§ 2.50 p.m.
§ Lord Clinton-Davis asked Her Majesty's Government:
§ Whether they will introduce a levy to protect airline passengers in the event of the failure of any airline based in the United Kingdom.
§ The Minister of State, Department of Transport (Lord Brabazon of Tara)My Lords, my right honourable friend the Secretary of State for Transport has asked the Civil Aviation Authority for advice on 392 an arrangement to protect scheduled airline passengers. No doubt a levy will be among the possibilities which the authority will consider. Airlines' charter passengers are already protected by the Air Travel Organisers' Licensing Scheme operated by the CAA.
§ Lord Clinton-DavisMy Lords, while the present Secretary of State may be exculpated from all responsibility because of his short tenure in office, in the light of authoritative concerns can the Minister say why, when certainly one, and more likely a number of airlines faced failure long before the recent incidents occurred in connection with Air Europe, the Government have only just asked the Civil Aviation Authority to look into the possibility of a system comparable with that which applies to charter passengers?
§ Lord Brabazon of TaraMy Lords, until now the main risk was seen to be for charter passengers and the bonding scheme was designed to cover that. My right honourable friend has concluded that it is right now to review the position.
§ Lord Clinton-DavisMy Lords, with respect, that does not answer the question at all. Is it not a fact that there was very considerable reliable conjecture about the possibility of failure long before this event took place? Why was it only on the 11th of this month that the Government announced that they were asking the Civil Aviation Authority to investigate that possibility? Can he say whether the Government are considering introducing a provision similar to that which applies in the United States? An American airline in difficulties can seek protection relating to Section 11 administration and that enables its operations to continue while an administrator seeks to get the airline into a financially viable position. Does the noble Lord agree that that would be a very much better situation than the one that applies in this country?
§ Lord Brabazon of TaraMy Lords, in answer to the noble Lord's first question, the number of scheduled airlines going bankrupt and leaving passengers in the position to which the noble Lord refers has fortunately been few. The US provision for protection under Chapter 11 is a different matter. We have our own insolvency procedures in the country which were introduced only a few years ago.
§ Lord Campbell of AllowayMy Lords, can my noble friend the Minister say whether a fail-safe insurance scheme, as I understand to be proposed by this Question, is in operation in any other country?
§ Lord Brabazon of TaraMy Lords, I am not aware of any other country which operates a system precisely as proposed by the noble Lord in his Question. There is some kind of scheme in operation in Australia. No doubt that is something at which the CAA will wish to look concerning the making of comparisons.
§ Lord MonsonMy Lords, does the noble Lord agree that there is no case at all to introduce a levy to protect airline passengers unless at the same time a 393 levy is introduced to protect shoppers who may have paid several hundred pounds in advance for, say, a three-piece suite or carpets, only to find that the firm in question goes bust a week later? The sums involved are much the same in either case. How can one justify protecting one set of consumers and not the rest?
§ Lord Brabazon of TaraMy Lords, the noble Lord makes an interesting point. At one time or another we all run the risk of a supplier of goods going bankrupt. That is something with which we all have to live. However, it is worth while looking into this situation, as my right honourable friend announced.
§ Lord TrefgarneMy Lords, is my noble friend aware that there were at least as many failures of scheduled airlines during the time that the noble Lord, Lord Clinton-Davis, was the junior Minister responsible for these matters? No scheme came forward then and the Minister is therefore right to take care now.
§ Lord Brabazon of TaraMy Lords, I was not aware of that. My research did not go so far back. I must admit that I am more concerned with what can be done in the future rather than with what was done in the past.
§ Lord StrabolgiMy Lords, does the noble Lord agree that the answer to the noble Lord, Lord Monson, is that in the case of goods from a shop one pays for them after one has received them whereas in the case of an airline one pays in advance?
§ Lord Brabazon of TaraMy Lords, I do not think that that is necessarily so. The noble Lord, Lord Monson, said that people pay in advance for certain things and occasionally the firm goes bankrupt before they have taken delivery of the goods.
§ Lord Clinton-DavisMy Lords, does the noble Lord agree that the noble Lord, Lord Trefgarne, seems to have taken too much milk of amnesia? The collapse of scheduled airlines took place on a substantial scale very much later than in my term of office? He is confused with Court Line, in respect of which action was taken. Does he further agree, as evidently he does, that there is a logical consistency in applying similar rules to charter passengers as those applied to scheduled airline passengers?
§ Lord Brabazon of TaraMy Lords, the noble Lord talks about the failure of scheduled airlines "on a substantial scale". I am not aware that there has been —in the noble Lord's own phrase —the failure of scheduled airlines "on a substantial scale".