CIVIL AVIATION.

§ LORD BALFOUR OF INCHRYE

My Lords, last Thursday the noble Lord, Lord Winster, unfolded to your Lordships the broad outlines of the Government's plans for civil aviation. I must say that over the week-end the consideration given by the country, as reflected by opinions stated in and out of the Press, has not, with the passage of time, made that scheme any more attractive than it looked at its inception: The noble Lord has undertaken to produce a White Paper which will give the details of His Majesty's Government's policy, but from what the noble Lord has said we already know enough to summarize the Government's policy by saying that they have gone for one hundred per cent. Socialist monopoly in regular airlines.

I do not think we can justifiably complain that the harvest of a Socialist administration is a series of Socialist measures, but what we can deplore, and what I believe the majority of your Lordships' House and the majority of the country, on consideration, will deplore, is that the Government have selected for experiment in socialization probably the most unsuit- 652 able industry and national activity of which they could have thought. The Government have not taken in this case 1945. an established industry, Goodness knows, we who do not believe in Socialism would deplore it if they took even an established industry; but they have selected an industry at its very beginning, in which the qualities of tenacity and of adventure, which certainly cannot be found in the pigeon-holes and behind the desks of Whitehall, are essential for the national well-being. Surely with the possibilities of free enterprise willing to pioneer or even go along the lines of the proposals put forward by my noble friend Viscount Swinton, and agreed to by Socialist Ministers in the last Coalition Government, there might have been something better than the sacrifice of the national interest for what is in effect a doctrinaire principle. The Government have ignored the interests of Britain as regards possessing a premier place in the new age of air travel.

The Government have ignored the need of having within our own national boundaries a system of internal airlines and of taking advantage of the great experience of other surface interests in the direction of running transportation. They also seem to be ignoring the services of those who have worked on the problem and are still willing to risk and adventure for the chance of final success. And all this is for what? It is for the fulfilment of a political theory to be accomplished at all costs, including the cost of national well-being. I think the proof of this can be found in the words in Hansard of the noble Lord, Lord Winster, when he said that they—that is, the Government— have decided that public ownership shall be the overruling principle in air transport… Your Lordships will note that it is not efficiency, it is not economy of operation, it is not safety in operation, and it is not the achievement of best results which is to be the determining factor in the Government's policy; but the fulfilment of a political theory is shown and admitted to be at all costs the ruling motive.

Nothing has been alleged by the Government against the past pioneers in air transport. Nothing has been alleged against the plan of my noble friend Viscount Swinton. Indeed, as my noble friend pointed out in the debate of last 653 week, that plan had the commendation of Ministers who now carry Cabinet responsibility. There is nothing alleged against the surface interests. All there is, is this peculiar craving for nationalization. It seems to me that this plan must inevitably mean Whitehall control right through British civil aviation. I would describe it as bureaucracy run wild.

Here, I think, is the proof. The Minister for Civil Aviation said he was going to form three corporations. All those three corporations are to be Government directed as to policy; they are to have on their boards Government nominees appointed (and if he does not like them, subsequently removed) by the noble Lord—or he can remove them if they do not fit into his exact Socialist pattern—and they are to be Government financed. That, broadly, is the set-up which is proposed. I certainly do not envy the gentlemen who accept seats on the boards of those corporations; they will be, I think, what are known in impolite circles in the City of London as "dummy directors." These will be nothing more nor less than "phoney" boards, because they will not be masters in their own houses.

The Minister himself has said that he is going to govern policy, to remove those he does not like and appoint those he does like. These boards are, therefore, going to be both directed and financed from outside by the owners of the corporations—namely, the Government, acting on behalf of the taxpayer. Therefore Parliament may rightly call upon the Government of the day to give an account of its stewardship at any time. That is essentially Parliament's right. I am sure the noble Lord would not take any exception to that contention. The Minister has said that unless exceptional cause is shown he will not consider it his duty to interfere with day-to-day administration. Let not the Minister think he call decide whether or not he will interfere with day-to-day administration; the Minister is the servant of Parliament and Parliament will call upon the Minister, when it wishes, for an account of his stewardship on matters great or small We have already seen this in British Overseas Airways Corporation matters when, in another place—and if my memory serves me aright, in your Lordships' House as well—the Minister was called to task upon matters affecting individual 654 employees of that Corporation. Therefore the Minister will have to answer to Parliament upon all matters of administration should Parliament insist. I maintain that there is no substance at all in the contention of the Minister that he will make a selection and decide whether or not he will interfere on matters affecting the day-to-day administration of these corporations.

On matters of finance, it is quite clear that Whitehall will control. I am sure you would agree that the Minister need not wait for the White Paper to be issued but should give us some details today of the principles upon which the finance of these corporations is to be established. I want to ask the Minister whether the corporations will work on a grant basis or whether they are going to draw upon the Treasury according to their requirements. I want to ask the Minister whether it is he or the corporations who are going to fix fares and decide whether fares should be on such a low level as to entail a subsidy from the taxpayer or whether, in cases of difficult operations, the fares are going to be so high as to make the operation economic but the cost virtually prohibitive. That is a perfectly reasonable question which I am sure the Minister will he glad to answer. Then I want to know whether the Minister can tell me if the tribunal which was envisaged in my noble friend Lord Swinton's proposal is dead? Does the Minister propose to insert between the socialized body controlling civil aviation and the public a tribunal which will keep a balance between the various interests of the consumer and the operator, or has that been thrown overboard and is Whitehall going to be the sole arbiter of what the public is to be charged?

If these corporations work on a grant basis, Parliament will, quite rightly, inquire how much the grant is to be and will demand from the Minister a justification for the sum it is asked to vote. Indeed the Government of the day will have to justify in detail the amount of the grant and how it has been spent. On the other hand, if the corporations are not to work upon a grant system but upon a system of drawing upon the Treasury for such deficiencies in operation as may be entailed, the Minister will have to explain to Parliament why he requires that particular deficiency payment.

655 Therefore, my Lords, my contention is that in every way the Minister is answerable to Parliament. If the Minister is answerable to Parliament, then he carries the responsibility, and if he carries the responsibility, it is only right that he should be in a position to control policy in order that he may control that for which he is answerable. In matters both big and small there can be no dividing line between where the Minister's responsibility starts and where it ends. I see the noble Lord, Lord Strabolgi, nodding assent. The noble Lord must agree that there is no substance in the words of the Minister when he says "I will judge that and I will answer for this, according to my dictum." The Minister is answerable to Parliament and Parliament will call upon him to answer in respect of all matters, great and small. That proves that this is essentially a bureaucratic set-up and that the future of British civil aviation, with which much of the prosperity of this country is bound up, will be controlled almost from beginning to end by Whitehall.

In his speech last Thursday the noble Lord, dealing with the expansion of civil aviation, said: It may well be found that additional corporations, or subsidiaries of these three, are desirable, and I shall form these at my discretion. The Minister is taking on quite a lot for himself; he is going to decide not only current policy but also whether British interests demand any expansion. I submit that Whitehall is the least suitable body to judge when British commerce needs expansion and development. It is for those who have to earn their living in commerce and adventure and pioneering to judge whether something is needed for the commercial interests of this country. The Minister has promised to give us full information. He said that on all points, great and small, he would give us all for which we asked in the way of facts. There are one or two points on which I should like to ask for some further information, and the first concerns the single field of commercial air operation which the Government are apparently leaving open for private enterprise, the field of charter aircraft. On the one hand, the Government seem to say "We will allow free enterprise to have the same play in the field of charter work as ourselves;" and on the other 656 hand, they take away what they are giving and make it virtually impossible for any commercial enterprise to go forward with charter work.

What is the reason for this attitude? Under the Act of 1939, the British Overseas Airways Corporation were specifically prohibited from competing in this field, and the argument at the time of the passing of that Act was that it would be unfair to expose those engaged in charter work to the blast of competition from a chosen instrument subsidized by the Government. That is a point of view with which I entirely agree. Now, however, the Minister says that although the field of charter work shall be left open to private enterprise, British Overseas Airways Corporation shall also be allowed to engage in that field. What is the hidden purpose behind the Minister's statement that he will let this remnant of private enterprise face the threat of those who at a political whim can run any charter service under private enterprise right out of the air by competition aided by Government subsidy, and by a Government-owned enterprise? I suppose the real reason why the Minister has done that is that he fears that a charter service may become too efficient. Such services may commit the sin of being so anti-social as to be successful in business enterprise, and therefore must at once get a knock on the head from the Socialist Government, who say that anybody who is so wicked as to succeed in life must at once conform to the Socialist pattern, and if he will not do it voluntarily he must be made to do it by law. That is all I can think of. It is a perfectly reasonable explanation to all except Whitehall, who feel they are supreme in every direction in which their hand wields power.

