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The Earl of Kinnoull rose to ask Her Majesty's Government whether arrangements for air traffic control at London's airports are satisfactory and what is their response to recent reports of near misses between civil aircraft.
The noble Earl said: My Lords, this debate in the dinner hour may come almost as light relief after the supercharged atmosphere which we have just experienced and which has gripped the House. After the debate on the amendment moved by my noble friend Lord Tebbit, the House seems almost like a ghost town. However, the safety of our skies--the air traffic control of our airports and over our cities--is no small matter. I am delighted that the noble Lord, Lord Brett, has chosen this debate to make his maiden speech; on a topic on which he is more than qualified to speak. I wish him well. I am also very pleased that other noble Lords and the noble Baroness, Lady Thomas, are to take part in the debate. That will give the Minister a chance to dig deeper into his brief.
As the time is limited, I shall come quickly to the purpose of the debate. In case there is any confusion, I should say that I intend no criticism of either the regulatory body or National Air Traffic Services, the service provider. Both are recognised internationally as world leaders. National Air Traffic Services, in particular, is a highly professional body of some 1,500 people who provide an efficient and vital service dealing with the most dense air traffic in the world. We should recognise that it is not only the custodian of our national air space but it has a major impact on our economy, security and public safety.
The air traffic market is huge. In 1998 159 million passengers passed through British airports; British carriers have doubled their number of passengers over the past 10 years; and air transport movements stand at 1.8 million a year. Having said that, I am sure that the Minister will agree that there is no room for complacency about safety. I am concerned that there are factors which, if not watched, could lead to this excellent record of safety being inadvertently undermined.
The first issue is the very pressure of the annual growth of traffic. It is remorseless and stands at about 7 per cent a year. The capacity needed to meet this growth lies in the London area--at the West Drayton centre. The second is the constant reports of increased numbers of overloads of air traffic controllers, where too many aircraft enter a sector. That undoubtedly affects the stress level of the controllers. The third is the number of incidents of "airproxes", or near misses, where aircraft have passed too close to each other. They include quite a number of risk bearing incidents. I believe that there were 34 such incidents last year.
A fourth, perceived factor is the increase in aircraft kept in a holding pattern waiting to land. It particularly affects short domestic services. I understand that during the summer of last year Edinburgh flights often spent 25 minutes in a holding pattern.
The fifth factor is crucial. We still do not know how successful the Swanwick centre will prove to be. So much depends on it. The delays have been embarrassing. The latest forecast is that the centre will come into service in the year 2002. I hope that the Minister will be able to restore our confidence. I hope that he will tell us that the development has now reached the stage of a design audit being passed and that the centre will meet future capacity for many years.
I want to touch on the future plans of the recently announced ownership of NATS. As regards the public-private partnership, there is a view that the very fact that this body will move into the joint private sector could lead to a lowering of safety standards. I find that argument wholly unsustainable. It has not happened to British Airways or the British Airports Authority. I do not see why NATS would suffer.
However, I hope that the Minister will confirm that those working in NATS will not be left in limbo regarding their jobs, their pensions and their future. Not only would that be unfair; it would be extremely damaging to this vital service. It could interfere unwittingly with efficiency.
A matter close to my heart, and I suspect to the Minister, is the future centre at Prestwick. We do not hear much about it. I hope that the Minister will be able to tell the House that there is a planned programme, that we know what the investment is likely to be, how many jobs are likely to be created and when the centre will become operational.
The 14th Report on Aviation Safety referred to the importance of English being the "language of the air". The report went further. It stated that the Government should seek to make that mandatory through the JAA. I am sure that everyone would agree with that recommendation. Safety can so easily be put at risk through a misunderstanding of language. The increased number of foreign pilots using British air space and flying British aircraft makes the urgency of a firm decision the more important. Perhaps the Minister will comment.
One final issue that I should like to raise with the Minister relates to the progress of Euro-control--in regard to which I believe the United Kingdom is one of 27 member states. I understand that one of the objectives is to harmonise and improve air traffic management with centralised flow management. Whereas I can see the advantage to British carriers in crossing Europe, are we being invited to give up any of our responsibilities regarding our air space? Perhaps I may ask the Minister also about the introduction of the traffic collision avoidance system on each major aircraft, which is due to come into operation in the next two months for airlines of all 27 member states. How many airlines have agreed, and how many have not agreed, to fit the system?
