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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.

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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?

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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.

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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.

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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

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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?

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