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Mr. Jenkin: In fact, we supported a proposal for a trust tabled by a Labour Member on Report.
Ms Osborne: I accept that, but Conservative Members did not support the amendment relating to the trust option that was tabled in the Lords and which could have been considered in this House this evening. Tory Members have a strong record of supporting full-scale privatisation, not trusts.
I do not believe that the amendments would allow an alternative solution such as trust. In that, I differ from some of my hon. Friends. We have argued for three and a half years about the various options. I have played my part in those discussions, but it is clear this evening that the PPP is the only show in town. I fail to see what can be achieved by further delay. Accepting the amendment would only cause further delay, and it would play into the hands of the Tory party.
Mr. Don Foster (Bath): I understand that the hon. Lady, inevitably, has to be worried about the impact of the proposals on her constituents, but will she reflect on what has been said about safety by many hon. Members of all parties? Does she truly believe that the PPP will provide a safe way forward for air traffic services?
Ms Osborne: There has been much discussion about safety and about proposals alternative to the PPP, and I
have taken part in that discussion. The amendment does not deal with those issues, but proposes delay. I do not see how delaying the matter further will aid safety.My greatest fear is that further delay will jeopardise the new Scottish centre and 700 jobs in my constituency. I cannot stand back and watch that happen. The new Scottish centre has been subjected to years of procrastination, delay and speculation already. It was for that reason that I campaigned for the Government to accept an amendment ensuring that current investment plans would be honoured.
In the past week, the competition to design the new Scottish centre building was won by Gibb Developments. The winning design was the work of Ron Moncrieff, who hails from Prestwick and whose first job was at Atlantic house there. My local newspaper, the Ayr Advertiser, carried a picture of the winning design, but people in my constituency have seen many pictures before. I want work to begin on the ground now, and I challenge any hon. Member to guarantee that the new Scottish centre will go ahead if the PPP is delayed any longer.
Mr. McDonnell: My hon. Friend will recall, from times when she has raised this matter before, that my hon. Friend the Minister responded by saying that funding for the Scottish centre would come by the traditional route. Does she not agree that it cannot therefore be dependent on a PPP?
Ms Osborne: That is not entirely true: £60 million of public money has been put forward, but that amount is predicated on the fact that the PPP will fund the remainder of what is needed.
Last week, I asked the trade unions in my constituency what guarantees there were that the new Scottish centre would go ahead if the PPP were delayed any longer. Dave Carty, vice chairman of the local branch of the trade union to which NATS employees belong, told the Ayr Advertiser last week:
- If it gets underway, great. We have heard so many promises up until now. Seeing is believing. It will another five years with the present conditions. There is quite a lot of work going on. Our traffic has increased by eight per cent. every year. That's with no extra staff. The waiting is constant.
6.30 pm
Mr. McDonnell: My hon. Friend the Member for South Derbyshire (Mr. Todd) spoke earlier, and while I respect his every contribution--they are very considered--I have to say that there are others of us who also come from private and public sector backgrounds. Even when I was a chief executive in local government, I managed a commercial operation within the private sector. I bring to this debate that experience, as does my hon. Friend.
The issue for us is not about the dogmatic approach of "public good, private bad" but about the decision-making process of this dangerous policy. In the passage from
policy to legislation, I believe that politics, policy making, Government and Parliament have been shown at their worst. The development of the initial political commitment was based on a deceit. This is not just about the statement at the Labour party conference about the air not being for sale. Air traffic controllers in my constituency received letters from Labour party spokespeople saying that there will be no sell-off.My right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) did not divulge what went on when he was on the Front Bench, and I honour him for that. However, we all know what happened. During the election campaign, the Tories found a black hole in our Budget proposals, and every Labour Front-Bench spokesperson was supposed to come up with a proposal to fill that black hole. The air traffic control sell-off was brought back on to the agenda to plug the gap. It was panic selling as a knee-jerk reaction to an issue in the election campaign.
If this does not show policy making or politics being degraded, it is government by fix. We know that the Government have the resources to avoid making this sale but the Treasury is demanding that the Deputy Prime Minister go ahead with the policy. It is allowing him to swing in the wind. This is about high politics in Cabinet--it has nothing to do with the policy itself. The tragedy is that the determination and commitment for which we all admire the Deputy Prime Minister--his ability to see things through to the end, as he has done on so many occasions--has become a terrible weakness and liability. It has become a determination not even to countenance the possibility of being wrong.
This issue has shown Parliament at its worst as well, although some good speeches have been made. We used to say that ambassadors were honest men sent abroad to lie. Junior Ministers have come to the House and, although I do not want to be rude, it is a case of the production of bovine faeces. The statements that have been made time and again in a serious debate are unbelievable. They have not addressed the issues and concerns that have been raised.
I say to my fellow Back Benchers that there are issues of principle here. Tonight we cannot allow principles to be put up for sale as well as air traffic control: this is too important. My hon. Friend the Member for Reading, West (Mr. Salter) said that we should have learned our lesson after what happened in the summer and the ensuing claims about arrogance. We are still affected by the 75p pension increase. I think that in some constituencies we are also still affected by the mayoral election stitch-up. We are still affected by asylum vouchers and lone parent benefit cuts. We must learn our lesson.
The Government have put forward three arguments. They are selling off NATS to introduce new management. They are selling it off because they need the capital. As for our counter-argument, they say that the sale will not affect safety. The last refuge of a defeated intellectual argument is that this is suddenly a constitutional issue.
As for the management argument, we know that NATS is an operational success story. Its annual report for 2000 shows a record number of flights being handled, with a record low number of risk-bearing airprox incidents. In other words, NATS has achieved the highest safety level
in our history and across the world. Passenger delays have fallen over the past five years. NATS has also achieved the best level of customer satisfaction in our history.
