Recommital is necessary in respect of amendments Nos. 1 and 2 in the name of the Minister which are amendments to the title.
Air Transport Bill, 1984: Report and Final Stages.
On a point of order——
Amendment No. 2 is consequential on amendment No. 13 so amendments Nos. 1, 2 and 13 will be taken together by agreement.
On a point of order, amendment No. 3 also relates to the Long Title.
It is proposed to take it separately.
On a point of order, it is proposed here to make three amendments to the Long Title of the Bill. They are major amendments changing the nature of the Bill as it was read a Second Time.
That seems to be a point which the Deputy may make in his contribution on the amendment.
Is it not a point of order? Is it in order to go ahead with a major change in the Bill, changing the nature of the Bill as it was read a Second Time?
I have already ruled that the amendments are in order and the Deputy can make the points he is making now in his contribution, and he can vote on them.
Is it correct that these three amendments and amendment No. 13 are in Committee now?
We are taking amendments Nos. 1, 2 and 13 together and they will be in Committee.
Deputy O'Malley made a point that there are amendments to the Bill. Surely that is what the whole process of going through Parliament is about. I have sat for too long in this House observing Ministers coming in with Bills which are unalterable, just making a charade of going through Parliament. Parliament is supposed to be a forum for discussing and improving legislation.
(Interruptions.)
When a Minister is open to suggestions to improve legislation——
What is the point in confining 27 amendments to two-and-a-half hours?
As Deputy O'Malley pointed out this morning, this Bill has been on the Order Paper for almost two years and Deputy O'Malley has singlehandedly filibustered this Bill. No other Deputy——
And got enormous changes made.
——has been against the Bill. Deputy O'Malley has made about 14 Second Stage speeches on it.
Bill recommitted in respect of amendments Nos. 1 and 2.
I move amendment No. 1:
In page 2, Long Title, line 13, to delete "FOR THOSE PURPOSES".
Deputies will recall that on Committee Stage on 4 December last at columns 1080 and 1085 to 1092 of the Official Report, Deputies sought to broaden the scope of section 5 in various ways. I refused to accept those suggestions for a number of reasons but indicated my willingness to see if anything could be done on Report Stage to broaden the scope of the register. Having considered the matter, I have decided that, as I will use the powers of approval in the Bill to regulate tariffs on scheduled air services, it will be useful to extend the scope of this Bill so as to incorporate in the register particulars of any application which I might receive for the inauguration of a scheduled air service to, from or within the territory of the State. That is the purpose of these amendments. In enabling interested parties to make representations to me in regard to particular air service applications, I believe this will assist the process of decision making in my Department in the area of scheduled air services. The amendments to the Long Title are necessary now that the scope of the register extends beyond matters strictly related to the regulation of airline tariffs.
Is amendment No. 1 agreed?
On this, I would like to reiterate the point I just made. The whole nature of part of this Bill is being changed quite radically. Various objects and objectives which the Bill had when introduced and read a Second Time are now being taken out and various things that I suggested during the debate are being inserted. Incidentally, although the debates in this House were prolonged over a period of time, they were quite short debates. The whole Bill has taken less than ten hours in this House even though it has dragged on now for 20 months because it was only ordered every six or nine months by the Government.
Various suggestions I made in relation to the objectives of the Bill which were not in it as introduced and read a Second Time are now being put into it by the Minister and I welcome that. I deplore the fact that two and a half hours from now the whole debate on the Bill including 27 amendments will have to come to an end under a guillotine agreed between the main Opposition party and the Government. These objectives are different now from what they were when the Bill was introduced and read a Second Time. Is it in order under Standing Orders and the precedents of the House to do this in this way without a direction being given by the House to the committee of the whole House that it can consider the Bill with different objectives and with a different Long Title? The changes being made in the Long Title are not drafting changes but changes of a fundamental nature. Major items which I objected to in the Bill are being taken out now by the Minister although the Minister scorned me for a long period and told the House that everything I said was stupid and so on.
I scorned the Deputy for gross inaccuracies throughout the debate.
We are now in a position that very major amendments are being made, amendments which go to the root of the Bill and make it in many respects a different Bill. I welcome that fact. I am simply querying the procedure as to whether or not — as I have seen happen in similar circumstances — a direction has to be given to the House to reconsider the Bill with different objectives and with a substantially different Long Title, not just some minor or consequential amendment as is seen from these three, especially amendment No. 3 and the other two which are related. On the assumption that the guillotine has to go through because the Opposition agreed to it — presumably they wish to curtail the debate as much as the Government do — by 1.30 p.m. the Minister will have made 31 amendments to this Bill between Committee Stage and the 14 amendments he put down today.
Is that criticism or praise?
It is praise.
The Deputy has not lost his Fianna Fáil hat yet.
It is a good hat to wear.
Order, please.
There are 31 amendments to a Bill which we were told on 27 June 1984 was an emergency measure which had to be put through this and the other House within 48 hours or there would be chaos in Irish aviation and that the whole system was liable to breakdown.
That is a slight exaggeration. The Deputy cannot be accused of understatement.
I am merely quoting what the Minister of State said at the time, that it was an emergency measure to close a legal loophole which had arisen as a result of a decision by the Supreme Court.
The Chair feels that that has probably been said before and the Deputy should confine himself to the amendments.
This measure had to be through in 48 hours on 27 June 1984 and it is now being amended 31 times by the Minister. That is an interesting commentary on the whole situation, on the genesis of the Bill and the way it has been dealt with since. The debate has been clearly very useful because while singlehanded I had to carry on most of it since Second Stage. I have succeeded in having the Bill amended by the Minister 31 times——
I was listened to also.
Deputy O'Malley has complained about shortage of time but he is again making a Second Stage speech.
I can see why the Minister is so anxious to guillotine the Bill.
I am anxious to get on with the business of the House.
Remarks on Committee Stage should be confined to the section with which we are dealing.
It is Report Stage.
This has been recommitted. Deputy O'Malley's remarks should be confined to amendments Nos. 1, 2 and 13.
I do not know which amendments will be taken together and I now have to look at amendment No. 13 as well as Nos. 1 and 2. Amendment No. 13 deals with adding things to the register. Does that mean that there will be four items in the register instead of two?
The purpose of amendment No 3 is to include in the Bill the thrust of certain amendments tabled by Deputy O'Malley.
I welcome the fact that it puts additional matters into the register which I have sought over a period of 12 months although I was told with some scorn and derision that they were unnecessary and inappropriate. I sincerely thank the Minister for this but one would like to have some time——
Deputy O'Malley said I treated him with scorn and derision. At what stage did this occur?
Every time I say something with which the Minister disagrees, will he continue to interrupt me?
I am sorry.
The Minister gave an extremely brief introduction to these three amendments. I suppose he does not want to highlight the major changes which have been made. It means I have to tease them out. It is proposed to insert the following:
Any application to the Minister by or on behalf of an air carrier for authorisation under section 7 or 8 of the Act of 1965 to operate an air service to, from or within the territory of the State and in respect of which operation the Minister would, if the authorisation were granted, propose to issue a notice under section 3 of this Act. Does that apply to all applications made to the Minister?
If the Deputy wants a reply he should resume his seat.
The register will apply to all applications made in respect of scheduled services.
Why do they not apply to charters?
Because we do not control charter fares.
The Minister controls charter licences.
That is correct. This amendment deals with notices under section 3, all of which relate to tariffs for scheduled services. Therefore, the amendment will affect all tariff applications in respect of scheduled air services.
Amendments Nos. 14 and 15 are relevant to this because they are adding things to the register. Will they be discussed separately?
We are now dealing with amendments Nos. 1, 2 and 13. It is proposed later on to take amendments Nos. 14 and 15 together.
Unfortunately, I will probably never be able to discuss amendments Nos. 14 and 15 because we will never reach them.
The more time we spend on these amendments, which seem to be agreed, the less time we will have to deal with other amendments.
It is very unsatisfactory that something like this should be guillotined as it is of considerable importance. Major amendments are being made and these amendments are being guillotined.
The time schedule has been agreed.
I know it has, but I am entitled to protest. This Bill is being fundamentally changed and we are up against this guillotine. I am told that, if I want to discuss amendment No. 14, I will have to stop talking now.
The Deputy has said that amendment No. 1 is agreed.
It is, but I understand this Bill reasonably well because I have been working on it for 20 months. Amendments Nos. 14 and 15 deal with exactly the same point as amendment No. 13.
We will discuss them when we come to them.
If we discuss amendment No. 13 without amendments Nos. 14 and 15 it is a bit meaningless because they all propose to add to the register matters of the kind I have been suggesting for the past year. You cannot get a complete picture without taking all these amendments together.
The agreement was to take amendments Nos. 1, 2 and 13 together. When I say "subject to agreement" it means the House may or may not disagree at that stage.
