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Mr. Alan Keen (Feltham and Heston): As time is limited, I shall concentrate briefly on the crux of the issue. Since my election to this place in 1992, I have often been asked what it is like to be in Parliament. My standard answer is that it is better than going to work. I know that we work long hours in this place, but I worked in the private sector for the whole of my previous working life and it is pretty tough there--efficiency is achieved through drive and ruthlessness.
My hon. Friend the Member for South Derbyshire (Mr. Todd) said that he wanted robust management--so do I. I want robust management in the design and installation of the IT systems and in their testing and re-testing. However, I want that robust management to end at the interface between managers who have to answer to shareholders and the people in front of screens who talk to pilots for hour after hour. I do not want robust management there. That is the crux of the debate.
There are parallels with PFI in hospitals. I strongly support PFI in such cases--so no ideology is involved. However, as my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) pointed out, we do not allow the people who build hospitals or those who have 25-year contracts to clean them to be involved on the clinical side--carrying out operations.
My objection to the Government's proposals is based on that one issue. I repeat that I want to remove robust management--chasing profits and applying cost pressures--from that interface. I do not want such management to control the individuals who have the crucial job of talking to pilots.
Some hon. Members have asked whether there is a difference between a small and a large airport in relation to safety. I have lived within five miles of Heathrow airport for 37 years. Those who do not live around the airport cannot fully understand the dangers. I lived close to the area of the Staines plane crash. Of course, that was nothing to do with air traffic control; it was a faulty plane. The trial taking place in Holland reminds us of the devastation that can happen on the ground--never mind a collision in the sky. My constituents suffer from aircraft noise day in and day out; a plane lands or takes off every 90 seconds. They deserve the best service that we can give them.
For the third time, I repeat that we do not want robust management to affect those people who sit in front of the screens doing that vital job. If we want our Olympic athletes to break world records, we take every worry away from them so that they can focus on their running or whatever event they are competing in. The people in front of those screens as just as important--indeed, they are much more important than Olympic athletes. We should treat them in the same way. They should not be subject to the pressures of the private sector.
Mr. Michael Connarty (Falkirk, East): I join my other colleagues in commending my hon. Friend the Member
for Ayr (Ms Osborne) on her speech on amendment No. 454. She has worked tirelessly to convince the Government that, whatever other structures are put in place, they must manage a two-centre strategy. Given that she is a Parliamentary Private Secretary--as I was for a year--I realise how difficult it must have been for her at times to convince the Government. Governments obviously assume that they have the votes of PPSs, who will be loyal. My hon. Friend has worked hard and I commend her on the amendment. It represents one last throw of an important dice--to include in the measure a commitment to the people of Prestwick and the workers there, so that they can be confident that, whatever the management system, there will be a second air traffic control centre.I seek one assurance from the Deputy Prime Minister. The amendment includes the words "was commissioned". How does my right hon. Friend interpret that? Does it mean that projects that are only at the planning stage? If the planning stage has already been initiated, will the project be encompassed under the provision? That is an important point, because Prestwick is at that stage--no bricks and mortar have been laid, so the project is at an early stage.
I prefer new clause 37 because it would require a report to the House on the progress of those establishments before any commitment is given on transferring assets or shares--it would be the belt and braces for that operation. I should like either new clause 35 or new clause 36 to be passed because they offer a better structure than that proposed by the Government--whether the percentage share is 46:5:49 or 75:25.
A couple of small matters keep coming up. It has been said that, because the rates for air traffic control are set by Europe, a publicly owned corporation could never finance its investment of £1.3 billion. In that case, why are no other EU air traffic services in the private sector? They, too, have to set their rates under European controls.
The hon. Member for Croydon, Central (Mr. Davies) made an important point. If there were better IT efficiency in NATS, there would be a greater flow through airports; there would be fewer delays and income would increase. That would be true of the private sector--it would be a public or a private option.
On management, the amendments on the trust model state clearly that all those involved in management would be from the private and the public sectors. The motivation would be the same for a trust or an IPOC as it would be for anyone else.
Why is a public plc acceptable for the Post Office and not for NATS? As a member of the CWU--Communication Workers Union--parliamentary panel, I have to ask whether the measure is a Trojan horse. If air traffic control is privatised, will there be full privatisation of the Post Office? Will the Secretary of State explain the meaning of clause 49(4), if it does not mean that 75 per cent. will be owned by the private sector and 25 per cent by the public sector? Is that not privatisation?
There is a difference between regulatory control and private profit. I recently picked up an example in the Financial Times which said that airlines in America have asked for a decrease of 10 per cent. in the amount of fresh air that circulates in cabins. They have done than to save millions of dollars in the cost of the fuel that is used to circulate the fresh air. If they are willing to make that cut, they will be willing to make others.
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My final point is one that I have made time and again. I am against the proposal in principle. When we campaigned against water privatisation in Scotland, we were opposed not just to the method, but to the principle. I am against the proposal, and I believe that the Government will pay the consequences, because the people who voted us in are against both the principle of the privatisation and the method to be used.
