HL Deb 07 July 1998 vol 591 cc1173-88

8.9 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman) rose to move, That the draft order laid before the House on 23rd June be approved [38th Report from the Joint Committee].

The noble Baroness said: My Lords, the proposed order in council has been drafted to fulfil our Community obligations in response to Council Regulation 2027/97, which enters into force later this year. The order was considered by the Committee for Delegated Legislation in another place on 24th June and approved by a majority.

Council Regulation 2027/97, on air carrier liability in the event of accidents, was adopted last year and enters into force on 17th October 1998. It was introduced as a reaction to the unrealistically low liability limits presently set by the Warsaw Convention and to harmonise the national regimes which various member states have installed as a consequence. It provides greater consumer protection by setting out a new liability regime applicable to Community air carriers.

The three main elements of the regulation are: the abolition of an upper limit for claims arising from the death, wounding or other bodily injury of a passenger—the carrier has absolute liability for the first 100,000 SDRs (approximately £82,000) of any claim and the burden of proof for higher amounts; secondly, a requirement for all Community air carriers to make prompt advance payments in the event of an accident, to make available to passengers adequate information on the new liability regime and to summarise these requirements on the ticket document or an equivalent; and, thirdly, in the case of non-Community carriers, which do not (voluntarily) apply the regulation, to inform passengers expressly and clearly thereof at the time of ticket purchase and to provide passengers with a form setting out their conditions. It does not replace the Warsaw Convention, which continues to apply in respect of matters not covered by the regulation and as between each member state and non-Community countries.

The regulation will be directly applicable to all carriers concerned when it comes into force and does not require implementing legislation as would be the case for a directive. However, member states are obliged to remove conflicts with national law and to impose appropriate, effective and dissuasive sanctions for non-compliance. Where possible, the sanctions should be analogous to similar provisions in national law. Failure to impose such sanctions would leave the United Kingdom open to infraction proceedings by the Commission and also possibly liable in damages if anyone suffers financial loss as a result of our failure to implement the regulation correctly.

An order in council has therefore been drafted to meet these obligations by amending the Carriage by Air Act 1961, the Carriage by Air Acts (Application of Provisions) Order 1967 and the Licensing of Air Carriers Regulations 1992 to remove conflict with legislation giving effect to the Warsaw Convention in the UK; and by imposing criminal sanctions for non-compliance in the form of a fine in a magistrates court, which currently cannot be more than £5,000, or an unlimited fine in a Crown Court.

I recognise that there has been both concern and controversy over those issues. However, I stress that the Council regulation will provide Community air travellers with more realistic protection in the event of an accident. The information requirements set out in the regulation will ensure that passengers are clearly informed of their rights. The order removes conflict with existing United Kingdom legislation and provides the necessary powers of enforcement. I therefore commend it to the House.

Moved, That the draft order laid before the House on 23rd June be approved [38th Report from the Joint Committee].—(Baroness Hayman.)

8.15 p.m.

Lord Brabazon of Tara

My Lords, first, I should declare an interest as a director of a company which owns a small airline in the Channel Islands, which I have no doubt will be affected in one way or another by the order.

This order was laid before the House on 21st June but that was not the first order that was laid. The original order was laid before that. It was then taken away and relaid on 23rd June. And yet two weeks later, today, we have the order which is full of manuscript amendments. How can it be that in the two weeks intervening between the laying of the second order—the one we are debating today—and today, we do not even have a proper printed copy of this order?

We are considering an example of bureaucracy at its worst. This is not a matter of policy but of red tape and worse still, gold plating. We all know about gold plating.

We have an EC regulation which enshrines in the national law of all Community states the principle of unlimited liability for airline passengers in the case of death or injury. That is a principle established by the airlines themselves in the 1997 inter-carrier agreement which the EC regulation serves to endorse. Therefore, there is absolutely no argument about the case for unlimited liability. That is not an issue of the order today. That is already in place and happening now.

We also have a draft order to require under United Kingdom law, and only under United Kingdom law, that a specific wording drawing that to passengers' attention must be included on the tickets of all EC airlines operating into this country or, in the case of non-EC airlines, drawing attention to the fact that they may not have waived their limited liability. I repeat that this EC regulation is not an issue of principle, which, by its very being, is in any event a part of UK national law, as the noble Baroness said in her opening remarks, but is concerned with the form of words drawing it to people's attention. Under this draft order, failure to comply means that an airline is held criminally responsible.

