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Orders Of The Day

Volume 462: debated on Tuesday 1 March 1949

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Supply

[3RD ALLOTTED DAY]

Considered in Committee.

[Mr. BOWLES in the Chair]

CIVIL ESTIMATES, ESTIMATES FOR REVENUE DEPARTMENTS AND ESTIMATE FOR THE MINISTRY OF DEFENCE, 1949–50. (VOTE ON ACCOUNT.)

Motion made, and Question proposed,

"That a sum, not exceeding £832,066,000, be granted to His Majesty, on account, for or towards defraying the charges for the following Civil and Revenue Departments and for the Ministry of Defence for the year ending on the 31st day of March, 1950, viz.:

CIVIL ESTIMATES
CLASS I
£
1.House of Lords29,000
2.House of Commons280,000
3.Registration of Electors145,000
4.Treasury and Subordinate Departments1,000,000
5.Privy Council Office10,500
6.Privy Seal Office3,000
7.Charity Commission22,500
8.Civil Service Commission192,500
9.Exchequer and Audit Department120,500
10.Government Actuary10,000
11.Government Chemist62,500
12.Government Hospitality35,000
13.The Mint10
14.National Debt Office10
15.National Savings Committee350,000
16.Overlapping Income Tax Payments17,000
17.Public Record Office24,000
18.Public Works Loan Commission10
19.Repayments to the Local Loans Fund12,000
20.Royal Commissions, etc43,000
21.Secret Service1,000,000
22.Tithe Redemption Commission10
23.Miscellaneous Expenses Scotland180,000
24.Scottish Home Department340,000
25.Scottish Record Office6,000

CLASS II
1.Foreign Office900,000
2.Diplomatic and Consular Establishments, etc.5,000,000
3.British Council900,000
4.United Nations1,150,000
5.International Refugee Organisation1,500,000
6.Commonwealth Relations Office125,000
7.Commonwealth Services718,000
8.Oversea Settlement218,000

£
9.Colonial Office290,000
10.Colonial and Middle Eastern Services3,000,000
11.West African Produce Control Board1,001,000
12.Development and Welfare (Colonies, etc.)1,750,000
13.Development and Welfare (South African High Commission Territories)100,000
14.Imperial War Graves Commission300,000

CLASS III
1.Home Office830,000
2.Home Office (Civil Defence Services)1,500,000
3.Police, England and Wales11,800,000
4.Prisons, England and Wales1,650,000
5.Child Care, England and Wales370,000
6.Fire Services, England and Wales3,650,000
7.Supreme Court of Judicature, etc500,000
8.County Courts, etc.90,000
9.Land Registry10
10.Public Trustee10
11.Law Charges180,000
12.Miscellaneous Legal Expenses60,000
Scotland:
13.Scottish Home Department (Civil Defence Services)13,000
14.Police20,000
15.Prisons168,000
16.Approved Schools60,000
17.Fire Services223,000
18.Scottish Land Court4,500
19.Law Charges and Courts of Law46,000
20.Department of the Registers of Scotland10
Ireland:
21.Supreme Court of Judicature, etc., Northern Ireland20,500
22.Irish Land Purchase Services610,000

CLASS IV
1.Ministry of Education59,000,000
2.British Museum110,000
3.British Museum (Natural History)70,000
4.Imperial War Museum11,000
5.London Museum4,500
6.National Gallery32,000
7.National Maritime Museum8,000
8.National Portrait Gallery6,000
9.Wallace Collection8,000
10.Grants for Science and the Arts1,500,000
11.Universities and Colleges, etc., Great Britain7,600,000
12.Broadcasting4,000,000
13.Festival of Britain, 1951200,000
Scotland:
14.Public Education10,200,000
15.National Galleries7,000
16.National Library4500

CLASS V
£
1.Ministry of Health17,000,000
2.National Health Service, England and Wales88,000,000
3.Exchequer Contributions to Local Revenues, England and Wales18,000,000
4.Registrar-General's Office160,000
5.Ministry of Labour and National Service10,000,000
6.Grants in respect of Employment Schemes250,000
7.Ministry of National Insurance72,000,000
8.National Assistance Board29,500,000
9.National Insurance Audit Department43,000
10.Friendly Societies Registry17,000
11.Ministry of Town and Country Planning400,000
12.Central Land Board200,000
Scotland:
13.Department of Health4,125,000
14.National Health Service12,000,000
15.Exchequer Contributions to Local Revenues, Scotland3,675,000
16.Registrar-General's Office24,000

CLASS VI
1.Board of Trade3,700,000
2.Services in Development Areas3,800,000
3.Financial Assistance in Development Areas400,000
4.Export Credits10
5.Export Credits (Special Guarantees)79,000
6.Ministry of Fuel and Power2,350,000
7.Office of Commissioners of Crown Lands21,000
8.Ministry of Agriculture and Fisheries3,800,000
9.Ministry of Agriculture and Fisheries (Food Production Services)10,700,000
10.Surveys of Great Britain, etc.800,000
11.Forestry Commission1,750,000
12.Development Fund250,000
13.Ministry of Transport950,000
14.Roads, etc9,700,000
15.Mercantile Marine Services170,000
16.Ministry of Civil Aviation7,500,000
17.Developments Grants410
18.Department of Scientific and Industrial Research1,250,000
19.State Management Districts10
Scotland:
20.Department of Agriculture1,300,000
21.Department of Agriculture (Food Production Services)2,750,000
22.Fisheries320,000
23.Herring Industry206,000

CLASS VII
1.Ministry of Works2,900,000
2.Houses of Parliament Buildings365,000
3.Public Buildings, Great Britain13,600,000

£
4.Public Buildings Overseas621,000
5.Royal Palaces136,000
6.Royal Parks and Pleasure Gardens221,000
7.Miscellaneous Works Services3,000,000
8.Rates on Government Property3,100,000
9.Stationery and Printing4,000,000
10.Central Office of Information1,200,000
11.Peterhead Harbour18,000
Ireland:
12.Works and Buildings in Ireland77,000

CLASS VIII
1.Merchant Seamen's War Pensions80,000
2.Ministry of Pensions32,000,000
3.Royal Irish Constabulary Pensions, etc.450,000
4.Superannuation and Retired Allowances2,000,000

CLASS IX
1.Ministry of Supply70,000,000
2.Ministry of Food170,000,000
3.Ministry of Transport (War Services)11,300,000
4.Ministry of Fuel and Power (War Services)2,000,000
5.Foreign Office (German Section)13,750,000
6.Administration of certain African Territories230,000
7.Advances to Allies, etc3,000,000
8.War Damage Commission500,000
Total for Civil Estimates£767,129,000

REVENUE DEPARTMENTS
1.Customs and Excise3,400,000
2.Inland Revenue7,300,000
3.Post Office54,000,000
Total for Revenue Departments£64,700,000
Ministry of Defence£237,000
Total for Civil Estimates, Estimates for Revenue Departments, and Estimate for the Ministry of Defence£832,066,000"

Civil Aviation

3.22 p.m.

At the opening of this Debate it is only right that I should make quite clear my own interest in civil aviation. I am a director of an air charter company in which I have a financial interest. It will not however prejudice my views——

On a point of Order. Is it not very unusual on occasions of this kind not to have the Minister present?

Quite obviously that has nothing to do with the Chair, and is not a point of Order. It may or may not be unusual.

May I apologise to the House for the absence of my hon. Friend, who will be here shortly. As hon. Members will have noticed, we are rather in advance of our usual schedule. I do not offer that as an excuse, but it is the reason why my hon. Friend is not in his place, as he hoped to be, for the start of the Debate.

Is the Parliamentary Secretary likely to be airborne within the next minute or two? It makes debate very difficult if my hon. and gallant Friend, who is opening the Debate, is not listened to by the Minister who is to reply.

I too must register my protest. I have a few points to put which are important and in the absence of the responsible Minister, one's task is more difficult. To have a Minister who perhaps does not know the subject taking down notes, is not the same thing as having the Minister concerned present. I feel that very strongly. However, there is no alternative. The Debate has to continue, but we are placed in a most difficult position. This is not the first occasion on which this has happened. [Interruption.] Does the hon. Gentleman wish to interrupt?

I was merely wondering whether it would not be possible for someone else to open the Debate?

The hon. Member has not made himself heard, and I can only assume that his point does not mean very much or he would have made it known to the Committee.

Regarding the accounts of the Corporations, I would say that they could not be more disappointing than they are. Each year the Minister has forecast better things in this nationalised industry. We have been led to believe that things would improve rapidly, instead of which we see that the losses this year of the three Corporations were 5 per cent. heavier than in the previous year. These accounts disclose that B.O.A.C. requires one employee to work for a year to carry five passengers at a cost of £345. The total cost of the civil aviation industry has been admitted in another place to be approximately £25 million. I believe that it is for this Committee to consider how this money is being spent, and whether it is a wise investment to sink so much money when the country is in such grave difficulties economically. [Interruption.] I am glad to see that the Parliamentary Secretary has come in. No doubt his right hon. Friend will pass his notes across to him.

I do not propose to bore hon. Members opposite by repeating these unpleasant things, which they probably do not want to hear in any event. The noble Lord the Minister of Civil Aviation has, in my view, in the short time he has been at the Ministry, made sincere efforts to cut expenditure. I believe that he set about this task of reducing the costs in a wholehearted way, but as he is new to this difficult and complicated civil aviation industry I wonder whether he really knows how far he has to go in cutting costs? If so, what is his yardstick? Perhaps the Parliamentary Secretary will refer to that when he replies.

We are all alarmed, at least I was, when we heard in the B.B.C. nine o'clock news on Sunday the announcement that Mr. d'Erlanger was resigning his post more or less at the request of the Minister. We on this side of the Committee are extremely sorry to see him leave British European Airways, because we feel that he has had an uphill fight. He built up the Corporation from the very beginning. He has had technical difficulties with which to contend. I understand that he has done his utmost to implement the Government's policy. There have been losses, but now they are beginning to be reduced he is practically "fired." It is most regrettable that it should happen at the present time. I have heard in the House at various times questions about what his qualifications are. I would say that he is a comparatively young man who has had a most severe training in finance. During the war he started the A.T.A. absolutely from scratch—an organisation the good work of which was never really recognised. He also started the Corporation from the beginning. He is a young, energetic man who knows his business. Now that he is, as it were, in his prime, out he goes.

We can only take what we read in the Press so far, that he is leaving because he wants to run the Corporation on a commercial basis. If that is the reason it is deplorable. How do the Government want the Corporation run if not on a commercial basis? One report said that there were differences because he wanted a separate allocation for the operation of the internal airlines, such as the one in Wales. That seems to be a fair request if that was the case. However that may be, it seems that the Minister has been particularly unreasonable in this case. No doubt we shall be told today what is at the bottom of it all. I can assure the Parliamentary Secretary that I have heard that, already, there is within the Corporation grave concern among the senior members of the staff regarding his dismissal.

We are told that Lord Douglas is to succeed Mr. d'Erlanger. I find myself in a difficult position because Lord Douglas was, as a very senior officer, my officer at different periods during the war. I have a great admiration for his ability as a war leader but I am surprised at this appointment. I should have thought that a more suitable appointment for him would have been something to do with our defences, which are sadly lacking at the present time and require an experienced and great leader. We can only look upon this as a political appointment. The chairman of an organisation is there in the main for his administrative ability and not because he knows all the intricate details, although it is sometimes a help to know them. It will be observed that Mr. J. V. Wood, the managing director of B.E.A. was sent on sick leave some months ago and from what I have been told I doubt very much whether he will return. If that is the case, we have a managing director and a chairman who have gone in a matter of six or eight weeks. I do not see how any nationalised or other industry can operate efficiently when that sort of thing is taking place. It is most disturbing, and we must register our protest.

I do not wish to go into personalities, but Mr. Masefield who has come in, I understand, as assistant to the chairman will undoubtedly stay with the corporation. He is a very brillant man and a great planner, but I would suggest that the managing director of an air line should have transportation experience and knowledge of operating aircraft. I put that forward as a suggestion. There is no doubt all three corporations are lacking men who know and understand transportation as such. I do not think it is any use just bringing in important names. Men may have made great names for themselves in other spheres, but that is not sufficient in these days in any business, or any nationalised business.

I would quote Mr. Plesman, the head of K.L.M., who has been in the business for 30 years and knows it inside out. He knows what competition he is up against and how to deal with it. He has had a lifelong experience. Yet we bring in senior officers and planners and others to run these most complicated businesses. Up to the end of December, 1947, K.L.M. made a net profit of £12,360. That is a modest profit, but it is a real profit. I have examined the balance sheets. Depreciation has been included for all the equipment, and accountants tell me that the accounts are in every way up to our standard of accountancy. Furthermore, they paid 4 per cent. dividend on preference shares, 4 per cent. on the A. and B. shares, and the management were given 10 per cent. as their share of the profits. That is a point which the corporations might care to introduce themselves. Perhaps if the management shared in the profits, there might be more keenness to wipe out the losses.

I wish to refer to the question of leased aircraft. In the figures before us no sum has been set aside for this item of leased or loaned aircraft. Modern aircraft have to be depreciated normally over five years, but when we get to more expensive plant and production the operation period may be nearer eight or 10 years, if loss it to be done away with and we are to get full utilisation. It does not seem right that the Corporation should get away with this. If they are getting the aircraft on loan from the Ministry of Supply at a fairly nominal figure, that is a concealed subsidy. I think the Committee is entitled to know how these aircraft are acquired and what is paid for them. We have been frequently told that the Vikings are complicated aircraft, and it is difficult to make a profit with them. It has been brought to my notice that three foreign countries are operating Vikings at a profit. I hope the Parliamentary Secretary will bear that in mind when excuses are made about the difficulties of maintaining Vikings.

In B.E.A. there is an offshoot, the Channel Islands Airways, which I should have thought was a plum of a route. It is seasonal up to a point, but not entirely. The figures of that particular section are not disclosed, but I am told that in the last year of operating with the railways that line made a net profit of £20,000. In the first year with B.E.A. they lost over £200,000, in one year to the other. Why is it that such enormous costs have been built up to operate a small airline which were not apparently necessary when the airline was being run by the railways, although the railways have been quite extravagant in their ideas of staff?

Would the hon. and gallant Member give some indication of the source of the figures which he is quoting?

I do not think that I am obliged to give the source of my information. I make it my business to find out these things so that I may make a contribution to the Debate in the Committee.

The hon. and gallant Member would surely agree that hon. Members would be in a better position to assess the value of the figures which he quotes if the source were given.

It is up to the Minister to tell the House if my information is wrong. I did not go round touting for it. It was given to me voluntarily by someone who happens to know something about it. If we can prove that there is an enormous loss, it may be reduced as a result of this Debate, because it is not mentioned in the balance sheet.

I do not think that these losses in the three Corporations are mainly due to the basic cost of flying. I think that in the main, the losses are due to bits and pieces—and some of them are pretty large bits and pieces.

Including payments to charter companies? Is the hon. and gallant Member complaining about that part?

I will come to that, and perhaps give the hon. Member and the "Sunday Express" a little information on that particular point.

The staffs of these nationalised industries have been built up since the war unlike the mining industry which was largely handed over as a ready-made concern—[Interruption.]— well, in the matter of staff I imagine that 98 per cent. of the people who were there under free enterprise are still there except the heads of the Coal Board who are drawing large salaries. But in the case of this industry it was not so. It was a mere skeleton. The staffs were built up enormously and very rapidly, mostly from ex-Service men who thought that by getting a job with the Government, they would have a real tenure of service. How do they find themselves now? They find themselves being dismissed from their posts.

Supposing this had happened in a commercial company, or a large concern rendering service to the public, what would have been said by hon. Members opposite? We should have heard criticism. But these dismissals are taking place piecemeal. Every few months we hear something about reorganisation, and someone is brought in to reorganise things. The staffs do not know where they stand. I agree that the staffs must be streamlined and overheads have to be cut, but something final ought to be done and these men told that they have security, at least for a period. It will be remembered that 1,500 employees left B.E.A. last year of their own accord, apart from dismissals from redundancy. That is 30 per cent. of the total number of the staff of the corporation. Something must be radically wrong if 30 per cent. of the staff leave in one year, apart from those who are redundant.

How on earth does the hon. and gallant Member reconcile the very serious and well-justified criticism of the management of the B.E.A. which he has just made, with his objection to the changing of the managing director?

Because there have been continual changes in the last three years. This only happened to be another change. I will reiterate what I have said. Mr. d'Erlanger, in my opinion, was overcoming very great difficulties in a much better way than most of the others.

The transfer of the base from Dorval to the United Kingdom was a right move, but it ought to have taken place at least a year and a half ago. I know it is a big move, but the Government delayed over it, and I can only think that the people over there did not want to come back. But the Minister, or whoever was in charge, should have brought real pressure to bear to get that organisation back in England where it would be more efficient than it was on the other side of the Atlantic.

Is the hon. and gallant Gentleman aware that the real cause of that suggestion being turned down—in any case, I think it came from this side of the Committee—was his hon. Friend the Member for Keighley (Mr. Ivor Thomas) who has joined his party?

If I have an opportunity, I shall be very glad to rebut that suggestion.

I have given way quite a lot. I want to follow my own line. If the Dorval base is coming back to the United Kingdom, is Filton the right place for it? It is some way from London and the activities will be considerably divorced from the main operations of the Corporation at Heathrow. I should have thought that over a short-term period of perhaps three or five years with these new types of aircraft, it would have been far better to concentrate them at Heathrow even in temporary hangars and with temporary workshops, In order to bring about drastic economies. That has happened at Schipol Airport at Amsterdam with K.L.M. In another place the Minister said how convenient it was for K.L.M. to operate aircraft which they could maintain on the same aerodrome. I cannot understand why the move has been made to Filton unless it is that the hangars built there for the Brabazons, have to be put to some other use.

I am also concerned about the close proximity of Northolt and Heathrow. The aerodromes are only some five miles apart. A friend of mine returned from Geneva on 13th December last year on the 4.15. The aircraft circled for an hour in cloud and suddenly they heard the noise of the engines of another aircraft. There must have been a very near miss. That incident happened soon after the unfortunate accident between the Swedish airliner and the York. We cannot continue to take these risks. If there is any risk at all the Minister ought to make up his mind whether or not it is a good thing that we should use these two airports which are so close together. The sooner Northolt is shut down and we operate only one airport on the west of London, the safer it will be for all air traffic.

As I see the position from the Report, there are about 20 subsidiary companies which the Corporation either own or partly own. The activities cover radar and radio, international radio and air operating companies. Losses are being made in 19 of those companies. The only one which has made a profit is Tasman Empire Airways which shows a net profit of £10,000 and which operates British flying boats. It is most alarming that the Corporation, apart from their own business, should be losing large sums of money in other airlines. I will not go through the whole list.

One company is Aer Lingus in which the Corporation's share of the loss is £228,000. B.E.A. have a holding in the equity of 30 per cent., and B.O.A.C. have 10 per cent. Therefore, the holding is 40 per cent. for the two Corporations, yet they have to bear 50 per cent. of the losses. This is a pretty bad agreement commercially, whoever drew it up and signed it in the first place. In the Italian airlines the B.E.A. share of the loss was £74,000. It may be said that we shall sell British aeroplanes and that it is a good thing to have an interest in that company, but from my visits to Italy it seems that, in the main, American aircraft are used. We do not get much of a dividend from the Italians. The loss in connection with Gibraltar Airways is £7,817. On Cyprus Airways, the loss is £3,916, and on the Hong Kong line, it is over £24,000.

We come to the question of whether the three Corporations in operating their main business from this country, are not becoming too involved in spreading themselves out in all these small airlines in the Colonies and other parts of the world. I know that in Hong Kong the airline is partly owned by the local people. I should prefer to see that airline completely divorced from B.O.A.C. It could be run by the people of Hong Kong. They could have a close working agreement with B.O.A.C. as a feeder line. They could take technicians from this country, as no doubt they would wish. It is most alarming that the Corporations should be losing all this money. I do not believe that it is generally appreciated how far they have spread themselves. We hear a lot about comparative losses. It is said that the British losses are higher because we do not operate the right aircraft. American losses have been reduced by two-thirds in the past year. The total losses for all American airlines, both internal and overseas, are £1,683,000.

Of course they get a subsidy in the same way as the British lines. I do not agree that the British rates are high enough, but I find it awfully difficult to discover whether or not the American rates for mail are too high. Personally, I do not think that they are. If the hon. Gentleman has any information on that subject, we shall look forward to hearing from him during the Debate because it is difficult to find out. Perhaps he will make a contribution later. The Australian airline—Quantas Empire Airways—made a profit of £80,000 for the year ending March, 1948. The Government only took over that airline in the middle of 1947 but it is run in a most efficient manner by Mr. Hudson Fysh. He knows his business just as well as Mr. Julian Tripp or Mr. Plesman. I only wish that we had a few men like Mr. Hudson Fysh in this country to help us out of our difficulties.

I wish to deal with the subject of the charter companies in which the hon. Member for Reading (Mr. Mikardo) is so interested. All I can tell him is that in my own company for over three years, the staff have had a bonus at Christmas time but the directors have not had one penny either in directors' fees or in the form of a dividend. If he thinks that that is getting fat, I should like him to come and look into the matter. I can prove to him that there is very little indeed in this business. The Minister of Civil Aviation made a statement recently saying what he intended to do for the charter companies. I believe that he is supposed to have said that what he said was well received. I can assure him that I did not think very much of it. I do not think that he was giving very much away.

