HC Deb 14 December 1977 vol 941 cc692-722

12.58 a.m.

Lord James Douglas-Hamilton (Edinburgh, West)

I refer to Vote on Account, Class VI, Vote 6. It gives me great pleasure to pay tribute to the work of the Civil Aviation Authority and the effective services which it has given both in its headquarters and in the Highlands and Islands airports of Scotland, including Inverness and Wick, Kirkwall, Sum-burgh and Stornaway, Islay, Tiree and Benbecula. There is considerable evidence that it has carried out its duties with immense efficiency and as much economy as possible.

I shall give three examples which establish beyond any possible doubt the very high levels of efficiency to which it operates. In 1976–77 the CAA spent £1.2 million on the Highlands and Islands airports to handle 650,000 passengers. In comparison, the BAA spent £10 million for 4,600,000 passengers. This means that the expenditure by the CAA for each passenger handled for that year was £1.80 and that the expenditure for each person by the BAA was £2.20. That shows that the CAA operated with greater economy. These figures exclude depreciation and indicate conclusively that the CAA operates these airports more economically than the vast BAA monopoly could ever do.

The second fact relates to the ratio of members of staff employed to passengers handled for the year 1976–77, In that year the number of management staff for the Highlands and Island airports was 110 and for the BAA Scottish airports 1,065. The number of passengers handled by the CAA was 651,000 and by the BAA 4,576,000. For every one of the CAA's airport management staff 5,918 passengers were handled and for every one of the BAA's airport management staff 4,295 passengers were handled. This means that the CAA employee can, and does, handle more passengers than the BAA employee under the present two systems in Scotland. This proves conclusively that the CAA operates on a more efficient and less bureaucratic level in the running of small and very small airports.

The third case that I would take for the year 1976–77 is a comparison between the productivity of two Scottish oil-related airports—Sumburgh and Aberdeen. The latter is operated under the BAA and the former by the CAA. At Sumburgh 22 members of the management staff handled 268,000 passengers for that year. The BAA in Aberdeen used 135 members of management staff and handled 882,000 passengers. This means that for every passenger handled by the BAA at Aberdeen the CAA at Sumburgh handled 1.86 passengers. Therefore, the CAA employee can handle nearly twice as many passengers as the BAA employee. That means that in practice the CAA is operating more economically and in cost-effective terms more effectively.

What is the significance of these facts? To use an old Scottish saying, "Facts are chiels that winn a ding." These three cases demonstrate that the CAA's considerable experience in running airports since 1945 should be allowed to continue, and that the Government would be wise to support the outstanding example of an efficient sector of a public body rather than to encourage monopoly control.

In the light of this very compelling evidence, I hope that the Minister will consider confirming the CAA as the long-term owner of these airports so that it can get on with the business of serving the vital needs of the oil industry and continue to foster the excellent relationship it has already established with the communities that these airports serve.

The crux of the matter is that there is a very great difference between administering large airports and small airports. Some of these airports consist merely of small landing strips. As the former chairman of the CAA, Lord Boyd-Carpenter, said in a recent speech, very often the handling of traffic is done by one man whose traditional form of duties consists first of chasing the sheep off the runways, then talking the aircraft down and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man whose heart is in the job and who is proud of the fact that he is running the airport, which under modern conditions is the hub of these remote islands.

I am glad that the right hon. Member for Western Isles (Mr. Stewart) is present. He can confirm whether I have painted an accurate picture of what happens at Stornoway and Benbecula. Similarly, the hon. Member for Argyll (Mr. MacCormick) may feel moved to state what the position is in his constituency.

In other words, those working for the CAA, are closely integrated into their communities as well as doing a highly efficient job, and it would be a human tragedy for any of them to be threatened needlessly with redundancy. This applies particularly to those who work at Aviation House in my constituency where the headquarters staff are carrying out their jobs with great dedication.

The Minister may ask, at a time of high unemployment, what a few dozen more job losses mean. But he is dealing with human beings who have considerable expertise, and if they are thrust into unemployment by a costly bureaucratic exercise there will be no guarantee of other suitable employment for them.

Is it the case that if this transfer were to go ahead the small number of executive staff at CAA airports would not be offered jobs? Would there not be redundancies at these airports as well as at Aviation House? The needs of these employees should be sympathetically considered by the Minister before he comes to any hasty conclusion.

But it is not primarily the question of redundancy which concerns most Scots and most Britons. There is a very important principle at stake, that the transfer of responsibility from the CAA would lead to increased costs, and that fact has certainly been put before the Minister by the Scottish Council for Development and Industry. If there are increased costs it is inevitable, surely, that sooner or later this will lead either to increased fares, which will be contrary to the interests of the Highlands and Islands communities, or to substantially increased taxation. Either way it would be unsatisfactory.

It is, of course, a fact that the total number of passengers handled by the BAA in Scotland is a small percentage of its total numbers, and any decision by the BAA might well be a corporate interest decision rather than one taken in the specific interests of the communities in the Highlands and Islands.

