Courting disaster

Sir George Young, MP

"From the strictly political point of view of Mr Benn and his Cabinet colleagues — all of whom

n°" face 'arb, increasingly bitter and strident Campaign against the nationalisation plans Court Line crisis could hardly have come at abetter time ." So declared the Guardian on its

front page on June 27, in reporting Mr Benn's

rescue operation of the ill-fated Court Line G1.'34. The opinion formers on that paper will doubtless be reconsidering that verdict, since the final collapse of the Group a fortnight ago could hardly have come at a worse time for Mr Rerin and his colleagues, striking a resonant and discordant note amidst the well-orches

trated symphony of white and green papers. Like other MPs, my postbag has been full of distressing stories from constituents who had boOked and paid for holidays with Court Line. This is an extract from the saddest: "Dear Sir George, I am an old age pensioner and have been saving for two years to have a holiday with myhusband, which we realised would be

ttlile last one we should have in our lifetime, aving gone without so many things to save

■ or this holiday, we finally had enough money to book with Clarksons a cruise, starting at Athens. We were a bit anxious when we heard ear their financial difficulties, but when we _rd Mr Benn state that holidays were gssured, paid Clarksons the sum of £369.28."

h Tne analysis of what would otherwise have "een the straightforward crash of a public FornPany has been complicated by the rte ....rvention of the Government over the past months, and by the various assurances FLven by Ministers. It has also happened at a i.e. of renewed public debate about the elative efficiency of public and private ,,ellt.erPrise, with the apologists on either side a:lib-nig that the collapse is incontrovertible evidence of the truth of their case. It therefore raises a number of important issues. ha WilY did Court Line crash? We will clearly

L ve to await the report of the enquiry until we '

now the precise reasons, but one can make 'Ilforiried guesses. Inadequate financial mangetlient and control in a business where wargins are narrow and turnover high were

11.3.robably the main reasons, aggravated by the

thisein oil prices and the fall in the fortunes of e iss0Ud and the UK economy. The point at in fact is not whether Court Line would apse, but when. With the benefit of elndsight, it would have been much better for e• rYone concerned if the Group had been d to collapse in June as it clearly : Quid have instead of being given a stay of xecution until mid-August. j When Court Line approached Mr Benn in With the suggestion that the Government gr,cquire the shipyards in order to prevent the ifirouP from collapsing, he should have said no. e_ was clearly not happy with the Group's r-sentat1011 of Its-financial affairs since, as we

',ear.nt later, it was a condition of purchase that

independent review be carried out by Peat &Zwick. Since the Group could not have been 6ed by the rescue of the shipyards, the A s'Yernment should have notified the Civil viation Authority that it had insufficient roZs?ul• lged urces to continue trading. This would have the CAA to revoke the licences and this

have immediately put the whole Group

liquidation. The Government could have 41nnediately acquired the shipbuilding side the liquidator and safeguarded the jobs. t,!'e Government could also have ensured that 'Lie bulk of the 1974 holiday programme would

be completed by setting up a separate company to continue trading, and to take the bulk of the public's money, most of which had not been paid at that date. This would have avoided, the farcical situation of the hotels in Spain being empty in August, the planes lying idle at Luton airport, the pilots being unemployed and the holidaymaker being stuck at home, having paid for his holiday. Of course there would have been complications and even perhaps some disappointment (though a modest amount of Government intervention could have prevented this) but not on the scale that we have witnessed now. The Government were wrong to think in terms of trying to keep the original company going from June to September. They should have 'put the boot in' in June, and supervised an orderly transition of holiday arrangements.

But they did not. They accepted, quite wrongly, the Company's interpretation of its financial prospects, although the fact that the Company had arrived, cap in hand, at the DTI should have alerted the Government that the Company's financial expertise was not to be trusted. Mr Benn was then minded to make his statement to the House on June 26 and that was when his troubles started.

It is quite clear to me from the many letters I have had from my constituents that people were influenced in their decision to book with the Court Line group by what Mr Benn said in the House on June 26. The sad extract of the letter I quoted from earlier shows this. I was in the Chamber at the time of his statement, and I certainly got the impression that the Government were underwriting the holiday side of the Court Line operation. His statement was, after all, "designed mainly to reassure holidaymakers." It is worth remembering that June 26 was also the date of a key vote in the House on rates, and there was talk of an election if the Government lost. (They did, and thereasn't.) The Sun, for example, on June 26 said that "A Government defeat in tonight's vital Commons vote on rates could trigger off a July election." They went on to say that there was a fifty-fifty chance of an election on July 18th or 25th. What better platform for the Labour Party to stand on than as champion of the holidaymaker, rescuing them from the incompetence of private enterprise? This is of course exactly the impression Mr Benn sought to give and one only has to re-read Hansard for that day to appreciate this. My constituents, however, do not read Hansard even when it is being printed. They read the daily papers, and a perusal of these for June 27 explains the bitterness of those who thought the Government were underwriting Court Line.

"Benn's grab saves tour firm," declared the Sun, adding that the Government was ready to rescue the ailing Court Line Group. "Lifeline for holiday firm" said the Express, explaining that "the price of safeguarding 400,000 holidays and thousands of jobs was spelled out last night by Mr Anthony Wedgwood Benn — nationalisation." It was "part of a deal to enable summer holidays to go ahead." The headline in the Daily Mirror was "Benn's big holiday rescue." "A black cloud hanging over the sunshine holiday plans of 400,000 Britons was swept away yesterday by Industry Secretary Anthony Wedgwood Benn. He rescued the financially troubled Court Line Group which owns the Clarkson and Horizon holiday firms." Even the Times, usually ultra-cautious in interpreting statements by

Labour Ministers, went out on a limb in its leader. "By deciding to take over the shipbuilders' interests of Court Line, the Government have averted the risk of a collapse of the Group as a whole." At no time did the Government seek to correct the impression given by the press until, of course, the Group collapsed when some small print, which had not appeared in ministerial statements, was quickly run off. What can be done for those who parted with their money after June 26? I may be old-fashioned, but I believe a Government Minister's word is his bond. Either Mr Benn should acknowledge that, as a result of his statement, people parted with money they would not otherwise have parted with and his Department will reimburse them; or he should resign. The man in the street is not interested in fine points of law; he is interested in the morality of Government and this looks like being the major casualty. If the present Government will not honour the moral obligation, I hope that my party and the Liberals will make it clear that, if either form a government after the next election, they will.

How do we stop recurrences of this abuse? Various suggestions have been put forward, ranging from depositing holidaymakers' funds in separate accounts until the holiday is completed, to better insurance cover. I would prefer the latter, which is much simpler and which uses existing machinery. But like so many remedies it will be too late. The real question raised by Court Line is not "how do we protect holidaymakers in the future?" but "in what areas will the public next be at risk?" The public have lost major sums of money in motor insurance, fringe banks and now holidays. Each time we have had an enquiry to stop it happening again. What we really want is an enquiry before these disasters happen.

Sir George Young is the Conservative Member of Parliament for Ealing Acton, and author of Tourism blessing or blight?