I very much look forward to the contributions of other noble Lords and the noble Baroness. No doubt we shall receive a robust, decisive reply from the Minister. Britain has a proud record in air safety, whether it be on a registered aircraft, British airlines or in our managed air space. But with the planned expansion of all three London airports to handle an ever-increasing traffic flow, vigilance will remain paramount in future if we are to hold on to our proud record.
Lord Brett: My Lords, I rise with gratitude and trepidation to make my maiden speech--gratitude for the opportunity to speak on a matter on which I believe I have a contribution to make; gratitude to the noble Earl for introducing the Question and making salient points; and gratitude to all the other noble Lords who have gone to dinner. I should have been rather more nervous making the speech to a crowded House. I have a sense of trepidation, but I do not suggest that nerves alone are the reason, although I have all the nervousness of a maiden speaker. I know that your Lordships are kind to maiden speakers. My trepidation relates to the possibility that I may offend one of the conventions of the House; namely, I may not make a maiden speech which passes the test of not being controversial.
My credentials for speaking on this issue are these. For 10 years, up to April this year, I was general secretary of the Institution of Professionals, Managers and Specialists, the body that organises the air traffic controllers, engineers and professional staff of both the Civil Aviation Authority and the National Air Traffic Service. Prior to that, I was the officer who physically took care of the affairs of the air traffic control service. For a number of years I was executive secretary to the ground engineers, an international body of air traffic engineers who maintain the radar and equipment. Finally, I checked my "frequent flier" collection and discovered that I made 79 journeys through London airports in 1998. The mystery is that I am here. All those journeys emanated from, and returned to, London airports. So I have presumably lost one of the flights in terms of "frequent fliers", otherwise I should not be here.
My task is easy in that I believe the Minister's answer to the Question will be yes--yes, with qualifications. I am sure that he will be able to quote statistics, take pride in the CHIRP system--a non-attributable system of reporting, which is now needed in other areas of transport. I believe that the Minister will be able to give us good news as regards the prospects for Swanwick successfully coming on stream.
The problem is this. I believe that there is a dark cloud hanging over the air traffic control system in the future. I refer to the proposals that are still being pursued for a part privatisation of the ownership of the air traffic services of NATS and the full privatisation, in effect, of the day-to-day running of that organisation. The proposal has little support outside this House. I do not know the opinion of this House, but I know that the proposal is actively and vehemently opposed by the staff of NATS, the airline pilots of this country, and by the House of Lords Select Committee; and public opinion is opposed to it. A reputable, independent public opinion poll of over 1,000 people, obtained over the past two or three days and published today, indicates that 72 per cent of those polled are opposed to the Government's proposals, and only 16 per cent support them. Indeed, 68 per cent believe that the proposals will damage air safety standards in this country. The latest doubter of the proposals is a consortium of airlines, including British Airways and Virgin. Anything that unites those two airlines has to be remarkable. But they are now coming together to ensure that the privatisation of NATS does not allow it to pass outside the industry. Interestingly, their reasons for doing that are safety, investment and costs.
The declared position of the Government is that they wish to provide air traffic control services in future in the private sector independently in terms of the provision of investment--some £40 million is required in the next five years--and also to raise some £500 million from the sale to the private sector of a 49 per cent interest.
The view of the Institution of Professionals, Managers and Specialists--I declare an interest as its honorary adviser in this House, but my opinions here are my own--is clear. It has proposed at least three other methods to achieve the same end: first, investment that is not attributable to the PSBR; secondly, an IPOC, which is an independent company owned by the Government--the Post Office is an example--that can invest freely. Thirdly, it has proposed a trust. Our Canadian colleagues have created NAVCAN Canada which is a 3 billion Canadian dollar trust with stakeholders where funding is independent of government. Fourthly, there is the much under-stated but very valuable opportunity to issue bonds on occasions like this. The 5 per cent per annum plus growth of the sector and guaranteed en route charges mean that bonds would be very attractive to the City.
I should be interested to hear the Minister on one very curious matter. We now all pay an airport duty tax: £10 for domestic and £20 for international flights. That will raise this year some £700 million. Only 1 per cent of that money would provide for the National Air Traffic Services investment programme each year. As I understand it--I ask for confirmation--currently none of that money goes back to the aviation industry in any form.