If a charter service looks like taking traffic away from a regular line, becoming too efficient, or becoming too popular, the person who will judge as to whether that charter service should be virtually extinguished by the competition of the Government-owned instrument will be the Minister. In fact, any individual who now goes into the charter field must face the fact that the Minister is the prosecutor, the Minister is the judge, and finally the Minister is the executioner, as regards any endeavours which anybody puts forward to make a success of an enterprise.

657 This is indeed a monopoly for the Government-owned instrument! The Government have the monopoly of an endless purse against all those who enter this last field left for private effort.

The second point about which I should like to ask the Minister for information is whit is going to be the position of the railways and shipping interests. I understand that they are excluded from sharn4 in operation and the Government have rejected the idea of a complete partnership of surface railway and marine interests with those of the air. Apparently, the Minister is in the process now of inventing some formula regarding which understand talks are now taking place with surface interests. The Minister in his speech said that the railways and other surface interests are to be integrated, they are to be co-ordinated—that blessed word "co-ordination," which the Minister used so freely but was careful not to define!—but they are not to participate in the actual responsibility for operation. It seems to me the railways and the surface interests generally, who can contribute much to this problem, having years or experience of transportation matters, are to be, as it were, the willing handmaidens of Whitehall. The Minister, in effect, said "Let them be hewers of wood, and drawers of water." That is to be the role cast upon those who have pioneered in other forms of transport and are now willing to pioneer in this form of transportation were they allowed to do so by Whitehall.

I was particularly interested in the speech of the noble Lord, Lord Rennell, on the last occasion, when he spoke on behalf of noble Lords belonging to the Liberal Party.

§ SEVERAL NOBLE LORDS

No, no.

§ LORD BALFOUR OF INCHRYE

I withdraw that at once. It is sometimes hard to know who does speak for the Liberal Party.

§ LORD STRABOLGI

The split atom!

§ LORD BALFOUR OF INCHRYE

The split atom, as Lord Strabolgi says. I was his view that surface interests should be allowed to participate. I admit that that was rather contrary to the view expressed by the noble Lord, Lord Sherwood, who seemed to think that surface interests should not be allowed to 658 participate. I look forward to hearing from the noble Lord, when he comes to speak later, whether he does so on behalf of his Party or independently. Certainly there is an educated body of opinion in this country, of all political Parties, which holds that the Government should not go forward with any scheme of air transportation which does not give an opportunity to surface interests not only to be coordinated and integrated but to have an actual share of responsibility. I suppose it is a little hard for those concerned with our railways to have to face a situation in which they are asked to be junior partners without any responsibility and without any participation—except, no doubt, in blame if things go wrong—when they know that the Government's programme puts their heads on the block about two from now. I believe that the nationalization of the railways comes about two from now in the Government programme. I think that they must be having an unpleasant time trying to negotiate on that basis.

In my view the least accurate and, if I may say so, the most deplorable part of the noble Lord's speech on the last occasion was when he virtually sneered at the railways and the Mercantile Marine in order to create political prejudice. The noble Lord shakes his head, but let us look at what he said. He said this The railways were developed the world over amidst a frenzy of wild speculation which has handicapped them ever since. I wonder from what handicap British railways are suffering today so far as that "frenzy of wild speculation" is concerned. I cannot recall any history of wild speculation or of frenzied scramble in connexion with our railways; the complaint has rather been that in the nineteenth century the old Tory squires were so backward and conservative that they would not allow the railways to come near their property. I have never heard these stories of a wild scramble, and at any rate the handicap from which the railways are suffering today is not sufficient to prevent the trade unions from investing a large amount of their reserve funds in railway securities! I do hope, therefore, that the noble Lord will be able to enlarge on this handicap from which he claims the railways are suffering today. It is generally admitted in your Lordships' House and in another place, and indeed throughout 659 the country, that the railways have played a magnificent part in this war.

§ THE MINISTER OF CIVIL AVIATION (LORD WINSTER)

Hear, hear.

§ LORD BALFOUR OF INCHRYE

Indeed, but for the railways we should not have been able to move our troops and our supplies to the Continent of Europe for D-Day. Impartial experts say that, broadly speaking, our railway system is the finest in the world, and I think it ill befits the noble Lord, Lord Winster, to say to us that our railways have developed under a wild scramble and have suffered from that handicap ever since, in order to achieve some political prejudice and help his particularly weak case.

The Minister went on to deal with the Mercantile Marine and said that it had been built up amidst a scramble for profits. Before this war we were proud of saying in this country that we had the greatest mercantile fleet in the world. It has been built up by co-operation, by hard work, by sacrifice, by a willingness to take risks, and by the adventurous spirit of our forebears; and I do not think it is appropriate for the noble Lord to throw a smoke-screen of political prejudice and verbiage, as it were, over our railways and Mercantile Marine, in order to bolster up a weak case.

Finally, the Minister went on with this barrage of misrepresentation to say that the air crews would do their job better if they knew that they were working for Socialism, for a Government-operated set-up. I do not believe that air crews really are politically minded or that they will care twopence whether they are working for a Socialist Government or for a private and free enterprise, provided that they are given the best possible equipment and the best possible circumstances of employment in order to fulfil their tasks. I do not believe that a pilot trying to make a landing with an aircraft carrying twenty passengers on a foggy night at some airport here or overseas will think to himself with any feeling of satisfaction: "I can really do my job better because I am working for a Socialist Government enterprise." The captain of an aircraft wants the best possible aircraft, the best possible engine and the best possible radio aids. I would hazard a guess that 660 many a British pilot in a few years' time, if this policy goes forward, will be thinking enviously of his American counterpart who may be trying to make a similar landing under similar difficulties but will have all the latest and best aircraft equipment and aids developed under a system of competition and free enterprise; and the British pilot will look regretfully at his own instrument board full of Whitehall sealed instruments, because he has to fly with those and cannot get any others.

The Government are creating with this policy two new classes in the community. They are creating the "untouchables"—those who are allowed within the magic circle of commercial aviation and the pariahs, those people connected with the railways, with shipping and the ordinary world of commerce, who are so anti-social as to wish to participate in and contribute to the essential air supremacy of this country. The 1939 Act gave a monopoly of subsidy to the British Overseas Airways Corporation, but it did not give a monopoly of operation. That is one of the essential differences between the present scheme and the 1939 Act. Under the present proposals the Government are to give a monopoly of the air for commercial operation to a chosen few, and anyone who flies without the Socialist Government ticket will, of course, be punished. There are many noble Lords who wish to speak, and I will conclude by saying this: I believe that the Government have done the worst service they can to Britain by introducing this policy, and that they are condemning to uselessness the experience, the talents and the enthusiasm which, as a nation, we cannot possibly afford to neglect at the present time in the development of our air transport, and which, in the years to come, we shall regret bitterly that a Socialist Government in 1945 threw away and refused to utilize in the national interests.

§ LORD REITH

My Lords, I have not occupied much of your time during recent years, and it is two and a half years since I spoke on this subject; but I ask for your attention to-day not just because I was the first Chairman of the British Overseas Airways Corporation—and more than another responsible for its establishment—but also because I really know something about these public corporations 661 and have had experience of them. I noticed that Lord Sherwood the other d delivered himself of this observation: It is slightly quaint, to me, that they should now suddenly ask the present Government the solution of the problem which they so obviously failed to solve themselves. "They" presumably were the three preceding speakers, Viscount Swinton, Lord Brabazon and Lord Balfour of Inchrye. Do they merit such a stricture?

§ A NOBLE LORD

Yes.

§ LORD REITH

In the opinion of one noble Lord apparently they do. But may I say that I would rather have interruptions from in front than from behind. It is awkward when they come from behind. Now, did Lord Brabazon merit that stricture? Listen to what he says: It is not for me to tell the whole story of the delays and the procrastination and the general disappointment which I and ray talented Committee felt about the progress. It would made you weep if I were to t you the full story. Did Viscount Swinton merit it? He had only been in office five months and to some of us it appears that he moved fast. I observed, however, that The Times the other day remarked that perhaps had he moved faster he would not have found it necessary to make the speech which he did make the other clay. I think there is no doubt in your Lordships' minds that Viscount Swinton during his five months of office did move fast. Did Lord Balfour of Inchrye merit that stricture—Lord Balfour, who was Lord Sherwood's colleague in the Air Ministry for years? If so, that is more than "slightly quaint." And Lord Sherwood himself, as your Lordships will recollect, represented the Air Ministry in your Lordships' House for many years, and rather distinguished himself by the inconsequence of his replies on the many occasions when the subject of civil aviation was raised.

I listened with curiosity and some anxiety to hear what the Minster might produce a week ago. I thought that he might perhaps announce a decision that all operations in all theatres were to be entrusted to the British Overseas Airways Corporation over which Lord Knollys presides with distinction and efficiency. He rejected that for reasons which probably commended themselves to your Lordships generally, but I, for one, would not have questioned such a decision. I 662 believe that Lord Knollys might have handled these additional responsibilities. However, I do not dispute the decision. Or Lord Winster might have adopted Viscount Swinton's White Paper more or less as it stood. Or he might have produced a scheme of his own, which is what Viscount Swinton and others consider him to have done.

