Examination of Witnesses (Questions 60
- 79)
WEDNESDAY 16 JANUARY 2002
SIR RICHARD
MOTTRAM KCB, SIR
MICHAEL PEAT
KCVO AND MR
IAN MCEWEN
60. Perhaps we could ask the Ministry of Defence
who presumably are the people who set the costs.
(Mr McEwen) These are indeed the variable costs.
61. So you are not charging anything above the
variable costs.
(Mr McEwen) No.
62. Even if you could do so.
(Mr McEwen) We have accepted the recommendation which
the NAO made which is that the charging of variable costs made
sense in terms of the wider value to the taxpayer. It is the case
that these aircraft are there for military purposes. They are
not fully required for military purposes in normal peacetime,
therefore if they were not being used by the Royal Household among
others, they could be under-utilised.
63. May I ask Sir John whether he has considered
the possibility that he might be able to get back more from the
taxpayer, not by charging perhaps a full cost inclusive of all
the fixed costs, because we accept that they are going to be met
otherwise, but by charging something which is still below the
market rate, but perhaps above the variable cost?
(Sir John Bourn) Absolutely. If the Ministry of Defence
looked at themselves as running an airline business, of course
they would charge what the market would bear and I would see no
problem about that. My concern was that at least the variable
cost should be recouped. I would have no objection whatever if
they did a deal with each Minister and the Royal Family to charge
what the market would bear.
64. It is not just Ministers and the Royal Family,
is it, because that is just money circulating within the public
sector? What we are really interested in here is the money which
is reimbursable from the private sector. If the private sector
could be charged a bit more and still feel it was worthwhile using
the spare capacity of the squadron, then clearly that is an advantage
to the taxpayers. It looks as though, thanks to Mr Williams' efforts,
we have identified at least one way in which the squadron could
actually get a greater reimbursement than it is getting now.
(Mr McEwen) We hire out the planes in effect only
to Ministers, in other words other government departments, or
to the Royal Household. We hire the planes out to the lead customer
and it is then up to them how much they seek to recoup from members
of the private sector on board.
65. What we are really saying is that Sir Michael
could actually be charging more than you are charging him. He
could be oncharging more to the private sector and that would
be money coming back to the Royal Household in effect and thus
reducing the need for grant-in-aid.
(Sir Richard Mottram) Yes.
(Mr McEwen) Yes.
(Sir Michael Peat) It is purely hypothetical. It never
happens.
66. You have charged the private sector something.
You have re-charged the private sector when you have had press
flying on the planes. You have re-charged the private sector what
I now understand is at the rate you were charged by the Ministry
of Defence and you could have charged them at a higher rate.
(Sir Michael Peat) No, we have never re-charged anyone
other than journalists.
67. Yes, journalists.
(Sir Michael Peat) But they are on aircraft chartered
by and large from BA. They are the large aircraft, the large overseas
charters where the journalists come on the big state visits we
discussed earlier. The journalists very rarely go on 32 Squadron
aircraft because there is no room and they are not used for the
big state visits on which the journalists go.
68. You say very rarely. So the amount of money
we are concerned about is probably small but there is something
in that.
(Sir Michael Peat) We are probably talking about tens
of pounds not hundreds of pounds. It comes back to Mr Gibb's point.
69. You are saying on the charter flights you
could not charge a higher charge than you are being charged.
(Sir Michael Peat) We do not charge anyone for charter
flights.
70. The press. Or are the press paying directly
to the charter company?
(Sir Michael Peat) We charge to the press; absolutely.
This is where we charter big aircraft from British Airways and
we charge the press and we charge them as much as we can. We have
raised hundreds of thousands of pounds from them which comes into
the grant-in-aid. It is nothing to do with 32 Squadron, it is
on the BA big overseas charters.
(Sir Richard Mottram) I was having a conversation
on this with Mr McEwen. Basically this issue arises in relation
to ministerial use of these aeroplanes where the Ministers are
taking journalists with them. The question then would be what
they should be charging the journalists. Should they charge the
variable cost or should they charge them something at or marginally
below the market price and then the taxpayer might get more money.
71. You are saying that at present the Ministers
are oncharging the press only the variable cost.
(Sir Richard Mottram) The answer is that I do not
know, but we can go and find out. The Ministry of Defence are
charging out the planes to the customers. How the customers are
then oncharging I do not actually know. We can find out.
(Sir Michael Peat) We charge on the basis of airline
tickets. We relate it to airline tickets because that is all the
press will accept.
72. Even when the press are using the squadron
flights.
(Sir Michael Peat) We do not take the press on the
squadron planes.
73. Never? You said sometimes a moment ago but
now you are saying never.
(Sir Michael Peat) I cannot think of any instance.
I do not think we have ever done it. I cannot think of an instance
when it would ever have happened because there is never any room.
(Sir Richard Mottram) We are really talking about
the question of ministerial use and we shall try to find out.
74. It would be interesting if we could perhaps
have a note afterwards on that point.
(Sir Richard Mottram) Yes, we shall find out.[2]
75. Have there been any occasions on which Members
of Parliament or Ministers have travelled with the Royal Family?
(Sir Michael Peat) Ministers generally travel on overseas
visits. That is part of it. I was asked earlier about the numbers
and I forgot to mention that yes, generally a Foreign Office Minister
and some members of his or her department will be on the aircraft.
76. On the squadron aircraft?
(Sir Michael Peat) No. This is a big overseas visit
again, the chartered aircraft.
77. So Ministers and Members of Parliament,
as far as you know, never travel on the squadron aircraft with
members of the Royal Family.
(Sir Michael Peat) I could not say "never",
but not generally. Possibly when the Queen went to Rome last year,
but I cannot say. No, not generally.
78. It is an interesting question whether, if
so, they would have to declare that in the Members' Register of
Interests and if so whether they do.
(Sir Richard Mottram) No, because it is not a benefit
to them.
(Sir Michael Peat) There is no cost involved.
Mr Rendel: It depends what they do when they
are out there.
Chairman
79. They are only Ministers, not Members of
Parliament.
(Sir Michael Peat) Yes, they are going to support
the Queen's state visit.
2 Note by the Cabinet Office: The guiding principles
covering all aspects of ministerial travel, including the use
of non-scheduled special flights is set out in the note from the
Prime Minister Travel by Ministers (Cabinet Office, July
2001). These guidelines do not cover the issue of on-charging,
and there is no specific central guidance to departments on this
subject. In practice, members of the media most frequently accompany
the ministerial party on those trips undertaken by the Prime Minister
and Ministers at the Foreign and Commonwealth Office. The Prime
Minister's Office and the Foreign and Commonwealth Office operate
a policy of charging members of the media at the rate equivalent
to the standard scheduled economy class fare (or standard scheduled
business class fare, if appropriate) charged by a commercial airline
for the route in question. British Airways is generally used as
the marker airline for setting the charge. Instances where members
of the media accompany ministers from other government departments
on special flights are less frequent. The Treasury's policy is
to charge members of the media on the basis of an evenly apportioned
share of the cost to the department of the overall cost of the
special flight. Ministers in the Ministry of Defence and the Department
for International Development do, on occasion, invite members
of the media to accompany them on special flights when there is
available capacity on the plane and it is considered advantageous
to have a media presence, and do not charge. Other departments
have no record of members of the media accompanying their ministers
on special flights, and have no specific charging policy in place.
The Cabinet Office intends to circulate a guidance note to departments.
A copy will be sent to the Committee. Back
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