We should also look at the motives of the organisations that oppose this move. Is the IPMS ideologically opposed to privatisation? No. Is it Luddite? Indeed, no; it supports the privatisation of British Nuclear Fuels. Are air traffic controllers and colleagues acting out of fear for their jobs, as the noble Earl suggested they might be? The jobs of air traffic controllers and engineers are safe. IPMS represents on a voluntary basis 96 per cent of those staff. Is there a fear of monetary loss in any form? They are being offered a 5 per cent share in a company which in the view of the Government is conservatively estimated to be worth £100 million. The sum of £50 million is being offered and declined, not because they are against share ownership. The IPMS pioneered share ownership in Amersham International, one of the first privatisations under the previous administration.
Why is it that air traffic controllers and NATS staff are opposed to it? The answer is, simply, safety. NATS has a fine record. It has no record of industrial action and a very sound record of productivity: 8 per cent growth year on year. In the UK en route charges have come down by 12 per cent in real terms since 1990. Across the North Atlantic the reduction has been 18 per cent. Working practices have been examined and changed by agreements. NATS returns to the Treasury a real profit, which in 1997 was £55 million. All of that has been achieved without compromising air safety. There has never been a mid-air collision in this country between passenger-carrying aircraft. The staff at the coal face of aviation, both engineers and controllers, fear that with the commercial ethic there will be a gradual erosion of safety. They would rather not see that happen in an organisation which they believe to be imbued with safety from top to bottom, and it is that fear which carries them forward.
The staff also have the support of British airline pilots--BALPA--100 per cent of whom are employed in the private sector and are subject to commercial pressures. They do not want to see a privatised air traffic control. In the short time available, I ask the Minister to give an assurance that the door is not closed to further consultation. We believe that there are better ways to achieve the Government's end. I support the Government and their Transport Bill. Without the privatisation of NATS in the next Session I believe that it will be a tremendous Bill; with it the Bill will be of less value. When the Government came to power I was told by Ministers that their attitude to privatisation was one of pragmatism, not dogmatism. If they cannot see that public opinion, the travelling
Lord Clinton-Davis: My Lords, I declare an interest. I am President of BALPA, to which my noble friend has just referred. I am delighted to welcome my noble and very dear friend to these Benches and the House in general. He has made an admirable and short speech that was very much to the point. He has had a distinguished career in the trade union movement, in particular in the IPMS, and he is an expert on the subject of air traffic control. We look forward to hearing from him on those matters and many others in future.
I very much share the apprehensions that my noble friend expressed about the possibility of the full or semi-privatisation of a service which has distinguished itself on the national and international stage as far as aviation is concerned and the way it has co-ordinated safety and standards. We are entitled to be very proud of NATS. The case for the radical change envisaged in discussion over the past few weeks and months needs to be made out beyond reasonable doubt. I do not believe that that has happened up to now. The price for mistakes in this respect would be much too high. Lives could be placed in jeopardy, and the reputation for safety that NATS has earned could be sullied.
I do not seek to make a case against all privatisations. Privatisation of British Airways has been very successful. I seek to make out a case that privatisation in this area is not something to be lightly entertained. The benefits that NATS provides for the airline industry are enormous. As my noble friend said, without exception airlines take the view that the Government should not take the course that they propose.
To change the basis of management could raise two very important issues. Not only could safety be compromised but the whole work of NATS could be undermined. At the moment it is a very efficient, well managed organisation. All this must be viewed against the background of a vast increase in air traffic movements. It has an impressive record in the face of undoubted capacity constraints that have been imposed on the system as a whole. Despite all of that it has managed to achieve a reduction in charges of nearly one third at major British airports--and it is innovative and dynamic. If some difficulties have emerged, as they have, I believe that they have arisen directly from the delivery of air traffic control infrastructures rather than from the NATS management itself.
I had responsibility for aviation in the Labour government of the 1970s. I also had responsibility for transport in the European Commission. I can say without fear of contradiction that the services provided by NATS in this country have been remarkable, and they have been lauded by many organisations within the European Union as proving to be greatly beneficial to the aviation system as a
I do not believe that the public-private partnership scheme is one that will work effectively in relation to this particular industry. There are long-term dangers. The reason flight crews, air traffic controllers and many others mentioned by my noble friend have supported NATS is that they believe that here is an industry that works and safety goes to the very heart of everything that it does. And that is not something that should be obstructed or deflected from by any plans to denude it of some of its strength. Why imperil a system whereby military and civil air traffic are so well integrated? Is there any insuperable financial burden involved here? I do not think that anyone can make out a case on that basis. I do not have time to go into all the relevant matters relating to that.