Amendment agreed to.
I move amendment No. 2:
In page 2, Long Title, line 14, after "1965" to insert ", and to provide for other matters connected with the matters aforesaid".
Amendment agreed to.
Amendments Nos. 1 and 2 reported.
Recommital is necessary in respect of amendment No. 3, which is an amendment to the Title and consequential on amendments Nos. 26 and 27. Amendments Nos. 3, 26 and 27 together, by agreement.
Bill recommitted in respect of amendment No. 3.
I move amendment No. 3.
In page 2, Long title, lines 14 to 18, to delete ", and to extend the power of the Minister for Communications to revoke or vary licences under the Transport (Tour Operators and Travel Agents) Act, 1982".
This amendment is related to amendments Nos. 26 and 27, whose combined effect is to remove an explicit linkage between tariff offences committed under this Bill and my consideration of applications for travel agent/tour operator licences under the Transport (Tour Operators and Travel Agents) Act, 1982. While lack of time prevented the House from considering this matter on Committee Stage in early December, I was aware of concerns which both Fianna Fáil and Deputy O'Malley had on this issue at the time.
Would the Minister speak more slowly, please?
Certainly. It is, I believe, important to advise the House at this stage as to my motivation for including this explicit linkage in the Bill in the first instance. Opponents of the provision have argued that the 1982 Act was never intended to be used in this fashion and that its only purpose was to provide consumer protection. That is not correct. The tour operators legislation has twin objectives: protection of the travelling public from stranding, etc. and the putting of the travel trade on a sounder footing.
The sale of scheduled service air tickets forms a major part of any travel agent's business and it was because of the close link between that part of an agent's work and the tariff matters covered in the Air Transport Bill that I considered it appropriate that I should include an explicit link between the two codes by means of section 11.
Section 6 of the Transport (Tour Operators and Travel Agents) Act, 1982, provides, inter alia, that the Minister shall refuse a licence to carry on business as a tour operator or as a travel agent if he is not satisfied, having regard to past activities, that the applicant is a fit person to carry on the business. Convictions of a serious nature under the air transport code would clearly have to be taken into account by me in carrying out the statutory requirements of the licensing régime provided for in the 1982 Act, and it was only to make that crystal clear to the travel trade that I included the section 11 provision.
Notwithstanding this, the Bill already makes provision for significant financial penalties and this should be sufficient to deter any intermediary, such as a travel agent or tour operator, from persistent breaches of approved tariffs. Indeed, I could only envisage a Minister resorting to use of the 1982 Act where either successful prosecutions had failed to be effective or where that intermediary's activities were having a disruptive effect on the market, thereby putting at risk the very viability of scheduled air services on the North Atlantic route, for instance, without which the Irish economy would suffer.
It is relevant to add that even if, as a last resort, the Minister were to revoke or refuse to renew a licence granted under the 1982 Act for repeated breaches of this Bill, the intermediary concerned would have available to him the significant appeals machinery provided for in section 9 of the 1982 Act and would be entitled to continue trading as a tour operator or travel agent pending the outcome of his appeal to the High Court, provided that he had a valid bond to protect his clients.
Subject to the clear understanding that my ability to take account in an appropriate case of a conviction or convictions under the Bill will not in any way be diminished in considering whether a person is a fit and proper person to carry on business as a tour operator or travel agent under the 1982 Act, I am prepared to delete section 11 from the Bill. My purpose in so doing is to go some way towards meeting the concerns which have been expressed and to indicate that I would only envisage such action being taken by any Minister for Communications in exceptional circumstances. However, I believe that it would be wise to keep that option open for any future Minister and, subject to this understanding, I am prepared to delete section 11 from the Bill.
I have a certain proprietorial interest in the Transport (Tour Operators and Travel Agents) Act, 1982, as I was responsible for putting it through the House. I take the Minister's point that it was two pronged, but the protection of the consumer was uppermost in my mind and in the minds of my officials at the time. I remember spending a very nervous summer when we could not put this legislation into effect, although we had it on the Statute Book, because there were some cowboys ranging around and some people who were unfortunate in business. I remember sending a civil servant to one particular gentleman, who was a very dubious operator, to buy a ticket; but the bird had flown. The girl said that all the tickets had been sold, but the fact was that the operation was very dubious and this was precisely the kind of operator that Act was put on the Statute Book to catch.
Modestly, I claim that the amendment I put down to this Bill was the most important and substantive one. I will be referring to this later. My thesis is that the Minister should not at any time refuse a fare solely on the basis that it was too low. That is essential to the operation of any Bill having regard to the first point the Minister made on this amendment, namely, that the protection of the consumer is paramount. I mentioned at an earlier stage that the idea of coralling the tour operators and travel agents punitively did not find favour with very many people in the House and I am glad of any amendment which tends to remedy that.
I am delighted to hear that there were many people in the House with whom some of these matters did not find favour, because we were led to believe I was the only one with whom they did not find favour.
It was on the record of the House.
It is a pity that when we had divisions on these matters I had to stand alone.
I would call the attention of the House to the fact that when Deputy O'Malley spoke——
The Deputy should speak through the Chair.
I have noticed in recent times that when one is victorious one suddenly acquires many allies which one might not have had in times of difficulty.
In fairness to Deputy Wilson, he also had an amendment down that was not reached.
It was guillotined on Committee Stage also. We did not discuss the latter part of the Bill on Committee Stage. The total time devoted by the House to this Bill in the past 20 months has been about ten to 12 hours which is scarcely excessive. More is spent on a sterile budget debate in one week.
I welcome the amendment in the name of the Minister to take out one of the most objectionable features to which I objected strenuously on 27 June and also in passing on Committee Stage. In the speeches I made, which were described by the Minister as of a Second Stage nature, several times I referred to my strong objection to this penal provision and I put down an amendment to remove it in its entirety. I welcome the fact that it has now been removed in its entirety. It was one of the penal penalties which I found most objectionable from the start.
Let us spell out the situation with regard to the penalties. Three major penalties were proposed in the Bill against travel agents, airlines and others for selling airline tickets too cheaply——
That is wrong.
The first was a jail sentence of two years for selling tickets too cheaply and that has been removed. The second was the revocation of the licence and that has been removed. The third was a fine of £100,000 which has now been reduced to £50,000. I think we could give the Minister two and a half marks out of three, which is honours in anyone's terminology. Some of the highly objectionable features and the ridiculous penal provisions in the Bill have been removed and if that is not a fundamental change I do not know what is a change.
I do not see how anything could be more fundamental, particularly when I recall the defence of the provisions made in June 1984 by the Minister of State, Deputy Nealon. Now that the jail sentence, and the revocation of the licence are gone and the fine has been reduced, the only thing that remains is whether this proposed law making it a serious criminal offence to charge too little for an airline ticket will stand up in the European Court. In these circumstances I cannot understand why the Minister persists in going on with the Bill when I understand that the decision in the Nouvelles Frontiéres case is expected in the next few weeks. Does the Minister know what date the court will give judgement in that case?
It is not clear yet.
I am sure the Minister will agree it is likely to be within the next few weeks. I understand that in November the court indicated that they hoped to give their judgment by the end of January. We are now in the second week of February and that decision may be given in the next week or two. As the House is aware, the Advocate General has given as his opinion, and his advice which he has suggested that the court should follow, that the French Government case is untenable and that French law on this matter should be struck down.
The Deputy is getting very wide of the amendment.
If it is struck down then these provisions will be struck down and the remaining half of the third penalty will be struck down.
I was glad to hear the Deputy express his welcome for the action we propose. However, he is grossly inaccurate in what he has said. I repeat that this Bill is merely clarifying that we have the powers of every other civil aviation authority. There is no connection between this Bill and the case before the European Court.
There is every connection.
The Deputy should know that this administration, with one or two others, are among those pioneering and pressing for greater liberalisation in air transport. That has been the case for over three years.
There could not be a case that is more on all fours with the present situation than the Nouvelles Frontiéres case now in the European Court. Perhaps the Minister was not aware of it on Committee Stage until I drew attention to it. Ireland is one of the few member states who have not entered an appearance in that case for some extraordinary reason because we are as much affected by it as other member states. I have had discussions with the Commission and various other people. They cannot understand why this Bill is being pursued when the very point that is crucial to it will be determined finally by the European Court. Obviously I have no idea of how the court will decide the case but at least we have some lead with regard to the thinking of the court in the matter.
The Deputy persists in dealing with the whole Bill but we are not dealing with the Bill. If he leaves himself time that kind of speech might be in order on Fifth Stage.
I am merely correcting the statement of the Minister that the Nouvelles Frontiéres case is not relevant.
Amendment agreed to.
Amendment reported.
