Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government, further to the Written Answer by Baroness Sugg on 13 November 2017 (HL2729), whether Greybull Capital made a profit from its investment in Monarch airlines.
Answered by Baroness Sugg
Greybull Capital is not itself a shareholder in Monarch Airlines but they do perform an advisory and management role for the principal shareholder, Petrol Jersey Limited. The extent of any profit or loss resulting from Petrol Jersey Limited’s investment in Monarch Airlines has not yet been determined as it will depend on the outcome of the administration process and any asset realisations and distributions that may result from that process. The administration is still ongoing, and the timeline and process for concluding it is being determined by KPMG as administrator.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether officials prepared any estimates for the Secretary of State for Transport of the value transferred, or to be transferred, to the franchisees of the East Coast rail franchise as a result of terminating that franchise; and if so, when.
Answered by Baroness Sugg
The Department for Transport is preparing contingency plans as we do not believe that the franchise will be financially viable through to 2020. The Secretary of State has a clear duty to do that for passengers. The Department is in discussions to ensure the needs of passengers and taxpayers are being met in the short term whilst laying the foundations to bring forward the reforms under a future long-term competitively procured contract. When a conclusion to that work is reached, the Secretary of State will make a statement in the House as he undertook to do on 10 January.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether the Secretary of State for Transport has issued a ministerial direction on any matters related to the termination of the East Coast rail franchise.
Answered by Baroness Sugg
The Secretary of State for Transport has not given a ministerial direction in this case. Assessments of Value for Money and the efficient use of public funds will be made at the appropriate stage in our standard processes. All decisions will be guided by HMG’s “Managing Public Money” guidance in the usual way.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether (1) Stagecoach, and (2) Virgin Railways, (a) are obliged, and (b) have committed, to make any payment to HM Government to cover losses that those companies would have incurred under the contract for the East Coast rail franchise.
Answered by Baroness Sugg
As with all recent franchise awards, Stagecoach Group PLC committed parent company support, in this case totalling £165million, which they are obliged to inject into the franchise in circumstances where it doesn’t perform as predicted. We will hold them to that commitment in full.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether they intend to review the impact of rail price increases on the employment and real incomes of those who commute to London by train from Brighton.
Answered by Baroness Sugg
The Government understands the concern about the cost of some rail fares and the impact that this can have on people’s budgets. That is why the Government has ensured that regulated rail fares have, since 2014, risen no faster than RPI inflation. We, of course, continue to monitor our rail fares policies closely and keep them under review.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether they intend to investigate the interest rates set on loans from shareholders to Monarch Airlines Group and determine whether those rates were reasonable in terms of protecting the rights of creditors, employees, pensioners and other stakeholders.
Answered by Baroness Sugg
The Insolvency Service’s enquiries into the insolvency of Monarch are ongoing and it continues to liaise with the administrators and the Civil Aviation Authority (CAA) to establish the facts surrounding the administration of Monarch Airlines Group.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government what assessment they have made of the Administrator's Report on the collapse of Monarch Airlines Group, published on 24 November, and the disclosure that substantial sums will be paid to Petrol Jersey Ltd and Windsor Jersey Ltd, both affiliates of the owners of Monarch, Greybull Group; whether they have now made progress in recovering public monies expended by Her Majetsy's Government in repatriating to the UK passengers of Monarch airlines; and if so, what.
Answered by Baroness Sugg
The Insolvency Service’s enquiries into the insolvency of Monarch are ongoing and it continues to liaise with the administrators and the CAA to establish the facts surrounding the administration of Monarch Airlines Group.
The Department for Transport are continuing to work with several third parties, including relevant card providers and travel providers through which passengers have booked flights, to recover costs from the repatriation operation. We have begun the process of issuing invoices to third parties, and we will report back with more detail on cost recovery in due course.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government, further to the Written Answer by Baroness Sugg on 13 November (HL2710), when they expect to be able to provide a final figure of the total cost to the taxpayer of repatriating to the UK passengers of Monarch Airlines; in relation to cases where there is no confidentiality clause in place, who the recipients of those repatriation costs were; what is their initial estimate of how much each of those named recipients received; why confidentiality clauses have been used in some cases; and in relation to how many recipients were such clauses used.
Answered by Baroness Sugg
We are not yet able to give a final figure for the costs of the repatriation operation as we are awaiting invoices and cost recovery from third parties. This was a complex operation and aircraft and cabin crew leasing, call centres and coaches to transfer passengers between airports were among the costs.
Confidentiality clauses were used to protect commercially sensitive information in the course of planning for the repatriation operation.
In line with the usual transparency guidelines on government expenditure and financial reporting the absolute full and final position will be made clear in the annual accounts for the department, the Civil Aviation Authority (CAA) and the Air Travel Trust (ATT), which should be published in June 2018. However, I very much hope to be able to give a more refined figure for the costs of the Monarch repatriation operation much earlier.
I would refer the Noble Lord to my answer of 13 November to his previous questions.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government whether they intend to pursue the assets of Monarch Aircraft Engineering (MAE) in obtaining a contribution to public funds to cover the cost of repatriating customers of Monarch Airlines to the UK; and whether they plan to establish whether (1) MAE is still owned by Monarch Airlines or Greybull Capital, and (2) whether all or part of the capital of MAE has been sold and, if so, to whom the proceeds were paid.
Answered by Baroness Sugg
Monarch Aircraft Engineering Limited (MAEL) remains a standalone business, which continues to trade, after the Monarch Airlines and Monarch Tour Group entered Administration. We are not aware that there has been any change to the ownership of MAEL or that any shares have been sold in that company.
We are focused on making sure that there is clear burden sharing, and that it is not only the government who pays.
We have entered into discussions with several third parties with the aim of recovering the costs of the repatriation operation. This includes Greybull Capital and relevant card providers and travel providers through which passengers may have booked flights. We will in due course be able to report back with more detail.
Asked by: Lord Myners (Crossbench - Life peer)
Question to the Department for Transport:
To ask Her Majesty's Government what is their estimate of the total cost to the taxpayer of repatriating to the UK passengers of Monarch Airlines; and who were the top ten recipients.
Answered by Baroness Sugg
The principal shareholder in Monarch Airlines is Petrol Jersey Limited with the Pension Protection Fund also holding a 10% stake. Greybull Capital is not itself a shareholder in Monarch Airlines but performs an advisory and management role for Petrol Jersey Limited.
There is no formal legal mechanism we can use to oblige Greybull to contribute towards the cost of repatriating passengers. However, Marc Meyohas, partner at Greybull has written[1] to the Transport Select Committee acknowledging a moral obligation (if they make a profit) to contribute to other stakeholders including helping to defray the costs incurred by the Government in repatriating Monarch customers.
Our initial estimate was that the total costs of the repatriation operation will be around £60 million. We are currently unable to give a final figure as we are awaiting final invoices and cost recovery from third parties. We will be able to report in due course exactly how much the taxpayer has contributed and further detail on the recipients, where this information is not subject to a confidentiality clause.
We are focused on making sure that there is clear burden sharing of the repatriation operation, and that it is not only the government who pays.
We have entered into discussions with several third parties with the aim of recovering the costs of the repatriation operation. This includes Greybull Capital and relevant card providers and travel providers through which passengers may have booked flights. We will in due course be able to report back with more detail.
[1] http://www.parliament.uk/documents/commons-committees/transport/Response-from-Greybull-Capital-LLP-to-Chair-re-Monarch-Airlines-collapse-24-10-2017.pdf