HL Deb 17 November 1981 vol 425 cc398-400

2.40 p.m.

Lord Boyd-Carpenter

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what action they propose to take in the light of the statement in British Airways' Report and Accounts for 1981 that the compulsory transfer of British Airways services to the Iberian Peninsula from Heathrow to Gatwick, while continuing to permit Spanish and Portuguese airlines on this route to operate out of Heathrow, will result in an annual loss of £8–10 million to British Airways.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne)

My Lords, my right honourable friend the Secretary of State for Trade has just received detailed proposals from British Airways which he is now considering in the light of both British Airways' commercial interest and the longer-term implications for airports policy. It was in fact British Airways themselves who volunteered to move their Iberian services to Gatwick, subject to the negotiation of capacity limits at Heathrow for the Spanish and Portuguese airlines.

Lord Boyd-Carpenter

My Lords, while thanking my noble friend for that modestly encouraging reply, may I take it from this that Her Majesty's Government do not intend to maintain a situation in which the authority of Government is used to give a strong competitive advantage to foreign airlines in competition with the state-owned British one?

Lord Trefgarne

My Lords, of course the Government would not deliberately wish to do as the noble Lord suggests, but I ought perhaps to make it clear that, although the Spanish and Portuguese airlines continue to operate their services from Heathrow, those services are subject to strict capacity limits.

Lord Paget of Northampton

My Lords, are we to understand from the noble Lord that when these botches occur it is incompetence and not malevolence?

Lord Trefgarne

My Lords, the noble Lord is not correct in that assertion. The fact of the matter is, of course, that Heathrow is approaching the capacity limit which it can accept and for that reason the Government have maintained the policy which was originally initiated, indeed, by the previous Administration to impose restraint upon the growth of services from Heathrow.

Lord Molloy

My Lords, in addition to the very important points raised by the noble Lord, Lord Boyd-Carpenter, is there not another aspect of British Airways' Reports and Accounts; namely, that because of their financial losses, which might be exacerbated in view of the point raised by the noble Lord, Lord Boyd-Carpenter, all the staff will have their pensions reduced as it is now proposed that there should be a reduction on the employers' side of the contribution? Will the noble Lord please look at that as well?

Lord Trefgarne

My Lords, that is, I think, another question; but in any event it is a matter for British Airways themselves.

Lord Leatherland

My Lords, will the noble Lord bear in mind when it comes to transferring traffic from Heathrow that Stansted already has some capacity which might very well be used?

Lord Trefgarne

My Lords, it is certainly the case that Stansted has certain capacity available at present, but there is no existing policy of directing traffic to move to that airport.

Lord Hawke

My Lords, is the noble Lord certain that the figures given by British Airways are correct and not exaggerated?—because the facilities at Gatwick are so much better than at Heathrow and the labour relations are so much better.

Lord Trefgarne

My Lords, there is certainly room for argument about such figures, although I have no reason to quarrel with the figures that British Airways have put forward. But the fact remains, as I said earlier, that Spanish and Portuguese airlines will themselves be subject to some restraints and hence doubtless financial penalties as and when the traffic approaches the maximum that they are permitted to carry.

Lord Boyd-Carpenter

My Lords, in the light of my noble friend's comments about overcrowding at Heathrow, would not a very simple and quick way of dealing with the problem be to inform Iberia and TAP that they would be most welcome at Gatwick, but not at Heathrow?

Lord Trefgarne

My Lords, TAP and Iberian Airlines—the Spanish carrier—would even now certainly be welcome to operate from Gatwick, but they prefer to operate from Heathrow.