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Mr. Chidgey: I oppose the Government motion, but, before I make my contribution, may I refer to the speech by the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang), who spoke with great clarity? I recall earlier in the Parliament when he and I spoke on transport matters from opposite Benches. Listening to his speech, we got an insight into what the real policy was behind the proposal.
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I have a constituency concern in the issue. As some hon. Members may realise, my Eastleigh constituency borders the new Swanwick centre. Many of my
constituents work at the Swanwick centre and, on various occasions in past months and years, have contacted me to express their concerns about the plan for NATS. Not the least of their concerns is that they will not be able to do their jobs as well as they do now. They have genuine concerns about the safety of the general travelling public, whom they feel it is their fundamental task to protect.The Minister knows what has happened at Swanwick. Although those facts are pretty much public knowledge, it is worth reminding ourselves of them. The new centre is forecast to be six years late, and it has already cost hundreds of millions of pounds more than it should. As we know, Lockheed Martin, which is a multinational concern, is both the prime supplier at Swanwick and a leading bidder in the Government's part-privatisation proposals for NATS. Those facts should suggest to the House and, I hope, to the Government that there is some variability of competence in the private sector.
As the hon. Member for South Derbyshire (Mr. Todd) said, there is more than one solution. The hon. Gentleman very eloquently and rightly pointed out that no particular part of our economy is perfect. However, neither the public sector nor the private sector is perfect. I say that with more than a quarter of a century's experience of working in the private sector on projects rather similar to Swanwick, although they may not have had the same outcome.
Ministers seem to have an almost childlike faith in the ability of profit-motivated private companies to cure the ills that we see in NATS. They seem to be claiming that only a public-private partnership can meet the necessary investment targets and deliver the modernisation programme that is necessary to cope with the growth in air travel.
Today, I was a little alarmed to hear the Minister say that the controversy in the debate--in which the House is rightly engaged--on when and how the proposals should be implemented are in themselves causing a decline in recruitment of trainee air traffic controllers. Although it may not have occurred to the Minister, perhaps the prime reason for declining recruitment is that potential recruits do not want to join an organisation that is no longer in the public sector or known to have as its fundamental aim the safety of the public whom it serves. Potential recruits may be concerned that a profit-driven company would not maintain the standards that they would wish to achieve. Either of those may be a key factor in people's decision whether to join NATS. Recruits who believe that the safety of the airways and of millions of passengers is paramount are perhaps particularly turned off by those considerations.
We should deal with NATS' response to the economic regulatory group's consultation. Does the Minister know of any organisation that has been able to achieve the type of targets set by ERG in its consultation paper? ERG proposes that there should be significant initial and subsequent price cuts leading to reductions of between 21 and 35 per cent. by year 5; assumed operating cost efficiency of the same order; and assumed savings of between 16 and 29 per cent. in capital expenditure. ERG is proposing that, in an organisation that is crying out for capital expenditure, there should be a saving of between 16 and 29 per cent.
ERG is also proposing not only that a 7.5 per cent. efficiency gain should be assumed in NATS' plan, but that NATS should make a profit. Where does safety come in in such a regime? I do not know of any organisation that has been able to achieve such targets and make a profit, let alone maintain safety levels. Let us face it--air travel is pretty risky. Aircraft do not stay up on their own. They are not like a No. 9 bus when its engine fails on the Clapham road and it just stops. Aircraft have a nasty habit of falling out of the sky, particularly if they are too close together and hit each other.
Ministers say that they have constructed a Bill that they believe makes safety the paramount issue in NATS' future, and I do not doubt their sincerity at all. I am quite sure that the Minister is absolutely convinced that he has done everything he can to ensure that safety is paramount. However, experience tells us that saying something does not make it happen.
I am sure that, when the railways were privatised, Ministers in the previous Government and Railtrack were equally sincere in their belief that they had created a structure that maintains as a paramount feature the safety of the travelling public. However, we do not have to be reminded of what happened at Paddington and at Hatfield to realise that one can get it wrong, and that saying it does not make it happen.
The official Opposition spokesman, the hon. Member for North Essex (Mr. Jenkin)--who has left the Chamber--said that the railways have a different safety culture, but I have to correct him. Anyone who has been involved in the engineering side of the railways will know that, whatever faults British Rail had, it was determined to run a railway. In BR's culture, although passengers may have been a bit of a nuisance and had to be put up with, safety was absolutely paramount. Any BR regional engineer who allowed his section of track--his permanent way--to get into the state that caused the Hatfield accident would have been sacked on the spot. Safety is built into public transport systems.
Dr. Norman A. Godman (Greenock and Inverclyde): I have complete trust in the Deputy Prime Minister's commitment to enhance maritime, rail, road and air safety. However, many of my constituents have a deep distrust of privatisation, private finance initiatives and other public-private partnerships. I fear that the Government have failed to win over constituents who have that distrust, which I share.
Mr. Chidgey: Such public perceptions should greatly concern us. Members of Parliament are, after all, the guardians of the public good and the public need. Clearly, the Government have failed to win that argument on the public's safety concerns.
The question is not whether privatisation is the solution, but whether we need a solution. The issue is not to decide whether public ownership is the only way forward, but to determine what is wrong with the current system and how to improve it without a wholesale sell-off. As the right hon. Member for Edinburgh, East and Musselburgh said, the issue is being driven by financial considerations, not by considerations of how best to develop and improve our National Air Traffic Service. That is the key issue.
The PPP has been debated at great length and with great clarity in the other place. Although I shall not rehearse those arguments, the point that has come through in
parliamentary debates on the issue is that we do not have to sell off a substantial chunk of NATS to get the things that Ministers rightly say are needed--such as project management skills and an investment stream, which are what the Minister said he is most concerned about.Anyone who has been involved in the type of projects undertaken by NATS knows that it is possible to procure high-quality management teams who have experience not only in the United Kingdom but around the world. One can buy in those services. One can even buy in greater expertise than that which would be available to the particular bidder who won the contract to run NATS. One can also find the income stream necessary to finance improvements to NATS.
There is absolutely no reason why NATS--it is a rock-solid organisation with a substantial guaranteed income stream; last year, its profits were almost 15 per cent., which is not bad in most organisations--could not raise the money that it needs to reinvest and to develop. However, it needs the Treasury's permission to do that. That is the nub of the issue. If NATS could raise money in its own right, there would not be a problem. NATS could develop equally well as a not for profit organisation.
We do not have to sell off half of NATS to raise the necessary money. We can ensure that it remains in public ownership, which is what the public clearly want. Most important, we can ensure that NATS remains publicly accountable.
Given that in the House and across the country there is great controversy and concern about the Government's plans, and given the horrific example of rail privatisation and what happened when safety was disregarded because of the pursuit of other interests, including profit, surely the Government should take a step back. They should invite the National Audit Office to review the PPP plans. We in the House do not have an answer to every problem; we would be incredibly stupid and arrogant if we assumed that, just because we have the power to make decisions, our decisions are necessarily right. This is the time to step back and allow people with no vested interest to look deeply into what the Government are trying to achieve, no doubt with the best interests of the public at heart.
Unless the Government can make sure that their plans provide for the public a solution that is sound, safe and robust, and unless they can show that their proposals are in the interests of the taxpayer and, most important, those of the travelling public, I fear that they are going down a slippery slope. They should let the NAO look at the proposal carefully and come back with an answer in which the House can have confidence. Otherwise, I fear that in a year or so the Minister could well be back at the Dispatch Box, just as the Deputy Prime Minister was recently, having to apologise to the House and the public for a failed privatisation that compromised public safety, with all that that entails.
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