Mr. Bernard Jenkin (North Essex): I am the 22nd Member to take part in the debate, which has been an exceptional parliamentary occasion of great credit to the House as a whole. We have had an extremely good debate.
Part of the concern expressed by Labour Members reflects a point made by the hon. Member for Falkirk, East (Mr. Connarty) about whether the proposal is or is not a privatisation. Part of the concern has revolved around the issue of safety, but Conservative Members do not accept that there is any inherent conflict between safety and the right kind of privatisation. As has been pointed out, our airlines and airports are already in private hands and they are part of profitable enterprises, and civil aviation just happens to be the safest form of transport. A sensible privatisation scheme would present no safety threat at all.
I wish to speak initially to our new clause 26, which sets out the policy on which the Conservative party stood at the previous general election. We have proposed a full flotation of NATS to create a great new British company with effective golden share arrangements that would protect the business from unwelcome foreign takeover and provide the widest possible share ownership among the British public.
Labour's proposed public-private partnership, however, is something of a mess. The Secretary of State has many friends, but not, I fear, on this issue. Although we reject the notion that safety is incompatible with private ownership, we have several concerns about the proposed scheme and its circumstances.
As my right hon. Friend the Member for Wokingham (Mr. Redwood) pointed out, this public-private partnership provides poor value for the taxpayer. National Air Traffic Services is probably worth between £1 billion and £1.5 billion and the PPP offers release of loans of about £300 million and net proceeds of £15 million from the sale of operational control of the business. A straight flotation would raise considerably more for the taxpayer, especially if sold in stages rather than in one go. Furthermore, sale proceeds are likely to be significantly enhanced after 2002 when the Swanwick centre becomes operational. Our amendment therefore also argues for delay.
Labour's PPP will not extend share ownership. It is a complex part trade sale, forced on NATS to try to disguise the reality that it is just privatisation by another name. A straight flotation would create thousands of new shareholders.
The strongest bidders appear to be foreign companies: Lockheed Martin, which is NATS's key supplier, is from the United States; Raytheon, which is working with the state-owned German air traffic control company, DFS, is also from the US; and Thompson CSF, with its avionics
subsidiary, Airsys, is a French virtually state-owned company. The only UK bidder appears to be the Airline Group, but there is no guarantee that its bid will be successful. The PPP will create not a new British company, but probably a foreign-owned subsidiary, and that does not appear to be in the national interest.Sale of control to a trade bidder carries extra risks. A straight flotation provides for continuation of the same business, but under the same management. A trade investor offers the downside risk of adverse interference in the management of the company and, in particular, in procurement issues. NATS could finish up tied to a less satisfactory supplier of equipment and there are also risks of transferring control to a state-owned entity in another country.
Moreover, the shareholding structure of the PPP creates its own uncertainties about who will be in control of the business. The Government intend to hold more shares than the so-called strategic partner and the draft articles of association for the partnership company and the draft strategic partnership agreement are both complex documents. In this privatisation, confused responsibilities about who is responsible for safety could give rise to safety concerns. NATS's management are excellent and they have no need for outside expertise from a trade investor.
Recent developments in European Community law mean that a sale at this time also presents a threat to national security on two fronts, and I totally reject the idea that this point is a red herring. First, after the PPP, the UK Government will not be able to determine who owns the controlling interest in NATS. The Bill provides for a golden share, but, in July 1999, the European Commission issued an opinion on golden shares in former state-owned companies as a preliminary to infraction proceedings against BAA's golden share. The Commission says that such shares are illegal under European Community law because they infringe provisions on the free movement of capital and the freedom of establishment.
Secondly, it is likely that the provisions in the Bill, which provide for the intervention of the Secretary of State to protect national security, are also invalid under EC law. NATS deals with military flight plans and has knowledge of the whereabouts of military assets at times of international tension and during hostilities. Although that issue will be dealt with in a later debate, I point out that Royal Air Force chiefs of staff have expressed concern that sensitive intelligence information could be compromised.
In short, Labour's PPP is deeply flawed. Moreover, the assurances given by the Government are false. They continue to mention the strategic partner, but why does clause 53 refer to the possibility of flotation? In Committee, the Minister told us that recourse to immediate flotation can be made under the Bill in the event that a suitable strategic partner cannot be found.
Why do the Government continue to talk about the retention of 49 per cent. when clause 49, now that it has been amended in Committee, specifically spells out that the Government's shareholding could be reduced to 25 per cent? What will happen if there is a rights issue then? What is clause 49 worth when it has a Henry VIII
provision stuck in it so, at a stroke of pen, the Government can, at a later date, tear up the golden share and the share restrictions provisions in the clause? It is incumbent on the Secretary of State to tell us exactly what the golden share is for, given that the European Commission has made it clear that it regards it to be illegal under European Community law.The Government's PPP is a bad privatisation that we cannot support. The Select Committee described it as
- the worst of all the possible options.
The Deputy Prime Minister has brought this so-called PPP to the House only because the Treasury is forcing him into the privatisation against his will. It is flawed by the Government's attempt to pretend that they are not privatising something when they are. Having promised before the election that
- our air is not for sale
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