What I wish to do is to touch on the possible alternatives. An independent, publicly-owned company, governed and managed by stakeholders, a Companies Act company with the Government retaining the shares and having the freedom to borrow in the financial markets, seems to me a far better route to follow. The principal shareholders could include the Treasury, civil and military authorities, airlines and customers, managers and employees. In that way accountability would be assured.
No country, even where privatisation has been practised on a substantial scale, has engaged in privatising this service. The partnership envisaged is not, I believe, a genuine one. It is a decision to entrust air traffic control to private sector management; and I do not believe that the case has been remotely made out for that. With respect, I think that it is a misconceived idea and the safety functions should in no way be compromised. I hope that the Government will reconsider their position.
Viscount Simon: My Lords, I congratulate my noble friend on his excellent and well-informed maiden speech. Unfortunately my asthma medication has affected my voice, as it does from time to time, which means that I shall be brief. Perhaps I should withdraw the word "unfortunately".
On 16th July of this year at col. 641 of the Official Report I drew attention to the fact that in one hour there were 98 movements at Heathrow. That is one take-off or landing every 36.7 seconds. It is a tribute to the air traffic controllers that this was achieved safely
Safety in terms of the number of reported airproxes where NATS was implicated have fallen over the past three years with the number of risk-bearing incidents falling further. Passengers have safety at the forefront of their minds when it comes to transport of all types and, like other public corporations, NATS has to ensure that all operations are both safe and efficient. This has been achieved.
Other noble Lords have mentioned the new centre at Swanwick. It is forecast that with suitable development of appropriate operational procedures and tools, this centre has the inherent capability to handle far more movements than can be possible at London ATC. Notwithstanding lack of investment, significant improvements have been delivered in the form of the automatic dependent surveillance broadcasts, separation monitoring function, and final approach spacing tool. In association with its European partners, a new traffic management system has been developed.
Baroness Thomas of Walliswood: My Lords, I thank the noble Earl, Lord Kinnoull, for introducing the debate--a peaceful lull and an opportunity for refreshment for some in the midst of battle. Will it not be sad if, as a result of that battle and whatever our feelings on the rights and wrongs of the main case, we shall no longer have the noble Earl with us in our debates in which he so often distinguished himself.
I join others in congratulating the noble Lord, Lord Brett, on a most informative and expert maiden speech. I was glad that he did not eschew entirely controversy. I do not think that we shall become very angry with him for that. We look forward to many more contributions from him with the same level of expertise which is always valued in this House. From my point of view, the only problem with his speech is that he has taken all my best bits. As noble Lords will see from the way that I hold my sheets of paper, some reconstruction has had to take place.
I share all the expressions of confidence in NATS made by every noble Lord who has spoken. We are extremely lucky to have such a splendid, reliable, trustworthy and internationally well regarded service at our disposal, living as we do under some of the most crowded skies anywhere. Recently, I was lucky enough to watch some of the air traffic controllers at work at Manchester Airport. Of course, there is no comparison of frequency of movements, and so on, with Heathrow. But it was fascinating to watch their
Noble Lords have referred, I think rightly, to the public's lack of confidence in the proposals to change the status of NATS. Such anxiety reappeared following the Paddington rail crash. There is no real connection between the Paddington rail crash and the structure of NATS. But, rightly or wrongly, the public have become alarmed about the safety of public transport. Rightly or wrongly, the public have become sceptical that private companies can be relied upon to put safety above profit. That, I think, is the nub of some of the public opposition. Meanwhile, the Labour Party has not been very supportive (to put it mildly) of the proposals. Such sterling Members of the House of Commons as the honourable lady Mrs Gwyneth Dunwoody and the former Minister for Transport, Dr Gavin Strang, have been extremely vocal in their opposition to the proposals. I understand that no fewer than 115 Labour MPs have signed a Motion urging the Government to find another method of securing the future financial well-being of NATS.
There are other problems. It is not just a matter of safety but of how structural change interacts with the need to continue the modifications and improvements at Swanwick, which is already £180 million above budget and six years behind the completion date first envisaged. At the same time, many of us were glad to hear that the modernisation of Prestwick is now being undertaken. These are difficult projects to manage, as the history of Swanwick has made perfectly plain. One is bound to ask whether structural upheaval fits well in the context of a need for clear, constant and successful management of projects which are already under way or in the pipeline.