It may be useful to noble Lords to appreciate what we are talking about here. Already there are two notices on airline tickets relating to passengers' rights in case of death or injury. One is the standard IATA notice required by the Warsaw Convention; the other is the specific notice required for all flights to an from the United States. The EC regulation will require a third notice. Funnily enough, the industry recognises that that is not exactly consumer friendly.

Even as we debate this order, a meeting of the Passenger Services Conference, a forum within IATA, is under way in Geneva. It is trying to agree a wording for airline tickets which will meet the requirements both of IATA and the new EC regulation which, as the noble Baroness said, comes into force in October. It may also meet US requirements. That would mean one ticket notice, no confusion and simplicity for consumers. I do not know how those discussions are going, but it is not a straightforward matter. Once the IATA airlines have agreed a wording, that is then subject to approval by their governments. That means virtually the whole world. There are certain key authorities which must approve it and, ironically, one of those is the EC whose regulation the UK Government are now rushing headlong to gold-plate.

There is no guarantee that all the world's governments will approve it at first sight. They may ask for it to be changed in certain ways. They may disapprove it altogether. Such is the nature of international negotiations. But it is the best way to achieve a solution which will be both simple for consumers and practical for airlines.

Surely our Government should put their effort and resources into supporting that process and encouraging key players on the world scene, particularly the United States and the EU, whose specific requirements for ticket notices are at the heart of the debate to find a common solution. Instead, the Government's blinkered paranoia appears to be directed towards ensuring that they cannot be accused of failing to interpret the EC regulation to the letter. The provision requires airlines operating in and out of the UK to have an appropriate ticket notice by October. No matter what the rest of the world may be doing, the UK must be 101 per cent. compliant by October. There is no stopping to consider what the international community is already doing to address that new situation; no consultation with the industry to consider the practical implications. UK airlines, for which it will be most burdensome, will inevitably find a solution to appease the UK authorities. However, foreign airlines will be unlikely to accept the UK wording or to formulate their own in time to secure UK government approval. What a mess it seems to be.

In justifying that in Standing Committee in another place, the Minister admitted that an EC regulation does not require implementation. It was argued that because of Article 5 of the EC treaty and a case which the Government called the Greek maize case, the UK is not only under a duty to implement the EC regulation but must also impose sanctions which are "effective, proportionate and dissuasive". It was alleged first that, if that were not done, the UK might be liable to damages if anyone suffers financial loss as a result of failure to implement the regulations correctly; and consumers' rights may be impaired. Neither of those allegations is realistic for the simple reason that the consumer benefits which take effect in October will be part of UK law automatically without any implementation measures.

As I said before, it is significant that so far no other member state is known to be considering either implementing the measures or, in particular, criminal sanctions. The possibility of the United Kingdom being liable to make good financial loss is usually only relevant in the context of a state which fails to implement an EC directive, which always requires implementation, and not an EC regulation, which does not.

It is also surprising that the Government rely on the so-called Greek maize case, which was a very extreme undefended case involving Greek officials fraudulently concealing the true origins of maize from Yugoslavia, failing to levy the correct duties, failing to pay what was due to the Community and Greece failing to prosecute the fraudulent officials. That is rather different from failing to print on the back of a ticket the new requirements; in fact it is a lot worse.

The United Kingdom apparently turns a blind eye to the more relevant decisions of the European Court of Justice, which expressly disapprove of efforts to implement regulations by reproducing the text word for word. Even the slightest difference in operative date is forbidden.

I am also well aware that the Government are under no obligation to consult on this matter, but sheer common sense suggests that it would have been prudent to do so in a matter of such practical complexity and international impact. The industry was consulted on the regulation but not on the Government's decision to introduce this draft order. I have seen many representations made by many sectors of the travel trade and I have read the report in Hansard of the Committee debate on this matter in another place. I find it staggering that so many genuine concerns and thoughtful objections were dealt with so dismissively by a Government which have staked their reputation on openness, transparency and participation.

