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Mr. Jenkin: That is a pretty double-edged sword. First, the Minister accuses us of not doing something that was not in our 1992 manifesto and then takes credit for the fact that we were beaten in the last general election, when privatisation was in our manifesto. Now, he proposes the privatisation of NATS when it was not in his manifesto.

I will come now to some of the comments that have been made. Fundamentally, these amendments are about only one argument--democratic accountability. It is always an exquisite irony--one that the hon. Gentleman seems unable to stomach--when the other place delivers a rebuke to this elected House about our democratic duties. The amendments offer just such a rebuke.

At the 1996 Labour party conference, the present Chief Secretary to the Treasury, then Labour's Transport spokesman, proclaimed to ecstatic Labour cheers:


There is not much cheering at present.

Later that month, the right hon. Gentleman issued a press release stating that the scheme


Why did Labour not make it a general election issue? Because Labour had a covert plan to privatise air traffic control.

In February 1997, the hon. Member for Manchester, Withington (Mr. Bradley), now a member of the Government, but then a shadow Transport Minister, said:


Nothing could have been clearer than that. There was nothing to suggest privatisation in the election manifesto.

Mr. John Bercow (Buckingham): My hon. Friend has alluded--entirely appropriately--to the views of the

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hon. Member for Manchester, Withington (Mr. Bradley). Does my hon. Friend believe that the hon. Gentleman changed his mind on the subject before or after he was appointed Deputy Chief Whip?

Mr. Jenkin: Those are murky matters; they are best left to individual hon. Gentlemen and their shaving mirrors.

During the general election campaign, a little skirmish took place on this matter. A Labour spokesman said:


Will the Minister tell me where Labour made it clear that they were looking at the privatisation of air traffic control? I suppose he--

Mr. Raynsford: The hon. Gentleman invites me to respond, but seems reluctant to hear the answer.

I have already quoted the Prime Minister's comments in our manifesto. On 4 April 1997, my right hon. Friend the Chancellor made it clear that the Government would consider a scheme for the privatisation of NATS; his remarks were reported in The Times.

Mr. Jenkins: One quote in one newspaper hardly constitutes a mandate. What is significant is the comment made by the Prime Minister when he was fighting the previous general election as Leader of the Opposition. In typically opaque fashion, the right hon. Gentleman said:


I do not follow the syntax of that sentence, but it confirms just how double-dealing and two-faced new Labour can be; it certainly does not constitute a mandate for the privatisation that we are considering today.

We are now offered the choice of deferral of the proposed sale. The Conservatives set a precedent for such a deferral: the idea for the privatisation of British Telecom germinated during the 1979-83 Parliament, but the Conservative Government knew that they lacked a mandate for such a privatisation. The Minister has already quoted from a debate that took place at that time. So it was a case of "not in our manifesto, no sale."

As Lord Brabazon of Tara pointed out in the other place, that view appears to be reflected by the Deputy Prime Minister in connection with the sale of Railtrack. Last month he told the House of Commons:


What is sauce for the goose should be sauce for the gander, and if the previous Government could have done it with Railtrack, the present Government could certainly do it with National Air Traffic Services.

This sale is every bit as controversial as that of Railtrack--possibly more so, as the election of the present Government was preceded by such explicit denials that such a sale could possibly take place.

This proposal should appear in a manifesto that wins the approval of electors before it goes ahead. The other place is right to make us think again about this matter,

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and it has every right to do so. After all, it was the Labour leader in the other place, Baroness Jay, who said that, following the Government's reforms of the upper House, it


She clearly did not envisage that Ministers would stand up at the Dispatch Box in this place and continue to demand fealty from the House of Lords as though it was some kind of patsy to be put back in its box at the first opportunity.

I wholeheartedly agree with Baroness Jay's comments, and I urge the House to reject the Government's motion.

Dr. Strang: I, too, oppose the Government's motion.

There are some very good practical reasons, some of which the hon. Member for North Essex (Mr. Jenkin) mentioned, for delaying the transfer. As was pointed out, National Air Traffic Services is facing two major challenges at present. The first is to get Swanwick--the new en-route centre near Southampton--into action as soon as possible, and senior management time should be devoted to that challenge. The second is to press ahead with the new Scottish centre.

The private finance initiative was initially proposed by the Conservatives, and for some time we continued to try to make it work. I agree with my hon. Friend the Member for Ayr (Ms Osborne) that it would have been a mistake. It is a mistake, in air traffic control, for the whole centre, let alone the software and hardware, to be owned by one company while the controllers are employed by someone else, as would apply under PFI.

Therefore, top management in NATS should be preoccupied with getting on with bringing Swanwick on stream and getting ahead with the new Scottish centre, and they should not be diverted, at this of all times, by this complex privatisation. It is indeed complex and, as we all know, has been described by the House of Commons Select Committee on the Environment, Transport and Regional Affairs as the worst of all options.

In addition, if the measure is driven by financial considerations--as we know it is--it does not make sense to sell off Swanwick when the whole place could have been operational in about a year's time. I emphasise that I am against privatising at any time but I ask the House to consider the following. Suppose that we are in the business of maximising capital receipts to get the best deal from the privatisation for the country and the Government. After all the trauma and all the problems, and whoever is to blame, whether NATS or the private sector--I am inclined to believe that both must accept some responsibility--if the Swanwick centre is going to be operational in the next year or so, surely it is sensible to wait until then before seeking a capital receipt for it.