Furthermore, as the British chambers of commerce have confirmed, there is very strong opposition throughout the chamber movement, both in Scotland and in the rest of the United Kingdom, against these aerodromes being transferred to the BAA.

It is also worth noting that the Chairman of the Highlands Air Transport Consumer Council, Major Hunter Gordon, has made certain representations in this matter. Not only is he Chairman of the Highlands Region of the Scottish Council. He also represents a broad cross-section of industry, commerce and local interests, quite irrespective of any political commitment which he may have. Even if this gentleman were a Labour candidate, he would still represent in his professional capacity a cross-section of industry, commerce and local interest. He has written stating that in view of the complete agreement of the elected representatives in the local authority and that of industrial and commercial air travelers represented by the Highlands Air Transport Consumer Council, the council feels that the changeover from the CAA to the BAA should not proceed. Indeed, late this afternoon, before the debate began, I received a telegram from him which states: Highland Air Transport Consumer Council deeply concerned about any possibility which would lead to increased operational costs. The existing high air fares already over one hundred pounds return are a disincentive to development representatives and buyers. On island routes air travel fulfils vital social need and costs must be kept to minimum. It is not only that consumer council which takes that view. It is of interest that virtually all the light aircraft operators are satisfied with the CAA charges, and invariably where the BAA has taken over airports, costs have escalated for landing and parking fees. If the Minister checks up with the light aircraft operators he will find that there is substantial opposition to any proposed takeover.

I regret to inform the Minister that that was not the only telegram I received this afternoon. I received another, this time from a wholly different source—the Convenor of the Shetland Islands Council. He states: I understand that you will be raising the question of the proposed BAA takeover of Highlands and Islands airports in the House of Commons today. You have the Council's strongest support for any action which prevents a possible increase in air travel costs to this community which is already experiencing major financial stresses and strains as a result of oil development but which tolerates them in the national interest. The proposed takeover can only result in an increased cost burden on the Shetland Islands people despite assurances by the BAA to the contrary. That is sent by the Convenor, Shetland Islands Council, Mr. A. I. Tulloch

I quote next from Lord Boyd-Carpenter, who probably knows as much about aviation as any man living. He made it clear that the Highlands and Islands airports were there not for economic reasons but for social services, and that they provide the only means of maintaining civilised standards of life for the persons in the remote communities concerned. He said: It seems the height of folly to alter what is plainly the most economic system, in order to substitue for it a system which, in the nature of things, must be more expensive and therefore must increase the bill which the taxpayer in one way or another will have to meet.

The Under-Secretary of State for Trade (Mr. Clinton Davis)

I have listened with interest to the telegrams that the hon. Gentleman has received. Can he indicate whether he has received any message at all, telegraphic or otherwise, from the Scottish TUC, for example? Can he indicate whether he has consulted the STUC?

Lord James Douglas-Hamilton

I am grateful to the Minister for asking that question. That was precisely the question that I was going to ask him. We are well aware that the Minister has been having conversations with the STUC. But my understanding is that the STUC was sworn to secrecy and was not in a position to state what representations it had made to the Minister. Perhaps the Minister can tell the House exactly what line the Transport and General Workers Union has taken. We should be most grateful to know.

Perhaps the Minister can also tell the House what specific terms the BAA has put forward concerning a possible takeover. Can he also tell the House whether it is the case that two years ago senior civil servants in the Department of Trade decided in principle that a policy should be adopted to take over the Highlands and Islands airports? Is it not the case that the Minister is coming under considerable pressure from his senior civil servants in this connection?

May I ask the Minister why is it that British Airways has not been consulted? We all know, of course, that the 13 AA has been consulted throughout. Is it not astonishing and extraordinary that British Airways has not been consulted in this whole process? If British Air ways had been, is it not possible that the Minister's picture of this matter might be somewhat different from the picture that he now has?

The Minister will be aware that in February 1974 the CAA requested that its airports should be looked after by a subsidiary company in Edinburgh with a Scots board receiving assistance from the staffs of the CAA. If the Government are still not prepared to consider this proposal seriously, will the Minister at least accept the recommendation of the Scottish Council for Development and Industry that the CAA's responsibility, with all its advantages of flexibility and experience, should continue until a far more comprehensive review of Scottish airport services can be undertaken?

After all, there is the awful warning to the Minister of local government reorganisation. In two years of local government reorganisation in Scotland more than 24,000 extra officials have been created. If this proposed take-over is thrust through we seriously believe that it will be exactly the same story all over again and that there will be a large increase in bureaucracy.

In the debate in the other place six days ago, on 8th December, the Solicitor-General for Scotland said that the Government had not reached a decision. I suggest to the Minister that this matter could be regarded by senior members of the Department of Trade as a peripheral matter compared with all the other decisions which go across his desk. But in Scottish terms it is not a peripheral matter but a matter of considerable importance, especially to the Highland and Islands communities themselves.

