interrupts, provided he just lets me find my feet—all right, come along.

Lord Malcolm Douglas-Hamilton

I only want to suggest that the service then got one from A to B, which the modern service does not.

Mr. Rankin

We have gone much further ahead. We have gone to X, Y and Z—we do not just go from A to B. We have made great advances since those days. Both the hon. and gallant Gentleman and the noble Lord realise that the type of safety aids—the ambulance services, the fire services, and the comfort and convenience which we all know is now part and parcel of the modern airport was just non-existent in the days they are still glorying in.

Major McCallum

That is the very point. Surely, in those days, the Gandar Dowers and so on were not subsidised. Today the B.E.A.C. are subsidised in regard to those very services.

Mr. Rankin

I do not want to prolong this somewhat fruitless argument. All I want to do is to resurrect the hon. and gallant Member and bring him back from the past to the present. I wish to remind him that in the days of private enterprise the number of miles which were being flown by passenger aircraft in Scotland could almost be counted on the fingers of one hand.

I should like to say a word in support of the hon. Member for Orkney and Shetland (Mr. Grimond) who made a plea for greater information. I had no intention of raising this matter, but, as the hon. Gentleman has referred to it, I should like to tell the House that during the week before the Recess I was flying home in a B.O.A.C. Stratocruiser to Prestwick and I had the unfortunate experience of remaining at London Airport for over 5½ hours. In the end I did not get away. Having started out about midnight, we came home again "on a wing and a prayer" at about one o'clock, and at two o'clock we were taken away to a hotel.

I feel that during that period we ought to have been given some information why we were kept there. I pointed out quite clearly to the officer in charge that I could have got a train and arrived home before the Stratocruiser, because the aircraft did not leave until 11 o'clock the next morning.

I have said very little about this because I only want to speak good about the operational side of our airlines, and it does not do any good if the story gets around that one can travel from London to Glasgow quicker by train than by a modern aircraft. That is not a very good advertisement. I agree there was a reason for this delay. The reason is that, because of the competition of the external services, we are giving our aircraft no rest; they have to be in the air all the time. They make no money when they are on the ground and so they are being flown backwards and forwards all the time, and, as with the human engine, they begin to wear out if they do not get an occasional rest.

Mr. Lennox-Boyd

I think it would be a bad day for British civil aviation if the idea got around that we are neglecting our aircraft in the interest of making money. There are the strictest regulations for periodical overhauls which would meet comparison with the standards anywhere else in the world.

Mr. Rankin

The overhaul on the night in question took over 5½ hours, and after the plane left it had to come back to the airport again. However, as I said, it was only the remark of the hon. Member for Orkney and Shetland that brought this matter to my mind. Other- wise I would have made no reference to it, because I fly a great deal in the Stratocruiser and I am very fond of it. I think it is an excellent machine.

Mr. Mikardo

The bar is very good.

Mr. Rankin

I do not mind distractions in front of me, but distractions behind me are uncomfortable. I agree that the bar is a very nice place indeed. In view of what the hon. Member for Stroud and Thornbury (Mr. Perkins) said earlier, I should like to say that I have flown with American passengers and I have asked them, "Why do you not fly by Pan-American? "and they have said, "No fear, we prefer the Stratocruiser. We think it is one of the best machines in the air today."

I should like to link up the remarks of the hon. Member for Stroud and Thornbury with those of the hon. Member for Exeter (Mr. Dudley Williams) and the hon. and gallant Member for Macclesfield (Air Commodore Harvey). I hope that my remarks are not so funny as the attitude of the Parliamentary Secretary to the Ministry of Transport would seem to indicate. So long as he is laughing at his colleagues, I do not mind. The hon. Member for Stroud and Thornbury seemed to think that too much was being spent on the administrative side. The hon. Member for Exeter followed him on the same lines, and the hon. and gallant Member for Macclesfield suggested that a tremendous saving could be made in the running costs of the two Corporations. I was interested when I heard those speeches, because I believe they contained points which merit attention.

I have taken certain statistics from both these Reports. B.O.A.C., with a total revenue of £36 million odd, has a central administration expenditure of £1¼ million, and B.E.A.C., with a revenue of something like £13 million, has a head office administration expense of £1,272,000. There is a point which requires examination because B.O.A.C. has a revenue nearly three times greater than that of B.E.A.C., and yet B.O.A.C, has a smaller expenditure in central administration. That is an interesting point, though honestly I do not think it is one which demands an inquiry.

Sir Wavell Wakefield (St. Maryle-bone)

I think the answer is given in the B.E.A.C. Report, which shows that the distance flown by B.E.A.C. aircraft is much shorter than that of B.O.A.C. aircraft.

Mr. Rankin

All I am saying is that it is a point which, on the statistical side, has got to be explained. When one goes through these Reports there are, no doubt, explanations which sometimes pass one by. A call has been made for an inquiry. The hon. and gallant Member for Macclesfield said that tremendous savings could be made. What he ought to have said in addition is that large savings have been and are being made. We have got to give credit to both Corporations for what they have done.

If we take the impact of the cost of central administration, sales, publicity and so on, on the total revenue, we find that the cost of those items represents 26 per cent. of the total revenue of B.E.A.C. If we take the number of passengers carried and the total amount paid in fares, we find that the average paid for each ticket on a B.E.A.C. journey is £8. I am just giving round figures. That means that £2 of the cost of the ticket goes to meet this overhead.

That is still not the point I want to make. B.E.A.C. should be given credit for the fact that in 1949 the ticket was carrying 41 per cent. of that charge and they have reduced it by 15 per cent. in four years. Should we not applaud them for that? In 1949 central charges absorbed 31 per cent. of the average ticket price of B.O.A.C. Today it absorbs 11 per cent. These are great savings and, rather than merely saying that tremendous savings can be made—which is problematical—we should thank B.O.A.C. and B.E.A.C. for the fact that their organisation has been so good that over four years they have made savings of this startling nature.

Whatever hon. Members may say to each other in the course of this debate, it can be said that there is no discordant note amongst us when we offer our congratulations to B.E.A.C. and B.O.A.C. for the magnificent Reports which they have given us. We include those engaged on the administrative side, the operational side, the maintenance side, and on design and construction.

Mr. Mikardo

And the steering side.

Mr. Rankin

I thought that my hon. Friend was going to bring me back to the bar. The steering gear is an essential feature of the bar. I wonder if we can congratulate the Minister. I should like to be able to do so. He should feel proud. He is a different man tonight from the man who once sat on this side of the House. He has changed not merely his position——

Mr. Lennox-Boyd

—but his age.

Mr. Rankin

I was going to say he has changed because of the wisdom he has gained through being the head of this great service.

While the cost of fuel, wages and material is going up, both B.E.A.C. and B.O.A.C. have managed to keep down the cost of the fares to the travelling public. It is worth noticing that while the passenger revenue from all services is now over £13 million, in 1949 it was a little over £4 million. There has been a threefold increase, and yet the fares have remained almost unchanged. We must give the Corporations credit for that, because it has been acheived by going out and getting new business.

In the days when we were nursing this service, as it had to be nursed, we did not get much help from the right hon. Gentleman who is now the Minister. On one occasion, when viewing the scene as he saw it, he said: Today we have a very sorry picture: no route from London to the West of England; no route from London to Wales; no route from London to Leeds and the North; no flights from Edinburgh to London … no flights at all from Edinburgh to Aberdeen or the Orkneys … That was the cheer and comfort which the right hon. Gentleman gave us. One would conclude that today we have flights on every one of those routes, but the hon. Member for Anglesey (Mr. C. Hughes) has told us that Wales is still in the same position. What the right hon. Gentleman was saying then is as true now as when he said it. He went on to say that all the difficulties sprang from the same root cause—applying political dogmas to a transport problem. Yet we are still in the midst of the troubles which he and his Government are perpetuating by doing the very thing which he condemned when he sat on this side of the House.

He saw easy solutions of all the problems. He said: If petrol is the cause, the Government have the solution in their own hands. The Report tells us that today petrol is costing the Corporations £115,000. He has the solution in his own hands today if he wants to bring down that charge. He went on: Whatever the cause, these services should be made to pay. These are the very things which worry us now. I believe that the Minister has grown in wisdom—that age and his transfer to that side of the House have brought him wisdom—and I hope that he will now modify the somewhat irresponsible attitude he showed then. He added: If the Government are determined that they cannot be made to pay, then private operators should be given the chance."—[OFFICIAL REPORT, 1st March, 1949; Vol. 462, c. 306–9.] These remarks have disturbed us very greatly, and I would ask him to make it clear that when he talks about the service being made to pay he is referring to the service as a whole. We all want it to pay, but we hope that he is not going to take away separate parts of the service, such as the social service to the Western Isles—to which the hon. and gallant Member for Argyll referred—and say that they cannot be made to pay. I hope that they will run on general revenue, because this is a most important problem for Scotland.

The Joint Under-Secretary of State for Scotland (Mr. Henderson Stewart) indicated assent.

Mr. Rankin

I notice that the Joint Under-Secretary of State for Scotland is nodding his head. I am glad that I have his support. He knows what de-population means to the Highlands of Scotland. One way of preventing that de-population is to provide easy and cheap means of transport. Will the right hon. Gentleman tell us tonight that nothing will be done while he is Minister and in charge of this great service—of which I think he is proud——

Mr. Lennox-Boyd indicated assent.

Mr. Rankin

Yes, he is. I am glad that I have drawn that acquiescence from him. He is now proud of a nationalised service, and we are proud of the fact that he has acknowledged it tonight. I hope that nothing that the right hon. Gentleman will do while he is the Minister in charge of this service will in any way make it harder for people to remain in the Highlands of Scotland.

I refer again to that second quotation I took from him: If the Government are determined that they cannot be made to pay, then private operators should be given the chance. I understand that Scottish Aviation are being encouraged as much as they can be encouraged to take over some of these services in Scotland. I want to ask the Minister whether it is true that as part of that encouragement he is going to relieve Scottish Aviation of the obligation to pay landing fees when they use a nationalised airport. Is that true?

Mr. Lennox-Boyd

That must be born in some even more exaggerated sense of fancy of the hon. Gentleman. Nothing more absurd has been suggested, I think.

Mr. Rankin

If I revealed the source of that statement, I should cause embarrassment to the Minister. I do not wish to embarrass him. It would not be fair of me to reveal the source of that statement because it would embarrass him, and because of that I shall tell him privately—if he likes, in the bar of a Stratocruiser; but it would not be fair of me to say it in the House of Commons.

Now, perhaps, I had better come to a conclusion, but I want to do so, as I think all Scotsmen want to do, on a Scottish note, and so I want to ask one or two questions about Prestwick. My hon. Friend the Member for Anglesey has had things to say about Prestwick, but that does not in any way impair the old alliance between Scotland and Wales. I support all that he said about Wales and I am sure he will support me in all I have to say about Scotland.

When will the programme of development at Prestwick commence? Is it possible to give an answer to that question? If it is not convenient tonight" perhaps the Minister at a later date may find it possible to say something about it. Is the drainage scheme proceeding? Has it been started?

Mr. Lennox-Boyd

I will tell the hon. Gentleman in the bar.

Mr. Rankin

Has a start been made in removing the bing that has been somewhat of a barrier to the development of the airport? I believe a demand is growing for the resumption of direct services from Renfrew to the Continent. What possibility is there of those?

If my information is correct—and I hope it is correct on this occasion—tomorrow will see the inauguration of a transatlantic service from Manchester to New York. It is going direct, and, as far as I know, it is to be run by a foreign operator. Could the Minister tell us what the frequency of that service is to be, and could he say if it is going to affect Prestwick Airport? Is this a third international airport that is being created? If we are creating another international airport, is it going to lower the status of Prestwick in any regard?

I think that that is an important point, because both the Government of my own party and the present Tory Government have given their pledge that, next to London, Prestwick should be the second international airport. We do not want to see anything done that would detract from that status which has been granted to Prestwick. We do not want to see the development consequential upon that pledge being slowed up by the opening of this new transatlantic route direct from Manchester to New York.

I crave pardon if I have somewhat exceeded the time limit that we all like to observe. I had no intention of exceeding my usual 10 minutes. [HON. MEMBERS: "Oh."] If tonight I have done it, then, as I say, I crave your pardon, Mr. Speaker, and that of the House, but I am consoled by the fact that I have done it in a good cause.

7.16 p.m.

Lord Malcolm Douglas-Hamilton (Inverness)

The hon. Gentleman the Member for Tradeston (Mr. Rankin) has eulogised the Corporations, as have various other Members who have spoken tonight, but I venture to say that as far as Scotland is concerned we cannot be altogether satisfied with the services we are getting; we cannot be satisfied with the fact that we are not getting a good many of the services we might.

I was glad to hear the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) say the service to the Shetlands had improved considerably, but the trouble is that there are a great number of places where no service is run at all. There is no service whatever run from Perth or Dundee, and yet there was one big aerodrome earmarked for such a service between Dundee and Perth just after 1946. I had occasion to land a private aeroplane there not long ago, and the man in charge did not know what to do. He had not had such a thing happen before, since he took over the aerodrome.