Pursuant to Standing Order 95 (3), I have to report especially to the Dáil that the committee has amended the title to read as follows:
An Act to make further provision in relation to the control of rates and fares charged on air services to, from and within the territory of the State, to make provision as regards the regulation of the other charges relating to such air services and the conditions or other terms on or subject to which such air services are provided and to amend the Air Navigation and Transport Act, 1965, and to provide for other matters connected with the matters aforesaid.
Amendment No. 4 is in the name of Deputy O'Malley. I remind the House that Standing Orders relating to Report Stage of the Bill will apply.
Is the new Long Title to be reported to the House?
I have already reported it.
Is it open to discussion or amendment?
No. We have just dealt with it. The amendments brought about the Long Title I have read out.
It is a major and significant change in the Long Title.
The Deputy has made that clear. We have passed from that now. With regard to amendment No. 4, I wish to make it clear that Standing Orders governing Report Stage will apply here. It is suggested that amendments 4, 22 and 23 be taken together, by agreement.
I move amendment No. 4:
In page 2, line 31, to delete "mail or other cargo and the conditions (including in particular conditions as regards agency or other auxiliary services) or other terms on or subject to which those charges are to be paid or made;".
The whole question of bringing under severe regulation mail or other cargo at this stage of the game in 1986 seems ridiculous. No country that I know of attempts in practice to keep up the price of carrying cargo or mail; indeed, there are all kinds of interesting situations that may well arise, in the context of the European Community in particular, as to whether a country is entitled to force air carriers to set minimum tariffs for the carriage of mail and not allow normal, open, competitive, tendering. Similarly, in regard to cargo there has been little attempt in recent years to specify and enforce rates for its carriage. A provision such as this would be laughed at in any other country.
The Minister's reply to similar suggestions which I made in the past was that he wanted to have these powers, even though he might never use them. That is not the right way to approach the making of law. The 31 amendments that he has made or is in the process of making to this Bill — nearly all as a result of suggestions made by me — bear out the fact that there are certain things that you should not put into law even if you do not propose to use those powers. This is clearly one of those situations. It is a bureaucratic approach. The Department concerned want to have everything tied up and to ensure that nobody can do anything in relation to aviation without their consent. That is ludicrous in this country with 240,000 people unemployed, with our huge deficit and other problems — enacting legislation here for the purpose of prosecuting people for charging too little to carry Irish exports or Irish mail out of Ireland, or foreign mail into Ireland. Happily, he will not now take their licences from them or sentence them to two years in jail, but they could be fined up to £50,000.
I think I am entitled to ask the House, have we any sense at all that we go on with these legislative proposals? They can make sense to nobody except these people of a bureaucratic frame of mind who think it is ideal to have every little item tied up within a bureaucratic framework, so that nobody can look crooked without the permission of the Department in every respect and so that law of this kind could be used against people if there were some reason for doing so, perhaps not related to the actual carriage of mail or cargo.
I am in the difficulty now that this is Report Stage and presumably I cannot ask questions as I could on Committee Stage. I would like the Minister, when replying, to explain to me what the purpose is, at a time of such high unemployment, of enacting penalties against people for charging too little to take goods into or out of Ireland? All of these phrases like "conditions and other terms on or subject to which those charges are to be paid or made" should also be removed. This is a way of trying to ensure that air fares, whether for cargo, mail or passengers, will remain unattractive into or out of this country and unduly high, when all these various conditions and other terms, as they are called, are put into the buying of the ticket. Equally, these phrases should go because it is quite ridiculous that if people sell tickets for less than the recommended price they are committing an offence.
On official British figures, 5 million discounted tickets a year are sold publicly, officially and legally in Britain. There is no effort whatever made by the British Government to move against anybody selling a discounted ticket. We are told then that we are only reflecting the law and practice in other countries. That so patently is not the case that it is a great pity that we should be making assess of ourselves, as we are here, by making ourselves the only country in the world which goes out of its way to prosecute people for charging too little for something and makes it a criminal offence here to do something which is a perfectly normal, laudable and commendable commercial practice in every other country.
In keeping with his contributions throughout this debate, Deputy O'Malley has again stated as a fact something which is not a fact. He has said that 5 million discounted tickets a year are sold legally in the United Kingdom. I presume that the Deputy will stand over that statement.
How many have been prosecuted for doing so?
Yet again, Deputy O'Malley is factually wrong. What surprises me is that throughout this debate a person of his standing, who is held in very high respect by many outside and inside this House has been, uncharacteristically I must say, repeatedly wrong not on matters of argument or judgment but on facts. Here again he is factually wrong.
I explained already, on Committee Stage, my position in regard to the matters covered by the Deputy's amendment. The 1965 Act already empowers the Minister for Communications to control passenger fares and rates for cargo and mail. The current Bill is simply reflecting that position. The fact that currently I choose not to exercise these powers is neither here nor there. I believe that it remains necessary for the Minister to have reserve powers in relation to cargo and mail in the event of predatory pricing on the one hand, or excessive pricing on the other. One of Deputy O'Malley's repeated remarks — he is the lone opponent of this Bill in this House — is that this Bill provides for the jailing of people for selling tickets too cheaply. It does no such thing. It is to control and regulate prices in the national interest as every other civil aviation authority do, including action against those who are charging too much. It is a power to stop people charging too much and it is a power to stop people charging too little. Aviation history is littered with the folly of predatory pricing and the disaster that has followed of liquidations, closures, stranded passengers, etc.
In the matter of conditions applying to particular fares or rates, it is equally as important to have power to control conditions as it is to regulate the level of a fare or rate. A cheap fare of itself is of no benefit to, say, Irish tourism if it is so restricted as to have little appeal to the potential market. Moreover, a debate on fares or rates is a little esoteric if you have no service. Continuity of service is one of the pillars of Irish aviation policies, and no matter what Government come into power in the future, even if Deputy O'Malley becomes Minister for Communications, that would be the case.
The Deputy has a right to reply.
I will answer. It is interesting that the Minister did not answer the question I asked him. I asked him a very specific question but he chose not to understand why. I asked him why, when 240,000 people are unemployed, does he want to make it a criminal offence to charge too little to take Irish manufactured exports out of this country. He did not tell us, and it is not surprising that he did not tell us. He made the point because I described the activity that is going on so widely in England with official approval and everything legal. In a very technical sense probably it is not legal, but it is useful to quote, if I may, from a UK statutory committee report, the Air Transport Users Committee Annual Report for 1980, on this point. Of course, matters have gone considerably beyond that situation since then. Let me quote from that report of 1980:
Many air travellers are now buying tickets at discounted rates from cutprice dealers colloquially known as bucket shops. Although certain illegal dealings by airlines and their agents are involved in at least some of these offers, there can be no doubt that the passenger is not liable to prosecution in accepting them. He is, however, taking some risk either that his ticket may not be accepted if he wishes to transfer to another airline or that, having paid for his ticket in advance, the agent will go out of business before it is delivered. He must weigh up these risks against the considerable discount he may get on the normal fare.
The system is operated by the airlines selling off blocks of seats that would otherwise not be sold, at what are at present often illegally discounted rates, to dealers who can then offer them to the public at most attractive prices. It is common practice for every manufacturer of consumer goods to dispose of surplus stock at a discount. This particularly applies to products with a short life, and probably the shortest life of any consumer product is an airline seat — once an aircraft takes off there is no way that empty seats can be sold.
The situation is aggravated by the time gap between the sale of APEX tickets, ceasing up to three months before the flight and the sale of standby tickets within 24 hours of departure, during which the airlines cannot otherwise sell seats they know will not be bought at normal fares. The system can, therefore, be regarded as being of benefit to both the airlines and their users and the Committee is in favour of legalising the selling of bulk fares for general re-sale by all travel agents.
That was an official statutory committee in Britain describing the situation and making certain recommendations back in 1980. To a large extent the position has developed since then in Britain and the official figures show that five million such tickets are sold with official approval each year.
I have similar quotations from the 1981 and 1982 reports of that committee where they continue to make the same recommendations and say that this should be encouraged on a wide scale.
Does this Bill prevent that?
It does.
It does not.
It does prevent it. The Minister argued in his brief speech, to which I am now replying, on that very point. In 1982 the committee said:
But what is really needed is Government action that will make discounted tickets available to all, with any conditions attached clearly explained and firm guarantees that such tickets carrying no extra risk of the purchaser being stranded or losing his money...
This Bill enables me to do that.
I did not interrupt the Minister during his speech. I invited him to answer certain questions that I asked and he failed to do it. It is deplorable when we have 240,000 people unemployed, when we need all the work and competitiveness we can get, that the Minister's response in a matter like this is simply to prosecute, to make it a criminal offence for someone to charge too little for taking cargo of manufactured exports out of this country. That is pretty shameful.
