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Civil Aviation Bill

Well, my Lords, if there was no conclusion internationally, we would be where we are now, which I agree with my noble friend is an unsatisfactory position. That is why we are working to make progress towards international solutions to this, as I will try to identify in a moment. The amendment proposes not only a national solution, but national support for the compensation funds involved. It seems to imply that the Government should pay or that the full costs of damage caused by such events should fall on the UK taxpayer. Of course, the Government are concerned about such a potential development. The issue was presented forcefully in Committee by noble Lords who spoke on that occasion, and the noble Lord, Lord Hanningfield, has returned to the issue today. We have, of course, given the matter careful thought, because we are aware that the present situation is very difficult. However, our way forward is this: because aviation is a truly international business, we believe that the solution to issues of this kind must be found through international agreement. In the longer term, a solution to the problem of capping airlines’ liability with respect to third parties is most likely to come via some form of international agreement. This looks most likely in the context of the work currently being undertaken by the International Civil Aviation Organisation to revise the 1952 Rome convention on third-party liability, although I accept the point made by my noble friend Lord Clinton-Davis that we are some way off reaching agreement in that area. In the shorter term, we need to be ready in case airlines are exposed to uninsurable risks. That was the burden of the remarks of the noble Lord, Lord Hanningfield. After 11 September 2001, we stated:"““Should another terrorist incident lead to a lack of third party insurance, such that the UK aviation industry was unable to operate, the Government’s intention would be to intervene as it did after September 11th””." That remains the Government’s position. We are aware of calls by the aviation industry for states to indemnify airlines against third party war and terrorism risks. However, in balancing the risk, we favour a solution that maintains as much market involvement as possible and seeks to maximise the amount of commercial insurance available. I regret that changing the status quo in the way that the noble Lord, Lord Hanningfield, proposes would strike a wrong note about the Government’s resolve to deter terrorism. I know that the noble Lord shares that resolve. It would signal that terrorism and its consequences are the responsibility of the state and that financial reparation for such acts should be transferred wholly to the British taxpayer. We do not intend to exempt or limit airlines’ liability through UK legislation in those terms. We recognise the difficulties of the situation. We certainly are not prepared to see our airlines fail to operate, but the solution has to be an international agreement; we cannot do it uniquely and alone through UK legislation. I hope that the noble Lord will feel able to withdraw his amendment.