I hope that the Minister, who in the past has listened to our representations with great courtesy, will appreciate the substantial strength of feeling throughout Scotland on this issue. If he interferes with men performing their duties with great efficiency and dedication he will be taking a great risk. If the CAA and the Highlands and Islands communities are unjustly treated this could well become a cause célèbre.

1.14 a.m.

Mr. Donald Stewart (Western Isles)

I am pleased to have been called after the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) because of the excellent case that he has made against the proposed transfer of the Highlands and Islands airports from the CAA to the BAA and also because of the way in which he has pursued this campaign with tenacity and vigour. This is a matter of great anxiety and concern for workers at the airports concerned, not least in the Western Isles—my constituency—at Benbecula and Stornoway.

As Lord Boyd-Carpenter, the Chairman of the Civil Aviation Authority, said in another place, there is all the difference in the world between large airports and the techniques involved in operating them and the small airports. The hon. Member for Edinburgh, West went into that in some detail, and I need not repeat what he said. The noble Lord went on to describe the unique job structure at airports on the islands, and I can confirm what he said. Apart from the jobs mentioned, workers double up by cutting the grass, tending the fire tenders, and so on. There is a very different job structure from that at a British Airports Authority airport where the very nature of the organisation means that jobs have to be divided among several categories of worker. That is the basis for the very real fear that jobs will disappear. On behalf of my constituents, I view with the greatest hostility the possibility that even one man may be added to the dole queue in an area with consistently the highest unemployment in the United Kingdom.

I want also to express anxiety on behalf of people in my constituency who travel by air or might wish to do so. We have appallingly high air fares. It is possible to fly from the United Kingdom to Canada for the fare that has to be paid to fly from Stornoway or Benbecula to London. If this proposed transfer goes through, the possibility that higher landing fees will be added to the astronomical fares is viewed with the greatest anxiety.

Lord Boyd-Carpenter said that it seemed the height of folly to alter what plainly was a most economical system by substituting for it a system which would increase the bill to the taxpayer. That is the nub of the matter.

We have had assurances that our fears are unfounded, and I do not cast any doubt on the sincerity or good faith of the people who have given those assurances. But I have found too often that assurances of that kind are altered within a year or two on the excuse that circumstances have changed.

Then there is the possibility that one of the functions of the proposed Scottish Assembly will be the running of these airports. For that reason, at least, any final decision should be delayed.

Those right hon. and hon. Members with airports in their constituencies are totally opposed to any transfer of the kind proposed. All the staff at the airports wish the status quo to be maintained, and that should have some weight with a Labour Minister. After all, there are considerations more important than administrative tidiness. There is no demand, nor, I believe, any need for the change. There is total opposition from the people most closely concerned. I say to the Government "Leave well alone".

1.18 a.m.

Mr. Iain MacCormick (Argyll)

I congratulate the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) on raising this subject and I applaud the energy with which he has been pursuing it for some time. I am also grateful to the Minister for the courtesy with which he received the hon. Gentleman and various other hon. Members representing Scottish constituencies when we discussed the issue.

However, now that we have a chance to discuss the matter on the Floor of the House, there are a number of aspects of it that I should like to bring to the Minister's attention.

I have the great privilege to represent what is probably the most scattered constituency in the United Kingdom. It comprises not only a very large part of the mainland but probably the largest number of inhabited islands of any constituency. Many of the islands are served by air, and the needs of the people of the islands are usch that they rely absolutely on the ability to fly straight to centres of population such as Glasgow. It may be for urgent medical reasons. That is why the Air Ambulance Service is important. Or, of course, it may be a matter of convenience. Most people in my part of the world rely on air travel in a much more real sense than those who live in urban conurbations such as Glasgow. If one lives in Glasgow one can travel to London by bus, train or plane. But if one lives on Islay or Tiree or Coll one has no option but to fly.

When discussing the running of airports, it is most important to bear in mind the degree of flexibility that is possible under the present system. We have a system in which everyone knows everyone, and everyone can do the job. There are no demarcation lines between unions. Firemen can become baggage unloaders, and the airport manager can become a jack-of-all-trades. We think that this is not a bad system.

I have asked the Minister to come to Islay and Tiree, and I hope that he will do so. I shall be glad to introduce him to the staff of the airports and to members of the local communities.

One can extend the argument further. There was a time when services to my constituency were run by British Airways, the biggest airline in this country. Now they are run by Loganair, a small independent company, helped by subsidies from public funds—

Mr. Dennis Canavan (West Stirlingshire)

Exactly. They are subsidised by the State.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. If the hon. Member for West Stirlingshire (Mr. Canavan) wishes to intervene, he must do so in the proper way and not from a sedentary position.

Mr. MacCormick

There might be another way out. If we have a situation in which it is better to have a small airline with small aeroplanes, it might be possible some day to make further economies by allowing that airline to be responsible for running the airports on the islands.