The provision relating to mail is probably in breach of EC law as the provisions relating to passengers appear to be, prima facie anyway, under the Nouvelles Frontiéres case. For example, I would be very interested to hear what Commissioner Sutherland would have to say in a situation where those tendering for mail contracts within the Community were liable to prosecution for a criminal offence if they tendered too low. This is the kind of thing Commissioner Sutherland wants to sweep aside, and properly so. This is only part of what he has described in the whole air transport regulation system in Europe as the great black hole of the European economy. This is the very sort of thing he wants to sweep aside, and he is going to great lengths to do so in the Commission and in Brussels. It is a pity that he is getting so little encouragement from a Government he was once associated with in this way.
The CII think that this provision making it a criminal offence to charge too little for cargo is ridiculous. Virtually everybody who has been consulted can see no point in this. The IDA, CTT and everybody else think that this is simply ridiculous. Why is it being enacted into law? Why is it a crime proposed to be a crime to charge too little for carrying Irish exports out of this country?
Is the amendment being pressed?
Yes.
Question: "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Amendment No. 5. Amendment No. 6 is related. Amendments Nos. 5 and 6 may be taken together by agreement.
I move amendment No. 5:
In page 2, line 34, to delete "‘fare' includes a fare net of discount;".
These amendments deal essentially with different aspects of the point I have been making on the last amendment, that is, they seek to prevent the prohibition now being brought in on discounted rates whether for passenger tickets, cargo or mail. Apparently the Minister finds that the existing definitions of words like "fare" and "rate" are not sufficiently broad ranging and he wants to include in their meaning a fare or rate net of discount. Apparently that was not the case up to now. In other words, he wants to turn the screw further in order to regulate the whole system to the greatest possible extent and to criminalise the normal commercial activity of discounting fares or tickets. It seems crazy that with all our economic difficulties we should constantly seek greater and greater State involvement in the normal commercial process, preventing market forces from operating as they do in neighbouring countries to a much greater extent. The State's involvement is bringing the heavy, dead hand of bureaucracy down more heavily on those who would seek to operate air transport or travel businesses for the benefit of people here or of those who would wish to come here if they could get the opportunity.
It is worth looking at much of the correspondence in the newspapers about the high level of fares into and out of this country, the difficulties of getting reasonable air fares and the appalling cartel situation which exists in relation to fares between here and Europe and especially the UK. Many people speak in these terms from time to time and they find themselves slapped down by members of the cartel. I have been accused of a vendetta because I deplore the efforts of cartel members to keep air fares so high. I have been told that it is a personal vendetta against our national airline.
I read with interest the Irish Independent of Monday, 27 January 1986. A very large headline stated “Bruton Slams Aer Lingus on High Fares”. He got the kind of ritual response from Aer Lingus that he, like everyone else who criticises them, is entirely wrong. But “Bruton” is not just a member of the public or an obscure Member of this House. He is Minister for Industry, Trade, Commerce and Tourism and he was wearing his tourism hat when deploring this situation. He is a member of the same Cabinet as the Minister for Communications. The Minister, Deputy Bruton, is right and everyone knows he is right, not least the Minister for Communications and his Department. Why do we have to go on with this charade indefinitely? Because we have to protect the British Airways-Aer Lingus cartel on the Irish Sea, we go on with a charade that potential tourists from Britain to Ireland are not being milked. The Minister for Industry, Trade, Commerce and Tourism deplores and regrets the situation which has arisen in tourism from Britain to here. So do I.
This is a Second Stage speech.
I am talking about discounts on fares and rates which are the subject of these two amendments under discussion.
We are dealing with an amendment to the definition section.
Yes, on discounts of fares and rates, which seems to go to the root of the whole question of the level of fares. I am suggesting that these amendments be accepted. The new definitions the Minister is trying to put in to cover discounts should not be inserted. We should allow discounts in the normal way.
Today's edition of The Irish Times contains a letter from a traveller who points out the constant difference in the fares from London to Dublin, London to Paris. London to Amsterdam and so on, showing that the Dublin fares are very substantially higher because they are kept up by a cartel and there is no proper competition.
We have had one fortunate development in the past few months. At least on one route to Britain there is an attractive fair, Ryanair are being allowed to charge a £99 return fare on the Dublin-Luton route. If they are able to do that, how can it be suggested that the cartel fare of £204 or £208 is so attractive? Why make it a crime for people to discount from that fare? Can we now expect that the Ryanair fare of £99 return with no restrictions will be matched by the cartel members? If not, why not? Why should the public be deprived of that right? Why should this cartel continue to be supported in the way it is? What is the profitability of the cartel on the Dublin-London route? Why has the London-Belfast route proved so successful? Why has the number of passengers on the London-Belfast route increased from 700,000 to over 900,000 in the 18 months since competition was introduced? Why is the number of passengers on the London-Dublin route falling? Why is it that Aer Rianta have to express concern about the under-utilisation of Dublin Airport, while at the same time Belfast is growing enormously although Belfast could not be described in anyone's terms as an attractive destination?
The Deputy has made all these points on other sections and on other amendments. He could argue that what he is now saying relates to this amendment but he is relating the same points to every amendment and making a Second Stage speech. I gather he has concluded. Is amendment No. 5 being pressed?
Does the Minister propose to reply to what I said? I know he does not really disagree with me.
I am very anxious that the House should get an opportunity to discuss all the amendments and I do not want to delay the House unavoidably. I have stated my position quite clearly. Deputy O'Malley has gone on a lot about cartels. Cartels operate on every international route. Aer Lingus cannot go where they like in America. They must get permission from the American Government. We cannot go anywhere we like in Britain. The routes must be governed by an agreement between ourselves and the British. Our airline has to get British approval for their air tariffs. Flights between Britain and Amsterdam and between Britain and Rome are jointly regulated by the two Governments. No Government abandoned the controls that Deputy O'Malley suggests we should abandon.
In regard to cartels and prices I should like to emphasise to Deputy O'Malley, who has been praising the regime in Britain throughout the debate, that the British Civil Aviation Authority approved higher prices for the Dublin/London route than I was prepared to approve. I got the price down. That is why so much of what Deputy O'Malley has said in this debate is totally misconceived. Many of the things he wants to achieve, such as lower air fares, more liberalisation and so on, are matters I passionately believe in and have been working hard to achieve since I became Minister. We have had some success in that regard. In the EC we are pressing stronger than any country for complete liberalisation so that Aer Lingus, or any other Irish airline, can have access to routes throughout Europe. The British withdrew freedom rights from Aer Lingus after the Irish company spent a lot of money developing routes out of Manchester at a time when nobody else was prepared to do so. However, after the routes had been established, bang went the Aer Lingus right. So much for liberalisation. The French authorities took similar action in regard to the Lourdes and Rome routes. No other company operated those routes with the exception of Aer Lingus, but when they were established Aer Lingus was chopped. A similar decision was taken in regard to Geneva and Milan.
We are prepared to offer complete freedom of the Irish air routes to all-comers from Europe if we have complete freedom of the air routes in Europe. That is the objective of Irish aviation policy and that line has been pressed strongly in Europe. Aer Lingus will take their chances with the best in Europe provided the terms of competition are right. Deputy O'Malley is urging us to abandon our national interest in the mistaken belief that some other countries have abandoned theirs. That is patently not so.
I regret, therefore, that I am unable to accept Deputy O'Malley's amendments. The definition of "fare" to include a fare net of discount is aimed specifically at controlling discounting by airlines and intermediaries such as travel agents. If this were not done a travel agent could perhaps sustain an argument in law that the Bill covered only the fares approved by the Minister but not the fare as discounted, the same consideration applies to the definition of "rate", which is the term most commonly used for cargo services.
If an air carrier wishes to amend or reduce its tariff in any way, it is completely free under the Bill to seek the approval of the Minister for such changes. I will be prepared to consider under the Bill any special tariff submissions which an airline may feel it needs for advertising or other promotional activity; and, if I deem that such proposals are consistent with the criteria laid down in section 3, I will have no hesitation in approving them.
I do not propose to read the extensive notes I have on this matter because I do not wish to delay the House. Deputy O'Malley is proposing to take away from us power that the British and other countries have. The Deputy read a long quotation from the air transport users magazine to the effect that passengers were not open to prosecution. That is correct and the Bill does not propose to make passengers liable to prosecution. However, as in the UK and most other countries, airlines and their agents will be open to prosecution if they breach the regulation. That shows the absurdity of Deputy O'Malley's opposition. He is saying we should not have those powers but other countries should; that we should abandon our national interest while others do not.