I gave evidence before Lord Douglas last Autumn and I was hoping that a licensing board would be set up to regulate the formation of charter companies. I say that sincerely and as a good Conservative. Where controls are necessary we agree with them. I do not want to see mushroom firms springing up which are not properly financed and in which the aircraft are not properly serviced. That view was put forward very strongly by many of those who gave evidence to the Committee, but it was not accepted. Perhaps we could be told why that view was not accepted. The hon. Member for Reading rather sneered at the chartered companies——

I am sorry. I really cannot let that remark pass. I merely asked the hon. Gentleman whether among the expenditure of the Corporations which he was criticising, he included payments made by the Corporations to the charter companies. That implies no reflection whatever upon those companies.

I was judging by the way in which the remarks were made. Perhaps the hon. Member's hon. Friends do not see it in the same way, but from this side of the Committee I got the impression that I have indicated. All I can say is that in the year under consideration the charter companies paid to the Corporations the sum of £285,809 for handling their own aircraft. That is a considerable amount of money which has been paid to B.O.A.C. in the main for servicing and handling charter aircraft, mainly abroad. I believe that that figure could have been enlarged had the charges been more reasonable. This is a form of income which the Corporations would do well to pursue, to try to bring down their deficit.

The charter companies today are making a real contribution. Many of them are coming into line with the rates paid by the Corporations to ground staff and aircrew. My own company has just accepted the same terms. In the whole country there are approximately 500 aircraft operated by the charter companies, who now employ 350 pilots and a staff approaching 2,000 of administrative and maintenance personnel. That is a large number of people. I believe that the majority of them like working under the conditions which the charter companies provide.

We should remember that, whatever we have been paid by the Corporation, we have had to give something in return. We have not been paid for nothing, and, in the case of the operation in India, which looked as if the charter companies were making a fortune, the petrol cost nearly 4s. a gallon, and there was very little left out of the operation for the charter companies. They worked well with the Corporation, without any quarrels or bickering and did the job they were sent to do. Diplomatically, they helped our relations with both Pakistan and India at that time.

Likewise, on the Berlin air lift all the diesel oil, petrol and kerosene is carried by the charter companies. It may be said that the rates are high, but, when we come to consider the utilisation of the double shift system, day and night every 24 hours, the provision of adequate leave and bonus pay for the staff, there is really not very much in it at all. These companies are playing their part with the Corporation and the Royal Air Force and are a great credit to this country in their share of this Berlin air lift air operation.

I make one final suggestion about these charter companies, and it is that the Minister should seriously consider allowing them to carry freight anywhere in the world on the scheduled service basis. I believe it will be many years before the Corporations can do it, and that it will extend trade between this country and overseas and will facilitate aviation generally. I do not think there is anything to be lost, provided that the service is regularised over routes on which the people can have confidence.

In regard to B.S.A.A., I want to express my sincere regret at the loss of Air-Commodore Brackley, an outstanding figure in civil aviation. He had no strong political feelings, and all his interests were in aeroplanes and flying-boats, and it is a tragedy that his services should be lost. I want to put a question to the Minister regarding the British South American Corporation. Is it true that, during the Tudor troubles last year, the Ministry of Supply cancelled the order for the Tudor V for this Corporation, which had ordered them at £140,000 each, and that, a few weeks afterwards, when the Corporation said they wanted them, they were re-ordered at a figure of £40,000 or £50,000 each? If that is so, it probably means that the Ministry is carrying an enormous loss, and I think this Committee must be clear whether these Corporations are paying the right prices for their aircraft, because, when these machines were re-ordered, the price had dropped to exactly one-third of the original figure. We have heard rumours that B.O.A.C. was taking over British South American Airways, and, personally, I think it would be a good thing if it should happen, but may we have some information on the matter today?

So far as the ordering of aircraft is concerned, the Hanbury-Williams Committee reported last year, and I should like to know why the report has not been published. There could be nothing secret in the report, or any reason why the public should not be told what is the present position. The findings of the Committee have been made known, but are they being implemented? Has the Corporation really got the freedom which it wants to order and follow through the construction of their own aeroplanes? I have a feeling that all is not well in that respect. My own view is that the Ministry of Civil Aviation should stay out of the business side of ordering these aeroplanes almost entirely, and, preferably, the Ministry of Supply as well, though, unfortunately, that is not possible. I believe that the Ministry of Civil Aviation should concern themselves mainly with routes and airfields.

We are often told that it is not possible for civil aviation to pay its way because the Corporations can never really afford to pay the development costs on new machines. I think it is generally agreed both in America and in this country that, if we have a successful aeroplane to carry 50 passengers, we would only need 500 of them for all the air routes of the world. I suggest that the Air Ministry should be brought into this matter much more closely. In America, the Skymaster was developed as a military transport, and, with very little modification, has been converted into a most successful civil aeroplane. No doubt, a proportion of the development costs could be allotted both to the military side and the civil side, but I should like to know if that liaison is really working with the Air Ministry concerning new types of aircraft.

I think the Government have been far too optimistic about the deliveries of these new aeroplanes. Reading past Debates year after year, one found that everything was to be solved the next year, but I think the Government have been far too optimistic and have not fully appreciated the many difficulties of designing and building modern aircraft. I sometimes think that it is an awful pity that the speed of modern machines has gone up to 400 miles an hour for commercial aircraft, and I think that if it had remained at between 200 and 250 miles an hour, with lower landing speeds and greater safety, it would have been much easier to attract people to flying and make it a paying proposition. I think the fact that we have had to expend money in these developments to keep in line with the policy of other countries is very regrettable.

I hope that, in the future, the Government will continue and even increase their interest in the flying boat. There is a tremendous future for this country in operating these very large craft, because we are rapidly getting to the stage where other countries may not be able to build these very great and expensive airfields, which cost millions of pounds, and I can see that the small countries in the Middle and Far East may not be able to build these large runways, perhaps three miles long. In contrast, these flying boats, with an all-up weight of about 300,000 lbs. are more economical to operate and give a greater degree of confidence and of comfort to the passengers. If we can pursue that policy, we may develop something which the Americans will want to buy from us. I have looked at the flying boats, which I saw at the Isle of Wight last summer, and I was most impressed with the way in which this job was proceeding. The firm concerned had full confidence in the designers and in the capabilities of the machines and were looking forward to flying them. I believe that they will come into operation very soon after the original test.

The Corporation have a good name for reliability, which I think is accepted by almost every passenger, but I ask them to consider introducing cheaper flying. It could be done, and I know one charter company which would like to do it. If we had the passenger version of the Bristol Freighter, carrying 50 passengers, the single ticket to Paris would be about £4 10s., and, if we could do that, we would really get the public of this country becoming air-minded and supporting civil aviation. I hope the Government will consider the suggestion. Already, the trade unions and the National Coal Board are interested in arranging tours by air for their workers, and, if we can get the costs down to something approximating what they are on the railways, we can get people to take up flying for their holidays.

I hope the Parliamentary Secretary will make some reference to his own Ministry. I recognise that he is responsible for providing a radio service, for radar and the operation of the airfields, but I cannot see what the 1,700 people are doing at headquarters and I hope that the Ministry to trying to cut down the overheads to the absolute minimum. It is a new industry, and it is a question whether we can afford even the present civil aviation programme. I am rather doubtful about the whole proposition, and I think it may be right to merge it into the Ministry of Transport as an important Division in that Ministry.

I do not think these Corporations will ever pay their way. I am trying to be quite unbiased, and I think that any man who comes in to run them as they are at present, will find that it is only a question of time before they break him. I do not think that any man can run a business under a Minister who is, perhaps, going to interfere, exert his will and upset the smooth running of that business organisation. We must remember that we are competing with hardheaded business men in foreign airlines. I do not believe that the industry can survive these constant changes, and I should like to see the valuable experience of men who have successfully run the shipping lines brought into this industry. When the Conservative Party comes back to power, we shall make drastic changes to see that the business is run efficiently, and we shall have the courage to "unscramble" it, where we think that is necessary.

4.1 p.m.

I am sure the House is grateful to the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) for the tone in which he opened this Debate. Except for one or two slight diversions, his speech was a little more realistic in its approach than some of the previous ones to which we have listened. I hope that the tone he set will be maintained by hon. Members on both sides throughout the Debate because the correct administration of civil aviation in this country can only be achieved by the fullest cooperation of all associated with the operations themselves and with the creation of public opinion in the country.

It is only about a month ago since my noble Friend in another place made a very detailed and analytical survey of the problems which face civil aviation in this country. I am certain that every hon. Member who is interested in civil aviation has read the Minister's speech and the Debate generally. Therefore, I do not intend to go over the field covered by my noble Friend on that occasion. I propose to confine myself to one or two important issues and to reply to the points raised by the hon. and gallant Member for Macclesfield.

The hon. and gallant Member's last question was with regard to the Ministry of Civil Aviation. May I congratulate him on admitting, in so far as the Civil Service is concerned, that the staff numbers 1,700. In other Debates it has been alleged by hon. Members opposite that we are expanding the number of civil servants, and that there are 8,500 ladies and gentlemen alternately making tea for the Minister and myself. Of course, that is not true. The headquarters staff carrying out Civil Service jobs number 1,700. Of that number 300 are technical men engaged in the planning of navigational aids, lighting systems for aerodromes and all the technical jobs which have to be done in regard to the development of facilities for civil aviation in this country. The remainder are engaged in licensing and in dealing with the problems which arise under air navigation regulations. I can assure the hon. and gallant Gentleman that there has been a very severe check of the organisation and methods of the Department by the Treasury and that the present organisation and staffing have been agreed as a result of that survey.

The total staff of the Ministry is 8,000, of whom 6,300 are employed on out stations. They are engaged in the maintenance of the aerodromes, aerodrome management, air traffic control, telecommunications, navigational aids, fire and rescue, police, and airport duties. I am not going to say that there is not one person on any of those stations who is not over and above the number which is absolutely necessary; such a claim would be ridiculous; but I can say that by staff audit methods within the Department itself everything possible is done to see that, the number is kept in check and that no unnecessary additions are made to the staff.

After all, air operations are a very specialised job. Where one gets an acute division of labour, particularly on outstations and small stations, there is sometimes a tendency for two people to be employed to do two specialised jobs when, in fact, one person could cover both jobs. That fact is appreciated by my noble Friend and he has given me a special assignment to inquire into the matter, to report to him as quickly as possible and to make recommendation on the outstations staff of the Ministry. But for the fact that this Debate was taking place I should have been engaged on that task today.

There is one matter to which I wish to refer and which was not mentioned by the hon. and gallant Member for Macclesfield—flying clubs. I am sure that other hon. Members will wish to deal with that matter in the course of the Debate. Considerable pressure has been exercised from all sides for assistance to be given to flying clubs which are at present in very difficult circumstances. I am sorry that I am unable to make a report today with regard to these clubs owing to the fact that discussions concerning them are at present proceeding with the Treasury. However, I can assure the Committee that as soon as possible a statement will be made.

On 2nd February the Minister said in another place that he expected to be able to make a statement in a month's time, that is, tomorrow. Will a statement be made as early as that?

It was because my noble Friend made that statement in another place that I felt bound to make some reference to it today. I made inquiries at the Treasury whether I could make a statement today, and I was informed that the matter is still under consideration and that therefore no statement could yet be made.

The hon. and gallant Member referred to the Departmental Estimates and to the fact that £24 million is set aside for the requirements of my Department. Of that amount, current expenditure represents £15,500,000 and capital expenditure £8,500,000. Of the £15,500,000, £8 million is required to meet the statutory loss or grant to the Corporations, and £7,500,000 is required for the provision of aerodromes, navigational aids, and similar services, at home and abroad. Of the £8,500,000 capital expenditure, £3 million is in respect of aircraft, £2 million in respect of the further development of London Airport, and £3,500,000 for the development of other airports, navigational aids, aerodrome lighting, and the other provisions which are essential if we are to develop civil aviation along the lines desired by hon. Members on both sides of the Committee.

The hon. and gallant Member asked a definite question about the aerodrome pattern for London. I am in entire agreement with him, and I think all those who have given thought and study to the aerodrome pattern in London agree with him, that the proximity of London Airport to Northolt makes the use of Northolt, when—and only when—London becomes used to the greatest capacity, a dangerous operation, or a risky operation if not a dangerous one. At the moment the Committee will appreciate that London is used by B.O.A.C., B.S.A.A. and 14 other international airline operators. Northolt is used by B.E.A.C. and six other continental operators.

In addition to London and Northolt, there are Gatwick, Croydon, Bovingdon, and Blackbushe, which are used by charter operators, Blackbushe and Bovingdon also being used as diversionary airports for London. With the development of London Airport we hope to bring it into use for B.E.A.C. when the Ambassador comes into operation, that is in 1951–2; and to concentrate B.E.A.C. activities at London Airport and thereby be able to give up Northolt by the end of the time it has been leased to my Ministry from the R.A.F.—that is, in 1955. It is hoped to transfer the operation and the maintenance of the Ambassador to London Airport by 1951–2. Over and above the actual utilisation of the airport it will give an added facility to B.E.A.C. in that it will give a direct connection with B.O.A.C.'s international routes for B.E.A.C.'s continental and internal services.

I turn now to Gatwick, Blackbushe and Bovingdon. Gatwick and Blackbushe are both requisitioned aerodromes and it is not the intention of my Ministry to acquire either of them. Gatwick is being derequisitioned in September of this year and we are hoping to derequisition Blackbushe by the end of 1950. To make facilities for the charter operators who will be displaced from Gatwick and Blackbushe, we intend to develop Stanstead Airport in Essex, which is near Bishop's Stortford, and in developing that airport we hope to make it available for diversion from London which may give an opportunity, perhaps, at a later date, for us to give up Bovingdon as well.

Would the Parliamentary Secretary say why he is unable to keep Blackbushe going when the owners of the land there are anxious that he should do so, when the local authorities would like it kept on and when the very good visibility and flying conditions of that airport are recognised?

Flying conditions and visibility are good, but I am surprised to receive from the hon. and gallant Member for Macclesfield—and I accept it from him as right because he is in close association with that airport and knows quite a lot about it—information that the local authorities are in favour of its being maintained as an airport. My information within the Ministry, which I will check up, was that they required it to be derequisitioned. In fact I am almost certain that only the other week I had my attention drawn to the fact that much of this airport is common land and that a promise had been made that it would be given back when its R.A.F. use was no longer being maintained.

Some local authorities asked me to approach the hon. Gentleman's Department because they want to get on with building houses for the workers there.

In any case, apart from that, it is not a good aerodrome from the point of view of operators. As the hon. and gallant Member knows, a main road, I think it is A30, goes right through it and it has many disadvantages. It is desired to close it in 1950 and we will open Stanstead and maintain it instead.

The only other possible aerodrome in the London area is Fairlop, which is near Ilford, in Essex. That aerodrome, which was purchased by the City of London in order to provide an airport for the City of London, is being safeguarded under normal town and country planning rules in order to protect the approaches of the aerodrome, but it will not he developed until such time as it is absolutely certain that the requirements are such that its use is absolutely essential.

The Parliamentary Secretary used the word "dangerous" in regard to the close proximity of Northolt and Heathrow. In order to allay any uneasiness on the part of passengers who have to use this airport, will he make it clear whether European passengers will have to use Northolt until the Ambassador is ready in 1951?

I corrected the word "dangerous;" I said it would be better and more correct to say there was a risk. The fact is that the circuits for the aerodromes overlap, but there is very adequate air traffic control of a very high standard indeed. But as the London Airport develops and the density of its traffic develops, in certain circumstances, particularly when weather conditions and visibility are not good, there is an added risk, and it is the desire of my noble Friend that every possible opportunity should be taken to eliminate any known risk immediately it arises. That risk is not there at the moment because the density of London Airport's traffic has not developed to that extent, but it will be there in the next few years.

Does that mean that the hon. Member's Department is satisfied that there is a reasonable safety factor there?

Yes, Sir; most certainly. The hon. and gallant Member for Macclesfield referred to associate agreements, or the opportunity which has been given following the announcement I made in the House in reply to the hon. Member for Eccles (Mr. Proctor) in regard to the opportunity for charter operators, by means of associate agreements with one or the other Corporations, to provide scheduled operations. The procedure for that, as is known in the Committee, is for an application to be made to the Air Transport Advisory Council for consideration by that Council and for the Council to make a recommendation to the Minister. It may interest the House to know that up to date there have already been 189 applications from 44 different companies. These applications are under consideration and it is hoped that a recommendation on many of them will be made to my noble Friend by the Council before the end of this month.

May I make it quite clear, because evidently it was not quite clear to the hon. and gallant Member for Macclesfield, that this is in no way a departure from the policy as laid down by the Civil Aviation Act, 1946, which confines to the Corporations the operation of scheduled services. It is no departure from that policy at all. What has happened, and what is evident in present operations by B.E.A.C. in particular, is that its internal services in this country at the moment cannot be operated at a profit, and during the time they cannot be operated at a profit and B.E.A.C. is running at a deficit the concentration of B.E.A.C. must be upon those routes where it is likely to break even, rather than upon developing new routes where, it is felt, B.E.A.C. is bound to lose.

It is admitted—and I freely admit—that the internal scheduled operations of this country do not appear from a Corporation point of view to be profitable undertakings, but there is no desire on the part of my noble Friend to adopt a dog-in-the-manger attitude and to say, "Just because the Corporation does not want to do it at the moment, other people who do want to do it and who have the facilities to do it shall not do it." What we say is this: if the charter companies undertake this work they will have to do it under two very definite conditions. One is that their standard of operations and of safety shall not be lower than that of the Corporations. I think every Member of the Committee would agree that my Ministry would be wrong if they permitted operations in which passengers were taking a risk. When a passenger takes a seat in an aircraft of a scheduled airline operator, that passenger does think that someone has taken some trouble about the safety of the flight and the standard of the operation.

The other stipulation is that the wages and conditions of employment of the charter companies shall be not less favourable than those of the Corporations, which up to now has not been the case. However, I should like here to pay a tribute to the work that has been done by the British Air Charter Association in bringing these charter companies together to try to negotiate an agreement with the trade unions and to maintain those standards which we consider are necessary if these operations are to be carried on.

Could the hon. Gentleman explain why it is that the independent operators expect to make a profit on these lines, when B.E.A.C. does not?

The hon. Gentleman has asked for this. I did not bring this in. I was trying to keep the Debate on the high level on which it was opened by the hon. and gallant Member for Macclesfield. The answer is that many of the operations of these people were below standard, and the rates of pay and the conditions of their employees were very much below standard.

I am not asking about that. I am asking how they expect in the future to make a profit when B.E.A.C. does not. Do I understand the hon. Gentleman's answer is that they expect to run under low conditions and, therefore, to make a profit?

Safeguards have been made against the possibility of such poor conditions. The answer is this. After all that has been said about the operation of internal services, no charter company really will run an internal scheduled service in this country. If there is no profit in it, they will not do it.

One hundred and eighty-nine applications to run services have been made. I am not going to analyse those. I cannot at the moment. If the hon. Gentleman likes, I will, perhaps, try to do so before 10 o'clock. However, the vast majority of the applications are not for scheduled services between, say, Birmingham and London, or Birmingham and Manchester and Newcastle, but for services from London to the Channel Islands during the summer months on Saturdays and Sundays—London to the Isle of Man on Saturdays and Sundays during the summer months, and from London to Le Bourget. In the main, they are to be summer holiday services, and they are not scheduled services in any shape or form.

Would my hon. Friend put it this way—that the charter companies, in effect, are to get the cream of the traffic at particular times of the year?

No, Sir. That is a point under consideration—or will be when the applications come before the Air Traffic Council. It will be considered whether or not they want to duplicate existing services already run by B.E.A C. That will be a matter for consideration when the applications come in. In the main we shall find, I think, that most of these services are not in that category.

Is it not the case that when the new nationalised service was put into operation many of the little service companies were then feeling their way and building up their business, and were paying much lower salaries than were negotiated when the Government took over? Did not some of the unions—I forget the exact name by which these organisations go, but I mean organisations speaking on behalf of the pilots—negotiate new rates of pay which are so high just now, that it is almost impossible for those charter companies to pay the new rates and be paying concerns? Were not the rates negotiated without consideration of whether those companies were paying concerns or not?

In so far as the earlier part of my hon. Friend's question is concerned, let me say that it is true that in some instances the rates of pay and conditions of service and the rest of it were not what they ought to have been. However, do not let us begrudge a tribute to the men and organisations that blazed the trail, and did a very heroic job. They did a good job. I think that hon. Members opposite claim too much for them sometimes, but they did the job here and in Scotland. In Scotland the standard of operation was So high—it was most creditable to them—that, in fact, during the operations there was not ever, so far as I know, an accident which cost the life of a passenger. That was a very, very creditable performance indeed. They did a good job indeed, as I say, in blazing the trail, but their general standard of operations in the light of present-day experience was not such as could be continued.

Reference has been made to deficits. It is true that the deficit in 1947 to 1948 was £11 million. The anticipated deficit for 1948 to 1949 is £9 million. It had been hoped that the deficit for 1949 to 1950 would have been kept down to £5,500,000. However, that target was set by my noble Friend—I am not saying it may not be achieved—on a basis which has been changed in a rather unfortunate manner. I shall deal with the repercussions in a moment or two. That was the basis on which the B.S.A.A.C. estimates were made. There are many factors which have come into play and which are beyond the control of the Corporations and which may affect the reaching of that target—such factors as delays in aircraft deliveries, which the hon. and gallant Gentleman referred to, difficulties in running in aircraft after they have been delivered, and all that sort of thing. However, I think the Committee is entitled to ask questions and to be satisfied with the answers about why the losses have been incurred by the Corporations to date, and about what is being done to effect improvements, and whether improvements in the current year will be continued in subsequent years.

