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Volume 19: debated on Monday 1 March 1982

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asked the Secretary of State for Trade whether he will use the occasion of the Festival of India to promote trade between India and the United Kingdom.

My right hon. Friend the Secretary of State for Trade has accepted an invitation to address a conference on the Indian market organised by the British and South Asian Trade Association to coincide with the opening of the festival.

The Festival of India presents a unique opportunity to improve political and cultural relations between the two countries, especially because of the visit of Prime Minister Gandhi. Surely it is not enough for the Secretary of State for Trade to address a conference. Surely what should be done in these circumstances—

Order. The hon. and learned Gentleman is making proposals. He should ask a question.

Does the Minister accept that it must be in the interests of Britain as well as of India to correct the massive trade imbalance and to help India, especially in the light of the proportionate cut in the economic assistance that we provide?

I assure the House that our efforts to nourish both economic and political relations with India will certainly not be confined to the period of the festival, during which, of course, we shall watch and admire artifacts of the Indian civilisation. Our relationships with India are of considerable importance and the subject of continuous scrutiny and endeavours by not only my Department but others.

Is not the main purpose of the Festival of India to foster music and the arts in the context of historic ties and warm relationships between India and the United Kingdom?

Export Statistics


asked the Secretary of State for Trade what information he has as to the proportion of exports from the United Kingdom which come from United Kingdom subsidiaries of foreign companies.

Foreign-controlled enterprises accounted for 29 per cent. of United Kingdom exports in 1979, the latest year for which data are available. The information is collected annually in the overseas transactions inquiry and was published in British Business on 3 July 1981.

I thank my right hon. Friend for that reply. Does he agree that this shows that the subsidiaries of foreign multinationals in Britain are an essential and important part of our economy, providing many jobs? Does he also agree that they have been coming to this country increasingly now because, as a member of the Common Market, Britain provides them with access to a large market? Does he agree that if we left the Common Market the multinationals would cease to come, which would cost thousands of jobs in Britain?

There is no doubt that these companies play a very important part in our national economy, accounting for 21 per cent. of output and 15 per cent. of employment, as well as the export figure to which I referred. I am certain that their success depends on Britain being part of an open trade agreement, including open trade with Europe.

Textiles And Clothing


asked the Secretary of State for Trade whether agreement has yet been reached in the Council of Ministers on the level of global ceilings on imports of textiles and clothing from all sources, including multi-fibre arrangement signatories.

The Council of Ministers agreed in principle on 25 February on global ceilings on imports into the Community of the eight most sensitive textile and clothing products.

Is the Minister satisfied that the ceilings agreed in principle will be sufficient to prevent any further erosion of our textile industries?

I am satisfied that the overall package that will emerge when the bilateral agreements within the framework laid down are concluded will provide a much tougher regime and greater protection for the British textile industry.

But just how tough is the mandate about which the Minister has boasted on the 1 per cent. growth? Will there not be a 4 to 5 per cent. growth in imports? Does that not give the lie to the Minister's claim?

I would be the last to boast of any achievements in this field. Knowing the sensitivity of the area, it would be extremely ill-judged for me to do so. The 1 per cent. growth rate relates to the most sensitive products. It is possible that there will be a higher growth rate in less sensitive products. We must wait and see. I can, however, assure the House that, in the most sensitive products, there will be a lower growth rate than that achieved in the last multi-fibre arrangement.

Has the Minister had any reaction from the textile industry to his announcement in the House on Friday?

I am happy to say that the only reaction has been an invitation to see the new headquarters of one of the associations, which I take to be a friendly invitation.

Does the Minister recognise the concern felt by producers and workers in the parts of the textile and clothing industry that come under categories two and three, dealing with such matters as suits, dresses, jackets, shirts and so on? Do the surge mechanism or the cutbacks on dominant suppliers relate to those categories? What action does he intend to take to safeguard what amounts to 50 per cent. of the industry?

No. Those categories are not covered. As the hon. Gentleman will appreciate, they are essentially non-sensitive categories. I appreciate that there are individual areas of concern. In those individual areas, the Government will endeavour to ensure that the growth rates are less than those negotiated under the previous multi-fibre arrangement. There are about 600 categories under those two groups. Many are areas where the textile industry would not press, I believe, for limited quotas.

European Community


asked the Secretary of State for Trade what has been the balance of trade in manufactures with the rest of the European Economic Community for each of the last six months.