I would say this to the hon. Member for Tradeston. There has been a tendency among one or two hon. Members to make this a political debate. We have argued the toss of nationalisation or no nationalisation. I have always taken the line about aviation, like everything else in this country, that it does not really matter who owns it so long as it is run efficiently. I opposed the nationalisation of aviation, and would again, simply because I have spent many years in aviation and I know the kind of structure needed to run aviation. Aviation cannot be run on the stereotyped lines that characterise the nationalised industries.

Aviation is a many-sided industry, and aircraft fly long distances, medium distances, short distances—very short distances when they are private aircraft. Together B.E.A.C. and B.O.A.C. run very well long-distance and medium distance services, and in that they lead the world, but that is not the whole of aviation. People want to travel shorter distances, particularly in Scotland, where land communications are difficult and where air transport could be inestimably helpful. In a small country like Scotland aviation can play a very useful part, but only if it is flexible and employs the right type of aircraft.

At present, as in any big organisation, there is a tendency to stereotype the type of aircraft. Since the war, apart from the 20 Rapides, we have had mainly Dakotas, or variations of each type, which are not suitable for operation in small fields. Both my hon. and gallant Friend the Member for Argyll (Major McCallum) and the hon. Member for Orkney and Shetland have said that what we need is the development of the Rapide. I am very disappointed that B.E.A.C. did not see fit to buy some of the twin-engine Pionair aircraft from Scottish Aviation and try them on short routes.

We have had disappointing news today about the helicopter. It looks to me as though B.E.A.C. are counting on the helicopter to do the short routes about which I am speaking. By the way, they describe themselves in this Report, on page 64, as the world's largest specialised short-haul airlines. I would not call them that. The phrase reminds me of the man who owns a private golf course, specialises in drives and iron shots, forbids anybody else to play on the golf course and then describes himself as the best putter on the course. That is about what B.E.A.C. are doing today; others are not given a chance to show how they could run the short lines. We need a great deal more flexibility and to realise that aviation is not an industry which stands still. It is always progressive. There is always something new coming.

The hon. Member for Southampton, Itchen (Mr. Morley) spoke in favour of flying boats, and I strongly support what he said about them. We could do a lot with flying boats. The whole of the west coast of Scotland has no air service and no prospect of getting one for the time being. Where shall we draw the line about these social services? Like my hon. and gallant Friend the Member for Argyll, I resent the idea of calling any service a social service unless we call them all social services.

An interesting point in connection with the services in the Highlands and Islands is that they netted £181,000 last year, which is rather more than 10s. per head of the population living in the Highlands and Islands, a far higher sum than in any other part of the country. B.E.A.C. would be very well off if England paid as much per head for their internal air services.

We want to see a change in policy. We accept the fact that it will take a long time to develop helicopters, so let us see what we can do with flying boats. Let us see whether we can have a suitable type of flying boat for operating services up the west coast. They could get into all kinds of islands and other places which often land planes cannot reach today.

A great deal could be done by helping flying boat operation. It is not economic to run flying boat services in Britain largely because of the amount of gear necessary, both on the ground and in the air, as a result of the regulations, and an overhaul of the regulations governing the operation of flying boats should be a very good thing. I understand that at Southampton the cost of landing a flying boat is greater than that of landing a four-engine aeroplane in an ordinary airfield, and the sort of reason which makes for expense is that they have to pay for the maintenance of a fire boat in case the machine catches fire while either taking off or landing. The boat has to carry an immense amount of specialised fire fighting equipment.

I do not think there is any record of a flying boat catching fire while taking off or landing, but I know there was a fire at Southampton not long ago; the fire boat itself caught fire and was burnt out. The operator of the flying boat said his only regret was that he could not get the flying boat up in time to put the fire out.

Finally, dealing with Scottish aviation, I would emphasise the need for flexibility. To get the needs of the country met, we want aviation in that country directed and run by men who understand these needs. It is an anomalous position, and nonsense which should be ended, that the chairman of the advisory body which advises on Scottish aviation should also have a seat on the board of B.E.A. There should be a controlling body within Scotland to decide what lines should be run, and we shall not get satisfactory air services until we have such a body.

7.25 p.m.

Mr. Ian Mikardo (Reading, South)

After the last four speeches to which hon. Members have listened, I want to ask the House for its customary indulgence towards a Member for an English constituency who has the effrontery to intervene in the debate. I want to begin by assuring the Minister—and I know he will be both delighted and relieved to hear it—that I do not intend to urge upon him that he should give his special attention to the fact that the county of Berkshire is the most neglected part of the country for aviation services.

I do not intend to put it to him that he should give absolute overall priority, among all his other cares, to starting a helicopter service between Reading and Westminster. Nor shall I even suggest to him that, far from it being Manchester or Valley or Prestwick, it is Woodley which ought to be our No. 2 international airport. To whatever extent he may or may not disagree with such observations as I shall make, he will know that at least they are observations over the general field of the subject and are not in relation to any particular part of it.

It would be wrong to begin without congratulating the Parliamentary Secretary on his speech today. I understand that he landed in this country only a short time ago from his long trip abroad and may, therefore, have had very little time, with the other cares which he has in the meanwhile, to attune his mind to speaking in the House today. If I may be allowed to say so without impertinence, we all agree that he acquitted himself most nobly. Nevertheless, he led with his chin and deserved the straight left which he got from my hon. Friend the Member for Wellingborough (Mr. Lindgren).

It is not a fact, despite what the Parliamentary Secretary said, that in the past our debates on civil aviation have always tended to be non-party and non-partisan. It is silly to try to ignore the fact that during the period of the Labour Governments of 1945 and 1950 the Opposition, and not least the present Minister, were not merely critical, which is their right and indeed their duty, but were fractiously and sometimes even meanly critical of what was being done by the two airways Corporations. My hon. Friend the Member for Glasgow, Trades-ton (Mr. Rankin) has read certain passages from former speeches of the Minister which I am sure the Minister would not now want to repeat as his contribution to the welfare of the aviation industry.

Whether or not the Conservative Central Office takes the advice of my hon. Friend the Member for Wellingborough and reproduces as a leaflet all the glowing tributes paid to nationalised industries by Conservative Ministers in the House during the last few days, right hon. and hon. Gentlemen opposite will not be able to complain if we on this side of the House, as I certainly intend to do, compose a leaflet containing all those glowing tributes to nationalisation which have been paid by Conservative Ministers in recent days for the purpose of handing it out to every one of our electors who, at any time in the past, has said anything derogatory about nationalisation.

I am grateful to the Parliamentary Secretary, and I express thanks in advance to the Minister because I know they will be deserved; and I am equally grateful to the other Ministers who have spoken in the last few days about nationalised industries for giving us the ammunition with which to destroy for ever the ignorant and ill-informed criticisms of nationalised industries which, in the past, they themselves have been the first to inspire.

When we debated this subject on the last occasion, about a year ago, I had the privilege of winding up the debate and, therefore, of being able to deploy a little more time than is proper normally for back bench Members to deploy. I propose this evening to make only three points and to make them very briefly indeed. The first concerns relations in the industry between the publicly-owned and the privately-owned sectors of it. Reference has been made to that subject today and much more extensive reference was made to it during our previous debate.

We have said over and over again that, of course, there is a place in this industry for both private and public ownership. I do not know anybody on either side of the House, and certainly not on this side who disputes that, although I expect one or two hon. Members on the other side to dispute that there can be a place for any public ownership in the industry.

What is important is that the area that each covers, and the line of demarcation between them and the relations between them, should be carefully defined and be fair. What hon. and right hon. Gentlemen opposite have always claimed is that there should be free and fair competition between the two sectors of the industry. A year ago, when we were debating the first manifestations of the present Government's policy in this industry, some of us on this side of the House said that what we feared was not that there would be free and fair competition, but that the public Corporations would, in fact, be deliberately inhibited by the Minister from competing fairly with the private companies in the industry.

I am sorry to have to say that the past 12 months have given plenty of evidence that that is the case. I really do not know how hon. Gentlemen opposite can square with their consciences and with their constant profession of the efficiency of private enterprise that they dare not now permit free, open and uninhibited competition between private companies and the public Corporations. If it were true, as so many of them have always said, that public enterprise is bound to be centralised, bureaucratic and inflexible, as the noble Lord the hon. Member for Inverness (Lord Malcolm Douglas-Hamilton) has just said, whereas private enterprise is lively and clever, changeable and variable—if that were true then, surely, in free competition the public Corporations would suffer by comparison.

Lord Malcolm Douglas-Hamilton

I said that ownership does not matter so much. I did not say much about competition, which is the strongest spur. It does not matter who is the owner; it is the centralised, monopolistic control that always makes for these evil results which have been described.

Mr. Mikardo

I am with the hon. Gentleman so far, but where is the control and the monopoly at the moment? What is happening is that certain Government contracts are being put out to tender, and B.O.A.C. are told by the Minister that they should not tender because if they tender the terms which they offer would be more advantageous than the terms offered by the private companies. If the noble Lord wants competition, let him urge on the Minister that they should be allowed to compete fairly with one another. What sort of free competition is it when a public Corporation is not permitted to enter into the field of competition?

My hon. Friend the Member for Wellingborough quoted two examples of this, and I should like to comment briefly on both of them. The first is with regard to the freight services across the North Atlantic. I do not want to overstate this case because, as the Minister knows, the general demand for freight services across the North Atlantic has shown signs of falling off in recent months, perhaps because of the end of the fighting in Korea and for other reasons.

But there is some market for freight services across the North Atlantic and in the future that market may be very considerable indeed. As my hon. Friend said, B.O.A.C. were told to keep off the grass for 12 months, and Airwork were given a licence to develop this service. What has happened? They have done nothing at all. The consequence is that we are not carrying freight by the public or by the private sector across the North Atlantic. It is our foreign competitors who are the only ones who have advantage out of this distortion of the relations between the Corporation and the private companies which the present Minister has imposed upon them.

I am not sure whether it is considered good form in this House to quote oneself. If I am permitted to do so, I should like to quote a short passage from something which I said in the debate a year ago, in which I gave a warning to the then Parliamentary Secretary, who since then has risen above the ordinary air and got into the stratosphere of the Treasury—a warning which he said the Ministry were keeping in mind very closely and which, apparently they have not heeded at all. I said: … if the Government go on with this ill-conceived nibbling away policy that will not happen. The operations of British airlines will be fossilised in their present pattern. Very few new routes, and perhaps none at all, will be opened up. The Corporations will not pioneer any new routes, for the reasons I have already given, mainly because they will not be willing to bear the preliminary expenses for their competitors to cash in on the results. The private companies will not do this preparatory work because, from their point of view, it would not be a justified speculation … The result will be that nobody will do this pioneering and that, as new routes become important in airline transport, they will be developed by our competitors from other countries. The Minister ought to consider whether what he is creating is not fair competition between the British public sector and the British private sector, but civil war in British air transport, in which both sectors will cut each other's throats and let the foreign competitor in."—[OFFICIAL REPORT, 29th October, 1952; Vol. 505, c. 2043.] The then Parliamentary Secretary replied that that danger was one of which the Ministry were very conscious and which they would guard against. But have they guarded against it? Here we have, in the first of the two examples given by my hon. Friend the Member for Wellingborough, the perfect example that by encouraging civil war between B.O.A.C. and Airwork we have ensured that such freight as is carried across the North Atlantic is not carried in British planes.

The second example is the disgraceful story about the contracts for carrying troops. B.O.A.C. have been told to keep off the grass and to leave the business to private companies. Again I ask, if it were half true what is sometimes said, that a nationalised industry is bound to be over-centralised and inefficient, surely we should find that out, because B.O.A.C. would not be able to compete with the private companies. But they are told not to try to compete, not because it is feared that they would fail, but because it is feared that they would be successful; not because the Government wants free and fair competition, but because they want to protect the private companies from the competition of a nationalised organisation.

What is the result? The result is that our troops are being flown about by private companies mostly in obsolete or near obsolete aircraft, like the ancient Yorks. As I said in the debate last year, the York was a good aircraft in its day, but it is now allowed to fly with 70,000 lb. all-up weight. I would not, of my own free choice, want to be in a York aircraft with 70,000 lb. weight on her taking off from Gander on a mid-winter day. We all recollect the tragedy of the York which was lost by one of the private companies on one of these contracts with a large number of Service men's families aboard.

While this is going on, as my hon. Friend pointed out, we had good British aircraft, semi-cocooned, standing on the tarmac at London Airport, that really should do the job. I think that apart from any question of private or public organisations doing this work, it is quite disgraceful that we should use the oldest and least comfortable aircraft available to us for carrying our Service men and their families around the world. It is older, less comfortable and less safe—I am not saying it is unsafe, but it is less safe, as, I think, the Parliamentary Secretary will agree—than the more modern aircraft. It is disgraceful that to carry our Service men and their families round the world they should use the least comfortable, the oldest and the least safe aircraft.

What I find absolutely ironical is that the French Government have given British Overseas Airways Corporation a contract to fly French sailors across the Atlantic in the best aircraft they have got. A British soldier, sailor or airman is entitled to as much consideration from our Government as the French sailor is entitled to from the Government of France. The French are supposed to be the people who are hard up, but they are not providing anything second rate, third rate, old, obsolete, uncomfortable or less safe for their sailors across the Atlantic: they are using the best aircraft that B.O.A.C. have got.

