Orders of the Day — Air Corporations Bill

Part of the debate – in the House of Commons at 12:00 am on 2nd December 1963.

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Photo of Mr Airey Neave Mr Airey Neave , Abingdon 12:00 am, 2nd December 1963

It may be that B.O.A.C. had not seen, as we have seen from subsequent history, that it had too many aircraft on order at that time. That is all I am saying, and I do not think that it is an unfair comment.

What is the cause of the balance of this enormous deficit, especially the net increase of £12.9 million since the House last debated the Report and Accounts? It is partly the interest payments, and I suggest that no settlement of this issue should be made until Sir Giles Guthrie has had time to make his report. An argument can be made about these interest payments, that they distort the Corporation's account, and the future system will have to be considered in that connection, but I do not think that anyone suggests that there should be immediate relief without consideration of what the future financial structure of the Corporation is to be, and this is something which must be settled by the new board.

What is needed also is an examination of the past two trading years. These are very important. The increase in capacity has not brought an increase in traffic, and perhaps the new management will judge capacity better than the old management, as I was suggesting when the hon. Member for Orpington (Mr. Lubbock) interrupted. So often, the board seems to have found itself unprepared for greater competition, and this certainly is not something for which my right hon. Friend can be blamed. Undoubtedly, there have been errors in this respect.

I am sure that there is a great future for the Corporation if it gets its financial structure right. I am sure, also, that Sir Giles Guthrie has the experience to judge what the best financial structure should be. I hope that he will concern himself principally with the long-term objectives of B.O.A.C. and be particularly careful about the surplus of aircraft when the VC10 comes into operation. We do not want another Britannia crisis in the next year or so.

The short-term job is to regain or recreate the morale of the staff. I hope that Sir Giles will be able to take the lead in doing this. I welcome the proposed interchange between B.E.A. and B.O.A.C, Mr. Milward being on the B.O.A.C board. I am sure that this will be a good thing, although I should not support a merger. I wish good luck to Sir Giles Guthrie in his new job and to my right hon. Friend in the present difficult situation, which, I am sure, he is handling very well. So far, no one has put forward an alternative to the way he is adopting now.