Notwithstanding the fact that it would appear to make eminently good sense to await the outcome of the international negotiations—as all other EC member states appear to be doing—this order will create enormous practical problems for airlines and for the travel agents who issue 85 per cent. of airline tickets in this country. Can the Minister say whether any other member state is introducing such legislation, let alone making a criminal offence of it? Can the Minister say whether it will be possible to adjust ticketing systems worldwide, bearing in mind the complexity of that procedure in the time available, and can the Minister confirm that no compliance cost assessment was done on the impact of the order?

Above all the order is simply unnecessary. The United Kingdom does not need to introduce such legislation in order to comply with its obligations under EC law. I have a copy of an independent assessment, prepared for British Airways by a prominent firm of aviation lawyers, which states this quite clearly.

This order will only be relevant temporarily, from the implementation of the EC regulation in October until such time as an international ticket notice is agreed. At that point, because the agreed ticket notice will be included on the IATA common ticket stock used by all the world's airlines, it will be impossible to be non-compliant.

Even when airlines in Europe began to raise limits from 1966 onwards, no European government required airlines to give notice to passengers of increased limits. The United Kingdom went even further when applying simplified Warsaw rules to domestic carriage from 1952 onwards: all ticket and notice requirements were deleted. Thus it is a completely retrograde step for the EC regulation to require airlines to inform passengers that by law limits are no longer applicable. This will introduce a completely new requirement in domestic carriage—for example, London to Manchester or London to Edinburgh—and it will frustrate present experiments in ticketless travel. Forty-six years of legal freedom from documentary requirements and domestic carriage will come to an end. Can the Minister comment on that situation? Will it no longer be possible to have ticketless travel within the United Kingdom under these new regulations?

Let us not forget that many airlines have been voluntarily applying the spirit of this regulation since the signature of the Inter Carrier Agreement 1997. Indeed a number of airlines already declare in their contracting documents that their liability is unlimited, so it is hardly likely that for the sake of a few months until that international agreement is reached, they need to be kept in line by such draconian measures.

Even if the Government feel that they still need this big stick with which to threaten the airlines, they only have to look at Article 7 of the regulation, which states that in two years the whole regulation must be reviewed and may be revised in the light of the economic climate which will prevail at that time.

In the meantime, given all the difficulties, both local and international, that I have outlined, I would welcome the Minister's assurance that this order will be applied with circumspection and any enforcement undertaken in a reasonable and practical way; but, better still, I urge the Minister even at this late hour to withdraw the order, which is unnecessary because the regulation will come into force without the need for any order such as this. We should wait until the outcome of the international negotiations.

Lord Graham of Edmonton

My Lords, unlike the noble Lord, Lord Brabazon, I do not have a financial interest to declare: I have a non-financial interest to declare on behalf of consumers. I am very closely attached to ABTA, although I do not have a financial interest. I could not possibly match the mastery of the intricacies of the order that we have just witnessed nor could I challenge the basis upon which they were made. However, I am told by ABTA that there had been no consultation with the industry on the order. The Minister can no doubt explain why there should have been no consultation but I am puzzled about that because, whatever the Government decide to put into the order, after the consultation the matter would be wholly in the hands of the Government. Was it a matter of practice or was it a mistake that the industry per se was not consulted on this matter?

ABTA has pointed out to me that because of the time scale involved it will be very difficult to comply with the order. When the order becomes operative and liability then flows, people may be in jeopardy. They may be committing an offence, not because they do not wish to comply with the order but because of the bureaucracy that is involved.

A point that I should like to reinforce is the failure to provide a departmental compliance cost assessment. I speak in the presence of those who have close connections with much larger businesses than a small airline in the Channel Islands and who know all about the effects and the costs. Cost analysis and environmental assessment are modern methods that are used in making such decisions. Can the Minister confirm that such an assessment was not made in this case, bearing in mind that we are talking about small and medium-sized enterprises?

I have a note here from British Airways. They very helpfully outline the puzzle. The EC is currently in discussion with the US Department of Transportation and IATA to agree a co-ordinated global approach to the wording of a single ticket notice. This is due for further discussion next month.

I have not sensed any resistance to the idea that those who suffer hurt as a result of accident where there is very limited liability should benefit from greater liability. Nor do I argue against the need for companies to make sure that the customer has any protection put in writing. However, I learnt a great deal from what the noble Lord, Lord Brabazon, said about the need to consult, and I am puzzled as to why in this country, when we are acting in advance of other countries and the liability will fall upon us, the Government have decided to move in this way. I should be most grateful if my noble friend the Minister could reply to my questions.