We all hope that the tragedy of the York aircraft which crashed with Service men's families aboard will never be repeated. If it were to be repeated, the Government would carry a great responsibility on their heads, because they have cheespared on the transport of our Service men and their families, not merely to save the money but to give an unfair advantage to private enterprise.

Mr. Profumo

The hon. Member said three times that the York aircraft is less safe. I know that he chose his words advisedly, but I do not want there to be any suspicion whatever that these aircraft are unsafe. The hon. Member talks about "less safe," but it seems to me that either they are safe or they are unsafe. I understand the rest of the hon. Member's argument about "less comfortable," and so on, but please let us be absolutely clear on this—perhaps the hon. Member will make the point clear: it would be a very great misfortune if it went out from the House tonight that these aircraft were unsafe.

Mr. Mikardo

As the hon. Gentleman was kind enough to say, I chose my words carefully, and I particularly made the point of saying that the York aircraft were not unsafe. I do not agree that an aircraft is either safe or unsafe and that there are no degrees of safety or lack of safety. Of course, there are degrees. One does not say that people are either brilliant or dumb. There are various degrees of intelligence, and there are various degrees of safety in aircraft. The Parliamentary Secretary has flown a great deal more than I have and knows a great deal more than I do about flying. I say to him that if he had the free choice on a dirty November day of going up from Gander and crossing the Atlantic in a York or a Stratocruiser, he would not choose the York, and nor would I.

The second point I wish to make is one on which I have spoken before: the question of maintaining in the private companies the standards of wages and working conditions for the workers which have been laid down for the public Corporations by the negotiations of the National Joint Council for Civil Air Transport. It has always been a fact—I am still choosing my words carefully—that many of the private companies have not done all that they should have done to bring their wages and working conditions into line with those which are paid and given in the Corporations. Although the Minister has instructed the Air Transport Advisory Council to make it a condition of giving a licence to a private operator that the Council shall be satisfied that the operator is paying the proper wages and providing the proper working conditions, licences have been issued to companies of whom it has subsequently been found that they were not honouring the bargain. I can, if the Parliamentary Secretary wishes, give examples.

The hon. Gentleman may well take the view that it is the business of the trade unions to protect their members, and so it is—and trade unions never look to anybody to do their own work for them; but the Minister has a responsibility in this, and so have the Air Transport Advisory Council. It would be quite wrong if the situation were that licences could be granted to any company and then the unions would have to come along and complain and agitate and, if need be, strike—and nobody would like that—if they found that the bargain was not being honoured. But as the Parliamentary Secretary knows, the Minister's instructions to the Air Transport Advisory Council are that they must satisfy themselves, before they issue a licence, that the proper wages and working conditions are being provided.

My own organisation has recently had to work out a large compensation scheme, because in one company, which has had more than one licence, we found that in one year there were two violations of the agreement. In the case of the second company, which has been mentioned this afternoon—I do not want to be invidious, so I do not mention names—only within the last few days have the workers in the grade which my union represent been organised, and we have already found a number of respects in which the company is not honouring its obligations. That means one of two things. Either the Air Transport Advisory Council did not do their job of satisfying themselves about wages and working conditions before the licence was issued, or they were innocently deceived by the applicant. Whichever of those two things is right, it clearly shows a weakness in the machinery.

Thirdly, I should like to refer to the question of relationships between the two Corporations. A number of opinions have been expressed today by hon. Members, on both sides of the House, about whether the two Corporations should or should not be merged. That is a highly complex question, involving very complicated and almost abstruse, almost metaphysical, technical considerations—not technical in the air transport technical sense, but technical in the managerial and organisational sense. I am a little surprised that hon. Members who could not possibly have had the opportunity of studying all these implications have, like the hon. Member for Hendon, North (Mr. C. I. Orr-Ewing), been willing to pontificate dogmatically about what ought or ought not to be done.

I think I know a bit about how these two Corporations are organised, but I am quite sure that I do not know nearly sufficient to give a firm opinion. I have some views; but I do not know enough to have a firm opinion and will, therefore, not obtrude my views upon the House. What I do say is that so long as there are two Corporations, we ought to take all the advantage we can of close working relationships between them in those matters where it is possible to have joint action. In that way we might manage to get some of the advantages of separate-ness with some of the economies of working together.

It was always visualised—I remember the first White Paper on civil aviation produced by the Government of 1945—that there were some areas where joint working would be possible. Some people had exaggerated ideas of the size of those areas, and some of the examples quoted in that White Paper of things on which it was possible to work jointly were, I think, not sufficiently well thought out. My own impression is that now we have gone to the other extreme and that there is a fierce passion for autonomy and independence of the two Corporations, Which virtually prohibits them from working together, except in so far as they have set up a common secretariat—an excellent secretariat—to deal with labour relations. There are, however, many other things that they could do together, but which they do not do.

I should like to draw the attention of the Parliamentary Secretary to the engine and propeller repair and maintenance base at Treforest. I do not know whether the hon. Gentleman has been there——

Mr. Profumo indicated assent.

Mr. Mikardo

The hon. Gentleman has been there. I have not been there for some time, but when I was there some time ago I thought it was one of the best organised industrial establishments I have ever seen in either public or private enterprise. That ought to be kept going at all costs. I understand that the present position is that, although there is a fair amount of work there now, the forward load looks very disappointing. Unless something unforeseen happens there is the danger of the work at that place running down and the very fine team got together being gradually dissipated. That would be a great tragedy.

British European Airways look upon Treforest as just one more contractor to tender for any work that they have. I do not think that that is quite right. They ought to give some preference to Treforest in the same way as B.O.A.C., who own it, do. It is true, as the hon. Member for Hendon, North said, that the total difference between the fleets of the two Corporations puts a severe limitation upon joint work, and especially upon joint maintenance, but there are some areas in which there can be a very close degree of working together. I hope that the Minister will have a good look at them, especially the point I have made about Treforest.

The whole tone of the Parliamentary Secretary's speech, and the observations we have heard from the other side of the House, show that on the subject of civil aviation the party opposite have become very chastened indeed. There was my nearest and dearest enemy, the hon. and gallant Gentleman the Member for Macclesfield (Air Commodore Harvey) who, in the days of the Labour Government, roared like a lion in civil aviation debates. Tonight, he was purring weakly, like the tiniest kitten. The party opposite have become chastened because they have been able to take a close look at the set-up, and they see that many of the things they said in Opposition about the Corporations as nationalised enterprises were empty doctrinaire views which do not stand up to reality on practical examination.

I, for one. welcome their conversion. … Joy shall be in Heaven over one sinner that repenteth … and I take great joy in their conversion from the slogans which in the past they put out to a mature understanding of this problem. I express once again my thanks to the Parliamentary Secretary for having provided me with a complete brief with which I can answer any members of his party if, at the next Election, they make any criticism of nationalised industries.

7.54 p.m.

Sir Wavell Wakefield (St. Maryle-bone)

The hon. Member for Reading, South (Mr. Mikardo) made reference to the disaster that occurred earlier this year and to the fact that the aircraft concerned was a York. He said that it was the oldest and least comfortable aircraft and was the least safe in operation. I am the director of the company operating these aircraft, and the hon. Member will know that at the inquiry which took place the evidence tendered showed that there was no fault in the operation of the aircraft and that the crew and maintenance were fully satisfactory.

At every public inquiry that was held before this inquiry it was revealed that there was failure by the operator in some way or another, whether the organisation concerned was B.O.A.C. or B.E.A.C. All public inquiries prior to this one had shown a fault in operation, but the inquiry into the York disaster revealed that there was no fault whatever in operation. In his speech the hon. Member tried to convey the inference that, because this aircraft was operated by private enterprise, it was inferior as compared with those owned by the nationalised Corporations.

Mr. Mikardo

I am sorry; I cannot allow that to pass. I did not say, or infer, or imply, directly or indirectly, that there was any inferiority in operation, but, of course, if the cap fits the hon. Gentleman he is entitled to wear it. There are some people who are knowledgeable in these affairs and they say, and say quite frequently, that private companies are keen to do no more than the minimum standards lay down.

Sir W. Wakefield

All I can say is that the inquiry showed a 100 per cent. satisfactory operation, which was not the case with the nationalised Corporations at previous similar inquiries.

The hon. Member talked about troops thrown about in obsolete aircraft. What was the impression he was trying to convey? Was it not that the aircraft were obsolete and, therefore, unsafe? Further, that it was wrong that trooping contracts should be given for them? He knows that when this mater was raised in the House before, I talked to some of his colleagues privately, outside, and told them that obsolescence did not mean unsafe; that operating the York aircraft was safer than operating the Comet. I made that remark just a few hours before the unfortunate Comet disaster.

These Yorks have been operating for over 10 years and are known to be safe. All the "bugs" have been taken out of them, but we know that the Comet is still in a state of development. Yet the Comet I is now obsolete, and there is now a Comet II and Comet III. There are the Rapides which are known to be very safe, and the Dakota is recognised as one of the safest aircraft in the world. They are obsolete, but they do a useful job of work satisfactorily and successfully.

The hon. Member tried to convey the impression that the disaster over the Atlantic occurred because an obsolescent and unsafe aircraft was being used. He referred to French troops being carried in Stratocruisers. No doubt he will recollect, when I remind him of it, that the type of aircraft to which he referred was lost in the Atlantic about the same time as the York. It disappeared just as the York did, and nothing was known about it. I am sure the House will regret deeply that the hon. Member should have tried to convey the impression that our troops are being uncomfortably carried in aircraft which are not safe.

Mr. Mikardo

I am sorry to interrupt the hon. Gentleman once again, but he ought to contain his passion. If he quotes me let him quote what I said. The Parliamentary Secretary intervened in my speech to elucidate what I had said, and I think I repeated what he said in the form in which he asked for it. He was satisfied with the formula I used. I certainly did not say that these aircraft were unsafe and I do not think they are unsafe. What I was saying was that there ought to be free and fair competition between these aircraft and other aircraft, which hitherto there has not been.

Sir W. Wakefield

The hon. Gentleman made these statements and they are within the recollection of hon. Members. HANSARD will record them. I took the trouble to take down his exact words. They were: "Least safe"——

Mr. Shackleton

No, he said "less."

Sir W. Wakefield

I must have misheard him then. It is not true that an old-established aircraft like the York is less safe than the Comet, which has yet to be thoroughly tried out. It is well-known that this is the sort of thing that happens. There may be an aircraft which is old but well tried with all the "bugs" taken out of it. It is safer. It may not be so fast and it may be noisier, but it is as safe, or safer, than modern aircraft that have to be tried out.

At any rate, I am going out to Cyprus on Friday in one of these York aircraft on the new Coach Colonial Service which is to be started from England to that island. I am coming back on Monday to be in time for the reopening of Parliament, so I have faith in them, as have many other people. In the last few months 50,000 troops have been carried to all parts of the world in these aircraft safely and punctually, and I would again challenge the suggestion that B.O.A.C. is able comparably to carry these troops any cheaper or better than the independent private operator.

I now turn to what was said by the hon. and gallant Member for Derby, North (Group Captain Wilcock), who referred to the excellent past trading year of the Corporations. I regard this debate as the equivalent of the annual general meeting of a company in which we are all shareholders. Each one of us in this House has an indirect interest in our nationalised Corporations as a shareholder because he is a taxpayer, and we represent many taxpayers in our constituencies who, in turn, are indirectly interested in these Corporations. Therefore, looking at this debate as if it were an annual general meeting, I know that if I attended such a meeting and learned that one Corporation was making a loss of £1 million or more and another was breaking even but unable to pay the interest on its capital, I would not think that it had been an excellent trading year.

I am certain that the board of directors and executives of those Corporations do not think they have had an excellent trading year and that they are just as anxious as we are that the Corporations should operate as commercial undertakings and make profits. I suggest that they should be put in such a position.

Reference was made earlier in the debate to the prestige operating of routes, and also to routes being run for social service or to feed certain parts of the country where other transport was unsatisfactory or inadequate. I suggest that B.O.A.C. or B.E.A.C. should not be required to run uncommercial routes. They should be allowed to say, "We do not want to run this route." Then the Minister or the appropriate Government Department could say, "We wish this route to be run." Then tenders should be put out to independent operators and to the nationalised Corporations, who could say," We will run this route if we are paid so much."

That has been done in the United States of America with considerable success and, if it were done here, it would give the Corporations a chance to run profitably and we, the taxpayers, would know how much it cost to run a certain service and could then decide whether it was worth while to pay that amount of money from the national Exchequer to run it.

Again, it is wrong that the Corporations should not be paid the proper amount for undertaking postal services. They should be in a position to say, "We want to be paid the proper amount or we will not carry the post." That would be only fair to the Corporations. Again, the Corporations and the independent operators should not be asked to pay the petrol tax since those in other countries are assisted to the extent of the tax they have to pay. Here, again, a true picture is not given of the efficiency, or otherwise, of our Corporations which every one of us wants to be efficient.

