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6.44 pm
Mr. John McDonnell (Hayes and Harlington): I do miss the late Alan Clark.
Given that Heathrow airport and the London area and terminal control centre at West Drayton are in my constituency, hon. Members will understand why I shall concentrate on the parts of the Bill that deal with air traffic control.
I should say at the outset that I have no doubts about the Government's commitment to safety or about the Deputy Prime Minister's lifelong commitment to the transport industry and safety. What bewilders a number of us is why, so soon after the commitment that we gave that the air was not for sale, part of the air is to be sold. We ask: what has changed?
I shall deal with some of the Government's arguments that have been set out by Lord Macdonald. The first is that the Bill separates safety regulation from service provision. There is now consensus on that; we support the division and welcome the implementation of the proposal as soon as possible. We believe that it will enhance safety.
The second argument is that the National Air Traffic Services proposal will make charging policy in the industry more transparent. Such greater transparency is welcome in the industry overall. There have been other proposals in the public sector to achieve that end. Another argument was that the proposal would enable NATS to expand its operation overseas. Although there has not been much evidence of that overseas market, such expansion would not require part privatisation, as the public-private partnership proposal.
Another argument is that the proposal will free the service from the constraints of the Treasury, and that it will introduce a structure of incentives and disciplines to maximise efficiency. Let us be clear that the objective on both sides of the House is a modern, safe, efficient, well supplied and investment-rich service. We all agree on that. We on the Labour Benches are very clear that wholesale privatisation would be disastrous. We do not want a rerun of British Rail privatisation, from which it appears the Opposition have learned no lessons. A number of us in our constituencies along the Great Western line have learned several lessons from both Southall and Paddington.
We also agree with the Deputy Prime Minister that we need to get round what he described as "silly Treasury rules". There is a need for long-term, stable investment in air traffic control services, for which NATS staff have been crying out. The service makes a profit for the
Treasury, and it should be able to modernise and be planned on a stable basis. That does not require the sell-off of the majority shareholding; there are alternatives that do not put safety in the skies at risk.
Our problem is that anyone who has argued for such alternatives has been told that they do so either for industrial or ideological reasons. I regret the allegation that my constituents who are air traffic controllers argue on industrial grounds. Their views, and now those of airline pilots, must be respected as the considered opinions of professionals who are dedicated to the safe and efficient delivery of their services. I resent any allegation that air traffic controllers are motivated by some selfish industrial reasons--far from it. In opposing the sell-off of NATS, they are rejecting the share out of anything up to £25 million-worth of shares. That is not some selfish industrial motive.
It is also argued that we are opposing the proposal for ideological reasons. It is quite the reverse; this is a mirror image of ideology. The Government's argument appears to be based on an ideological bias against the public sector--public sector bad, private sector good. That runs contrary to everything that the Prime Minister has stated. He has said that we must aim to let the public sector do what it is best at, and the private sector what it is best at. NATS is run efficiently, effectively and, above all, safely in the public sector.
We take the clear view that, if there are failings of management or problems on project management resulting from a failure to achieve contract management, the management should be changed, not the service sold off. If the management is poor, it should be replaced with a more effective one that, yes, may be drawn from some elements of private sector expertise. However, I give a warning if there is to be blind faith in private sector management--I have worked in both, public and private.
Let us look no further than the Railtrack investment programme. The Booz-Allen and Hamilton report demonstrated that, as a result of poor management, 22 per cent. of the service was not up to the quality expected. Look at tube service investment by private-sector management of individual projects: a private-sector company, Adtrans, could not even properly measure the gauge in respect of the provision of track and carriages to the London tube, thus delaying improvements to the Central line.
Lord Macdonald of Tradeston has argued that there should be a structure for incentives and disciplines to maximise efficiency--in short, the profit motive. However, I believe that there is a potential conflict between profit and safety. The Secretary of State says that the argument that the profit motive undermines safety has not been proven--but it has been proven to the professionals who run the service. In their submission to the Government, they say that the concerns of NATS staff about a public-private partnership are founded on the experience of other privatised industries, and they drew a parallel with Railtrack and the rail industry.
Mr. Justice Scott-Baker said about the rail industry
It has been said that there is no safety problem affecting the air industry generally, but I beg to differ. Last week's debate about air safety revealed that commercial pressures put on pilots and others were putting the industry's record at risk; those pressures arise from profit motivation. It is interesting to note that the role of air traffic control is to ensure safety by mediating between different private companies and the pressures they put on air space. Therefore, we are proposing today to privatise part of the regulation service that keeps our skies safe.
Concerns about safety have not been adequately heeded. We have to listen to what the experts who have, over the years, built up the safety culture are saying to us. We have to ask how we can generate increased stable investment and introduce more effective management while maintaining the safety culture and denying the introduction of the profit motive. There are alternatives. I urge the Government to think again and to review the options that have been put to them. We have to consider how we can introduce a not-for-profit motivation--one that is based on professionalism and regulation, not on the fast buck.
The future should not lie in the profit ethos, but in consideration of other proposals, such as those that have been advanced by the airline industry. The Airline Group, comprising major airline companies, has submitted a proposal to purchase the shareholding and said that itsees an opportunity to run the service on a not-for- commercial-return basis. Given the participants in that group and their direct interest in future charges for the services, it is not surprising that the proposal has met with a degree of scepticism and incredulity.
However, if there is to be a purchase, the possibility of a not-for-commercial-return group gives us an opportunity constructively and creatively to examine ways to enshrine a guarantee that the system will not be run for profit in perpetuity, or in the long term. One of the proposals that has been put forward by operators, air traffic controllers and pilots is that the any sale should lead to the creation of a trust, run on a not-for-profit or not-for-commercial-gain basis. In that way, future investment and future safety would be consolidated within a structure in which we could all have confidence.
The Government and the Select Committee considered the Canadian trust option, and detailed arguments in support of such proposals were laid out by the Committee. However, the Government rejected the Canadian option
too lightly and too swiftly. I plead for that option to be revisited in the Committee on the Bill. It would provide an opportunity to effect a sale, if necessary, and thus a substantial capital receipt, to introduce an element of new management, to create greater accountability and transparency, and to expand overseas--an objective to which the Government appear to be committed. However, it would also provide a guarantee that the service would not be run for profit and that pressures would not be put on the service and staff to reduce conditions or operational costs in such a way as to put safety at risk.
"There may be a conflict between profit and safety."
20 Dec 1999 : Column 584
On 25 October, the former head of fire safety for British Rail said on the BBC Radio 4 "Today" programme that safety standards had been "compromised" by privatisation. On "Panorama", Gerald Corbett, chief executive of Railtrack, conceded
Air traffic controllers are clearly concerned that the profit motive will undermine safety. We should rely on the judgment of those operating the service before proceeding further along the path proposed. In their submission, the controllers state that the primary objective of the strategic partner should be, not profit, but safety of flight, security of investment and sensible capacity for future growth.
"It is impossible to keep everybody happy at the same time. It is actually at the moment unmanageable. We cannot . . . keep shareholders happy at the same time as fulfilling our public service obligations, and that tension is just massive, and it is at the heart of our unpopularity."
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