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Mr. Duncan Smith: If my hon. Friend will bear with me, we shall deal with that argument later on. I agree with him, but I shall cover the point more powerfully in another part of my speech.
In Committee, the Minister prayed in aid the Sirdar case for the success of his provisions. I was concerned by another of his comments. Perhaps under advice from an official--although not, I hope, one who had studied European law--the Minister quoted article 297 of the treaty as the defining moment showing that our concerns and worries were wrong.
The Minister said that the exercise of powers under clause 81 would be entirely consistent with the treaty--in other words, that national security and thus the exercise of derogations, and so on, were sacrosanct in the eyes of the Court. However, I have taken advice on the matter and article 297 means the opposite of that. It is important to re-read the article. It is about how a clash with the ECJ and the acquis communautaire would be remedied. The article states:
- Member states shall consult each other with a view to taking together the steps needed to prevent the functioning of the common market being affected by measures which a Member State may be called upon to take in the event of serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.
If the Minister had read on, he would have seen that article 298 kills his argument completely. Article 298 makes it clear that, if the Commission takes the view that the Government have acted in a way that distorts the marketplace, it can take the Government to the ECJ on an accelerated proposal.
The treaty takes a view about a member state making what the treaty determines and the Court then decides is improper use of legislation. The Minister's firm ground in Committee is now very shaky indeed. If the Government felt it necessary to use these provisions to protect national security, there are serious doubts that they would succeed, and that they would not have an injunction placed on them. They need to face up to that problem.
The Government must also face up to some other difficulties presented by their provisions. Their stance is not absolute. There is a progressive process that is likely to give a private company the reason and opportunity to challenge the Government's interpretation of national security--not in great moments of crisis and conflict but, when there is a military requirement for airspace, they may find themselves in some difficulty.
Let us move on to other aspects of the clauses. What will happen if, for example, the Government have security concerns about an employee or employees of the future privatised company? Those concerns might not necessarily arise during a conflict, but in a normal working year when the Government do not have a specific conflict in mind. Clause 38 does not deal with that point even though it should. The Government may decide that certain people pose a security risk to the running of the company, particularly given its relationship with military controllers, but the clause gives them or the company no powers to insist that those people are not employed for security reasons.
In Committee, my hon. Friend the Member for North Essex referred to the security difficulties of the Kosovo operation. I cite a more obvious example. The French take a different view on the use of our military in Iraq and there may be differences that could lead the Government to decide that a person employed may cause a security breach or lapse as a result of his close connection with the military on the control of airspace. The Government should have addressed that problem in clause 38, but they
have not done so. I urge them to think carefully about it and, if necessary, to table further amendments. At present, the clause is flawed.Even if the Government want to use another device to stop someone being employed, they will face difficulties. The European security and defence identity process will mean that anyone from the Commission to the European Court will take the view that, because we are in a common defence position, it is difficult to say that a security risk arises in relation to any other member of the European Union. Because the Government have not addressed the problem in clause 38, they have no hook on which to hang that objection. That will create a huge problem for them in the future.
Why does clause 38 not refer to compensation if the Government intend to use the devices available to them? What will happen if there is no compensation provision? Clause 81 and new clause 5 contain such a provision, but if a private company is aggrieved by the provisions employed in clause 38, it will want to take redress in legal processes.
Mr. Raynsford: It might help if I point out to the hon. Gentleman that he has misread clause 38, which is about giving directions. He will surely understand from what I said earlier that there is a distinction between new clause 5, which allows for powers to seize assets and where compensation is clearly appropriate, and the provisions that give directions to the licence holder to act in a certain way. He must recognise that, if there is a fear about the security rating of an individual, that matter can be well covered by the provisions in clause 38(2).
Mr. Duncan Smith: I hear what the Minister says. On compensation, the directions to which he referred could, and are likely to, lead to claims for compensation because the directions might result in changes of operation. As a result of that, the company might claim that there is problem. The Minister dismisses all the arguments as though the Government have arrived with a tablet of stone that cannot be changed. I simply point to a problem.
I do not think that the Minister's other point about whether it is possible to dismiss someone is covered by the clause. He should take serious legal advice, because a company is bound to challenge the provisions.
Under the combinations of events that I have described, a private company is more likely to make a challenge over the issue of national security. The vagueness of some of the wording will, I suspect, lead to further challenges to the Government in the European Court. Clause 81(2)(e) says that the Government may give directions to
- a person who owns or operates a relevant asset.
I return to paragraph 26 of the Sirdar judgment that the Government were so keen to pray in aid in Committee. When the issue of national security is invoked, the court states:
- That principle requires that derogations remain within the limits of what is appropriate and necessary.
I sat on the Government Benches when the Conservative Government were in office. I remember Conservative Ministers often saying exactly the same thing. There was almost deja vu when I read some of the Minister's comments in Committee and set them against those made by some of his predecessors within the Conservative party when they were in government. In so many cases they found themselves eating their words two, three or four years later. In each instance they said that they could not have anticipated that the court would move in a particular direction. The Minister should take note of that. Unless he finds his own words an excellent diet, he should be prepared to find himself in deep difficulties in a few years' time.
There is a unique relationship that I would wish to see replicated if a private company is to take over the running of our airspace. That is unlikely as long as the Government fail to accept our amendments or fail to recognise that there is an issue which poses the question, "Who controls our airspace?" That is the key. Throughout consideration of the Bill in Committee the Government failed to answer that question. If they do not do so tonight, the issue of national security remains live and may yet pose huge problems for the implementation of the Bill when it is enacted. When the Government need the legislation, it will not be there. I am deeply concerned.
Mr. Brian H. Donohoe (Cunninghame, South): I shall speak to amendment No. 147, which stands in my name. I shall be brief in asking my hon. Friend the Minister two specific questions.
First, the Government have introduced a provision that suggests that ownership can be taken down to 25 per cent. If what I have learned in the Select Committee on the Environment, Transport and Regional Affairs is anything to go by, a foreign company is almost certain to be the successful bidder. I am concerned about national security. The Government talked originally about a public-private partnership, and I want to know why the Government would accept a 25 per cent. shareholding. Surely this must have a major effect on national security. I want to have some assurances that that is not the position.
During the discussions of the Select Committee, one of the most interesting episodes was a meeting with the senior management of National Air Traffic Services. We talked about expansion and they said that our technology was potentially at the leading edge. They added that that would lead to the possibility of us participating in foreign air traffic control. I believe that there could be problems if the Government were to have any shareholding in air traffic control.
Let us say that the Government maintain their 49 or 46 per cent. holding, a private company is taking control and it decides that it will invest in, for example, Russian air traffic control. There is always the potential for a problem in that airspace. Were there to be a major incident with two airliners crashing, what would be the political and diplomatic implications of such an
investment? In those circumstances, the British Government could be under an A-bomb if there were such an incident in foreign climes. I did not receive a reasonable response on that until the directors of NATS told me that they could not foresee NATS making foreign investments while it had even a single share in publicly owned companies in this country.
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