Civil Aviation Bill

Part of the debate – in the House of Commons at 6:49 pm on 23rd July 1980.

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Photo of Mr Clinton Davis Mr Clinton Davis , Hackney Central 6:49 pm, 23rd July 1980

The hon. Gentleman said that that was not his intention, but he could not bind his successors. That is a fair resume of what he consistently said in Committee.

We have been given no good reasons why at least two Government directors should not be appointed to the board of the successor company to act, as the hon. Member for Brentwood and Ongar (Mr. McCrindle) requested, as watchdogs to protect the public interest while it is still so substantial. Of course, that would have been a commonsense proposal and, for that reason, would have been out of place in the Government's thinking.

The Government have still not indicated what they are to sell and why there is to be no accountability to Parliament. Those are important issues and, as long as the Government retain a majority shareholding, they are vital for the people of this country.

I suppose that to expect an answer from the Under-Secretary in the closing moments of the debate would be tantamount to expecting the greatest miracle since Moses struck the rock. It is not going to happen.

The Government are hiding behind a fig-leaf—the provision, selling or giving of some shares to some employees. I shall come to the question of the viability of that proposal later, but I suspect that there will be only limited interest in the scheme. If that is what the Government wanted to do, it would have been possible to do it without embarking on the whole programme of privatisation.

The credentials of the Bill have been in the gravest doubt from the beginning. There was no electoral requirement for it because it was not in the Conservative Party's manifesto. It did not engage-in consultations in advance, but it was the Secretary of State's burnt offering to the Tory Party conference in October 1979. That is why it had to be announced in July of that year.

In order to justify the lack of consultation about the principle underlying the proposals—and I repeat that the trade unions regarded that as a deliberate snub, and were right to do so—and despite the fact that from the Government's own pragmatic view it was absurd to go along that road, the Under-Secretary has repeatedly treated the House to a veritable cornucopia of constitutional drivel about why he could not engage in prior discussions with those whose lives revolved around the industry.

That has not deterred the Secretary of State from engaging in discussions with those interested in other Bills before the proposals have been announced. That is true of the Companies Bill and a variety of measures. Only recently, the Minister of Transport said that he had consulted British Rail management and the National Union of Railwaymen before bringing a proposal to the House. The Under-Secretary claims that constitutional proprieties prevented him from doing that. That is balderdash. If it were not an offence to the great constitutional lawyer Dicey, I should refer to it as a dicey proposition.

There are no compelling reasons and no justification for the Bill, except the dubious one of removing British Airways' operations and investment programme from the public sector borrowing requirement.

The truth is that the Bill has been introduced for doctrinal reasons alone. The Government's reasoning represents all the bogus rationale of the monetarist school, of which the Secretary of State is so prominent a member. It is the Department of Trade's contribution to rolling back the frontiers of public ownership. The tragedy for the country is that the Government are made up of men and women suffering from an overwhelming compulsion to believe what is demonstrably untrue.

This irrelevant measure must pose an enormous question mark over the future of British Airways. The Government are pursuing their policy regardless of the consequences. I believe that it represents a threat to the stability of the airline—a vital commodity if British Airways are successfully to withstand foreign competition. The Bill will represent a threat to the morale of the work force and management, particularly if the flotation of the shares proves to be unsuccessful. It is a bad proposal and we shall remedy it.

For all those reasons, I can only liken the Bill to a mule. It has neither pride of ancestry nor hope of posterity. The real question is: how viable is the proposition to sell the shares? Ministers have regularly refused to address themselves to that question.

The Secretary of State said that British Airways fared better during the recession of the early 1970s than did most of their competitors. They have done that again, under the existing management and under public ownership. They have unquestionably provided a much better service overall than some of their detractors in the Sunday Express and other rabble newspapers have suggested.

The Under-Secretary and the Secretary of State have paid tribute to the role played by British Airways. We are in accord on that, but it is clear that in no circumstances can the airline provide, in present circumstances, a track record of profitability, which is the usual criterion for establishing a flotation.

The Under-Secretary refers to the United States scene with considerable interest from time to time. What is the position there? Airline after airline is showing a considerable deficit. Whatever the reasons—they are largely attributable to the oil crisis—I have cited on a previous occasion the status report by Paine Webber Mitchell Hutchins Incorporated, a very reputable organisation, which, having recited the situation at the present time, concluded: All this should mean lower airline earnings in 1980 and no big earnings recovery in 1981. In order to achieve large near term gains in stock prices, a large rebound in 1981 is a must. Otherwise, the group may continue to drift lower and/or at best offer dead money for some time. Neither possibility argues for heavily owning these stocks. What is the difference between owning stocks in British Airways under these circumstances and owning stocks in a large number of American airlines? I believe that the Sunday Telegraph is right in pouring scorn on Government intentions.

I turn briefly to part II. The transformation in Government thinking on this issue is extraordinary. Originally, the plan was for the Government to distance themselves from aviation policymaking despite the fact that the Opposition contend that it should be the role of the Secretary of State to determine a clear policy within which parameters the Civil Aviation Authority should operate. It should be accountable to Parliament on these matters.

The Government went ahead with their proposals despite considerable opposition from virtually all the airline interests. That was the policy until just before the Report stage. The plan, at that time, was to turn the Civil Aviation Authority from a quango into a tango—a totally autonomous non-governmental organisation. Suddenly, all that was changed by the Secretary of State's Hong Kong decision. The right hon. Gentleman made the change in time for his now famous after-dinner speech at the Dragon Boat dinner. He abandoned his quasi-judicial role—never mind his offering the thinnest possible veneer of adhering to that important role—and ignored all the evidence presented to, and analysed by, the Civil Aviation Authority. The right hon. Gentleman effectively opted for, although he still denies it, an open skies policy on that route. He held that the Civil Aviation Authority had entirely mis-directed itself on the issue of having four carriers on the route. What he has achieved is turmoil.

One possibility is that we are now back to the pre-1971 situation of pantomime hearings before the Civil Aviation Authority with arbitrary decisions made by the Secretary of State on appeal. If, on the other hand, it is simply a one-off decision, made clearly for political purposes, he hopes that it will have so intimidating an effect on the Civil Aviation Authority that, in future, to avoid a clash with the Government, the authority will operate within the vague philosophy that he has enunciated but for which he provides no statutory basis. That would be a sinister turn of events.

I recall reading, I think in Lloyd's List, in the early days of the Secretary of State's ministry, an article which stated, appreciatively and with some justification, that the right hon. Gentleman had a great sense of humour. One needs to have a sense of humour to be a member of this Government. The article recalled that the right hon. Gentleman had been financial adviser to Burmah Oil when it had gone bankrupt in 1974. According to the article, the right hon. Gentleman said about that event: "It was not my finest hour."

By comparison with his accomplishments as Secretary of State in charge of aviation, I think that it was the apogee of his career. This is the glittering limelight into which he has gone. He has posed a wilful threat to the success and the future of British Airways, which remain a priceless national asset that over 50,000 people have sought to preserve and enlarge. He has left civil aviation policy in a shambles. This is a bad Bill, based on the invincible ignorance of the right hon. Gentleman and his hon. Friend about the needs of our aviation industry. It should be rejected by the House.