I do not quite understand the vehemence of Viscount Swinton's dismay and disgust last week. He made a great point of the three corporations and he prided himself—as he was entitled to do—on this: that despite the fact that the three corporations received a certain amount of criticism and some gibes in this country as to what the Americans would think, in fact the Americans produced three corporations themselves. Viscount Swinton was entitled to feel pleased about that. Now Lord Winster still has three corporations.

The interplay between Viscount Swinton's three bodies, the holding which the B.O.A.C. was to have in the other two, the unspecified degree of authority which the B.O.A.C. was to exercise over the other two, seemed to me to be a compromise sort of arrangement which might lead to a confusion of responsibility that would be unfortunate. Lord Rothermere was puzzled about that and he likened it, if I remember rightly, to the abstrusities of the trinitarian doctrine. I was not quite clear whether the noble Viscount's three corporations were in fact corporations because the terms "corporation" and "company" are used in the White Paper. Were they really public corporations as we understand them to-day? He refers to memorandum and articles of association. Therefore it appears that the other two were not public corporations but companies. Certainly they would have been subject to more control than companies established under the Companies Act would normally have been.

Lord Winster is charged with jettisoning the transportation experience of railways and shipping and travel agencies. Incidentally, there are all sorts of problems in air transport which are not found in surface transport; and we should remember this, that there are twenty-two years' accumulation of experience in Lord Knollys' corporation. Undoubtedly sur- 663 face experience is valuable. Is it only to be given in return for the somewhat doubtful privilege of being permitted to finance air routes in Europe and to South America? Might we await the outcome of the Minister's conversations with these other interests? Might we be permitted to hope that the experience of the railroads, of the shipping lines and of the travel agencies will be available to him, and that the co-operation of which he has announced himself to be in need and anxious to secure is assured? I should think that those other interests would have given it, and that they would have welcomed the opportunity. We may hear from some of their representatives to-day whether that be so or not.

As to Lord Swinton's joint overhaul and joint training arrangement, I do not think Lord Winster mentioned these. I hope it does riot mean that he does not approve of them. It may be, and I hope it is, that the Minister intends to leave that sort of thing to the operators themselves to arrange if they care; and I should have thought that they would consider Lord Swinton's proposals. As to Lord Brabazon's Committee, we know that any Committee of which he is the Chairman would be likely to do excellent work however great the difficulties and we know how great the difficulties have been. I do not think the Minister mentioned that. Perhaps, again, he proposes to put that Committee more directly into touch with the operators because there is something odd in that Committee being advisory to the Minister and not to the noble Lord, Lord Knollys, and his associates.

Apart from all that there are matters in the Minister's decision to which due weight must be given. What he has decided is in line with the political mandate which he and his Government and his Party have. There is no getting away from that and I think you would expect him to decide in line therewith; and when I say "in line therewith," I mean just that and no more. I agree in regretting something of what the Minister said in his peroration; I thought it would be criticized and it has been. But despite what he said I do not believe the Minister was primarily motivated by Party political considerations. If I did think so, I should be talking differently from the way in 664 which I am. There is something much more important. To be motivated by Party politics in this field would be shocking and quite possibly disastrous. This scheme, I submit to you, is quite in accordance with the trend of public opinion generally; and, more important than that, it is in accordance with the hard economic facts of experience in public services.

My conclusion will be this, subject to Lord Winster being able to give me an assurance on two or three points which I will mention very shortly: I feel he has adopted the major points and the best points in the noble Viscount's White Paper and has rationalized the rest where he felt it to be in need of rationalization. Had I been Lord Swinton, by and large I should have felt pleased and more or less satisfied. Lord Knollys expressed himself to be quite happy about the noble Viscount's White Paper when it was issued. Perhaps he saw more clearly than some of us how the trinitarian arrangement was to work. I do hope we shall hear from him to-day, and that he will feel able to say exactly what he does feel. If he speaks he can confirm or contradict my own feeling which would be this: that he is satisfied, and relieved more than anything else, as to the changes which the Minister has made, and that he now knows more clearly than he did before what is expected of him.

On this question of public corporations, I must make a comment or two about Lord Rennell's speech. He spoke with an obvious sincerity but he is under, or appears to be under, some misapprehensions which are still common in the field of public corporations. He said that Lord Winster's corporations would be in difficulty in negotiating with foreign concerns; the participants would be of different and unequal standing. I cannot understand it. If so, it would apply also to Lord Swinton's corporations. In fact public corporations are at no disadvantage in dealing with operating concerns, whatever they may be, in the same field in other countries. I speak, my Lords, from what I know. I just do not understand the point. Then he asked about priority of traffic, sea or air, if there is not enough for both. Who would decide the means of travel? He seemed to think it might be the Minister. Surely the passengers would decide this and be under no 665 pressure whatever except their own inclination. Finally, he said that being servants of the State, pilots aid other employees would be awkwardly placed compared with the Royal Air Force. May I make this clear, that in the public corporation field employees are no more employees of the State than if they were employees of a private company. Is it suggested that a variety producer in the B.B.C. is a servant of the State? I do not blame him if, in fact, he lilies to feel he is working for the State. Go id luck to him. He is in fact as much the servant of the corporation as if he were in the employ of a private company.

Lord Balfour of Inchrye did not, like Lord Sherwood, feel "slightly quaint"; he felt slightly pleased. He said: I feel some slight pleasure to-day because … I, for some years, have been the stalking horse or whipping boy warding off attacks made on the late Government in another place, having to defend the fact that civil aviation had to go to the wall in the greater interests of the war. If the noble Lord, Lord Balfour of Inchrye, will not be offended, I should just like to say what I feel. I do not feel that he was either stalked or whipped sufficiently frequently or sufficiently energetically. Why go to the wall? "Civil aviation had to go to the wall." Go to the wall, my Lords! Second place, yes, a distant second, if you like; and that it was permitted to go to the wall by the noble Lord, or the noble Lord's chief, the then. Secretary of State for Air, is the explanation of the unfortunate position in which this country finds itself to-day.

Did the Americans permit their civil aviation to go to the wall during the war? Far from it. Who, if not the noble Lord or the Secretary of State, was responsible? Pre-war conversations and agreements, in my view, if followed up, would have secured one single corporation for the Empire to-day instead of a multiplicity of joint and parallel workings, and the effects of that would have gone tar beyond the field of its immediate application. It was to the noble Lord, Lord Balfour of Inchrye, that the corporation looked for defence and support; there were plenty of others looking after the war. Your Lordships have heard many times the sorry tale of the starved instruments, the resignations of all but one of the board—a subject of much comment here. Perhaps the noble Lord fought 666 harder than we knew, but no fight was obvious at all, and so civil aviation went "to the wall."

I will not take up your Lordships' time today by dealing with the points he made, except in respect of the one about Parliamentary procedure in connexion with these public corporations. The Clerk at the Table in another place will not permit questions to be asked about a public corporation unless they be on policy. Quite a number of questions, to my knowledge, are rejected by the Clerk at the Table because they are not on policy; and of those which are answered, a considerable number, possibly the majority, possibly all, are replied to by the responsible Minister to the effect that these are matters for the corporation, whatever they may be. You cannot, I admit, stop a member raising a point on the adjournment. I agree with the noble Lord, Lord Balfour of Inchrye, in regard to some observations made the other clay in another place. That cannot be stopped, but the Minister can, surely, deal with them as they are required to be dealt with.

I have now a few points to put to you about these public corporations, because if we are to give dispassionate consideration to this matter of civil aviation, and other things that come before us, we must be clear what they mean—what the corporations are, and what they are not. May I tell your Lordships that with me there is nothing of Party politics in this whatever? May I make that clear by saying that, on the whole, I believe I would prefer private enterprise in any form to nationalization, if by nationalization is meant what used to be meant, conduct of public services by a Government Department, politicians and civil servants? With me, the simple issue is that of securing the most efficient form of management. There was a tribute to railroads. There is a high ideal of public service in many private enterprises, particularly, I feel, in railways. But we cannot get away from the fact that their first and inescapable obligation is to shareholders. There is the crux of the problem—obligations to shareholders on the one hand and to the public on the other, which are increasingly difficult of reconciliation. That is what I mean by hard economic facts. There are some who feel that the first obligation of public service 667 to shareholders is morally indefensible or anyhow undesirable. I am less concerned with this than the economic side. The position of directors and managers is becoming increasingly invidious to-day with, on the one hand, their own ideals of public service and their knowledge of public requirements, and, on the other, the natural, but hungry, expectations of shareholders.

