HL Deb 28 March 1988 vol 495 cc441-2

2.49 p.m.

Baroness Burton of Coventry asked Her Majesty's Government:

With reference to their answer of 18th February (HL Deb. cols. 751–752) whether they will make a statement on the decision of the European Commission concerning the merger of British Airways and British Caledonian.

Lord Beaverbrook

My Lords, investigation of complaints about abuse of a dominant position under Article 86 of the Treaty of Rome is a matter for the Commission. However, I am very glad that the Commission and British Airways have been able to reach an amicable settlement which is compatible with the arrangement on which the Monopolies and Mergers Commission reported. This left it to the UK licensing process to decide which of British Caledonian's routes and associated slots BA should be allowed to take over.

Baroness Burton of Coventry

My Lords, does the noble Lord agree that we shoud congratulate both Mr. Sutherland, the Commissioner for Competition, on the work that he has done and British Airways on the good grace it displayed in accepting those recommendations? Will he tell the House whether the recommendations are for a period of four years, which would give independent United Kingdom airlines a chance to consolidate any new routes? Finally, if I table a Written Question, will the Minister set down in the Official Report details of Mr. Sutherland's recommendations so that we may all know exactly where we stand?

Lord Beaverbrook

My Lords, I should like to join the noble Baroness in paying tribute to the work of Commissioner Sutherland and British Airways in negotiating this sensible agreement. Of course the undertakings agreed by British Airways will be looked at carefully by the Commission. The detail of the monitoring arrangements is a matter for British Airways and the Commission. I believe that the agreement is for four years.

Baroness Burton of Coventry

My Lords, the Minister forgot one small point. If I table a Written Question, will he set down the details in the Official Report?

Lord Beaverbrook

My Lords, I was in danger of exceeding the allotted number of answers that I should be giving; but of course I shall look at what the noble Baroness said to see whether that is possible.

Lord Taylor of Blackburn

My Lords, will the Written Answer be more than 100 words?

Lord Beaverbrook

My Lords, I assume that the noble Lord is referring to my original Answer, which was about 85 words.

Lord Williams of Elvel

My Lords, what is the virtue of British Airways, or any other company for that matter, giving one series of undertakings to the Monopolies and Mergers Commission which are enforceable under United Kingdom law and then having to go to Brussels to give a further series of undertakings to the European Commission which are not enforceable under United Kingdom law? If that is to be the future of competition policy, should not United Kingdom law be brought into line so that the second series of undertakings can be so enforced?

Lord Beaverbrook

My Lords, the noble Lord raises an interesting point. As I said earlier, the recommendations will be looked at over a period by the Commission, and it will no doubt ensure that British Airways is complying with them.

Lord Williams of Elvel

My Lords, I am sorry to press the noble Lord, but in the DTI White Paper the noble Lord, Lord Young of Graffham, announced that there would be a voluntary process of clearances for mergers. Will the Minister say what will happen if there is a voluntary clearance under United Kingdom law, as it then will be, which is then opposed by the Commission?

Lord Beaverbrook

My Lords, that is a hypothetical situation which has not happened in this case. In this case the deal achieved with the European Commission fits in well with the MMC recommendations. I cannot tell the noble Lord what will happen in circumstances that we have not yet come across.

Lord Campbell of Alloway

My Lords, is my noble friend aware that in the ultimate result undertakings given to the Commission are enforceable by an adverse decision of the Commission, and therefore, although in effect there is logic in the question put from the other side of the House, in the ultimate there is an effective sanction?

Lord Beaverbrook

My Lords, that may well be the case. I am grateful to my noble friends. In the case with which this Question is concerned, the EC recommendations and the MMC recommendations fit together.