§ Baroness Burton of Coventry asked Her Majesty's Government:
§ Whether they will amplify the statement made by the Secretary of State for Transport on 17th April that lessons should be learnt from the mistakes made in the United States which saw the emergence of a handful of giant airlines after deregulation.
§ Viscount DavidsonMy Lords, agreement is due to be reached on the second stage of EC aviation liberalisation by the end of June this year. This will allow airlines greater scope to compete on routes within the Community. The Government recognise the need for effective safeguards if the benefits of competition are to be maintained. That is why we are pressing hard in this second stage to ensure that suitable arrangements, which enhance those already in place under the existing competition rules, are introduced.
§ Baroness Burton of CoventryMy Lords, will the Government be more specific? I believe the Minister mentioned greater scope and effective safeguards in the reply he has just given to the House. Is it correct that the European Commission has stated that it is seeking powers for prompt action against big airlines which use predatory practices to exclude or squeeze out smaller airlines from the European market? If that is the case, do the Government support the Commission in its aims, and will they endorse the action the Commission seeks when the matter arises at the Council of Ministers? Further, is it the hope of the Government that the effective safeguards will prevent the dominance of the major airlines in the landing slots, as has happened in the United States? That process has blighted the deregulation there.
§ Viscount DavidsonMy Lords, the noble Baroness is quite right. The Commission has recently announced its intention to put forward proposals aimed at preventing a range of anti-competitive predatory practices in air transport. The Government not only support that but have also been urging the Commission to take action and will look at the proposals with interest. The slot allocation is carried out by scheduling authorities under International Air Transport Association guidance. The EC Commission is shortly to produce a code of conduct on slot allocation which the Government will study with interest.
§ Lord UnderhillMy Lords, is it not a fact that the Civil Aviation Authority's document on the United 384 States deregulation published in 1984 was highly critical of the policy followed in the United States and concluded that one of the problems was that the deregulation in the United States removed all regulation of air services? That led to unfettered competition and the situation whereby the national mega-airlines grabbed the smaller airlines.
§ Viscount DavidsonMy Lords, the noble Lord is correct. We shall not follow the United States down that road. The CAA already has effective controls through its routes licensing system against anti-competitive behaviour including predatory pricing in the UK airline industry. We have recently introduced expedited procedures for handling such cases. Under existing EC legislation the European Commission can act on its own initiative, or following complaint, under the competition rules of the EC treaty. The UK has also been pressing hard to ensure that adequate safeguards against anti-competitive behaviour are built into Community agreements on liberalisation.
§ Lord MolloyMy Lords, will the Government also take into account —I am sure they will —the fact that some of the giant airlines of the United States have been severely criticised for their attitude towards security in recent times? Will the Government ensure—I am sure they will—that such matters of security will be taken into account as regards any changes in the airlines?
§ Viscount DavidsonMy Lords, if the noble Lord cares to stay until the end of business today, he will be present for the Report stage of the Aviation and Maritime Security Bill. His question will probably be answered then.
§ Lord Stoddart of SwindonMy Lords, is the noble Viscount aware that on the basis of cost per mile, the fare between London and Brussels is the highest in the world? Perhaps the Commission could take note of that and investigate it.
§ Viscount DavidsonMy Lords, I shall certainly pass on the remarks of the noble Lord to the Commission.
§ Baroness Burton of CoventryMy Lords, does the Minister hope to come back to the House one day to say not only that the Government will look at what has been put forward, but also that they have taken action and supported it?
§ Viscount DavidsonMy Lords, I come to the House every day. If the noble Baroness cares to put down another Question at a convenient moment when I can give her that answer, I shall be happy to give it.