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Lord Hanningfield: My Lords, I thank the Minister for that comprehensive reply. This issue is rather different. From my local government career, I am very familiar with blight for all sorts of reasons and in relation to all sorts of issues. The area of this airport expansion is enormous—miles by miles. The proposal is not just to add a bit to a runway or to an airport. It encompasses several villages and a great chunk of Essex and therefore affects lots of people.

The Government came up with a policy statement, which has since been overruled in a judicial review, about siting a runway miles away from the existing runway. That would blight a great chunk of the county. If the runway had been close to the existing airport, one could perhaps accept a lot of the Minister's arguments. I hope that the Government will have learnt a lesson from this for the future. If you come up with a policy statement, you can blight great chunks of countryside even when the development might not happen. Of course, the whole process takes seven or eight years, so you have blighted these properties and this area of land for a long while.

I will not press the amendment today, but I wanted to air the issue again. It is a policy area that any government must consider. I am talking about blighting a whole area. It is not like what would happen with a waste plant, road or rail line; a great chunk of countryside is affected. Before announcing such a proposal, any government must think carefully about how it will impinge on hundreds of people's lives, properties, homes and livelihoods for many years. Whatever wealth is ultimately generated from the expansion of the airport, the process takes so long that it harms a lot of people and makes a lot of people unhappy. I hope that we have had enough debate to ensure that, any time the issue arises again, governments will think rather more deeply about it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 5:

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(1) Section 76 of the Civil Aviation Act 1982 (c. 16) (liability of aircraft in respect of trespass, nuisance and surface damage) is amended as follows.
(2) In subsection (2) for "subsection (3)" substitute "subsections (3) and (5)".
(3) After subsection (4) insert—
"(5) No liability shall be incurred by the owner of the aircraft (or the person to whom it has been demised, let or hired out) if he proves that material loss or damage as aforesaid—
(a) resulted from an act of war, hostilities, civil war or insurrection, or
(b) was due wholly to anything done or omitted to be done by another person, not being a servant or agent of the owner (or of the person to whom it has been demised, let or hired out) with intent to do damage.""

The noble Lord said: My Lords, we have debated the merits of this amendment on three previous occasions and, on each occasion, we have failed to elicit a satisfactory answer from the Minister. I shall not rehearse the arguments again in great depth, but I must reiterate the main arguments.

Under our present law, which was introduced over 85 years ago, the aircraft owner is made absolutely liable, without defences or limits, for damage caused by an aircraft to persons or property on the ground. The world changed abruptly on 11 September 2001, when four civil passenger aircraft were converted into weapons of mass destruction. Within 11 days, Congress passed emergency retrospective legislation to protect US air transport and to create a victim compensation fund. The total cost so far is estimated at around $40 billion and, as we know, litigation continues.

We do not need the same sort of legislation in the UK. Since 1964, we have had a system for compensating the human victims of violent crime and, today, all 25 European Union states are required to have something similar. For property damage, we have had a Treasury-supported scheme since 1993 to ensure that adequate insurance is available for terrorism risks. The cost is met by premiums charged to property owners and to their insurers. The amendment will not change that; there will be no new burdens for the British taxpayer.

We must face reality. The threat of terrorism from the ground or in the air has not gone away. If anything approaching 9/11 should succeed over here, it could easily transcend the limits of available insurance, and the financial consequences could wipe out the interests of the British or foreign airline involved.

It is a matter of considerable regret that the Minister has not changed his position in the slightest degree. That means that he has not been able to fault our basic arguments. Although he has been good enough to concede that the present position is unsatisfactory, what does he propose? He clearly hopes that a solution will emerge from the present work of the International Civil Aviation Organisation, which is charged with modernising the 1952 treaty. Last month, in Montreal, the special group of ICAO seems to have reached the
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conclusion that not one, but two separate, unlinked treaties may be necessary—one dedicated to terrorism alone—all subject to further directions from the council of ICAO.

Even assuming that there are no further changes of direction, we cannot wait to see what might emerge. We would be failing in our duty to the peaceful aims of the international air transport industry, on which so many depend, if, nearly five years after 9/11, we failed to take the simplest steps to minimise the risk of financial disaster for British and foreign aircraft operators.

The amendment provides a simple and non-controversial solution. I would like to think that today we could persuade the Minister to refrain from reciting, as he did on Report, the substance of his departmental brief, just as if we had offered no answers or corrections to what were, I think, his misleading remarks. In particular, I deeply regret the fact that we have not received an answer to the fundamental question that I first posed on 8 December, when I asked,

What on earth is the justification for saying that innocent aircraft owners should be liable for the financial consequences of war or terrorism? The House deserves an answer to that basic question. With no other solution in sight, our amendment is a modest and timely step in the right direction, providing sensible and conventional defences for innocent aircraft owners of all nationalities in our airspace. I beg to move.