In the last four months of 1981 there was a crude deficit of about £1, 400 million. With permission, I shall circulate the available monthly information for 1981 in the Official Report.

My right hon. Friend says that in the last four months of 1981 there was a crude deficit of £1, 400 million. That is a very considerable amount. In view of the recovery and massive increase in productivity that is taking place in British industry, does my right hon. Friend see the prospect of this deficit reducing significantly? Or does he see it, like the Japanese deficit, as a matter about which hon. Members should be concerned?

My hon. Friend is right. This is a deficit of great significance. Just under half of it is accounted for by road vehicles. I would not care to make an assessment of whether there will be a reduced deficit in the year in prospect.

What is the right hon. Gentleman's latest estimate of the likely loss of exports and jobs if Britain were to withdraw from the European Economic Community?

That would depend almost entirely on what replacement arrangements were made.

Is not the deficit almost exactly the same as the combined deficit with the United States, Japan and EFTA? Do not these three together take a smaller proportion of our exports that the EEC as a whole? Is it not further a fact that our export-import ratio with the EEC is still more favourable than that with the United States, and about three times as favourable as that with Japan?

Broadly speaking, I agree with those propositions, but I am not quite certain that I could validate the individual statistics that my hon. Friend has quoted.

Following is the information:



£ million, OTS basis


Source: Overseas Trade Statistics of the United Kingdom.

Notes: Figures for March to August are not yet available due to the Civil Service pay dispute.

*The October export figures are inflated as a result in the system of documenting exports.

British Airways


asked the Secretary of State for Trade whether he will make a further statement on measures taken by British Airways to improve its financial position.


asked the Secretary of State for Trade if he will make a further statement about the measures taken by British Airways to improve its future financial position, referred to in the Under-Secretary's reply on 4 February, Official Report, column 171.

British Airways made a pre-tax loss of £141 million last year and is expected to make a further substantial loss in the current financial year. Its debts are fast approaching the £1 billion mark. It is clearly the management's responsibility, therefore, to take strong measures to improve its financial performance as quickly as possible. I welcome the determination of Sir John King and the British Airways board to take such measures.

In the interests of fair competition in civil aviation, will my hon. Friend confirm that, despite British Airways' rejection of the description that it is State subsidised, it has received a wide variety of support from the taxpayer over the years? Is it not true that if British Airways were not a nationalised airline, but a private sector company, it would have been declared bankrupt long ago?

In the last part of his question my hon. Friend certainly puts the issue rather brutally, but, many people might think, accurately. It is absolutely right that the House should be aware of the massive support that British Airways has received from the taxpayer by means of the national loans fund and public dividend capital, amounting to £10 million a year, injected over the last five years, on which it has not recently been repaying its dividend. Its private sector debts are guaranteed by the Treasury, which means a preferential rate of interest. It also benefited at no cost to itself from the exchange cover scheme when that scheme was in operation. It has had £160 million of PDC written off. Its Concorde support programme was funded by the Government. There are many other points that I would raise if time were available.

Will the Under-Secretary of State take an early opportunity to withdraw the statement he has made on a number of occasions that British Airways has been subsidised? What were the subsidies? Is he aware that he gave an answer only last Friday indicating that over the last five years British airways had paid £100 million to the taxpayer and received £50 million back. That means that the taxpayer is £50 million up if one takes out of the calculation Concorde, which is a separate operation?

I thought I had made it clear even to the right hon. Gentleman that British Airways has benefited from taxpayers' support by at least ten separate means. If preferential rates of interest from the national loans fund and preferential rates from any private sector borrowing are not benefits, I cannot think what are. In addition, it has benefited from the exchange cover scheme. As for subsidy, it had £160 million written off. Furthermore, Concorde was subsidised by the taxpayer to the tune of £10 million every year. This also existed under the Labour Government.

Does the Under-Secretary of State realise that it is wrong to try to imply that the losses on Concorde result from any commercial mismanagement on the part of British Airways? Concorde is a national project subsidised in France and in Britain. It is the decisions of Governments that have led to subsidies and to losses. Does the Under-Secretary understand that one of the obligations of a Minister of the Crown is to play fair with the industries that he is supposed to support?