The hon. Member for Tradeston (Mr. Rankin) said he was happy to get an admission from the Minister that he was proud of a nationalised service. Of course we are proud of our nationalised service. I should be shocked to think any of us was not proud of it. We criticise a nationalised service because we want to be proud of it and because we hope it will be efficient so that we can be proud of it. I hope hon. Members opposite are proud of the Cunard Line and of our other great shipping or private enterprise undertakings.

There is a consideration in the operation of these Corporations of which proper account is not taken. When B.O.A.C. or B.E.A.C. put a new aircraft into operation there are considerable development costs. It is of great assistance to our manufacturers to have aircraft proved in this way when they sell aircraft abroad to other airlines. There is an advantage to our own airlines in getting a new type of aircraft which is presumably more economical and satisfactory in operation, but against that there is the disadvantage of having to do the development work. If it can be shown that the Corporations are incurring a financial loss in this way, some assistance should be given to them.

Another way in which the Corporations could be helped would be by knowing that there was a good secondhand market for those despised aircraft which the hon. Member for Reading, South thinks should not be used. I am referring to aircraft which are not first-line; that is to say, aircraft which are not suitable for our Corporations if they are to maintain the high position they have in the world today. This means that as the newer types come along, the old types must be replaced by them.

If our Corporations are to operate efficiently, they must have the fewest pos- sible types in service at a time, and, therefore, they must get rid of the older types, and if that can be done at a good price, so much the better. There seems to be an excellent field here for the independent operator to acquire these older types for the cheaper kind of service, or for trooping or for freighting, which would not compete with the Corporations.

We have, in fact, completely complementary and supplementary conditions for building up a fine mercantile marine of the air: the Corporations always having the latest aircraft available for first-line operation, and a ready secondhand market for the disposal of their obsolete aircraft which can be used by the independent operators carrying out work not in competition with, but supplementary to, the nationalised airlines. For this, however, long-term contracts are necessary, as has always been the case in shipping.

These should be given by the War Office, the Air Ministry and the other Government Departments concerned by way of long-term trooping contracts, which would enable the independent operators to purchase from the Corporations the available secondhand aircraft at appropriate prices. If that were done I could see no better way of the Government giving support to civil aviation, to the nationalised Corporations and to the independent operators, to the building up of a substantial mercantile fleet of the air, to the saving of taxpayers' money in bringing trade to this country, and to the creation of a very valuable insurance in the event of war.

I suggest that greater attention be given by the Corporations to some of their administrative costs. It seems to me that 8 per cent. to 10 per cent., as is the case with B.O.A.C., is too much to spend on the sales, etc., side of the service. If more careful attention were paid to matters of that kind and to some of the other suggestions which I have made then we might well see the Corporations running at a good profit. That is an achievement which we all want to see accomplished.

My hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) referred to the difficulties experienced by manufacturers in selling aircraft to America because of the refusal of the American Civil Aeronautics Board to give reciprocal rights in the recognition of certificates of airworthiness. I support most strongly what he said and I beg the Government to take up this matter at the highest possible level. There is no doubt that real discrimination is taking place against our newest and most up-to-date aircraft. We have a lead in jet aircraft and the American airlines want to buy our aircraft, but they are being prevented from doing so by the Administration. Just as when we wanted to buy American aircraft we gave certificates of airworthiness so now, when we have the lead, we should have the same reciprocal rights in America.

I hope that consideration will not be given to the merging of B.E.A.C. and B.O.A.C. into one gigantic Corporation. There would be no real saving if such a course were adopted. They have different tasks to perform and they are both of sufficient size to work economically. It would be disastrous to amalgamate them, each with their loyalties, each building up a fine service and each with new and different aircraft coming into operation. If some of the suggestions which have been made on both sides of the House were put into operation I believe that we would find these two Corporations not only giving good service to their passengers but also operating at a profitable rate without loss to the taxpayer.

8.14 p.m.

Mr. Edward Shackleton (Preston, South)

I really must correct the entirely wrong impression that the hon. Member for St. Marylebone (Sir W. Wakefield) acquired from the speech of my hon. Friend the Member for Reading, South (Mr. Mikardo). There was no suggestion whatever that an unsafe aircraft, or the least safe aircraft, was operated in the case of the recent disaster. But I think that it was generally agreed, and there were hon. Members on both sides of the House who suggested it, that that particular type of aircraft was less suitable to operate in the operational conditions in the North Atlantic.

I can assure the hon. Member that the point which my hon. Friend was making was not so much on the score of that accident, but on the ground that the Government, for purely doctrinaire reasons of their own, are giving an undue advantage to the independent operators. The hon. Member for St. Marylebone said that he would challenge B.O.A.C. to carry troops more safely or cheaper than would his own company. Am I interpreting him correctly?

Sir W. Wakefield indicated assent.

Mr. Shackleton

If so, should it not be put to the test. All that we are suggesting is that this matter should go out to free competition between B.O.A.C. and independent operators. It is really ludricrous that the national Corporation, whom we know are making a loss and who have aircraft suitable and available for certain types of trooping operations, should be debarred from the opportunity of even tendering for the contract. I hope that when the Minister replies to the debate he will have some sort of answer to that point. I believe that it is agreed throughout the House that there is a place for the independent operator, but I also believe that if the virtues which hon. Members opposite attach to these independent operators could be put to the test in fair competition with the nationalised airlines, it would be to the benefit of the community as a whole.

Mr. William Shepherd (Cheadle)

Is the hon. Member suggesting that these independent operators should have the opportunity of running scheduled air services in competition with the Corporations?

Mr. Shackleton

The hon. Member knows perfectly well that scheduled air services are a completely different field. Nobody—I can hardly believe even the hon. Member—really suggests, and certainly the Government do not suggest, that they should compete with the national operator when the national operator is in competition with foreign airlines. But the field which I have mentioned is a peculiarly suitable one for the satisfactory operation of competition. We know that competition in the scheduled air service field is basically between the national airlines of different countries. The hon. Member for Cheadle (Mr. Shepherd) had better realise that. This continual harping on competition between scheduled air services and the desire to create an artificial state of competition between different British operators tends to work to the national disadvantage.

I should like to take up another point with the hon. Member for St. Marylebone. He suggested that we ought not to be too satisfied with the losses which these national Corporations sustain. He said that we should look at the matter as if we were shareholders at a company meeting. But I am sure that shareholders at a company meeting are never faced with the situation which we as shareholders in the nationalised airlines face—though I think that this is largely a false analogy. I do not think that the average company, whether public or private, has ever had obligations imposed upon it in the national interest as has been the case with our nationalised airlines.

Right from the early days they were handicapped by the obligation to buy British as far as possible. It was right that that should be so and that these types of aircraft should be developed so that today, nationally, we have the lead. But even today B.E.A.C. and B.O.A.C. are severely handicapped by aircraft which have been unsuitable for the purpose, and it is only now that at last they are beginning to obtain the aircraft which they really need. In any case, I suggest that this test of showing a profit is a very dangerous one.

Will the hon. Member for St. Marylebone, and other hon. Members who say that things are unsatisfactory because no profit is shown, equally argue when the day comes, as I believe it will, when the Corporations are showing a healthy profit, that automatically everything then is all right? The test of efficiency in a nationalised industry, and indeed in much of industry, is not simply in the profit itself but in the types of statistics and figures of which some mention has already been made in the debate today. It is in the measurement of the relative efficiency in the cost of capacity ton miles. It is in the measurement of the load factor.

These are the real tests, both by comparison with the past of the particular Corporation concerned and by comparison with other undertakings, in so far as they may be similar. It is very difficult to establish quite simple and comprehensive tests, but there are a number of indications which together will give us the keys we need.

Sir W. Wakefield

When we add up all those various factors to which the hon. Member has referred, we get the true test of efficiency, that of making a profit or not. Money is the common denominator in any organisation or business which shows whether it is efficient or not. The main theme of my speech was that obligations and handicaps which had been imposed on the Corporations in the past, and which still exist, should be removed so that the Corporations could be put on a strictly commercial basis and the taxpayers—the shareholders—could then see how really efficient they were.

Mr. Shackleton

I do not want to be drawn too far on this subject, but I hope the Minister does not share the idea of the hon. Member for St. Marylebone that once the airline Corporations show a profit they can be adjudged efficient, because that is only one of the tests that can and should be applied in this particular field.

I was interested to hear the hon. Member for Stroud and Thornbury (Mr. Perkins) and the hon. Member for Exeter (Mr. Dudley Williams) quote figures designed to show that perhaps the British Airways Corporations were not as efficient as certain foreign operators. I think it is unfair to the House for hon. Members to quote isolated figures and give as an excuse that they could not get other figures to set beside them. In fact there is an immense body of statistics available in the reference library in the I.A.T.A. Bulletin, which is the proper place to look in this connection.

If we are to form these conclusions on this sort of technical question, we shall have to argue at very great length and go into the whole question of capacity ton miles and other questions and equate them with the international standards, with kilometre measurements and so on. But there are sufficient standards available without going into that question at great length in figures which I have studied, and which I think the Minister has studied, which show that the Corporations bear comparison with other undertakings.

That does not mean that I would not favour in due course the type of inquiry suggested by the hon. Member for Stroud and Thornbury. This raises the old problem, which always confronts this House, of how we are to measure efficiency in nationalised industry and how to stimulate efficiency. I think the present management and boards of these two nationalised Corporations deserve the thanks of the country. They are men of efficiency, enthusiasm and vision, but that does not mean that in another 10 years they will be so. They may be sitting comfortably making a profit, but still not giving the efficiency which should be given. I hope, therefore, that this problem will be considered as part of the long-term problem of achieving efficiency in publicly-owned industries.

The hon. Member for St. Marylebone referred to the desirability of encouraging independent operators in order to provide a market for secondhand aircraft of the Corporations. I wish to ask the Minister something about this market, because strange stories have been circulating about how these aircraft have been disposed of—stories some of which are so unpleasant that I do not intend to repeat them in this House.

It is a point of the utmost importance that when the airline Corporations are disposing of this extremely expensive public property—it may be 10 or 20 Vikings worth several hundred thousand pounds, or it may be a Hermes from B.O.A.C.—there should be an established procedure which is well known, with which the Minister is satisfied and which independent operators, possible purchasers, also understand. It should not be tackled simply by one or two advertisements, but the matter should be dealt with in a way which would satisfy the Minister, and perhaps some other public official particularly concerned with financial efficiency, as to method.

There have been a certain number of deals lately. I do not know whether British European Airways got the best price they could. I hope they did, I am sure they tried. I do not know whether in those sales they were satisfied or whether they have been paid for the aircraft they sold, but this is a matter of real importance, not least to the independent operators themselves.

In this connection I wish to ask a question about the Tudor aircraft. Perhaps the Minister will correct me if I am wrong, but I understand that the Tudor aircraft has recently been certified as fit for carrying passengers. Is it likely to be used for trooping operations? Perhaps the Minister could mention that in his reply. I do not claim to be an expert on the Tudor, but undoubtedly it would cause a certain amount of anxiety unless there is a very full explanation of why this aircraft has been permitted again and why the Minister has changed his opinion on the matter of the carrying of passengers.

Many hon. Members have advocated the desirability of maintaining the flying boat in civil aviation. I suggest that a little more attention should be paid to research into the problem of getting the flying boat off the water. That is a problem—and the possible solution is the use of hydrofoils—in which I think this country has done less than any other country. The Germans and Americans have experimented with hydrofoils for surface craft, which might provide the answer to this problem of getting the flying boat off the water. I am sure the Minister will know how the principle of the hydrofoil works.

I am surprised that in this debate very little has been said on the subject of Gat-wick. I do not know whether the hon. Member for the constituency which includes Gatwick is present, but I think the Minister will be aware that a very full statement was recently issued by local authorities in that area imputing the most serious breach of faith, inefficiency and countless other things. My hon. Friend the Member for Uxbridge (Mr. Beswick), who was previously the Parliamentary Secretary, was strongly in favour of Gatwick. An answer ought to be given to this series of charges, if not today then upon a suitable occasion.

Mr. Profumo

While the hon. Gentleman is on that point, perhaps I should stress what I think is already known, that my right hon. Friend intends to go to Gatwick himself and speak at a meeting in the not-distant future, when all the charges which the hon. Gentleman is repeating in the House will be dealt with.

Mr. Shackleton

It will be a very lively meeting.

The hon. Member for Exeter said that, although he thought the staffs of the nationalised Corporations were satisfactory, it was difficult to get people into the higher positions. That is the type of loose, rather offensive attack that is always made by certain hon. Members on the Government benches in relation to the nationalised industries. We can all remember incidents, some of which have poisoned relationships and have undoubtedly made the task of Ministers of this Government a good deal more difficult, but I would take this opportunity of congratulating the Government on extending the service or reappointing both Lord Douglas and Sir Miles Thomas. Undoubtedly, despite some of the rather nasty things that have been said about them, they have done rather well for the country.