First, it was always expected that there would be losses in airline operations when they were re-commenced after the war. The legislation which went through the House recognised that fact—recognised that the Corporations which were being set up to commence operations were being set up under severe handicaps—and statutory provisions were made to meet the losses which were expected because of those handicaps, which were well known. What are those handicaps? The first is that of aircraft; the second is the dispersal of bases; the third is the flying of uneconomic routes, particularly, in some cases, of internal routes in this country, and the rendering of social services—particularly in the Highlands and Islands of Scotland; and there is also the excessive cost which arises through the rapid building up and development of an organisation in its early days—a matter referred to by the hon. and gallant Member for Macclesfield.

The plain fact is that the disadvantage which B.O.A.C. was operating under was that the aircraft which were available did not give B.O.A.C. an opportunity to earn sufficient revenue to meet its direct operating costs. Let me give an example. The average payload of B.O.A.C. aircraft is 5,800 lb. The payload of a Constellation is 12,000 lb. It means that to carry the same load and to secure the same revenue B.O.A.C. has to run two aircraft and run at double cost—double crew, double maintenance, double handling, double book-keeping; all the general incidental costs are doubled because the payload capacity of an aircraft of B.O.A.C. is only half that of more up-to-date aircraft. The hon. and gallant Member for Macclesfield is usually so fair, so let me point out this to him. He mentioned K.L.M. However, every aircraft which is operated by K.L.M. is an American aircraft.

Really, the hon. and gallant Gentleman is splitting hairs. They are all American aircraft. Would the hon. and gallant Gentleman say that the first Minister of Civil Aviation in this country should not have associated himself with the "Fly British" policy and should have sacrificed the British aircraft industry in order to get hold of more economic operational aircraft?

Of course, I do not think that the Minister should have sacrificed the British aircraft industry; and we all expected losses, but not such heavy losses. The point we query about K.L.M. is that they operate very efficiently, although they have American aircraft operating from one base.

K.L.M. is a most efficient airline. It has every right to be proud of the record it has achieved for its own country and throughout the world. K.L.M. takes the best of all that is going—the best aircraft, irrespective of the country of origin of the aircraft, and the best personnel. I am proud that a large section of its personnel—flying crews and training and maintenance staff—are British personnel. K.L.M. made an airline, but it killed a Dutch aircraft industry.

The Americans have an advantage in operating aircraft built in their own country. Surely it is reasonable to take Holland as a yardstick. They operate American aircraft and make a profit, but the Americans do not.

It is difficult to make a comparison unless one can do it on a basis of real equality.

Can the hon. Gentleman tell us whether B.O.A.C. is operating its American aircraft on the north Atlantic route at a profit after making proper provision for overhead costs?

If I may first deal with the point made by the hon. and gallant Member for Macclesfield, K.L.M. chooses its routes. It does not run everywhere in the world. It picks and chooses on a commercial basis. So far as this country is concerned—and so far as America is concerned—it runs a number of routes other than on a direct commercial basis. Hon. Members opposite have often asked questions about why we are running certain routes. The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) will be asking me questions very late tonight on that matter. That consideration does not enter into the K.L.M. airlines. Whether or not it should do so, is another matter, but it does not detract from their standard of operations.

When the hon. Gentleman says that K.L.M. has the best of flying, does he mean that it has five State and four absolutely private directors on its board; and if that is the best of flying, why cannot we have that here?

I am not prepared to enter into a dialectical argument with the hon. Gentleman on the question of nationalisation. Ninety per cent. of the paid-up capital of K.L.M. is State capital. My information is—and I checked it this morning—that 90 per cent. of the paid-up capital of K.L.M. is State capital, and the majority of the directors are nominees of the Government.

Almost the odds at Hammersmith. It does not matter whether it is a State organisation or not. We are concerned about the efficiency of airline operations. It is a transport job of running services for the people, and the aim of every one ought to be to do that at the highest standard of efficiency.

The hon. Member for Keighley (Mr. Ivor Thomas) asked what was the result of B.O.A.C. operations on the north Atlantic route. There is only one route, the north Atlantic, on which B.O.A.C. operate on a comparative basis with its competitors. On that route, the degree of utilisation per aircraft is higher than on any other airline operating over the north Atlantic, and the pay load secured is higher than that of any other airline operator. It is useful to draw a comparison. If B.O.A.C. had been able to operate all its routes on the standard on which it operates, the north Atlantic route, the deficit would have been£ 1½ million and not £6½ million. That is a very striking example of the difference which the use of economic or neareconomic types of aircraft makes in comparison with uneconomic aircraft.

The only conclusion I can draw is that B.O.A.C. is not operating at a profit on the London-New York route with American aircraft, provided provision is made for a due share of overheads.

I would not claim that it was in fact actually making a profit. The last analysis I had was some time ago, and then it was anticipated that there would be a dollar profit operating in 1948–49. I am not certain what was the actual standard in 1948–49, but I will find out before we come to the end of this Debate. A fundamental of economic airline operations is to have as few types of aircraft operating as possible, to concentrate on the maintenance of those aircraft at as few bases as possible, and to fly them as much as possible. That is one of the problems of B.O.A.C. They were operating nine different types of aircraft from 11 different bases, a set of conditions with which no other operators had to deal and for which B.O.A.C. were in no way responsible. They have been striving to deal with those conditions.

His Majesty's Government must take some responsibility for the fact that they have not concentrated on that more than they have done. B.O.A.C. have pointed out time and time again that, given a greater priority for the development of London Airport, they could save a very considerable amount of money. The development of London Airport means labour and materials, and a balance has to be struck between the development of London Airport and the provision of houses, factories and workshops for the people of West London and Middlesex—and this is apart from purely civil aviation considerations.

Is the hon. Gentleman satisfied that the money spent on London Airport was directed to the most useful ends, and would it not have been better to cut down some of the runway development and get the maintenance side established first?

In dealing with an international airport, it is necessary to make it possible for operators to land in this country, and one of the first jobs was to develop the runway system, to get a dual triangle system going, and to bring in as large a number of aircraft as possible. In addition, the provision of hangars used a considerable amount of steel. Cement was a problem in the early stages, but now, because of good organisation in association with the cement industry, there has been a larger availability of cement, and we have been able to go on. That condition is rapidly drawing to a close, and a much brighter period is appearing, because the B.O.A.C. aircraft position will, in the near future, be much better. They will be equipped with the Boeing Stratocruiser, the Canadair IV, the Constellation, and the Hermes.

Here I should like to deal with a point made by the hon. and gallant Member about the association of the R.A.F. and civil aviation in aircraft development. The Hermes is, surely, a good example of what has gone on and what is going on in co-operation with the R.A.F.: the Hermes is the civil version and the Hastings is the military version. In dealing with the general question of losses in civil aviation, let no one overlook the almost inestimable value to the aircraft industry and to aircraft engine manufacturers of the co-operation between the various Corporations in the development of those aircraft and of the engines, nor the relationship of that work to military work later on. In addition, of course, there will be the D.H. 106, the Bristol 175, with the Brabazon coming along, and the S.R. 45 for B.S.A.A. With the development of London Airport, which is going ahead as rapidly as is possible, B.O.A.C. will be able to concentrate its maintenance at London Airport and close some of its outstation maintenance bases.

With B.E.A., the aircraft position was a little easier; it was not so difficult as with B.O.A.C., but they had their problems with aircraft. The development of the Viking cost B.E.A. half a million pounds, but it is now a first-class aircraft, and we have reached the stage when B.E.A. is meeting operational costs on its Continental services. In fact, there is an operational surplus on the Continental services, and they are approaching the stage when these routes will meet all their overheads, and the only deficit will be on the internal lines. As the Ambassador comes into operation, it will be transferred to London Airport, and B.E.A. will concentrate their maintenance there. At present B.E.A. are concentrating their maintenance of the Vikings at Northolt, to be followed by the Ambassador at London Airport, and the Dakota at Renfrew, thereby reducing costs very considerably.

Has my hon. Friend received advice about this? Is he satisfied that the concentration of all this maintenance at London Airport, and consequently the testing of the aircraft there, will be perfectly satisfactory, in view of the increased traffic at London Airport in any event? In other words, is he satisfied that the aircraft to be maintained there will be tested after their maintenance?

I can only go on the technical advice I receive, and that technical advice is that the operational flights required as a result of maintenance—tests, and so on—will not stretch to any degree the utilisation of London Airport. My advice is that it was correct to concentrate maintenance there, that it will save dead flying, and that they will be able to carry the load in that area.

I turn now to B.S.A.A. As with B.O.A.C., B.S.A.A. commenced under handicaps in operating converted bombers—Yorks and Lancastrians. They were looking forward to bringing the Tudor into service—and, in fact, had brought the first Tudor into service. Unfortunately, there have been the tragic losses of the "Star Tiger" and the "Star Ariel." Shortly after the disappearance of the "Star Ariel," my noble Friend invited Lord Brabazon to inquire into the design and construction of Tudor IV aircraft in relation to safety and airworthiness, and into any other relevant matters. Lord Brabazon has now communicated to the Minister the interim results of his inquiries. My noble Friend has also received the preliminary report of the Chief Inspector of Accidents. Neither of these investigations discloses the probable cause of the disaster, just as no probable cause was found when the "Star Tiger" disappeared a year earlier. Had it been possible to determine the definite actual cause, which could have been remedied, my noble friend feels that the aircraft might have continued to carry passengers. But as this was not the case, and, taking account of the psychological reaction of the travelling public, he has regretfully come to the conclusion that this type of aircraft should not continue to be used for carrying passengers—a conclusion with which the chairman of B.S.A.A. fully agrees. Subject to certain modifications, it will be possible to use these aircraft for freight-carrying purposes, and plans are being made for their use, in the first instance, on the Berlin airlift. This decision immediatly raises the question of aircraft to replace the Tudors on B.S.A.A. routes, and this matter is under consideration.

Let me now deal with the point made about excessive staffs for the Corporations.

Before the hon. Gentleman leaves the important question of the Tudor, I should like to put this to him. It may be highly technical, and he may not be able to give the explanation at the moment, but if an aircraft is unsafe for carrying passengers in any circumstances, how can it be safe for carrying crews?

Those who fly aircraft are brave men who have the future of aviation at heart, and they take risks on behalf of aviation in making certain that aircraft are safe for passengers to fly. If aircraft crews had never taken a risk on the possible development of aircraft, there would not have been an aircraft industry, and there would never have been civil aviation.

Is not the real point that it is now more likely that this aircraft will be used over land areas rather than over the long sea routes on the journeys they performed with B.S.A.A., and that in those circumstances the risk, even for crews, is not as great?

That is a consideration. It is true that if they are flying over land and there is an accident, the aircraft will come down on the land, and we may then find out what has happened. At the moment those that have crashed have disappeared under the sea, and there is no story to tell. If one crashes on land there can be an examination of what is left of the aircraft, and those skilled in these matters may find some reason for the failure of the aircraft. But that does not dispose of the point made by the hon. and gallant Member for Central Glasgow (Colonel Hutchison), that every pilot and every member of a crew who goes in the aircraft is taking a risk, and knows he is taking a risk: he is taking that risk in order to perform a function in the airlift, and also to make his contribution to finding, perhaps, some cause——

Is not the hon. Gentleman aware that Air Vice-Marshal Bennett and his crews are perfectly satisfied, and that they do not think they are taking a risk at all in flying the Tudor on the Berlin airlift?

That was the opinion expressed by B.S.A.A. crews when they went. It is a fact that the crews themselves speak extremely well of the aircraft; but two have disappeared, with no explanation possible, and in those circumstances the decision which I have just read is one which has been agreed to by all parties concerned.

On the Berlin airlift they will not be used as pressurised aircraft, which is an important consideration in regard to the question raised by the hon. and gallant Member for Central Glasgow.

That may be a factor. They will not, of course, be used as pressurised aircraft.

The criticism about the excessive staffs of B.O.A.C. and B.E.A. does not apply to B.S.A.A. The Corporation themselves would be the first to admit that during that period of rapid expansion there was a tendency, when the whole urge was to get the services going, to set standards and to get results, for there to be an accumulation of staff. It was an expensive way of doing things, but it was done. and the manner in which it was done and the standard of performance achieved reflect considerable credit to all those concerned in it. Now that the services, routes and standards have been decided upon, it is possible to review the machine and to adjust it where necessary. B.O.A.C. have already made a start, and over 5,000 people have been dismissed, and in the case of B.E.A. some 800 people have been dismissed. We have been told that there would have been a row if this had been done by private enterprise. I am surprised that that statement should be made, because it used to be a common practice for the man at the bench to get his cards on a Wednesday or Tuesday night.

It is not a question of since the end of the war; the trouble was before the war. Before the war, a man who got his cards did not know whether he could find another job, but now it is comparatively easy to find another job by just going round the corner.

If that argument is to be used, can we be told why it is that at every by-election the charge is constantly hurled at the Tories that they are the party who dismiss people from their jobs?

The trouble was the consequences following dismissal. The hon. Member cannot have it both ways. The rapid expansion of Civil Aviation led to over-staffing, and now that we are streamlining the organisation it means that those who are additional to our requirements must be sacked. Surely it is not being suggested that we should carry passengers on the ground as well as in the air. Is the suggestion being made that we should dismiss no one?

I am not suggesting that. It is the Parliamentary Secretary who is trying to have it both ways. Why should the Conservative Party be criticised in view of what the Parliamentary Secretary has just said?

Had the hon. Member been present during the speech of his hon. and gallant Friend the Member for Macclesfield, he would have heard him say there would have been a howl from these benches, if people had been dismissed by private enterprise. B.E.A. and B.O.A.C. are pruning their organisations to bring about lower costs and more business. Civil aviation is a transport job which is no different to the job of running road transport or rail transport. In other words, we have to bring down the costs of operation to the lowest possible level, and the lower we get the costs, the larger the volume of business and the nearer we shall be to breaking even or making a profit.

I wish to deal now with the change of chairmanship at B.E.A. I wish to make it perfectly clear that there was no personal disagreement between my noble Friend and Mr. d'Erlanger. The correspondence published tells the whole story. My noble Friend had to make a decision. Mr. d'Erlanger's period of appointment finished in June, and my noble Friend had to decide whether he would reappoint him or make another appointment. He decided to make another appointment. [HON. MEMBERS: "Why?"] Because he felt that change would be to the benefit of the development of B.E.A. and civil aviation generally. No chairman of any organisation can claim the right to perpetual reappointment, and the fact that a person is not reappointed does not in itself mean there is any criticism of the individual.

The Lord President of the Council laid it down about a year ago that anyone who opposed nationalisation would not be considered for appointment to a board, and there was a great row in the House about it at that time. The Parliamentary Secretary is aware that Lord Douglas joined the Socialist Party some months ago, and we know how the Socialist Party treat their converts. Is there anything at all in this dismissal from the point of view that the ex-chairman was a Tory and the man who has been appointed to the job is a Socialist convert?

No, Sir. As the point has been raised, I shall deal with it a little more fully. Lord Douglas has accepted the appointment offered to him, and he has accepted it at a salary of £5,000, which is £1,500 less than the salary received by his predecessor.

Is not Lord Douglas also receiving the full pay of a marshal of the Royal Air Force?

I could not say. He is a marshal of the Royal Air Force, but I do not know whether or not he receives full pay. I should have thought that a retired marshal of the Royal Air Force would be on half pay.

Does the Parliamentary Secretary not know that a marshal of the Royal Air Force never retires but is always on the active list?

If the hon. and gallant Member's information is so much better than mine, then why did he ask the question?

May I point out that although Lord Douglas has retired, he does not retire from the active list, and that he is paid £1,750 as against £3,000 when serving full-time.

Apparently I know more about these things than some of those who claim to have expert knowledge. I thought he was receiving half pay, and £1,750 is very nearly half pay. As far as the Opposition are concerned, if it is a Tory appointment it is a nonpolitical appointment, but if it is a Socialist appointment then it is a political appointment. [HON. MEMBERS: "No."] There are a lot of Members on the Opposition Front Bench who when they lost their ministerial jobs in 1945, immediately became railway directors. After all, Lord Douglas has reached the highest rank in a glorious Service. Do the Opposition claim that his appointment to marshal of the Royal Air Force was a political appointment? He was Commander-in-Chief of Fighter Command during the Battle of Britain in 1940, those dark days of the war.

Lord Dowding was at the head of the Royal Air Force in the Battle of Britain. Lord Douglas took over shortly after him.

In the darkest days of the war, in 1940, Lord Douglas was appointed A.O.C.-in-C. Fighter Command. Was that a political appointment? Lord Douglas was appointed A.O.C.-in-C. Middle East, 1943. Was that a political appointment? In 1944, he was appointed A.O.C.-in-C. Coastal Command. Was that a political appointment? You see, each time he is appointed by a Tory Government, he is the best man for the job but——

I am sure that the hon. Gentleman does not want to be unfair to Mr. d'Erlanger. I am certain that he was never appointed in the first place as a Tory. I was associated with him on British Airways and elsewhere. He was a pioneer in civil aviation administration. I wish to make it absolutely clear that he was not appointed politically as a Conservative.

The hon. Gentleman has raised the point. I have not raised it. So far as their politics go, I never know that of any person associated with air-line operation. It is not my purpose to discuss politics with them. I do not know. It is hon. Gentlemen opposite who are making all the fuss in regard to it.

When I was referring to this matter of the airlines I was trying to deal with the wider aspect, and in particular to a new chairman being appointed when the managing director had gone on extended sick leave. Would the Parliamentary Secretary tie himself to that question of two senior executives coming into the Corporation at the same time?

I would much prefer to deal with the matter in the manner in which the hon. and gallant Gentleman raised it. It is the hon. and gallant Gentleman's associates round about him who are on it like dogs on a bone for headlines in the "Daily Express" and the "Sunday Express." What I should like to know from hon. Gentlemen who have interrupted is why, when one appoints an officer with considerable ability to a very high office in the service during a period of war, that appointment is non-political, but when he is appointed to use the same qualities in the same sort of service in a peace-time operation for the benefit of the nation, it becomes a political appointment.

Is the Minister aware that the right hon. Member for Dumbarton Burghs (Mr. Kirkwood) and I were thrown out of industry without a penny, and that it would please us very much if the Parliamentary Secretary were to purge every Tory out of it?

I am spending much more time than I ought to be spending on this matter, but I shall give way to the hon. and gallant Member for Central Glasgow (Colonel J. R. H. Hutchison) if he wants me to.

The Parliamentary Secretary has asked why, when high appointments are made in the Services during the war, they were not political appointments, and after the war they become political appointments. Surely we have always prided ourselves on the fact that political considerations do not enter into any appointments during wartime.

I wish the hon. and gallant Member would have the courtesy to admit that that question does not enter now into this matter. This is an appointment in the same relationship: the best man for the job then, the best man for the job now. Perhaps one ought not to say "the best man" but certainly the best man within the knowledge of the person who makes the appointment. It is not the high-ranking officers who are always the best men in the Services.

The hon. Gentleman has been very courteous. Will he deal with the one point which I put to him, that the Lord President of the Council laid down that a man, no matter what his ability, who opposed nationalisation, was not to have a position on the Board?

I have quite enough to do with answering for myself. The Lord President of the Council is quite capable of answering for himself, and if the hon. Gentleman will put a question down to him, or will take some opportunity of raising the point in the House, I am sure that my right hon. Friend will be glad to answer it. The hon. Gentleman is not going to draw me on that line. What I have been saying is equally true in other directions. Sir Miles Thomas has been announced as chairman to follow Sir Harold Hartley at the B.O.A.C. Is the appointment of Sir Miles Thomas a political appointment? Why is it not, if the appointment is a political one at the B.E.A.? Is there not a difference, simply because the political leanings of Sir Miles Thomas and Lord Douglas may be a little different? The appointment of a Tory is non-political but if it is of a Socialist it is political. I am happy to pay a tribute to the work that is being carried on by Sir Miles Thomas, following on the standard set by Sir Harold Hartley.

May I now close? I have spoken for much longer than I really ought to have done and I apologise most sincerely to the Committee.

Why apologise? It is hon. Members opposite who ought to be apologising to the Minister.

It has been my privilege and experience to travel over many airlines in many parts of the world since I have been in this job. I have seen the standard of operation on our own and other countries' airlines. I have seen the standard of passenger handling of other countries. I can say that I am proud that the standard of operation, the crew standards and the passenger handling both in the air and on the ground of British airlines and British airports are second to none. Given the tools with which to create an economically operative machine, the aircraft and adequate maintenance bases, British air transport through the three major Corporations will lead airline operations throughout the world.

5.7 p.m.

An added interest has been injected into the Debate by the dismissal of Mr. d'Erlanger from British European Airways, to which the Parliamentary Secretary has just referred at some length. I do not propose to go into the personalities of the matter except to congratulate Lord Douglas upon making the grade so quickly, and also to congratulate some Members of the Government Front Bench in having their apprehensions relieved so quickly by this appointment, and in particular the Minister of Defence and perhaps the Minister of Civil Aviation himself. The new appointment does however raise certain general questions of some importance. I should be grateful if answers could be given. No mention has been made by the Parliamentary Secretary of the question of a Welsh service, which figures so prominently in the correspondence between Mr. d'Erlanger and the Minister.

