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Lord Filkin: My Lords, I thank my noble friend both for his question and his comment on Swanwick. It has been a success. We shall not go over the delays and the implementation challenges, but now that it is up and running it is an excellent centre. One must commend all those involved in bringing it on-stream and into operation. As to Prestwick, the position is basically clear. As I signalled in an earlier answer, work is progressing although not at the full level. The original plan was that it would come on-stream about 2007 or 2008. There may be a couple of years delay, but there is clearly no immediate operational need for the full centre. However, our commitment to it remains firm.
Viscount Astor: My Lords, does the Minister agree that the part-privatisation of NATS was largely debt financed, which has left it with a highly leveraged balance sheet? As the Government currently hold a 49 per cent stake in the National Air Traffic Service, do they agree with its proposal that it should raise its charges by an average of 5 per cent a year for the next three years?
Lord Filkin: My Lords, the level of charges that NATS is entitled to impose is not a matter for me or for the Government. The cap is set by the Civil Aviation Authority rather than by the Government. In this circumstance, one would expect that a company of this kind would be looking at all options to see whether it could reduce expenditure, increase income and strengthen its equity. No doubt those are some of the issues being considered.
The Earl of Caithness: My Lords, despite what the noble Lord has said, is it not a fact that there have been increased delays in air traffic since the transfer to Swanwick? On two occasions recently, I have been delayed for more than two hours and the blame has been firmly put on Swanwick rather than on anyone else.
Lord Filkin: My Lords, as is the tradition of the House, one always expresses deep regret that any noble Lord has been delayed for any reason whatever. The statistics I have show that there were in the very early days some delays as a result of settling-in the new systems. But the figures I have been given are that the average delay per flight is now three-and-a-half minutes compared to an average before the switch to Swanwick of two minutes. Clearly that is a movement in the wrong direction, but it is hardly of great significance. I mentioned previously that there has been progressive implementation. The centre is not being loaded fully at this stage. It is being governed back so that air traffic controllers have plenty of time to get used to the systems. That is what is causing the slight delays. We can be confident that these will be eradicated relatively rapidly.
Lord Brooke of Alverthorpe: My Lords, I declare an interest as a non-executive director of NATS. Does the Minister agree that any delays related to Swanwick that are currently being experienced were built into the planning process for the introduction of the new system? Secondly, will he join me in commending all those involved in devising and introducing what is probably one of the most complex systems in Europe? It is equally important to recognise that the transfer of this system from its former establishments to Swanwick was one of the most complex arrangements that could have been undertaken. Will the Minister also take note that, in the current year, charges in the UK have gone down, while charges elsewhere in Europe, particularly following the events of 11th September, have increased substantially?
Lord Filkin: Yes, my Lords, I agree that the reason for the delays is essentially that an extremely prudent approach was taken to bringing the new centre on-stream. I signalled that point earlier, although I did not put it quite as explicitly. Judgments were made that the centre would process only a certain amount of traffic at any one time in an attempt to ensure that there was not an excessive load on air traffic controllers. That has led to very slight delays. It is a highly prudent way of bringing such a system on-stream. The staff and management are to be commended; so far, the process has gone extremely well. Let us trust that it continues to do so. With regard to charges, the current formula by which NATS is governed is a cap of RPI-minus X—it is slightly complicated—whereas in Germany and elsewhere this year charge increases of 10 per cent or more have been imposed.
Baroness Thomas of Walliswood: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, it must be the turn of the Liberal Democrats.
Baroness Thomas of Walliswood: My Lords, surely the Government must be interested in the fact, even though they cannot influence it, that—as the noble
Viscount, Lord Astor, has reminded us—the plan for a progressive reduction in charges by annual amounts of 4 and 5 per cent over several years has now been abandoned by NATS in favour of a planned increase in charges over the same period.
Lord Filkin: My Lords, the Government are interested in the situation in a number of ways—as a shareholder, and as a government with an overarching concern regarding these issues. The reality is that, while air traffic volumes are down, the revenues to NATS—whether or not it is in a PPP— will also be down. In a worsening situation in terms of income, there are only two options: either income charges go up, or other forms of funding are introduced. There is a strong argument that the costs of air travel should be borne by the users rather than more generally. There is certainly a debate to be had with the CAA—and I am sure that NATS will put the case—about the need to reconsider the level of the cap.
Tourism
11.23 a.m.
Lord Harrison asked Her Majesty's Government:
- What they are planning to do to help the tourism industry in Great Britain, given the 16 per cent reduction in foreign tourists visiting Great Britain in 2001.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, the Government are investing £65 million in tourism this year—more than ever before. This is justified because the number of overseas visitors arriving on holiday in the UK in 2001 was down by 14 per cent on the figure for 2000. In January, the British Tourist Authority launched its new £5 million campaign to help tourism recover from the events of 2001. The campaign will promote special offers provided by over 1,000 tourism businesses.
Lord Harrison: My Lords, I thank my noble friend for that Answer. Will she consider boosting the £5 million now allocated to the "UK is OK" campaign in order to encourage tourists from several of the world's wealthiest countries to return to this country? Considerable government support has gone to the farming industry, and rightly so. Will my noble friend recognise that the tourism and hospitality industries have an equal claim to attention and finance?
Baroness Blackstone: My Lords, the British Tourist Authority along with the industry has made a bid to the Government for a contribution to its plans for a major tourism recovery programme this year. The Government are currently considering their response. We are, however, encouraging the BTA and its partners to attempt to maximise the industry contribution.
In reply to my noble friend's second question, the Government committed an extra £14.5 million to the recovery campaign. Any extra funding will depend on genuinely additional contributions from the industry.
Baroness Anelay of St Johns: My Lords, when will the Government give some long-term help to the tourism industry by doing something about their two year-old promise to reform our licensing laws? Is the Minister aware that her honourable friend the Minister for Tourism in the other place revealed this month that every year of delay on this matter is costing the hospitality industry £1.9 billion?
Baroness Blackstone: My Lords, I am aware of the extra cost to the industry. To reform the licensing industry it is necessary to introduce new legislation and the Government are considering that. I cannot at this stage give an indication as to when it is likely to be brought in.
Viscount Falkland: My Lords, does the Minister agree that the Question on the Order Paper draws attention to a problem not far removed from that affecting the film industry; namely, that American companies are not now coming to Britain to film, as we would expect, but are going to places such as Prague? One of the main reasons is that it is increasingly expensive to maintain large groups of people here because of the cost of hotels and restaurants. The same applies to tourists. Overall, the costs in this country are exorbitant. Can the Government do something about it?
Baroness Blackstone: My Lords, the Government cannot run the private sector. It is a matter for hotels and restaurants to price the services that they offer competitively. The Government can encourage the hotel industry, restaurants and other parts of the tourism industry to do just that. But in the end it is up to them to compete successfully with similar parts of the industry in other countries.
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