We hear too much about capital and labour and not enough about the third essential element in industry—management. Can you visualize the position of a manager when the distribution of a sum of money at the end of the year is under discussion? He says, rightly, he would like that money put back into the business, but the directors say, also rightly, that it should go to give the shareholders who have had a lean time an extra half per cent. Who is to reconcile them? They are both right. I do not underestimate the power of the profit motive, nor suggest that capital risk should not have a fair chance of reward. I say that profit motive and competition are not the only motives which inspire to efficient management, and that competition is not always beneficial. There are occasions when it is the competitive system itself that plays for safety, and, if no longer answerable to the shareholders, these public corporations are answerable to the public; and public opinion can be voiced in Parliament and elsewhere.

This system is misunderstood, and often deliberately misinterpreted, both from the Left and from the Right: from the Right, in that people will contend that ownership means management, which it does not and must not; from the Left, in periodic attempts to treat the public corporation as if, in fact, it were a Government Department. The chief characteristics of the public corporation system is that it is established and owned by the State, but not—repeat not—managed by the State. State control is over major policy, defined once and for all and clearly in the instrument of establishment, charter or Statute, subject, possibly, to periodic, clearly defined and necessary directives. Parliament approves the instrument which tells the corporation what it has to do and defines safeguards, if necessary. Parliament and the responsible Minister can watch what is happening and 668 if they feel the corporation is not doing what it ought to do, and is established to do, can take the, necessary steps. Otherwise, my Lords, there is freedom of management.

There are three reasons for the establishment of public corporations, and for transferring some industries which were or are to-day under private enterprise to this public ownership. One is where there has- been or is likely soon to be this irreconcilable conflict between the public service motive and the dividend motive. It has nothing whatever to do with politics; it is the simple issue of economic fact. Another is where the members of that industry cannot live and work amicably together. The fault may be on one side, or both, or neither, but there are suspicion and friction which nothing appears able to eliminate, as, for instance, in the mining industry. Thirdly, there is the fear lest worse should happen. Three and a half years ago I said that if I were a railway director, faced with the avowed intention on the part of the Labour Party when it came into power to nationalize—perhaps governmental or departmental management—I should do my best to have steps taken in the railways so that the industry was reorganized by those who understood it, and not by politicians and civil servants.

I have questions to put to the Minister, but let us be clear that ownership is not management, and must not be management; that the employees are not civil servants, and that there is no public interference in management. "And if to starboard red appear," as the Minister will remember, "tis his duty to keep clear." Here are my questions. Having told these corporations, in charter or Statute, what to do, will the same freedom in management be given to them, subject only to the essential periodic direction and reference to which no one could take exception? Will he ensure that in securing, largely by the efforts of the noble Marquess, Lord Londonderry, at long last the release of this vital service from the trammels of the Air Ministry, we have not merely effected the exchange of one hierarchy of civil servants for another? Will he tell them to "stand from under"? Will he allow the corporations to communicate direct with their colleagues all over the world, and with the Royal Air Force? Will he 669 be personally available to the Chairmen of the corporations and not permit them to be "boomed off"? And will lie consider—I only ask, will he consider—establishing at some time some central, co-ordinating, advisory body, representing not only the three corporations bit also those other forms of transportation whose co-operation he is so determined to secure, if in fact they be willing o give it?

I have had no conversation with the noble Lord since he last spoke. I put my points straightly to him, and if Le answers those questions in the affirmative, as I hope and believe he will, I, for one, acquit him of ulterior, invidious, shocking Party motives with which he has been charged. I would credit him with honesty and determination of purpose. I would feel him to be entitled to the commendation, encouragement and support of the House—and, my Lords, such support the Minister and our civil aviation general will surely require.

§ THE MARQUESS OF LONDONDERRY

My Lords, the noble Lord who has just spoken will pardon me if I do not follow him in his eloquent speech. I am glad he has put several very important questions to the Minister and I hope the Minister will be able to reply to them fully and adequately. I am sure that, like myself, other noble Lords listened to the statement of the Minister of Civil Aviation with great disappointment and also with great anxiety. There is no need for me to go into the history of the last three years, in which some of my friends here and I waged a battle in which we eventually succeeded. At the outset we were unable to persuade the War Cabinet -that transport aircraft was a vital, war issue. Your Lordships will remember that we had innumerable debates in which members of the Government—Lord Sherwood for one and Lord Cherwell for another—were put up on different occasions to try and beat down the irksome opposition which was rising, perhaps on my initiation but warmly supported by a, treat many of your Lordships in this House.

First of all we were given Lord Beaver brook. Lord Beaver-brook was Chairman of a Committee. I have never been able, exactly to fathom what the Committee was. Anyway it was delaying tactics, 670 and we made no progress whatever. After that, by repeated attacks on the War Cabinet and telling them that they knew nothing about the air and cared less, we were fortunate in having a Minister of Civil Aviation appointed in the person of my noble friend Viscount Swinton, and I feel that we achieved a great object when he was appointed. There had been a very long delay. We then came down to this House and watched his efforts with the greatest satisfaction and enthusiasm. As you know quite well, the noble Viscount turned to his task with his accustomed energy. He travelled to America. He was at Chicago and at Montreal, and he also went to South Africa. In an incredibly short space of time the noble Viscount produced a White Paper. He covered the ground very adequately when he made his speech last Thursday.

When the noble Lord's White Paper appeared, I was naturally most anxious to congratulate him on having been so prompt in what I might call "delivering the goods." I am not going to say that I fully agreed with every provision in that White Paper, because I thought it erred on the side of giving too much control to the Government; but it certainly would have been churlish on my part if I had placed any obstacle in the way of his going forward on the road on which he had set out. I was under the impression that the White Paper was a compromise between the different elements in the Coalition Government, but I know that was not the case. The White Paper was agreed by the Cabinet of the day and was considered, in the phraseology of Sir Stafford Cripps, to be the best plan that could possibly be put into operation at that time. The noble Viscount, Lord Swinton, quoted Sir Stafford Cripps in his speech last Thursday. But to my mind, the great virtue of the plans which were forecast in the noble Lord's White Paper was that he brought in the great organizations of transport in this country: he brought in the railways and he brought in the shipping interests. Those, as we know, have been for years past the experts in transport and it was highly important that those two organizations should have a full interest in the development of this tender plant of civil aviation.

The noble Lord who has just sat down spoke of the profit motive. Of course we know perfectly well that in all industries 671 throughout the centuries the profit motive has had to come in; otherwise it would have been impossible to carry on. In these days there is a tendency to think that all those people who embarked on and made such a success of free enterprise throughout this country, and indeed throughout the world, were solely actuated by the profit motive. I have had enough experience of aviation and of other business to know that whereas the profit motive has got to come into the picture, nevertheless the enthusiasm and the whole-hearted co-operation and support which we have always received from everybody in the industry (with a very few exceptions) has been the mainspring of the success on which this country has depended. I ask people to realize that it is only by giving those interests an opportunity of participating that you will get that full service which, I am quite certain, you will never get with the strangle-hold of Government organization and Government control.

My noble friend made a beginning, and a very good beginning. We came down to your Lordships' House last Thursday and found that the whole of the noble Lord's White Paper had been thrown overboard. I think it could not have had a better or stronger commendation than that which was given by Sir Stafford Cripps in the speech from which my noble friend quoted. We understood that we were to have three organizations and that the noble Lord would tell us how far they were to be controlled, what their responsibilities were t6 be and how far the whole of their activities would be directed by the Minister of Civil Aviation. In his statement the noble Lord said one or two things on those matters and I was not able fully to understand exactly what he meant.

I venture to suggest that the noble Lord should set up, as soon as possible, a Civil Air Council so as to be able to get the best advice from those people who are fully trained in these matters, from those people who are not in business for the profit motive alone but because of their love of aviation and because they believe that the future of this country is dependent upon the successful development of aviation here. I hope that later on, after he has set up the Civil Air Council, we shall find a Civil Aeronautics Authority (comparable with the Civil 672 Aeronautics Authority in America) which will have jurisdiction over all these matters instead of their being handled and administered by a Government Department. I can assure your Lordships that I have no criticism to make of civil servants; we all owe a great debt of gratitude to the civil servants of this country; but I say at once that they are not the people to handle business in this country or in this Empire. I was glad to see that of those who have shown a deep interest in these matters, the noble Lord is retaining the services of Lord Brabazon of Tara. I am glad to think that the noble Lord will have somebody associated with the Committee over which he presides who is able to explain exactly what he means (sometimes in forcible language) and who will be able, we hope, to guide the noble Lord along the road he has chosen to follow.

