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Aviation History
1964
1964 - 2156.PDF
FLIGHT International, 30 July 1964 175 BOAC's VCIOs DEBATED E of the worst messes seen in the House for many years." This was how the BOAC VC10 affair was described when the Commons came to debate it on July 22, on a resolution taking "note of the Report from the Select Committee on Nation- alized Industries on the British Overseas Airways Corporation." Tfee words about the mess first came from a Conservative, Sir Arthur Harvey; they were endorsed by others on both sides of the House; and, moderate and constructive as was most of the debate, especially from the back benches, the more one listened to what was said the more justified the description appeared to be. The Minister of Aviation recognized that he was vulnerable on the timing of his now much publicized directive to Sir Giles Guthrie, in which he laid it down clearly that Sir Giles was expected to operate the corporation as a commercial undertaking, and the greater part of his speech was devoted to a justification of his action. He related it to the very trenchant discussion in the Report on the responsibilities of the Government and the corporation in relation to one another and, secondly, the relationship that should exist between the corporation and the aircraft industry. Mr Amery recalled that the Select Committee was impressed by the uncertainty which it judged to prevail in the corporation as to what its role and duties were; as to how far it was intended to operate as a commercial undertaking and how far it was a flag carrier and a body which had responsibility to the aircraft industry. But Mr Amery went on to say that no directive similar to that laid down for Sir Giles had been given previously because none was thought to be necessary. Sir Miles Thomas and Lord Douglas had both regarded the corporations as commercial undertakings, and Sir Gerard d'Erlanger, in correspondence with the then Minister, now Lord Watkinson, had stressed on many occasions the importance of not prejudicing BOAC's commercial position in a highly com- petitive industry. Sir Gerard had also, the Minister revealed, asked in 1957 for a written directive to take delivery of Britannias that he considered were not up to standard. In his talks with Sir Matthew Slattery, said Mr Amery, he was never aware that Sir Matthew took any other view of the matter than this. The Minister then proceeded to explain, in a most interesting passage, why he had given the directive although, on his own argument, all Sir Giles' predecessors had fully appreciated the proper position. Industrialists, he said, were limited by their responsibilities to their shareholders in the co-operation they could give to a Minister. The head of a nationalized industry was "perhaps more likely to find it easier to accept responsibility for decisions which he judges to be right in the national interest, even if they are not directly connected with the interests of his corporation." It was because of the possibility "that responsibilities may become blurred" that he had issued, not at anybody's request, the general directive to Sir Giles Guthrie. The essence of the directive was that the chairman and the board were to run the corporation as a commercial undertaking with the aim of securing a return on its capital. The Government's duty, on the other hand, was to make sure that the public interest, in the widest sense, was taken into account. What they wanted to avoid and perhaps had not always sufficiently avoided in the past, insisted Mr Amery, was either that the Government should interfere in the commercial policy of the corporation or that the corporation should try to determine where the national interest lies. Flying British In the context of the re-equipment problems widely known to have been existing on January 1 and before, this doctrine appears to be a perfect recipe for the trouble which later exploded. Mr Amery agreed that the question of the composition of the fleet was a difficult one and for that reason he had made special reference to it in these terms: "The choice of aircraft is a matter for the corporation's judgment. It has been the aim of the corporations to buy their aircraft as far as possible from British sources, and I trust that this policy will continue. There may, of course, sometimes be occasions (as when Boeing 707s were purchased in 1956) where the choice of foreign aircraft is unavoidable." So much for Mr Amery's doctrine that the corporations must look after the corporation interests and the Government protect the public interest. Mr Lee, opening for the Opposition, said that the Select Com- mittee's Report had brought to light this "complete muddle," and he declared that it was "essential to our success to bring about a greater degree of partnership between the Government and the two arms of the aircraft and aviation industries." He did not elaborate any formula for achieving this very desirable partnership. Inevitably there was recrimination about the size of the original VC10 order. Mr Amery declared that, despite the evidence given to the Select Committee, he could find no evidence that the Govern- ment put pressure on BOAC and that, indeed, such evidence as there was rather pointed the other way. In 1960 Mr Duncan Sandys, then Minister of Aviation, had questioned the need for ten more VCIOs requested by the corporation, and a year later, when the corporation sought to increase its capacity still further, the Govern- ment had cut back the order and incurred cancellation charges on three aircraft. Mr Roy Jenkins put forward a different version of the events of that time. He asserted that in November 1959 the corporation made a commercial analysis which led them to the decision not to take < up any part of their option on ten aircraft until the latest possible date, August 1962. In the next three months they moved from that decision under a combination of pressure from the then Minister of Aviation and from Vickers. Not pressure put crudely in writing, said Mr Jenkins (who has been carrying out his own researches recently); there were meetings. In addition, Vickers made it clear at that stage that they could not undertake to produce the original 35 aeroplanes at all unless the additional order was placed. "Ridiculous" Corbett Exercise The Chancellor of the Exchequer, winding up the debate, replied to these charges by Mr Jenkins, but scarcely convinced the House that he was giving his Ministerial colleague maximum support. "Is there anything wrong in trying to persuade BOAC to buy more British aircraft in order to support the production and development of overseas sales?" demanded Mr Maudling. "Pressure may be wrong or right," retorted Mr Jenkins, "but what is wrong is for pressure to be applied and for the Minister then to devote most of his speech to denying it." It was Mr Jenkins who made the most telling attack upon the Minister. The present Minister, said Mr Jenkins, when he came to office inherited the difficulty and inherited the very clear notice which Sir Matthew Slattery had by then given of his doubts about the economic performance of the VC10. "The sad fact was that for 18 months he did practically nothing about relations with the corporation except to set up the ridiculous cloak-and-dagger accountancy exercise, the Corbett Committee . . . and, to quote the words of the Deputy Secretary of the Ministry, put the whole discussion of the long-term policy of BOAC into purdah for 18 months." Then came the replacement of Sir Matthew Slattery by Sir Giles Guthrie, which may or may not have been necessary, but was carried out in a way that was "very discreditable." Then came the second aspect of the matter. "It could have been predicted by any Minister of Aviation with the knowledge at his disposal that if he set Sir Giles these terms of reference he would inevitably get exactly the sort of plan and exactly the sort of report which in fact he has received." So much for responsibility for the past. From the present Govern- ment decision to retain the VCIOs, reported in Flight International last week, there was no dissent. None supported the proposal to cancel British Super VCIOs and buy more American Boeings. Sir George Edwards, who sat through most of the debate, was able to listen to a succession of well-briefed speakers praising his aircraft and himself. The Minister emphasized again the technical super- iority of the British machine and the remarkable fact that the
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