8.30 p.m.

Baroness Thomas of Walliswood

My Lords, in speaking towards the end of such a debate, much of the material has usually been gone over pretty thoroughly by those who have spoken before. However, I should like to ask the Minister a few questions. As I understand it—and the noble Lord, Lord Brabazon of Tara, made this very point—this waiving of carriers' rights of limited liability is not in dispute. Indeed, it has been determined by IATA, which is the most suitable mode of determination, that the process should be gone through. I believe that our airlines are probably all signatories to that procedure. So the question of unlimited liability is not in doubt.

Can the Minister confirm—I am sure that she can—that these EU regulations are in fact the implementation of that IATA agreement at a European Union level, and that it was the stimulus of the IATA agreement that brought these regulations to a conclusion? Again, previous speakers referred to the ongoing discussions as regards the European Union, the US Government and members of IATA as to the possibility of having not several but one form of words to explain to passengers their rights.

Perhaps I may say straight away that I have no objection—indeed, it is desirable—to passengers knowing their rights. But the question is how that should be implemented. If these negotiations are ongoing, would it be possible for Her Majesty's Government to delay enforcement of the regulations which, according to the Government, have to be completed by 17th October? Could we delay their enforcement until the negotiations are complete? I shall try to explain what I mean by that as I continue.

Alternatively, I believe that the industry would very much prefer it if the whole procedure were postponed until the IATA negotiations are completed. The noble Lord, Lord Brabazon of Tara, explained very clearly—and the Minister nodded her head in assent at the time—that, whatever is done with the order, the introduction of unlimited liability is already part of our national obligations. Therefore, there is no question of that part of it not going ahead. If work is continuing on the implementation of the order, especially on the wording of a single form of words to be introduced into the ticket, would it not be wiser on the part of the Government to delay the whole process and the introduction of the order?

Perhaps we should look at the problems that providing this information on the ticket would bring, especially to the travel agency industry. I repeat that I have no objection in principle to the introduction into the ticket of information setting out passengers' rights, or for that information to be made available to passengers in some other way. However, in the interim, before an agreed form of words is achieved at an international level, would it not be sufficient to have a printed form of paper to accompany a ticket rather than interfere with the whole drafting process of the ticket itself?

At present—again, the noble Lord, Lord Brabazon, explained this very clearly—the information is set out in an IATA form and goes into every ticket. That is why it is so important to get a new IATA form of words which would go into every ticket. It is particularly important because, often, travel agencies, which issue about 85 per cent. of all tickets, issue tickets which have different carriers for different parts of the journey. As I understand it, the information going to passengers will have to be different according to whether the airline is or is not an EU airline, and/or whether it does or does not comply with the IATA agreement. Can the Minister confirm that that is the case? If it is, it will greatly increase the problems of the issuing travel agents.

I turn now to my final point, which was also raised by other speakers; namely, the matter of compliance cost assessment. In the 9th Standing Committee when the matter was discussed, I believe that the Minister for Transport in London, who appeared for the Government, gave a very cavalier answer to those worries. She said: It has never been without the wit of any commercial organisation … to list in meticulous detail those areas in which it is not liable. It is therefore odd that the industry is finding particular difficulty in evincing the area in which it is liable". I would say that that statement certainly casts something of a slur on the various industries involved in this particular matter, all of which are quite important. There will be a cost to travel agencies in particular as regards complying with the regulations. Travel agents are not all big organisations; indeed, many of them, like those who supply the useful market competition for the large organisations, are in fact very small high street businesses. Those of us who use those travel agencies value the services that they provide.

Therefore, why was there no compliance cost assessment at the time that the 9th Standing Committee dealt with the matter? Has a compliance cost assessment now been made? Further, are the Government at all worried by the suggestion that local travel companies may face costs for replacing their ticket machines and their ticketing processes?

Baroness O'Cathain

My Lords, I must, first, declare an interest as a board member of British Airways. However, having said that, I am also aware of the considerable implications of this measure for other parts of the travel industry, which were so well explained by the noble Baroness, Lady Thomas. That also applies for the very many foreign airlines operating into this country.