It may be interesting for somebody who has not heard all of this before to hear the Minister's reaction. The reaction has been the same for the last 18 months. He spoke about the absurdity of my position. That is pathetic. The Minister may believe some of what he has said but I do not. The Minister moaned on at length about the necessity for us to have the same powers that other countries have. In other words, he is saying that we must have the same power to prosecute people for discounting tickets. The Minister said that Britain has that power. How many people have been prosecuted in Britain in the last five years for selling discounted tickets? At least 20 seconds have elapsed since I posed that question but an answer is not forthcoming. Of course the answer is that no airline or travel agent was prosecuted. Why, therefore, do we want to change the law to enable us to do it? Why do we want to change the law to deal with something that is regarded as a commendable practice in other jurisdictions? Why do we want to make it a criminal offence here to do something that 100 miles away in Britain, or less in Northern Ireland, is a commendable practice?
The quotation I referred to was not in the air transport users magazine but in a report by the Air Transport Users Statutory Committee, the official view of a statutory committee. The Minister said that I am obsessed by the cartel and that there are cartels everywhere. For example, he said that in going to the United States Aer Lingus has to form part of a cartel because it has to get permission from the United States. That is not so. I do not think the Minister understands what a cartel is. There is no cartel on the North Atlantic route because the Americans would not wear it. They would be horrified at the thought. A person who tries to operate a cartel into the United States will be prosecuted by the US authorities for it, and very properly so, because it is a serious criminal offence under American law to operate a cartel. That is why such huge damages were awarded against British Airways, Pan-Am and other airlines recently. They tried to operate a cartel to kill off the competition.
There is no cartel on the North Atlantic or into the United States. It would be a criminal offence to operate one. But there is a cartel between Ireland and the United Kingdom, a serious and damaging one. A cartel is not just an arrangement whereby two Governments licence the operation, as the Minister seems to think it is. It is a secret commercial agreement on price and on sharing of the market, things that are explicitly prohibited by Article 85 of the Treaty of Rome. It is done to the detriment of the consumer, is maintained to the detriment of the consumer and the profit that arises from it is enormous. One of the major beneficiaries is British Airways and I would say that they cannot believe their luck that this is allowed to continue on the Irish scene. For two years they have had to compete on the London/Belfast route. The cartel on that route was stopped and two other airlines, Dan-Air and British Midland, have moved in. There is now genuine competition and all of a sudden the fares are well below what they were when there was a monopoly. The fares are well below the London/Dublin route even though the London/Belfast route is longer and, therefore, more expensive.
Those things go unanswered and it is not enough for the Minister to get up time and again and say that Deputy O'Malley is talking through his hat. I am right and people know I am. Every time one opens a paper one reads comments from various people. I will quote a person of equally impeccable origin and genesis as the Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton, whom I quoted a few moments ago. I quote Dr. Edward M. Walsh, President of the NIHE, Limerick who, as reported in The Sunday Tribune of 5 January last, said:
It is absolutely vital that the Aer Lingus/British Airways cartel be broken. If we want to develop service industry, software, consultancy, professional services, then one important Government initiative would be to break this cartel and bring fares into line with the norm. Brussels should also encourage mobility, perhaps by subsidising fares.
Presumably everyone who criticises this cartel situation and the abnormally high fares that we persist in maintaining here is, like myself, supposed to be totally wrong. The country and the House are crazy to underwrite again in this Bill this mad system of deliberately keeping up fares. We should have sense now and cut out the nonsense. I have had calls to speak in recent weeks about pressure groups and so on, but here we find perhaps the most effective and professional of all pressure groups working successfully within this House. It is an interesting study in relation to how such matters are approached that I am the only one to stand up here today and to call for what everyone in his heart knows to be right.
Deputy Skelly rose.
The Deputy may not intervene at this stage. I indicated that I was calling on Deputy O'Malley to conclude the debate on amendments Nos. 5 and 6.
Surely I am entitled to comment. I only need about two minutes. I had already offered.
I indicated to the Deputy that I was calling on Deputy O'Malley to conclude the debate on the two amendments. I am now in a position to put amendment No. 5 to the House.
I have been here during other debates and we have been able to contribute to amendments to which others had spoken.
We are on Report Stage. The Minister replied to both amendments and the procedure is that the Deputy who moved the amendments concludes the debate on them. No one else is entitled to contribute at that stage.
There was no one else here.
The Deputy is not in order.
With respect, my reading of the rules is that I would be in order in making a comment.
The Deputy's reading of the rules is erroneous.
Will I be in order in making the comment I wish to make at any other stage?
The Deputy may comment on other amendments but we have concluded the debate on Nos. 5 and 6.
Amendment put and declared lost.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 3, line 41, to delete "competitive airline tariffs," and substitute "airline tariffs which are competitive in the fares, rates or other charges and in the terms and conditions applicable,".
This amendment arises out of our discussion on this subsection on Committee Stage on 4 December last, as reported at columns 1055, 1056, 1061 and 1062 of the Official Report. It will be recalled that Deputy O'Malley wished to insert "price" before "competitive", on the basis that airlines channel competition into areas, other than price, such as "image building" and "artificial product differentiation". I argued that this suggestion narrowed the scope of the provision and prevented the Minister considering in the interests of tourism the need for competition in so far as the terms and conditions of tariffs are concerned. An example might be where an unrestricted 1,000 French Franc one-way fare became available between Paris and a destination competing directly with Ireland for tourist business. Once carriers on the Paris-Ireland routes filed a 1,000 French Franc one-way fare with me, even though its availability might be severely restricted I might not be able under Deputy O'Malley's formula to have regard to those restrictions, despite their adverse impact on the attractiveness of Ireland as a tourist destination.
At the time I undertook to bring forward an alternative formulation which would enable the Minister to have regard to both the price and conditions elements of the airline tariff in assessing their competitiveness. That is the purpose of my amendment.
I am not enamoured with this amendment. It misses the point I was trying to make at the earlier stage. It is very confusing to deal with a Bill that has been amended so heavily, though I welcome the amendments. My recollection is that the phrase, "competitive airline tariffs" which the Minister is now proposing was itself an amendment.
It was. The Deputy proposed that the word "price" be inserted but that would have had the effect of restricting——
It was at my request that the Minister included the phrase "competitive airline tariffs". I was anxious to make it clear that what was involved was price competitiveness. The Bill would be better as it stands than with the Minister's amendment. He seeks to amend what was his own amendment on Committee Stage; but it can be argued that the new formulation is inferior because it affords equal status to price competition in what are referred to as fares, rates or other charges and to non-price competition "in the terms and conditions applicable".
Competition in terms of non-price competition is a strong characteristic of European scheduled airlines or cartel airlines. They typically charge the same fares but engage in wasteful and costly attempts to secure product differentiation on the basis of, say, food or the image of the airline. The tourist industry, to which this amendment is addressed, needs real price competition. The Minister's amendment to his own Committee Stage amendment would equate competition with non-price competition. Under the so-called non-price competition which exists between British Airways and Aer Lingus on the Irish Sea the number of air tourists to Ireland fell by 50 per cent between 1975 and 1983. Therefore, the air traffic between Britain and the Republic of Ireland is falling; but where there is genuine price competition and not this illusory non-price competition in conditions and so on, is between London and Belfast. An additional 210,000 people used that route in the first full year after the introduction of price competition. Therefore, I submit that price competitiveness is the important aspect and the Minister should not amend the Bill on lines that would give equal prominence to alleged areas of competition with such captions as "We will give you champagne with your breakfast if you pay the £208 fare and will give you two rashers with your egg. But the people at the back who are paying the Apex fare will be given only cold meat or something else".
All this nonsense that goes on in attempts to sell the image of an airline is of no consequence whatever. On a short hope from London to Dublin meals should not be served. There should be none of that kind of nonsense. Prices should be kept down in the way they are between London and Belfast. That is the way it will be. Yet we go through the futility of legislating for things that will be swept aside by market forces, and by the EC in any event. Are we doing this simply to pander to the bureaucratic mind? It will do nothing but harm to our national interest.
The amendment is designed to make it clear that not only should we have regard to prices but to other matters. Prices are of primary importance, and so are the other matters. The amendment improves the text of the Bill.
Amendment put and declared carried.
Amendments Nos. 8 and 9, in the names of Deputy O'Malley and the Minister, are related and can be discussed together.
I move amendment No. 8:
In page 4, line 4, to delete "air transport" and insert "international".
The Minister's amendment is almost the same as mine. It was circulated late last night, obviously in reply to mine which was submitted yesterday. I do not know why the Minister will not accept mine. I wanted to delete "air transport" and to insert "international", because we have to take account of all our international obligations. Air transport agreements, which of their nature are international, should not be looked at in a vacuum. It seems to me that the words "or other international" seem to be inappropriate because they give the choice of looking at air transport agreements or international agreements. My amendment provides for all international agreements, which include air transport. The Minister's amendment appears to accept entirely the point in my amendment.
The Bill provides for any air transport agreement for the time being in force. The defect I saw in that, and the Minister appears to agree, is that it is wrong to look just at air transport agreements and not at our general international obligations. Our primary general international obligation is to the Treaty of Rome. Article 85.1 provides:
The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decision by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage.