If I have made a mistake I apologise and withdraw it, but it has certainly been referred to prominently——

My impression was that it figured in the correspondence, but apparently I am in error.

Before the hon. Gentleman set out to deal with the correspondence, surely he should have had the decency to read it.

The hon. Gentleman is making an unnecessary observation. Of course, I have read the correspondence published in the newspapers yesterday morning and I thought this matter came into it, but apparently it was referred to outside the correspondence. I shall be glad to know something about this service, because it raises the question whether the Minister regards himself as having power under the Civil Aviation Act to direct a Corporation to run a service. That is my own view. The Minister has power to issue directions of a general character, and I should regard a direction to run a certain service as being a direction of a general character. If the Minister gave directions that the Corporation was to use Dakota aircraft or went into similar details, that would be a particular direction and would not be permissible. I should like to ask the Parliamentary Secretary whether any such direction has been given in this case? There must have been a good deal of discussion between the Minister and Mr. d'Erlanger. Perhaps we can have that point cleared up before the evening is over.

I should like to address myself particularly to the question of the finances of the Corporations. The Committee will appreciate that I want to see these Corporations a success. I have more reasons than most persons for wishing to see them make a success of their task. If they are to be regarded as successful, it is absolutely imperative that the deficits of the Corporations should be cut down to more reasonable figures. I was very glad to see that the noble Lord the Minister of Civil Aviation has set the Corporations a target of £5,500,000 as the total deficit for the coming year. I should be grateful if the Parliamentary Secretary would tell me what is the basis on which the Exchequer grant is to be made. As he will know, the Civil Aviation Act requires that a basis shall be formulated, and presumably this £5,500,000 deficit is on some particular basis. I should be grateful if I could know what it is. I believe that the present deficit can be cut down, and I regard the figure of £5,500,000 as quite reasonable. It was, in fact, roughly the figure at which the air line Corporations were operating from 1st April to 31st July, 1946.

The Parliamentary Secretary will know that before that period there was an extensive waiver of charges, and it was not possible to say with any accuracy what the profits or losses of B.O.A.C. were. In actual fact, a surplus was made in those days, but I should not like to place any great emphasis on it owing to this very extensive waiver of charges. When the waiver of charges came to an end on 31st March, 1946, from that date until the three Corporations started to work under the Civil Aviation Act on 1st August, 1946, the deficit for five months was £2,170,923 for all air services except the internal services, which works out at an annual rate of £5,210,015. I think that the fact that we were then at the beginning of the services, with all the inherent difficulties of the commencement, should be set against the additional mileage which has since been flown. This figure of £5,500,000 accordingly strikes me as a reasonable target at which the Corporations should aim, and I am glad that the Minister has laid it down so definitely.

Before we ask ourselves how these losses can be cut down we must ask ourselves precisely what the losses are. They can be put in a graphic form. The loss of B.O.A.C. can be measured at £54 for every passenger carried; of B.E.A.C. £7 for every passenger carried; and of B.S.A.A., £37 for every passenger carried. Of course, the distances for which the passengers were carried must be taken into account. The average number of miles per passenger were: B.E.A.C., 239 miles; B.O.A.C., 2,126 miles; and B.S.A.A., 3,580 miles. That calculation presupposes that there is no deficit on mail and on freight. So far as I can gather, mail pays its way. The receipts from non-surcharged mail on the external services are 16s. a ton-mile, and for surcharged mail, 32s. a ton-mile; these figures are above the total costs of operation. There is, accordingly, no deficit on account of mails, but I have not the figures on which I can make a calculation for freight.

This raises the very important question whether the Post Office ought not to be paying higher rates for the carriage of mail. I appreciate that in the case of international routes this would have to be agreed internationally, but in the case of the European services the British Post Office would be in a strong position to take a lead. The Post Office appears to be in a position to make a more substantial contribution. We have seen this morning in the Post Office Commercial Accounts the very large surplus which the Post Office is making, and I hope that the Minister will press for a more substantial contribution from the Post Office.

If the Post Office also is a business concern and has to be responsible for the working of its own arrangements, why should it have to subsidise any other form of industry and, at the same time, balance its own accounts? Does not the hon. Gentleman think that the Post Office has quite a lot to do in running its own affairs and in paying its own people adequate wages without subsidising another industry?

This bears on something which I shall raise at greater length later on. Both the Post Office and the Ministry of Civil Aviation are engaged in business, but the Post Office is in a stronger position than the Ministry of Civil Aviation, and I should like to see the hand of the Minister strengthened.

The hon. Gentleman has agreed, I think, that the Post Office is paying adequately for the services which it is receiving. If that is so, does he mean that it should pay over and above what is adequate for those services?

I said that it was paying its share of the cost of the operation of the aircraft, but in transport it is a familiar practice to charge according to what the traffic will bear. Diamonds are charged very much more than coal. It would be perfectly in accordance with commercial practice to have differential rates of that character. I have obtained the figures of Post Office payments for a previous year, and they reveal that the Post Office receipts from the carriage of air mail just about equal its outgoings; but the Post Office is clearly in a position to pay more. This argument has come in the middle of an attempt on my part to express graphically what is the loss of the Corporations for their services in the past year.

We get a more accurate picture if we measure the loss per capacity-ton-mile. I reckon that B.O.A.C. derived in revenue 3s. 10d. for every capacity-ton-mile and spent 5s. 10d. for every capacity-ton-mile, which means a loss of 2s. for every capacity-ton-mile; B.E.A.C. received 4s. 2d. in revenue and spent 7s. 6d., at a loss of 3s. 4d. for a capacity-ton-mile; whereas B.S.A.A. received in revenue 2s. 5d. and spent only 3s., so that the loss is only 7d. a capacity-ton-mile.

I think there is a slightly more accurate measure still. I have changed my view since last year on that point. The loss might be still better measured, I now think, according to the loss per load-ton-mile, because that takes into account the success of the airlines in attracting business and maintaining a high load factor. Measured in that way, the loss to B.O.A.C. is 3s. 4d. a load-ton-mile; for B.E.A.C., 5s. 4d. a load-ton-mile; and for B.S.A.A., only 11d. a load-ton-mile. This is not due to B.S.A.A. having the aircraft full the whole time, for in fact the load factor of B.S.A.A., which is subject to very intense competition on the South American route, is lower than that of the other two Corporations. For B.O.A.C. the over-all load factor is 66.3, for B.E.A.C. it is 62.3, and for B.S.A.A. 58.9. It must therefore be due to some factors other than the load factor.

At this point may I say that I think it is very useful for us to be able to measure one Corporation against another, and that is one reason why it was considered desirable to set up three Corporations. I hope there will be no departure from that policy. Indeed, I should like to see still greater decentralisation. I think that in this era of rapid development this is the only way in which we can get efficiency. I hope also that no one will ever confuse this question of efficiency with the unfortunate accidents which B.S.A.A. has suffered. The losses of the "Star Tiger" and the "Star Ariel" are complete mysteries. There is no known cause for those accidents, and they certainly have no bearing on this question of efficiency. It would be unfortunate if the very commendable efforts of the staff of B.S.A.A. to cut their costs, which they have done so well, were confused by this question of the baffling losses of the two Tudor aircraft.

I should now like to ask what are the causes of these losses? I can put this problem also in graphic form. I think it is fair in the first place to ask what is the number of staff employed for every aircraft used? This test is admittedly subject to a little doubt as there is some uncertainty about how many aircraft ought to be reckoned in a fleet. However, I calculate that in B.O.A.C. there are 159 staff for every aircraft in the fleet, in B.E.A. 70 for every aircraft and in B.S.A.A. 63 for every aircraft. The relatively good showing of B.E.A. is to be expected as it uses two-engined aircraft, whereas the other Corporations use four-engined aircraft and the figures are more strictly comparable.

Next I suggest as a measure of efficiency the degree of utilisation of the aircraft, which is of fundamental importance. I have not the figure for B.O.A.C., because there are not enough data in the annual report to calculate it, but B.E.A. used its aircraft on the average for two-and-three-quarter hours a day and B.S.A.A. for three hours a day. B.O.A.C. has told us that its degree of utilisation on the North Atlantic route is much greater than elsewhere. B.E.A. has gone into this question in some detail, and it points out that some of its aircraft are used in the Summer months for 4.9 hours a day. We shall not get complete efficiency from our airlines until their aircraft are used for about eight hours a day. The aircraft only cost money when they are on the ground; it is only when they are in the air that they are earning. The aim should be a much greater degree of utilisation. In Europe, where travel in the hours of darkness is often not practicable, and where the aerodromes are often inadequately lighted, I must concede to B.E.A. that it is more difficult to achieve a high rate of utilisation than over the trans-oceanic routes.

In asking what is the reason for these losses I shall next use as a measure of efficiency a division of the costs between direct operating costs and total costs. By direct operating costs I mean aircraft standing charges, aircraft maintenance and overhaul, flying operations and the charter of aircraft and crews. As the Minister knows, the direct operating costs of B.O.A.C. were 40d. per capacity-ton-mile out of a total cost of 70d., or 57 per cent. For B.E.A. the figure is 44d. out of a total cost of 90d., which gives us 49 per cent. The figure for B.S.A.A. is 24d. out of total costs of 36d., and the percentage is 66 per cent. In those figures we have the explanation why it is that B.S.A.A. made such a smaller loss than the other Corporations. It is because their direct flying costs are a very much higher percentage of the total costs than the administrative expenses, and because their costs as a whole are very much lower than those of the other Corporations.

There is yet another test and it is perhaps the best of all. It is admitted by the Corporations themselves as the best measure of relative efficiency. It is the capacity-ton-miles turned out by every member of the staff. The average member of the staff of B.O.A.C. turned out 3,105 capacity-ton-miles in the course of the year. In B.E.A. the figure was 2,819 and in B.S.A.A. 10,758.

This is an explanation that I am attempting to give why B.O.A.C. and B.E.A. made heavy losses, and why B.S.A.A. made so small a loss. The ratio of efficiency measured by that standard is 1.00 for B.E.A., 1.06 for B.O.A.C. and 3.75 for B.S.A.A. It is observed in the B.O.A.C. report that on the North Atlantic route it is able to get a figure more than twice as high for the capacity-ton-miles per employed person. I have offered these calculations to the Committee as an analysis of why these losses have arisen, and I think it can hardly be disputed that it is correct in broad outline.

We have now to go behind the analysis and ask what are the main causes. The Parliamentary Secretary has dealt with several of them, and I accept in general what he said. He has referred to the postwar problems. Another cause is that we are living in a period of very rapid development, and I am afraid that losses are inevitable in this period. It means that aircraft have to be written off in a very much shorter period than that in which they will be written off in the future. Here I should like to pick a very small bone with my hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey). He would have liked to see a stabilisation of aircraft at speeds of about 200 miles an hour. I do not think that is possible. If that argument is pushed to its logical conclusion we would arrive at the result that it would be far better if we had never flown at all.

Having gone into this business, we must see it through, and in my view we shall have more reasons to hope for stabilisation at a figure of about 500 miles per hour, which will be the cruising speed of the D.H.106 in a few years' time. I say this, not simply from a love of speed, but normal cruising speeds of 500 miles an hour will solve many problems in air travel. It will be possible to cross the Atlantic in four hours and it will be possible to cut out night travel, because the whole journey can be done in the day time. It will make the problem of air travel a great deal easier. It may very well be that we shall not be able to stabilise at that figure, and that speeds will be pushed up beyond the speed of sound. Personally I think the D.H.106 and a few other aircraft in the next few years will be thoroughly satisfactory aircraft, and I hope it will be possible to keep them in use for at least 10 years of flying life. I do not think it is possible to stabilise at lower speeds.

There is another cause of our present discontent, and here I cannot expect the Parliamentary Secretary in public to agree with me. A main reason for the troubles of civil aviation in recent years, and a main cause of the losses of the Corporations, has been the fact that civil aviation does not receive a sufficiently high priority from the Government. I will take four illustrations of what. I mean, and it will be seen what a bearing it has upon this question of loss. In the first place, the Corporations are much handicapped in not having any proper collecting centre for their traffic. They made strong representations that Earls Court should be made available for that purpose, and they were turned down because it was wanted to house part of the British Industries Fair. They have in consequence to collect their passengers all over the place. Some of the work is done near Victoria, some in the centre of London, some in Kensington, and some at the aerodrome. This has meant very serious extra costs to the Corporation. It shows that when the Minister of Civil Aviation goes to the Cabinet he is nearly always overborne by colleagues, who are able to shout louder than he is. Civil aviation has never had a square deal in the Cabinet.

The second illustration is the scattered nature of the bases which the Corporations, particularly B.O.A.C., have to employ. That has already been mentioned by the Parliamentary Secretary. B.O.A.C. estimates that it would save £1 million a year if all its bases could be concentrated at the London Airport. The hon. and gallant Member for Derby (Group-Captain Wilcock) made a very important point in an intervention just now when he asked if test flying could be carried on with all the regular services operating from the airport. That is certainly a big question. I should not like to say that I have come to a right decision but my feeling is that all the bases ought to be concentrated at the London Airport and that the work could be carried on along with the regular services. If the Government had given a clear line some years ago and said, "We will provide the labour and the raw materials, particularly the steel, for constructing all the necessary hangars at the London Airport," that would have cut out an enormous amount of dead flying and the Corporations would have been in a very different financial position. However, the Ministry of Civil Aviation has never been able to get from the Government the priority it ought to have in such a matter.

My third illustration is that of the internal services. Apart from the Welsh service which has lately come into the news, it looks as though all the projected internal services have now been dropped. There was a very good plan for the internal services of the country, and it appears to me now that the Government have capitulated completely to surface transport in this matter and that in the interests of the nationalised railways we shall not have any further development of the internal air services——

Surely the hon. Gentleman is aware that a new internal service between London and Birmingham is opening in April this year?

I thought that the distance between London and Birmingham would not justify a regular scheduled service, and, of course, there are also two excellent railway lines between those places. It appears that almost the whole of the projected plans for the internal air services have been abandoned, and that is a sacrifice to surface interests, the surface interests in this case being a nationalised industry. From the point of view of civil aviation, it makes no difference whether it is private or nationalised. This bears on the suggestions which have been made that the Ministry of Civil Aviation ought to be merged in the Ministry of Transport. I have always felt that that was the ultimate end of the Ministry of Civil Aviation, but I doubt whether the time has yet come to do it, if only because the interests of civil aviation would suffer still more. The Minister of Transport will certainly put the railways——

The hon. Member cannot discuss any alteration in legislation, which his remarks now would involve.

I am grateful to you, Mr. Bowles. I had not appreciated that point. That matter was raised a little earlier, and I am sorry that I pursued it. The essential point I wanted to make is that the internal air services of the country are being sacrificed in the interests of the nationalised railways.

The fourth illustration is that of flying clubs. This question has been hanging about a very long time, and the clubs are now in a desperate position. I know the views of the Parliamentary Secretary on this matter, and I know that he would be glad to do what he can for the flying clubs, but it involves the Government as a whole, and I think that the Government should certainly, in the highest national interests, give a substantial contribution to the flying clubs at the present time. They make a very great contribution both to civil aviation and to national defence. We were glad enough of the pilots trained in the flying clubs when the Battle of Britain came in 1940, and we may want the services of club-trained pilots again. I hope that this question will not be allowed to hang about any more. It is, of course, well known that the regular air chiefs do not attach much importance to all this amateur flying, but the Government ought to look at the matter in a more national spirit.

If some of these suggestions are carried out, such as concentration of bases, a great impression could be made on these losses of the Corporations. I am very glad to see—this is a technical point which I raised last year—that the practice of writing off twice over the cost of an aircraft has now been given up. It has been given up in a very complicated manner, but nevertheless it has been given up, and that is all to the good. If that had not been done the losses would have been even greater.

Although the outlook is a little gloomy—we are faced with heavy losses and continual upheavals in the Corporation—I think we are moving into a period which will justify greater optimism. It will not be very much longer before the Brabazon I takes the air, and also the D.H.106, two very important aircraft. According to my information, both are making excellent progress, and so is the S.R.45, the big flying boat. When we have these aircraft flying and the Ambassador, we shall have a very much better prospect of holding our own in the world. We have had to wait a very long time for it, but there is going to be a big transformation in our flying position, particularly when we have the D.H.106 in operation.

The aerodrome position is also sound. London Airport is the best airport in the world. I was very interested in what the Minister said about the proximity of Northolt. It was, of course, always understood that no final decision had been taken about Northolt, and I am inclined to agree with him that a permanent aerodrome there would be unsuitable. From what he said, I inferred that the European services would be operated mainly from the London Airport. He did not give any indication whether the project for building an airport for the European services to the East of London, say at Fairlop, has been abandoned or not. Presumably it is still open for consideration.

It is still open, but the airfield is protected by town planning. It will be used if required, but not until it is required.

I thank the hon. Gentleman. He spoke of the Ambassador going to Northolt in 1951, but the date given by B.E.A.C. for bringing the Ambassador into service is 1953. Presumably there will be two years' experimental work beforehand, or perhaps that was a slip.

It will be 1951 or 1952. They will be brought in as they are received. They will probably come into service in late 1952–53.

I thank the hon. Gentleman. There is a case for keeping open, as he is obviously doing, the need for an aerodrome to the East of London, but London Airport is in itself very satisfactory. I should like to close with one suggestion which might make it more satisfactory still. It occurred to me in the train from South Wales this morning as I came past the aerodrome at Filton. The railway runs alongside the aerodrome. The problem of fog in the London area is, of course, notorious. Why should not Filton be declared the aerodrome for Bristol and also a diversion for London Airport? Those two airports are sufficiently far apart usually to have different weather. If passengers had to be diverted to Bristol, they could then very easily be put into a waiting coach and hitched to the back of the South Wales to London trains. South Wales has the best train services in the country, and the passengers would be in London in a very short time. It strikes me as being a very practical suggestion which I should like to see the Minister take up.

5.40 p.m.

I hesitate to intervene amongst the experts, but let me say at once that I have no intention of following the hon. Member for Keighley (Mr. Ivor Thomas) except to dissent from his last point, if he made it generally. I understood the hon. Member to indicate that he was satisfied with the position regarding aerodromes, and it is on that I wish to speak tonight. We are keenly aware in the North-East of our lack of first-class airport facilities. We feel that we are being overlooked, if not prejudiced, at the present time. It is quite true that about three years ago the hon. Member for Keighley, who was then in better company, assured us that we would have a designated international airport; in fact, he was rather more specific and told us that a permanent airport would be available in from three to five years, and that Croft would be used almost at once for full continental services. However, I do not hold my hon. Friend to anything that his predecessor may have said.

Does it not bear on something I said earlier, that the internal services have been largely abandoned? That would apply to aerodromes as well as to services.

Having allowed the hon. Gentleman to state his case, I will come to my hon. Friend. In mid-summer, 1947, he told the House that Croft was intended for temporary use and Boldon had provisionally been selected as the site for the new airport. However, later the temporary use of Croft was abandoned. I am not critical of that decision. I think there were good reasons for it. On the other hand, the difficulties regarding Boldon were overcome. Our disadvantage was that although, seemingly, the obstacles to obtaining a first-class airport had been overcome, the Government had given no indication of any order of priority of development, so that we still did not know where we stood.

Then, again, there was the cut in the capital investment programme, and today we have no airport and apparently no immediate prospect of one. This means, in effect, that we are the only important part of the country entirely without adequate airport facilities. We feel our shortcomings all the more when the noble Lord the Minister can say in another place with pride that the air passenger traffic of British airports is five times as great as it was before the war, and when he can point out, too, that the volume of operations is increasing at the rate of between 37 and 39 per cent. each year.

Again, the Elmwood-Paris service has been mentioned, and also the Welsh service, which has been begun for an experimental period of six months. All these factors make us feel that we are very poorly off in the North-East. I know our shortcomings. As far as an internal service is concerned, if we could get back the fast trains we had before the war, there is no great advantage in an internal air service. I fully realise that B.E.A. withdrew the Belfast-Carlisle-Newcastle service on the grounds that it was not paying. I know that many of our major industries are producing goods which are not likely to make extensive use of air transport. In spite of all this, however, I would emphasise that we have industries in the North-East which are vitally important to the export trade. It has already been mentioned by the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) that the National Coal Board intends to organise air trips for the miners. Well we have a large number of miners in the North-East. More important than this, we are a Development Area endeavouring to attract into the area new industries which are likely to make extensive use of air freight. Whilst we have not the airport facilities, we have not the incentive we should like to those industries to come up to the North-East.

There is another and even more important factor. On broad national and international grounds we should do everything we can to encourage our contacts today with Scandinavia and with North-West Europe. We have a lot in common with Scandinavia. Some of the difficulties in getting a closer understanding are due to the fact that travel to Scandinavia is less easy than to other parts of Western Europe. On this ground alone I stress the importance of the provision of an airport which would provide ready, speedy air transport to Scandinavia. The attraction of a direct service to London is obvious, but it has been indicated today that in London we are already foreseeing the overcrowding of our present airports. If we should decide, on broad national grounds, to provide facilities for air travel to Scandinavia, I would urge that we should establish that airport in the North-East and provide for feeder services.

I have mentioned the cut in capital investment. We appreciate that, and we understand the reasons for the delay in proceeding with the scheme which has been accepted in principle. I would point out, however, that the two major difficulties were manpower and materials. As far as manpower is concerned, there is no difficulty regarding the Boldon scheme. Unfortunately we have sufficient unemployed in the locality to provide the manpower required. We are different from Heathrow where the labour is imported. With regard to materials, I realise that the main difficulty will be one of steel, but the shipyards are having an increased allocation of 5 per cent. this year, and I should have thought that the time had come when we might revise the position regarding the airport programme. Indeed, when we see that even under present difficulties for each of the years between now and 1952 £2 million to £2½ million is to be provided for London Airport, we feel the time has come when the decision regarding our airport programme should be reconsidered and the possibility of commencing the Boldon Airport be reviewed.