I am only too well aware of my duty to play fair. It is precisely because I am playing fair to the taxpayer that I emphasise the massive support that the taxpayer has given to British Airways over the years. I am extremely surprised that the right hon. Gentleman is apparently not aware that British Airways is claiming to make a profit out of Concorde at the moment, that it thinks it will do so in the years to come, and that it is extremely keen to keep it.

On the matter of improving the financial position of British Airways, will my hon. Friend confirm that the baggage handling dispute has improved the service to British Airways' customers and has also reduced the pilferage from those customers—

If this is absolute rubbish, will my hon. Friend say so? If it is true, however, will he encourage British Airways to draw the obvious conclusion and perform accordingly?

I shall encourage British Airways to draw the correct conclusions from what is happening. The manner in which other members of British Airways are acting in this crisis is a splendid tribute to the spirit that still exists within the airline.

Is the Under-Secretary of State aware that the dispute is the fault of British Airways, which will not respond to an ACAS initiative to engage in negotiations with the Transport and General Workers Union? Is he also aware that this is a dispute in which British Airways has locked out its own staff despite guarantees from the executive council of the Transport and General Workers Union to meet some of the negotiating deadlines? If there is a deterioration in British Airways finances as a result of this dispute, it is its own fault.

I certainly do not confirm what the hon. Gentleman says. The details of the dispute and how it is handled must remain matters for the British Airways board.

Cars (Imports)


asked the Secretary of State for Trade how many British cars have been privately imported during the last 12 months.


asked the Secretary of State for Trade what proportion of privately imported vehicles is manufactured overseas.

Separate statistics of new cars imported personally, whether of United Kingdom or foreign manufacture, are not available.

I do not know whether I dare thank the Minister for that reply. Is the hon. Gentleman aware that, in addition to the import of cars for personal use, there is a strong rumour that British companies will be allowed to buy their car fleets abroad? If that is so, does not the hon. Gentleman agree that it will greatly harm the motor industry in Britain? What will he do about it?

In general, would it not benefit British customers and, in the long run, producers, if cars had to be made as cheaply in Britain as they are on the Continent?

My hon. Friend has emphasised a tremendously important point. It would not be in the long-term interests of anyone in Britain if our motor car industry did not strive to become efficient and competitive in full world market terms at the earliest possible moment.

If the Government believe that the retail margins on sales of new cars are too high, might it not be better to refer that to the Director General of Fair Trading under the Competition Act than to make it easier for foreign-based people such as civil servants, defence personnel and—according to The Times—even Ministers to bring in cheaper foreign cars?

The hon. Gentleman has begun from the wrong point. Pricing decisions are for the commercial judgments of manufacturers and dealers, acting within the requirements of the competition rules of the United Kingdom and the EEC.

"The Sunday Times"


asked the Secretary of State for Trade if he will publish his reply to the letter from the National Union of Journalists' chapel at The Sunday Times relating to the infringement of editorial independence.

I have placed a copy of this correspondence in the Library of the House. It is for the independent national directors to consider allegations that editorial independence has been infringed.

In regard to the company articles and the likes, does the Secretary of State agree that Rupert Murdoch attempted to find a way round the original agreements, but was caught? If the right hon. Gentleman had his time again, would he not design the articles quite differently, and would he have taken different action in referring the matter to the commission?

The hon. Member for Battersea, South (Mr. Dubs) has tabled question No. 22 about the titles, and I hope to reach and answer it. The answer to the second part of the hon. Gentleman's question is "No". The answer to the third part is that I do not think that I would depart from my judgment.

Does my right hon. Friend accept that an element of make-believe surrounds the so-called guarantees of editorial independence? In practical terms, they are now unenforceable. Might it not be much more realistic for my right hon. Friend to accept that Times Newspapers Ltd. has a proprietor who, from time to time, may decide to fire an editor pour encourager les autres, and that there is nothing that the Government can do about it?

I do not agree that there is an element of make-believe in the articles. I understand that the question refers to the dismissal not of an editor, but of journalists. If the editor thought that his independence had been infringed, he could have appealed to the independent national directors.

Reverting to the episode to which my hon. Friend the Member for Tottenham (Mr. Atkinson) referred, does the right hon. Gentleman agree that Mr. Rupert Murdoch failed to act within the spirit of the agreement when he attempted to transfer the titles without any reference to the independent national directors? What decision, if any, has been made about the future of the titles? In the light of recent experience, are not further safeguards necessary?