This is not a partisan issue; it is an issue of absolute bureaucratic nonsense prevailing in the face of sheer common sense. It is also an issue that I raised in the debate initiated by my noble friend Lord Mountevans on civil aviation on 20th May, which took place only a few hours before this order was laid before Parliament. Indeed, I believe that it took us all by surprise, including the Minister.

My noble friend Lord Brabazon of Tara pointed out that the legislation is unnecessary, as has every other speaker. He highlighted the likely pattern of events over the next few months which make its introduction, at best, premature and, at worst, entirely superfluous. It makes no sense to me to rush into legislation to enforce compliance that will be automatic once an internationally agreed ticket notice is added to the world's ticket stocks. That point was also made by other speakers, so I need not dwell upon it.

However, rather than rushing to gold plate—and I use the same terminology as my noble friend Lord Brabazon—EC legislation in this unnecessary manner, would not the Government be better advised to use their considerable talents and influence to support those international efforts now taking place in Geneva, as we have been told, to secure a single ticket notice and to urge the speedy approval of that single ticket notice by the world's governments; indeed, I emphasise the word "speedy"? I should very much welcome an assurance from the Minister that her Government are committed to this.

What concerns me, and indeed other noble Lords, is the practicality of implementing this legislation between October, when it comes into force alongside the EC regulation, and whenever we secure this international agreement. What is involved is the possibility of airlines being held criminally responsible if a sticker, or an insert, outlining passengers' rights under this new regulation is not added to each individual ticket. I am reliably informed that this is an area where it is really not appropriate for the criminal law to apply, as it is a civil matter. This is despite the fact that the issue of tickets is undertaken largely by travel agents who are not necessarily themselves deemed liable under the legislation but over whom airlines have no control.

The Minister in another place, during the extensive debate in the 9th Standing Committee on Delegated Legislation on 24th June, indicated that airlines would discharge their obligations by writing to travel agents reminding them of the requirement. If it could be proven they had done so, they would not be liable. Will the Minister confirm that that is the case, although, if so, it only heightens the silliness of the legislation in the first place. I give the House a hypothetical situation. An airline may send a fax to a travel agent which arrives at 7 o'clock in the evening. Most of us have fax machines and they spew out rolls of paper. A cleaner comes in at 9 o'clock at night, sees the rolls of paper on the floor and dumps them in the bin. It probably could be proven that the airline sent the fax, as it would have a record, but it could not necessarily be proven that the travel agent had received it. It is important to take into account that kind of practical objection to the order.

This renders the legislation almost unenforceable, except that it raises the spectre of the ludicrous situation whereby an under-employed police constable—if there is such a person—could stand outside a travel agency, or in an airport lounge, inspecting people's air tickets at whim to see if they bear the necessary sticker or insert. If not, the hapless airline on whose behalf the ticket has been issued could find itself in the dock. Do we really need or want our police to become travel industry traffic wardens? Noble Lords will appreciate that whereas British airlines may well have taken steps to cover themselves, foreign airlines, unaware of our peculiar British ways, may well find themselves exposed. Do we really want to prosecute foreign airlines—I was about to say "persecute" and that would be appropriate too—with all the potential diplomatic misunderstanding that that may create?

Let us be clear. We are not talking about anything to do with the principle of waiving limited liability as set out under the Warsaw Convention. That was initiated by some airlines long before the cause was taken up by the EC and is now enshrined in the regulation and, as such, is part of UK law. What we are talking about is a requirement for a specific wording in the small print on a ticket which would probably take all of the air journey to Majorca to read.

According to Article 189 of the EC Treaty: A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States". Thus no ratification or implementation is required. It may, of course, be entirely reasonable to suggest that there should be sanctions to enforce the "notice" provisions of Article 6; namely, the criminal sanctions to which this order relates. However, the Council, of which the UK is a full member, unanimously decided otherwise. It was not mere inadvertence. There never has been any proposal published to impose sanctions, and this feature has frequently been noted in the growing literature.

