Civil Aviation Policy

Part of the debate – in the House of Commons at 12:00 am on 26th February 1976.

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 12:00 am, 26th February 1976

The Minister certainly made the figures available before the debate took place—they were available last night. In my view, we had only a short time to get outside reaction to the figures. My hon. Friend tabled his Question last Monday. Therefore, I see no reason why the Secretary of State could not have provided the figures earlier. However, I do not want to take up time on this procedural matter.

There are no fewer than 16 assumptions in the document. A great many of those assumptions are open to an immense amount of dispute. I do not accept the Secretary of State's view that there is bound to be a corresponding American Skytrain moving in the other direction. There are a great many cartels where an interloper cuts rates but where no one else feels bound to match those rates. I do not accept the doubling-up argument.

I find myself in disagreement with approximately half the total number of assumptions contained in the document. I think that the Opposition can agree with the Secretary of State's comment that £10 million or £5 million either way would have no significant effect on the balance of payments.

The Secretary of State also referred to the wrecking of the rationalisation agreements on the North Atlantic run. That matter is referred to in paragraph 6 of the White Paper. Although one can see an argument for rationalisation in respect of resources and the airlines, it is difficult to understand how it would have a favourable effect on passengers. It is also said that fares would be substantially higher without the rationalisation. What is crucial is that the Secretary of State has apparently been engaging in an arrangement with the airlines and with the United States authorities. As far as I am aware—the right hon. Gentleman will correct me if I am wrong—the House has at no stage debated this matter, and the merits, advantages or disadvantages of this particular arrangement have not been analysed. This may have been justifiable during the oil crisis of 1974 but I am doubtful whether it is necessarily true of the future.

Many of the Secretary of State's figures are based on the Laker figures in connection with the 1974 overall picture. In my view, that is not the relevant comparison to make when trying to reach a sensible conclusion on this matter.

The right hon. Gentleman also said that there would be substantial losses to British Airways. Indeed, in the White Paper a specific figure is quoted at the bottom of page 4 where it states that Her Majesty's Government estimate that BA"— that is, British Airways— would incur losses of about £6 million a year if the Laker Skytrain and one corresponding US service were to be operated. I believe that if any hon. Member present were asked what was meant by the expression "would incur losses", he would assume that it meant losses as opposed to profits. I do not believe that there is any other meaning of those words when they are unqualified. If it is said that British Airways will incur "about £6 million losses", it is assumed that they will incur £6 million worth of losses as opposed to £6 million worth of profits. I understand that this particular matter has been taken up by Laker Airways with the Secretary of State and that the Secretary of State has given a reply. I think that the right hon. Gentleman was asked for a definition of the £6 million losses and in effect he replied "There is no mystery about the £6 million losses. I understand that they are actually gross revenue".

Apart from the assumptions which I have already disputed, I believe that the passage which indicates that British Airways would incur losses of about £6 million is most misleading. The Secretary of State has still not corrected that passage. He says that it is a loss of gross revenue and not a loss of profit. Therefore, the House has been given a deceptive impression about this matter. It is most unfortunate, and I hope that the Minister will feel it appropriate to apologise to the House at the conclusion of the debate.

In those circumstances, I do not believe it right to oppose the Secretary of State's motion on the guidance. I think that the arrangements which have been made on a number of points are reasonably satisfactory. However, on the main issue which I have raised I hope that the House will take the view that the arguments which I have put forward are convinc- ing and that it is right to support the CAA's view that the designation and the licensing of Skytrain should remain in being. Although leaving open the question of actual timing, I hope that the House will feel it right to countermand the Secretary of State's decision on this particular issue. I hope that at the appropriate time we can move our motion and that the House will feel it right to support us.