I do not wish to be in any way obstructive, but I owe it as a courtesy to the hon. Member for Battersea, South—who has tabled a question specifically on the transfer of titles—to deal with the matter later.

Given the importance that all hon. Members attach to editorial independence, will my right hon. Friend speculate on the degree of independence enjoyed by other newspapers, such as Militant?

Is the right hon. Gentleman aware that events seem to justify some of the fears that were expressed when Mr. Rupert Murdoch took over Times Newspapers Ltd? If The Times is closed, what approach will the Government take towards ensuring that it reappears in the near future?

I do not agree with the hon. Gentleman's first observation. Clearly both sides of the House would like The Times to continue as a major journalistic force. However, it must do so on an economic basis.

Tourist Industry


asked the Secretary of State for Trade if he is satisfied with the operation of the law relating to the regulation of the tourist industry ; and if he will make a statement.

The principal measure is the Development of Tourism Act 1969, the main provisions of which govern the activities of the British Tourist Authority and the English, Scottish and Wales tourist boards; in general I am satisfied with its operation.

Is the Minister satisfied that present legislation is effective enough for debacles such as the collapse of Laker Airways? Is the law adequate to reinforce the action being taken by organisations such as the Association of British Travel Agents, which I understand are doing their best in difficult circumstances? Perhaps they would like some legislative reinforcement from the Government.

I thank the hon. Gentleman for his words of praise about the action that is being taken. The Government passed legislation so that the air travel reserve fund can back up with the necessary funds any shortcomings that may result from the bond scheme, which is in operation in the first instance.

Does my hon. Friend appreciate that while hotels can be built with the help of grants in industrial development areas where they are not necessary, they cannot similarly be built in non-development areas, such as the South-East, where they are necessary? Will he consider the regulations in that respect?

Laker Airways


asked the Secretary of State for Trade what is the position of the route licences granted to Laker Airways and held by it prior to the receivership; and if he will make a statement about its current status.

The Civil Aviation Authority has given notice to Laker Airways that its air transport licences are suspended. However, whether the suspension takes effect and, if so, the timing of it, depends on whether the airline appeals to my right hon. Friend and on the outcome of any appeal. I understand that the authority has also notified the airline that it intends to publish particulars of a proposal to revoke the licences; this proposal may be the subject of a hearing and subsequently of an appeal to my right hon. Friend, so it would not be appropriate for me to comment further.

No doubt the Minister recalls that on 9 February the Prime Minister spoke about the possibility of de-suspension. Will he confirm that such de-suspension could not take place unless the airline were sold in its entirety as a going concern, with due consideration for the outstanding debts?

The hon. Gentleman has asked an extremely intricate question. I cannot answer "Yes", but I can say that this matter is for the Civil Aviation Authority to decide. It will, of course, take account of the financial state of the company, or any reconstructed company. In addition, it is taking advice on whether the suggested reconstructed company—Brenpage—qualifies under regulation 17.

Given that the Minister's appellate functions require him to be somewhat circumspect when replying to my question, can he at least place on record the Government's hope that, after all the inquiries, two British airlines will still fly both to Los Angeles and New York?

It would be improper for me to say more than to remind my hon. Friend that an application from British Caledonian and, presumably, from any reconstructed Laker Airways—if it is reconstructed—to fly to Los Angeles would be the subject of an appeal to my right hon. Friend the Secretary of State. Therefore, I should not comment.

Will the Minister ensure that a pirate like Laker does not fly again? Sir Freddie Laker paid less in salaries than other airlines and had a registered office in Jersey so that his employees did not have the benefit of going to industrial tribunals. Indeed, Sir Freddie Laker prevented his employees from joining a trade union. The result has been that all of them have lost their employment. Will the Minister protect people in future?

It is a shocking abuse of the House that the hon. Gentleman uses the privilege of the Green Benches to call Sir Freddie Laker a pirate. The hon. Gentleman said that Jersey was being used as a way to get round section 15 of the Act, to which I presume he was referring. As usual, the hon. Gentleman is totally inaccurate.

Sir Freddie Laker did a good deal of good work in the early days, but is the Minister aware that the worst feature of the misfortunes was that so many people who were booked on scheduled flights lost their money? Therefore, is there not a need for cover by the air travel reserve fund, bonding or insurance to make sure that if an airline goes bust—as British Airways could now. if it were not nationalised—such people are protected?