On that financial issue, I am grateful to my hon. Friend the Minister for Housing and Planning for recalling what the Government were saying on the subject just before I left the Administration in July 1998. I have no intention of breaching any of the confidential discussions that took place between Ministers before I left the Administration

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and, as I have said time and again, I accept complete responsibility for any answers that I gave or anything that I said on the issue, but let me place the matter in context. My hon. Friend will recall that the announcement was made by the Chancellor of the Exchequer in his comprehensive spending review; that was the significant thing. Of course, as the then Minister of Transport, it fell to me to set out, as I did in a written answer, that the Government would consult. I emphasised--I remember the words vividly--that we were going to consult not just on the practicality, but on the principle behind the proposal.

5.15 pm

My right hon. Friend the Member for Hamilton, North and Bellshill (Dr. Reid) took over from me as the Minister of Transport, but the post was no longer a Cabinet position. He duly published a consultation document that made it clear that the Government were examining alternatives. It was a genuine consultation and he made it clear that other options would be considered. However, the announcement was finally made by my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), who had taken over as Minister of Transport, and, as we were rightly reminded, it was made on the last sitting day in July 1999. Governments tend to make a clutch of important announcements on the last day before the recess, but--my right hon. Friend will correct me if I am wrong--I think that she had to be summoned to the House to respond to a private notice question from the Opposition.

The history of the proposal is in the public domain, but the important point is that we all know that it has been driven by financial considerations. Indeed, my hon. Friend the Minister for Housing and Planning quoted what my right hon. Friend the Chancellor of the Exchequer said during the general election campaign. That shows that the proposal is all about finance. It is about the so-called "black hole" in the finances that the Labour Government inherited from the Conservative party's programme. It is important to understand that, for the Government, this proposal has been driven by financial considerations. There was the prospect of significant capital receipts and the Government wanted borrowing to be transferred from the public to the private sector.

NATS is profitable, and the Government still had the option of the Post Office solution if they wanted to choose it. Many people find it hard to understand how they accepted that option for the Post Office, but not for NATS.

We know that the proposal has been made for financial and not for safety reasons, and there is no point running away from the safety issue. To put it briefly, privatising NATS is not like privatising an airline. Make no mistake about it: the Government fully intend that the so-called private strategic partner will have complete strategic control of the service. With a privatised airline, such as British Airways, the private owners can maximise profits for their shareholders by improving the service. They can increase the frequency of the service, make it more reliable and improve comfort and in-house catering. That option does not exist for air traffic control. All that air traffic controllers do is keep planes apart and our skies safe. The only way a new private owner can obtain a

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higher return on the capital deployed and make even more profit from the service for private shareholders than it is making in the public sector is to cut costs.

That is why there is a concern that--not immediately, but in the long run--the conflict between private profit, which means driving down costs, and safety standards could put safety in jeopardy. If anyone is any doubt about that, I remind the House of what has emerged. In preparing for privatisation, the Civil Aviation Authority has proposed major cuts in NATS' prices. That information was leaked over the summer, and NATS said that that would


That is what the management of NATS--probably the safest air traffic control system in the world--is saying about the threat of privatisation and the specific, complex partial privatisation scheme proposed by the Government. It will not wash to say that safety is not an issue, because it is, and that is why the scheme is opposed by airline pilots, air traffic controllers and the British people. On safety, let us not forget that, as far as the airlines are concerned, the crucial dialogue is between the airline pilot and the air traffic controller on the ground.

As for regulations in the public sector, the standards achieved by NATS are substantially higher than those laid down by the CAA as regulator. Everyone in the industry believes that if privatisation takes place, NATS standards will initially continue to be higher than those laid down by the regulator, who will remain in the public sector, but that, over time, they will inevitably come down to the level set by the independent regulator. That regulator will be responsible not just for NATS but for private airports and other groups that are in the business of air traffic management and control, although NATS is, of course, dominant. All the onward traffic--every plane in our air space--has to go through NATS. We should not get the exaggerated idea that because private airports are able to manage their inflow of planes, that is comparable to the national job that our nationalised, and therefore publicly owned, air traffic control does for this country.

Safety is an issue, but so is national security, and I believe that that is why no other country--certainly no major European country--has taken this approach. I have been told that the only country with a privatised air traffic control service is Fiji. The United States has not privatised its service because national security is involved. It is not just civil planes that have to be managed, but military planes--Royal Air Force planes and other military planes--that are based in this country. Our system is a model for Europe, if not the world. We manage to get RAF controllers and NATS civilian controllers to co-operate by working from the same premises. I, like most people, believe that that co-operation is best facilitated by having NATS and RAF controllers in the public sector.

There are other national security issues. What if there is a crisis? I do not want to be overdramatic, but we have to accept that we are planning for the long term. We are not merely concerned with what is going to happen in the first two or three years of privatisation. If we had information that a plane was coming into the country that had been hijacked or was carrying--dare I say it--a bomb

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or a substance that could be a threat to the civilian population, our Government, security services, police and military would have to take complete control and act as one with the air traffic control system. That is undoubtedly best facilitated by retaining NATS in the public sector.

We cannot rule out the possibility--we dealt with this in the Standing Committee--that the privatised company will eventually come under foreign ownership. The Minister confirmed that the Bill provides for the public stake in NATS to fall to 25 per cent., which means that more than 60 per cent.--two thirds--of the service will be owned by the private sector. The foreign-owned company could be based in a country where, in the event of a crisis in the middle east, the population and the Government might support, to put it crudely, a different side to that supported by the British Government. In such a situation, there could be a conflict of interest between the directions given by the Secretary of State, who has powers in the Bill to direct the new privatised air traffic control system, and the management--the foreign ownership--of the company.

We cannot run away from those issues. We are not legislating on a minor or inconsequential matter. We are not passing legislation that will have an effect just for the next two or three years. If the proposal goes through, the worry is that, in the long term, our people will pay a heavy price.


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