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Air Transport In Europe

Volume 491: debated on Thursday 10 December 1987

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My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, following the meeting of the European Community Transport Ministers' Council held on 7th December, agreement was reached on a total package covering air capacity and market access; and what was the action agreed on for hastening the liberalisation of air transport in Europe.

The Parliamentary Under-Secretary of State, Department of Transport
(Lord Brabazon of Tara)

My Lords, I am pleased to say that a package of measures liberalising civil aviation within the Community was agreed by the Transport Council last Monday. This provides important new opportunities for airlines to introduce lower fares, to decide for themselves what capacity to operate, to open up new routes and for greater competition.

This is a major achievement. But it is only a first stage. The council is committed to agreeing on a second, more far reaching, step by 30th June 1990 as part of the wider process of completing the Community's internal market by the end of 1992.

My Lords, I welcome this initial first step and congratulate the Government on their sustained effort to bring about the signing of this agreement, but is the Minister aware that regretfully I have reservations? I believe that the original proposals have been watered down significantly because of strong opposition from member states of the Community.

Will the Minister answer two brief questions? Does he feel able to agree that substantial benefits to airline passengers are unlikely until more radical measures have been introduced; and that the present agreement will have less far-reaching effects on fares than people imagine? Lastly, can he tell us when the agreement comes into force?

My Lords, we certainly would not have agreed to the package if we did not believe that it was worth having. In fact it is based largely on the UK initiative and took shape during our Presidency last year. It will allow airlines to compete over the level of discount fares and to introduce new cheap fares. It relaxes the strict 50–50 capacity-sharing rule where it still exists, allowing airlines to operate more flights without being limited to matching the number flown by foreign airlines.

It will open up 60 new routes for UK airlines between hub and regional airports. But, most importantly—and for this reason in particular I think that we shall see cheaper fares—it allows direct head-to-head competition, known as multiple designation, on all the major trunk routes in the Community. This will mean increased choice for the consumer. The package comes into effect on 1st January next.

My Lords, I welcome this package agreement, but does the Minister agree that there could be a danger of believing that liberalisation is deregulation? This is particularly important as on 9th November the Secretary of State said in answer to a Question in the other place that the air space over London is crowded. Must we not keep that in mind? Therefore we will still need to regulate the capacity our airports can cope with.

My Lords, yes. I can assure your Lordships that all member states take their responsibilities for air safety extremely seriously. Questions of safety and congestion are kept under constant review. However, there is nothing in the new package that in any way weakens our present stringent safety standards and procedures or our determination to enforce them. The airports policy White Paper in 1985 took into account effects of liberalisation. As I said in an earlier answer, there is great potential for development of regional airports in this package.

My Lords, is the Minister aware that I hope my reservations will prove groundless, but I doubt it? If I put down a Question for Written Answer will he have the details of this agreement printed in Hansard? It will then be much easier for all quarters of the House to realise what has been put forward.

My Lords, certainly. Copies of the instruments as adopted will be deposited in the Library as soon as they are available from the Commission. However, I should also be happy to provide a summary of the effects of the package in the form of a Written Answer if the noble Baroness puts down a Question.