It is matters of that kind that should be taken into account. That view is strongly held by the Commission in Brussels, not just by Commissioner Sutherland but by the Transport Commissioner, Mr. Clinton Dairs, who, in the October 1985 issue of the magazine Euro Forum, was reported to have said:
If by next June, on the other hand, the negotiating process is not seen to be working we shall have no option but to use other weapons. These weapons include direct action by the Commission against airline and Government practices which it believes are contrary to free and fair competition. Already, in order to give a warning of our determination we have taken a number of legal steps, but trying to achieve our objective through the courts is only a second best solution.
The Commission's proposals are contained in a memorandum which suggests relaxation of rules within the EC to allow enterprising airlines to bring in lower fares. Therefore, I do not think we should be entitled to exclude major international treaties by which we are bound.
I spoke about the international aspect on Committee Stage and earlier. The House should welcome anything coming from the EC which will help consumers, but I should not like the House to think that there has been such rapid progress and general acceptance as Deputy O'Malley has suggested. Peter Sutherland is the Competition Commissioner — he will have to major on that because he has been deprived of other parts of his brief — and in an interview in the February 1986 issue of Irish Business he gave his views on this. He stated that he is committed to development that would make for more competition in Europe. He went on:
Some of the member states have traditionally argued that competition policy relates to all trading activity within the Community, with the exception of transport.
This shows the difficulty he has in achieving his objective. He stated that until a common transport policy is adopted by the Commission, the Competition Directorate has no right to interfere on transport issues. I came up against that attitude in Education, particularly with the Danes who would not allow any advance in that field because they said it was not included in the Treaty of Rome.
Mr. Sutherland said he rejected that kind of attitude or interpretation. On Committee Stage, I pointed out that there seems to be an implication in some of what he said, and what the Transport Commissioner has said, that somehow or other the Commission will be able to do things that the Council of Ministers do not want done or have not decided to do. There has been a reference to Memorandum No. 2 which is important and will become increasingly important. Mr. Sutherland said that court proceedings would be less satisfactory than progress by agreement and decision in the Council. It is important for the House to reflect on that. Mr. Sutherland said that progress through the courts would be less satisfactory because Memorandum No. 2 allows for a structured development of the air transport field whereas if court proceedings are taken it can have the result of total deregulation which is not something which the Commission has been seeking as they have been looking for something less than the American situation of total deregulation.
When Mr. Sutherland was asked quite bluntly what progress had been made he did not seem to have a great deal to go on but said that during the course of the last year there had been significant improvements and that there was a clear climate of opinion developing towards a liberalisation, and he then mentioned what the Minister and Deputy O'Malley have already mentioned, that bilateral agreements between the British and the Dutch and the British and the Belgians have been successful. That is the sum total of what can be claimed in this field. The British, as Mr. Sutherland says, have been adopting a very liberal approach. That would go along with their Tory free market philosophy. It is easy to see why we should adopt that philosophy. I would emphasise that there is a tough enough furrow to hoe yet before significant advances are made in what is called the liberalisation of transport. It is not just a one dimensional position and the House should be aware of that and take cognisance of it. Mr. Sutherland also in that interview indicated that suggestions that more freedom means less safety and so on is not necessarily so. My reason for rising on this point with regard to the amendment to include the word "international" is to indicate that there are two sides to the story.
I would just remind the Minister that he can contribute to the debate and formally move his amendment later on.
When I got to consider Deputy O'Malley's amendment in the early hours of this morning I thought there was some merit in what he had said. We could not accept precisely what the Deputy proposed but we are proposing to insert after "air transport", "or other international". Deputy O'Malley is worried that that would give another option. The paragraph will now read:
any air transport or other international agreement for the time being in force, to which the State is a party...
Deputy O'Malley seems to be concerned about the word "or" but if he reads the whole paragraph there is no problem.
Deputy O'Malley, to conclude the debate on both amendments.
The Minister's point is accepted. There is a convention that Ministers do not accept other amendments and must put down their own, for pride or prestige reasons. However, since the Minister's amendment meets the point 99.9 per cent of the way I will accept it on the basis that amendment No. 9 is agreed.
Amendment, by leave, withdrawn.
I move amendment No. 9:
In page 4, line 4, after "transport", to insert "or other international".
Amendment agreed to.
I move amendment No. 10:
In page 4, lines 5 and 6, to delete "and which the Minister considers relevant".
The words "and which the Minister considers relevant" should be omitted because if the Minister were perverse enough to form an opinion that the Treaty of Rome was not relevant or that some air transport bilateral agreement was not relevant, he could consider it irrelevant and then do what he likes even though it might be flagrantly in breach of the Treaty. It is just commonsense that that should be left out. It should not just be a question of whether or not a Minister considers it relevant. If we are bound by these agreements we cannot consider them irrelevant.
I accept the amendment.
Amendment agreed to.
I move amendment No. 11:
In page 4, line 15, to delete "of" and substitute "or".
This is just to substitute the word "or" for the word "of".
Amendment agreed to.
I move amendment No. 12:
In page 4, line 19, after "notice" to insert the following:
"and, in any case where such a notice relates to airline tariffs of a class or description so specified, the notice shall be given to all air carriers to which this Act applies, which apply or propose to apply airline tariffs of that class or description".
Deputies may recall that during Committee Stage at column 1882, Volume 358 of the Official Report of 22 May 1985 a suggestion was made by Deputy O'Malley that the requirement to file airline tariffs arising from the issue of a notice under this section might only be applied to some carriers. I undertook at the time to bring in an amendment on Report Stage the effect of which would be to impose a duty on the Minister in issuing such notices not to discriminate between carriers. That is the purpose of this amendment.
Is amendment No. 12 agreed?
It is. It largely meets the point I made on Committee Stage and I am grateful to the Minister. Hopefully it will reduce the level of collusion between the Department and a particular airline on airlines. It may perhaps reduce the scope for independent initiative by airlines but that may be unavoidable in the way in which it is drafted. On the whole the amendment meets my point and will be helpful in all circumstances.
Amendment agreed to.
Amendment No. 13 has already been discussed with amendment No. 1 and the Minister can now formally move it.
Bill recommitted in respect of amendment No. 13.
I move amendment No. 13:
In page 5, between lines 2 and 3, to insert the following:
"(a) any application to the Minister by or on behalf of an air carrier for authorisation under section 7 or 8 of the Act of 1965 to operate an air service to, from or within the territory of the State and in respect of which operation the Minister would, if the authorisation were granted, propose to issue a notice under section 3 of this Act,
(b) any decision given by the Minister under paragraph (a) of this subsection,".
Amendment agreed to.
Amendment reported.
Amendments Nos. 14 and 15 are related and may be discussed together. Is that agreed?
I want to move amendment No. 15, as I want a reply to it.
If the Deputy wants to take it separately, we can do that. I only asked for agreement.
I move amendment No. 14:
In page 5, to delete lines 6 and 7, and substitute:
"(d) any decision given by the Minister under the said section 3, and
(e) any temporary direction given under section 4 of this Act.".
As my amendment indicates, it is appropriate that any temporary direction which I might give to an airline prohibiting the sale of a particular tariff should be incorporated in the register for the information of the public.
Amendment agreed to.
I move amendment No. 15:
In page 5, between lines 7 and 8, to insert the following:——
"(c) all submissions made to the Minister under section 3 of this Act, and
(d) any temporary direction made under section 4 of this Act.".
This is not very satisfactory as amendments Nos. 14 and 15 are almost exactly the same. In the normal way I would be more than willing for them to be discussed together.
I offered that and the Deputy did not agree.
Because I may only speak once if I do that. The procedure here is archaic.
The Deputy asked that amendment No. 15 be taken separately. I agreed to that and the Deputy is now taking it but still wants to go back to a joint debate. I am sorry, it cannot be done at this stage.
The two amendments are almost exactly the same but if I move one rather than the other. I may speak twice.
You have moved amendment No. 15.
I know, but the procedure is ludicrous. It is not your fault or mine, but we took over this nonsense handed down years ago and we never changed it. I readily agreed to amendment No. 14 as it is almost exactly the same as an amendment which I put down yesterday. Amendment No. 14 is obviously a midnight amendment in response to mine and I am grateful to the Minister. The only difference between the amendments is that in amendment No. 14 the word "decision" is used and in amendment No. 15 I had "submissions" inserted. There is a big difference between decisions and submissions. It is one thing for the Minister to publish his decision which is either yes or no but the applications under section 3 are important. Why does the Minister rule out submissions and confine it only to his own decisions?
Have you concluded?
I am allowed to reply only once.
I am also in this difficulty. Could we recommit the section?
No, we would have to change the whole procedure.