There is another point closely associated with this. When my hon. Friend made a statement to the House on 9th July, 1947, he said that
"many of the aerodromes will be used on a joint basis with the Service Departments and the aircraft manufacturers."—[OFFICIAL REPORT, 9th July, 1947; Vol. 439, c. 2190.]
I believe that we should consider the introduction of the aircraft industry into the North-East, or at any rate into the Development Areas. I was privileged to serve on the Select Committee which inquired into the construction of the Brabazon I. The figures about the Brabazon I are interesting. The total cost of the project at the time when we enquired into it was estimated at about £11 million. Of that £11 million rather more than £5,750,000 was to be expended on the two prototypes and their engines. Only half of that represented manufacturing costs, the other half went on development and research. Over and above that, nearly £5,250,000 has been spent on the Filton runway and the assembly buildings.

The position is that, if the prototype proves successful, B.O.A.C. expect to order not more than three aircraft, and it is quite clear that they will not be able to afford more than £1,250,000 at the outside for each of the aircraft. That means we have a project where the manufacturing costs will run at about £3 million, and £9 million will have been spent on the cost of development and the capital costs that go with it. In short, as far as the large aircraft are concerned, we have reached a stage of development where development costs are quite irrecoverable, and those development costs include substantial capital costs. Those costs obviously are so tremendous that they cannot be loaded on to the sales of the aircraft.

We are conducting a national experiment at the country's expense and, of course, in the country's interest. But the State expenditure which is incurred for and on our behalf is very substantial indeed, even when compared with other Government expenditure. The total outlay on the Brabazon project alone is very nearly as much as the total Government expenditure on the North-East Development Area since the war. Bristol has had expended upon it, for good purposes, a capital State expenditure, substantially irrecoverable, of about £9 million. I have no criticism of that. It was very difficult to decide where the expenditure should be incurred.

On balance the Government were quite right in seeing that the capital expenditure and development costs were incurred and that the buildings and runway were erected at Filton. But if this Brabazon experiment is to be successful, as we hope it will, and if, moreover, it is proved that the Brabazon aircraft can be operated economically, then, although the Bristol Aeroplane Company clearly will be able to meet the needs of B.O.A.C., who have indicated that they might require three aircraft, and three only, for their Transatlantic services,—although, so far, B.S.A.A.C. have indicated that they have no intention of ordering the Brabazon I—I think we can nevertheless assume, that there will be a much bigger overall demand

But by the very fact of this development itself we have created an unavoidable monopoly to the firm responsible for the development work. No other aircraft constructor in the country could at present construct the Brabazon I. Should it prove successful—we have very good grounds for believing that it will—I am sufficiently confident to believe that it will lead to a demand for large aircraft, which the Bristol Aeroplane Company themselves cannot meet. We are immediately faced with the question of considerable capital expenditure and also expenditure on development costs, because when I say it will succeed, I do not mean that it will succeed necessarily in the form and shape of the present Brabazon I.

We have, therefore, to consider as a nation where that expenditure should be incurred, and we come right up against the question of the location of industry. Here we have an opportunity to direct or persuade an industry to go into one of the development areas. There may be arguments against doing so but, as far as the aircraft industry is concerned, I think we recognise two things: that it has suffered and has successfully dealt with a considerable contraction during the past few years, and that aircraft workers generally have been able to turn their hands to other work. I mention this because we are not bound, when considering such substantial national expenditure, necessarily to follow the industry wherever it may be. I hope, therefore, that if and when this problem arises, as I hope it will, my hon. Friend will consider the broad question of the location of industry and will see whether or not a vitally important industry such as this—for all practical purposes, a new industry—could be steered into the North-East or to another suitable development area.

I mention the North-East because, if we have airfield development then I belive, in spite of what has been said about the difficulties of test flying and so on, that it would be possible to combine the two schemes. What shape or form it should take is a matter about which we need not be doctrinaire. Provided we could get a nucleus of the design staff and engineering technicians, then in an area like the North-East, with its background of highly skilled workmen, we could soon provide the labour force which would be required. Whether the project should be carried out by the Bristol Aeroplane Company, by a corporation comprising all aircraft constructors, or by a State-sponsored corporation, is another matter, but I hope that the essential point—the importance of the location of industry being borne in mind when such very substantial State funds are involved—will not escape my hon. Friend's attention and that he will see that it is seriously considered in turn by the Government if the question arises of our entering in a substantial way upon the manufacture of large-scale aircraft.

To conclude, as far as the airfield programme is concerned we must pay regard to what I consider to be important national and international considerations. We must pay attention to the urgent need for providing better transport facilities to Scandinavia. As far as concerns the new development in the construction of large scale aircraft, if our optimism is justified—and we have every reason for believing that it will be—we must realise that we must set the pace for the construction of these very large aircraft and that the need for them will not be confined to B.O.A.C. It is up to us, therefore, as quickly as possible to show that we are in a position to construct them to meet those needs. I end, as I began, by apologising for intervening amongst the experts, but I hope that the two points I have raised are matters which will not escape the attention of my hon. Friend.

5.57 p.m.

I should like to begin by referring to the final observations of the Parliamentary Secretary when he commented upon the appointment of Lord Douglas. The actual phrase which he used was, "When it is a Socialist appointment the dogs go for the bones." I can only suggest——

The hon. and gallant Member should not put words into my mouth. I never used such a phrase. What I did infer was that my reply was due to the fact that hon. Gentlemen opposite were like dogs at a bone.

I was about to suggest to the Parliamentary Secretary that if his knowledge of Lord Douglas was a little greater he would realise how inappropriate it was to refer to him physically as a bone. It is only right that we should be fair to Mr. d'Erlanger. The Parliamentary Secretary said that, whereas Mr. d'Erlanger had been receiving £6,500 a year, Lord Douglas was to receive only £5,000. I believe that Lord Douglas is in receipt of other remuneration, and the Committee should know whether he will, in fact, draw the two remunerations and will remain also a director of B.O.A.C.

Is it now the policy of the Conservative Party that any person who receives a pension from any one of the Services should have that pension taken into account when his wage or salary is being fixed?

There is no question of Conservative Party policy. The Parliamentary Secretary emphasised that Lord Douglas was to get several hundred pounds less than Mr. d'Erlanger. I merely want to know whether that is so.

Will the hon. and gallant Gentleman make clear why he is emphasising that a particular person draws a Service pension? Is it his policy and that of his hon. Friends, that Service pensions should be taken into account when wages and salaries of individuals are fixed?

Lord Douglas is not in receipt of a Service pension. He is in receipt of a payment as a marshal of the Royal Air Force, which is altogether different, as the hon. Gentleman knows, because marshals of the Royal Air Force, admirals of the Fleet and field-marshals always remain on the Active List. I also ask the hon. Gentleman to tell the Committee if Lord Douglas is also to remain on the board of B.O.A.C., because I believe that for that office he draws a thousand pounds a year.

The Minister referred to his great career in the Royal Air Force, to which everyone in the Committee will also pay tribute, and also to his work as Military Governor in Germany. The Minister went on to refer to the fact that he was appointed Air-Marshal and so on by a Tory Government. That is completely away from the story. When Lord Douglas was in the Royal Air Force he was an expert in the job and had been at it all his life. He was appointed by a Liberal. Our criticism today is that Lord Douglas cannot be regarded today as an expert in air transportation.

Is the assertion now that knowledge of air operations in the Royal Air Force is not a contributory factor to knowledge of normal air operations?

One of the troubles with air transport today is that it is not run by people with a background of air transport. Today more than at any time transport undertakings should be run by experts at the job. The Minister does not like us commenting on the fact that the new chairman of B.E.A. only joined the Socialist Party 12 or 18 months ago. We say, and say quite frankly, that this is a most blatant case of "Jobs for the boys."

Is it contended that Lord Douglas could have joined the Socialist Party on some previous occasion, in view of the fact that he was a serving officer of the Royal Air Force?

It is very unfortunate that Lord Douglas should have joined the Socialist Party at all. The hon. Member knows quite well that serving officers cannot take part in party politics. It also seems extremely unfair to Mr. d'Erlanger that after the years of hard work he has put in, the Minister of Civil Aviation should adopt the very dangerous policy of swopping horses in mid-stream.

I should like to comment on one or two matters to which the Minister referred. There is the question of flying clubs. We know the difficulties his Department have with the Treasury, but we have now reached 1st March and if we do not get a decision and some money soon, the whole year will pass before any use can be made of any grant which the Treasury may give his Department. I assume that he and his noble Friend will do their best to press the Treasury and to ensure that a decision is reached without further delay, so that these flying clubs which did such grand work between 1925 and 1935 get help and encouragement not only from the Department, but from the Treasury. The Minister made but a passing reference to the transfer of the Dorval base over here. It would be very useful if he could tell us how far that has progressed and what dollar saving is being effected.

Lord Brabazon's report on the Tudor will cause great disappointment to the people of Lancashire, who have worked so hard on that aircraft. I suggest that even though the Department will not wish to publish Lord Brabazon's full report, they should consider, in the interests of the workpeople, giving the country some information why this aircraft has now been grounded. I think that only fair to the manufacturers and workpeople.

Civil air transport is very far removed from the Royal Air Force and Service activities. One of our troubles has been that while everyone who goes in an aeroplane belonging to B.O.A.C., B.E.A. or B.S.A.A. have the most complete confidence in that aircraft and its crew once they are off the ground, they have not the same confidence in the ground organisation which looks after them. In civil aviation it should be the passenger first and last, and the policy should be, "The passenger is always right." If the Corporations consider this, they will realise that, after all, the passenger is the one person who matters in making a success or a failure of an airline, not the set up of the Corporations and not the Ministry of Civil Aviation. When we travel by steamship, or even on the nationalised railways, there is a feeling that in the people on the ground one has equals. We hear many complaints and I have experienced it myself, when travelling by air, that this does not apply to our Corporations. One gets the feeling that we are travelling on sufferance and that we are a bit of a nuisance.

On the ground. I had personal experience of this in Lisbon not long ago. We rang up and received the reply that the aircraft was ready to take off. Then one had to hang about for two and a half hours and no one told one why there was delay and one was treated like a child. In that case the people to blame were British South American Airways staff. I wrote a report about that in "The Aeroplane." I happened to give this address, and when asked my occupation I said, "Critic of nationalised airlines." Perhaps that is why I did not get a reply. There is a considerable lack of facilities in this country and until quite recently once one got inside Heathrow and gave up a ticket, one could not even telephone to say goodbye to friends. I believe that at long last that has been remedied.

Air Corporations run on three distinct routes. They run on profitable routes, on which we should concentrate; on social routes, which are to provide services to the Western Isles and other parts of the country; and on what are essentially political routes, routes which have to be kept open for political or strategic reasons. They are the kind to which I have referred which are only carrying the personal perquisites of Ministers abroad, such as the Ambassador's gin. Those are the political routes which must be left open and, in my view, could be run independently, or as a separate division of the Corporation. It is obviously unfair that these routes, for strategic purposes only, which must inevitably lose large sums of money, should be charged against the operating costs of the Corporation.

What liaison is there between the Ministry of Civil Aviation and the Colonial Office? We know that B.O.A.C. has certain subsidiaries operating in the Colonies. We were very alarmed to read a reply by the Secretary of State for the Colonies in this House saying that no less than 1½ million dollars was being expended on surveys in the Colonies. So far as I know no opportunity has been given to British air survey companies to enter that field. In this matter one can speak from previous knowledge. There are private companies, commercial undertakings, in this country which are well equipped to carry out large and complicated air surveys for payment in sterling instead of our having to get money through the Marshall Plan to pay for these services. I hope that we shall have an answer tonight on that matter because our air survey companies are a very valuable reserve to the civil aviation industry. It is heartbreaking to them to see American dollars used when they could do the work so well.

In his opening statement the Minister omitted to mention one or two matters. He made scant reference to the part which British commercial aviation is playing in the Berlin airlift today. It is not only the Corporations which have aircraft on charter for that important work but the charter companies also. I think that the Royal Air Force will agree that the civil side of aviation has played——

On a point of Order. May we discuss in this Debate the question of the charter companies and what they are being paid per hour and all these other aspects of the Berlin airlift? I put the point because I submitted a Question to the Clerk at the Table and it was ruled out of Order. I should like to know whether I can make the point now?

The position appears to be that the Foreign Office pays for the Berlin airlift, and it would be in Order to discuss it. This Debate has nothing to do with Question time.

I had no intention of discussing whether a profit or loss was made by these companies. The fact remains that the Government and the Royal Air Force will admit that these charter companies and the Corporations have played a large part in keeping the people of Berlin fed and warm during the winter. My last observation is that I hope that the suggestion that has been made by, among others, my hon. and gallant Friend the Member for Macclesfield that at some time it might well be considered that the Ministry of Civil Aviation should become a Division of the Ministry of Transport, will receive due consideration.

6.14 p.m.

I am quite sure that the country generally will have nothing but contempt for the way some Members of the Opposition have tried to drag in personalities for the purpose of making political capital. I am very sorry that the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) has permitted himself to be goaded into this position following the present Conservative policy of trying to extract the greatest amount of mischief from the smallest possible grievance.

I was trying to make the point, which I thought I had made clear, that if the managing director and chairman left any company in the space of six or eight weeks, it was very unsatisfactory and was a bad thing, to which I have had no reply.

The hon. and gallant Member and his colleagues have been criticising the administration of B.E.A.C. and the other nationalised Corporations in the course of Debates in the House for as long as I can remember; yet when a change is made in the central direction they criticise the Government for that change. The manner in which that criticism has been made is typical of the present unattractive way in which the Conservative Party tries to make the greatest possible amount of mischief when there is any grievance whatever.

There are any number of matters for which the Ministry of Civil Aviation have responsibility and which the Opposition might well have usefully raised instead of starting up this trouble. For example, they might have asked my hon. Friend, as I shall have to ask him, who it was that spent £200,000 in travelling and incidental expenses in 1948–49? Will he also tell the Committee why his Ministry have incurred a loss in the past year of £73,000 under the heading of catering, as shown in the Civil Estimates? It seems to me quite unsatisfactory that the Ministry of Civil Aviation should have incurred such an expenditure in that direction.

In the course of his further remarks, when he had cooled down a little and reached the more constructive part of his speech, the hon. and gallant Member mentioned the Eire Agreement. I agree with him that we ought to know much more about the advantages we are supposed to get from that agreement in return for the losses we incur. I should like to have an opportunity on some other occasion, if not now, of raising the question of the Air Advisory Council, which is costing us about £20,000 a year. This party and Government have much to learn about the question of consumer councils. Two requisites of any consumer council are that the members must have some organic relationship with the consumers whom they are supposed to represent, and have access to the central direction at the top. They should be appointed by the consumers and not by the Minister. It is wrong to bring in people from outside on a sort of hired basis and call them a consumer council. Of all the unsatisfactory kinds of such councils set up under the various nationalisation Acts, that set up under the Civil Aviation Act is by far the least satisfactory.

I will also touch upon the question of airport control. As aircraft become more numerous in the sky and as they become faster, and especially when we get jet aircraft, the question air traffic control round our airports will become much more important. I understand that it will be possible in the not-so-distant future for jet aircraft to do the journey from London to Paris in 25 minutes. When that is the case it would be absurd to have such aircraft milling round the circuit for a quarter of an hour or so after having done the journey in so short a time. I should like my hon. Friend to let us know exactly what is being done to improve air traffic control round our airports? Some little time ago I had the advantage of watching the control over Gatow. I wrote to the Minister and said that I was sure there were lessons to be learned from that Berlin control. I saw machines banding over the radio beacon and coming in remorselessly every three minutes. I feel that that form of direct approach might well cut out a good deal of the congestion to which the hon. and gallant Member has rightly called attention.

Although I hope to get some reply on these points, what I really wish to deal with is not so much the technical side of our aviation policy, but the administration, the general set-up of our air Corporations, and the question of labour relations within them. I believe—and I hope I shall have the concurrence of hon. Members opposite—that what we should concern ourselves with is not the engineering or technical side, but the administrative pattern and the question of labour relations within the Corporations. Especially now that we have settled the question of aircraft, the engineering and technical side could very well be left to those whose job it is. I think we should have confidence in the way in which they will settle the different problems that there will be in the next two or three years.

Perhaps I may be allowed to recall that some of us on this side of the Committee put forward certain suggestions when the Civil Aviation Bill was going through the House. At the top of our aviation industry we wanted to have what we called an air transport authority. We wanted that authority to be composed partly of men who were appointed or nominated by the men engaged in the industry; we wanted a proportion to be appointed or nominated by those who had an interest in the efficiency of the industry—the users—and maybe even one from the aircraft manufacturing industry, and we were prepared to have an independent chairman and two others appointed by the Minister——

On a point of Order. In view of your recent Ruling, Mr. Bowles, is the hon. Member in Order?

I was about to stop the hon. Gentleman. He cannot continue that line of argument any longer. It is not within the present Supplementary Vote. It would require legislation to bring about what he desires.

I wish to call attention to certain administrative changes which I think will have to be contemplated in the present set-up and I want to relate the kind of changes contemplated to the description I have just given. I think, Mr. Bowles, you will see, if I am allowed to continue, that I am relating it to something which is very much within the scope of this Debate.

The hon. Gentleman is in Order so long as he does not refer to what is not in the Act, however much he may have desired it at an earlier period.

I was endeavouring to give details of the kind of set-up we envisaged. Under this air transport authority and—this is important—we proposed to have a number of executive bodies responsible for given spheres of the globe. They would be separate, both operationally and financially, and their particular part of the globe would be defined in relation to certain technical requirements.

When the Act was passing through the House, although we did not accept these particular suggestions that were put forward, we did say that we should have three separate Corporations. Some of the reasons advanced in favour of three separate Corporations instead of one big one were that it would give the opportunity to develop different techniques; it would also provide an opportunity for individuals to prove themselves more quickly and clearly within the different Corporations and it would give an opportunity for new men to come to the top much more easily than would be the case with a centralised corporation. That would be a particular advantage, in this new industry, because at the present time there is no doubt that we suffer from a shortage of proved airline executives. I mention that point because one gathers—it has already been mentioned and there are various reasons why it should be considered—that there is a possibility of absorbing the British South American Corporation into the British Overseas Airways Corporation.

Can the Parliamentary Secretary tell us something about the circumstances or the conditions in which these two Corporations are to be absorbed, if that decision is made? I want him to assure us that we shall not have the South American Corporation brought in and completely merged with B.O.A.C. If it is brought in under the general control of B.O.A.C., I hope it will be allowed to operate separately, both from the financial and the technical point of view; that it will be budgeted separately; that costs will be kept separately and that there will be maintained the initiative of and incentive to the individuals within what might be called a division rather than a separate Corporation.

There are two lines of approach to this problem of the shape of our airline Corporations within the next year. We may consider the functional approach, with the long lines of functional command, such as we had in the beginning in the National Coal Board; or we may have the horizontal or divisional set-up, with the separate divisions costed separately and with the possibility of making decisions lower down the line instead of only at the top, as was the case under the National Coal Board. I mention this because I am sure that decisions on this matter will have to be made within the next few months. We cannot escape them. I am hopeful that when decisions are made we shall bear in mind the experiences we have already had in other nationalised industries and that there will not be this temptation to over-centralise B.O.A.C. I am not one of those people who say that because a thing is bigger it is necessarily better. I do not think that there is any essential virtue in size, and if the South American Corporation is brought into B.O.A.C.——

The hon. Gentleman is again out of Order, because he is visualising a scheme which can only be brought about, in the way he has framed it, by legislation. He cannot discuss any legislation at all on a Supply Vote of this kind.

Thank you, Mr. Bowles. I have already completed what I wanted to say, and I hope that the attention of the Lord President of the Council may be drawn to the remarks which you have permitted me to make when he is considering what structure shall emerge in these socialised Corporations in the near future.

The only other matter I wish to mention is labour relations within the Corporations. Although I have had something to say about the administrative setup in B.O.A.C., I must say that the labour relations within B.O.A.C. have been excellent. There have been no recent troubles there, and I think great credit is due to those responsible for the personnel relations within that corporation.

There is always a certain amount of trouble with that particular organisation, but in general the staff relations within B.O.A.C. have been extremely good, especially compared with the British European Airways Corporation. I was about to say something regarding the labour relations within that Corporation. I think I am right in saying that there have been something like four changes of senior personnel officers within B.E.A.C. I believe one was employed there for only a few weeks and was then given six months' salary and discharged.

That kind of thing shows quite obviously that something has been wrong at the top, and I wish to say this to the new leaders who have been appointed to B.E.A.C. The first step that must be taken in that Corporation is one to improve the relationship between the management and the men. I know something about the Corporation. I do not think that there are many private industries in the country which have the same unsatisfactory working atmosphere on the floor of the shop as there has been recently in B.E.A.C. To those who have now taken over the leadership of the Corporation, I say that I hope that they will do something to break down that barrier which, in the imagination of the men, at any rate, has existed between the hangar and the administrative office. It is wrong that this should be so. I am not apportioning any blame but we cannot have complete efficiency if that kind of atmosphere persists. I hope that something will be done about it. I am sure that in that I have the agreement of both sides of the Committee. This is not a question of idealism. It is a matter of sheer common sense and good business. I hope, therefore, that in the near future we shall see an improvement in the labour relations and the atmosphere in which the men work within the British European Airways Corporation.