I and those on our Benches support the separation of NATS from the CAA. However, there is no reason why that separation needs to be carried out in the context of a partial privatisation of any part of it. At the same time, we very much oppose the dispersal of any of the CAA's functions into other bodies. We believe that the CAA should remain at the centre of the governance or regulation of safety in this country. It possibly may one day become the British arm of the European regulatory organisation which it is anticipated may one day be established.
We very strongly feel, as the noble Lord, Lord Clinton-Davis, and others have said, that there are other ways in which we could secure the necessary finance for NATS, which I believe amounts to about £1 billion over the next 10 years, without going down this road. Indeed, an emergency resolution to this effect, stimulated by the announcement in July of the Government's firm intention to go ahead, was passed at our conference. Let us not forget that the road chosen by the Government involves not the Government or any government organisation but the private partners in the PPP making all the day to day decisions on the running of NATS. I believe that we really need to look again at a public interest company, at the Canadian example and at other examples that noble Lords have suggested.
I urge the Government to tell us today that their minds, as the noble Lord, Lord Clinton-Davis said, are not closed and that they will look again at the very serious concerns of the public, the politicians and the people who have spoken in this debate.
Lord Brabazon of Tara: I thank my noble friend Lord Kinnoull for introducing such a topical debate. I also join other noble Lords in contragulating the noble Lord, Lord Brett, on an excellent maiden speech. If I may slightly rephrase the normal wording, I hope that I shall be here to hear many more contributions from him!
I was Minister responsible for aviation during a period in the late 1980s when there were serious delays in air traffic control. Many of those were caused by industrial action on the other side of the Channel. It is a great tribute to the management of National Air Traffic Services, to the controllers themselves, and to their union, of which the noble Lord, Lord Brett, was then in charge, that we have experienced nothing of that sort over here for a very long time indeed.
We have a very good air safety record in the United Kingdom. Despite very large increases in traffic over many years, the number of airprox incidents--they used to be called "air misses" in my day--namely; those with a risk of collision in categories A and B, has fallen to 1.2 per 100,000 flying hours last year, from 2.37 in the year before and 2.87 in the year before that. However, as my noble friend Lord Kinnoull and others have said, there is no room for complacency.
What is worrying, however, is the increase in the periods of overload--up to 49 in 1998-99, compared to 24 the previous year and 16 in the year before that. Indeed, the Environment, Transport and Regional Affairs Select Committee of another place said in its report on aviation safety in July this year:
What is needed, of course, is the new capacity in the ATC system that is to be provided by the new centre at Swanwick. I had the pleasure of visiting Swanwick this summer. It was the first time that I had been there since I dug the first sod of the new building as Minister back in 1991. There is no arguing that, for very good reasons, it is running very, very late. Can the Minister now give us the latest on its opening and tell us how much extra capacity it will provide? Can the Minister also say who is to bear the costs of the delay in opening? What is the cost overrun, and is it true that most of the cost overrun will in fact fall on the contractors and not on the CAA?
What do the Labour Government now propose? They propose a public/private partnership by means of a disposal of 51 per cent of the shares, handing over day-to-day control to the private sector and, of course, keeping a golden share. When we sold 51 per cent of British Telecom and kept a golden share, it was described by the then opposition as a "privatisation", and indeed it was. So is this. However, we welcome the albeit late conversion by the party opposite. It is not just the Conservative Party that describes this as a "privatisation". The IPMS, the union of the noble Lord, Lord Brett, and the air traffic controllers' union, suggests that the PPP is "privatisation by another name".
Can the Minister say whether there will be legislation in the next Session? We on this side of the House hope that there will be, because NATS' need for investment is becoming desperate. We would also like that to be a separate Bill, not part of some giant transport Bill dealing mainly with rail and road.
Of course, safety is the main concern of NATS. However, I do not believe that safety will be jeopardised by a transfer to the private sector, and here I part company with the noble Lord, Lord Brett, and others. Indeed, I welcome particularly the reference made by the noble Baroness, Lady Thomas of Walliswood, to the separation of the regulator--in this case, the safety regulation group of the CAA--from the provider, NATS, which is, of course, a wholly-owned subsidiary of the CAA. I challenge anyone to suggest that British Airways has become any less safe since it was privatised; nor has BAA in any of its safety-related activities.