Lord Clinton-Davis: My Lords, one of the principal virtues of the amendment moved by the noble Lord, Lord Hanningfield, is that it would impose no new burdens or imposts on the British taxpayer. That is an important point to emphasise. The present position is, of course, entirely unsatisfactory, as my noble friend the Minister has admitted. He has said that he hopes, perhaps somewhat optimistically, that the ICAO discussions will have an acceptable outcome.

We are light years away from that situation. The ICAO special group considered that two separate, unlinked treaties might have to come into operation. As has been noted, one is associated with terrorism. Because of that, it would be subject to the approval of this Parliament and, presumably, many other Parliaments. Can we afford to wait? That is the question that the noble Lord, Lord Hanningfield, has posed. Perhaps an initiative taken by us would spur others to get a move on.

Why cannot we say in the legislation that our proposal will come into effect X years from now? That would give an indication of our bona fides. I understand that the proposed regime already applies to ship owners. Why should the protection afforded not also apply to aircraft? The Minister said that the position for shipping was entirely irrelevant. Will he kindly explain why? I neither understand nor accept that.
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The noble Lord, Lord Hanningfield, raised a basic question, which remains unanswered. He posed it again tonight. He asked why airlines should bear any responsibility for terrorist attacks. That remains a vital and unanswered question. I support the amendment.

Lord Davies of Oldham: My Lords, I am in some difficulty. If I present arguments against the noble Lord, Lord Hanningfield, he says that they are not good enough and that they were not last time, but I shall say the same thing again. He presented his arguments last time, and he said the same thing again. My arguments will not be good enough for him because they were not last time, but neither were his. We do not accept some of the basic premises on which the noble Lord argues. He says that I am not to use the departmental brief. I do not need to use the departmental brief because the principles that the noble Lord puts forward are so mistaken that all noble Lords who do not have the benefit of the departmental brief will see why the Government have right on their side.

In straightforward terms that have nothing to do with the complex arguments in my departmental brief, the Opposition are saying that we should change UK law for UK aircraft involved in this situation because this is a UK matter. The Government say that airlines and aircraft are involved in international travel. War and terrorism are international phenomena. The damage done may be in this country, but it may be overseas. The matter cannot be governed by international law alone; it is an international problem that needs an international solution.

I am sorry if my department thought of this and it seems that I am therefore guilty of having learnt it from the departmental brief, but I assure noble Lords that that is not so. That is the fundamental division between us. I could reiterate the argument in a range of increasingly diffuse and subtle ways, but that is the heart of the difference between us. That is why the noble Lord was forced on two previous occasions to repeat his arguments—to his own satisfaction, but not to mine—and that is why my refutation on two previous occasions did not meet his requirements and will not do so today. I have nothing further to add to the overall position than that.

My noble friend introduced an extra dimension, and I shall take a shot at responding. I spoke from the wretched departmental brief on a previous occasion, when I said that we thought that the amendment emerged from some comparison with maritime law. My noble friend has made that explicit today. He said that international maritime law provided for different aspects, so why cannot we attribute to aviation law similar concepts?

There are several international conventions in maritime law to which the UK and many others are party that address ship owners' liability for acts of terrorism and the resultant pollution. Noble Lords will recognise that the law of the sea has to cover those issues because of, in particular, pollution of a third party's territory. Liability and compensation are treated hand in hand. There is no international
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convention governing aviation law in those terms, so we have nothing to fall back on. There is no corpus of law governing the international provision of aviation that meets that point.

The noble Lord was kind enough to say that he thought that I would seek to produce some argument along the lines of an international solution. Both he and my noble friend Lord Clinton-Davis doubt the extent to which the International Civil Aviation Organisation could produce an early solution to this complex problem. They are right to have those doubts. None of us thinks that the development of treaties that govern this area will be easy or speedy, so I share their doubts on that point.

Before my noble friend intervenes again, I should say that it is recognised that, in the shorter term, the Government accept the need to be ready in case airlines are exposed to totally uninsurable risks. After 11 September 2001—I am sorry for repeating what I said in Committee and on Report—I said:

On those occasions, we identified the same gap that noble Lords have identified in this debate. We took the necessary action as a stop-gap measure. We hope that there is never occasion to do that again, but we undertake that, if necessary, we shall act in like manner. Aviation cannot be subject to anything except international law in the long run. That is why we cannot abstract from international aviation law a parallel with maritime law, and that is why the amendment will not hold.

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