I have only one more point. I would urge on the Government, as I urged on the last Government and as my hon. Friends have urged today, that justice be done to the airline Corporations in the matter of the handicaps which are imposed upon them. I do not wish to restore the sort of free commercial situation, which I do not think it is possible to do and as the hon. Member for St. Marylebone has suggested, but it is extraordinary that where, despite the feelings of certain Scottish Members, charges like those of the social services arise, it should not be clear and apparent to everyone, whether they live in the Isle of Man or in Scotland, that they are being provided with these services out of the national pocket. They could then at least appreciate some of the things that the English do for their colleagues across the Border and in the Isles. [Interruption.] I am keen that the Highlanders should not desert their Highlands, and that it should be made clear who is paying for these services.

I would urge once again that in regard to mail rates, social services, fuel tax and the introduction of new aircraft, the Government should find a way to show, not only notionally but in the accounts, the type of subsidy they are making to the nation through these services. It would be a good deal easier, this problem then being out of the way, really to discuss efficiency. Even today's debate has been vitiated by sheer prejudice on one side or the other, and by the arguments that have gone on around this point. Once the matter can be placed on a firm basis we can look at the matter more objectively and with a great deal less prejudice than has been shown in recent years.

8.33 p.m.

Mr. John Maclay (Renfrew, West)

I must apologise for having to be out of the Chamber for some time during this debate. I have listened to some of the speeches and I was anxious to speak briefly about a number of things that have been said, as well as to touch on other subjects.

It has been interesting to hear a certain amount of general "fun and games" about the fact that on this side of the House we are proud of the performance of the two Corporations. Of course we are. We take this matter seriously, and not as a piece of party politics. It was inevitable after the war that in international aviation the "chosen instrument" principle would prevail, but I have never been convinced that the completely nationalised chosen instrument was the best.

I objected to it at the time, and I am still not convinced. There are many other forms in which it could have been done which might have been as effective or more effective. Nevertheless, we have accepted the fact that the nationalised corporation is the chosen instrument. No one who has had anything to do with the Ministry of Civil Aviation could fail to be intensely interested in this year's Reports. I congratulate all those concerned on the results that are being achieved.

I am willing to go a little further and to tell the hon. Member for Wellingborough (Mr. Lindgren) that I am prepared to concede to the Labour Party reasonable credit for their share in developing the Corporations. But I do say most positively that had there not been such a restrictive policy surrounding the Corporations. I believe that British civil aviation would be stronger and healthier today. That is a point on which I wish to dwell.

A good deal has been said about the Government nibbling away the security of the Corporations. I am not going into the argument about trooping, or even about trans-Atlantic freight; I am going to stick to the principle. Admittedly, this Government have changed the broad policy in relation to independent operators. The hon. and gallant Member for Derby, North (Group Captain Wilcock) and the hon. Member for Preston, South (Mr. Shackleton) said that people on all sides of the House agree that there is a place for independent operators. But that did not seem to be borne out by the hon. Member for Wellingborough in the first part of his speech.

The fact that the Government have made it possible for independent operators to develop is not necessarily damaging to the Corporations. Unfortunately, I think there is a blemish in the report of B.O.A.C., and above all, an unnecessary blemish. In paragraphs 66 and 67 of its Report, B.O.A.C.—as it is perfectly entitled to be—is clearly critical of the change of policy. As I say, it is entitled to do it, but I think it is a blemish, particularly when one reads: Under the new procedure, however, the Corporation is requested by the Minister of Civil Aviation to sign associate agreements with independent companies to whom permission has been granted to operate on international routes within the ambit of the Corporation's route network. The Corporation may accordingly be required to sign an associate agreement with a company with which it is in direct competition. … I wonder whether those who drafted that paragraph bothered to read the actual words of the new terms of reference to the Air Transport Advisory Council, because these words are in direct contradiction to those in the directive. I wonder how many hon. Members opposite have read the directive recently. Has the hon. Member for Wellingborough looked at the directive to the A.T.A.C. in the last few weeks, or before making his contribution to this debate?

Mr. Lindgren

The agreements of which they are complaining in that paragraph refer to Africa.

Mr. Maclay

They are complaining about the stopping of routes in Africa?

Mr. Lindgren

About the civil routes.

Mr. Maclay

It is even more surprising if that is so. What happened on the Safari routes in East Africa?

Mr. Lindgren

That is what I think.

Mr. Maclay

I do not think anyone can deny, least of all B.O.A.C., that the starting of the Safari service has opened up a new travelling public.

Mr. Lindgren indicated dissent.

Mr. Maclay

It is no use the hon. Gentleman shaking his head on that one, unless it was nervousness which made it wobble.

As I was saying, the safari service has opened up a new travelling public which it would otherwise have taken years to develop. There has been no falling off in the number of passengers using the first-class service. That is the whole purpose of introducing some flexibility into the policy surrounding the Corporations.

I would ask hon. Members, before they become too critical of any changes, just to remember the opening phrases of the new directive which are: The policy of His Majesty's Government is to give greater opportunity to private enterprise to take part in air transport development without in any way impairing the competitive strength of our international air services. A later phrase says: By avoiding any measures that would undermine their existing international network. That is the directive under which the A.T.A.C. is working, and I am satisfied from my knowledge of the men who composed it that they will honour it to the best of their ability and judgment. If we can develop a new travelling public, that is what everybody must want.

The B.O.A.C. itself makes the case on another page. It explains how the introduction of tourist services in the North Atlantic, while taking off some traffic from the first-class service, actually resulted in a substantial increase in the total revenue. The Report says: On the route between London and New York, for instance, total revenue was increased by 17.6 per cent. during the year, while receipts from standard services fell by 1.9 per cent. In other words, it is also making the case for cheap services in other parts of the world. Let us, therefore, get clear that the policy of this Government has been to see that the chosen instrument, the State Corporations, are encouraged to do the job for which they are preeminently suited, but, at the same time, to give a greater flexibility and a greater potentiality, to British civil aviation by encouraging the independents to go ahead. The old directive on which the Air Transport Advisory Council operated previously was a most restrictive document. The previous Government, admittedly, did begin to see the light; they did realise that more associated agreements would be necessary and that the independents should be allowed to do some of the work the Corporations could not do.

There were two things that did the mischief between 1945 and 1951. First, that no associated agreements were given for more than about three years, except in one known case for 10 years, and, I think, one or two for five years. The other was that not only could the independents not apply for a route in any way covered by the Corporations, but they were liable to be refused a licence if they applied for a route in the list of planned developments.

I should like to know how many services inside and outside this country have not yet been developed just because of that restrictive policy in the 1945–51 period. It is difficult—we can never prove it—but there was a good deal of talk from hon. Members opposite to the effect that, under the present arrangements, neither Corporation would bother to develop something it might lose to the independents, nor would the independents undertake what they might regard as unjustifiable expenditure in order to look for new routes and new types of traffic. There seems to be no evidence to support that.

That also applies to this vexed question of freight services. I know their hands were very full with other matters but, if the Corporations were so worried about the fact that it is possible for the independents to come in on that business why should they allow the Canadians and Americans—and latterly the Scandinavians—to get right ahead of them on all Transatlantic freight services? They only began to show a real interest once it was realised the independents were to be given a fair crack at that particular trade.

I should like now to turn to the main charge, because the general impression is, some genuinely believe, that the action of the Government, by its new policy, is working to the disadvantage of the Corporations. The fact is that the Corporations and the independents are complementary to each other. I would like to go further on a subject on which I have had some discussions, although I do not think they got anywhere. I would like to see developing, sooner or later, a Chamber of Air Transport, in which the independent operators would probably be the main constituents, but the Corporations would be associated with them on subjects of common interests to both. It would certainly be a most desirable development if any Government wanted to discuss general problems of civil aviation. I do not know whether it is possible, or will be possible, in the years to come.

There is only one other subject on which I should like to speak, and that is helicopter development. There is an intense public interest in the helicopter. There certainly is in Scotland. We are apt to think that it is the answer to all our Scottish Aviation problems, but I am not sure that it is or that it may become so. The B.E.A.C. Report gives very interesting information about the present stage of development, but it would be a help to all our thinking if, possibly not tonight but as soon as it is reasonably possible—it may be some years—the general public is given a clearer idea of what are the real possibilities of the helicopter.

I would mention, in particular, its range. My present impression is that at no time can any helicopter now under development be a proposition for much over 300 miles. There is no doubt that up to 150 or 200 miles it would be most valuable, but for 300 miles and beyond it is out of the question. If that is so, and there is no sign of it developing into a longer distance aircraft than that, it would be as well if the local authorities were to realise that and reshape their thinking according to a more realistic knowledge of the potentialities of the helicopter.

I myself have been wondering about the possibilities of the helicopter on the Western Isles service. Incidentally, I do not like the expression "social services." I wish people would stop using it, and I agree with my hon. and gallant Friend the Member for Argyll (Major McCallum)——

Mr. David Grenfell (Gower)

Is it not clear to anybody who has given thought to this that it is either the helicopter service or nothing at all over large areas?

Mr. Maclay

That may be. I do not quarrel with the helicopter; I am all for it.

All I say is that as soon as we can get information from the Minister or the technical experts and correct some of the over-optimistic assumptions—or possibly not sufficiently optimistic; I do not know—the better it will be. I am wondering whether the helicopter will be the answer to the Western Isles problem. Will the speed of the helicopter enable it to compete with 50 and 60 miles an hour headwinds? It is the answer to that kind of question which would be of help to many of us who are interested in this subject.

The important thing is that in town planning, in planning aerodromes and sites, which local authorities have been urged to do, there is still a lot of ignorance about the potentialities of the helicopter. I fear that we are more in danger of being too optimistic about it than of not being sufficiently optimistic.

I hope that we can keep civil aviation as far away from politics as possible. I do not say that if a matter is brought before this House we should not have a certain amount of cross talk. It is right people should be able to criticise the operations of the Corporations, and if I have criticised their apparent attitude to the independent operators I hope they will take my remarks in good part and realise that the independent operators are as vital to them as they are to the independent airlines.

8.48 p.m.

Mr. G. A. Pargiter (Southall)

So far we have had an interesting debate in which there has been a remarkable degree of unanimity on the efficiency of the Corporations. That is not to say that there has not been some criticism or that there will not be some further criticism of the Corporations. Any organisation must always be subject to criticism, whether it is public or private, and if it so happened that we wanted to criticise some of the private undertakings in commercial aviation, we should probably be able to do so as effectively as we can criticise the Corporations.

The right hon. Member for Renfrew, West (Mr. Maclay) referred particularly to the helicopter, as have a number of other hon. Members, particularly the hon. Member for Hendon, North (Mr. C. I. Orr-Ewing) who expressed alarm at the fact that it is likely to be 1958 before the helicopter becomes available and operational for general service in the country. Surely this is a failure of private enterprise. All these things are in the hands of private enterprise. It is the job of private enterprise to get on with development.

It is not a question of the availability of money. I take it that the Ministry of Supply have made and are making money available for the development of the helicopter, but apparently the designers have not proceeded very far or very fast. Therefore, I think hon. Members opposite might chivy some of their private enterprise friends into getting a move on, instead of chivying the Government, because it is not fair to make such a charge against the Government with regard to helicopters.

Major McCallum

Surely it is not the fault of private enterprise, which is developing the helicopter? We are complaining that the Corporations are not using helicopters to sufficient purpose.

Mr. Pargiter

The position is that the producers of helicopters are apparently prepared to admit that they have not yet produced a suitable type of helicopter which can be operated economically and with safety by the Corporations. If the responsibility for development rests with private enterprise, it must be enterprising and develop the things which are necessary for the service. If we are not to get the helicopter until 1958, I would lay the charge against private enterprise rather than against the Government or the Corporations.

It is the duty of the Corporations to insist that the designers shall give them the type of machine which they can operate efficiently and with safety. Until that is done it is obvious that the Corporations cannot themselves proceed with their operation. They have enough to do without having to be responsible for the development of an aircraft which will probably prove to be most expensive, as most aircraft are when they come into the hands of the Corporations for general tests.

This question is of vital importance for the internal service, and I urge the Government to see what can be done, through the Ministry of Supply, to hurry development. Helicopters are apparently operating successfully on the Continent, and we should be able to do something. Having established a lead in other branches of aircraft, we should get going with the helicopter.

My hon. Friend the Member for Preston, South (Mr. Shackleton) referred to general statistics. We have had some ex parte statements about the statistics of American companies, and they were of some interest. The question was raised about the difference between the number of people employed by Pan-American Airways and B.O.A.C. in Bermuda. If one looks at the nearest port of call in Pan-American hands, as against the nearest port of call which B.O.A.C. have, one will see the reason for the differences in operation. This is an example of how dangerous and fallacious it is to use figures which bear no relation to operating conditions. Pan-American Airways will not spend dollars in Bermuda which they can spend in America. That is why the work is going to America. It is because of the greater distance from any other place. Hon. Members should not use arguments which are entirely misleading to the public.

It was rather unfortunate that the hon. Member for St. Marylebone (Sir W. Wakefield) developed the argument of the York as against the Comet. He implied that because the York was old it was safe, and because the Comet was new it was less safe. That sort of argument is not very good. It is generally admitted that York aircraft are safe so far as operating is concerned, but if it is a question of comfort, or which one I would prefer to fly in, I would choose the Comet. Although it is newer, and we have not had so much experience of it as we have had of the York, I should be much more satisfied to fly in it than in the York at any time. It was a point raised by my hon. Friend the Member for Reading, South (Mr. Mikardo) which led to this particular remark by the hon. Member for St. Marylebone. It is rather a bad thing if we get to the stage of thinking that, provided it is safe, anything is good enough for the troops. That is the implication.