There is one particular question which I should like to address to the noble Lord, and that is in relation to the Ministry of Aircraft Production. The Ministry of Aircraft Production has done great work in this war, but latterly, in view of the lack of policy on the part of the Government, those of us who have had to have dealings with, it have found that as no decisions are being taken we can get no answers to our questions. I should like to know from the noble Lord the position of the Ministry of Aircraft Production in the future. Will the Ministry of Aircraft Production give orders on their own behalf or on behalf of the Minister? Are they the agents or the principals? What are their relations to all the manufacturers? The noble Lord is, I think, well aware that the bleak statement to which we listened the other day is a matter of the greatest concern in the minds of all manufacturers and I do not think he thought it would have an exhilarating effect on them. They know quite well that if you have a restriction of authority in relation to the handling of all these numerous matters by the Government we shall probably come down to one or two types of machine, and there will be very little encouragement for that spirit of enterprise in developing other machines to fly in competition—and I am not speaking of cut-throat competition—with other operators. That is one of the difficulties which I expect the noble Lord will understand. I think he will agree that this hide-bound system of Government control will damp down that spirit of enterprise which has 673 been the mainspring of everything in this country and from which our successes in flat past have been derived.

The noble Lord in a recent speech, in which he did not even adumbrate the sad tale he was going to narrate to us last Thursday, was kind enough to pay compliments to myself and to my friends who supported me during all those. three, troublesome years through which we have passed. He gave me the title of tin "only begetter" of the Ministry of Civil Aviation. I am very happy to share that title with some of my friends here who gave me every assistance. We worked in co-operation. I did, however, hope for something very different when the noble Lord came to make his statement. He told us, on that occasion, that he had had a second sight—or a foresight—which prevented him from making any contribution to those debates which we had in relation to civil aviation. I am not quite sure whether the noble Lord is correct in saying that because I have a recollection of his taking part in the debates. I venture to say that after all the able and eloquent speeches which the noble Lord has delivered in this House during the last few years I had no idea that he would be standing at that box expressing convictions which, I should have thought, were entirely contrary to everything which had been in his mind when he made them.

In the past the noble Lord was a very excellent critic, and a very fair critic, of the Government of the day who, as w e know, were in a very difficult position. After all, they had on their shoulders de burden of winning the war and we can pay them the tribute of saying that they were successful in their efforts. It was natural that certain matters such as civil aviation should take a secondary place, although not the place of complete obliteration which was imposed upon them. Since then we have had an Election in this country. To all of us considered these matters, it was quire obvious that there was likely to be what is called a swing to the Left. My noble friend Lord Reith, however, speaks of a mandate. I deny that at once. I am quite sure that if you could canvass the voters who voted for the Socialist Party you would not find one or even a half per cent. of them telling you that they expected that when the Government was returned to power civil aviation would be 674 nationalized. That verdict was a remonstrance against Government controls; those votes were given by people standing in queues, by people who were objecting to all the restrictions which were put on them during those war years. That was really what that verdict meant. I deny at once that the Government have any right to say that because they have a majority of 190 or so votes in another place they have, therefore, a direct mandate for the nationalization of this budding industry, this tender plant called civil aviation.

§ LORD STRABOLGI

If the noble Marquess will forgive me, surely it was his Party which advocated the abolition of controls. My Party advocated their continuance.

§ THE MARQUESS OF LONDONDERRY

I was speaking in rather a discursive manner—which I think is wrong in your Lordships' House. It was a change from one Government to another that was wanted. The majority of voters thought that if another Government was in charge those restrictions and those irksome conditions under which they had lived would be removed by that Government. What I am contending is that the Government have no mandate whatever from the people of this country for the policy which they are putting into practice at the moment.

I hope that the noble Lord will be able to tell us some of his plans. We should like him to tell us what is going on at the present moment. We are well aware that a number of bilateral arrangements are being made between America and countries in Europe other than our own. I think the noble Lord will be able to tell us that some of these agreements have been signed, and others are at present in process of being signed. What is Great Britain doing? I know quite well that if we delay very much longer we may find that many of these airlines will bypass Great Britain altogether. There is a terminal at Rineanna, and, with the arrangements which are in being now and with these bilateral agreements, we may find ourselves in great difficulty unless we move as quickly as we can. We have, I believe, day-to-day agreements under which numbers of aircraft land at Croydon, though that is perhaps not a very suitable airport. I need hardly say that I regard with admiration, and have done so 675 for a great many years, the activities of America in regard to the air. The Americans have understood the air question a great deal better than many people in this country, and they fully agree with what we call free enterprise. I think we can learn a lesson from the manner in which civil aviation is being administered in America, with great advantage to ourselves.

We understand that the Prime Minister is going to America in the near future, and that he is going to discuss the atomic bomb. At the same time, there are conferences taking place on financial matters in America. I wonder whether the noble Lord, Lord Winster, could persuade the Prime Minister to take him to America? He might be accompanied by Sir William Hildred, and also by Mr. Farey Jones, whose name will be familiar to the noble Lord because he has been at all these conferences on- civil aviation in connexion with international air transport should like the noble Lord to go to America at this time and come to some definite agreement with America about all these matters. I think that I should be right in saying that America is most anxious that these matters should be the subject of a definite agreement between our two countries.

I do not feel disposed to go into the question of aircraft at this time. We know quite well that we are dependent on American aircraft for some considerable time, but I do not think that it should delay us in establishing our organizations all over the world, and especially throughout the Dominions and the Colonies. American aircraft can be used so long as it is necessary. I understand that Transport Command are using 98 per cent. of American aircraft at the present time, and B.O.A.C. are dependent very largely on Dakotas. That should not delay us in getting our organizations throughout the world, so that when the time does come for the switch-over to British aircraft, which I hope will not be delayed though somewhat discouraged by this new statement of the Minister, in a shorter time than perhaps we anticipate we shall have these machines flying throughout the world in friendly competition—I am not looking to any cut-throat competition—for the benefit of the human race and the de- 676 velopment of air-mindedness in this country. My noble friend Lord Balfour objects to the use of the term "air-mindedness," and I agree with him, but I do not know a better word. I want the noble Lord, Lord Winster, to spread air-mindedness throughout this country.

There is one matter which, in a discussion of this kind, may not be regarded as of first-class importance but which is, nevertheless, of great importance, that of education. It is not really a minor matter. If the noble Lord goes with Mr. Attlee to America, I should like him to visit some of the schools there. He will find that every American child is being brought up to-clay on a different curriculum from that which used to prevail, and in history and in geography the importance of the air is emphasized. Indeed, children are even being taught aerodynamics. What is being done in this country? I have made various representations on this point. I do not know whether Miss Ellen Wilkinson is going round the schools and saying that we must be air-minded or we shall lose our place as a great nation! I hope that the noble Lord will be able to answer some of these questions. The situation is very serious, and if there is delay it will be more serious still.

§ LORD BRABAZON OF TARA

My Lords, I am sure we have all enjoyed the three speeches to which we have just listened, because they have all expressed rather different points of view. I hope that my own will not be an exception. I particularly enjoyed the speech of the noble Lord, Lord Reith, who, as he told us, has not spoken for a long time—much too long—in this House. I agreed with nearly everything he said except for the phrase "starboard red," which seemed to me a slip.

§ LORD KEITH

My Lords: If to starboard red appear Tis your duty to keep clear.

§ LORD BRABAZON OF TARA

If the noble Lord had quoted the whole poem, we should have understood him a little better. I want also, like other speakers, to draw attention to the speech of the Minister at the beginning of this debate. We Conservatives are now getting accustomed to two types of attack. One of them is represented by articles such as are written by Mr. Foot, in which everybody 677 who does not agree with him is designated a Nazi, a traitor and a scoundrel. The inspiration of most of them is founded on "envy, hatred, malice and all uncharitableness." If your Lordships read one of them you might be rather surprised, but you get used to them after a time, and if you read others you will probably find them arousing. I am sure that the Daily Herald, which has a great journalistic flair, prints them as rival pieces to those of Mr. Beachcomber. We can put up with hard-hitting political articles, and nobody is going to quarrel with them; the sort of speech to which I object, and to which I am sure that everybody else will come to object, is the sort of speech which the Minister delivered to us, in which he ended up with a sort of Sermon on the Mount. I must say that the pharisaic: priggishness which is put over I find quite intolerable. We listened to the noble Lord's peroration about the service of the pilots. I hope that the service principle will be inculcated into the dockers and the miners by the noble Lord himself before he stretches it to the pilots. It may well be true that that sort of moral uplift is wanted in the Lower House, but I cannot help drawing attention to the fact that there should be two rows of professional Prelates her It is their business to give us that moral uplift, and it shows the topsy-turvy world that we are in when we get moral lessons from the Government and speeches on finance from the Bishops.

Like my noble friend Lord Reith, I refute to make this question of civil aviation a Party affair. I differ from my noble friend Lord Swinton when he says that it has become a Party issue. If we look back into the past, we discover that it was a Conservative Government who set up the State-owned B.O.A.C. It may have been right or it may have been wrong. Then Lord Swinton, with great imagination, and I think probably quite rightly, introduced the other agencies which he thought—and I agree with him—might be useful. Those have been thrown overboard, and of course for him and for many people that is regrettable. But I cannot help drawing attention to the fact that in America, where no ideological considerations come into the question, and where these matters are dealt with on a purely commercial basis, it has been definitely laid down that no 678 form of surface transport is to have anything to do with the air. They may be right, or Lord Swinton may be right; all that I say is that there are those two opinions, and it cannot be said that because the Government take a certain view on this matter they are following a purely Party shibboleth. It is purely a matter of opinion.

