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Dr. Gavin Strang (Edinburgh, East and Musselburgh): Does my right hon. Friend agree that the most important requirement facing air traffic control is to ensure that the new centres at Swanwick and Prestwick are successfully brought into operation without further delays? Would it not be better to allow the top management of air traffic control to concentrate on those major technical and managerial issues without being diverted by a major and complex privatisation? As air traffic control in this country runs at an operating profit, if it is the Government's main objective to allow air traffic control to raise money privately for investment, why do they not
allow a public sector National Air Traffic Services to borrow in the market in the same way as is envisaged for the Post Office?
Mrs. Liddell: My right hon. Friend has raised a number of issues. He asked about the development of Swanwick and Prestwick--an issue in which he takes a special interest. Through the public-private partnership, we shall be able to ensure that there are no further delays in getting Swanwick and Prestwick on stream. As a result of the previous Government's incompetence, the delays at both Swanwick and Prestwick have been unacceptable. Faced with an increase in traffic of 6 per cent. per annum--8 per cent. last year--we need those two new centres on stream very quickly indeed.
My right hon. Friend asked about the pressures on top management. One reason why we have gone for a public-private partnership is that we want to be able to enhance and enlarge the management expertise within NATS. One considerable difficulty that we experienced when we came into government was the lack of project management at Swanwick. As a consequence of the lessons learned from that, an external project manager was appointed to allow the Prestwick development to go ahead. Rather than hampering top management, introducing a public-private partnership will assist top management to deal with the complex issues that will require £1 billion of investment over a 10-year period--an extremely complex matter.
The right hon. Gentleman--[Hon. Members: "Friend."] Indeed, he is a right hon. Friend. When I was struggling for a way to emphasise how good the Government's proposal was, I looked to the words of my right hon. Friend, who stated on 11 June 1998:
However, our proposal is not solely a revenue-raising exercise, although the previous Government put a price of £500 million on NATS. Our proposal will allow an opportunity to raise capital much more freely on the international markets, and it will allow it to be done without Treasury constraints. It will allow a degree of flexibility that could not be guaranteed within the public sector. It will also ensure that prudent use of the public finances will enable us to continue with the economic growth that has been secured by the Government through a sensible economic policy, which the Opposition seem now to have adopted.
Mr. John Wilkinson (Ruislip-Northwood):
May I tell the right hon. Lady that my constituents, a number of whom work at the West Drayton centre, will be profoundly unimpressed by her attempts to shuffle the announcement through in a written answer the day before the summer recess? On my constituents' behalf, I express my warm thanks to my hon. Friend the Member for North Essex (Mr. Jenkin) for ensuring that the matter is being properly and publicly debated.
The right hon. Lady has no comprehension of air transport safety matters. Is it not the case that countless airlines across the world are owned wholly by the private
sector, are regulated by the appropriate regulatory authorities and perform entirely competently and safely to standards equivalent to those in the public sector? Is it not also a fact that air traffic delays are now running at 10 per cent. of civil air transport movements in United Kingdom airspace? In view of that and the inordinate delays both with the Prestwick centre, which is still in project definition, and with Swanwick, why has not the right hon. Lady come to the House much sooner to put that shambles to rights? Will she bear in mind that there are a number of private sector airports with private sector air traffic controllers that do a perfectly good job with regard to air safety?
Mrs. Liddell:
That is the longest intervention that the hon. Gentleman has made without mentioning Europe. He will know, if he has contact with air traffic controllers at West Drayton, that there has long been uncertainty about the future of NATS, largely because of the mess that we inherited from the Government whom he supported. I judge it a matter of some importance to end that uncertainty, so that those who work in NATS can be taken fully into account as our proposal moves forward. Had we received a response from EUROCONTROL earlier than last week, we would have been able to publish the proposals earlier than last week.
The hon. Gentleman spoke about privatised airlines. NATS is not an airline. We seek to take the best of the public sector and the best of the private sector and work together in partnership, with safeguards and controls that guarantee the national interest, security and safety.
The hon. Gentleman mentioned air traffic delays. As he will know if he has visited West Drayton, over the past year NATS has gone to considerable lengths to try to limit the number of air traffic delays over United Kingdom airspace, and has made some improvement. However, the hon. Gentleman makes a valid point about the international impact of air traffic delays.
One of the great benefits of the proposal before the House this afternoon is that it will enable the considerable expertise of NATS to be marketed internationally, so that we can take our experience to other countries which seek to learn from Britain's experience and, in that way, seek to improve air traffic not just nationally but internationally in a way that benefits all passengers.
Madam Speaker:
Order. As a number of hon. Members seek to ask a question on the statement, may we have brisk questions and answers so that I can call as many hon. Members as possible?
Ms Sandra Osborne (Ayr):
My right hon. Friend said that the speculation over the years about NATS has caused constant insecurity, and I agree--but does she agree that we are now faced with another two years of turmoil while the PPP is introduced? When will phase 2 of the new Scottish centre begin, and how will that be funded? Is my right hon. Friend aware of the early-day motion in my name, signed by 140 hon. Members, calling on the Government to consider in detail a public sector alternative with greater commercial freedom? What action have the Government taken on that? Can she confirm whether the receipts will be used for investment in NATS
Mrs. Liddell:
I have discussed these matters with my hon. Friend, who takes a considerable interest in matters at Prestwick. She mentions the uncertainty that has existed over Prestwick, but she will be well aware of the considerable difficulties in moving ahead with the Prestwick project because of the private finance initiative proposals that we inherited from the previous Government. Now that we have resolved those difficulties with today's announcement, we should be able to press ahead with the Prestwick proposal. It will also allow the management strengthening that is required to process that as quickly as possible.
My hon. Friend also referred to the independent publicly owned company proposal from the trade unions. We considered that in some detail--it contains some excellent ideas--but it would still have meant that NATS would not have had the commercial flexibility to raise internationally the capital required to secure its future in the long term.
With regard to the receipts from the public-private partnership, my right hon. Friend the Prime Minister has already pointed out that the arrangements mean that the Department of the Environment, Transport and the Regions has been able to secure an even better settlement in the comprehensive spending review so that we can ensure an integrated transport system that operates in the United Kingdom's interests. Phase 2 of the new centre at Prestwick will be funded under the partnership, and the Government will fund it until then.
Mr. Christopher Chope (Christchurch):
Many of my constituents who work for NATS will be confused and bewildered by this muddled statement. Can the Minister come clean with the House about what will happen to the £500 million that will be raised from the sale? Is not the reality that that money is needed to pay for the massive overspend on the Jubilee line, and that that is what is driving this weird Government announcement?
Mrs. Liddell:
The massive overspend on the Jubilee line is much more than £1 billion, because of the ineffective contracts that we inherited which could have been designed only by someone who had no experience of drawing up contracts. The hon. Gentleman was a Transport Minister, so he should be hanging his head in shame. Were it not for the overspend on the Jubilee line, we would have been able to release even more expenditure for public transport in London and elsewhere, so we will take no lessons from the previous Government on how to draw up contracts.
"This package, taken together, will guarantee the highest safety standards as air transport increases in the future. It will retain a large public stake and golden share in NATS. And it will ensure that NATS can finance its future investment effectively within a secure framework of safety and economic regulation."--[Official Report, 11 June 1998; Vol. 313, c. 637.]
I could not have expressed it better myself.
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