I am looking at this purely from a constituency point of view. I admit that if any particular airport grows to such an extent that it becomes a major airport, it must be looked at in a different way. But no one can tell me that Tiree or Islay airports will become major centres of international traffic and, therefore, must be taken over. There is a very strong case for looking at them separately.

I urge the Minister to have regard to all airports in the Highlands and Islands in the same way and to realise that certain airports will never be great commercial airports. We could suffer from having them put under the blanket control of the British Airports Authority instead of leaving them as they are under the Civil Aviation Authority. In the long run the solution might be different, but it is dangerous and wrong to make up one's mind about these airports, take a difficult decision, and then reverse it later.

1.24 a.m.

Mr. Dennis Canavan (West Stirlingshire)

I have a great deal of sympathy with the views expressed by the right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll (Mr. MacCormick) about viable air services to their constituencies, particularly to the islands in the West of Scotland. The only way in which we can get a viable service to the West of Scotland is by having a Socialist public transport policy and State intervention. The hon. Member for Argyll admitted that when he said that formerly British Airways ran the service and latterly it has been run by Loganair. But Loganair could never do it on its own as a private enterprise concern; it can be done only with State intervention, and State intervention, to my mind, is the very essence of what Socialism is all about.

The hon. Member for Western Isles finished by saying "Let well alone". To suggest that the present standard of service to his constituency is well shows considerable complacency. I do not think that it is well. I do not think that we should "Let well alone". We should improve the standard of public transport to his constituency.

Mr. Donald Stewart

When I said "Let well alone", I meant it on the basis of the old saying "Better the devil you know than the one you do not know".

Mr. Canavan

Whether he thinks that British Airways is a devil, whether he thinks that Loganair is a devil, or whether he thinks that the CAA is a devil—whatever he thinks about devils—the hon. Gentleman must admit that the status quo for his constituency is far from well. It is very imperfect, and the Labour Government are intent on improving it. The only way to improve it is by getting a greater degree of co-ordination of the existing services. That is why the Government are coming forward with the present proposal.

The hon. Member for the Western Isles may shake his head and come out with his nationalist argument, and the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may come out with his Tory argument about leaving it all to free enterprise and so on, but the truth is that there would not even be a service to the Western Isles or to Argyll if it were not for State intervention. The Labour Government are now trying to rationalise things in a reasonable way.

Mr. Donald Stewart

I want to get this on record, and I apologise for intervening again. At a CAA hearing in London two months ago it was admitted by British Airways that the airlines to the Western Isles and to the Orkneys and Shetlands are in the black, paying their way, whereas the services in the internal parts of Scotland, such as the one which the hon. Member represents, are in the red Let him put that in his pipe and smoke it.

Mr. Canavan

This is nonsense. For example, the British Airways shuttle service is the most profitable service in the United Kingdom. But if British Airways or any other airline were operating purely on the basis of profit it would not even bother to go to the Western Isles. It is nonsense to say that one can run a profitable enterprise going to the Western Isles or to Argyll.

In my view, what the Government propose is a reasonable solution to get some integrated organisation into the whole concern so as to provide decent services to these Tory areas of Scotland where the people do not even have the gumption to vote Labour. If they did vote Labour, they would have had a decent transport service perhaps a century ago.

1.29 a.m.

Mr. Teddy Taylor (Glasgow, Cathcart)

Once again the hon. Member for West Stirlingshire (Mr. Canavan) has shown that he is in a very agitated state this week, and I think we understand the reasons for it. But it should be said at the outset that this debate is not about nationalism, about Socialism or about Conservatism, or about air services, shuttles and the like. It is about the management and control of a number of airfields, and to that extent we are grateful to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) for raising the matter. He has pursued this cause with vigour and tenacity, and, without doubt, his argument tonight has been excellent.

I remind the hon. Member for West Stirlingshire that when we talk about the British Airports Authority and about the Civil Aviation Authority we are not talking about one Socialist efficient organisation and one inefficient capitalist one. They are both State organisations.

The Minister has kindly received a deputation, including me and two SNP Members. I know that the Minister is a busy man who has many important problems to look at which need to be resolved and which are crying out for action. However, the general message from the Opposition and those who are involved at a constituency level is that here is a problem in which the Minister would be well advised not to look for trouble. As the right hon. Member for Western Isles (Mr. Stewart) has said, the Minister should let well alone unless he can successfully prove that his alternative proposals would be of advantage to the communities invomved.

The Under-Secretary of State for Scotland, the hon. Member for Glasgow, Queens Park (Mr. McElhone), has been kind enough to attend the debate and show his continuing interest in this matter, and I should like him to talk to the Secretary of State for Scotland about what happened in the House yesterday. There was an announcement by the Secretary of State about teacher training colleges in Scotland that was the culmination of a long battle stretching over 10 months in which the Government had originally had a report prepared that was presumably based on expert advice.

Mr. Canavan

That is irrelevant.

Mr. Deputy Speaker

Order.

Mr. Taylor

The House knows all about it, but I simply put the point that in this matter a proposition was put forward by experts although it was totally opposed by Scottish opinion.