My hon. Friend the Member for Wellingborough (Mr. Lindgren) drew attention to the fact that Hermes aircraft are standing on the tarmac at London Airport. I am not saying that they are more safe, but when perfectly safe and much more comfortable aircraft are available and could be used for the purpose, it seems a very great pity that they are not so used, and that the Corporations should be debarred from tendering for trooping contracts. That is what it amounts to.

The Report refers to the question of the development of freight services. These are of considerable importance. I do not want to enter into the civil war which appears to be going on in Scotland. The hon. and gallant Gentleman the Member for Argyll (Major McCallum), as I understood it, was hankering to get back to the old position, but the general impression appeared to be that the Scottish Members are pretty happy with the B.E.A.C. services and would like more of them, and that if that should be at the expense of the taxpayers that ought not to be worried about so long as they get the services.

I am inclined to agree that if we can afford to subsidise a shipping company which serves certain areas of the Western Isles to the tune of possibly £500,000 a year, there is no particular reason B.E.A.C. should not be subsidised to provide proper facilities for the people in Scotland, even at the expense of the taxpayers, but it is hardly fair that this should be a charge on the accounts of the B.E.A.C. There is always a danger about a direct subsidy, and in certain conditions it does not necessarily make for greater efficiency, but some means ought to be found whereby at the end of each accounting year the Treasury can review the operations of the Corporation, and, seeing that the Corporation provided the Scottish services the Government required them to run during the year, pay an amount to the Corporation in respect of them. I would not say that that sum should be paid before the services are given, but there should be some adjustment at the end of each accounting year.

It seems to me that the arguments are all against any reduction of the petrol duty purely for air operations in this country. It would be difficult to apply in any case. It would apply only to the internal services, and so far as the Corporations are concerned it would be only a question of taking money from one pocket and putting it into another. The hon. Member for St. Marylebone advanced a claim in this respect for the independent companies as well, but then that would be at the expense of the Exchequer's pocket, and I could hardly subscribe to that as a method of assistance that the taxpayers should be called upon to provide.

I have no doubt that the Minister will in due course give the necessary assur- ance that Prestwick is the number two international airport. I am sorry that my hon. Friend the Member for Tradeston (Mr. Rankin) got so worried in case the number two international airport should be fixed somewhere in Anglesey instead of at Prestwick. I am sure that the Minister will give the necessary assurance.

Mr. Lennox-Boyd

Given now.

Mr. Pargiter

My hon. Friend the Member for Tradeston spoke with his usual brevity. He said for his usual 10 minutes. I believe that in Scotland they must have somewhat different methods of calculating time from ours in England, but that is nothing to be worried about.

The Minister ought to tell us something about the possibility of the further use of the flying boats. I know that this subject is a hardy annual for my hon. Friend the Member for Itchen (Mr. Morley), but it is rather important that we should get the question of the future of the Princess flying boat cleared up. The question should not be left in the air, as it is at the present time. It seems to me that we have here the reverse of what is usually the case. Usually the difficulty in aircraft construction appears to be getting an aircraft that can stand up to the power of the engine. In the case of the flying boat the difficulty appears to be getting a sufficiently powerful engine. It seems to me that something ought to be done to see what are the qualities of the Princess flying boats with a view to bringing them into proper use, and I hope the Minister will be able to say something about that.

May I refer for a moment or two to the accounts themselves? It seems to me that B.O.A.C. are somewhat critical of the limitations which are placed upon them. We have the question of the Air Transport Advisory Council to which an answer should be given. In paragraph 38 the Corporation say: The Corporation applied in September, 1952, to the Air Transport Advisory Council for permission to introduce tourist services between London and Lusaka, but it was not until the end of March, 1953, that temporary permission was obtained from the Ministry of Civil Aviation. The sting is in the next part of the paragraph, which reads: In June, 1953, Central African Airways received permission to operate coach class services between London and Salisbury and two British independent companies were similarly authorised. There does not seem to have been the same delay in the authorisation of the independent companies as there was in the case of B.O.A.C., and I think we ought to have some explanation from the Minister on that point.

Another question relates to operating permits and is dealt with in paragraphs 66, 67, 68 and 69, which refer also to what we may regard as the new policy in respect of operating permits. They refer to the methods which now have to be adopted in that connection. Paragraph 68 reads: The Corporation was also required to apply to the Council before permission could be obtained to introduce any services in addition to those operated on 1st January, 1952. In consequence, the introduction of services, even though long planned, and variations in routeing from time to time required over a world-wide pattern of services, had all to be approved through the new machinery. This inevitably involved delay with a loss of revenue to the Corporation. I think the Minister ought to give some answer to such a paragraph. We ought to know a little more about it and also about paragraph 69, which reads: In compliance with the Minister's request, the Corporation undertook not to seek permission to operate new all-freight services for a year from 16th July, 1952, in order that the independent companies might be given the opportunity to enter into this field without additional competition by the Corporation. Advantage of this special concession was not, in fact, taken by any independent company, and so no new freight services have as yet been introduced by these companies over the routes covered by the Corporation's network. However, in order to provide for the future expansion of this type of traffic, the Corporation has constantly under study the desirability of operating all-freight services on suitable routes, particularly on the North Atlantic. That is too bad. The Corporation are warned off and are told, "You have not to do anything about this, for you must give the independent companies a chance." They have had a chance and have done nothing. What does the Minister intend to do now? Will he give the Corporation the green light? Will he say," In fairness, we have done all we can for the independent companies but they have not faced up to their responsibilities and therefore we must let the Corporation now have their head in the establishment of freight services "?

Redundant Tudors and even Hermes aircraft, which are not to be used for any other purpose, might well be used for freight purposes by the Corporation and be operated profitably, possibly on the North Atlantic service. They might also get back some of the losses which have obviously occurred during the past year because the Corporation have been prevented from operating. It seems to me that these are pretty damning indictments on the general question of——

Mr. Shepherd

Would the hon. Gentleman counter the impression which he has given that no British freight services operate over the Atlantic? Will he make it clear that B.O.A.C. carry a good deal of freight over the Atlantic?

Mr. Pargiter

They never carry it in passenger aircraft. They have established no special freight services, which they have been anxious to do and have been prevented from doing by the Minister in order to give the independent companies an opportunity of getting in on this, which they have not in fact done. That is precisely what I have said, and it is a point to which I hope the Minister will be able to give us some satisfactory answer, or upon which at least, whether or not he will be able to explain the past satisfactorily, he will be able to give us some hope for the future. That would be something worth while.

One or two hon. Members on both sides of the House have referred to the possibility of a merger. I was rather alarmed when I saw in the main editorial of the "Sunday Times" a few weeks ago that this particular "kite" was being flown. I do not know whether it was flown as their special leader, but I think that this is something which is more than just a whim of the editor of the newspaper or even of one of its leader writers. It is obvious that there is something behind this particular suggestion and also something behind other things which have been said about it from time to time.

My views coincide with those of my hon. Friend the Member for Reading, South. I feel that he would be an unwise person who would say that what could be accomplished was a merger over and above what is at present being accomplished. It is obvious that there would have to be a pretty considerable investigation into the possibilities and probabilities of what might occur in the amalgamation of the two Corporations, were that deemed to be desirable.

I think that we must start off with the fact that they are operating entirely different services. We should have to look at the point that where B.O.A.C. had in operation a short haul—that is, from London to Lisbon—they lost a very considerable amount of the traffic to the Portuguese airlines and, that being so, we should certainly want to see what advantages we were going to get because that would have a bearing on the operation of both long-distance and short haul traffic, and it is a question of the extent to which they could be merged.

I think that there is a co-ordinating committee between the two Corporations which has under review the question of the joint use of services, and the Minister might look to see whether it is functioning efficiently, or whether more could be done. It occurs to me that between them the two Corporations are about the next best customers to the brewers of the advertising agents. It annoys me sometimes to see on a single hoarding the largest-sized poster that one can get advertising B.E.A.C., and almost next to it one advertising B.O.A.C. The public are not so simple-minded that they have to see that on two separate posters, and would know the advantages of flying by B.E.A.C. or B.O.A.C. if they were put on one poster. It might be that in this field there is considerable room for adjustment, although the matter would have to be handled with considerable care, as there is a special appeal as between the short-distance customer and the long-distance customer. So far as the general advertising is concerned, such as "Fly by B.E.A.C. and be safe" or "Fly by B.O.A.C. and be safe," I do not see why the two could not be combined on one poster.

In the Reports there is reference to the housing of airport employees. I believe that this ought to have the attention of the Minister of Civil Aviation so far as housing at London Airport is concerned. I do not think that this should be the Corporations' particular pigeon, even if the people are employed by the Corporation. I know that may be a debatable point; but the position is that housing development is not going on at anything like the rate at which it ought at London Airport. There is a reference in the Reports to what is being done, but it is very little in comparison with the total number of people who require houses, having regard to the fact that in the whole of that area no local authority has any accommodation to spare. If they are able to build houses on their limited available land, they want it for their own people. It seems to me that it must be done either by the Ministry of Civil Aviation or by the Corporations, and I ask that the matter should be speeded up. Much greater progress ought to be made. There are various sites available, and they ought to be developed as quickly as possible.

After all, it is in the interest of efficiency that workers should live somewhere near to their ob. I do not say that they should live right on top of their work, but when they have to travel long distances in each direction it adds to the length of their working day. If people are required to work late on rush jobs it is difficult to get them to do so if they have a long way to travel home and there are transport difficulties, in addition to the difficulty of shift work. For all these reasons, I ask the Minister to look at the question of speeding up the housing of airport employees.

We have heard a good deal today about the independent companies, the way in which they operate, and how they should operate. There are one or two things to which I should like the Minister to give attention. We may as well be quite frank that there are in this country no independent companies or groups of independent companies, no matter how large, who can afford to do the development work which is done by the two Corporations. They simply do not have the resources and would not risk their capital and the possibility of failure. Because of this, the development work has to be undertaken by the Corporations.

I am rather interested to see where private enterprise comes into the set-up. First, the Corporations indicate to the aircraft companies that they want an aircraft to do certain things. The private enterprise aircraft manufacturers then design something, or, at least, get a picture on to a drawing board; that is about as far as it gets. At that stage, they say to the Ministry of Supply, Here is an aircraft which is suitable for certain types of civil aviation flying." They say, with a certain degree of accuracy, what they anticipate the aircraft will do, and then the Ministry agree to finance its development. There is, therefore, no development whatever until the Ministry of Supply indicate that they are prepared to pay for it.

Equally, after the aircraft is developed, no private operator is prepared to risk the tremendous costs of the proving flights, modifications, and so on, which have to take place subsequently. It must be borne in mind that although, presumably, the aircraft manufacturers operate to provide an aircraft which will do certain things, it is found when the aircraft gets in the air or when the Corporations get it that it has to be modified. Then the private enterprise company modifies it, again at the expense of the public Corporation or of the Ministry of Supply.

There is not very much private enterprise about these matters. It is a considerable expenditure of public money. I do not complain about the expenditure of public money. What I do complain about is that, this public money having been expended, the Corporations are held in check and private companies, which have done nothing whatever towards the development and have not paid a penny towards the cost, must have the advantage of stepping in on profitable things which the Corporation have done. The Corporations are sent into the battle with one hand tied behind their backs, because the independent operators are given far too favourable terms. If they want to operate, let them come in and pay some of the costs of development.

I made inquiries last year as to the cost to B.O.A.C. of development. The actual cost to the Corporation of providing contacts with manufacturers and Government Departments and carrying on continuous development work in the early stages is approximately £225,000 to £250,000 a year in this one respect alone. The gross cost of development flying on the introduction of a new type of aircraft would be in the neighbourhood of £640,000 per annum. This is reduced by contributions from the Ministry for development work on radio aids and similar things, to a net cost of about £500,000 per annum, but the total cost as far as the taxpayer is concerned is about £640,000. The cost of initial training of crews on a new type of aircraft and of the necessary information service—this always goes on to subsequent buyers—would be about £325,000 per annum. These are terrific costs, and although I have not the B.E.A.C. figure, they are having to meet similar costs for development of new aircraft, training of crews, and so on.

We are told that if they compete with independent operators it is not fair competition, notwithstanding this backlog of initial development which they have to carry. I think we are being less than fair to the Corporations, and we seldom give them credit for the amount of work that they have to do. We ought to take that into account in order to get a fairer appreciation of the element of competition which prevails between the Corporations and the private companies.

This tempts me to ask the Minister a question. Is it not a fact that the manufacturers of the aircraft are able to sell the aircraft they produce to other countries or other companies at a pretty good profit, and none of that profit goes back to the Exchequer except through the normal channels of taxation, although the Exchequer have made its manufacture possible through the Ministry and the Corporations? The Corporations have also to pay for the aircraft as it is being built and developed, and I should like to know whether foreign countries or companies have to pay as they go along. [HON. MEMBERS: "Yes."] Maybe they do. That is fair as between one and the other, and it is an important factor here. Nevertheless, it seems to me that the companies get the advantage.