With regard to my hon. Friend's point about scheduled passengers, I ask him to wait until question 15 is answered, when I hope he will receive a satisfactory answer.

Does the Under-Secretary agree, as a matter of general civil aviation licensing policy, that it would not be proper for an airline operator to be able to walk away from hundreds of millions of pounds of debt at home and abroad and then to start operating a licence again without having made any arrangements to pay those debts?

The right hon. Gentleman is putting a hypothetical question to which it would not be proper for me to give an answer. With regard to the laws of receivership, it is the duty of the receiver to get as much money as possible for the creditors. That is what Mr. Mackey and his associates are doing.

European Community (Motor Vehicles)


asked the Secretary of State for Trade what was the balance of trade in motor vehicles with the European Economic Community Six in 1970 and for the latest available year.

Our crude deficit of trade in motor vehicles with the six original members of the European Community was £11 million in 1970 and £1, 290 million in 1980.

From those horrendous figures, is it not undeniable, despite what Lord Stokes told us would happen at the time, that Common Market membership has proved disastrous and catastrophic to the British motor vehicle industry? We negotiate limits on Japanese imports, which will allow in more EEC imports, but will the Minister accept any responsibility for the existence of the British motor industry? We are investing in the motor industry and seeking to build it up, but would it not be wise to negotiate import ceilings on EEC imports in the same way as we do with Japan, regardless of what the Treaty of Rome says?

I note the hon. Gentleman's last comment. If he is advocating that Britain should be outside the Community operating a tariff barrier against it, that would lead to massive industrial dislocation. On the hon. Gentleman's first point, those figures show an enormous increase, but they derive, in part at least, from the policies of companies, such as Ford and Vauxhall, which have Continental-wide manufacturing strategies which, in consequence, lead to high levels of imports, particularly from Belgium and Germany.

Is it not a fact that harmonisation and the role of non-tariff barriers has not gone far enough, particularly in the field of taxation? Will my right hon. Friend bear in mind that motor manufacturers and motor agents are disturbed that British cars can be bought more cheaply in other EEC countries? This certainly appears to be the case with cars manufactured in these countries which have similar costs of manufacture.

My hon. Friend's second point was dealt with by my hon. Friend the Under-Secretary in answer to a question by the hon. Member for Dearne Valley (Mr. Wainwright). It remains the Government's policy to secure as far as possible the mutually agreed dismantling of non-tariff barriers throughout the Community.

Do not the figures show that a large part of the huge trade that we are now supposed to be doing with the Common Market consists of unnecessary car imports that are damaging British industry and employment?

Only someone with a monumentally narrow mind could describe as undesirable a car that had been manufactured in Italy, France or Germany. If the right hon. Gentleman wants to be an anti-Marketeer, he should not be a puritan at the same time.

Does my right hon. Friend agree that the figures also show how desperately uncompetitive the British car manufacturing industry has been compared with the European car industry?



asked the Secretary of State for Trade what steps he is taking to promote the expansion of trade with Malaysia; and if he will make a statement.

During his recent visit to Malaysia my right hon. and noble Friend the Foreign Secretary discussed fully with the Prime Minister of Malaysia the problems for bilateral trade that have arisen. As my right hon. Friend the Lord Privy Seal reported to the House on 11 February, we hope that this meeting will be the beginning of a better understanding.

Will my hon. and learned Friend redouble his efforts to try to find out why relations are so sour between Britain and that responsible, democractic, strong and free country, which has always been a supermarket for Britain's exports? In particular, will he seek to influence the policies of some of his colleagues to ensure that we do not treat some of our loyal Commonwealth friends in the same way as people coming from East Germany and China, while giving massive preference in fees and health care to all members of the EEC?

I assure the House that my right hon. and noble Friend has explored the question of Anglo-Malaysian relations with the Prime Minister of Malaysia. I should say British-Malaysian relations as it is St. David's day. Naturally, the high commission is in constant touch with the Malaysian Government. It is a matter of concern to us that there is reported to be some discrimination against British bids in the public sector in Malaysia. I assure the House that I am not aware of any discriminatory measures against Malaysia or its residents by the present Administration.

Will my hon. and learned Friend seriously consider sending the Minister for Industry and Information Technology to Malaysia, which has a ripe market for such technology and is looking to this country to assist it?