On the question of the railways, to which the noble Baroness, Lady Thomas, referred briefly, I do not believe that in the recent tragic accident at Paddington there is any evidence that privatisation played a part. But, of course, we shall have to await the report of Lord Cullen.
However, I would take issue with those who say that because there is a profit motive, that will cause people to take unacceptable risks. I remind noble Lords that even the old British Rail tried to make a profit or, more usually, to make a smaller loss and not to breach its EFL. Far better a profitable company which can
We are also concerned about the possible future ownership of NATS. Could it be allowed to fall into foreign hands? There is an issue of national security here, especially because of the joint RAF/NATS operations. What of the golden share? Are the Government concerned about the European Commission's recent challenge to the Government's ownership of golden shares?
The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, I, too, am grateful to the noble Earl, Lord Kinnoull, for bringing this important subject before your Lordships. I have listened with interest to the views of noble Lords. Air traffic control provides a vital service to the nation's economy, to the 100 million or so passengers who use London's airports each year, and to public safety. Therefore, perhaps I may reassure your Lordships' House that the Government are fully committed to maintaining and improving wherever possible our high standards of aviation safety.
The noble Earl, Lord Kinnoull, and the noble Baroness, Lady Thomas of Walliswood, asked about the safety aspects of services related to London's airports. The provision of air traffic control services to aircraft approaching and departing from London's airports is centrally co-ordinated to gain safety benefits, capacity increases and improvements to the efficiency of the service. The services are combined into one operation and provided from one location.
The London Terminal Control Centre, and its modern, purpose-built operations room at West Drayton, functions very effectively to provide integrated control services at Heathrow, Gatwick and Stansted, and at other airports, and uses some of the most up-to-date and sophisticated equipment. The controllers there enjoy a very close working relationship with the air traffic control staff at the airports who are now responsible for the services in their immediate vicinity and, together, they are among the most highly trained and motivated in the world.
These centralised services also bring benefits in terms of the optimised flows of traffic so that air traffic control and airspace capacity are maximised to reduce delays. However, noble Lords will wish to be aware that delays can be induced through the imposition of restrictions to traffic flows in the UK and Europe to provide another safety valve. I can assure the House that flow restrictions can be imposed quickly to ensure the safe separation of traffic while services are maintained with the maximum flexibility.
The noble Earl's example does not necessarily mean that safety has been compromised. There is rarely a loss of separation between aircraft as a result of such incidents. I assure your Lordships that all reports of overload incidents are investigated thoroughly and actions arising from those lessons are learnt and implemented. In 1999, the trend in the overload reports is consistent with the number of reports in 1998.
As regards airproxes, we are far from complacent. Several noble Lords expressed concern about near-miss incidents in the past. All airproxes are a matter of concern. But all recommendations are followed up quickly and carefully and the Civil Aviation Authority ensures that appropriate corrective action is taken. Therefore, despite the high traffic growth in the 1990s, the number of reported airproxes in UK airspace has been falling. Indeed, 1998 saw the lowest figure in more than a decade, with 13 airprox incidents reported in the London area in contrast to 22 in 1997. That picture is mirrored nationally and the trend in airprox reports in 1999 is similar to that experienced in 1998.
Noble Lords asked about the new ATT centre at Swanwick. That will be introduced into operational service as soon as possible, consistent with the need to ensure its safe operation. I assure the noble Earl, Lord Kinnoull, that the most likely date for that remains the winter of 2001/2002. That was noted by the DERA report in November 1998. Since then NATS has met all its target milestones in this project.
The main advantage that Swanwick will offer is the capacity to deal with much larger numbers of aircraft flying over the rest of England and Wales. Until Swanwick opens, measures will be taken to ensure that traffic flows are kept within capacity.
I also reassure noble Lords that we still expect the new Scottish centre, Prestwick, to come into operation by the winter of 2005-2006. NATS has told us that the existing centre is able to cope until then. Noble Lords may recall that the new Scottish centre was originally planned to be a private finance initiative project, but when we came to power and examined the proposed PFI, we saw that the contract NATS had been obliged to negotiate by the previous Government was not viable. However, we believe that the new arrangements we are putting in place will allow Prestwick to develop into operation by the winter of 2005-6.
