Orders of the Day — Air Corporations Bill

Part of the debate – in the House of Commons at 12:00 am on 2nd December 1970.

Alert me about debates like this

Photo of Mr John Wilkinson Mr John Wilkinson , Bradford West 12:00 am, 2nd December 1970

Time is very much on our minds, and I do not want to strain the indulgence of the House. I intend to make a few observations and ask one or two probing questions of my right hon. Friend.

It is obvious that the borrowing powers are necessary in view of the long-term re-equipment programme of B.O.A.C. However, one factor that is extremely disturbing is the dollar element involved. I would like further and more detailed elucidation from my right hon. Friend. Earlier today the House received news from the Minister for Aviation Supply, which concerned another corporation, admittedly, but which will incur the country in a vast addition of dollar expenditure for the purchase of foreign aircraft that we should be building ourselves.

B.O.A.C.'s record of profit has not only been achieved by the Guthrie reforms and by the limitation of the amount of capacity offered to the market: it was achieved also by having the most admirable aircraft in its class, the indigenously-built VC10. The British airframe and manufacturing industry should take credit for the achievement that led to the profit made by B.O.A.C. which we have been praising for the last few years.

If my right hon. Friend succeeds in catching your eye again, Mr. Deputy Speaker, I hope that he will give us a few assurances about long-term plans in terms of dollar expenditure by B.O.A.C. on the purchase of foreign aircraft.

The Government envisage the establishment of an Air Holdings Board and they intend to superimpose it on the two corporations. When that occurs, it is not entirely hypothetical to say that it could rationally lead to the establishment of a British Airways Corporation. When this examination of route structures takes place under the Air Holdings Board, it could well come out of its deliberations that an extended version, let us say of the Lockheed Tristar, would fulfil British Overseas Airways Corporation's requirements exceedingly well. In that case, it will involve an even higher dollar cost.

I do not know how we are to pay for this sort of dollar expenditure. Take, for example, the balance of payments in May. The right hon. Member for Huyton (Mr. Harold Wilson), then Prime Minister, was saying that it would lead to a balance of payments crisis just to import three Jumbo jets. Yet we are to have a fleet of no fewer than 12. These matters really should exercise our minds in the long term.

Then there is the question of Concorde. I was delighted at the bold statement of my hon. Friend the Member for Woking (Mr. Onslow). He has always had faith in the British industry, and rightly so. I should still like a further positive statement of affirmation from my right hon. Friend on Concorde because B.O.A.C.s future is staked on that aircraft. I believe it is the right aircraft for the job in the late 1970s. There will be a requirement for premium travel, with a premium fare. The market has always gone to the fastest airliner with the shortest journey time.

We can be certain that if we lose faith the French will not, and the blue-riband on the Atlantic will be sported by Air France if B.O.A.C. shows any pusillanimity or faint-heartedness over Concorde. That is another matter for which we are legislating.

These extra funds will pay for the investment on Concorde, and I believe they are well spent. They are well spent today when B.A.C. has already received one hard knock. If it were to receive another hard knock over Concorde, indigenous British airliner construction would come to a halt overnight.

Route transfers, to which the right hon. Member for Barnsley (Mr. Mason) alluded, are a once-for-all transaction. The transfer of the West African routes is a comparatively small matter when taken into account with the rest of the route structure of B.O.A.C. It is a permanent structure. More important than that is this. When the Air Holdings Board gets to work, and perhaps when we get the greater degree of co-operation and rationalisation leading to my hypothetical merger, I would hope that the second force will be free, where I.A.T.A. allows it, to compete much more freely with the State corporation because it is from competition with the independent sector, with the second force, that the spur to still greater efficiency will come for B.O.A.C.

I shall be looking to a dual designation on the North Atlantic. This will be to the benefit of B.O.A.C. If there is a marginal decrease in profit for B.O.A.C. on that route, the overall British share will be increased, and there again we have by this Bill financed borrowing powers which in the short term might be necessary.

On the question of pilot relations, I agree wholeheartedly with my hon. Friend the Member for Woking. There has been far too little understanding by management of the problems faced by air crew, and, obviously, vice-versa. We must take into account the fact that in these days air crew in the State corporations are exceedingly highly-trained personnel. They look for their occupation not only in the British market but also in the worldwide market, and we are competing in the world market for their services. Thanks to the cripplingly high marginal rate of taxation in this country, they are particularly badly served for being loyal to the British corporations and to British aviation. We really must open up these avenues of communication if valuable investments in dollar terms and in financial terms generally are not to be left idle.

I hope my right hon. Friend will be encouraging a much greater participation by air crew in management in the corporation, because this will be helpful in the longer term.

I shall say no more now, as we are to discuss God's time very shortly, except that I heartily support and endorse this Measure.