AIR SERVICES AGREEMENT (Hansard, 22 June 1977)

§ Lord BOYD-CARPENTER
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

Lord GRAM
My Lords, agreement was reached in the early hours of today on the principles and main provisions of a new Air Services Agreement to replace Bermuda. The final text now has to be drafted before the new agreement can be signed, probably next month. Some further negotiations are taking place this afternoon. My right honourable friend the Secretary of State for Trade expects to make a Statement in another place tomorrow afternoon, and this can, of course, be repeated in this House.

§ Lord BOYD-CARPENTER
My Lords, in view of the fact that the Bermuda Agreement, having been denounced by Her Majesty's Government, lapsed, as I understand it, at 5 o'clock this morning, can the noble Lord say what is now the current position? Is the new, unsigned agreement yet in effect, or has the Bermuda Agreement been carried on temporarily? Secondly, can the noble Lord say whether the new agreement makes provision for the operation of the Laker Skytrain, and will not this involve a sacrifice by the Government of the principle—to which they, rightly or wrongly, attach great importance—of single designation between all pairs of cities? Will the agreement also make it possible now to designate British Caledonian on the points to the Southern United States to which they already hold licences from the Civil Aviation Authority? Finally, would the noble Lord feel it appropriate, whatever views one may hold as to the wisdom of the original denunciation of Bermuda, to convey our thanks and gratitude to the teams from the Department of Trade and the Civil Aviation Authority who did 667 an extremely good job, against time, in very difficult circumstances?

Lord ORAM
My Lords, I hope that the noble Lord will recognise that tomorrow may be a better opportunity for me to give categorical answers, but I will do what I can this afternoon. My understanding is that the existing agreement will be continued temporarily until the new one comes into effect. On Laker, my right honourable friend intends to designate Laker for the New York route, where two operators under the new agreement will be possible. Elsewhere, apart from the Los Angeles route, there will be single designation. As to the other routes regarding which the noble Lord asked a question, I think that in the first instance this is a matter for the Civil Aviation Authority, upon which I therefore would not wish to pronounce either this afternoon or, probably, tomorrow afternoon. But certainly I endorse wholeheartedly the tribute of the noble Lord in his concluding sentence, to the very effective work that was done by our team from the Department of Trade.

§ Lord BOYD-CARPENTER
My Lords, while thanking the noble Lord for that extremely interesting and helpful reply, may I put to him the one point regarding which he seemed a little uncertain; namely, the designation of British Caledonian to points in the Southern United States? Is the noble Lord aware that the Civil Aviation Authority has already granted the licences to that airline and that action to designate the airline to these points under the new agreement therefore lies with Her Majesty's Government?

Lord ORAM
My Lords, because of the noble Lord's immense experience of these matters, I defer to what he has just said. However, I should prefer to have the matter looked into and to give a fuller answer tomorrow.

§ Lord TREFGARNE
My Lords, may I put two points to the Minister? First, is the noble Lord satisfied that the new agreement will encourage, if that is the right word, both signatories to implement its terms? Is the noble Lord aware that in at least two instances the agreement just expiring has been flagrantly disregarded by the Americans, to our dis- 668 advantage? Secondly, may I ask the Minister what concessions have been made in the Far East? In particular, has Pan-American Airways been granted fifth freedom rights between London and Hong Kong?

Lord ORAM
My Lords, I accept that the text of the existing agreement is imprecise in certain regards. Indeed, this was one reason why we sought to have it renegotiated. One certainly hopes that the new text, which has yet to be finalised, will overcome any such defects. With regard to the Far East, the concession that has been made is for American airways to operate between Hong Kong and Singapore and in the reverse direction.

§ Baroness BURTON of COVENTRY
My Lords, on behalf of many ordinary travellers may I offer congratulations to British Airways and to the Government for what they have done in this particular venture? As he has been named, may I ask whether it would be in order to congratulate Mr. Shovelton, who led our delegation in these talks, and the Secretary of State for Trade, for what they have brought about? Lastly, I am sure that the Minister realises the ridiculous nature of the past situation when empty places were being ferried to and fro across the Atlantic and that it is useful that this situation has now been brought, we hope, to an end.

Lord ORAM
Yes, my Lords, one of the main objectives of the negotiations was to bring about a more economical operation of services, and I think we can look forward to that being the situation. As to what my noble friend said about congratulations to Mr. Shovelton and his colleagues, this is warmly welcomed.

§ Lord HAILSHAM of SAINT MARYLEBONE
My Lords, is the noble Lord aware that what disturbs some people in this country is the fact that two great civilised nations should have come so close to a complete breakdown in that after six months' notice we then have negotiation by ultimatum and an all-night sitting? Is this really the way in which two civilised countries closely allied with one another ought to behave, and what is the explanation of this having taken place? It worries me if it does not worry the Government.

Lord ORAM
My Lords, of course the Government have been worried and a great deal has been at stake in this matter. It is a highly competitive industry in which both nations, highly civilised as the noble and learned Lord points out, nevertheless have very strong interests. When there are strong interests on two sides of a negotiating table it often happens that brinkmanship is one of the weapons used.

§ Lord HAILSHAM of SAINT MARYLEBONE
It ought not to be, my Lords.

Lord ORAM
My Lords, perhaps it ought not to be in an ideal world, but I am speaking of the real world.

Lord PAGET of NORTHAMPTON
My Lords, is it not the fact that these were the means that enabled the Government to get a much better deal, and ought we not to be very grateful for that?

Lord ORAM
My Lords, it certainly is our hope that as a result of these negotiations this country will be able to have a larger share of the North Atlantic trade, which was one of our main objectives.

§ The LORD PRIVY SEAL (Lord Peart)
My Lords, I think it is the wish of noble Lords that we should proceed to the next Question.