I raise only one other point, on which I would welcome the Minister's comments. Article 7 of Regulation (EC) No. 2027/97, reads: No later than two years after the entry into force of this Regulation, the Commission shall draw up a report on the application of the Regulation which, inter alia, takes into account economic developments and developments in international fora. Such report may be accompanied by proposals for a revision of this Regulation". If the Minister will confirm that her understanding is the same as mine; namely, that the EC itself recognises that in two years' time its regulation may be unnecessary in its present form, perhaps she will also be able to explain why secondary legislation is so necessary, why the Government are pushing it through with such indecent haste, and why they have not taken the time to discuss the complex issues of implementation with the industry that will have to live with it. Above all, I support the suggestion of the noble Baroness, Lady Thomas, that it should be abandoned until the wording is agreed.

8.45 p.m.

Baroness Gardner of Parkes

My Lords, while major concern is concentrated on countries within the EU, there is also provision in the UK draft order relating to the obligation of non-EU airlines. Article 6(3) of the draft order covers those non-EU airlines which fly into, out of, or within the UK and which do not conform with Articles 3 and 5 of the order—that is, those airlines covered by the Warsaw Convention, as amended, which still have limited liability.

Not only will these airlines have to ensure that the information should be available to all passengers but they will also have to issue a form setting out their conditions. Failure to do so will render them liable for a fine. I notice the clock registers eight minutes but I have only just started to speak. Perhaps the clock can be reset.

To avoid the commission of a criminal offence under the order, an airline would have to show that its failure to conform was without its consent and that to avoid this failure all due diligence was taken. I understand that the Association of Asia-Pacific Airlines has submitted strong objections to the British Government—so far without any positive result. The AAPA points out that the UK Government do not have the right to impose criminal sanctions in this regard.

The International Civil Aviation Organisation is reviewing the Warsaw Convention which remains the only international obligation on the non-EU air services. Article 6(3) of the order before this House tonight will force travel agents to keep in stock quantities of different airline tickets covering terms and conditions.

As far as I am aware—other speakers have mentioned this—no other EU member state has implemented this regulation to include criminal sanctions and I cannot understand why the UK seeks to do so since the EU regulation itself does not seek to impose such sanctions.

No additional legislation would be required as in October, EU Regulation 2027 takes effect throughout all EU member states. Why are we proposing to criminalise the breach of these regulations? So often in the past when in this House I have even suggested criminalising any action I have been told that would be unduly oppressive and quite unnecessary. Again, I ask: why are we proposing this new criminal offence? Can the Minister assure the House that if IATA, the EU and the US can find a common solution to produce satisfactory wording for a worldwide ticket, the Government will withdraw this legislation?

Lord Berkeley

My Lords, I listened with great interest to all noble Lords who have spoken. I have read the debate in another place on 24th June. I believe that there has been a sad lack of consultation on the order. However, having said that, I certainly believe that the House should welcome the unlimited liability that will now be enforced. In my view that is long overdue.

The noble Baroness Lady O'Cathain, said that some airlines have taken steps to cover themselves. I do not know which ones; I should be pleased to know. In my opinion all we are talking about is how the passenger is told this good news if it is good news. The order does not appear to give the relevant wording. That is wise. It seems to me that it is a matter of coming up with a form of wording to put on a sticky label on the back of a ticket.

Several noble Lords have said that IATA is presently discussing the wording which will reduce three separate documents into one. International organisations have a habit of taking many years to do these things. It has taken many years to bring about unlimited liabilities and a Warsaw convention. I do not see that it is beyond the wit of man to put a sticky label on the back of a ticket as an interim measure until either the wording is sorted out or new tickets are printed with one extra page. There are already two in some cases, and it would need a third.

I am sorry to say that the industry is complaining rather too much. It has taken a long time to get this far. I believe that passengers really would like to know, in big red letters, that if they fly by a certain airline they have unlimited liability protection if something goes wrong. Everybody should welcome a requirement to be told which carriers have that and which ones do not.

Lord Mountevans

My Lords, gold plating has already been discussed, which the House will be pleased to hear takes out 20 per cent. of my remarks; and consultation likewise. I wish to echo a sentiment expressed by the noble Lord, Lord Graham of Edmonton, who put the ABTA view. He could have extended it by saying that there are much wider-ranging travel agency bodies, ones that go further in global terms. It could be argued that Europe is doing so. But we are not discussing what Europe is doing; we are discussing the measure before the House.

