§ 3.15 p.m.
§ Baroness Burton of CoventryMy 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 what decisions affecting the liberalisation of air transport in Europe were taken at the meeting of the European Community Transport Ministers Council held on 24th March and what dates have been arranged for future meetings of the council.
§ Lord Brabazon of TaraMy Lords, there has at last been real progress on cheap fares. Other countries have now unanimously accepted our view that cheap off-peak fares should be available to everyone. This is a major step forward, improving the prospect of overall agreement by the Commission's deadline of 30th June, although a considerable amount of work still has to be done by then. We are pleased that the Belgian Presidency has called a further meeting on 9th June in addition to that planned for 24th/25th June.
§ Baroness Burton of CoventryMy Lords, while hoping that real progress has been made, may I ask the Minister this question? Is he aware that consumer organisations both in Europe and in the United Kingdom, concerned particularly with the liberalisation of air transport, believe that the original proposals have been watered down? Can the Minister tell the House whether or not it is correct that the agreement reached on the 24th March is subject to several qualifications, including a clause that any fares proposed by an EC airline may be challenged by another EC airline?
§ Lord Brabazon of TaraMy Lords, indeed the Government are well aware of the views of consumers and we have made it clear to other member states that we will not accept any package which is watered down to a point at which it fails to bring real benefits. It is important to remember, however, that we are here talking about a first step towards full liberalisation in 1992. Considerable work still has to be done on a satisfactory package, but agreement has already been reached on a new international arbitration procedure, to which the noble Baroness referred, which will we hope make it easier for airlines to introduce new and cheaper normal fares if they want to do so.
§ Lord Harvey of PrestburyMy Lords, is my noble friend the Minister aware that it is cheaper to fly to New York than it is to Southern Europe, and that these monopolies have gone on far too often? Will the Government ensure that progress is made to bring our fares more into line with those of the internal services within the United States?
§ Lord Brabazon of TaraMy Lords, that is precisely what the Government have been trying to do for many months, if not longer, within the European Community. I can assure my noble friend that no government within the Community have tried to do more than our own to liberalise European air fares.
§ Baroness Burton of CoventryMy Lords, is it not correct that the agreement reached on March 24th depends also on a total package, covering capacity sharing and market access, being reached by the end of June? If that is correct, can the Minister tell the House what action is proposed by the Commission if agreement is not reached by 30th June?
§ Lord Brabazon of TaraYes, my Lords. The noble Baroness is quite correct that the fares deal is only part of an overall package and that considerable work still needs to be done, particularly in the vital area of market access. The Commission has in effect set a deadline of 30th June for agreement in the Council. After that it will withdraw its offer of some exemptions from the competition rules. We greatly welcome the increased pressure that this has brought to bear on the Council and the robust attitude adopted by the Commission in negotiations.
§ Lord RentonMy Lords, will the welcome liberalisation of fares on regular airlines have some effect on the fares of chartered flights which carry thousands of people to and from this country on package tours for holidays?
§ Lord Brabazon of TaraMy Lords, chartered flights already enjoy a fairly liberal regime. I am not quite sure whether or not fares in that market could come down. That would depend on the market. However, any pressure on commercial flights would probably have some effect.
Lord Paget of NorthamptonMy Lords, the noble Lord referred to the benefits gained by the Government in these matters. Should not our thanks be due to the noble Baroness rather than to the Government?
§ Lord Brabazon of TaraMy Lords, I am not quite sure whether I understood the question of the noble Lord, Lord Paget, correctly. However, if he was suggesting that questions from the noble Baroness, Lady Burton, helped us on our way to achieve this package, he is indeed correct.
§ Baroness Burton of CoventryMy Lords, fortified by that comment, may I ask the Minister a question on a point of clarification? I think in his Answer he referred to pressure being brought by the Commission on the Council of Ministers. May I ask him whether he is aware that my information is that Mr. Peter Sutherland, the commissioner responsible for competition, wished to take action against three national airlines, Alitalia, Olympic Airways and Lufthansa, but that on 18th March his fellow commissioners ruled that this was not to be done at that stage and asked for three weeks' further grace? The three weeks' further grace will be up next week. Can the Minister tell the House whether it is the case that if those airlines have not by then conformed with what they were asked, action will be taken; or will there have to be further discussions in the Commission?
§ Lord Brabazon of TaraMy Lords, I very much hope that there would have to be no further discussions on this matter. The Commission announced, as the noble Baroness said, that it will continue with legal action and adopt reasoned decisions against the three airlines that the noble Baroness mentioned. These will take effect next week, thus forcing them to bring their inter-airline agreements into line with the treaty's competition rules. Their final period of grace which was given was to allow the airlines concerned to enter voluntarily into discussions with the Commission in the way that all the other airlines subject to the Article 89 action are now doing. I hope that this will prove effective.
§ Baroness Burton of CoventryMy Lords, I thank the Minister for his patience.