Mr. Deputy Speaker

Order. We are not discussing teacher training colleges in Scotland, and I ask the hon. Gentleman to remember my ruling on the matter. [Interruption.]

Mr. Canavan

Behave yourself, skinhead.

Mr. Deputy Speaker

Order. I have indicated that I shall not allow discussion on teacher training colleges or what happened in the House yesterday.

Mr. Taylor

I can make a general point without referring to that. It is sometimes unwise to proceed with plans based on expert advice and to have to alter them later when opposed by local community opinion. The Minister should bear in mind that the proposals that have been put forward have been opposed by the Scottish Council, the chambers of commerce, the local communities and hon. Members. I am sure that if the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Inverness (Mr. Johnston) were here tonight—and we understand that they have had a busy and trying day—

Lord James Douglas-Hamilton

Is the hon. Member aware that the right hon. Member for Orkney and Shetland (Mr. Grimond) wanted to be here very much but was unable to attend because of a pressing engagement and that he is going to send strong representations to the Minister on this subject?

Mr. Taylor

Yes. Like other Liberal hon. Members, the right hon. Member for Orkney and Shetland has had a trying day today, and I can fully understand that.

Local hon. Members, the Highland and Islands Transport Consumer Council and other local interests have made it clear that they do not like the proposals, and the Minister, although he has indicated in an intervention that some bodies in Scotland may take a different view, should bear in mind that those directly involved—those who use the airfields—and the local communities are of one opinion: they are happy with things as they are and are extremely concerned and apprehensive about a major change.

There was a discussion on this in the Lords on 8th December, and there was given then an indication of some of the reasons—they were advanced by the Solicitor-General for Scotland—that might be argued for the change. Only two arguments have been generally advanced and those were the ones that were raised by the Minister at his meeting with us. The first was that it would be useful and constructive to have the Scottish airports brought into one package in the event of the Government devolution Bill going forward. That is laughable. It might go forward and be approved in a referendum or it might not, but it was said that it might be administratively useful at that time to have all the airports in one package to prepare for devolution.

The words used in another place were: The transfer of the eight Highlands and Islands aerodromes to the BAA and their incorporation with the other Scottish airports in a single organisation with headquarters in Glasgow, perhaps or, possibly, Aberdeen, would therefore be wholly consistent with, and would facilitate, the Government's approach to devolution. It would be a major mistake if the Government envisaged two major organisational changes in airports in Scotland in preparation for something which might or might not happen.

I was worried to read in some newspapers, including that Scottish paper called The Scotsman, on 31st May a report that the BAA had told the Government that it was prepared to take over four of the Highlands and Islands airports. I am not sure whether that has been confirmed, but if it were proposed to transfer only four of the airports, that would be a new fragmentation and the Government would not even have the argument that something was being put in one package.

The second argument concerns commercial exploitation. The words used in another place—which were similar to those used by the Minister—were: Another way to reduce the losses is to exploit other means of income which airports have. Much of this argument has been centred around Sumburgh airport. Many of the oil men are going through there and there might be considerable exploitation available from those who go through there. The BAA has considerable experience of this, but has the Minister any evidence that this cannot be done by the CAA, which, as far as Sumburgh is concerned, has shown a great deal of commercial expertise?

Another point that worries me is that it was said in another place that the Government have not been given convincing evidence that the transfer of airports to the BAA would result in increased overall costs. That is not the sort of argument that is acceptable to hon. Members representing Scottish constituencies. We want an assurance that there is evidence that there would be advantages from transfer and not that there was no evidence that there would be no disadvantages.

Transport is so vital to Scotland that any possibility of additional costs understandably causes enormous concern. It is no part of the case of those who oppose change that the BAA is inefficient or costly. All the indications are that it is extremely efficient in running the airports it manages at the moment. Few people could produce convincing evidence that it is an inefficient organisation. It has major problems, particularly with trade unions and others, but it copes pretty well. However, that is different from saying that an organisation which has experience of managing its present airports could necessarily manage other airports better than the CAA.

There are a number of particular points that I hope the Minister will be able to answer. There is concern that the changeover may result in increased costs. There is no doubt that at CAA airports one has quite different management and labour arrangements from those organised by the BAA. This was summarised brilliantly by one or my noble Friends in another place who said: very often the handling of traffic is done by one man whose traditional form of duties takes the place, first, of chasing the sheep off the runway, then talking the aircraft down, and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man, locally recruited".—[Official Report, House of Lords, 8th December 1977; Vol. 387, cc. 1838, 1824.] I do not know whether that was an extreme example or a paraphrase of what may happen. There is no doubt that the flexible arrangements at these airports contribute to reduced costs. If there were to be a division between the airport and the management functions, there would be increased costs.

There is no doubt that if we were to have this change of ownership, it would not mean the CAA disappearing from these airports. It would carry out some of the functions, and the other functions would be carried out by the BAA. There would be a real danger of duplication of what is done by one person or organisation now.

