HL Deb 07 November 1968 vol 297 cc365-9

3.45 p.m.


My Lords, perhaps it would be convenient if I now answered the Private Notice Question of the noble Earl, Lord Kinnoull. I will do so in the words used in another place by my right honourable friend the President of the Board of Trade.

"I much regret that one of the oldest and most respected of British Independent Airlines, British Eagle, with its charter company, Eagle Aviation Limited, has had to cease operations. I have been aware of the companies' growing financial difficulties, but this was a commercial enterprise and the Government would not have been justified in intervening. The cessation of its operations must cause inconvenience to some passengers, but arrangements are being made to rebook on other airlines all or most of the passengers booked with Eagle. Carriers and travel agents are at present busily making such arrangements. It will, of course, be necessary for any alternative services to comply with the relevant licensing, safety and operational requirements. Subject to this, my Department, which is already in touch with a number of carriers, will seek to ensure a continuity of service to the public, particularly from provincial cities.

"I would also trust that any reallocation of services, in advance of the Edwards Committee's Report, would not significantly affect the present balance in the structure of the industry. We must, however, await this Report before the Government's future policy for the civil aviation industry as a whole can be formulated.

"As regards employees, the Department of Employment and Productivity is in touch with the airline and its employees. The Department will take all the steps it can to help those employed by the firm to find new jobs quickly."


My Lords, while thanking the noble Lord for repeating that Statement, and associating my name with his words of regret at the sudden closure of what was our second largest independent airline (I am sure that many Members of this House will have had experience with the airline), may I ask the Government whether they are aware of, and appreciate, the seriousness of the conditions faced not only by the British Eagle company but by other British independent airlines; namely, the very poor trading conditions under which they at present operate, largely due, one must add, to the somewhat dilatory policy of the Board of Trade?

May I also ask the noble Lord whether the Government are satisfied that they can just sit back and await the Edwards Committee Report before taking action to safeguard this industry, an industry which is a most valuable foreign currency earner and an industry which is bound to face more severe competition from America should the peace talks on Viet-name succeed? May I finally ask the noble Lord what more specific news there is at this stage of the steps being taken to safeguard both the passengers and the staff involved in this closure?


My Lords, I agree with what the noble Earl has said about the importance of this industry. We recognise that the financial climate in the last year has been such that the conditions have been difficult for many of these operators. But it would be quite wrong to draw the conclusion from what the noble Earl has said and I hope he does not mean to indicate this—that other companies are in the same financial difficulties as British Eagle. Some have found it difficult, but there is no reason at all to believe that they are in the same position as British Eagle. Indeed, many of them, having gone through a bad patch, are now showing better results.

So far as the noble Earl's second question is concerned, as to the possibility of taking some steps before the Edwards Committee Report is received, I think that on reflection the noble Earl will probably agree that, whatever is done in this industry, it is now much better done on the basis of a considered recommendation from this most authoritative Committee.

The noble Earl naturally asks about the passengers and the staff, two elements in this tragedy with which we must be seriously concerned. There are clearly difficulties with the staff, especially pilots. A good deal will depend upon what happens to the aircraft which will be thrown up by the closure of the Eagle airline. But I assure him that the Department of Employment will be looking into this and doing all that is possible. So far as the passengers are concerned, I think at this time of year there should be little difficulty.


My Lords, is the noble Lord able to give an assurance that any members of the staff who lose their jobs will receive in full any redundancy payments to which they are entitled?


Yes, my Lords, I understand that that is the position, although of course there may well be some slight delay, since that will be paid out of the monies available to the Official Receiver.


My Lords, may I ask the noble Lord whether he knows of anything in the existing regulations or treatment of the independent British air companies that might indicate that some similar disaster might overtake another British air company in the near future? Also, continuing what the noble Earl said, would he say whether the Government are considering asking the Edwards Committee for an interim report on this aspect?


My Lords, I repeat what I said to the noble Earl, Lord Kinnoull: that there is no reason at all to believe that any other company is in the same position as that which has faced British Eagle. Her Majesty's Government are under no obligation at all to rescue any company in financial difficulties of this kind. It is really the responsibility of the Air Transport Licensing Board to see that no licence is given to a company unless they have the necessary financial means to carry out the responsibilities of taking the licence. I hope that protection of itself should be sufficient until such time as there is any rearrangement consequent upon the Report of the Edwards Committee.


My Lords, may I ask the noble Lord a question on one point that he has made? I understood him to say that because of the financial position those who lose their jobs may have to wait for redundancy payments. Is it not possible, under the Redundancy Payments Act, for the Government to make payments and, in their turn, to recover from the Official Receiver? Is it not a fact that one of the main purposes of the Redundancy Payments Act was to act as a bridge and to tide over people who are unemployed?


My Lords, I was immediately concerned to ensure that redundancy payments will be made, and I understand that this is so. But I am further given to understand that it may be a matter of some negotiation with the Official Receiver. However, I will certainly look into the point raised by the noble Lord.


My Lords, what I am about to say has nothing to do with the technical side of air companies, but can the noble Lord give any assurance in regard to a company which has had to (as the term has it) "fold up" so suddenly? One is led to realise that in commercial life—I stress that it is commercial as companies come to the end of their tether there is an inescapable inclination to cut corners. Speaking as a potential passenger, I would ask: can the noble Lord give an assurance that the vigilance and supervision, which are exemplary in this country on everything, will not be relaxed but, if anything, will be extended in regard to those private companies which may face the kind of difficulties with which this particular company met? I cast no aspersions on them at all and, knowing nothing at all about aircraft, I put this point forward merely as a potential passenger.


My Lords, as it happens, I have from the first beginnings watched with admiration the work of the Chairman of this company, Mr. Bamberg. He may well have put in an extra effort at various times, but I have never known him to "cut corners" in regard to safety; nor do I think he would do so. Nor do I think that any other company, under the present system of inspection, would be able to do so.


My Lords, may I clear up any misunderstanding that may have arisen? I was in no way implying that other independent airlines were in financial difficulties at the moment. What I was trying to say was that I think it is unanimously agreed among the independents that the conditions under which they operate are unsatisfactory at the moment.


My Lords, I am glad to have that assurance from the noble Earl, because it would be wrong if it were to go out, and undermine the confidence of other air passengers, that the companies with which they are travelling were in any way in difficulties.