HL Deb 07 March 1987 vol 487 cc239-40
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, arising from their answer to her Starred Question on 2nd April (col. 693), legal action has now been taken with the adoption of reasoned decisions against the three airlines concerned or whether, alternatively, all EC airlines have now brought their inter-airline agreements into line with the competition rules of the Treaty of Rome.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

My Lords, I understand that the three airlines concerned—Alitalia, Olympic Airways and Lufthansa—have entered into direct discussions with the Commission, in the same way as the other airlines involved in the Article 89 proceedings, and have undertaken to bring their commercial agreements into line with the Treaty of Rome. As a result, the Commission has not for the moment proceeded with formal legal action.

Baroness Burton of Coventry

My Lords, while I am glad that the Commission has made some progress, may I ask this question? Does this mean that we shall have to wait until all these agreements have been deemed compatible with the competition rules of the Treaty of Rome before any further step forward can be taken?

Lord Brabazon of Tara

No, my Lords. Modification of airline agreements will clearly be a useful step forward towards more genuine competition but will not remove the unnecessary regulatory restrictions imposed by some governments. It therefore remains essential for consumers that we should, if possible, reach agreement at the Council of Ministers on a satisfactory package of liberalising measures. We hope this will be possible in June, regardless of the state of play of the Commission's direct action with the airlines.

Baroness Burton of Coventry

My Lords, I thank the Minister for that helpful comment, but can he deal with one further point? Is it correct that all the airlines had agreed to set up a tribunal to settle disputes on air fares but that this would fall unless agreement on a general package is arrived at by 9th June? Further to that, if there is a general election on llth June, would that mean that our responsible Minister would be unable to add his signature to any agreement reached and that we should thereby lose the advantage of any progress made?

Lord Brabazon of Tara

My Lords, on the first point raised by the noble Baroness, the tribunal on which agreement has been reached in principle would be established by the governments and not by the airlines. It cannot become effective within the Community unless formal agreement on the package as a whole can be reached. Without wishing to speculate on the date of the general election, should there be an election my right honourable friend the Secretary of State for Transport will then decide who should represent the United Kingdom. In any event, we shall make every effort to secure agreement in June.

Noble Lords will be aware that liberalisation is long overdue and there is nothing unusual about senior officials representing Ministers at tile Council if necessary. In fact, it is rare for every Minister to be present.

Lord Bethell

My Lords, does not my noble friend the Minister agree that whereas it is true that 10 European airlines have, under pressure from the Commission and under threat of legal action under Article 89, agreed to bring their practices into line with European law, it follows that all or most of them are still in breach of that law? As a result, the European passenger is suffering by paying higher air fares than necessary. Will the Government therefore consider taking powers under Article 88 to regulate this matter and to see that the competition articles are enforced? If not, will the Government at least make a commitment to do so should there not be agreement in the June Council?

Lord Brabazon of Tara

My Lords, my noble friend has a Bill along those lines which is currently before the House. If the Council reaches a satisfactory agreement by 30th June—the deadline set by the Commission—then unilateral action by member states will no longer be legally possible. If no agreement is reached, the Government already have the necessary powers in Section 2(2) of the European Communities Act to establish Article 88 machinery and have already undertaken to do so if necessary.

Lord Broxbourne

My Lords, further to the constitutional question raised by the noble Baroness opposite, is it not a fact that though dissolution creates a parliamentary vacuum it does not create an executive vacuum?

Lord Brabazon of Tara

My Lords, my noble friend is right.