Has the Minister given any consideration to what might be the additional costs of dividing into two the responsibility for airports for which at present the CAA is entirely responsible? [Interruption.] Or the CIA? I am not allowed to mention teacher training colleges—

Mr. Deputy Speaker

Order. Hon. Members should not make sedentary interruptions.

Mr. Taylor

The second point concerns landing fees. There is very real concern that if the changeover takes place, the BAA might increase landing fees. That would undoubtedly have an effect on air fares. The Minister must come to some of these Scottish airports to realise how acutely concerned people in the area are about the high level of air fares. It may be that some commercial travellers engaged in the oil industry will not be so conscious of fares, but the high level of fares is causing serious concern and anything that would result in fares increases would be of enormous concern.

Third, private fliers, operators of small aeroplanes of their own, have given reports that in places such as Aberdeen, where there was a change, the costs have risen considerably.

There are four additional questions that I hope the Minister will be able to answer tonight. First, how many complaints has he or the Scottish Office had about the CAA's management of the airports that it controls? That is often a good guide. My experience of these airports, particularly Inverness and some of the island airports, generally gives me the impression that most travellers and local residents are very happy indeed with the way in which the airports are managed.

Secondly, will the Minister give an assurance that he will visit the airports and consult the employees and travellers?

Thirdly, will the Minister assure us that in the event of his going ahead with the proposals, there will be no question of having a further division, of having, as was suggested, perhaps four airports being transferred to the BAA and the rump being transferred to some other body?

Fourthly, will the Minister give a clear assurance that he will not advocate a change unless he can present convincing evidence to the House of Commons, the local community, the local councils and other bodies that the change will be for the better?

It would be only fair to tell the Minister that on the basis of the opinions that I have gathered in Scotland and of the speeches that the Minister has heard tonight and the representations that he has received, there is little doubt that if this proposal were to go forward without absolutely convincing evidence that it would result in an improvement, the Minister would be facing a very major battle.

My final point is very important. In the discussion on a Question in the House of Lords, there was a statement by the Solicitor-General for Scotland that a decision was expected round about the end of the year. The words used were, Around the end of the year, the Government plan to publish a White Paper … on airports policy, and it is my expectation that a decision on the aerodromes will be reached by them and announced at that time."—[Official Report, House of Lords, 8th December, 1977; Vol. 387, c. 1842.] We are almost at the end of the year. Some of my hon. Friends have been buying Christmas presents. There is no doubt that the end of the year is approaching. When does the Minister expect this decision to come? Unless he can provide the most convincing reasons for change, will he let well alone, let the CAA get on with the excellent job that it is doing for the eight airports and let the BAA continue to manage the other airports in Scotland, for the management of which it can take credit?

1.44 a.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis)

This has been an interesting debate. From my point of view, as one who has to make a decision or, at least, to recommend a decision to my right hon. Friend the Secretary of State, it is helpful to garner hon. Members' views. Indeed, as has been mentioned, I have heard every one of the hon. Members who have spoken in the debate, apart from my hon. Friend the Member for West Stirlingshire (Mr. Canavan), because they came to visit me and made almost exactly similar representations on that occasion.

I want to make it clear that although it is true that the White Paper will be published, it is hoped, early in the New Year—it will not be before the end of this year—the Government have made no decision on this particular point at present. We would wish to announce our decision in the White Paper. It is right that at this stage I should not commit the Government—indeed, I am not in a position to do so—to a particular point of view. However, having heard the arguments for maintaining the status quo, it is only right that I should present the arguments on the other side of the balance-sheet so that the public at large may be aware of the respective arguments. That is what I propose to do.

The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is not directly affected in terms of constituency interests by the operation of the Highlands and Islands airports. His interest lies in the fact that the Civil Aviation Authority has its headquarters in Edinburgh. In that sense he is concerned primarily with a constituency interest, although I am certain that he is entitled to take into account wider interests in Scotland. He is concerned about any possible redundancies that might affect about 15 employees at the Edinburgh headquarters of the CAA.

Lord James Douglas-Hamilton

Will the Minister accept that the much more important principle is that of my constituents who have to travel to the Highlands and Islands, who suspect that they may have to pay substantially increased fares or higher taxes? That is a much wider principle affecting many more people, and it also affects my constituents.

Mr. Davis

I shall come to that argument. It was my impression that the hon. Gentleman was primarily concerned with the possibility of a loss of jobs at Edinburgh. That seemed to be one of the most important points that he made to me in his representations. I do not complain about that. I shall deal with that argument.

I am fully aware that there is opposition to the proposals. I have had not only a substantial amount of correspondence on this score from hon. Members but the sort of representations to which the hon. Gentleman referred during the course of his introductory remarks. He did not exactly catch me by surprise when he read out the telegrams. I do not think that the money was very well spent as everyone was well aware of the position that the various bodies were taking.

