I am honoured that my right hon. Friend the Secretary of State will reply to my humble debate. It shows the significance and importance of the subject that I am raising.

The talks between Her Majesty's Government and the United States Government on changes to the bilateral air agreement between our two countries are of the greatest significance for civil aviation in this country. The move towards an open skies policy between us means not only that a new era has begun but probably that our Government will have to play the highest card left in their hands—control of access to Heathrow airport. Therefore it is surprising that this appears to be the first time that the negotiation has been debated on the Floor of the House, and then, alas, for only half an hour. I know that other hon. Members are anxious to take part.

The inevitable background to the talks and the proposed alliance between British Airways and American Airlines is the proposal that 168 slots at Heathrow will be transferred. This transfer is presumed to quieten concerns over the possible dangers to competition arising from the alliance.

Let me make it clear that I do not in any way endorse the view of the European Commission that the issue is its responsibility. A Commission that has allowed and condoned massive handouts to national airlines in France, Spain, Italy and Greece, to mention just a few, has no right to expect confidence in its ability to enforce fair competition.

In addition, I do not raise the issue to attack British Airways. I am well aware of its great success since privatisation. However, some considerations lead me to ask whether all the facets of the issue are being properly examined.

First, if confirmed by the bilateral talks, is the British Airways-American Airlines deal really in the best interests of the consumer? At the moment, the two airlines have a 100 per cent. monopoly of 13 transatlantic routes, and 80 per cent. of other routes, particularly the important ones—London-New York, London-Boston and London-Chicago.

Many of the slots that are supposed to be released will be only on a temporary lease and will not, in the eyes of many other airlines, really provide powerful enough competition, especially as they would have to be divided between seven competing airlines wanting to run new services from Heathrow, at least two of which are British. Such a monopoly on so many routes is not healthy. As we have seen over the years in Europe, we know to our cost that many fares are still too high. It is clear that at least three carriers are needed on each route to ensure adequate competition.

There is a further concern that British Airways, having given up some slots, could switch the use of other slots that it currently holds. There is a worry in some regions of the country that that could affect regional services, so they will require some guarantee or reassurance on that point.

If the intention is to strengthen competition, how can British Airways suggest that it sells its slots at about £3 million a time? That would amount to approximately £500 million for British Airways. I have never understood how any airline can claim to own something for which it has not paid, and which is of value solely because of Government action, for example licensing services into Heathrow.

As a member of the Select Committee on Transport, I asked the former Secretary of State for Transport, my right hon. and learned Friend who is now Foreign Secretary, what his views were. His response was similar to the remarks that he made to the American Chamber of Commerce on 24 July 1991. He said: No airline has a legal right to a landing or take-off slot. Rather, airlines have permission, and this must be subject to the public interest … People, rather than airlines, come first. The government will decide aviation policy on the basis of what is best for the travelling public, and if this conflicts with the interests of any individual airline, the former will take priority. He concluded by saying: British Airways has benefited over the years from the competition it has received from smaller British airlines. The government will continue to seek to extend the opportunities for all British airlines in Europe, in the United States and right around the world. Will my right hon. Friend tell the House whether Her Majesty's Government's policy on this point has altered? If so, when and why? If an airline sells only some of its slots and continues to use others, keeping the payments that are made for them, it has extra resources available to fight competitors.

My third question is whether Her Majesty's Government should make an agreement with the United States soley on the basis of the British Airways-American Airlines alliance. Many will argue that there are other considerations, such as the need not just to consider the consumer but to benefit other British airlines that also wish to use Heathrow more—British Midland would like to develop new European routes and says that it needs more slots to do so, and Virgin Atlantic also wishes to increase its intercontinental services—let alone meeting the need to make room for new services from new competitors.

Is there not a danger that if US negotiators feel that our overriding concern is to cement the British Airways-American Airlines deal they will not offer us much else in the negotiations? There are those who fear that a one-sided open skies policy would allow the United States to enjoy extra freedom rights beyond the United Kingdom to Europe and further afield, while British airlines, including British Airways, would gain no greater access to the US domestic market, which is by far the largest in the world with nearly half of all aircraft movements.