I accepted a large part of the substance of Deputy O'Malley's amendment by inserting an amendment in the early hours of the morning to meet as much of his point as I thought possible or desirable. I substituted the word "decision" rather than "submissions" because anyone who wishes to make a submission can publicise it if he or she wishes. However, sometimes submissions may include confidential corporate information which it would not be appropriate to publish. For that reason, I cannot accept it. The other point is that if the register is to be useful it should have merely essential information and should not be clogged up with irrelevancies. The idea of sending in huge submissions could be used as a ploy to confuse the situation and to hide relevant information. They are the reasons for not accepting Deputy O'Malley's precise amendment and why I tabled my own during the night.
The submissions made are of crucial importance because if they are excluded and if decisions are made rather than applications and submissions, inadequate notice is given to the public or those in the trade who are interested in these matters. There have been so many amendments made to the Bill that I am trying to trace one of the earlier ones. Applications have been added to the register by amendment No. 13 which was one of the first taken today.
The Minister's amendment is to replace that contained in section 5 (1) (b) of the Bill before these amendments were made because it is the same terminology. I cannot ask the Minister any more questions so the debate is a little pointless at this stage. This is an unusual Report Stage because there are a very large number of amendments and some of them are fundamental to the Bill and will change its nature. It is terribly difficult when I am only allowed to speak once on each amendment. If I ask a question that is my time used up for that amendment. It is not a very meaningful procedure.
You conclude the debate on your amendment also.
I know but it is not satisfactory. The whole purpose of this register which it is proposed to introduce — and I acknowledge that the Minister agreed with my suggestions that it should be more meaningful than proposed earlier — is to give information to the public, the trade and to consumers and consumer organisations about what is happening. One of the awful features about applications for licences and services and so on is that it all goes on behind the scenes. There are close relationships between certain civil servants and people in a particular airline, which is unhealthy to say the least and is condoned to a far greater extent in this country than in others——
On a point of order, is it right or fair that Deputy O'Malley should be allowed to impugn the characters of civil servants in this manner? It is an intolerable allegation.
I am not impugning anyone.
It is not good enough to attack people who cannot answer for themselves.
On Committee Stage I quoted a memorandum on this very point setting out exactly what the relationships concerned were and——
There is an inference that civil servants are not acting in a detached and objective way in the public interest, which is not the case and has never been the case.
This situation has existed for some time and it does not exist in other countries in that way. It is better that more of these matters should be brought into the open and that the register should be as full as possible in the sense that the public will have the right to access to as much information as possible short of doing commercial damage to individual airlines. I mean genuine commercial damage and not what they consider to be commercial damage. My concern is that this register should contain the maximum amount of information compatible with that objective because it has been a totally closed shop and all kinds of things were going on behind closed doors. It is in everyone's interest — not least that of the civil servants — that they can now point to a register that contains all the relevant information.
The point I am making is that I do not think it contains all the relevant information although it will contain a lot of it. We now have a register which we did not have before the Bill. The Minister put down an amendment to introduce it and he is now amending it further in response to my amendments and suggestions. It would be in the interests of civil servants if more information was made available as is the case in other countries. In some countries it is compulsory by law. They cannot conceal these matters. It would also prevent civil servants from being open to the innuendo's which inevitably arise — for example, the internal Aer Lingus memorandum which I quoted during Committee Stage — if they could point to documents which were freely available and to which the public and the press had access as of right.
It is not enough simply to include the decisions because these are after the event. What should be included are the submissions but the Minister would have the right, on the request of an airline, to exclude anything that might be commercially damaging if it were published. Some bits and pieces could be damaging because the airline would be giving private information which they might not wish to make public, and they would have the right to object to it being made public, but most of the submission should be published and subject to public scrutiny. This is taken for granted in other countries but we are very slow to move in this direction.
If the Minister is concerned about civil servants, whom I am not impugning, it would strengthen their hand if negotiations did not take place behind closed doors and would not give rise to the kind of thing which caused a certain person in Aer Lingus to write the memorandum I quoted to someone else in Aer Lingus. There are other interesting references I could produce if they are needed to show that it has been less than satisfactory that these matters have been conducted in private.
Between now and when this Bill is presented in the Seanad, I would ask the Minister to consider looking at this again. I know his amendment is almost the same as mine, with the exception of the publication of the submission, but I ask him to think whether the general public interest, and not least the interests of the people in his Department, might be served by publishing as much of this as is compatible with commercial prudence rather than as little.
Are you pressing your amendment?
I am not.
Amendment, by leave, withdrawn.
I would like clarification. How does section 5 now read?
I am sorry Deputy——
I was interrupted.
I move amendment No. 16:
In page 5, lines 15 and 16, to delete "not contained in" and insert "greater than".
Section 6 deals with offences and reads:
(1) Where—
(a) a person collects, charges, makes, applies or imposes any fare, rate or other charge, term or condition to which this Act applies, and
(b) (i) the fare, rate or other charge, term or condition is not contained in an airline tariff previously submitted by or on behalf of the air carrier concerned to the Minister...
I propose that the change be made so that it will read that "the fare, rate or other charge, term or condition is not greater than contained in an airline tariff ..." In other words, if a particular fare level is approved by the Minister and someone wants to charge less, that would not constitute an offence, but if he charged more it would. Originally such a person would lose his licence as a travel agent, get two years in jail and be fined £100,000. Happily the licence revocation provision is gone, jail is gone and the fine is reduced to £50,000. I am giving the Minister two and a half out of three for that because although he has got rid of two and a half of the three penal penalties. I still consider a fine of £50,000 for charging too little for an airline ticket a bit extreme.
I am suggesting in this amendment that provided the fare charged is not above the approved level a travel agent or other person of that kind should not be guilty of an offence for charging less than the approved level. That seems to be commonsense and, as I said, last year and the year before, five million such tickets were sold in Britain. Tour operators in Britain and Northern Ireland have official encouragement to do this. Why should it be encouraged as a commendable normal commercial practice in Northern Ireland and be a criminal offence here to knock a pound or two off an airline ticket? Now such a person may be fined up to £50,000 but happily will no longer be jailed or lose his licence in this jurisdiction. This is the purpose of my amendment and would avoid a lot of difficulty, hardship and unfairness to which this Bill will give rise.
I would like clarification. The amendment asks that "not contained in" be deleted and "greater than" inserted. The word "not" is not reinstated. What is the new suggestion, because there is no negative?
There must be a printing error because the word "not" should be repeated before "greater" or else the word "not" should not be in the part being deleted. It does not make sense otherwise. Perhaps it could read, "not greater than"?
We can record it in that form.
The effect of the amendment would be to make it an offence only where a fare was sold at a level higher than the approved level. We had extensive discussions on this on Committee Stage when the Deputy put forward a number of amendments advocating control in a maximum selling fare basis. As I pointed out then, such an approach would be tantamount to deregulation of air fares. Contrary to what the Deputy has said, it is not the case in Northern Ireland that air fares have been deregulated. In an extreme situation it would leave the Minister virtually powerless in dealing with dumped or predatory prices. Therefore, I must reject the amendment.
This is the basis of the whole issue in aviation. Predatory pricing has littered aviation history with many aviation corpses. Airlines have collapsed and passengers have been stranded. It is going for the short-term bargaining regardless of the long-term implications. We must have some control over air fares so that that will not happen. We must also have control so that people may not charge excessive prices. I have used my existing powers on many occasions in the past three years to bring down air fares. Even where increases have been approved by other civil aviation authorities, I have insisted on smaller increases. That is the way the powers will be used.
The Minister makes the claim constantly that he has brought down air fares. We are talking mainly about the Irish Sea——
About aviation generally.
The cartel agree between themselves and seek an increase of 10 per cent. They go to the British authorities who tell them that as there is no competition on the route they can have whatever they agree between themselves as a cartel. When they bring it to the attention of the Minister here he tells them that 10 per cent is very high but he will grant them an increase of 5 per cent. He regards it as doing a great service to the Irish people but the fact is that the full cartel fare is already at an outrageously high level. What the Minister should do if he wants to bring down air fares is to say to those people in the cartel that they must compete the same as happens on the London-Belfast route. Otherwise he should tell them he will allow in more people on the route.
A fare is regarded as reasonable and one that cannot be reduced below a figure of, say, £208 but then a new airline comes along and offers to fly without any restrictions for a £99 fare. Why can that airline operate on an exactly comparable basis for a fare of £99 while the cartel has a fare of £208? One of the members in the Irish Sea cartel reduced its fares enormously on the London-Belfast route when there was competition — in this connection I refer to British Airways. Could they not reduce their fares on the London-Dublin route if they were subjected to competition on that route? Reducing the level of annual increase on the part of the Minister is not keeping air fares down and I do not think anyone other than a simple-minded person would believe that. Air fares on the Irish Sea route could be slashed down to the Ryanair level or to the level of British Midland and British Airways on the Belfast route if the cartel were removed. One of the ways is to allow competition. We should not have an artificial cartel where there is no competition except in regard to items such as meals, the colour of the airline or the attractiveness of the staff. These factors are not relevant to competition.