However, in the first place I shall deal with the argument that the hon. Gentleman made rather more emphatically when he came to see me than tonight—namely, the future of the Edinburgh office of the CAA. I do not believe this to be an argument of substance, although the loss of 15 jobs is not something that one relishes. However, if it were in the interests of a more efficient operation to take such a course, what view would the Opposition take? Opposition hon. Members constantly regale us with talk about overmanning, and the right hon. Member for Leeds, North-East (Sir K. Joseph) never stops talking about it from one weekend to another. I can understand the hon. Gentleman's reticence in broaching the subject tonight.

It is true that if the BAA took over the Highlands and Islands aerodromes about 15 jobs would disappear. That would have the effect immediately of reducing the overheads and providing a saving on the costs of the running of the aerodromes. It is accepted that any loss of jobs is regrettable, so we have asked the CAA, which employs another 100 or so people in the Edinburgh office who are unconnected with the operation of the Highland and Islands airports, for an undertaking that the people employed in Edinburgh on aerodrome management work would be found other work. I have not yet had that undertaking.

It has also been suggested, more particularly in the representations I received from the hon. Gentleman earlier, that if those 15 or so people lost their jobs the CAA's office in Edinburgh would no longer be viable. I have asked the CAA management about that as well, and it has not yet responded. I find it difficult to accept that the future of the Edinburgh office could be jeopardised by the loss of these relatively few jobs. That would be ludicrous. If it were so, it would call seriously into question the authority's judgment in acquiring an expensive new headquarters site in Edinburgh. Therefore, I do not believe that that is an argument of substance, and I understand the hon. Gentleman's reticence in not referring to it tonight.

Lord James Douglas-Hamilton

What evidence is there that the BAA could run these airports more efficiently, in the light of the fact that the CAA has operated them efficiently and effectively over past years?

Mr. Davis

The hon. Gentleman must not imagine that I shall sit down at this stage, although hon. Members who want to get on with the next debate might reasonably desire that I should. I shall deal with these points.

I come to the question of the future ownership of the aerodromes. The argument has been adduced that the Government have sought to introduce this idea simply for the sake of administrative tidiness. There are far more serious and fundamental reasons. There are three principal considerations that I would put to the House as matters that should go into the scales of the debate on this issue.

First, the CAA was established for the purpose of regulating civil aviation and to run the National Air Traffic Service. Incidentally, the service would not be devolved. The Highlands and Islands airports are absolutely essential to the communities they serve. They are vital to the Scottish transport system, but they are peripheral to the main functions of the CAA. On the other hand, the British Airports Authority was established exclusively for the purpose of running aerodromes. That is the distinction between the functions of those two bodies.

The second consideration relates to Sumburgh. It would be wrong if I were to hide my concern about the way in which Sumburgh has been utilised and developed by the CAA. Sumburgh has expanded rapidly, but it clearly requires expertise in the planning of new facilities, the control of investment and the exploitation of commercial opportunities which is not available in the CAA to anything like the extent that it is within the BAA.

I said that I was disappointed by the CAA's failure adequately to develop the opportunities for commercial exploitation. I am disappointed that the previous chairman of the CAA did not cast his mind sufficiently, or at all, over this important aspect. My noble Friend the Solicitor-General for Scotland was right to assert that there was an opportunity for taking advantage of people who could afford to pay considerable sums of money, who could take advantage of restaurant facilities and shops, and the rest, which provide the infastructure of the modern airport. That opportunity, so far, has been lost, and it is a regrettable loss. It means that the income which could have been used to sustain the whole operation of the Highlands and Islands has been lost.

Mr. MacCormick

I agree with much of what the hon. Gentleman has said, but does he not appreciate the fact that the real opposition to the proposal set before us is not to try to create a dividing line between those airports run by the BAA and those run by the CAA? We are not saying that just because one airport has always been run by the CAA it should not be run by the BAA. The point is that some airports are not capable of being commercially expanded in the sense to which the hon. Member is referring.

Mr. Davis

It is an extraordinary thing that in this debate hon. Members should exercise such impatience. I am coming to that point—but I must deal with the points one by one, and I must express my disappointment at this lost opportunity. In that respect I do not sense that there is any great disagreement between the hon. Member and myself.

The hon. Member for Edinburgh, West presented some very unfair comparisons. I think it was Lord Boyd-Carpenter who on one occasion talked about comparing apples with pears. That is precisely what the hon. Member was doing when he read out his statistics. The sorts of operations carried on by the airports run by BAA and those carried on by the airports run by the CAA are quite different. The general undertaking is of quite a different character.

Here we have an example where the expertise to seize the commercial opportunities that are available has gone by the wayside thus far, and I think it is a pity. I think I have the hon. Member for Argyll (Mr. MacCormick) with me on that point.

Mr. Teddy Taylor

To be fair to the CAA, we accept that a great deal of money can be made by selling sticky buns and tartan pencils at airports, but some of the catering facilities at airports run by the CAA, certainly in Inverness, are among the best in Britain.

