After careful examination His Majesty's Government have decided to reject the scheme put forward by the Airship Guarantee Company—commonly known as the Burney scheme. In their opinion this scheme would have entailed the creation of a virtual monopoly, and contained a number of other features which are open to objection both on financial and technical grounds. At the same time, His Majesty's Government share the view of their predecessors that it is essential to carry into effect as early as possible a constructive programme of airship development.

They propose, accordingly, to authorise the Air Ministry to initiate forthwith a comprehensive programme of lighter-than-air research and experiment at Cardington, including full-scale experiments with one of the existing ships, which will be reconditioned for the purpose, and to undertake the early construction of a new airship of a capacity of 5,000,000 cubic feet.

Further, the Air Ministry will undertake the construction of a terminal and an intermediate base overseas, with the necessary facilities to enable these two ships to be operated with safety between England and India.

Simultaneously, the Air Ministry will give the Airship Guarantee Company the first offer of a contract for the construction of a second ship for commercial purposes. It is proposed that this contract shall include a clause under which the constructors will be permitted to repurchase the ship from the Air Ministry at a reduced figure on completion of satisfactory flying trials, provided—

1. (1) that it is to be operated in connection with an approved British commercial airship service; and
2. (2) that it shall be available for use by the State as required.

By these means private initiative will be linked with lighter-than-air development from the start, and, in the event of success, the early inauguration of commercial airship services open to all firms likely to be interested will be facilitated. At the same time this second vessel will provide the nucleus of a reserve of personnel and material. Such a reserve will be essential if, as is hoped, airships prove capable of fulfilling certain important defensive functions—a development from which material economies in other forms of defence expenditure may ultimately result.

These proposals should enable two airships to be placed in commission in a shorter period than under the original scheme, since the Government and commercial vessels will be laid down simultaneously. They will, moreover, result in the maintenance of two separate airship manufacturing plants and other ground facilities on a scale which will admit of rapid expansion. Further, the valuable existing airship stations at Cardington and Pulham will remain State property, instead of passing into private hands, whilst ownership of the new bases to be constructed overseas will also be vested in the State.

As regards the financial aspect, under these proposals it will not be necessary to incur from the outset the very heavy commitments—amounting to a total sum of £4,800,000 over a period of 15 years—which would be involved by the original scheme.

A three years' programme only will be authorised in the first instance, and no decision will be necessary as to further development until this programme is nearing completion, when much fuller data will be available than at present. It is estimated that, allowing for the repurchase of the second ship by its constructors, the net expenditure involved in 1924–25, 1925,–26 and 1926–27 will not exceed £1,200,000.

A Supplementary Estimate in respect of the sum required for this service in the current year will be laid before the House at an early date. My Noble Friend, the Secretary of State for Air, will make a fuller statement on this subject on Wednesday, the 21st instant, in another place.