Aviation (Liberalisation)

HC Deb 24 February 1986 vol 92 cc660-2

7. Mr. Hind

asked the Secretary of State for Transport what recent discussions he has had with British airlines about the liberalisation of aviation.

Mr. Michael Spicer

We regularly seek the advice of British airlines in negotiating for more liberal aviation agreements. We have made notable progress in Europe, with liberal agreements with five other countries, and are pushing hard this year for real progress in the EC.

Mr. Hind

Does my hon. Friend agree that cheap air travel cannot come quickly enough? Will he take every possible step to liberalise the cost of flying in Europe? [HON. MEMBERS: "Reading".] I am not reading. One cannot even look down these days. Does my hon. Friend agree that the sooner the EEC and our European allies come to terms with free and non-protective flights between European nations the better that it will be for the consumer, especially the British consumer?

Mr. Spicer

As a direct result of the new air service agreements that we have signed with several European countries, cheaper air fares and many more services are being introduced. I am confident that during the coming year more British airlines will fly those routes and that as a result the quality of service will rise and air fares will fall.

Mr. Evans

What is the difference between liberalisation and complete deregulation of aviation? Has the Department of Transport considered what has happened in the United States, where complete deregulation has meant several aviation companies tottering on the brink of bankruptcy? Will he confirm that he does not intend to go down that track?

Mr. Spicer

There is no proposal on the table in Europe or in the mind of the Government for complete deregulation. Obviously the Government will be involved on a bilateral or a multilateral basis. We wish to make it easier for competition to exist, in the interests of passengers.

Mr. McCrindle

From his discussions with British Airways and Al Italia, is my hon. Friend satisfied that no barriers are being placed in the way of the proposed additional service to Milan from Gatwick, in conformity with the Government's policy of dual designation by British airlines to European destinations?

Mr. Spicer

I am not satisfied that the Italian Government understand, as we understand, that the Treaty of Rome should apply to aviation matters as it applies to other matters, and that there should be far greater competition and multidesignation of airlines on that route and on other routes into Italy.

Mr. Ron Davies

Does the Minister accept that price considerations must always be secondary to safety? In the discussions that he and his Department are having, what consideration is being given to safety standards?

Mr. Spicer

Safety standards are the statutory responsibility of the Civil Aviation Authority. My Department supports the Civil Aviation Authority in precisely the way that the hon. Gentleman implies.

Mr. Soames

I congratulate my hon. Friend on the fine work done by him and his Department. Anyone working in the aviation industry is grateful for the progress that he has made, but does he agree that there is much more to be done? Will he assure the House that he will continue to press, especially within Europe, for further and dramatic liberalisation'?

Mr. Spicer

I thank my hon. Friend warmly for his kind remarks. I agree completely that there is much to be done to reduce fares and to establish the rules of competition, so that our formidable airline industry can succeed in Europe, as it is succeeding in other parts of the world, to the benefit of passengers throughout Europe.

Mr. Robert Hughes

Is it not the case that in 1984 the Secretary of State rejected the Civil Aviation Authority's competition policy because he wanted to protect the value of British Airways for privatisation? Is this sudden new-found enthusiasm for competition today a recognition that the value of BA has fallen by half and that the Government cannot sell it with a proper competition policy?

Mr. Spicer

I hope that that question means that the Opposition, led by the hon. Gentleman, will nov, fight for more competition. If that is true, it is to be welcomed. The arrangements that my right hon. Friend made last year, whereby British Caledonian could take over some substantial routes into Saudi Arabia in exchange for some not-so-substantial routes to South America, were a move towards further competition, and go against what the hon. Gentleman implied in his question.