I am sure that my hon. Friend will take note of my hon. Friend's comments. It is for him to assess the opportunities in the light of public statements that have been emanating from Malaysia.



asked the Secretary of State for Trade what steps he is taking to redress the imbalance of trade with Japan.

The Government—along with the rest of the European Community—are continuing to press the Japanese to open their market to our manufactured goods and to limit exports in sensitive sectors. The Japanese Government have recently announced a number of measures to improve access for imports from overseas, but I made it clear in Tokyo last month that, while I welcomed these steps, much more would need to be done.

Does the right hon. Gentleman agree that he has perhaps made a mistake in his softly-softly approach, particularly as there is an adverse trade balance of more than £1 billion? The Japanese will always parley while they take the barley. Does the right hon. Gentleman further agree that it would be best to say to the Japanese that we will import as much from them as we export to them—no more, no less?

That would be a dubious proposition from a country that has so much to gain from multilateral trade. The only approach that has any likelihood of success is one that links the interests of the West European nations and the United States. That will remain the centrepiece of our approach

As our deficit in manufactures with Germany last year was twice what it was with Japan—£2 billion—what is the logic of insisting on voluntary restraint on Japanese imports but not on German imports?

There are three reasons. First, Germany does not have the massive balance of payments surplus that is causing difficulty to other countries. Secondly, Germany has an open market for British goods. If we have the competitive skills, we can sell on that market. Thirdly, German penetration of the United Kingdom market is not based on a narrow range of items.

Has not the Director General of Fair Trading, under section 2 of the Competition Act 1980, the power to prevent the distribution of dumped goods where they distort trade and where such action can be construed as an anti-competitive practice? Will the Secretary of State suggest to the Director General that he should use those powers and accept applications by British manufacturers of, say, footwear, who are in competition with Japan, to restrict the flow of such products to British markets?

I shall look into that important, though somewhat. esoteric, point and write to the hon. Gentleman when I have concluded my investigations.

In view of the marked difference of opinion among anti-Marketeers as to whether Japan is more to blame than the EEC, is it not safer to cling to the conclusion that we need open trading and that there is no substitute for that for a country, such as ours, that depends on exports?

Yes. I have a great belief in open trading, although it is qualified in certain circumstances, as with the MFA and, indeed, trade with Japan.

Is the Minister sure that restricting Japanese imports is not a puritan attitude?

Hire Purchase Act 1964


asked the Secretary of State for Trade whether he is satisfied with the working of the Hire-Puchase Act 1964.

Does my hon. Friend agree that someone who might buy a secondhand product, for example, a car, which is subject to a leasing agreement does not have the same protection under the Hire-Purchase Act 1964 as someone who might innocently purchase a secondhand car that might be subject to a hire-purchase agreement? If so, does he further agree that thousands of people could be driving cars which, for reasons best known to others, they do not own? Will my hon. Friend bring forward legislation to amend the apparent anomaly in the Act?

I share my hon. Friend's concern about the innocent private buyer. I am grateful to him for his proposed amendment to the Supply of Goods and Services Bill. I am urgently considering a number of legal and other aspects of the matter, particularly whether the amendment is within the scope of the Bill. I shall be in touch with him on all these matters at the earliest possible moment.

Does the Minister agree that there is no possible reason of principle why the same protection should not apply to a consumer of a product on a leasing agreement as to a consumer of a product on a hire-purchase agreement? Would the Government, as the first single piece of primary consumer legislation for which they have been responsible in the past 34 months, amend the Act?

I have a great deal of sympathy with the hon. Gentleman's feelings. I agree that the innocent private purchaser is likely to be in a weaker position to bear a loss than a finance company. If the hon. Gentleman would bear with me while we consider the legal aspects, and particularly whether the matter comes within the scope of the Bill, I shall do my best to be helpful.

Air Travellers (Travel Insurance)


asked the Secretary of State for Trade if he has any proposals to extend protection of air travellers, other than those on package tours, in the event of the failure of the airline.


asked the Secretary of State for Trade if he will introduce legislation to provide protection for air travellers who buy tickets on airlines which become insolvent.

At present I have no plans to introduce legislation on these lines. This is a complicated and difficult problem involving as it does an international industry. However, as I am sure my hon. Friends will be pleased to hear, I have instructed my officials to review the position to see whether there is any practicable way in which protection could be given to the scheduled air traveller.

