HL Deb 05 June 1984 vol 452 cc490-2

2.50 p.m.

Lord Beswick

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

The Question was as follows:

To ask Her Majesty's Government whether they will give an assurance that the current process of consultation and decision-making with regard to the future regulation of civil air transport will not be finalised simply to enable an early marketing of the shares of British Airways, and whether they will consider the advantages of postponing the sale of these shares.

Lord Trefgarne

My Lords, the review currently being undertaken by the Civil Aviation Authority is a thorough study of the implications of privatising British Airways for competition and the sound development of the British airline industry. The Government expect changes, if any, in air transport licensing policy arising out of the review to be decided well in advance of privatisation and there should therefore be no need to delay it on that account.

Lord Beswick

My Lords, I thank the noble Lord for his Answer. Is he aware that I share the view that the present process of consultation is absolutely admirable? However, in view of the complexity of the issues involved, is it not essential that adequate time be given for the decision-making process? In particular, will he bear in mind that there is a growing feeling that the proposed sale of British Airways could well be delayed to give the potential investing public a better opportunity of assessing the significance of the recently announced quantum leap in profits?

Lord Trefgarne

My Lords, the investing public will of course have a full opportunity to consider the merits of the proposals that are put before them when the documents are issued in due course. It is, of course, important that potential investors are aware of the sort of competitive environment in which British Airways will be operating. That will be made clear to them at the same time.

Lord Underhill

My Lords, can the Minister give an assurance that before the privatisation of British Airways takes place, following the conclusion of the review, there will be a parliamentary debate on the issue and not just a Statement in either House?

Lord Trefgarne

My Lords, the question of debate on these matters would not be one for me. I feel sure, however, that what the noble Lord says will be heard by the usual channels who sit in your Lordships' House. It is perhaps worth saying that the proposal to privatise British Airways is one that has been well known to your Lordships for a long time. Indeed, it was I who had the honour some two years ago of taking through your Lordships' House the Bill that made provision for this step.

Lord Mackie of Benshie

My Lords, can the noble Lord say how channels sit?

Lord Trefgarne

My Lords, comfortably.

Lord Balfour of Inchrye

My Lords, would it not be to the great advantage of a large number of the staff of British Airways and also the conduct of foreign airline negotiations about British Airways if we could have the earliest possible privatisation?

Lord Trefgarne

My Lords, my noble friend will not be surprised to hear that I agree with the assertion that he makes. I believe that the privatisation of British Airways would be very much in the interests both of the staff and of the company itself.

Lord Bruce of Donington

My Lords, will the noble Lord when he studies this matter further, also consider telling the House and the country what benefits are supposed to flow to the British taxpayer as a result of this ridiculous transaction?

Lord Trefgarne

My Lords, I am not sure that now is the occasion to consider again the merits of privatisation of British Airways. They have been discussed at great length in your Lordships' House, not least during the passage of the Bill to which I have referred.

Lord Kaldor

My Lords, will the noble Lord say how many airlines of other countries which were in public ownership have been subsequently privatised?

Lord Trefgarne

My Lords, I am afraid that I have not got that figure in my head. But is fair to say, I think, that a large number of major world airlines are not in public hands.

Lord Molloy

My Lords, can the Minister say what degree of consultation takes place, and whether this will continue, with the staff associations, which are numerous, involved in British Airways?

Lord Trefgarne

My Lords, the staff of British Airways have, of course, been kept fully informed of the Government's plans as they have developed. It is perhaps worth adding that they will be given a chance to participate in the privatisation when the time comes.

Lord Beswick

My Lords, the noble Lord referred to the need to look at the published facts about the value of British Airways position. If it is a fact that a company makes special provision, writes down its assets by some 350 million in one year and then, in the following year, brings back some of those provisions and increases the value of some of its aircraft by no less than 100 million, does that not mean that there is bound to be an unfair reflection on the past efforts of the staff of British Airways as compared with the present administration?

Lord Trefgarne

My Lords. I think that the important factor to remember is that in recent months and years, British Airways has remarkably improved its position as a major airline. I think that, when the time comes to offer shares to the public, there will be a warm welcome for them.

Lord Molloy

My Lords, will the Minister agree that there cannot be anything special in allowing the staff of British Airways to participate? I would assume—the Minister will tell me if I am wrong—that anyone on this island can participate in the privatisation that is going on. There is nothing special about saying that the staff can. Or was it in the Government's mind that they should not be able to? Will the converse view be considered when those trade unions and staff associations are opposed to the privatisation of what they consider to be a national rather than a private asset?

Lord Trefgarne

My Lords, the noble Lord has. I think, misunderstood my earlier remark. The arrangements for the staff to which I referred will be advantageous, not just the ordinary ability to buy shares on the open market.

Lord Beswick

My Lords. is the noble Lord aware that many people will be especially pleased that he referred to the previous efforts of those responsible for British Airways, including people like Mr. Roy Watts, who has been displaced? Will he bear in mind that the figures recently published appear to accord more credit to the efforts of Saatchi and Saatchi and the accountants than the airline operators?

Lord Trefgarne

My Lords, I think that the noble Lord underestimates the very remarkable improvement that has occurred in the fortunes of British Airways as a result not only of the efforts of previous members of the staff but particularly of the new chairman, my noble friend Lord King.

Lord Mackie of Benshie

My Lords, in view of the fact that most major airlines are back in profit and have greatly improved their results, will the noble Lord say by how much British Airways has outperformed other major airlines in the same field?

Lord Trefgarne

My Lords, again, I have not got comparative figures at my fingertips. But the improvement that British Airways has achieved in recent years, as I have already said, has been quite remarkable. Off the top of my head, I would think that it has outstripped a good many other airlines.