These remarks of mine might be construed as favouring the nationalisation of the aircraft industry. That is not a subject for this debate, but it would form the basis of an interesting debate, because we must have regard to the amount of money which the taxpayer spends on aircraft development. That is money which could not be provided from private sources, because they could not run the risk of the loss that might possibly ensue.

There is one other point on the accounts which I should like to put to the Minister. I see in the B.O.A.C. balance sheet that on the credit side there is a figure of some £9 million owing. That is a pretty considerable amount, and I should like to ask the Minister to look at this and see whether it can be reduced, because in that figure there is provision for a possible loss of more than £100,000. If outstanding debts were collected a little more expeditiously the amount of bad debt losses might be reduced.

I have posed a few questions to the Minister in addition to those already put to him by hon. Members. There has been general agreement that the Corporations are doing a good job, and, because of that, this debate has pursued an even course and has been without rancour. But the Minister should remember this. If he expects this evenness to continue, he will have to consider giving the Corporations more freedom than he is doing at the present time, particularly in their freight and charter services.

9.18 p.m.

The Minister of Transport and Civil Aviation (Mr. Alan Lennox-Boyd)

In this debate there have been more short speeches than in any debate I can remember in recent times. Perhaps HANSARD tomorrow will prove me wrong, and it may be I have been more interested than in many other speeches, but they certainly seemed very short. A consequence of that is that a wide variety of issues has been touched on, which makes it inevitable for me to effect a balance by making a rather longer speech.

I am grateful to the hon. Member for Southall (Mr. Pargiter) for sitting down one minute or, to be exact, 50 seconds before he assured me he would do so. I hope I may also say what a pleasure it is to see him winding up a debate of this kind on behalf of Her Majesty's Opposition. Hitherto, I have met the hon. Member over problems of heavy vehicles that go at more than 20 miles an hour.

Mr. Pargiter

I shall return to that.

Mr. Lennox-Boyd

The hon. Member says he will return to it, and no one will be more pleased than I in my other capacity as Minister of Transport. Tonight, we are all pleased, I think, to welcome him into a rather more supersonic world.

I must say, however, that when he spoke about the handicaps under which the Corporations "suffer"—if I may be allowed to put in the quotation marks—in comparison with the independents, I felt that I should be most interested to meet, with the hon. Gentleman, either supersonically or otherwise an Air Corporation and an independent with the Air Corporation's hands tied behind its back——

Mr. Pargiter

Only one hand.

Mr. Lennox-Boyd

Even that would be a singularly unlikely picture. Perhaps, however, as we have now gone from the ground to the stratosphere, the hon. Gentleman was thinking of another world altogether.

In welcoming him to his important task, I should like to say also what a pleasure and comfort it is to me, as Minister, to welcome back my hon. Friend the Parliamentary Secretary to the Ministry of Civil Aviation. Because he was, unfortunately, out of the Chamber and there was no Stratocruiser available at the moment, as the hon. Member for Tradeston (Mr. Rankin) should know, I repeated to my hon. Friend the kind words of the hon. Member for Reading, South (Mr. Mikardo) both about his speech and about himself personally.

I should like to say to my hon. Friend how grateful I am for the ready and gay way in which he identified himself with B.E.A.C.'s valiant enterprise in entering the Viscount for the New Zealand race. I do not think many people would have done it or done it in the way that my hon. Friend did. We are deeply grateful to him—not only his colleagues here, who see a further identification of Parliament with the people who are carrying our national prestige all round the world, but also our colleagues in Her Majesty's Governments in New Zealand and Australia. They too, I know, welcomed both his presence in the Viscount and the talks he was able to have with them afterwards.

I should like at the start to say how grateful I am, as Minister, to British European Airways for the way in which they entered the Viscount. They knew in advance that because of the heavy handicap they were doomed to take second place anyhow, unless their nearest competitor had arrived 43 hours after them. Because of that, they knew that they could not win or were very unlikely to win. However, they took the view that one cannot only enter for races which one is certain to win, otherwise competitions might come to an end, and they realised that they were doing something both to cement the ties between New Zealand and the mother country and also to further the cause of British aviation. That, if nothing more—though other things have happened—would do more than most things to reconcile me to the idea of partial monopolies.

I should like to congratulate the Boards of the two Corporations, and their resourceful chairmen, on the successes they have had this year. I should like, at the same time, to congratulate the independents on the work they have done this year, because we often need them in moments of crisis, such as the Berlin airlift, but sometimes people forget to mention them in moments of calm like the present.

I should like, also, to congratulate the peerless designers of the new British aircraft, the men and women working in the drawing offices and in the factories, and the pilots and crews who fly them, on a year of really remarkable achievement. Those of us who were present at the dinner of the great Society of British Aircraft Constructors and heard the comments of Mr. McGregor from Canada on British design and achievement in recent years would, I know, echo those words. Here let me say that just as I believe strongly that we would have been faced with appalling disaster in the Second World War had it not been for the action taken by the Government of the late Neville Chamberlain in planning aircraft production years ahead, so I fully recognise that the aircraft now coming into service could not have done so had it not been for the drive and enterprise shown by Her Majesty's previous advisers.

It is, of course, a business where there is a long period between the twinkling in the designer's eye and the production of the finished aeroplane. In particular, as it has been mentioned, I should like to say how grateful I am personally, and many of us are, to the courageous way in which, for example, the Princess was kept going, despite obvious difficulties and the continual urge for economy in that and other directions.

The hon. Member for Wellingborough (Mr. Lindgren), who opened the debate, said that this was a remarkable week in that Minister after Minister had praised the work of the nationalised Corporations. The hon. Member for Reading, South (Mr. Mikardo) echoed that and, as far as I can make out, said that he was going to turn almost his entire Election effort on it in Reading next time. I hope that the hon. Member will make plain, also, that the situation has entirely changed. I cannot speak for the coal industry, though I was very interested to hear about some devolution there. But I can speak for my responsibility—the transport industry embracing aviation as well. There is to be a devolution of responsibility in the railways, there is to be full road competition, and in civil aviation there is now the spur of private competition.

After mature thought we never had any intention to break up the Corporations, but we were anxious that there should be a much wider measure of private competition. When we were in Opposition we resented—and I still would resent it if it were true now—the protection accorded to the Corporations not only on their existing routes and services but on the routes and services which they had projected in their minds. Now the entire position has changed and with regard to future routes they are subject to the Air Transport Advisory Council. Therefore, my attitude and that of those who think like me seems to me perfectly consistent; but it would be expecting too much to hope that that particular aspect would appear on leaflets in Reading.

Mr. Mikardo

May I assure the right hon. Gentleman that the whole of my Election effort will not be devoted to those leaflets. I have also purchased 40 copies of Conservative Election posters, stating that the Tories will cut the cost of living.

Mr. Lennox-Boyd

No doubt some other part of the hon. Member's activities will be devoted to producing leaflets to explain why he, as a member of the "Tribune" group, does not agree with the nationalisation of the biscuit industry.

I have mentioned the Air Transport Advisory Council and I should like to say how grateful Her Majesty's Government are to Lord Terrington and his colleagues for the work done in the year under review. We are dealing with the Reports of two Corporations with very different problems. I was very interested in what the hon. Member for Southall said about possible mergers. I would say to the hon. Member that he ought not to believe everything that he reads in the Press, not even in the "Sunday Times" though, if he had to make a choice, they are often right, but not always.

As far as I know, every hon. Member who has spoken has opposed this suggestion, or only given it the most qualified support. I have heard the speech of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey), who took a strong line. I must apologise to my hon. Friend the Member for Hen-don, North (Mr. C. I. Orr-Ewing) for having unfortunately, but unavoidably, missed his speech, but I gathered he took the same line. I watched with great interest and, I must confess, a certain amount of curiosity, the modest campaign which has been going on in recent weeks to achieve a merger. Those who advocate it seem to overlook the formidable difficulties and disadvantages of any such procedure. I made the position of the Government plain in an answer I gave in this House in July restating the answer I had given on 4th March that no change in the present organisation is contemplated.

Whatever may be said in favour—of course, there are arguments one could adduce in favour—a merger would mean the creation of a great monopoly. It would remove the great British opportunity of comparing competitive efficiency, the organisation would be of such a size that personal relationships—so valuable in this business—would be prejudiced. Apart from all this, the two Corporations are engaged in a very different type of business. We all welcome joint arrangements, sharing agents and handling of passengers and freight in harmony thus reducing the cost of each of the Corporations.

As the hon. Member suggested, I will look into the working of the joint machinery. I see both chairmen and other members, but more frequently the chairmen, regularly and together. The Parliamentary Secretary, our advisers and I, with the two chairmen, discuss a whole range of matters of common interest. I agree with my hon. and gallant Friend the Member for Macclesfield and others that the pooling of resources can achieve some very valuable economies. Tonight, however, we are discussing the affairs of two separate Corporations, each of which has presented its Report to me and to the House.

I recognise that these Reports are not only very interesting but, I think it fair to say, very creditable as well. We know of the problems of both Corporations—the fierce competition to which they have been subjected, which is a very healthy thing of which they are not in the least complaining, the many problems which have come on them unexpectedly, oil strikes in the United States, and so on. That concerns the Report under discussion; there have been other difficulties which they have triumphantly surmounted in the last few days a little nearer home. All sorts of other problems have confronted B.E.A.C. in particular. The tax on petrol, which, from a solution point of view, eluded our predecessors, is one and there are problems of currency and difficulties in connection with the decline in value of first-class mail. All these problems have come on them, some unexpectedly.

I think they are entitled to credit that, in the case of B.E.A.C. for example, output is up, total load miles are up—but, because they are not quite so high as the output, the load factor was lower than a year ago. I think it was 62.9 per cent. as against 64.7 per cent. In the case of B.O.A.C., income is up nearly 8 per cent. but, after charging their proper charge to capital account, they had a net deficiency of about £800,000. B.E.A.C. had 21 per cent. more revenue, but lost, as they recognise, £1,500,000. It has not been a very good year for air operators in the world as a whole and many commentators from the flanks have discussed whether that might be due in any way to too hasty adoption of tourist fares throughout the world.

I, personally, welcome the coming of tourist fares and the opening up of this fascinating field to hundreds of thousands of people who hitherto have not been able to enter it. But there are certain significant lessons which a careful student of these Reports is bound to draw, which show that merely increasing the number of passengers does not necessarily get one out of the "red." I take it that most hon. Members have read the interesting analysis in the "Economist," with which I will not burden the House.

In 1951–52, B.E.A.C. had a surplus of £275,000. In that year they offered for sale 20 per cent. more capacity. They needed to sell 65 per cent. of this to break even and they actually sold 65.7 per cent. There was in fact a profit. So narrow is the margin. In the year under review they increased their capacity 10 per cent., but in that year they had to face higher flying costs, and the breakeven point became 66 per cent. They only achieved 64.6 per cent. so, after paying their proper interest there was actually no profit.

One thing we can gather from these most interesting Reports is how much success or failure turns on the aircraft that are being used. Those who fly a lot as I do, or who are lucky enough to be able to fly a lot, know what a vital factor that is. Hon. Gentlemen will know who have studied the B.E.A.C. Report, the particular difficulties they have had in securing a part of the service to Switzerland, Scandinavia, Holland and Belgium. Their share in the year under review of the traffic to Switzerland was only 29 per cent. and to Scandinavia 28 per cent. On the London to Holland service it was only 19 per cent. and the London to Belgium only 28 per cent.

Since this Report has been published, the new Viscounts were introduced on the route to Switzerland in the beginning of the 1953 season, and in July on the service to Scandinavia. We have now the statistics for July and August. They have increased their proportion of the traffic on the Swiss routes to 45 per cent. in July and 46 per cent. in August, compared with 29 per cent. and 31 per cent. in July and August last year. On the Scandinavian route they have increased the proportion to 45 and to 46 per cent. in July and August against 32 and 30 per cent., respectively, last year. On the remaining two routes, where they have not been able to make these substitutions, there is an improvement, but it is very slight. The more one reads these Reports and discusses them with people who know about these matters, the more one realises that success largely turns upon what aircraft the Corporations or the independents may be able to fly.

I know that Press reports have suggested in some quarters to a casual reader that B.O.A.C. had made a profit and that B.E.A.C. had suffered a heavy loss. B.O.A.C. did not draw on the Exchequer and I am sure that all of us, and particularly the Chancellor of the Exchequer, are very grateful. My hon. Friend the Member for Exeter (Mr. Dudley Williams) queried whether the accounts of the B.O.A.C. had been presented in an altogether proper form. In fairness to the Corporation, I must say that the accounts in the Reports bring out the fact that the profit of £103,000 was reached before allowing for the paying of the interest of about £942,000. There is no reason why a careful reader should get a wrong impression. As I am responsible for the form of the annual accounts I naturally asked myself whether this was the proper way in which to present the accounts. Again, in fairness to the Corporations, I accept the claims that they make.