Now as to these corporations. It seems to me that the Minister has, so to speak, copied Viscount Swinton's plan in a rather half-baked way. There is no real reason for three corporations. There is some reason for dividing traffic into four separate groups. There is the American situation, the European and internal routes, West Africa and South America and the East and South Africa—these are the natural groups into which the business falls. Why I object to the corporations is that some of them will be financially successful—the one to Europe, for example, carrying, as it will, big load factors, ought to be very successful—whilst others will not do so well. The consequence will be that you will get between the corporations a very unhealthy feeling; one saying, as it were, to the other: "We are a successful line but you cannot pay your way." That will be very tiresome. I should have thought that it would be desirable to have an overriding organization which would have the separate groups subordinate to it, so that there would be only the one organization with which the Minister would have to speak. You must remember that there is going to be a lot of common services. The services for training, welfare, stores, publicity and the accounting side, for example, must be common to the lot.

I would ask my noble friend the Minister if, when he comes to reply, he will tell me a little more about the tribunal—the C.A.A. Is that going to be independent of the Government, to fix fares and to say who is going to run here and who is going to run there? There are going to be great difficulties in the way of fixing fares, especially as against the people who are going to run in competition with us. I do not suppose that anybody in this House would say that I have ever been an enemy of the Air Ministry or the Air Force. I have fought their battles over and over again and have taken on all the Admirals of the Fleet 679 in England in this House on their behalf. No one could accuse me of not being a sincere friend of the Royal Air Force, but I must say that, as you look back over the past, you will see that the Air Ministry has not been helpful to civil aviation. I do not blame them for they have had to build up the R.A.F. and to defend the country; but the fact remains.

The trouble at the present moment is that, the war being over, the Air Force have gone transport mad. They have now one quarter of their whole organization in Transport Command. They did not take any trouble to get transport machines. We are all behind-hand in that, and no great effort has been made in that respect since the war. They have not got the machines, and of course their record from the point of view of safety, compared with that of B.O.A.C. is very poor. But both concerns are run by the taxpayer—both the R.A.F. and B.O.A.C. Is it not high time that Transport Command was reduced in size to, so to speak, an adequate but skeleton peacetime level, and that B.O.A.C. took over from them the work which they were intended to do, and carried the passengers who now go by Transport Command. The R.A.F. was not horn to carry passengers, and it must be remembered that Transport Command have very great advantages of which they can and do make use. They have military priorities and they can get what they like in the way of equipment. They can stick to any aerodrome that they fancy in any part of the country. If we are really thinking of getting on with civil aviation then we should give Government assistance to civil aviation instead of giving it to Transport Command.

My noble friend the Minister in his introductory speech was good enough to say that he meant to continue my Committee. Well, whether my Committee continues or not is a matter for me and for nobody else to decide. But still it is a very kind gesture on Lord Winster's part, and anything that my Committee can do to help him we always will do. But he must remember that the time has come, or it is very imminent, when the operating company, the B.O.A.C. should know what they want. It is not for me to tell them what they want or for the Government to do so. It is for the operators themselves 680 to say, and, if they have not the technical strength available to enable them to determine what they need, then they must be given more technical help. Shipping interests always know exactly what they want in the way of ships and so forth, and airline operators, such as the B.O.A.C. must be able soon to go direct to the manufacturer and say what they want. When that time comes—I hope that it will not be long before it does—the reason for the existence of the Brabazon Committee will soon disappear.

In conclusion I wish to point out that although we may squabble on questions concerning the organization which is going to be set up, the difficulty which the Minister is in to-day is not that he has opposition from us, whatever we talk about, but that he has got opposition from two Government Departments. The Air Ministry is inimical to him; he has rivalry to meet from Transport Command, and as I have said, M.A.P. is simply a delaying Post Office. If he, with the energy which he possesses, will get on and, with the Government behind him, sweep away these two obstacles and get something going, then, never mind how we may disagree about questions of theoretical organization, we will help him all we can.

§ THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON)

My Lords, I am sure that your Lordships will agree that the speech to which we have just listened has contributed very greatly to dispelling the atmosphere of gloom and despondency which seemed to overshadow this' debate from the time of the speech made by the noble Viscount, Lord Swinton. I was greatly cheered by the speech of the noble Lord, Lord Brabazon of Tara, and indeed I may say that I knew perfectly well before he got up that he would contribute some helpful suggestions. May I say—though, of course, this is not my particular Departmental business—that I know that my noble friend Lord Winster and those who are taking a close interest in the activities of his Department will certainly display energy in pushing forward several of the things which the noble. Lord, Lord Brabazon, says are so essential and with which I agree entirely?

I was a good deal perplexed by the speech of Lord Swinton because it was such a strange and difficult-to-explain 681 mixture, as I will show in a minute or two. I could riot understand why, at the beginning of his observations, he introduced me. I was charged—I think this expression is right—with "characteristic levity". I am not quite clear what I did do, but, however, if the noble Lord obtains some inward satisfaction from dragging me into it I am very glad.

§ VISCOUNT SWINTON

My Lords, I thought the noble Viscount was showing amusement at some observations of mine, but if it was a joke of his own then I am sorry for what said about it.

§ VISCOUNT ADDISON

Very well, we will wipe it out. But on this question of the gloominess of the noble Viscount's forecast, in which he was vigorously sup-ported to-day by Lord Balfour of Inchrye, may I say that what puzzles me rather is the way the world outside receives these Socialistic suggestions as compared with, say, a speech like that delivered by the noble Viscount. On the same day that the noble Lord, Lord Winster, introduced this discussion and announced the Government's decision, another Government decision was announced. It is true that it was rather obscured in this House by the interest which was aroused by this debate but nevertheless it was a very, very important decision. I refer to the decision as to the Commonwealth system of telecommunications, as a result, partly, of a recommendation of the Committee over which my noble friend Lord Reith presided with such distinction, and I would state in passing, that the Commonwealth Governments without exception have established Governmental organizations. I was interested in a little piece which I abstracted from a tape machine and I should like to read it. This the sequel to this dreadful announcement of another piece of Socialism. It is headed "The Stock Exchange, 10.37 a.m." and says: An outstanding feature of the House h the advance of about ten points in Cable and Wireless Preferential Stock following the news concerning State control. I may be a mere child in these matters bus I am somewhat perplexed to know why, if it is so dreadful, the Stock Exchange should be so buoyant and should welcome it by jumping up Cable and Wireless.

§ THE EARL OF ROSEBERY

It has gone down since.

§ VISCOUNT ADDISON

I should not think it has gone down far, but the point I am making is the psychological effect of this news. It did not have anything like the same effect on the Stock Exchange as it did on the noble Lord. I should like to join with those who paid tribute to the activity the noble Lord displayed and the services he has certainly rendered to civil aviation under exceedingly difficult conditions. I should like to say that without qualification. But the noble Lord went on, in expressing rather pained surprise, to say that the circumstances to-day are no different from the circumstances of a few months ago. With the greatest possible respect I cannot agree with that observation. I feel that the circumstances are very different. There has been a General Election. It is a fact, and the country has returned a Government which does not take the same view as to how these things should be done. This is not a new thing on our part. This kind of thing has been advocated for years and years and years. Even this particular proposal was approved at a conference some considerable time ago. The fact is, strange as it may appear, saddening as it is, that we really do believe that this is the best way of doing this kind of thing. That is the difference. I know it is very painful, but there it is. That is true. We certainly have got to face up to it and we have certainly never hidden it from the country. I think that the decision of the country was right, and of course it is a different decision—I am not complaining—from what the noble Lord would have had. I have spent many years in the political wilderness myself but still we were not depressed. We kept struggling along and now it seems that the country quite emphatically believes that this is the sort of way to deal with these problems.

Let me give one or two reasons which occur to me. Take, first of all, the overwhelming necessity for safety on a service of this kind. To have the confidence of the public the service must, above all, be a safe service. I think that is much more important than a few minutes here and there as to the time taken. Are you more likely to get the development of a thoroughly reliable and safe service by having the continual oversight of an organization which is subject to Parliamentary control? Or would it be better if you left it to a miscellaneous assortment 683 of private companies who would like to develop the service on their own? To my mind there is no question of what the answer is. I am not saying that you would have petty interference with the direction and management of the business. We have got to develop the kind of method which Lord Reith was talking about. As to safety and confidence, I feel they would be much more likely to be achieved by this method than in any other way.

