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House of Lords

Thursday, 25th May 1995.

The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of St. Edmundsbury and Ipswich.

National Air Traffic Services

Lord Clinton-Davis asked Her Majesty's Government:

    What are their plans for the privatisation of the National Air Traffic Services.

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the Secretary of State for Transport announced in November 1994 that the Government continue to favour privatisation of the National Air Traffic Services in principle but that further work was needed on a number of important issues before any final decision could be made on whether or not to proceed with privatisation. We are currently considering the further work that has been done and will make an announcement soon.

Lord Clinton-Davis: My Lords, is it not clear that the Government have made a complete U-turn on this matter? Is it not clear also that, following consultation, their proposals have found little or no favour with air carriers, pilots, air traffic controllers and anyone else who has an interest in the matter? Is it not also bizarre that the Government should even have entertained the idea when no other country in the world, including the United States which has rejected the concept of privatisation of the service, follows that course?

Viscount Goschen: My Lords, I do not see how the noble Lord could have gleaned any of that from my full Answer. The party opposite continues to refuse to acknowledge the benefits of privatisation, which we have seen in a number of organisations which have developed efficiencies, introduced new management techniques and found new sources of investment. Privatisation is a very useful tool.

Lord Boyd-Carpenter: My Lords, as one who fully shares the view of my noble friend about privatisation, may I ask him whether in this particular case there are any real advantages to be obtained from it?

Viscount Goschen: Yes, my Lords. Privatisation of an organisation such as NATS can bring efficiencies, reductions in charges and a more efficient service to airlines and hence to the users of airlines, the passengers.

Lord Harris of Greenwich: My Lords, is the noble Viscount indicating that there will certainly be reductions in charges if the privatisation is carried through?

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Viscount Goschen: My Lords, I am indicating that the possibility arises.

Lord Clark of Kempston: My Lords, does my noble friend agree that in 1979 British taxpayers were losing £50 million per week in the nationalised industries whereas now, under privatisation, the Exchequer receives £50 million per week? Is that not proof positive that privatisation works?

Viscount Goschen: My Lords, I could not agree more with my noble friend.

Lord Marsh: My Lords, does not the Minister agree that there is a faint danger that the Government may be entrapped by a sort of Clause 4 in reverse?

Viscount Goschen: My Lords, I am grateful for the noble Lord's concern. As ever, the Government will be able to make their position absolutely clear.

Lord Merlyn-Rees: My Lords, does the Minister agree that there are arguments for privatisation in terms of efficiency, greater profits and investment, but air traffic control depends on safety? Can we have an absolute assurance that nothing will ever be done that will weaken the safety record of air traffic control in this country?

Viscount Goschen: Yes, my Lords, I can give that firm assurance.

Lord Craig of Radley: My Lords, can the Minister reassure the House that if NATS were to be privatised the essential training needs of the Armed Forces and the allocation of airspace in and around the UK would continue to be met?

Viscount Goschen: My Lords, our proposals fully take into account the needs of the Ministry of Defence.

Lord Clinton-Davis: My Lords, is the Minister aware that the enthusiasm that he portrayed for this proposal seemed a little restrained this morning? He asked me how I gleaned my information. Is he aware that the White Paper on competitiveness (which I think should be more appropriately called Forging Behind) contains no reference to the privatisation of NATS, in contrast with the 1994 White Paper which was full of it? That seems—does it not?—to be sufficient evidence of the Government's intentions.

Viscount Goschen: My Lords, I set out the Government's position very fully in my original Answer.

Lord Marlesford: My Lords, can my noble friend explain why considerations of safety in air traffic control seem somehow to inhibit the consideration of privatisation of that service when in the case of airlines, where safety is just as important, that does not seem to be a factor?

Viscount Goschen: My Lords, that is an extremely important point. With the privatisation of British Airways and the British Airports Authority, which are entirely safety critical, we have seen two businesses which have an excellent safety record combined with a very good financial performance.

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National Lottery: Proceeds

11.12 a.m.

Lord Donoughue asked Her Majesty's Government:

    Whether and in what ways it is proposed to improve the arrangements for distributing the proceeds of the National Lottery to good causes.

The Parliamentary Under-Secretary of State, Department of National Heritage (Viscount Astor): My Lords, the National Lottery has raised £524 million so far for good causes. The distribution of those proceeds has only just begun, with £69 million being allocated by the 11 distributing bodies for 284 worthwhile projects.

Lord Donoughue: My Lords, nothing is perfect, not even the present Government—

Lord Graham of Edmonton: That is a bit strong!

Lord Donoughue: Yes, my Lords. Is the Minister aware that there are already concerns about the arrangements for distributing the proceeds of the lottery? There are concerns about the priorities that have been established as regards the distributions to charities. There are also concerns about the criteria for the millennium distribution and about the presentation of the heritage distributions. Above all there are concerns about how much is being retained—currently, it is probably 9 to 11 per cent.—by the managers, Camelot. Will the Minister ask his right honourable friend the Secretary of State to reconsider some of these matters? Above all, will he look at whether Camelot should be required to publish every month the amount it is retaining from this huge revenue?

Viscount Astor: My Lords, we have to remember that the lottery funds only started to flow into the distributing bodies in November. So far 284 schemes in our sports heritage have been approved. We expect at least 1,000 projects to be approved by the end of the year. These are early days. Of course I appreciate the noble Lord's concerns as regards how the distributing bodies manage their task but, as I say, these are early days and we must let them get on with the job that was set by Parliament under the Act. As regards Camelot's profit, it is worth emphasising that over the course of Camelot's seven year licence its take-out to cover both operating costs and profit will be just 5 per cent. That will be the average over the period of the licence. As the turnover increases, so does the amount that goes to the good causes, and Camelot's percentage share goes down. Therefore, the more successful the lottery, the more money that will flow to the good causes.

Lord Donoughue: My Lords, before the Minster sits down, does he not agree that although Camelot retains an average of 5 per cent. over a long period, it is currently retaining a figure that is about double that? It has retained that money early in the proceedings, and that is done at the cost of less distribution to the good causes. That is not what we anticipated when we discussed and supported the lottery in this House.

Viscount Astor: My Lords, the percentage retained by Camelot to date is about 9 per cent. which is higher than the overall forecast figure and reflects its higher investment and start-up costs. However, the main point is

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that over time the figure will reduce to just over 5 per cent. over the course of the whole licence. Therefore, it will average out. The gearing effect of a licence means that Camelot's share will be a lower percentage as the turnover increases. Therefore the figures will balance. I remind the noble Lord, Lord Donoughue, that the licence under which Camelot operates, which is awarded by OFLOT, is available in the Library of your Lordships' House.

The Viscount of Falkland: My Lords, is it safe to assume that there is some kind of a fast track for funds to be distributed from the lottery, to judge from the decision to keep the Churchill papers in this country? If there is such a fast track, how does one get on to it? For example, the folk heritage of this country, which comprises a multi-media collection of videos and films, is now likely—according to a report in the Observer last Sunday—to go to the United States because of lack of funding here. How could that heritage be put onto a fast track?

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