Select Committee on European Communities Report


Letter from Glenda Jackson CBE MP, Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions, to Lord Tordoff, Chairman of the Committee

  Following my submission of an Explanatory Memorandum on these two Commission proposals on8 September 1997, the House of Lords Select Committee on the European Communities indicated that Sub-Committee B has decided to hold an Enquiry. I have heard from my officials that the Committee wishes to stage the Enquiry before the Summer recess. I fully understand why the Committee wants to hold an Enquiry on these proposals, which could have wide-ranging ramifications on the future development of the UK's aviation relations with third countries, but I have some concerns about timing which you might wish to consider.

  As you know, for many months the UK competition authorities and the European Commission have been carrying out separate investigations into the competition aspects of the proposed BA/AA alliance, under Articles 88 and 89 of the Treaty of Rome respectively. Negotiations between HMG and the Commission on reconciling the two sets of conclusions and taking the matter forward, in what is largely unchartered legal territory, are now coming to a head. As part of this process we expect that before long the Commission's draft Decision will be the subject of discussion in Brussels in the Advisory Committee of Member States. Looking slightly further ahead, we hope to move on to bilateral negotiations with the US Government, with a view to liberalising air transport between our two countries against the background of a BA/AA alliance conditioned by the competition authorities on both sides of the Atlantic.

  Member States have shown little enthusiasm for the Commission's proposals, which are not under active discussion in Brussels. We shall not be taking them forward during our Presidency, and there are no indications that the Austrian Presidency will do so. In the circumstances I can see merit in deferring the Enquiry until the next Parliamentary session, when hopefully the dust of BA/AA will have settled somewhat. I am particularly concerned that raising the profile of the wider arguments about competence in questions of aviation competition, and the closely related issue of competence in negotiating air service agreements with third countries, could have a damaging impact on the series of delicate negotiations with both the Commission and the US Government. I also wonder whether the current focus of attention on the BA/AA case would create the ideal climate in which to hold a dispassionate Enquiry on what are issues of considerable long term significance, going well beyond this particular case. Indeed, an Enquiry held slightly later might well benefit from the participants being able to draw in a considered way on the experience gained in the BA/AA case.

  I emphasise that my concern is purely one of timing, not of substance. I think an Enquiry of the kind the Commission envisages could make a valuable contribution to public debate on important aviation issues, and this Department would welcome the opportunity to participate. But there would be good tactical reasons from a UK point of view for holding over the Enquiry until later in the year.

  I am sorry that I am unable for diary reasons to meet you at the times you have suggested, but I would of course be happy to discuss this matter further with you in person if that would help.

13 May 1998

Letter from Lord Tordoff, Chairman of the Committee, to Glenda Jackson CBE MP, Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions

  Thank you for your letter dated 13 May on the above proposals in which you outline your concerns over the timing of Sub-Committee B's enquiry. Your letter was considered by Sub-Committee B at its meeting this morning.

  While the Sub-Committee appreciated your concerns, it felt that the enquiry dealt with issues much wider than those raised by the British Airways/American Airlines case, and could be conducted so as to avoid the dangers to which you referred. Accordingly the Sub-Committee agreed to continue with its enquiry, which it plans to complete before the summer recess. In carrying out this enquiry, the Sub-Committee will keep very much in mind the need to avoid involving itself in the British Airways/American Airlines case.

14 May 1998

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