European Airlines: Competition (Hansard, 13 June 1985)

HL Deb 13 June 1985 vol 464 cc1349-50 1349

§ Baroness Burton of Coventry
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Question was as follows:

§ To ask Her Majesty's Government whether they are now in a position to make a statement on the progress made by the European Commission in drawing up a range of legal options that could involve legal action against European airlines for restrictive practices.

§ The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne)
My Lords, the Government welcome the fact that the European Commission is exploring ways of applying the Community's competition rules to air transport. My right honourable friend the Secretary of State for Transport will continue to press the Council of Ministers to adopt a regulation which achieves this.

§ Baroness Burton of Coventry
My Lords, I thank the Minister for that most acceptable reply. Perhaps I may ask him, as it would be useful to have legal options in the background and known to be there, especially as a number of countries do seem to favour restrictive practices, whether the Government could increase the excellent efforts they are making to secure bilateral agreements between countries both in the EC and outside? If that could be done might it not spur the European Commission to more speedy action?

§ Lord Trefgarne
My Lords, our preference is for the Council of Transport Ministers to make a regulation in this matter. That I think would be the swiftest and most effective resolution to this problem. We do not rule out the possibility of legal action in due course if that is not achievable, but for the moment at least we prefer to follow the other course.

§ Lord Beswick
My Lords, the noble Lord will be aware that deregulation in the United States has not been an entirely unmixed blessing. There is quite a story there of bankruptcies, litigation and redundancies, and so deregulation has not always been in the interests of the air transport industry. In view of the success of the Government in the bilateral negotiations with the Netherlands, would it not be preferable to pursue the problem along these bilateral lines without invoking Brussels laws?

1350

§ Lord Trefgarne
My Lords, I agree that deregulation on the American model is probably further than we would wish to go. Of course the circumstances are different in the United States. That is a national market and we are facing an international question here in Europe. We have reached three agreements of a bilateral kind which offer the sort of improvements we are looking for: with the Netherlands, with Germany and with Luxembourg, although the last two are rather recent. Unhappily, some of the other European countries seem less willing to reach bilateral agreements than the ones which I have just mentioned.

Viscount St. Davids
My Lords, does the noble Lord agree with me that bankruptcies are not always a bad thing? Has he ever heard of any bankruptcies among the inefficient industries of Soviet Russia?

§ Lord Trefgarne
My Lords, that is an interesting reflection but probably not flowing from the Question on the Order Paper.

Lord Bruce of Donington
My Lords, in view of the fact that under the treaties the Commission itself is charged with interpretation of EC law, would it not be unfortunate if in the event of the Commission itself drawing up a regulation to eliminate restrictive practices in the European airways business, the Council of Ministers decided to overthrow that decision?

§ Lord Trefgarne
My Lords, the Commission produced last year some guidelines which we felt did not go far enough. We think that the right course now is for the Council of Transport Ministers to reach a conclusion on this matter, and I hope they will do that.

§ Baroness Burton of Coventry
My Lords, am I correct in thinking that the Council of Transport Ministers is to meet here in the near future? If so, can the Minister give us the date?

§ Lord Trefgarne
My Lords, I am afraid that I do not have the date of the next meeting of the Council of Transport Ministers, but I shall certainly try to find out and let the noble Baroness have it.

§ Lord Beswick
My Lords, will the noble Lord the Minister bear this in mind? The Government have had success in these bilateral negotiations. Would it not be a mistake to drop the slogan, "Whitehall knows best", for one now fashionable, "Brussels knows better"?

§ Lord Trefgarne
My Lords, we are not proposing a slogan of the kind that the noble Lord suggests; nor indeed do we offer a slogan of the earlier type which he mentioned. There is a limitation to what can be achieved by bilateral methods. Although the noble Lord pointed to some successes, and rightly so, which we have achieved in that area, we have also discovered some failures in that area. I am not saying that we have gone as far as we can in bilateral negotiations. On the contrary, I hope there is more to be gained. But some countries within the European Community are very resistant to any change in the existing bilateral arrangements.