6.31 p.m.

During this Debate many Members have paid tribute to the staffs of the Corporations. As one who has travelled on these lines a great deal, I should like to add my tribute to the efficiency and courtesy of the staffs in the air. Looking back over the history of civil aviation during the time between the wars when very few Members of this House took an active interest in it, I remember that for a long time we made three requests to the Governments of the day. One was that British civil aviation should be divorced from the Air Ministry. Another was that a Department should be set up under a Ministry of transportation. The third was that civil aviation should be run as private enterprise with a certain amount of Government control if necessary.

During the war, when civil aviation did not exist at all in this country and we saw what tremendous strides were made in America, some of us became rather alarmed about the future in this field. I recall going on a deputation to the then Prime Minister, the right hon. Member for Woodford (Mr. Churchill), and asking him if he would treat this matter as urgent and appoint a Minister of Civil Aviation immediately in order that he should be able to attend the Chicago Conference which was dealing with the future of civil aviation.

The right hon. Gentleman agreed to appoint a Minister. He appointed Lord Swinton, who immediately went to Chicago and put up a very good fight to get British civil aviation recognised and to find for it a place in the sun. It was necessary to set up a Ministry at that time because the Ministry of Transport was controlling shipping and the officials had their hands full. The Ministry was formed, but I am convinced that today the Department has grown far too big. We never envisaged that there would be 1,700 people at the Ministry of Civil Aviation. I am convinced, especially as I have had an opportunity on a Select Committee of this House to inquire into civil aviation, that there are far too many bodies at the Ministry and far too many on the ground at the airports. There are certainly far too many bodies at some of the internal aerodromes. One or two examples have been given already where there are more men on the ground than the number of passengers who travel from or through the airport in any one day. That is an absurd situation. It must be dealt with if we are not to have this millstone of £11 million hanging over our heads for all time. When that sum of money is added to the other development and capital costs, the bill is very big indeed. It is one which this country cannot afford and it shows that there is something wrong with the administration somewhere.

Reference has been made to the appointment and the dismissal—it is nothing more or less than dismissal—of Mr. d'Erlanger from the chairmanship of British European Airways. I should like to pay a tribute to Mr. d'Erlanger. He was a most efficient administrator, and a very able young man doing a very good job. I have no personal animosity against his successor. In fact, I had the honour of serving under him in Fighter Command during the war and I have the highest regard for him as a military leader. But one of the points I always made in trying to get British civil aviation divorced from the Air Ministry was that air marshals were not fitted, either by training, tradition or attitude of mind, to deal with a civilian transportation problem.

It was obvious when they had civil aviation under their control at the Air Ministry that they did not take very much interest in it. They were far more concerned with their own love, their own Service. That was natural. When a certain amount of money, which was always limited, was to be distributed between the two, it was always the civil aviation side which suffered. The result was that when war came and in the years between the wars, our civil air pilots, the best pilots in the world, were obliged to fly old "crates" about the world which did not do credit to any country, instead of being able to fly up to date aircraft.

At the end of the war we had hardly any transport aircraft at all worth naming. We are obliged today, four years after the end of the war, to buy American aircraft with hard-won dollars. That is the situation, yet the successor to Mr. d'Erlanger—who is trained in commerce as well as widely experienced in civil aviation—is a marshal of the Royal Air Force. So, the service is going back into the hands of the military again. It is true that they may have changed their brass hats for bowler hats, but it is the mentality that matters. I hope that Lord Douglas, if he takes over this job, will remember that he is taking over a service which is quite different from his old military Service. Civil aviation is an organisation which deals with civilians.

I remember travelling down the Mediterranean at the end of the war when Transport Command were trying to find bases for civil aviation. We arrived at one of the Mediterranean stations and the station commander, who was a senior R.A.F. officer met us. During lunch I asked him how he liked his job. He said, "I do not mind the freight side of it and I do not mind dealing with military personnel, but I cannot stand these 'something' civilians; I hate civilians." I said, "I hope you never will be in a position to deal with civilians," but, believe it or not, that man is now engaged in civil aviation.

During our inquiries into the work of the Ministry of Civil Aviation, we found that the witnesses turned up in large numbers, and that, in most cases, there was an air vice-marshal or two amongst them. I asked some of these people on what lines they were building up the new Ministry, and particularly whether it was on the lines of the Royal Air Force. They said it was, and it was obvious to me that that was not the proper way in which to build up civil aviation. That is why there were so many idle people to be found on the ground recently, and why that the Minister was compelled to make very drastic cuts in the staffs. This has caused a great deal of hard feeling, and no doubt injury to a lot of people who trusted their lives to this service, having come out of the R.A.F. or some other jobs, but who are now slung out of employment when they thought they had jobs for the rest of their lives.

Nevertheless, there is no doubt that these cuts ought to be made. The number of people on the ground, compared to those in the air, was phenomenal, and this was why it was making it so costly for the service to carry any passengers anywhere at all. It was even suggested at one time that it would be far better to offer a prospective passenger on the civil air lines some £50 or £60 and tell him to go by train, because of the losses which the air lines were suffering. Obviously, this is a situation which cannot go on, and I still believe that there are great opportunities for economies in the Ministry itself. Obviously, we do not need 1,700 people in the Ministry of Civil Aviation to control the few machines in the air which we have. There is far too much duplication in the Ministry and in the Corporations, as well as between the various Corporations themselves. There are quite a lot of jobs being done by each of the three Corporations which might easily be done by one staff through a co-ordination of the three, and I hope this is now being done, because it is one of the recommendations which we made.

Another matter to which I want to refer concerns flying clubs, and here I am very disappointed that the Minister is not in a position today to make a statement about them. Many of us have been pressing for some time for more recognition for these clubs, and the time is passing rapidly. No doubt it is the fault of the Treasury, but somebody ought to ginger up the Treasury and explain to them that, unless something is done for these flying clubs soon, it will be too late. Before the war, I was president of a flying club. I should like to tell the Committee something of the work which it did in training personnel for the Royal Air Force, and, when the war came, in supplying instructors for the R.A.F. The club with which I was connected had trained a number of young people as pilots, every one of whom went into the R.A.F. Every instructor we had also went into the R.A.F. as an instructor. That was the record of only one small club.

If we multiply that example by hundreds all over the country, it will be seen that it would be the best recruiting ground there ever was for the R.A.F. Everybody knows that the R.A.F. today badly needs recruits and technical men, and there is no better means of obtaining them than by training them in the flying clubs, making them air-minded and encouraging them to go either into the Auxiliary Air Force or into the R.A.F. itself. I hope the Minister will give attention to this matter, and that he will be able to make a statement at the earliest possible moment which will give some encouragement to these flying clubs to go ahead.

6.45 p.m.

This is a particularly interesting Debate for some of us on this side of the Committee, because for the past four years we have been advocating a certain number of changes and we are ready to record today that at least a few have been made. Some of us may, perhaps, be over-critical of the fact that it has taken what we consider to be a rather unnecessarily long time for these changes to be brought about. One of the more recent changes seems to have taken about three years, although it does seem that it is a good one. It is easy for us, in recording these changes, to say "We told you so," but nevertheless some progress has undoubtedly been made and we should take some encouragement from that fact.

We see that the staffs of the Corporations are being reduced, but I should like to ask the Parliamentary Secretary to look into one particular point here, though he may not be able to give an answer tonight. I am informed that there are a certain number of dismissals still being made and that some men being discharged are in fact on paid leave, which is an unfortunate state of affairs if it is continuing to any extent. I am also informed, in regard to the reduction of staffs of the Corporations, that a certain number of new staff have also been engaged in the period during which dismissals have taken place. That would seem to be extremely unfortunate. Why people are being dismissed when information is being bandied around that a considerable number of engagements are being made at the same time is very difficult to understand.

One of the changes which we suggested concerned the senior staffs of the Corporations, and it may be the case that changes at the higher levels are still required. I trust the Minister will give serious attention to this point, because it is generally accepted in industry that the tone and success of an organisation is set by those who are in control, and we need to have in control of these organisations people who have proved their competence over a period of time.

There has also been the change of the base from Dorval to Filton. There are many of us who think that the money spent in Canada and the U.S.A. might very well have been used far more advantageously for the purchase of American aircraft in the intervening period while we were waiting for our own machines to come forward. That decision has taken some time for the reason that we had not the American dollars available for the purpose. Now we see that a considerable sum has been expended in a way that could have been avoided. We ought to look at the experience of K.L.M., who decided that they must run their aircraft from their own bases in Holland, and spend any dollars which they had to spare in the purchase of new aircraft instead of wasting them on maintenance.

There is another matter which I hope the Parliamentary Secretary will look into. I am told that Constellations, not only those flying across the Atlantic but also those going to the Far East, are being controlled and operated from the American side, and I cannot imagine a sensible argument for such a decision to be taken. I should like my hon. Friend to look into the point, which appears to be associated with the argument that an aeroplane does not know whether it is flying West or East, which is the stupid argument which has been put to me. I ask my hon. Friend to explain why that decision was taken.

The hon. and gallant Member for the Isle of Wight (Sir P. Macdonald) made reference to the purchase of American aircraft when we were trying to make do with converted machines from the R.A.F. and those used for transport purposes. That, unfortunately, has not proved to be a very successful policy, and we have had to divert from it. I trust that the fact that American aircraft have been purchased will not reduce the sense of urgency on the part of the Ministry in regard to the early completion and use of aircraft of our own construction and design.

When referring to the reports issued by the Corporations, one looks in vain for any encouraging signs in them; it is rather a doleful story which they have to tell. I ask the Minister to make representations for these reports to be more carefully prepared by the Corporations. Although we see that in the case of B.S.A.A. they have gone to some considerable trouble in working out details of operational statistics, we find that the reports of B.O.A.C. and B.E.A. are not so full in that respect. Therefore, it is not over-easy to make a comparison between the various activities of the Corporations.

I also believe that more care should be given to the way in which reference is made in the B.O.A.C. report to the success or otherwise of subsidiaries. Some clearer form should be used in setting out the results of the subsidiary companies. We should be able to see clearly whether or not they have made a profit or a loss, what is the capacity per ton-mile, and what is the actual load factor. We should be able to analyse these things with reasonable ease so that we can see in what direction losses or profits are being made.

One of the points made by the Lord President of the Council was that under nationalisation he thought it was a good thing to have a number of Corporations. He said that if there were a number of Corporations, each preparing its own reports and accounts, it would be possible to have a certain yardstick of competence and efficiency which might act as a spur to each one of them in considering, if not the profit motive, at least a profit sense so that they would feel some pride in their operations. If subsidies are poured into a Corporation indefinitely, it tends to demoralise the undertaking, and to take from it that profit sense which is so vital to successful operation.

A suggestion has been put forward that it is intended to absorb B.S.A.A., but it would not be appropriate at this time to discuss that particular matter. However, I would emphasise the point made by the Lord President of the Council, that it is necessary under nationalisation to have some yardstick of efficiency. If we go more and more towards centralisation of control and operation we shall run a grave risk of creating large-scale organisations in which the individual worker feels that he is such a small part that he cannot really express his individuality, enthusiasm and initiative in a way which it should be possible for him to do.

I am worried about one point with regard to this question of the individual worker in the organisation. Only a few days ago I had the good fortune to meet a member of one of the Corporations whom I had known some years ago. I asked him for his frank opinion of the general attitude of the staff towards their job, because, as Socialists, I think we should pay special regard to that particular point. After all, it has been the foundation of our faith that we represent the worker, and we should think out ways by which the individual worker in these nationalised industries can get a sense of really belonging to the organisation and a real feeling of responsibility. This individual said that he thought that the morale of the Corporations at the present time was of a low order, particularly towards the centre. It seemed from his remarks that there was not the leadership at the centre that there should be. Perhaps when the Minister is speaking with the people at the centre in the Corporations, he can take up that point with them.

What of the future? It is important that the individual worker should be able to look towards a good future, not only for himself, but also for the organisation of which he is a member. I want to put two points to the Minister. First, are the tools with which to do this job really adequate, or are they going to be in the near future; and secondly, are the personnel, particularly at the top level from which the leadership must come, really suitable for their task? With regard to the first point, the question of aircraft is an extremely important matter, for without adequate and suitable tools these Corporations cannot hope to be a commercial success. We have seen, for example, the case of the K.L.M. Because they had suitable aircraft coupled with suitable personnel, they have been able within a few years of the end of the war to make a success of their undertaking.

We must consider whether we shall have British or foreign aircraft. Of course, we must have the best aircraft we can possibly get. For quite a time we have been suffering from a Tory policy which we inherited. We have had to make up the backlash owing to lack of competence in deciding the suitability of aircraft. Some have said that the war prevented us from thinking about this problem of suitable transport aircraft, but I believe that is merely an evasion. The problem has never really been stated by the Corporations. They have never stated clearly and emphatically what type of aircraft they wanted, nor have they given any target dates by which they would like particular aircraft.

If we were to read the report of the Select Committee on Estimates which inquired about the Brabazon I, that point would be clearly brought out. The Brabazon Committee, which was set up in 1942, advocated, amongst other aircraft, the Brabazon III. That was a four-engined aircraft of the Constellation type. We are now told that the aircraft which is going to comply with the Brabazon III specification will not be ready for another four years. I am referring, of course, to the Bristol 175. That means that it will be something like 11 years since the date when the Brabazon Committee looked into the matter before the aircraft will be available to the Corporations. It is, I believe, because the Corporations have not emphatically demanded an aircraft of the bread-and-butter type that this situation has arisen.

I should like to refer to the evidence taken by the Select Committee on Estimates, which deals with this point. When questioned, one of the officials of the Corporation said, referring to the Brabazon III type:
"It has not progressed as fast as type I, but at the time the specifications were put out we had no reason to believe it would not. In fact, as I mentioned earlier, we were very anxious to get our bread-and-butter machine, our all-purpose machine, as quickly as possible."
He does not express himself very clearly, but the implication of his evidence is that, although they hoped to get the "bread-and-butter" aircraft—they were anxious to get it—they had, in fact, never taken the trouble to ensure that they would get it. One cannot help feeling that had there been a really clear conception of what the Corporation required, they would have obtained the aircraft by now, and would have made far greater progress. More progress has been made on the more experimental type of aircraft, the Brabazon I, and the bread-and-butter aircraft has been left a long way behind.

Dealing with this question of suitable tools for the job, I want to put one point strongly to the Minister. The "bread-and-butter aircraft" is manifestly the one which is going to earn the bread and butter and possibly jam, too, but it will do so only if the operation of these aircraft can be done economically, and I refer in particular to the consumption of fuel. It seems to me that the Corporations have tended to go chasing after the turbo-jet type of aircraft, that they are hoping it will be available for use at a fairly early date and are backing that as the real solution to their problems. I believe they are chasing this particular type of aircraft long years before it will be proved to be a commercially successful type of aircraft for use on the air line routes. That may not apply to journeys such as the long hops between London and New York, for which the Brabazon I has been designed, but it will apply to the short-haul routes. In spite of that fact, this point has not been sufficiently strongly borne in mind by the Corporations, which are still demanding the turbo-jet type of aircraft and are failing to take account of the reciprocating engine type as the one which will, in fact, earn the bread and butter more certainly and successfully during the next seven to 10 years. I want to ask one further question. Who is responsible for this lack of foresight? I think we should know. I do not agree with the hon. and gallant Member for the Isle of Wight who said he thought aircraft of a suitable type were now coming along. If those responsible for this situation are still there, I think we shall find ourselves, in three or four years' time, in a similar position to that in which we find ourselves today. We shall, in fact, not have an aircraft which will earn our airlines a substantial surplus because of this question of the amount of fuel which the jet type of aircraft uses. I want to know whether the advice which is given from the Corporation, in making demands on the Ministry of Supply and Civil Aviation for aircraft, is still of the same calibre as it was when these mistakes, as I see them, were being made, because this is a most serious situation which has arisen in the past and it will continue unless the cause of the trouble is eliminated.

May I deal with the question of personnel? This is a subject upon which it is not easy to touch but it is, I think, one from which we cannot escape. I want the letters "C.A." for "Civil Aviation" to refer not only to civil aviation but to commercial airlines. I think we have to place emphasis on commercial experience. That automatically suggests that those who are in positions of responsibility in these Corporations, who have to lead them, must primarily have commercial experience. I do not think we shall ever get a successful airline operating if we do not place emphasis on commercial practice and the commercial requirements of airline operations. [HON. MEMBERS: "Hear, hear."] That is a non-party point and I did not think over a point of that sort I should receive approval only from the Opposition. It is a point which should be obvious and which should hardly require saying at all.

The mistake which I think we have made in the past is to place in charge of these Corporations, in all sorts of positions—I am not referring only to the position of chairmen—those who have had almost completely R.A.F. experience. I think that is not a good training ground for those who have to do essentially a commercial job in aviation. Let us recall, too, that the job in the R.A.F., particularly in the war, is a risky job. If we bring in, particularly in this type of organisation, as men who are to be responsible for civil aviation, those whose very upbringing and background is one where risk is continuously taken—with knowledge, of course, but where risk is taken—and where risk has to be taken. surely that is wrong; surely that is not the right background for those who are to be in charge of an air-line organisation in which the emphasis should be placed on safety. Safety is the prime consideration in the operation of civil air-lines—and that is another obvious remark. It is such an obvious remark that it has been overlooked in making the selection of those who are to fulfil the senior jobs; they have been given to those with Service, risk-taking experience rather than to those with the safer experience which is required of those who have to do essentially a civil air-line job. I think that was borne out in the case of the chief executive of B.S.A.A. who had to be changed because it was obvious he had been taking unjustified risks.

I am sure the hon. Member for West Middlesbrough (Mr. Geoffrey Cooper) was not suggesting that officers of the R.A.F. in Transport Command had any idea other than the safety of their passengers, and I am quite sure, therefore, that he would not wish to include those R.A.F. officers in his statement.

I appreciate the remark of the hon. and gallant Member and, knowing his association with Transport Command, he obviously speaks with some background knowledge. In that case, although I may include them in reference to the safety factor, I might exclude them from the standpoint of not having continuously in the back of their minds, as a commercial man has to have, the need for the organisation to pay its way. It would be a very surprising thing if the Cunard White Star Line were to appoint as chairman an admiral of the Fleet. I have never heard of its being done and I do not think they would be inclined to do it. I think that is a parallel case which both the Minister and the Parliamentary Secretary might bear in mind when considering the leadership of these air-line Corporations.

Some hon. Members on this side of the Committee had great hopes of the present Minister when he was appointed to office. We saw that he had made a good job of the Pakenham Report. It was got out very quickly and it was an able report. Now that the Minister is in a position of responsibility, perhaps he will see whether he can emphasise—[Interruption.] Does the hon. Member for Mid-Bedford (Mr. Lennox-Boyd) wish to interrupt?

I thank the hon. Member for giving way. I merely wished to point out that nothing has happened as a result of that report, but that the experience of producing a report on which no action was taken, did not apparently stop the noble Lord from becoming Minister.

I was about to deal with that point. Surely the noble Lord was not in a position to implement the report until he came into his present office. I was about to follow that remark by saying that now he is in that position, he may find it possible to implement the recommendations of the Pakenham Report.

I want to draw the Committee's attention to the very great progress which was made during the war in what was called selection procedure. It was a thing which was developed in the Army with very great success. I believe it is a pointer to what might be done when we are considering this very responsible job of making selections of suitable personnel for both senior and more junior jobs in peace-time. I think the Fighting Services made quite an achievement at that time in working out a scientific selection procedure; in other words, they analysed the job to be done, they analysed the individual requirements needed to fulfil the task, and then a selection was made accordingly.

I think that is the type of thing to be taken into consideration, not only for appointments made within our nationalised undertakings but also for top-level appointments. If we analyse those jobs thoroughly and the requirements needed for them, I believe we shall meet with more success in appointing both junior and senior people for these Corporations than we have achieved in the past. As an illustration of why I think the Services outlook is inappropriate, I think it is essentially a nationalist outlook which a person obtains when he is in the Fighting Services, and an international outlook is literally foreign to the type of mentality of those in the Fighting Services.

I do not want to go into details now, because I may find it necessary to deal with the subject on a more suitable occasion, perhaps on the Adjournment, but I think it is borne out in the case of International Aeradio. Leadership in this organisation has not been knowledgeable or inclined to consider the international aspects of this job. International Aeradio, instead of developing into an international organisation under the leadership which might well have come from this country, has in fact developed into a nationalist organisation which is held almost in suspicion, judging from the comments which have come to me from foreign airline operators, as a national organisation to carry forward the air radio services.

I believe also that the conduct of the international negotiations on behalf of the Corporations is far below the standard that we require. I have had it said to me by more than one foreign airline operator that when foreign airline operators meet us in international negotiations our case is not put clearly or convincingly, and is not put with a sense of give and take, or with confidence, so that our British case can receive the respect it should have. I ask the Minister to look into that particularly, because I think we are doing ourselves no good at all in the international field in the way that our case is sometimes represented by those responsible for putting it.

