Monarch Airlines

Lord Myners Excerpts

Monday 9th October 2017 Lords Chamber

[Lord Myners (CB)]

My Lords, the Minister said that this was an unprecedented and most regrettable story, but it is not unprecedented for Greybull, the owner of Monarch, to have seen a company fail. In the past, companies have failed with damage to creditors, customers and employees, but with much less damage to Greybull because it has taken secured credit on receivables and fixed assets. It has put itself in the position of being a preferred creditor. I hope that the Government will encourage the authorities to investigate whether that is not an issue of fraudulent preference.

Secondly, the Minister praised the CIA and said that it could organise things reasonably well. I wonder whether it did so a year ago because the method by which Monarch was recapitalised was to lease planes from Boeing, which told it that the planes were worth £100 million more, which it could book as equity in its accounts. The Minister said that the money was in the bank. I suggest that the Minister is showing a complete failure to understand what has happened here. I encourage him to look objectively at the performance of the CIA, which appears to have licensed a business with inadequate equity, and also at the Insolvency Service and its investigation into the activities of Greybull—which this House was previously told would be reported on to Parliament, although the Government then decided that they would not publish the Insolvency Service report.

[Lord Callanan]

I am sure that the CIA is doing a great job, but on this occasion I will talk about the CAA—the Civil Aviation Authority. The noble Lord makes a number of very serious accusations. As I said, the administrators have a duty to report to the Government within three months on the actions of the directors. Again, as I said, if there is any evidence that those directors have acted improperly we will not hesitate to take action against them. I am afraid that I do not agree with the noble Lord: the CAA has done an excellent job in unprecedented circumstances. I have been working very closely with the CAA and it has acted in the best interests of the passengers involved. The noble Lord shakes his head. If we had not done anything and not put any contingency plans into action to bring people back, I am sure that he and many of his colleagues would be criticising us for not doing so. The CIA—the CAA; the noble Lord is getting me into it now—has acted properly and done an excellent job in very difficult circumstances pulling together a huge rescue operation for over 110,000 people. It deserves our credit.