§ 3.2 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 whether, recognising the obligation of the European Commission to look into possible breaches of the EC's founding treaty and the right of the Commission to take such matters to the European Court if warranted, they will clarify the legal right of the Commission to open a formal inquiry into the merger of British Airways and British Caledonian.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)My Lords, the competition rules of the Treaty of Rome set out in Articles 85 and 86 may apply to certain mergers. Under the EC regulation laying down the procedures for the enforcement of Articles 85 and 86 in relation to international air transport between Community airports, the Commission may investigate on its own initiative or following a complaint.
§ Baroness Burton of CoventryMy Lords, while believing that had the Minister been able to announce speedy and effective action he would have done so, may I ask him whether it is correct that a number of small airlines have formally asked the Community to look into the merger because they believe it to be anti-competitive and against provisions in the Treaty of Rome? If that is the case, can the Minister tell the House whether such queries will be referred to the Commission, leaving the Council of Ministers with no say in the matter at all?
§ Lord Young of GraffhamMy Lords, I am grateful to the noble Baroness. This was a matter that I referred to the Monopolies and Mergers Commission, which concluded that, in the light of proposals developed by British Airways, it would not operate against the public interest. It is open to other individuals to approach the Commission. That has been done. Investigations with British Airways and Commission officials are, I believe, continuing. But it is a matter solely for the Commission and the company involved, and I cannot comment upon it.
§ Baroness Burton of CoventryMy Lords, I am sure it is me and not the Minister, but may I ask him whether, in answer to what I just asked him, it is the case that such queries concerning requests from smaller airlines that these matters be looked into would be referred to the Commission and that the Council of Transport Ministers would have no say in the matter?
§ Lord Young of GraffhamMy Lords, that is a matter for the Commission. My understanding of the present position is that the matter is with the Commission and with Commissioner Sutherland in particular. It is very much a matter for what he proposes and where he proposes to take it afterwards.
§ Lord BroxbourneMy Lords, does my noble friend agree that, in spite of the undoubted legal expertise of Her Majesty's Ministers, this Question is not properly addressed to them? Does not Article 177( b) of the Treaty of Rome preserve the right of interpreting the validity of the articles of the treaty to the European Court of Justice; and would it not be better for the noble Baroness to address herself to that authoritative source?
§ Lord Young of GraffhamMy Lords, I am happy to dispute one fact with my noble friend. I lay no claim whatsoever to any legal ability.
§ Lord Williams of ElvelMy Lords, following on from the question of the noble Lord, Lord Broxbourne, is it true that the only action the Commission could take, were it to believe that the merger was contrary either to Article 85, or, in practice, to Article 86, would be to take the matter to the European Court? Is it then seriously proposed that a case should drag through the European Court the result of which might be the dismemberment of British Airways and British Caledonian?
§ Lord Young of GraffhamMy Lords, the noble Lord, Lord Williams of Elvel, is in this instance being carried away with the thought. At the moment the matter is still with the commissioner. Let us see what he does with it and then we shall see whether we should worry from that time onwards.