I welcome that move. Will my hon. Friend confirm that among the matters that his officials might take into consideration is the possibility of a small levy on each scheduled airline ticket to enable a fund to be created comparable with the one that was used in the recent Laker situation to protect people who have gone abroad on package tours? Would it also be within their orbit to take account of the possibility of a foreign airline failing, tickets for which having been purchased in the United Kingdom?

I thank my hon. Friend for his welcome for the important review. I assure him that all those points will be covered within it.

Does the Minister agree that it is not at all difficult to make such provision? Would it not be possible to introduce a bonding scheme along the lines of that operated by ABTA? Has the promise that Tiny Rowland made on television to meet the costs of scheduled air travellers been fulfilled?

The promise made by Mr. Roland Rowland was that he would pay the costs of scheduled tavellers if and when he was in charge of the air company. Perhaps I might ask the hon. Gentleman why the Labour Government did not introduce a bonding scheme. If he is baffled, I can give him the answer. It is an extremely difficult and intricate matter, involving foreign airlines. We shall certainly look at all the intricacies and difficulties in our review.

When making a booking no air taveller is likely to assume that he might lose his money as a result of a company's bankruptcy, so should not travel agents at least make the position clear to people booking tickets and provide them with an opportunity to take out insurance

That is an interesting suggestion. No doubt representatives of the travel associations will take it to heart.

Will the Minister reconsider what he said to the hon. Member for Norwood, (Mr. Fraser), as many hon. Members may feel that Mr. Rowland's promise was unqualified?

As I understand it, Mr. Rowland was saying what he would do were he ever in a position to be influential in the airline.

Will my hon. Friend ask his officials to look at the air travel reserve fund, which contains a large amount of money, to see whether some of that can be used to compensate people who, although not scheduled passengers, booked hotels through Laker as well?

The fund contains about £18·5 million. I shall have my officials look at the matter. There is a difficulty in making people who paid a surcharge when they were going on a package holiday pay for the problems of those going on scheduled tickets.

Laker Airways


asked the Secretary of State for Trade whether problems faced by the travelling public following the collapse of Laker Airways have yet been resolved; and if he will make a statement.

Laker Airways scheduled passengers overseas were all brought home successfully, thanks to the generous efforts of other carriers. The bonding arrangements, provided by Laker's tour operating companies as a condition of their holding air travel organisers' licences, made available funds to bring home inclusive package tour customers from this country who were already abroad, and I understand that all these people have been repatriated. Together with the air travel reserve fund, the bonds should ensure that no one who has booked an inclusive air package holiday or advanced booking charter with one of the Laker tour operating subsidiaries loses financially. Unfortunately, scheduled ticket holders who had not yet made their journey with Laker Airways are unsecured creditors of the company and as such should contact the receiver if they have not already done so.

The hon. Gentleman said "should". Is he aware that many Spanish hoteliers have said that they intend to sell their Laker bed contracts, despite the fact that Laker Tours and Arrowsmith have been purchased by Saga and Greenall Whitley? Will the hon. Gentleman seek assurance from the two companies that every person travelling this year through them, particularly to Spain, has guaranteed accommodation, despite the threats of Spanish hoteliers?

I am sure that the two companies will need no urging from me to do their best for all who booked through Laker subsidiaries. It is entirely a commercial matter.

When my hon. Friend is considering whether protection should be afforded to scheduled airline passengers, will he bear in mind that the air travel reserve fund was set up by the Labour Government by inposing a levy on package holiday passengers to bail out other package holiday passengers and that it would be airway robbery if, many years later, the money were to be used to refund to people the cost of booking on a schedule airline?

My hon. Friend has put the matter fairly. We have the air travel reserve fund because of the extremely—I must watch my adjectives—ill-judged action by the right hon. Member for Bristol, South-East (Mr. Benn), who set the whole thing in motion to begin with.

Does the hon. Gentleman agree that some of the problems for passengers and other creditors arose because Sir Freddie Laker made misleading statements about the viability of his enterprise three days before the collapse? He said that £60 million had been secured to rescue the company and that his confidence was rising ever higher. Does the hon. Gentleman believe that those statements were justified?

I have no doubt that when Sir Frederick made those statements he was under the impression that they were correct. What is more, when this matter was reported in The Guardian and the Daily Mail the following day, the reports were put side by side with statements from bankers saying that Sir Frederick had probably jumped the gun.