I shall make one comment on the Ministry itself. Reference has been made to the size of the headquarters staff of some 1,500. This is a matter of some concern to Members on this side of the Committee. It was always said that when we carried through any schemes of nationalisation they would be self-supporting, largely self-governing, Socialist organisations. I use the term "Socialist" in the broadest sense, not the political sense—in the sense that the individual worker would feel he was working in a team of which he could feel proud. It was said that in those circumstances it would not be necessary to have a large Ministerial staff. However, we have seen growing up a large Ministerial staff parallel with the increase in size of the Corporations. That points the finger to the fact that we have not thought the matter out in all the detail we should, to ensure that there is just sufficient contact between the Minister, who is ultimately responsible, to the House, and the Corporations themselves. The Corporations feel that there is too much interference in their day-to-day affairs—or that there is likely to be, and that prevents them from planning ahead with that sense of responsibility they need to have.

Some of us have been critical from time to time, as I said at the beginning of my speech but changes have taken place and have taken place in line with some of the criticisms and suggestions we have made, indicating that there was some justification for what we said. I hope, therefore, that when criticisms and suggestions are made in future from time to time, some more careful regard is paid to them than has sometimes been paid to them by the Ministers in the past. As I see it, some of the suggestions we have made have taken far too long to implement, and civil aviation is a matter of great urgency to us, and of great concern to the Commonwealth and to the Colonies as a means of providing adequate communications. If criticisms and suggestions are not carefully studied, and the right decisions made promptly about them and promptly acted upon, we shall fail to make that progress which we ought to make, and which we on this side of the Committee, at least, are hoping to see.

7.13 p.m.

There is not a great deal in the speech of the hon. Member for West Middlesbrough (Mr. Cooper) with which we on this side of the Committee would profoundly disagree, but there was one matter with which I should like to deal right away. I am very sorry to have to disappoint him in his efforts to prove Tory misrule in the air, but I think that the Parliamentary Secretary will confirm that, in fact, the order for the Bristol 175 was placed only last year—that is, three years after the Socialist Government came to power.

The Parliamentary Secretary gave us a comprehensive and, I thought, a very fair catalogue of the difficulties which have confronted the three Corporations. Most of those difficulties were, of course, already well known to us on this side of the Committee. We want to be quite fair when discussing civil aviation and the reports of the three Corporations. We want to make it clear that any criticisms which we may level in this or other civil aviation Debates are in no way meant to reflect upon the personnel of the three Corporations. I believe that they have carried out and are carrying out their task in difficult, exacting, and often extremely discouraging conditions, and I believe that their skill has been and is in the very best tradition of British aviation.

Although the accounts for 1947–48 show a 5 per cent. greater loss than that in the previous year, I myself feel that the picture as a whole is very much more encouraging. The reports show that 37 per cent. more capacity-ton-miles was flown and 42 per cent. more passenger-miles. They are expanding their business all the time, and their operating costs show the very welcome reduction of a shilling per capacity-ton-mile. Since these reports were published we have seen very creditable and welcome efforts to cut down their expenditure even further. Meanwhile, the air crews have built up a reputation for technical and operational efficiency, for safety and regularity, and for courteous treatment of their passengers. I was more than gratified during my visit to America last autumn to hear the high tributes paid by the Americans to the B.O.A.C. Atlantic service.

However, I do believe that rather more should be done by the ground staff. My hon. and gallant Friend the Member for Stockport (Wing-Commander Hulbert) has already referred to that. I think that it would also be useful to make a note of the arrangements for conveying passengers on the Empire routes between London and Southampton—on the flying-boat service. I understand that although the handling of passengers at the intermediate stops on the Empire routes is beautifully done—excellently done—because it is all under the control of the crews, the moment the passengers are disembarked at Southampton, and come under the control of the ground personnel, there are irritating and unnecessary delays. I hope I am not stating the case incorrectly, for I must admit that I have not experienced it myself, and have this information only second hand, but I understand that the bus which goes from Southampton to London is not allowed to take less than three hours, and that, to fill in the time, the passengers are forced to eat two teas, one at Southampton and one somewhere on the way up to London. That is the sort of thing which leaves a nasty taste in the mouths of the passengers—in every sense of the term.

However, this great reputation which the Corporations have built up and the great prestige which they have won have, I submit, been achieved not because the Corporations are owned by the State, but in spite of the fact that they are owned by the State. I hope to show that in the course of my remarks. B.O.A.C., during the period under review, had unfortunately to contend with the same assortment of uneconomic and makeshift aircraft which was the main cause of their heavy losses in the previous year. I do not think that we shall be able to get a clear picture of B.O.A.C. operations until they are equipped with their new fleets of aircraft—Canadairs, Comets, Constellations, Bristols, Hermes, etc. Until they have this new fleet, I do not think that we shall be able to judge clearly and fairly what proportion of their losses are due to weakness in administration as opposed to weakness in operation. At the moment, this is a somewhat confused and blurred picture.

As regards B.S.A.A., they have been greatly handicapped by lack of suitable aircraft, and by the grounding of the Tudors after the loss of the "Star Tiger." They are now faced with another bitter blow. I hope that the Parliamentary Secretary will be able to make an early announcement in the House of Commons, because we are all most anxious to know what type of aircraft is to replace the Tudor and how quickly. It is most important that we should get suitable aircraft going again as quickly as possible.

Concerning B.E.A., I think that we can examine the picture rather more closely because they have now been equipped with an economic British type of aircraft at least on the Continental routes. I think that we must examine the Continental routes quite separately from the internal air routes. The report on the Continental Division is most encouraging. I do not myself consider that the loss of approximately £1,200,000 for the Continental routes is excessive in view of the circumstances with which they had to contend.

I cannot agree with my hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey) that a comparison with K.L.M. is a fair one. K.L.M., as the Parliamentary Secretary pointed out, had a tried and tested aircraft that had overcome its teething troubles. B.E.A. were faced with the very high engineering costs involved in the operational development of the Viking. I know that the Viking is being operated successfully by foreign air lines, but we do not know what are their standards of safety, whereas we do know that the standards of safety in B.E.A. are extremely high. I would prefer to believe that these teething troubles which had to be overcome by B.E.A. were necessary for safety. The high engineering costs involved were a great handicap to them and their inability to utilise the aircraft fully was estimated by the Corporation in their report to have cost over £500,000.

I should like to know the Government's reason for rejecting the claim of B.E.A. for a special grant towards development expenditure, as distinct from the Exchequer grants under the Civil Aviation Act. The Committee will appreciate that exactly the same trouble will arise with all these new aircraft—the Ambassador, the Hermes and the Comet—and I do not think that it is fair to include these costs in the accounts of the Corporations, not only from the point of view of the Corporations, but because it gives the public a completely false impression. It is very disheartening to the people working in the Corporations if they have to show a continual heavy loss which is beyond their control and which has nothing to do with operating the airlines. I agree with the idea of a development fund suggested by B.E.A., and I should have thought that the development of new types of civil airliners as opposed to trying to operate them, was the one really useful contribution that could be made to civil aviation by the State.

I recommend the Government seriously to ponder on paragraph 16 of the report of B.E.A., which seems to me eminently fair and perfectly sound. B.E.A. on their Continental routes had also to contend with the development of the Hercules engine in the Viking. The report shows that the average hours between overhauls was nearly 400 instead of 800 to 1,000, and that extra expenditure amounted to £90,000. There was also the system of priorities, happily now deceased. This system was in operation during the period under review, in spite of very strong protests from both sides of the Committee a year ago, and has only recently been withdrawn. The cost of unsold seats due to this system was borne by the Corporation, and amounted to £40,800. Finally, there was the heavy cost of basic staff training which will be largely non-recurring, and which we hope will not be shown at anything like the same amount in future reports. Taking these factors into consideration, I do not think that we have much to complain about on the Continental side of B.E.A.

My hon. Friend referred to my remarks about K.L.M. and B.E.A. I should make it clear that the comparison was with B.O.A.C. and not B.E.A.

I am sorry, but I think that my point is still fairly sound.

May I turn to internal services, and here we have a completely different picture. I do not think that anyone on either side of the Committee can look at a loss of £2,097,104 on the internal services as anything but highly unsatisfactory, particularly when one considers that private enterprise operators before nationalisation were willing to operate a great many of these lines without a Government subsidy. On page 16 of the report of B.E.A. it says:
"In our opinion the internal services will continue to show substantial losses. …"
The Parliamentary Secretary touched on that this afternoon, and his reasons, so far as I can remember them, were that these lines were never likely to pay because the scale of wages and working conditions were now so high that it had become virtually impossible to show a profit. I am afraid that I cannot agree.

I think that there are other reasons why these lines are not paying. I think that, first of all, they are not getting enough help from the Government, and, secondly, there is far too much meddling in the policy of the internal services by the Ministry of Civil Aviation for political and other reasons. Let us first take the question of their not getting enough help. Why are mail rates 2s. per ton-mile lower on internal services than on Continental services? A year ago, when we discussed this matter in this Committee, we asked the Parliamentary Secretary to see the Postmaster-General to find out why mail rates for the internal services could not be brought up to the same level as those for the Continental services. I see no reason why they should not be, but nothing seems to have been done. Indeed, on page 8 of the report the chairman says:
"It is regretted that the continued representations of B.E.A. for higher rates have not been acceptable to the Post Office, and the negotiations which have been carried on between B.E.A., your Ministry, and the G.P.O. have so far been unsuccessful."
Why does it take so long? Why are these negotiations unsuccessful? If the Government want these internal lines to pay, surely that is the sort of thing we can get done.

Again, last year we also raised the question of the Excise Duty on petrol and oil, and we pressed for some relief for B.E.A., and also for charter companies, from that Duty The Parliamentary Secretary said on that occasion:
"The question was asked whether we would allow a reduction, or a rebate, in the fuel tax for the Corporations. I have to inform the Committee that, after consideration by the Government, it has been decided that such a rebate cannot be given. After all, it is a charge against the industry, and therefore the industry will have to carry it, in the same way as other industries have to carry the taxation imposed from time to time by this House. That is equally true with regard to landing fees."
Yet only a few weeks later landing fees were reduced. If he can do it in the case of landing fees, why cannot he do it in the case of taxation? He lumped them together.

If the hon. Gentleman is not satisfied I shall read on. I did not want to bore the House; that is why I omitted to do so before. He said:

"The provision of aerodromes and navigational aids is very costly and it costs this country nearly £5 million a year. The receipts, even from present landing fees, are only £500,000, so that within the confines of our own country there is a hidden subsidy of £4½ million a year."—[OFFICIAL REPORT, 26th February, 1948; Vol. 447, c. 2257–8.]
In other words, he gave the House the impression that nothing could be done about landing fees, for reasons which we accepted at the time. But only a few weeks later landing fees were reduced. Will he now tackle the other problem—the problem of a reduction in taxation? Those are, I think, the main difficulties with which the internal airlines have had to compete. I believe that removal of those difficulties—and they could be removed—would go a very long way towards putting the internal services on a much more economical basis.

I pass to the other aspect: too much meddling from the Government. I have to accept, as I do, the assurance the Parliamentary Secretary gave us this afternoon, that the resignation of the chairman of B.E.A. had nothing to do with the disagreement over the internal services. I also accept, as I must, the assurance which he gave me in a written reply on 16th February, that the agreement to start the experimental Cardiff-Liverpool line was obtained without invoking Section 4 of the Civil Aviation Act. Although I have to accept that, it seems a little odd that, whereas normally new or altered scheduled services are announced by the Corporations through their public relations office, in this case the new service was announced by the Minister in another place. That is unusual, is it not? It also seems significant that the reductions in the Isle of Man services, which were announced about the same time, were announced by the Ministry of Civil Aviation and not by the Corporation concerned. Why was that? Surely a detailed matter of day to day policy, such as whether there should be three or six services a week to the Isle of Man, is not something with which the Ministry of Civil Aviation should, or generally does, concern itself. Can the Parliamentary Secretary tell us why, in this case, they took such an interest and announced it themselves, instead of allowing the Corporation to do so?

Perhaps I might here say, in case, in the hurly-burly of the Debate, I overlook this point in my reply——

The right hon. Member has only just come in. If he is so interested in the Debate perhaps he might have come in a little earlier. Until his intervention we had been having a very useful Debate.

So far as the Welsh service is concerned, the announcement by the Minister was purely accidental. The agreement to run the service was arrived at by B.E.A., and the general arrangements were made for it a day or two before the Minister made his speech in another place. It is not uncommon for Ministers, even junior Ministers, to put something fresh into their speeches now and again, and the Minister put that into his speech. The announcement about the Isle of Man services was not made by our Ministry. There is a relationship between the Home Office and the Isle of Man——

Certainly the representative for South Hammersmith is not to be found on the Opposition benches. The Home Office has a responsibility in connection with the Isle of Man, so that there is consultation between the Minister of Civil Aviation and the Home Secretary if action affecting the Isle of Man is taken by our Ministry. It was that consultation between the Home Office and the Ministry which caused an announcement to be made, because the Minister received representations at the request of the Home Secretary.

I am obliged to the Parliamentary Secretary for that interjection; but I am sure he will agree that all these things, putting two and two together, gave a rather mistaken impression.

This afternoon the Parliamentary Secretary took the line that losses on internal services were inevitable. Speaking for myself, I do not agree. It is becoming abundantly clear that a large, impersonal nationalised corporation, under the thumb of the Government and subject to political direction, is quite unsuitable to run the internal routes, which must depend, and have always depended, mainly upon local contacts and local goodwill. That is what built up the internal airlines before the war, and we shall go on losing money on them until there is once again this personal local contact. Any fear the Government may have that the standard of safety might not be maintained can easily be taken care of. That is the sort of provision which we on this side would thoroughly welcome, because we are as keen on air safety as anybody. In other words, the solution to this problem is to hand the internal routes, the whole lot of them, back to private enterprise and let them get on with it. And they will get on with it; there will be no difficulty in getting people to run these services; and they will show a profit if they get from the Government that help which B.E.A. is not getting but ought to get.

I regret very much that the Minister of Civil Aviation found it necessary to dispense with the services of Mr. d'Erlanger. I think that he was doing a very good job under very difficult conditions, and that had he been given a free hand, without interference from the Government, B.E.A. might have been showing even better results than at the present time. The reason for the change has not emerged clearly from this Debate, and it is still a matter of conjecture. I do not propose to enter into the argument about Lord Douglas, because enough has been said already on that point. One thing that has not been said, and it is the most important of all, is why it was necessary to bring in anyone from outside at all. Surely there must have been plenty of people in the Corporations who have spent a lifetime in the business of air-line operations capable of being promoted to the higher posts. It is very disheartening for senior officials and employees, with long and loyal service in air transport, to see chairmen brought in over their heads and having to teach them the job. They are pulling down these large salaries and learning as they go along.

There is no doubt, and I am sure the Parliamentary Secretary knows it, that there is a feeling of frustration and insecurity in the Corporations. B.E.A., on page 25 of the report, speak of the "disturbing effect" on the morale of the staff which the very necessary cuts in the strength of the Corporations have had. I do not disagree with those cuts, but the Minister of Civil Aviation, speaking in another place, was rather proud of the fact that in the last 18 months there has been a reduction of over 5,000 in the staff of B.O.A.C., and at a time when business was expanding very rapidly indeed. He was again rather proud that the staff employed by B.E.A. was now under 7,000 compared with 7,500 some five months ago. I do not think that is anything to be proud of at all.

It is all very necessary, but the difference between a State corporation and a private-enterprise firm is that the State corporation starts by building up an enormous empire and then finds it has to cut it down, whereas private enterprise starts modestly and builds up as business expands. Under private enterprise there is hope of advancement as business expands, instead of the frustration and insecurity which exists under State ownership. There is no doubt at all that these cuts are having a very serious effect on morale in the Corporations. I shall quote one piece from the official organ of the AeronauticalEngineers' Association, "Wings." It says:
"Try as they will, the B.O.A.C. rank and file cannot find how persons are selected as being redundant. Long service, a blameless record and unquestioned skill will not save you. Good time-keeping does not count, nor strict loyalty. I cannot help feeling that some of those displaced persons would not be in that class had they sold the 'Daily Worker' instead of 'Wings' at Croydon."
If that is the sort of thing being said in the Corporations, it is not very good for the Corporations and it is bad for morale.

That is not being said inside the Corporations, but by an interested party outside.

There must be a percentage of this particular union in the Corporations, and this is their official organ.

Am I to understand that the hon. Member accepts the remarks he has quoted; that he thinks that staff would not be declared redundant if they were members of the Communist Party.

I do not know about that. What I am saying is that these Corporations were built up as enormous empires and now have to cut down at the expense of the employees—which is having a very bad effect—instead of building up modestly when there would be security for everyone. Why has not the general pensions scheme been set up? It is two years since it was envisaged under Section 20 of the Act. Surely the Government can do something to accelerate these arrangements. It is obviously quite impossible to achieve maximum efficiency unless the employees in these Corporations are happy, have confidence in the management and a reasonable sense of security and hope of advancement.

We have made our position perfectly clear. We do not like nationalisation which we should like to stop as soon as possible; but while it lasts, we who have the interests of civil aviation at heart want to make the Corporations work as well as possible, if for no other reason than that the aeroplanes of these Corporations carry the British flag to every quarter of the earth. We want the prestige of British aviation to be as high as it possibly can, but we cannot make the Corporations work, build up prestige and the sort of business we want unless they are run on proper commercial lines, without interference, without meddling and without dictation from the Government. New types which are coming along will compete with anything that anyone else has to offer, but they are coming along too slowly. Before we compete with other foreign airlines, the Government must help the aircraft industry more than they are doing at the moment; they must have a sense of urgency, making decisions quickly and getting the new types into production and service without delay. There is far too much inter-Departmental delay all round. Apart from that, I have great confidence in the future of civil aviation, particularly if we can help to free it when we get back to power. Meanwhile, I for one shall do all in my power to support civil aviation and help it along.

7.48 p.m.

The hon. Member for Worcester (Mr. G. Ward) always makes a well-reasoned and well-informed speech. The Debate has now returned to sweet reasonableness, which was the note on which it was introduced by the hon. and gallant Member for Macclesfield (Air-Commodore Harvey). but whether it will remain so now that the right hon. Member for Bournemouth (Mr. Bracken) has entered the lists, I do not know.

I wish to support the appeal that has been made in regard to internal airlines. The Parliamentary Secretary referred to the fact that they were not paying, and the hon. Member for Worcester said—and I agree with him—that internal airlines cannot pay in this country unless they are run over water, as across the Bristol Channel and to the Channel Islands. I doubt whether we can go on asking the taxpayer to spend these considerable sums of money for this traffic, and I reinforce the plea made to the Government seriously now to consider whether private enterprise should not run these internal services. I appeal to the Parliamentary Secretary to discuss this suggestion with his noble Friend. I put this forward in no party spirit, but merely ask the Government as a bold move to see what private enterprise can do with these services. Let it be done in a spirit of co-operation. Let it be done, not through the B.E.A.C. licences, but through some central licensing authority, requiring certain standards to be observed.

A reference was made by the hon. Member for the Isle of Wight (Sir P. Macdonald) to the long fight in the House many years ago to take civil aviation away from Air Ministry control and from the Air Ministry mind. After a struggle at last we got a Ministry of Civil Aviation. I am sure that the appointment of the Chairman of the B.E.A.C. was read in the Press by all those who believe in the future of Civil Aviation with absolute amazement. That long fight has been of no avail. We are returning now to something in the nature of Air Ministry control and influence, and the Air Ministry mind. It is not as though this were the only appointment. I believe that the controller at Heath Row is an air-marshal. Of course, this is wrong. We shall never build up an effective airline organisation with proper efficiency in the Corporations unless we make promotions from within the Corporations themselves.

I am sorry to see that such an experienced aviation and airline administrator and executive as Mr. d'Erlanger is to leave. We have been told that we are short of airline executives, yet here is a man who has spent a great part of his life on this work. He has been through it all at all stages. The Parliamentary Secretary cannot ask the Committee to accept the statement he has made this afternoon on the matter. I hope that the Government will make a far more satisfactory and certainly a more informative, statement telling us why Mr. d'Erlanger is being asked to relinquish this post. Ministers are being constantly changed, chairmen and managing directors of the Corporations are always being changed. We shall never make an efficient business of civil aviation unless the people who are in the organisation create an efficient unit by their own work without bringing in these people on the top. What is behind all these appointments of air-marshals and pensioners coming in from outside.

My right hon. Friend was not here earlier this afternoon, when there was considerable cross-fire on this topic. The Parliamentary Secretary, I am glad to say, made it clear that when Mr. d'Erlanger was made chairman of B.E.A.C. it was not a political appointment. I hope that these appointments will be taken out of parliamentary politics and that we shall get the best men for the job. The Parliamentary Secretary must really make these points perfectly clear when he replies. It is amazing: here is a first-class executive who has given a great number of his years, at considerable financial sacrifice—I know something about it—in the interests of civil aviation. The public of this country and the House of Commons will want something better than a short notice in the Press and the brief, bare statement made by the Parliamentary Secretary in the Committee. Some more and satisfactory explanation than that will be wanted by the taxpayers who will have to foot the Bill. I hope that the Parliamentary Secretary will give it to them tonight.

The hon. Member for Uxbridge (Mr. Beswick) made a reference to the bad relationships existing between management and staff in the public Corporations. I hope that we shall be told something about it. It is completely depressing that there should be bad feeling between the managements and the staffs of these Corporations now that the industry has been nationalised. We are not dealing with carrots but with an organisation to handle and transport by air passengers under conditions of safety. Another hon. Member referred to a lack of supervision. We cannot run a large airline organisation unless we have effective supervision and proper control. I want to know from the Parliamentary Secretary what is behind all this. If there is not an effective pattern of organisation, as the hon. Member for Uxbridge called it, working today, what is the trouble? If it is not working under the new Government set-up, what is the reason? Why the discontent?