One way to reduce fares is to start having some competition, but that cannot be done if we make it a crime to compete. This amendment is designed to allow people to charge the approved fare or less than the approved fare and not have to face a fine of £50,000. If a travel agent wants to give a discount or if an airline wants to charge a lower price they should not be penalised. It is not possible to have competition on the one hand while making it a crime on the other hand.
It might be worthwhile reminding the House of the report of the Restrictive Practices Commission on this matter which was published last year. Recommendation No. 9 stated:
The inclusion of a provision in the rules of an association of tour operators and/or travel agents imposing on its members price maintenance requirements in respect of rates and fares on scheduled services, whether surface or air, should be prohibited.
This Bill will make compulsory measures which the Restrictive Practices Commission recommended should be prohibited. Here we have two agencies of the State pulling in exactly opposite directions. The Restrictive Practices Commission say that the provisions in this Bill making it a crime to charge too little should be prohibited by law.
Before this Bill was introduced the Irish Travel Agents' Association had an arrangement that they would not compete with one another below a certain level. The Restrictive Practices Commission inquired into that and they said it should be prohibited by law. They said there should be competition and that anything which did not lead to that should be prohibited by law. In this case the direct opposite is being done. Law is being enacted to make illegal the very thing the Restrictive Practices Commission said should be legal. We are a mixed-up country. We are a mixed-up House.
In a sense this is the kernel of the matter. Do we want competition or do we not want it? Are we going out on a limb at a time when a decision is expected from the European Court with regard to a certain case, where the whole tendency worldwide is towards greater competition and freedom in these areas? At this time we are making it a criminal offence to charge perhaps £1 too little for an airline ticket. We are flying in the face of the recommendations of the Restrictive Practices Commission, of the White Paper on Tourism published by the Government last year and of the experience on the Belfast-London route. In the first full year of competition there when the cartel was abolished the traffic grew on that route by 30 per cent. It is now at 910,000 a year compared to under 700,000 before competition was introduced. Fares are lower as a result and services are better. The Belfast-London route is now bigger than the Dublin-London route. If we are seriously interested in promoting a competitive aviation policy we should examine the undoubted success of price competition on the Belfast-London route. This amendment is crucial to this whole matter. It would seek not to make normal commercial competition a criminal offence. Therefore I recommend it to the House. I see that Deputy Skelly wishes to offer.
I have already indicated that Deputy O'Malley, the mover of the amendment, had been called upon to conclude the debate on this amendment. There can be no further speeches on it. I am sorry but you are out of touch again, Deputy.
I am well used to it.
Amendment No. 16 in the name of Deputy O'Malley. The question is: "That the words proposed to be deleted stand".
Question put.
Deputies
Votáil.
On that question a division has been challenged. Will those Deputies who are demanding a division please rise?
Deputies O'Malley, Molloy and Wyse rose.
As fewer than ten Deputies have risen, in accordance with Standing Orders I declare the question carried. The amendment is rejected. In accordance with Standing Orders the names of Deputies dissenting will be recorded in the Journal of the Proceedings of the Dáil.
Amendment declared lost.
I move amendment No. 17:
In page 6, to delete lines 1 to 6.
This amendment proposes to remove a subsection which would have the effect of making somebody other than the person who committed the offence guilty of the offence, even though that offence might well have been committed without that person's knowledge and even without any possibility of his knowledge. It seems, therefore, that this provision is especially odious and onerous from the point of view of the criminal law particularly as the matters we are dealing with are not criminal offences in the normal sense of the word but simply efforts to prevent people engaging in normal commercial activity. The effect of this subsection if it were to stand would be that if some travel agent somewhere at some time were to give even a minor discount on an airline ticket out of his 9 per cent commission, the air carrier concerned, even if they knew nothing about it and could not know anything about it, would still be deemed to have committed an offence. That is monstrous. If this were not applied, say, to airlines, if it were applied to some company manufacturing some product and if the retailer of it were to give a discount of £1 or £5 or something off the price of it in a shop in some remote town or village without the knowledge of the manufacturer, there would be an absolute public outcry if the manufacturer was then going to be prosecuted for having committed an offence. The same is true here. It is one thing if it is an Irish airline, but if it is a foreign airline, American, French, British, German or whatever, why should they be made criminally liable for a minor discount given in the normal course of events by a travel agent in the normal course of his business? It is monstrous and would not be tolerated in any sphere of commercial activity and it would be disgraceful if this were introduced into our criminal law on the basis that people can be responsible in crime for acts that they could not conceivably know anything about.
It is obvious where this came from. This was suggested by an airline in this country in order to get at an airline that was trying to introduce competition into this country. Competition is frowned on by the powers that be here to the extent that it is made a crime if you compete. This is a monstrous provision and this subsection should be dropped. I cannot think of any parallel for it in commercial law nor would any such parallel be allowed.
It is one thing to protect Aer Lingus in these circumstances. It is quite another thing when it is broadened widely to affect any person who even advertises the name of any other airline. The objective is to act in the common good. If Aer Lingus represented the only common good there is in relation to airlines or air travel in our society, that might be acceptable, but we must consider the knock on effect and the tremendous damage that this provision and the previous one on which there was a vote could have on our economy. The Minister must act for the common good, but this section and the last section in effect will block tens of thousands of people from travelling over here at reasonable rates in order to shop, tour or be entertained. In my submissions to this House in the past I have made the point that one of the solutions to our huge unemployment problem, to the tourist industry's problems——
We are on amendment No. 17.
This is on amendment No. 17. One solution is to attract into this country huge numbers of people who by their spending power can provide large numbers of jobs. I am thinking particularly of the Dublin area. I addressed the Irish Hotels Federation not long ago on this topic and I suggested that Dublin could be turned into a tourist, shopping, entertainment Mecca for these islands. We should think of ourselves as a city in the midst of 60 million people.
In case you think I am going off the subject, Sir, Aer Lingus and fares come into it by a link up with the shopping, entertainment, tourist and hotel facilities in this city and country by providing reasonable fares. At present people who can go to Amsterdam for £49 will not consider for even one minute coming to Dublin at the astronomical fares they have to pay, not to mention the ordinary citizen here being totally blocked out of even considering making a casual trip in this country because of the high fares. The Minister should take into account the common good, the unemployment situation and the effect of competition being opened and fares reduced between Britain and here. Let him consider the stimulus this would have on our economy particularly in the Dublin region where a third of our population reside. If competition were introduced and this amendment accepted, it is possible that carriers would make available package trips in co-operation and conjunction with the Irish Tourist Board, the shops, the hotels and the entertainment business that would bring tens of thousands of people in here.
Our trouble is that we have no confidence in the business community who want to do that at the moment; we will not allow them to do it. I suggest that the Minister has a responsibility to consider this very carefully because we have our heads in the sand and we are protecting one airline. Maybe we are keeping the air fare between Ireland and Great Britain high in order to protect Aer Lingus and, of course, it suits British Airways also, but by doing that we are doing enormous damage. Maybe the Minister should hire an economist to find out how much money, how many tens, hundreds of millions of pounds we are losing by pursuing this course of action. It is stupid.
We are on amendment No. 17.
It is indefensible. This is on the amendment.
We are dealing with offences.
The offences prevent other airlines or other people from getting a crack at this market. It is inhibiting the best tourists we ever had, the British tourists who prior to the troubles came here in tens of thousands and were the best spenders. We earned hundreds of millions of pounds from them. At the moment we have no policy except to provide unemployment benefits on the one hand, State agencies to train people for jobs that are not there——
Deputy, that is not in this amendment.
The IDA have failed totally to provide jobs so the only chance we have is to bring in——
You are up in the air, Deputy.
——tens of thousands of people by the airlines. Open that up and let those people into the country and the Irish Tourism Board, the hotels and the entertainment and business people will bring them in by providing the packages.
Minister, you have 20 seconds.
Deputy Skelly has come late into this debate. He has never come to my office to talk to me about this although he has come many times about many other things. The point is that he is ignoring the fact that I have approved a £99 air fare to Luton. We have approved Avair and Shannon Executive Aviation. So much for protecting Aer Lingus. For the first time across the board let me say that nothing is stopping any airline from coming to me with a proposition in connection with the regulations.
Where are Avair now?
It is now 1.30 p.m. and I am putting the question.
I licensed them.
Where are they now?
They are not operating now, unfortunately.
Please, Deputies. I am putting the question: "That the amendments put down by the Minister for Communications to the Bill and not disposed of are hereby made to the Bill, Fourth Stage is hereby completed and the Bill is hereby passed."
Question put and agreed to.
It is a disgrace that legislation of such importance should be rushed through in this fashion.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.