The possibility of giving away entry control at Heathrow has led others to ask for more meaningful access in the United States for all UK carriers that want it. The question of cabotage should surely be on the agenda for the intergovernmental talks.

I say to my right hon. Friend that I fully understand why the Government want to help British Airways in its competition with the biggest of the world's airlines, all of which are based in the United States. I suggest to my right hon. Friend that we should never forget that other United Kingdom airlines exist, and they deserve encouragement. I refer to his predecessor's speech from which I quoted.

At this moment we should recall the treatment of Laker Airways, which competitors froze out of the market, and where compensation was paid only long after the airline ceased to fly. I hope that my right hon. Friend will agree that that episode was not the happiest memory in the history of British civil aviation.

My fourth question relates to the ownership of airlines. We know that current United States law forbids foreign ownership or control of a United States airline. That means that, unless the law is changed, British Airways—or any other British airline—can never take over any American airline. Certainly, BA cannot take over American Airlines. Can my right hon. Friend tell the House of any similar legal device that would prevent American Airlines, or any other foreign airline, from taking over BA? In view of what has happened in the public utilities, I suspect not. Moreover, I understand that between 20 and 25 per cent. of BA shares are already in the hands of American investors.

My fifth question relates to the Government's intention regarding the treaty negotiations, and the apparent advantages and disadvantages to be gained or lost from any change. In an attempt to obtain information, I tabled a question to the Secretary of State—Question 5657—in November. I asked what information he has asked the CAA to provide concerning benefits to the United Kingdom that would arise from the proposed British Airways-American Airlines alliance; and what factors underlie changes from the previous practice in respect of consultation with the CAA. A junior Minister replied: It is for the competition authorities to analyse the proposed British Airways-American Airlines alliance. I understand that the CAA has contributed to the analysis carried out by the Office of Fair Trading."—[Official Report, 29 November 1996; Vol. 286, c. 420–21.] Not surprisingly, that reply did not entirely satisfy me, and shortly before the Christmas recess I tabled another question. I asked the Secretary of State whether his officials had discussed with the CAA the issue of commissioning a balance of benefits study in relation to the renegotiation of the US-UK Air Service Agreement (Bermuda II); and what assessment he has made of the adequacy of the analysis in relation to the bilateral talks. The same junior Minister replied: Officials regularly discuss UK-US aviation matters with the Civil Aviation Authority, and such discussions have included the feasibility of an overarching 'balance of benefits' study of liberalising UK-US air services. We decided not to instruct the CAA to undertake such an analysis; the number of variables which would need to be taken into account, and assumptions which would have to be made, would make it impossible to model results which could be treated with any confidence. I am however satisfied that UK negotiators are fully briefed for the current series of bilateral talks."—[Official Report, 13 January 1997; Vol. 288, c. 111–12.] I find that reply remarkable. I have been given to understand that, in the past year or so, the Department itself has requested the CAA to undertake an analysis of the benefits or disbenefits of a European-US open skies agreement. That is clearly much more complicated than the UK-US bilateral. I have also been informed that the CAA has been prepared to produce such an analysis for the present situation. I feel that I must ask my right hon. Friend to explain why the Department abandoned the chance to obtain a balance-of-payments study.

Furthermore, if no such study or analysis can be conducted, will it not be more difficult for the House and all interested parties to judge how successful or otherwise the negotiations turn out to be? Even our own negotiators would surely have been assisted by an analysis. It could even be asked how my right hon. Friend himself can be sure that any agreement is in the best interests of the United Kingdom's airlines and consumers.

I realise that I have asked my right hon. Friend a number of questions that he may not have time to answer fully today, but I believe that they need to be answered, and I hope that he will assure me that answers will be forthcoming.

Let me repeat that I have great admiration for British Airways and its achievements. Some critics, however, feel that it has somehow managed to "sew up" the Department of Transport on the question of the bilateral, and I think that such suspicions will only be confirmed by cagey departmental replies to the questions being raised. According to some newspapers, the chief executive of British Airways has also "sewn up" the Labour party in exchange for his advice to the Leader of the Opposition. I sincerely hope that neither statement is true, but, if either were true, it would not reflect well on the civil aviation policies of either of the main political parties, both of which are now supposed to believe in competition and value for the consumer.