Civil Aviation (Bermuda Agreement) (Hansard, 18 October 1976)

§ 1. Mr. Arnold
asked the Secretary of State for Trade what progress has been made in the renegotiation of the Bermuda Agreement; and if he will make a statement.

§ 6. Mr. Tebbit
asked the Secretary of State for Trade if he has yet resolved the issues raised by his decision to renegotiate the Bermuda Agreement.

§ 9. Mr. McCrindle
asked the Secretary of State for Trade what is the present position on discussions with the United States authorities on revising the Bermuda Agreement on civil aviation.

§ 14. Mr. Adley
asked the Secretary of State for Trade what progress has been made in the renegotiation of the Bermuda Air Services Agreement.

§ The Secretary of State for Trade (Mr. Edmund Dell)
The first round of negotiations with the United States for a new air services agreement was held in London on 9th and 10th September. A programme of further meetings was agreed, designed to lead up to a new agreement before our notice of termination of the Bermuda Agreement comes into effect on 22nd June 1977.
916 Our principal reason for serving notice of termination of the Bermuda Agreement is that a substantial revision of the rights covered by that agreement is needed to achieve a more equitable balance of benefits overall.
The most direct means of achieving this is to bring the routes which both sides can operate into better balance. The other principal change we are seeking is to establish an effective means of regulating capacity on an equitable basis between the airlines on both sides.
A second round of talks begins in Washington today.

§ Mr. Arnold
Why is the Secretary of State's concept of British interests one which appears to militate strongly against increasing competition? What, for example, is the attitude of the Government towards the recent recommendation by the Civil Aeronautics Board that two more airlines, Delta and North West, should be allowed to fly passengers across the Atlantic?

§ Mr. Dell
What I am doing is not inconsistent with the concept of British interests across the North Atlantic. Under our service agreement, this competition takes place within a framework agreed between Governments on both sides of the Atlantic. I do not see that it is a valuable form of competition to have aircraft crossing the Atlantic half or two-thirds empty with the wasteful consumption of fuel that is involved. That is what we are trying to restrain. The CAB proposals are matters which will be considered within the context of the renegotiation.

§ Mr. Ioan Evans
Will my right hon. Friend take note of the fact that there is already a great deal of international competition and there is, therefore, no need to have internal national competition? Will he also have regard to protecting the consumer in this area?

§ Mr. Dell
My hon. Friend knows that single designation is the Government's policy, confirmed by this House in a debate earlier this year. I believe that the consumer will certainly benefit if wasteful fuel consumption is cut down by controls on capacity agreed in advance, as we succeeded in doing in a significant way in the recent agreement concerning 917 Miami and Chicago, to be effective during the coming winter.

§ Mr. McCrindle
While endorsing the desirable objective of having a larger proportion of transatlantic traffic coming the way of British Airways, may I ask whether the right hon. Gentleman is convinced that that objective could not have been achieved by the exercise of that aggressive commercialism which we have come to associate with British Airways rather than by upsetting the treaty arrangements in the way proposed? Is the right hon. Gentleman absolutely sure that the negotiations will not have any effect on the likelihood of Concorde entering into service to New York?

§ Mr. Dell
The aggressive commercialism of British Airways is something which I greatly welcome. I welcome, too, their improved performance on the North Atlantic route. I am certain that the only way of improving the situation of British air companies operating on the North Atlantic route and in other parts of the world is by renegotiating the Bermuda Agreement. We must have clear rights regarding capacity determination, fares and other matters which are doubtful in the Bermuda Agreement at the moment. There are a number of respects in which we believe that the Bermuda Agreement is currently being ignored by the United States Government. This, again, makes it right that we should have an agreement very much clearer in form than the current one.
I see no reason why Concorde's entry into New York should be held up by this renegotiation. The existing Bermuda Agreement does not expire until 22nd June next. This is the relevant agreement at the moment, and under that agreement I believe that Concorde should be allowed into New York.

§ Mr. Adley
Is the right hon. Gentleman aware that, as there has to be some legal relationship between the two Governments, many people will welcome the Government's determination in principle to renegotiate something which is 30 years out of date? Will the Secretary of State be a little more forthcoming on the question asked by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) and give a categoric assurance that Her Majesty's Government will 918 not tolerate the Americans in any way dragging Concorde into these negotiations as a bargaining factor?

§ Mr. Dell
I am pleased to have the hon. Gentleman's welcome for what we are doing. As for Concorde, one of the worries about the current agreement has been that we have had so much difficulty in respect of that aircraft. It will be my objective to ensure that we have rights to fly Concorde into the United States.

§ Mr. Tebbit
Is the right hon. Gentleman still convinced that this was the right time to start negotiations, shortly before an American presidential election? Does he not agree that it is clear that no substantive commitment can be made by the United States Government before the outcome of the election in November and that this leaves perilously little time before the embarrassing situation which could arise in June with no Bermuda Agreement and no agreement to put in its place?

§ Mr. Dell
Yes, I am absolutely sure that this was the right time to start this renegotiation. There are always reasons for putting off unpleasant decisions, even decisions which happen to be very much in the interests of this country. There is always an American election of some sort, but I do not think that that should be a conditioning factor in determining the date on which this renegotiation is commenced. I hope that the Conservative Opposition still welcome the renegotiation and that they see that British interests are clearly involved. I more airlines, Delta and North West, indicated earlier, will be available. A great deal of useful preparatory work is being done.