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Mr. Martin Salter (Reading, West): Does not my hon. Friend recall that many of us who were extremely unhappy at the proposed part-privatisation of National Air Traffic Services received assurances that it would not lead to cuts in the standard of service, nor indeed, in the support infrastructure upon which air traffic controllers depend? Given the cataclysmic events of 11 September, the contraction in the industry, the decision recently announced by the Government to put on hold the second Scottish air traffic control centre, and that a number of the airlines that he listed that are making substantial job cuts are members of the Airline Group, the consortium that is the Government's strategic partner, does he not think that now is an excellent time for Ministers to show the same pragmatism and realism towards NATS that they showed towards Railtrack, before it is too late?

John McDonnell: I fully concur with my hon. Friend's views. The NATS privatised business plan is now unworkable. It is time to rethink the whole proposal and introduce the trust option that was put forward by me and my hon. Friend in the debate on the privatisation of NATS. In fact, the trust route is being used for Railtrack itself.

Mr. Salter: I thank my hon. Friend for being so generous in giving way, although he has some time at his disposal. If it is right and proper—I believe that it is—for the Secretary of State for Transport, Local Government and the Regions to say that there is an essential contradiction between the interests of the travelling public and the interests of the shareholders vis-à-vis what was formerly Railtrack—that botched and barmy privatisation as we have called it—does not the same logic apply to the very service that we depend upon to ensure that aircraft are kept apart and that the travelling public can continue to use the airline industry with confidence and safety?

John McDonnell: There is a need for consistency from the Government on transport overall, and that consistency must apply to air traffic. In the current difficult circumstances for the aviation industry, we could do without the problems associated with air traffic control and the inherent dangers of the system that has been proposed. I agree that there should be a complete rethink; we should go back to the drawing board and reconsider the trust option.

Mr. Geoffrey Clifton-Brown (Cotswold): Is the hon. Gentleman aware that NATS was to have funded its business plan with investment of £1 billion, but that

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because of the problems of the airline partners that funding will almost certainly no longer be forthcoming? Will not the Government have to rethink the whole NATS privatisation plan?

John McDonnell: A rethink of the overall proposal is inevitable. We are not talking only of future investment but of future solvency: that is my main concern. The job losses already announced and future possible job losses will put the whole system at risk.

The announcements that I listed are based on staff lay-offs—often worldwide—throughout the companies involved. However, because Heathrow airport is a focus for the operations of many of those companies, a significant proportion of the job losses will fall on Heathrow and its communities. Even the job losses announced by European and American airlines will have a major impact at Heathrow, because most of those companies maintain substantial operations at the airport.

The impact is being felt not only by the airline operators but throughout the lengthy supply chain of the aviation industry. It is estimated that about 180,000 people are directly employed in the aviation industry, but that about 200,000 people work in its immediate supply chain, providing goods and services to the industry. Evidence is appearing that depicts the impact of the combination of the already existing downturn and 11 September on the multitude of supply firms. Orders are not coming through, bookings are falling and telephones no longer ring in offices with the usual demand for service delivery. Many of those firms are small and are those that employ the lowest-paid staff. Such companies are least able to provide reasonable redundancy packages and support measures for staff leaving their employment.

A large proportion of the staff affected by the current crisis—especially the lower-paid staff—live in the communities surrounding Heathrow airport. According to figures published last year, direct employment at Heathrow is about 68,000. For every person directly employed at the airport, it is estimated that there are three in the supply chain. Eighty per cent. of the workers directly employed at Heathrow live in the surrounding local authority areas, putting about £2 billion into the local economy. More than 25,000 directly employed workers live in the three immediate boroughs of Hillingdon, Ealing and Hounslow.

There is a paradox in that although the development of a massive airport such as Heathrow brings with it the advantage of large-scale employment, it also has the disadvantage of increasing demand for land, thereby raising land prices and providing other sectors of industry with an incentive to sell their sites and move to cheaper locations, thus squeezing out those sectors. Local economies have become heavily dependent on Heathrow so when the aviation industry catches a cold, our communities risk pneumonia.

Mr. Salter: Will my hon. Friend share with the House his view as to the effect of this dramatic decline in the industry on the plans for Heathrow terminal 5? Those plans have given rise to some controversy across the whole Thames valley.

John McDonnell: There is an argument that the current problems might bring the terminal into existence more

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swiftly. I would argue that we should stand back and consider the future demand for a fifth terminal, and that we should adopt a more planned approach to aviation development in the south-east. For example, there is a proposal to develop Marinair, rather than building a fifth terminal. That would give us greater long-term capacity as well as some breathing space. However, I await the announcement about terminal 5 and I am sure that the Under-Secretary of State for Transport, Local Government and the Regions will not want to comment on that issue tonight.

I have lived in my community for more than 25 years, representing it on the Greater London council and in Parliament. I went through the three recessions under the previous Conservative Government and witnessed the effects of unemployment on my community. That Government's commitment to market-oriented, non- interventionist policies meant that they failed to act to assist my community during that period. We lost most of our manufacturing base, and only after four years of Labour Government are we beginning to get back on our feet. That is why I am asking—pleading—for an interventionist approach from the Government.

It has been suggested that the current problems faced by the aviation industry will be as temporary as those experienced during the Gulf war or in previous downturns. I differ strongly from that view. The fact that civilian aircraft were used as a weapon in the 11 September attack and that the present war is predicated on a long-haul approach to tackling terrorism means, in the view of many people, that the current recession in the industry will be deeper and longer lasting. In that situation, the Government cannot stand back or fail to intervene.

Today at Heathrow, I convened a meeting with the airport community partners—the airport operators, the British Airports Authority, trade unions, community leaders and local MPs—and the Minister for Transport. We held a useful discussion and agreed to form an airport community task group to prepare a programme—an agenda—for a co-ordinated approach to tackle the recession that faces us, considering short and long-term measures to address the crisis.

The proposals include, first, support for individuals. We want to establish a form of early-warning system to predict the announcement of lay-offs. We want to provide a co-ordinated system of advice and assistance on issues such as welfare benefits, redundancy payments, retraining and employment opportunities for those workers threatened with unemployment as a result of the crisis. We want to bring together local advice agencies, the Department for Work and Pensions and the Employment Service to provide that facility for people threatened with, or experiencing, the loss of their job.

We want to consider advice and assistance for alternative employment through the Employment Service, which has already established an initiative as a result of previous crises in other industries. That could be valuable in our area.

We want to examine how to set up retraining options through the Learning and Skills Council, working with local colleges and training agencies to ensure the reskilling of people who will be displaced from their existing jobs. Some of them may return to the aviation industry, but we want to make sure that they have updated skills, thus giving them greater employability.

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Secondly, we considered support for the industry itself—for the companies. We are concerned about the additional costs that they are bearing as a result of the crisis and examined several measures to assist them. That is not a soft option; it is not backing losers: it is about finding short-term support to help to tide us over the current crisis. Some of the proposals included the following: to extend


to secure


to provide


and airline companies—


and to ensure


The protection of the public demands assistance from the Government to ensure the highest levels of security.

Another proposal was for a promotional programme to get people flying again—to renew their confidence in the aviation industry. Historically, flying is the safest form of travel and we should remind people of that, and that we are working together to ensure that it continues to be so.


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