Such consultation, be it with IATA, or any other bodies that were mentioned, is essential if the whole concept of inter-line air travel is to continue to work. The provision of information to the industry, and indeed to the passengers, the consumers, must be in a straightforward manner and, equally importantly, in a universally acceptable one. It seems clear from what we have heard tonight that universal acceptability is a long way away.

Surely those two criteria should be subject to much wider consultation—not merely for a once-off, loose cannon action, which seems to be the policy on which Her Majesty's Government are determined to embark. That is an approach which, as several speakers have remarked, can lead only to confusion. Confusion among travel agents has been discussed by many speakers. After all, they issue most of the tickets. There could be confusion among the carriers, particularly those who will be beyond the jurisdiction on the order. Are they to be desperately concerned about British law? Do they even understand English law? The same applies to the travel agents.

Finally, and most seriously, taking up the point made by the noble Lord, Lord Berkeley, the consumer wants easily accessible information. Sadly, I do not believe that this once-off attempt is the way to go about it. Rather, we must look for a globally acceptable form of small print. It is not easy—but then desirable things never are. I urge the Government to work in that direction. So far as this draft instrument is concerned, the Government should think again. There is time to do so before commencement.

Baroness Hayman

My Lords, we have had an extremely interesting and useful debate. As I anticipated in my opening remarks, the controversies and concerns which I knew existed have been eloquently expressed around the Chamber. I hope that I shall be able to address the many points that were raised. They fall mainly into broad sections with which we can deal. If there are specific questions that I do not manage to answer, I will write to noble Lords.

First, I apologise to the noble Lord, Lord Brabazon, if he has been working from a manuscript-amended copy of the order. It was reprinted on 26th June. I offer my apologies to the House if that copy was not available in the Printed Paper Office. It certainly should have been.

Lord Brabazon of Tara

My Lords, I have in front of me the copy that I obtained from the Printed Paper Office after lunch today. It is the manuscript edition.

Baroness Hayman

My Lords, all I can do is apologise to the House. It is a matter for my department to see what went wrong in communications. I will ensure that that happens.

Most, if not all of the matters raised this evening concern the effect of the regulation on airlines and, in particular, the effect of the information requirement as set out in Article 6. However, some of the concerns raised relate not so much to the implementing order but to the substance of the regulations themselves. For example, the noble Lord, Lord Brabazon, raised the question of the effect on non-UK airlines. All carriers selling tickets in the UK will be obliged to comply with the regulations. If they do not, they are liable to be prosecuted. That comes from the regulations; as indeed do the other issues that the noble Lord raised about ticketless travel, which will become difficult under the regulations. But that relates back to the regulation rather than the implementing order that we are discussing.

It is, however, the implementation upon which most Lords have focused their contributions, and the basic contention put by several contributors is that legislative action is not needed to give effect to the regulation in the United Kingdom. That is common ground between all of us. There is a recognition that the regulation becomes a legal requirement without the need for additional secondary legislation in this country.

Where the difference lies is in our understanding that it is necessary for us to remove any conflicts between existing national legislation and since the regulation contains no penalties, to impose appropriate sanctions to deal with non-compliance.

The European Court of Justice has consistently held that member states are under an obligation to impose penalties in their jurisdictions even if the regulation has no such provision. Any failure to do so would put them in breach of treaty obligations. If we fail to put in place appropriate sanctions, leaving aside the possibility of infraction proceedings by the European Commission, the intention of the regulation, which is to ensure that airlines provide air passengers with clear information, would be unenforceable.

Under European law, it is open to member states to impose whatever penalties they choose so long as such penalties are "effective, proportionate and dissuasive". Therefore, the department considered whether it would be more appropriate to impose administrative sanctions rather than criminal sanctions. That was the point suggested by the noble Baroness, Lady O'Cathain. But those administrative sanctions would be in the form of suspension or revocation of an operating licence or permit. They were thought to be out of proportion to the offence as they would effectively stop the carrier operating at all. There are similar measures in the Package Travel Regulations 1992 relating to the provision of certain information in holiday brochures. The imposition of criminal sanctions was therefore considered entirely appropriate. Indeed, the criminal sentences created and the scale of penalties proposed are fully in line with UK practice in other areas. The way in which the penalties are drafted gives the court a wide discretion to impose a fine which it considers commensurate with the seriousness of the offence.