The B.O.A.C. said that it was normal commercial practice to quote the results before the remuneration of capital which, in the case of commercial firms, would be the payment of dividends. They say that they ought to follow this practice even though they are nationalised, to show that they are financed, not by equity capital, but by fixed capital stock. Otherwise, they say that they would suffer in comparison both with private firms and with other international airlines whose profits are generally quoted before the deduction of dividends.

Mr. Joseph T. Price (Westhoughton)

After the very interesting revelation which the right hon. Gentleman has just made about the technique of the bookkeeping entry, would he be prepared to adopt the same principle in presenting the account of the nationalised railways in future years?

Mr. Lennox-Boyd

It has never been put up to me, and I think I had better wait and see.

B.O.A.C. say that where private enterprise concerns are financed partly by debenture capital the interest thereon is charged before arriving at the proper figure and that as debenture capital is more normal than equity capital in a comparable enterprise, and as they cannot make a split in their accounts, this is, on the whole, the fairest way to present their accounts. But in fairness to the other Corporation, I think it ought to be realised by those who perhaps give only cursory reading to what they see in the newspapers that neither this year, to our great regret, have they made what could be regarded as a proper profit.

The explanation, so some hon. Gentlemen would say, comes from the difficulties put in the way of the Corporation. I do not know whether they would really pursue that very far if actually challenged to produce facts and figures. I recognise that the policy of this Government has confronted the Corporations with different decisions from those which confronted them before, but that is frequently the result of a change of Government.

No one can say that the Corporations have not expanded, and considerably expanded, since the new policy was announced. In 1950–51, the two Corporations offered 214 million capacity ton miles and flew 826 million passenger miles. For the last year under review, these figures had risen to 283 million capacity ton miles and 1,252 million passenger miles. They have expanded their production almost over the whole field.

Nor, I think, could the Corporations—and it is only B.O.A.C. which makes complaints in this field—really complain of the new policy. B.O.A.C. gave me their assurance, which they have kept, that they would co-operate with this policy. They accepted at the time, and I hope have since, the corollary of the role of the Air Transport Advisory Council. They were consulted about the terms of reference of that Council, and they agreed with them. They realise that this procedure was to be carried out within the framework of the existing law.

Of course, we can always change the law, but I am not anxious to recommend that. I had the agreement of the Corporations that this could be worked within the framework of the existing law. They complain that they are asked to work with firms with which they are in competition, but Section 15 of the existing law, the Act of 1949, requires that an undertaking appointed as an associate should be associated with the Corporation under the terms of any arrangement for the time being approved by the Minister as being an agreement calculated to further the efficient discharge of the functions of the Corporation. Ever since Lord Pakenham, I think it was, promoted the idea of associate agreements, it has always been understood that this Clause should be read in relation to the need to avoid impeding the Corporation's development. We have been scrupulous in trying to observe that reading. The form of agreement with associates was agreed with the Corporations.

The complete reservation, as there is now, to the Corporations on all their normal schedules has been confirmed, and despite difficulties caused by independents who come along, that has not been whittled away. There is to be protection against material diversion on other routes to the disfavour of the Corporation, and where they have freight services, or supplement freight with their passenger services, they also have protection there. Therefore, I do not think there is any cause for complaint here.

When I hear stories, so indignantly proclaimed by the hon. Member for Wellingborough, about the 19 Hermes on the tarmac I am reminded that the reservation of trooping to the independents was first decided upon by the Socialist Party.

Mr. Lindgren


Mr. Lennox-Boyd

Most certainly. There will be plenty of opportunities for the hon. Gentleman to challenge that later in the debate. If we are to have a field of public and private enterprise, then, clearly, this is a field in which private enterprise should play a very large part.

In regard to freight, the situation is quite straightforward. This is essentially a field for the private enterprise operator. When we adopted the new policy, there was no evidence whatever of any intention by B.O.A.C. to operate a North Atlantic freight service in the immediate future. I cannot believe that that one year up to now could have been a great disadvantage, but, in any case, that year stopped last July.

I fully agree with what I heard of the speech on that theme by my right hon. Friend the Member for Renfrew, West (Mr. Maclay). Nor do I think it can be claimed that the charges laid in the new procedure, with application to the Air Transport Advisory Council, can really be sustained. I am told that in the United States the phrase of one operator was that it takes from six to 66 months to get a decision.

The only case of delay which had any substance was the application relating to the service to the South, but Corporations, and all of us, must realise that Governments, some of them of semi-independent status like Southern Rhodesia, come into this picture and there are a great many negotiations that have to take place. Even with Colonies, as opposed to Southern Rhodesia, which is not, there has to be discussion with the Governor and the Executive Council.

I understand from A.T.A.C. that during the period covered by this Report B.O.A.C. submitted 13 formal applications to them. The time for dealing with these, apart from Lusaka, varied from six weeks to three months. These involve advertisements, hearings and a host of other complicated things and I do not think it would be unreasonable to say that they have no complaint in that sphere.

Another complaint that has been made is that the Corporations, having bought so often the initial aircraft, ought not to have to pay the heavy initial costs. I should like just to point out that they have the capital, but it is the capital of the country, and the independents who would like to do the same have not the same resources to call upon. I am sure we welcome—I did, certainly—the arrangements made between Lord Rotherwick's company, the Clan Line, and Hunting's, which will facilitate the purchase of three Viscounts by that most enterprising aircraft pioneer.

We must remember, in regard to this suggestion, that the Corporations, having paid for the initial cost, ought to be recouped, that though it is perfectly true—and there are arguments the other way—I am studying all the time these problems with my colleagues and advisers. I agree that when they deliver an aeroplane to a Corporation or anyone else, a certificate of airworthiness only means that it is safe to operate. It does not guarantee that any particular standard of efficiency has been reached. The real difficulty is to determine at what point the responsibility for operational development should pass from the Ministry and the manufacturers to the Corporation, because after the certificate of airworthiness has been granted a great many snags and difficulties undoubtedly emerge.

We are all, I think, grateful to the Corporations for the splendid work they have done in pioneering these aircraft—the Viscounts, the Elizabethan, the Comets, and soon the Britannias. We have recognised the need for special payments in certain cases; £150,000 for the Comet I, both Ministry of Supply and ground service, from my point of view; paying them 200 hours for the Viscount; the promise of £50,000, for the Comet II for voluntary research.

These are recognition of the different stages. But we must remember that the owners of these first operators also get great advantages. They get the publicity and all the value that comes with that. They are a jump ahead of their competitors and, indeed, I was reading the Report of Sub-Committee B of the Select Committee on Estimates only this year. There, Sir Miles Thomas says: Any gratitude or recognition that we receive for the work we do— he was talking of this sort of thing— in pioneering these aircraft is very welcome, but we do not expect to be rewarded for it, other than just plain thanks. And Mr. Peter Masefield, for B.E.A.C., said: … we feel we are a jump ahead anyway, and although we do have the job of eliminating the initial 'bugs' we are ahead of our competitors because the advantages are greater than the disadvantages. A number of other most important points have been put to me in the course of the debate, and, as far as time allows, I will answer them. To those who have raised local points I will do my best to write to them on any matters where I am in a position to give a proper answer.

To the Scottish Members I should like to say how interesting it has been to me to have a debate in which so many Scottish points have been put. The hon. Member for Tradeston, whose speech, in beautiful English, was made all the more so by his continual quotations from my previous orations, asked me about Prestwick. I am shortly going to Prestwick, so I will be able to see there the preliminary work which, I hope, by that time will be going on. We certainly propose to start on the proper work after the preliminary work early next year.

I recognise the problem of the Western Isles, and all the time I have been searching for an answer to those problems. They are very considerable. If my hon. and gallant Friend the Member for Argyll (Major McCallum) knows of a private firm which will do the inter-island service on terms satisfactory to the taxpayer, I shall be only too interested to consider it after it has been to the A.T.A.C. I myself am a strong believer in the Pionair aircraft in which I have flown and which are made by Scottish Aviation. They may well have a future in Scotland and elsewhere.

I have been delighted to see that, last, year, international traffic through Prestwick jumped up by 32 per cent. and Scottish internal trunk routes in April to August this year have jumped by 80 per cent. This, of course, has been helped by the reduction in fares. As Minister of Transport, interested also in the railways and the roads, I can say that when I watch the Viscount, the Starlight Special and Northern Roadways, all offering concessions to the traveller, I think some good results from a policy of restrained competition. I was very glad to hear the hon. Member for Orkney and Shetland (Mr. Grimond) say that, on the whole, conditions were better in Scotland. I agree with him about the need for co-ordination, and the irritations which come through lack of it, and I hope that the new Scottish Transport Council will provide that co-ordination.

The hon. Member for Anglesey (Mr. C. Hughes) asked me a number of questions about Wales. Wales is a very difficult problem. [HON. MEMBERS: "Hear, hear."] I was referring solely to its aeronautical problems. The hon. Member asked me about customs at Haverfordwest. No services requiring Customs are at present proposed. If there were, I would certainly take up the matter with the Treasury. With regard to Valley, which is a Royal Air Force airfield, I do not know of any demand that that should be an Atlantic airport, and I think we have to go a little carefully in these matters. I will continue to examine, with the Welsh Advisory Council, ways in which we can help development in Wales.

The hon. Member for Southampton, Itchen (Mr. Morley) and a number of other hon. Members asked about the Princess flying boat. This is mainly the responsibility of the Minister of Supply. I very much hope that a proper use will be found for this aircraft. At this stage, it would be outside normal scheduled services. It is clearly unthinkable that the Princess, with all the talent that has gone into it, should go the way, inevitable though it was in that case, of the Brabazon I. I hope that other opportunities will arise to deal with this point.

Many hon. Members have dealt with the question of helicopters, and I must say that I very much welcome the interest that has been shown in them. I would have liked to tell the story of helicopter development. We have not lost the lead in any way. The intention of the Government to order, as we have done, three military prototypes of the 173, and seriously to consider ordering two civil, prototypes of the same kind, will keep us well in the lead. We have no evidence whatever that the two types most dangerous to the 173—the Piasecki H16 and the Sikorsky S56—are in any way ahead of us technically. In this field it is no good jeopardising the position by asking single-engine helicopters to do the work which only twin-engine helicopters can do.

There is one point which was raised by my hon. and gallant Friend the Member for Macclesfield to which I should like to refer. It concerned the development work at London Airport. There are all sorts of problems about air traffic control, but we have told Airwork and Huntings—two independents—that if they accept our terms we shall offer them accommodation at London Airport at normal rates. This is because Air-work proposed to operate scheduled freight services and also, if they buy Brittanias and have to operate them in the London area, London Airport is the only airport big enough for them to use those aircraft. Huntings have been made this offer because they are also running scheduled services.

There is one final point with regard to London Airport. We are constantly faced with the problem of trying to make ends meet. At present, the revenue we are getting from all the aerodromes in the United Kingdom is 53 per cent. of the total running costs. That does not allow for any interest on the capital expended. London Airport is, however, contributing, through revenue, 81 per cent. of the running costs and those of us who have some knowledge of how the sea has been run and the burdens of shipowners, think it entirely right and proper that it should become as far as possible self-supporting.

The hon. Member for Preston, South (Mr. Shackleton) asked a question about Viking and Tudor aircraft, on which I shall write to him in considerable detail. I did not hear his speech, but I think I know the points he had in mind. If he will forgive me I shall not deal with them now, but I shall certainly take them up, and if he feels that anything wrong has happened in either of the cases, or that there is any danger that something wrong has been spreading to the general public, I shall gladly discuss the matter with him on the Adjournment, if he cares to raise it.

Reference has been made to the strengthening of the Boards of the two Corporations, and to the appointment, which I was so glad to make, or Sir Arnold Overton to the Board of B.E.A.C. I have been giving careful thought to the problem of strengthening the Corporations in the exercise of financial control. I know that this question is also dear to the hearts of the members of the Boards and so, in agreement with the Chairmen, Sir Miles Thomas and Lord Douglas, I have appointed to the Boards of both Corporations members who will have special responsibilities for the financial aspects of policies and the suitability of the organisation and methods of the Corporations.

As the House no doubt knows, I have also appointed Sir Reginald Wilson, former Controller of the British Transport Commission to the Board. In this case we have appointed Mr. Smallpeice as Financial Controller of B.O.A.C. Up to now he has only had an executive position. I was a little disappointed at the suggestion that I was trying to find a job for Sir Arnold Overton, who is a most distinguished person. I had no thought of that, but it would be very bad if I were to be artificially precluded and forced to deprive myself of the choice of such a man if the choice were available.

It was a happy opportunity that Sir Arnold was available at the time, and I think I am betraying no confidence when I say that when I stated that I intended to make an appointment of this kind the Chairman of B.E.A.C. was delighted that the choice should fall on Sir Arnold Overton. I am sure that all who know him from experience will agree that he will bring great qualities to this Board.

Finally, I hope that the House will take notice of the Reports of these Corporations, and that the lessons we can show of harmonious discussion in much practical detail will not be lost in future years or on future Parliaments. I am grateful to hon. Members on both sides of the House for the courteous and informative way in which they have put their observations.

Question put, and agreed to.

Resolved. That this House takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March. 1953.