To take another point, safety depends on the high standard, among many other things, of training of the pilots, the ground crews and all the rest. The Royal Air Force has developed a system of training ground crews and has achieved a standard of accuracy which is second to none in the world. That has been done in the service of the State. I think myself that the way to secure the mobilization of all that is best in education and training is for a powerful organization of this kind, responsible to the State, to have general charge of the direction of the scheme.

Another point was raised by the noble Lord as to the welfare of the pilots. He spoke in one place of a suggestion that the pilots could be looked after if they become servants of the State. He knows quite well that an essential and integral part of the Services is that everyone should maintain the highest conditions for the pilots. The noble Lord himself—I do not think he was Minister—and those with whom he was associated were responsible for doing away with the two private companies. There were two great private corporations. It was true that they were receiving State subsidies but they were amalgamated. I see that one of them in the House of Commons, on November 17, 1937, was sadly criticized because it cut the salaries of its pilots, but it was a fact that this same company, the same year, increased its dividend from 8 to 9 per cent. That does not satisfy us; we happen really to be Socialists. We do not think that that is the right way of doing things. The well-being of the pilots is much more important than 1 per cent. in the dividend and I am quite sure that the noble Lord will entirely agree. The point, however, is this: that if you want an increasingly good standard of safety in regard to the welfare of the pilots, I think you will be 684 much more likely to obtain it this way than if you leave it to a number of private corporations.

Then again, I am perplexed at the condemnations of the noble Lord, Lord Balfour of Inchrye, and to some extent of those of the noble Viscount who first spoke. Anyone might think that this proposal was some strange departure in principle from what has happened before. As a matter of fact, it is not. These two private companies, as we all know, were amalgamated into one public corporation with national money by the political friends of the noble Lord. If that was right then, why is it wrong now? That is the proper question to ask.

§ VISCOUNT SWINTON

But you are not going to have three corporations.

§ VISCOUNT ADDISON

I am coming to that but I understand that the criticism is whether we accept B.O.A.C. We are partly responsible for it—it is a dual responsibility. I understand that the B.O.A.C. will be accepted. Even if there were only two—according to the noble Lord's proposal he is limiting it to two—if the principle for which the noble Lord is contending is right, why not twenty? Why two? The reason for two is that the noble Lord recognizes—and everybody recognizes—that a new, great developing service of this kind must be subject to a great measure of central direction for all kinds of reasons. For those reasons, I think, the noble Lord suggested two separate corporations. Of course, as he says quite truly, his ideas have been debated here, except that they have a different basis. I have a good deal of sympathy with what the noble Lord, Lord Brabazon, has said. He did not see why there should not be one corporation. I think there is a good deal to be said for that, and it would not be a rough surmise to imagine that that question was the subject of considerable discussion. Anyhow, there is no reason at all why, as the service develops, there should not be amalgamation in the future if it was thought to be desirable. At any rate, there will be no private interests against it, if it is found to be desirable.

There is this to be said for it, too. This method of approach to this great new service will make it easier to secure the kind of co-operation we want with our Dominions than would otherwise be 685 the case. The Dominions have started their own corporations, as we know, and I believe it will be much easier this way to establish a coherent Empire service than it would have been if there were number of separate and competing private companies. Two noble Lords on the Front Bench, who have spoken, deplored the sacrifice of the travel agencies.

§ VISCOUNT SWINTON

If die noble Viscount will forgive Inc for interrupting him, is it not a fact that before I went out of office a complete working partner ship had been established with every one of the Dominions, and is that going to be carried on?

§ VISCOUNT ADDISON

Certainly, but, of course, the noble Lord must remember that, at that time, the British and European service had not been established, not had the South American service, which he, himself, suggested. There was excellent co-operation between the Dominions during his time, but there is scope, possibly, for a gradually increasing co-operation, and we think that is more likely to be obtained this way. I think there is no doubt about it. As to the travel agencies, do the noble Lords really seriously contend that it would not he possible for my noble friend, the Minister, to make satisfactory—in fact, excellent—arrangements with all those experienced agencies, to secure their co-operation and good will, by any other means except by their having a few shares in the enterprise? I cannot imagine that anything of that kind is possible. Let me ask the noble Lords this. The conduct of the war has certainly been on a socialistic basis. There is no doubt about that—

§ VISCOUNT SWINTON

I should have said—

§ NOBLE LORDS

Order, order.

§ VISCOUNT SWINTON

The noble Viscount did ask me—

§ VISCOUNT ADDISON

Quite right, go on.

§ VISCOUNT SWINTON

As the noble Viscount has asked me, I should have said the success of the war was due to a partnership which evoked the best out of u s all.

§ VISCOUNT ADDISON

Very good, that suits me admirably, and that, I think, 686 will arise out of this. I do not think you are going to get the best out of us all simply because a selected number of individuals have a few shares in the enter prise. I have not the slightest doubt that we shall get the co-operation of the scientists and the designers in our aircraft industry. The designers of the Spitfire were not actuated by motives of profit; they loved their task; they were full of zeal and enterprise, and full of ideas. I have not the slightest doubt that these corporations, with the Ministry associated with them, will get much better work out of the few scientists we have got—and we have far too few—and a much better co-ordinated effort out of the designers, inventors, and scientists than would happen if there were a number of separate companies, each struggling to get their own share of these scarce men. Surely, that is the best way of making use of our very scanty resources of scientists, chemists, metallurgists, and all the rest.

I would pray your Lordships—and I do not want any better text than the speech made by the noble Lord, Lord Brabazon—to try and approach this matter, if you can, free from political prejudice. We are accused of introducing political considerations into this. Let me say that, for twenty years, we have advocated this kind of thing on economical grounds, because we say it is the best way of doing it, and that is why we believe in it. So, as I said, I would pray your Lordships, at all events those who entertain these political suspicions, to put them out of your minds, and let us look at this matter on its merits, and see what is the best way, in the interests of the community, of developing this service It is impossible, now, to foresee how great it will become, but I am sure that, by coordinating national inspiration, you are more likely to get development on the right lines than you are by leaving it to a number of scattered agencies, each struggling on its own account. That is our view, and that is the reason for the Government's decision, which, I believe, is the right decision.

§ THE EARL OF GLASGOW

My Lords, I shall not keep you more than fourteen minutes. Several aspects of civil aviation have been discussed during this debate, but I propose to confine myself 687 to Scottish interests. The electorate have given the Government a mandate for nationalization, and, whatever the cost may be to the country, that mandate will, no doubt, be tried. I wish, however, that it had stopped short of civil aviation because, although the electors south of the Border have given this mandate, the Scottish people have given it with a reservation. They may be ready to have public ownership of mines, but they do not wish to have nationalization of Scottish aviation on the English model and run from Whitehall. Civil aviation is a new thing on which the Scottish people pin their hopes. Air transport, properly run, will give direct employment to thousands of people, and, indirectly, to hundreds of thousands. We have, in Prestwick, an international airport, the operators of which have had six years' experience of running it, and we wish to utilize the experience they have gained for the advancement of the interests of the Scottish people. It is not desirable that our chances of prosperity should be lessened for the sake of exact uniformity with England. Those politicians who believe in nationalization, and those who believe in free enterprise, have left out of account those who are interested only in developing the optimum efficiency of air transport.

Scottish opposition to the policy proposed for air transport is already considerable, and it will grow truly formidable unless assurances can be given on one fundamental point—the measure of control of Scottish interests and Scottish enterprise which are to remain in Scotland. In the case of Prestwick airport, which is the most important single asset of the northern end of the Kingdom, the proposal was made by the founders and owners that ownership should pass to a Scottish public utility corporation. That proposal has received the approval of the Secretary of State and of the local county council and planning agencies, and it has also had a recommendation from the Scottish Council of Industry, but nothing more, so far as I know, has been heard of it. One more word about the Prestwick international airport. There would have been no airport at all if it had been left to the Government. The Government would not have put an airport there at all. They have opposed it from the very beginning and have thrown obstacles 688 in its way over a period of years, and if it had not been for the perseverance and careful planning of the Scottish Aviation Company there would have been no airport there to-day. I would like to inform the noble Lords opposite—there are only three of them, I see—that the Scottish Aviation Company is not primarily out for profits. Their attitude has always been, as everybody in Scotland knows, directed towards the development of employment opportunity in commercial aviation.

In the case of airline operation—and airline operation is obviously the most important of all branches of commercial aviation—there are factors which make it much more difficult to guarantee efficiency under a system of common ownership than under free enterprise which is subject to the pressure of competition. But in both cases the attitude of the people of Scotland may be summed up by saying that ownership, public or private, is a matter of expediency rather than of principle. Noble Lords opposite are probably sceptical about that, but let me remind them that a member of their own Party declared, in another place, that "Scottish members have removed Prestwick airport from the realm of Party politics. We stand united on this question." The one principle from which there is no retreat and it has been enunciated frequently and eloquently in both Houses of Parliament—is that Scotland must have, as a matter of right, reasonable opportunity to work out its destiny in air commerce according to its own peculiar needs and its own capacity. It is precisely for that reason that Scottish opinion has been shocked and bewildered by the nature of the Government's proposal.