Mr. Tom Levitt (High Peak): My hon. Friend talks about the safety record of NATS, which is to be welcomed and praised. I ask, in all innocence, whether there is a difference in the safety record of airports that use NATS as a public service, those which use it as a contract service and those which use private providers instead? If so, would he advise us to avoid certain airports?
Mr. McDonnell: That point has been made time and again. It relates to experiences in the mining industry. I was a full-time officer for the National Union of Mineworkers at one period in my career. We had private mines then, but they were relatively small and insignificant. We set the safety standards in them by ensuring that the major mines stayed in public ownership. Safety standards were dependent upon the scale of public ownership and regulation that set the standards for others in the nationalised industry.
We are talking about 2,000 air traffic controllers, of whom fewer than 200 work in the private sector. Safety standards are set by the 2,000--they are set to standards operating across the country. The other day, my hon. Friend the Member for Luton, South (Ms Moran) described Luton as a safe airport. Luton has just come back under NATS control. NATS is winning contract after contract based upon reliability and guaranteed safety.
The issue here is the failure of project management--we understand that. That is why we want to look for solutions for project management rather than simply selling off NATS. The argument is that project management in the public sector is particularly weak. Yet the channel tunnel was hardly a wonderful example of project management in the private sector. Lord Macdonald argues that there needs to be a shareholder. It did not work with the channel tunnel. There was a single shareholder in the dome, and it did not work there. The argument does not hold water.
We have looked at other forms of contractual arrangements in the public sector to undertake proper project management. They have not even been explored in this debate. If shareholders are required for project management, why is that logic not extended across the health service, the police service and the fire service? Are we really into the full-scale privatisation of public services on a scale not envisaged even by the Opposition?
Reference has been made to these wonderful potential shareholders. I do not even want to mention Lockheed Martin. Serco is just pulling out of Liverpool airport. Earlier in the year, a report was leaked from the Airlines Group in which it examined how contributors to the group could gain preferential treatment in the sky--a lunatic proposal, yet it was being considered seriously.
This takes me back to our experiences as a party when the Conservatives introduced compulsory competitive tendering. There was no market--it had to be invented in order for companies to come forward. That is what is happening here. Yet some companies--Boeing and others--have pulled away because they do not see it as a practical option.
Lord Brett's report is very interesting with regard to the NAVCAN proposals. When the NAVCAN board meets, the airlines press time and again for cost-cutting measures
and reductions in charges. In every paragraph of that report, the other partners reject those proposals because the trust binds them into a safety role.Anyone who knows anything about the airline industry knows that this proposal is already an anachronism. It is a United Kingdom solution, whereas no one is interested in individual in-country solutions. There must be an integrated solution to air traffic control at least across our continent; otherwise we shall not be able to cope with the year-on-year growth of 5 to 6 per cent. A doubling of air traffic is predicted within 10 years. The argument within the industry is based on enhanced technological possibilities, of course, with a Europe-wide solution. Most of the European partners involved in the discussion argue for a public sector solution. We are alone in arguing for a private sector solution.
The International Air Transport Association has said that it looks to a solution through more co-operation between nations in managing pan-European air space. It says that there will be a rationalisation of air traffic control centres. It believes that there needs to be a co-ordinated strategy to create more capacity in the skies: liberalisation but not privatisation. That is the view of one of the organisations of which we are a constituent part.
There needs to be a general technological leap forward. Boeing is arguing for a satellite system. I do not fully understand the merits of that argument, because I believe that there must be a ground-based system at the end of the day. The investment needed to solve the problem goes far beyond the £1.3 billion maximum that we expect to raise through the Government's proposal. We are talking about £20 billion to £30 billion on a European scale. We are leaping ahead of the European discussions about how we arrive at that amount of investment.
It is interesting that the only opportunities for such a level of co-operation is to retain the public sector operation within the UK while the debate continues or to opt for the NAVCAN solution. At least others will have confidence that the priority is safety and service, not privatised profit.
As regards overall capital investments, the NAVCAN solution produces twice the amount of income in terms of the sale. It is bizarre that we are selling off the organisation cheap. We attacked the Tories time and time again for cheap sell-offs, yet we are doing exactly the same thing.
My hon. Friend the Member for Ayr (Ms Osborne) talked about the Scottish air traffic control centre. We were given a commitment that the traditional route would be taken. To me, that means money direct from Government. If that means borrowing on the market through a Government bond, for example, that is another form of the traditional route. If £60 million is required, the NAVCAN solution would provide triple that sum from a sale.
I live among people who work at Heathrow as technicians and at air traffic control centres. What motivates the controllers? My right hon. Friend the Deputy Prime Minister attacked me on this issue and said that industrial reasons lay behind the Government's proposals. My constituents may be passing up the opportunity of up to £50 million in a share-out. Why are they doing that? The issue is not confined to the protection of jobs; it is about doing the right thing for the community. None of them want to live in a community that they may have helped to put at risk. It is as simple as that.
What is the position of some of the ex-members of the Health and Safety Executive? Baroness Gibson, formerly of the TUC, made it clear. She said that when profit comes in, safety is always at risk of going out. That is why she argues so cogently for a not for profit trust.
The argument has been advanced that other parts of the airline industry have been privatised without a decrease in safety. British Airways has been privatised. A report on aviation safety was debated in the House and we found that pilots said that commercial pressures on them were impacting upon safety. The British Airports Authority has been privatised; it is like a city in my constituency, and I work well with it. My right hon. Friend the Deputy Prime Minister has twice called the chief executive of BAA to his office during the Government's term of office to reprimand him for security failures at Heathrow airport. They were the result of commercial contracts involving security. Privatisation lessons have been learned even in the airline industry.
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