asked the Secretary of State for Transport what has been the effect of the more liberal air services agreement with the Dutch Government on traffic between Holland and the United Kingdom.
Excellent. In the first eight months, London-Amsterdam traffic was 16 per cent.)higher than it was a year before, compared with an average growth in air traffic of 9 per cent. between London and Europe as a whole. Six more services have begun between the United Kingdom and the Netherlands and a further 10 are proposed.
I am grateful to my hon. Friend for that answer, which fully illustrates the beneficial effects of deregulation and competition. Having already achieved the same deal with Luxembourg, will he now try to negotiate similar arrangements with other countries, such as France and Italy? May we look forward to further progress in that respect?
I am grateful to my hon. Friend for mentioning the Luxembourg agreement, which we hope will be a model for future agreements with other countries. We are especially pleased with the arrangements whereby the airlines can set their own tariffs, subject only to the very rare cases in which both Governments disagree with them. In the case of Luxembourg, the lowest return fare has already fallen from £98 to £73.
If the Minister is really such a great believer in free enterprise, why has British Airways been offered a subsidy of £7 million to run a doubly expensive air service to the Falkland Islands? I should have thought that if the Royal Air Force could run services more cheaply than British Airways—
Order. That is a little wide of the question—unless the Dutch aircraft go there, too.