It may be that the noble Lord contemplates a wider distribution of power than his statement of policy would suggest. There are two points in particular which require to be clarified. The first concerns the nature of the air services which would be operated via Prestwick; the second is the Minister's assurance that Scotland will be able to play its full part in aviation with regard to both service and airport, by the opportunities provided for internal services between Prestwick and the rest of the United Kingdom, and for direct services between Prestwick and overseas countries. Are we to understand from the latter statement that Scottish operators are to be allowed to operate such services?

689 I am sorry the noble Lord is not here at the moment, because I particularly want this question answered. Or are we to understand that the critical and highly complex task of creating air commerce for Scotland is to be left to the three monopoly corporations the noble Lord has envisaged, each and all controlled from Whitehall and subject at every turn to the supervision of the Treasury in addition to the Minister of Civil Aviation? These are the two questions which I hope the noble Lord will answer. I gave him notice of them.

The effect of the noble Lord's announcement has been to throw into the melting pot once again the central plan to which all Scotland has been working—a plan based on the possession and development of Prestwick airport by a Scottish authority, but applying to every corner of Scotland and to Scottish trade as wet as Scottish industry. If at this date the essential combination of airlines, international airports and aircraft manufacture are to be taken out of Scottish hands and entrusted to alien boards and departments then the noble Lord should show greater cause for such action. It is true to say that the drafting of a commercial air policy for this country is just about the most difficult of all decisions which this Government can take. One cannot blame Ministers for feeling their way towards a Formula which will reflect enlightened public opinion, for in this country there is little real knowledge of the present scale and future possibilities of air transport

Many of us believed that Viscount Swinton's policy of a few months ago would have eventually resulted in an independent tribunal to license aeroplane operators, which would have permitted orderly development of air interests in every part of the country, and that such a tribunal would be rather on the same lines as the American system of State regulation of airlines. It is rather surprising that a Labour Government, looking for some means of State regulation should not take advantage of the experience of America, which has already produced in a Civil Aeronautics Board an ideal form of State regulation which has proved itself efficient in practice. The American system of State regulation of competition between airline operations and other forms of transport has proved that it bring cheap, efficient air service to the people, can meet every progressive 690 need of an airfaring nation; and, surprisingly enough, it has enabled their airlines to bring revenue into the national Exchequer, thus laying no burden whatever on the American taxpayer. So it is very difficult to know why this example should not be followed here in this country to a certain extent.

Finally, although I have said something about Scottish interests I am not a Scottish nationalist and I do not want the Government policy to have the effect of manufacturing more of those gentlemen. I would remind your Lordships that we are a small country with a small population, but the whole matter of civil aviation is of the deepest interest to Scottish people; and since they feel that their future welfare is bound up with it, they wish to have the right to run it in their own way with their own experienced operators and with the minimum of supervision from London.

§ VISCOUNT ROTHERMERE

My Lords, I would like to thank Lord Winster for very kindly mentioning me in his speech on October 18 as one of the small band of noble Lords who pressed the Government in the last Parliament to appoint a Minister of Civil Aviation. It is interesting to notice that not one of the names in the list that he gave belonged to a member of his own Party. I think it can be said that had it not been for our activities there would not have been a Minister of Civil Aviation and, in short, Lord Winster would not be sitting upon that Bench to-day. I think we can say also that there would not have been a Brabazon Committee, nor would there have been any civil transport aeroplanes in any form of production to-day.

The noble Lord, Lord Winster, congratulated himself on his foresight or second sight in not taking part in the debates—a tribute paid, I imagine, if not to his knowledge of the subject, certainly to his perspicacity. There was, however, one tiny slip in that straight and narrow path. On May 11, 1944, Lord Winster rose from his seat on the Bench he used at that time and intervened in the debate. He said in the course of his opening remarks that he wished chiefly to reinforce the very remarkable speech made by Lord Essendon in regard to civil aviation and the shipping industry. I would like to say in passing that it is 691 greatly to be regretted that Lord Essendon is no longer with us. He made a very remarkable speech and nobody could talk with greater authority upon the subject of shipping.

I know it is very unfair to quote speeches some time after they have been made, but this was only eighteen months ago. I would, therefore, ask this House to bear with me whilst I quote some of the speech which the noble Lord made on that occasion. He said: Coming to the question of air transport in connexion with our shipping industry, I have said that it may be necessary in certain cases to subidize air services in order to get them started; but it seems to me we are on very dangerous ground when that has to be carried to the length of subsidizing one branch of the same industry—namely; transport—against another, and that is going to be the situation if you have to subsidize air services which are running in competition with sea services. It certainly is bad enough to have to rob Peter to pay Paul, but if you are going to kill Peter in order that Paul may live that seems to be going too far altogether. I am sure that shipowners do not want to find themselves working in competition with Government subsidized airlines. As regards the position which the shipping industry is taking up in this matter I see that, speaking in another place, a member gave as his opinion that shipowners were seeking to control post-war aviation in order to make up for possible losses on passenger ships. So far as I am able to judge …that is not at all the attitude which is taken up by the shipowners in regard to post-war civil aviation…It is not merely a matter of the shipowners; it is a matter of the whole shipping industry… and so on. He made a very strong plea on behalf of the shipping industry on that occasion and I remember that I whole-heartedly endorsed that plea.

At that time the noble Lord was of the opinion that it would certainly be wrong to run air services operated by the Government in competition with shipping lines operating in that particular area. I think, therefore, that upon this question we should have some explanation of why in the South American Service the noble Lord proposes to take away the interest of the shipping companies. No doubt we shall have his reply on that point. I would like to ask him whether he has changed his opinion or whether, when he made his statement the other night, he was giving voice as a sort of spokesman for his Party. Perhaps he might also tell the House when this great vision 692 struck him and converted him to an entirely different belief. I cannot believe that office is a price high enough to pay for one's own opinion, and I am perfectly certain that the noble Lord would not have sacrificed those opinions which he held then purely for the sake of occupying an important position.

British shipping is going to be thrown on its own resources not only to compete with rival foreign shipping lines but also to compete with the British Government. In his statement the noble Lord made rather a curious remark; he said that shipping would be integrated with the airlines. I did not understand what he meant by that because shortly afterwards he used the word "co-operation." The use of the word "integration" would suggest a kind of blackmailing of shipping companies—if they do not co-operate they will be forcibly integrated. Obviously the co-operation which the shipping companies are expected to give to the new airlines is co-operation which cannot in any circumstances be to their advantage. It cannot in any way help the shipping companies which are operating the lines to give co-operation which, as far as one can see, must be entirely in one direction. If they lose passengers by reason of the Government subsidized services—and they must be subsidized, apparently, if they are Government services, however much the noble Lord may try to hide that fact when he eventually produces his estimates —that must have a bad effect upon them.

If I heard Lord Brabazon aright, he said that some of the remarks of Lord Winster were extremely priggish. In that case some of the remarks of Lord Addison were pure humbug. Lord Addison suggested that everybody here should cooperate (he said that was for the good of the country) towards making a success of a national venture in civil airlines. He said it was for the good of the country and that everybody knew it was for the good of the country. So far as I am concerned, I state quite emphatically that I do not think it is for the good of the country at all. I do not propose to be converted like the noble Lord opposite and to agree that the nationalization of civil aviation is for the good of the country. On the contrary, I take the view that it is extremely bad and that it will not be successful, however much it may be covered up in the financial estimates which will be presented to Par- 693 liament from time to time. I would state, furthermore, that I disagree entirely and absolutely with the view put forward from the Benches opposite, (not to-day but from time to time either here or in another place), that concentration of resources in the hands of a Government such as this will be is a powerful force for peace. That is not borne out by any kind of experience or by history. On the contrary, powerful concentrations in the hands of Governments lead far more towards war.

I would draw the noble Lord's attention to a paragraph, with which I entirely agree, written by Professor Einstein, in which he said: As to Socialism, unless it is international to the extent of producing world government which controls all military power, it might mere easily lead to wars than does Capitalism, because it represents a still greater concentration of powers. It seems to me to be beyond all question that the tremendous concentration which is going on at the present moment of all the resources of power in this country in the hands of the Government will inevitably lead to a highly dangerous state of affairs, especially in view of the fact that sooner or later the noble Lord will have to try and make a success of this experiment.

As showing what is likely to happen in the future, I should like to refer to the debate which took place in another place on October 12. If you read that debate you will find that one after another honourable gentleman rose and said that there should be an international aerodrome in his own constituency. That kind of thing is not possible under the capitalist system. Five members made speeches of that kind. This is the sort of thing which the noble Lord, Lord Winster, will have to face in future if he nationalizes air transport. He has no idea of the political pressure that is going to be put upon him, both in the other House and in t