I understand the concern expressed that it might appear that the creation of a criminal offence for not providing an air passenger with certain information is excessive. We appreciate that generally the passenger purchases his ticket from the travel agent—that was the point made by the noble Baroness, Lady Thomas of Walliswood—rather than the airline itself. It was on that basis that we provided a defence for the airline if it can show that it has exercised all due diligence to ensure that its agents complied with the regulations requirements. The interpretation of any particular case, like the example that was given, would depend on the interpretation of whether all due diligence had been complied with. Airlines that comply with the regulation will have nothing to fear. However, where it is clear that passengers are not being given the necessary information powers will be used to enforce the law.

The issue of gold plating, or whether we have acted out of line with other countries, was raised by several contributors to the debate. The regulation does not come into force until October. Other member states have different procedures for implementing Community law, which means that they may not be required to go through the same affirmative resolution process which we, on account of the parliamentary summer Recess, are obliged to follow if the order is to be in place in time. In any event, whether or not other member states are implementing the regulation does not affect our obligations under the Treaty of Rome to remove any conflicts with national legislation and impose appropriate sanctions, without which the intention of the regulation would be frustrated.

On the specific point raised by the noble Baroness, Lady O'Cathain, about Article 7 and the power given to the Commission to suggest amendments to the regulation, the Commission may propose amendments and the Council may adopt them but until that time the regulation stands.

I turn now to the issue raised by several noble Lords, including my noble friend Lord Graham of Edmonton, about the consultation that did or did not take place on this issue. It has obviously been a matter of concern, as I know from the correspondence that I have seen, as well as from contributions tonight. Since the draft order merely facilitates a Community regulation, no formal consultation is necessary, or indeed appropriate. But I should make clear to the House that, as far as the regulation itself was concerned, there was indeed formal consultation. A cost compliance assessment was carried out and was scrutinised by the scrutiny committees of both Houses and approved by them. There is no question that the procedures were not followed properly as far as the regulation is concerned.

I think that the reason that the House is getting into difficulty here is that we are dealing with the implementation of the regulation, for which the same consultation does not exist. That was why, as a matter of courtesy, officials in the department spoke with aviation legal experts and airline representatives on a number of occasions before drafting the order to outline our obligations as Community members and to indicate the proposed approach. I should point out that the department consulted the airlines on the substance of the regulation before it was finally adopted by the Council.

As I am on the issue of consultation and sharing information, I should like to repeat the apology that I made in a letter to the noble Baroness, Lady O'Cathain. It would have been much better if I had been in a position to mention the timing of the laying of the directive when we debated these issues in your Lordships' House a few weeks ago. I regret that I was not able to do so.

Perhaps the most substantive issue, and the one raised most often, is the context in which we are operating and whether it would not be sensible to postpone the order until new ticket wording is agreed globally. I entirely agree with noble Lords who made the point that the best solution in the medium and longer term is for a worldwide agreement on the form of words to appear on tickets. We welcome the efforts being made by IATA to this end. However, I must stress that, whether or not the UK implements the regulation, the requirement for certain information to appear on tickets will apply from October this year. As I understand it, IATA's passenger services conference will not be in a position to agree a new form of words until at least October, and, assuming agreement is reached, new tickets will not be issued until the approval of certain governments has been obtained, stocks of current ticket blanks have been largely used up and new tickets have been printed.

Since it will be upwards of a year, and possibly longer, before the new tickets appear, I believe that the point made by my noble friend Lord Berkeley is a real one and that airlines should consider what measures might be put in place from October in order to comply with the regulation. Even if a new form of words were universally agreed and adopted, we should still need to put in place the powers to enforce the other information requirements of the regulation. It does not obviate the need for enforcement.

The noble Lord, Lord Brabazon, asked me two questions about whether we could delay and what the attitude to that would be. We believe that it is not within our power to postpone the coming into force of the regulation; but, in relation to enforcement, we would obviously consider the merits of each case to determine whether prosecution would be in the public interest.

I am conscious of pressures in opposite directions. One is time and the other is the number of questions that were asked. I hope that I have dealt with the substantive issues that were raised in the debate and that the House will now agree that it is important for the United Kingdom to adopt appropriate measures to implement the Council regulation, which will provide much greater financial protection for air travellers. I commend the order to the House.

On Question, Motion agreed to.