My noble friend Lord Brett feared that his speech was controversial. I found it very cogent and informative. I congratulate him on his maiden contribution and I look forward to taking his advice on this and many other matters in the future. With regard to the consultation on our plans for the PPP, noble Lords will wish to be aware that they have been developed in full consultation with stakeholders in the industry, including the trade unions. We launched a formal consultation in October 1998 when we published a paper setting out our outline proposals for NATS. Interested parties were invited to comment by the end of January 1999. In all, we received 230 responses from across the aviation industry and we published the report on the consultation in July.
Although the formal consultation has ended, my department is continuing to consult with the aviation industry as the detail of the policy is being developed. My right honourable friend the Prime Minister made it clear in another place that that process of consultation is ongoing. My honourable friend the Parliamentary Under-Secretary of State with responsibility for aviation recently met union representatives and the safety regulator to discuss concerns about safety issues. He is planning further meetings with unions and pilots' representatives, and intends to invite NATS' management to participate. We are also in the process of discussing our proposals with Members of another place.
There is no need for a new process of consultation. We are not stopping consulting and shall continue to talk to the industry. We believe that there is support for our plans within the industry, and considerable interest from potential investors and from our overseas counterparts, a number of whom are contemplating following our lead.
The question of the opposition of NATS staff to our proposals was raised. Certainly some staff have expressed concern, which is hardly surprising. Everyone is apprehensive of such changes. The NATS staff are a key factor in the future of the PPP and we hope that they will come to see, in the course of this debate, that the PPP is an opportunity and not a threat. Not only will staff have 5 per cent shareholding in the new partnership company, but they will be represented on a stakeholder council. I assure the House that this is not an old-style privatisation. NATS has a lot of potential opportunities in an expanding global market-place. The employees' shareholding will enable staff to share in the company's success.
I treat the contribution of my noble friend Lord Clinton-Davis with great respect, given his ministerial experience and the European dimension to the work he has done. He urged the Government to consider a trust model, perhaps along the lines of NAV Canada if the Government's overriding objective is to raise money from a partial sale of NATS. However, we are not
When they looked initially at the options for the future of NATS, the Government considered model trusts and not-for-profit company models. We agree that those models have some attractions. Principally, they would lend themselves to stakeholder involvement. However, we felt that the drawbacks outweighed the advantages. The ownership structure would be complex to put together because we would need to ensure that no one stakeholder could dominate and that there was no conflict of interest. We would need to have provision for the emergence of new user stakeholders and the disappearance of existing ones. We felt that the structure was not necessarily conducive to maximum efficiency. Although the proceeds are not our main objective, it was also felt that we nevertheless have a duty to the taxpayer. It would be difficult to achieve value for money because of the lack of a competitive sales process. Canadian law is not like ours. The nearest equivalent to NAV Canada and UK law would be a company established by Royal Charter, such as the BBC.
The Government rejected the concept of an independent publicly-owned company, a so-called IPOC, for NATS. I assure your Lordships that the Government considered a number of those public sector solutions for NATS. Indeed, we have incorporated many aspects of the IPOC into our proposals for the new partnership company. For example, either would be able to secure access to private capital, separate safety regulation from operations and include a role for the Government to ensure that the company was operating in the national interest. I assure my noble friend that we have ensured in the structuring of the deals in prospect that national interests will be maintained through the Government's ability to use their position through their golden share.
However, we believe that our new partnership company does more. It introduces top-level project and financial management skills, commercial freedom to expand into foreign markets, private sector efficiency drivers, and it provides proceeds for use in other transport projects.
I turn briefly to the points made by my noble friend Lord Simon. I was very pleased to hear his praise for the London ATC centre. However, I am afraid that I cannot agree that there is no advantage in the proposed PPP. NATS' business--and it is very good at it--is air traffic control. Where I believe that it is less experienced and consequently less skilled is at project management, as the Swanwick project has shown. I do not dispute that Swanwick was a massive undertaking. Nor do I underestimate the effort that NATS put into the project and in ensuring that the London centre could continue to handle traffic safely until Swanwick became operational.
I return to the core of the original proposition. I conclude by saying that the air traffic control arrangements serve London's airports very well. It operates in a high density, complex environment due to the proximity of the airports and the volume of traffic. However, a measure of success of those services is that they are well appreciated by all the airspace users. They are also the envy of Europe and of the rest of the world.
I apologise to those noble Lords whose points I have not been able to meet in the time available. I shall certainly write to them on any points that are outstanding. I assure your Lordships that this Government believe that our air traffic control system is safe, efficient and effective. I assure noble Lords that it will continue to be so under this Government.
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