Decentralisation of production was referred to by the hon. Member for Sunderland (Mr. F. Willey), in relation to some of the important aircraft types. I believe that the production of some of our vital new designs will have to be decentralised, not only to the North-East Coast as the hon. Member suggested, but throughout the Commonwealth. It will mean that we shall have to decentralise our designs, staffs, technicians and draughtsmen. Some of them will have to go to the Dominions to help build up sub-production units there. I hope that the Ministry of Civil Aviation are planning sufficiently far ahead on this problem now that Mr. Masefield has gone.

If we took the internal services and handed them over to private enterprise to see what it could do, with the yardstick of efficiency for comparison, that would give the Department or Corporations a considerable saving. I ask the Parliamentary Secretary whether any allocation is to be made over and above the £250,000 which has been made for two years for the development of helicopters. I know that the hon. Gentleman cannot cover all the subjects in one speech. I congratulate the Parliamentary Secretary on the many points which he put before us this afternoon, and on the ready manner in which he gave way to other hon. Members at all times and then tried to answer their questions. I am sure that the Committee is indebted to him.

The helicopter is essential for internal services. I ask him how many helicopters are in production in this country. This is an important question for the future. How many rotor stations are being planned? Are the Ministry of Town and Country Planning giving full co-operation in the allocation of suitable sites for helicopter stations? Who in the Department is responsible for helicopter development? Is it a committee or a particular individual who understands the subject? What about helicopter mail delivery developments? Although the Parliamentary Secretary referred to the Ambassador and the Brabazon, he did not mention the Marathon. Also when does he expect the first jet airliner to be in use?

In conclusion, I would point out that every time there is an empty shop in the West End of London it is taken over by an international airline—K.L.M., American Overseas, Pan-American, B.O.A.C. and so on. We can count them by the dozen in the West End of London and other capitals. There must be a tremendous overlapping at present in competitive booking and freight arrangements. I do not know whether the former chairman of B.O.A.C. has managed to cut down the overheads, or whether the new chairman is going to do so, but if B.O.A.C. continue to take these booking offices in the most expensive places in the West End of London and in other cities it will be a very costly business.

What does this mean? I believe that in the end we shall have to come back to the proposal which was made in the House by the hon. Member for Nuneaton (Mr. Bowles) who, time after time, before the end of the war, almost alone advocated international civil aviation or a world airline corporation. The various companies use the same aircraft. The Parliamentary Secretary told us this afternoon the aircraft which are being used, such as Boeing, the Canadian Skymaster and so on. All the large international companies are using the same types of aircraft, and the same engines to a certain extent. They also use the same sort of supervision and technical maintenance. They use the same types of equipment on the airports. They have the same offices for booking seats, and I believe that at the conferences at Montreal there is a good deal of interchangeability in matters of administration and regulation. Why does not the Minister now advocate boldly an amalgamated international airline? In the end the march of events will bring us to it. It is nothing to do with national prestige or defence; it is nothing to do with the development of military aircraft.

I hope the Parliamentary Secretary will not be drawn into this race in civil aviation for national prestige, or advance the argument that we should follow a certain line because of Empire, Foreign Office, or diplomatic reasons. Because eventually we shall look for world co-operation with the help of universal airlines, and I hope the Parliamentary Secretary will be able to say something encouraging on that matter when he replies. I do not think that, on the whole, the Parliamentary Secretary can complain about the tone of the Debate. Everyone has been helpful and co-operative, and I hope the Parliamentary Secretary will recognise that there are Members in all quarters of the Committee who speak from considerable experience and who wish to be constructive.

8.2 p.m.

I agree with the suggestion of the hon. Member for Eye (Mr. Granville) that some form of international control of aviation would be helpful, but we have to remember that in many respects today there already exist international controls. It does not always follow that international control gives us, for example, the fare structure which I would like to see operating today in civil aviation. There is the danger that unless we have proper control of an international organisation it may establish itself as an anti-social monopoly, and that is a danger which we must recognise and meet.

I was not advocating international control; I was advocating World Airlines Limited.

I am glad the hon. Gentleman has made that point clear. I am glad the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) is now present.

When the hon. and gallant Gentleman was speaking he struck a responsive chord in my mind. He referred first of all to types of machines, chiefly from the point of view of our internal services. I know he will agree when I say that time and again I have sought to hammer home in this Chamber the need for freezing design in the machines which operate on our internal services. I do not refer to machines operating on external routes where we are compelled by other circumstances to take a different attitude, but on the internal services I believe there would have been great saving in cost had we frozen design and concentrated, as I have often urged, on a type of machine with low landing and take-off speeds and a cruising speed which I would put below even that suggested by the hon. and gallant Gentleman. I would suggest not 200 to 250 miles an hour, but 180 to 200 miles an hour would, I think, meet the requirements of our internal services, and I believe lead to cheaper costs.

The hon. and gallant Gentleman referred also to the reliability of the services, and that is a point of which we must take note. The services have been remarkably reliable. It is worth while noting that in one of the foggiest periods which we have ever had in the history of aviation in this country, from the end of November to the early part of December last year, not one B.O.A.C. service failed to operate during those four very foggy days. Out of 73 movements at Hurn airport, I believe 57 of them were carried out during that foggy period, and the remainder were carried out on 2nd December. That is a remarkable performance. It is something of which we should take note, and we should pay tribute to B.O.A.C. for the efficient way in which they overcame what might have been a very serious period of dislocation.

The hon. and gallant Gentleman referred to the question of cheap fares, and it is that with which I want to deal particularly. The main purpose in having a service is that it should be used. As the report of B.E.A. shows, the load factor in the internal services is only 53 per cent. and in the European services 69 per cent. That means that the aircraft on the internal routes are flying half empty, and they are doing so because not only in the aviation sense but in the fare sense they are far above the heads of the mass of the people of this country.

Those responsible for these matters seem to base these fares on what one might call the first-class fare structure of land transport. We forget that only a very small proportion of the people in this country travel first-class. If I take as an example the London to Glasgow service, it used to be £14 15s. return, a fantastic figure which even a first-class passenger of surface transport would hardly think of using. We thought it was a big step when the fare was brought down to £11, but we forget that the £11 is still dearer than a first-class fare, and is double the third-class fare between London and Glasgow. As a result of that, we are still finding it very hard to fill the aircraft that fly between London and Glasgow, because we are not taking a proper attitude towards this question of the fare structure.

My hon. Friend said that it means lower operating costs. I agree, but he also said it means an increase of business. How are we going to get an increase of business unless we produce a fare that people can pay. We look for comparisons, and I am not suggesting that any conclusion can be drawn from the comparisons, but I am saying definitely that these comparisons must cause us to question the fare structure operating here.

For instance, naturally I look for comparison with the route I use, the London to Glasgow route. It is about 400 miles long and it costs £8 per single journey. Melbourne to Adelaide is 5 miles longer—405 miles long, and there the fare is £3 18s. sterling. They do not use out-of-date Dakotas, however serviceable and useful they may be, but they use a better machine, the D.C.4. That service provides a comparable distance with the fare fixed at £3 18s. If we take the Buffalo to Boston service, we find it is 415 miles long, that the flight there is by D.6 and the fare is £6 15s. There are two internal services in two different countries, which are comparable in distance to the London-Glasgow route, and yet there is this remarkable difference in the fare. I am bound to ask why, and what is the explanation if one exists.

There is another aspect of this fare problem. I have here a letter in reply to a memorandum which I submitted to B.E.A. last October on this question. It is signed by Mr. d'Erlanger, of whom we have heard a good deal tonight. I submitted certain figures which he confirmed. Those figures show that in every European service—Ostend, Brussels, Paris, Amsterdam, Basle, Copenhagen—we are charging a higher fare from London than the average 1948–49 costs laid down by the International Air Traffic Association. The Ostend fare of £10 2s. is £7 12s. 6d. on I.A.T.A. cost. Amsterdam is £14 8s. and I.A.T.A. cost is £12 6s. The Glasgow fare is below the average International Air Traffic Association cost, but is still too high.

I was interested in the suggestion by the hon. and gallant Gentleman the Member for Macclesfield (Air-Commodore Harvey) as to the fare from Paris. It is only a little different from what I suggest should be the desirable fare to Paris, namely £5. I think the hon. and gallant Gentleman mentioned £4 12s. That is the figure I suggested, because we have to think of a new type of air travel, which I have called second-class air travel, although I do not like the phrase "second-class." However, I use it because, speaking last October, the Director of the International Air Traffic Association said that we have got to think of this question of air traffic along different lines, and find out a fare structure which would be acceptable to the great masses of the people who are paying by subsidy for these losses.

I want to divert for a minute to a point I intended to mention. My hon. Friend the Member for West Middlesbrough (Mr. Cooper) wanted to see civil aviation called commercial aviation. I disagree with that, because we have got to think not merely of making them pay, but we have got to think of the needs of the country. I think in particular of parts of Scotland, where in the Western Isles for example we find it difficult to get people to remain. The problem of the depopulation of the Highlands is an important one not only for Scotland but for the whole of the United Kingdom. If we do not do something for the people in the Western Isles to enable them to get easy transport to the mainland then we are going to encourage depopulation. The fare from Belfast to Glasgow is £4, and yet we charge £4 1s. to Islay from Renfrew, a distance of little more than half that between Glasgow and Belfast. That is a fare which ought to be immediately reduced.

I should like to refer now to one of the reasons why some of these losses are taking place, and why we find it difficult to get a reasonable charge that people will be able to pay. Operating costs are an important problem and affect the business which the Parliamentary Secretary wants to see increasing. Why are we faced with the difficulty of getting more people to travel? If we look at the revenue of B.E.A. as shown in the report it comes to £4,125,536. If we take one group of expenditure, the general administration expenses, as shown in the accounts at the end, we find that divisional administration today is costing £542,177. The head office administration is costing £763,305, making a total for these two items of £1,305,472.

If we add the commission paid to selling agencies of some £166,000 and the amount for publicity—with which I agree—of £193,000, we get for this single group, on the expenditure side, £1,665,124. That is, out of a revenue of a little over £4 million, for selling and general administration there is an expenditure of over £1,660,000. This is a matter which should be the cause of the most careful inquiry, for it represents a percentage charge of 41 per cent. on our revenue. Many people are critical of B.O.A.C., but the corresponding figure for B.O.A.C. is 31 per cent., and that for B.E.A. is 10 per cent. higher. If we take from these accounts the average selling price of a ticket it comes to £30. Of this amount, the allocation which I have mentioned comes to £12 3s., a charge which is far too heavy to impose upon the selling price.

It is worth while to note the graph on page 48 for both the Continental and the internal services. It shows a tremendous gap of unused capacity on both these services. On the Continental services the capacity ton miles are 1,300. At the peak of the season the extent to which it is taken up is only a little over 800 tons. An examination reveals a similar state of affairs on the internal services. The reason is largely that our fare structure is too high and places on the potential passenger a burden which he simply cannot carry.

In ordinary times something like five million people travelled between these Islands and the Continent of Europe, only 100,000 of whom went by air. I know that at present restrictions prevent the easy flow of people to the Continent, but these restrictions will pass and when they do it is our business to see that our civil aviation services secure a much greater percentage of that five million than they did in the past. They will do so only if by paying attention to their fare structure and realising that the great mass of people travel not first-class, but third-class, and that, therefore, in creating our fare structure, it is based not on first-class, but on second-class travel.

8.25 p.m.

I listened with very great interest to the speech of the hon. Member for Tradeston (Mr. Rankin). I hope that the Government Front Bench took notice of his statement—a wise and a good one—that high costs of administration must mean high costs to the consumer. It was a good point and one which has arisen in connection with every monopoly or nationalised industry in this country. It is not common to civil aviation alone and I am glad that, in this one case at least, the hon. Gentleman realises that that is true.

The hon. Gentleman must not read into my statement more than I said. I do not admit that it follows in any case as a consequence of nationalisation.

I was merely commenting upon the fact that, in one case at least, the hon. Member had seen the light. It happens so often on the benches opposite that in one case an hon. Member sees the light and in another he takes no notice at all.

We have had a very interesting Debate. The Parliamentary Secretary treated us with great courtesy in giving way to so many interruptions, both from this side and from his own. It is a fair comment, in recalling past Debates on this subject, to say that the Parliamentary Secretary is now becoming quite experienced in coming here and making explanations of the millions of pounds which are lost in civil aviation. He has done so before, he has done so today, and I venture to prophesy that, if by any chance the Government should still be in power this time next year, he will have to come back again to Parliament and explain away further losses and still hope that things may be better in the future.

Today, however, the hon. Gentleman's case was a little easier, because one of the main bones of contention from last year has now been removed. I refer to the fact that after three years of pressure upon the Government from this side, they have at last been able to eliminate the Ministry of Supply in the purchase of aircraft for the civil aviation corporations. They should have done so three years ago and not waited until the pressure which had rolled up from all sides forced them to take what was a wise and very necessary step.

There are, of course, other things which they have not done, and I should like to emphasise the point made by the hon. Member for Worcester (Mr. G. Ward) that it is time we got rid of the Petrol Duty on aviation spirit. It is highly illogical that we should put this heavy tax upon the corporations and then have to give it back to them by means of subsidies for the heavy losses which they have to make. The flying of an aircraft is, and always will be, expensive. It is altogether wrong, therefore, that it should have to bear this heavy and unnecessary tax. Both the Minister and the Parliamentary Secretary would be doing their duty properly by the industry, if, when the time for the Budget comes along, they lined up and hammered at the door of the Chancellor of the Exchequer on this matter. This is not a new or controversial point, for every person who has anything at all to do with civil aviation, believes that this tax should be removed.

The Corporations, as the hon. Member for Worcester said, now face a rather better future. We see a certain amount of improvement and I am wondering whether the Parliamentary Secretary can give us a target date by which he hopes the Corporations will be equipped with their new aircraft. It would help us all if we could know what we were aiming at. From our point of view, we want two things: we want the Corporations to fly the best planes, and we want them to fly British planes. Until those two points coincide, we on this side will not be satisfied.

It would be interesting to the Committee if we could have a statement from the Parliamentary Secretary telling us that the new Welsh service was being run because it was believed that there was a chance of its "breaking even" from the financial point of view. The Parliamentary Secretary himself said that, so far as B.E.A. was concerned, they were now having to go in for a policy of concentration on those routes where they are likely to "break even." Is this one of those routes, or has it been introduced purely for a political consideration? We are inclined to think that it may be a political matter because, as has been said before, the announcement of the new service was made in another place by the Minister, instead of in the ordinary routine way where new services or cancellations are announced by the Corporations themselves. I could not forbear a smile when the Parliamentary Secretary intervened to say that the announcement by the Minister was rather in the nature of an accident that sometimes happens. It was not announced in another place in response to pressure or interjections, but as a deliberate point in a prepared statement made by the Minister himself. He began it by saying, "I should like to take this, the first opportunity, of informing the House, etc."

I hope we can hear from the Minister whether there is any truth in the suggestions which have appeared in the newspapers that the imposition of this service was one of the reasons for the resignation of Mr. d'Erlanger. I have never met the man but I have followed his career, and I know him as one of the pioneers of civil aviation, a distinguished man and one of great ability. I should have thought that in the normal course, when his contract expired in May or June, the Minister would naturally want to renew it because he had done the job well. However, the Minister has decided to "fire" him, and I think that this Committee is entitled to know why the Minister has decided to get rid of the head of one of these great Corporations.

The Parliamentary Secretary rather passed it over early this afternoon by saying, "Because we have a man once, we do not have him for ever." Remember, this gentleman has not been Chairman of the Corporation for long, but he has risen with it from its earliest days when it was private enterprise, from managing director to the position of Chairman of the Board, and now, after a short period, he is being allowed to depart. It seems to me that there have been far too many changes in the direction of the three Corporations. Whether the industry is nationalised or run under private enterprise, if we want to make it a success we must get the best men to run it, we must choose them irrespective of their politics. It does not matter, so long as the man has the right qualifications whether he is Conservative, Liberal, Socialist or what his political views. If he is the best man to do the job, he should be there and, once there and doing it well, he should be assured of some kind of continuity of office.

We are sorry that Mr. d'Erlanger has gone, and we note with great interest that a distinguished officer is following in his steps. Perhaps it would help us if the Parliamentary Secretary told us if the Marshal of the Royal Air Force is taking this job as a permanency, or is it just a small stepping-stone to another position which may involve some change in the Government Front Bench? If a man of this position goes into such a job, he has to be given the chance to make a success of it and, on taking it, he should give his undertaking that he will stay there and try to make it the success it should be.

I support my hon. Friend the Member for Worcester (Mr. G. Ward) on the subject of flying clubs which are a valuable source of training. Hon. Members have always had great enthusiasm for them and, if they can be helped, it would be wise to do so. I understand that the Minister has been giving some attention to this question and has set up a committee—in the more modern words of Socialism a working party—which has reported to him. Will it be possible for this committee to know the kind of report that that working party has made? The Minister has had it for nearly a month now, and we have had no indication whether the report is to be published. We understand, however, that as a result of it he has at least discussed the matter with the Treasury. Cannot we know something about it, instead of being given in a month or two the Treasury decision, yes or no? We want to know exactly what it has recommended, and how much money the working party suggested should be spent on the flying clubs.

Now a few words on the air charter companies. We should welcome the fact that once again they are being put to real use in their work as associate companies with B.E.A. The reason they are coming in can only be that there is a public demand for these services which the Corporation itself is not able to fulfil. They should be encouraged, not only in the public interest but also because they have proved a most valuable source of trained pilots who have done good work for this country in emergency. The hon. and gallant Gentleman the Member for Macclesfield (Air-Commodore Harvey) referred to the India-Pakistan services, and the great work done in the Berlin airlift as well. We should use these people and encourage them.

The Parliamentary Secretary said they should be encouraged subject to conditions. One was the standard of safety and the second was that of wages and conditions of service. We agree with him on that, but he forgot to state conditions Nos. 3 and 4 which he has imposed on these people. Condition No. 3 is one which should be of interest to the hon. Member for Tradeston, that there is to be a restriction on the fares which these air charter companies can charge. They are not to charge less than the Corporation would charge and, if they do, their contract must be cancelled. The hon. Member for Tradeston referred to the high fares charged by the Government corporations, but here, when there might be a chance that the fares could be lowered by energetic private enterprise charter companies, the monopoly socialised Corporation, no doubt on the instructions of the Minister says, "You must do nothing to reduce the fares to the consumer." That is wrong.

Condition No. 4, which the Minister did not mention either, was that when they are given permission to run the service as an associate corporation, they are only allowed to have it for two years. I believe that two years is not enough and that it ought to be five years. It is elementary knowledge in flying circles that the commonsense thing to do is to write off the value of the aircraft in five years. Can the Minister possibly expect these air charter companies to get new and up to date equipment when they know that they may only have two years in which to do their work? It is uneconomic to write it off in two years; at 50 per cent. per annum they cannot do it. He should give them the period over which they can write off the aircraft they are using. If it has to be written off in two years, it means that they are forced by that very proviso to use old aircraft instead of re-equipping themselves with new ones. After all, if too great a burden is put upon them they cannot possibly achieve that high standard of wages and working conditions which the Parliamentary Secretary said he desired. I do not believe that the Minister is really wholehearted about developing these air charter companies. He has himself said in another place, "I am not asking or encouraging these charter companies to step in." The fact is that he needs them, and if he accepts their services he should give them fair play.

There is a further point which I wish to make which is of some importance. Why when the Ministry of Civil Aviation sets up a committee to examine and investigate any particular question, it does not take action on the report? In June or July, 1947, the then Minister announced the formation of two committees, the members of which were appointed so that they could begin work by the end of September of that year. One of the committees was under the chairmanship of Air-Commodore Helmore, who is known to many of us as a distinguished officer and as a former Member of this House. He had as his vice-chairman the hon. and gallant Member for Derby (Group-Captain Wilcock). The hon. Member for Uxbridge (Mr. Beswick) was also on the committee. In addition there were eight other people of great technical knowledge and of good technical background and wide experience. That committee was set up to examine and report to the Minister on the certification of aircraft and the approval of equipment. At the same time a twin committee was set up of which the hon. and gallant Member for Derby was the chairman, and the vice-chairman was Air-Commodore Helmore. Their job was to examine and report on the licensing, recruitment and training of civil aviation personnel.

I speak about this matter because I have some knowledge of it in that I accepted an appointment to that committee and sat with it throughout the whole of its deliberations. One of the first impressions I had, which lasted all the time, was that the Minister had appointed to that committee men of extraordinary ability and knowledge of the subject. One of them was Air-Commodore Brackley, who went on to become managing director of British South American Airways. He was one of the ablest men I have ever been privileged to meet, and it was a great tragedy for civil aviation when he lost his life. With him was Group-Captain Hockey of the College of Aeronautics, Captain James, Chairman of the British Airline Pilots' Association, Dr. James, the High Master of St. Paul's, Sir Eustace Pulbrook, ex-Chairman of Lloyds, Sir Miles Thomas, Chairman - Designate of B.O.A.C. and a director of the Colonial Development Corporation, Sir Edward Crowe, a director of Courtaulds, Lord Milverton, an experienced Colonial Governor and administrator, and also a director of Colonial Development Corporation, and Mr. Leslie Gammage of the General Electric Corporation. They also had Lord Dukeston to represent the trade union point of view, and Lord Londonderry. Owing to illness neither of those two gentlemen was able to serve.

The Government set up a committee of active, busy an