Orders of the Day — Air Corporations Bill

Part of the debate – in the House of Commons at 12:00 am on 22 November 1965.

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Photo of Mr John Cronin Mr John Cronin , Loughborough 12:00, 22 November 1965

I entirely accept what my hon. Friend said. Cunard is acting as a travel agency and at a very high price to B.O.A.C. As hon. Members on both sides of the House know, Cunard-Eagle obtained a 6 per cent. preferential dividend with a 30 per cent share of B O.A.C.-Cunard. That is a 6 per cent. preferential share on all the profits of the North Atlantic route, which in the first six months of this year brought Cunard £150,000. I cannot believe that Cunard is doing anything to help B.O.A.C. which is worth anything like £300,000 a year. This is now a very unfavourable situation for B.O.A.C.

The Minister said that he disapproved of the B.O.A.C.-Cunard arrangement. Disapprobation is not enough. I do not think that B.O.A.C. can get out of this arrangement. I do not believe that it has the legal powers to do so. One of the clauses of the agreement makes it clear that B.O.A.C. cannot retract from this agreement, or even move a resolution to modify it, while Cunard holds 20 per cent. of the equity. There is probably no legal way at present for B.O.A.C. to get rid of this burden on its back. It is probable that the Minister will have to introduce some legislation to cope with that situation, and I hope that that is something from which he will not shrink. It is very important for the Minister to realise in this particular instance that he should represent the interests of B.O.A.C. and that Cunard shareholders are not his concern at all. I hope that at any early opportunity he will introduce appropriate amending legislation.

May I turn to one of the Acts passed when right hon. and hon. Gentlemen opposite were in power which had a peculiar baleful effect on the affairs of B.O.A.C.? I refer to the Civil Aviation (Licensing) Act, 1960. This has potentially taken away from B.O.A.C. a large part of the monopoly which it had on many of the routes, including the North Atlantic route. Unless an airline makes an application, B.O.A.C. still retains the monopoly, but these applications have been made. I do not think it likely that any application which takes away from B.O.A.C. part of its profitable trunk routes will receive serious consideration from a Labour Minister of Aviation, but we cannot expect this desirable state of affairs to continue indefinitely. In a democratic country one must visualise the possibility that at some time in the late 1970s or 1980s there may be a Conservative Government for a short time, and then we may well find that once again competition is introduced on the main trunk routes.

The right hon. Member for Mitcham spoke in a most eulogistic manner about the desirability of competition, but this country, and indeed only one party in this country, is singular in wanting competition on the main trunk routes. No other country wants such competition, because it is realised everywhere that competition from foreign countries is quite enough and that it is best for a country that it should have its own national air line running the trunk routes. We intend to ask the hon. Member for Sudbury and Woodbridge (Mr. Stainton) to let us know which other country introduces competition in its overseas routes.