Mr. Davis

I was not referring to the hon. Member's tastes when he visits airports; I was talking of tastes that were somewhat more selective. There can be no doubt that at some airports the facilities that could have been provided have not been provided.

I do not want to labour the point. [Interruption.] The hon. Member must take drink for what it is worth. If I went into a debate about drink I am sure that you, Mr. Deputy Speaker, would rule me out of order.

Mr. Deputy Speaker

The one sad omission was that the hon. Member for Glasgow, Cathcart (Mr. Taylor) did not mention haggis.

Mr. Davis

I feel rather a stranger in this debate in some ways.

The third point—I find it difficult enough already; heaven knows what I shall run into when I try to answer all the points that have been made—deals with the question of devolution. The hon. Member for Glasgow, Cathcart (Mr. Taylor) is wholly opposed to devolution. I shall not become involved in a debate about the principle; the House is now considering the issue of devolution, the Bill having been given a Second Reading by a considerable majority. I want to refer to a number of questions that I think are relevant to that principle.

At present, the British Airports Authority already has Scottish airports, under an executive director. It has in mind—I have this from the chairman of the British Airports Authority—to establish a board under the present deputy chairman, who would be the chairman of the Scottish board, so that Scottish airports would be provided with a greater degree of autonomy. I do not think that hon. Members representing Scottish constituencies would cavil at that suggestion, which I think is desirable.

The proposal for the Highlands and Islands airports is to establish the control and management of the western airports from Glasgow and the eastern airports from Aberdeen, thereby again providing a closer and more localised area of control than exists at the moment.

There is another factor, which has been left out of the speeches made tonight on this subject, which I might interpose at this point. The British Airports Authority has a considerable record of consulting local opinion. Indeed, it is duty bound to set up consultative committees. Only two months ago the Civil Aviation Authority set up a consultative committee at Sumburgh. I pay tribute to the present chairman of the CAA, who applied the expertise that he had gained when chairman of the BAA, for taking that step. I think that it is a great pity that his predecessor had paid such scant regard to local interests and had not considered it necessary to establish a consultative committee earlier. That is certainly an advance. I welcome it as a move in the right direction on the part of the CAA. I know, however, that it would be part and parcel of the duties and functions of the BAA to establish consultative committees in respect of every aerodrome if they were to be transferred to the BAA.

Perhaps I may summarise the position regarding devolution as I understand it. I do not claim to be an expert in this area. Hackney, Central is far removed from this matter.

As I said before, airports would be devolved under the Bill, but there would be no automatic devolution of the BAA or the CAA. Indeed, the CAA, except in its functions as an airports authority would not have its functions devolved at all.

The devolution of those bodies, as airports authorities, would arise only if the Scottish Secretary made a request to the Secretary of State for Scotland for that purpose or if the Scottish Assembly should legislate to remove the BAA from Scotland altogether. That would be an alternative proposition. It seems to me that already the BAA has established a mechanism that is more available and flexible in this regard than that which operates under the CAA.

In the light of these considerations, the Government formed the view that there were good grounds for asking the authorities to consider a change of ownership.

Earlier this year Mr. Norman Payne, the Chairman of the BAA, told the Secretary of State that his authority was willing to take over the aerodromes if the Government wished that to take place on certain stated terms.

Mr. Nigel Foulkes, the Chairman of the CAA, took the view—frankly, he has always taken this view, even when he was with the BAA—that there would be no benefit to be gained from his authority, the CAA, relinquishing the aerodromes.

Since that time we have had a substantial number of representations. I have gone to a great deal of trouble, as has been acknowledged by hon. Members, to try to sort out the views of people who are interested in this matter, which is very important to the people of Scotland, in particular to the Highlands and Islands. It may be considered by some—particularly English Members—not to be a matter of great concern, but I do not share that view.

Only a few days ago I went to Scotland where I met and had further consultations with the Scottish TUC. I have discussed this matter with the STUC on two separate occasions. It is only right that I should tell the House that the STUC is firmly of the view that it would be right for the BAA to take over the aerodromes. That is one point of view as against the others that have been mentioned. Of course, the unions are anxious to ensure that the new terms of employment for their members are satisfactory.

Lord James Douglas-Hamilton

Does the Minister deny that some senior members of the STUC have expressed a contrary view? Why was British Airways not consulted?

Mr. Davis

I shall deal with British Airways later. I did not sense that there was outright opposition to the proposals for a BAA takeover. Concern was expressed about a number of issues which would be dealt with in the course of ordinary industrial relations negotiations. I have just referred to that.

Mr. MacCormick

The Minister has implied that we are to be faced with a situation in Islay and Tiree in which everyone will be totally unionised and that there will be demarcation lines and even disputes about who does which job.

Mr. Davis

That is a rather frivolous intervention. I shall deal with the question of one man having two or three jobs in a moment.

The question of British Airways really relates to the whole process of consultation that has taken place on an unprecedented scale. At the outset I took the view, as did my predecessor, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), that it was right notwithstanding the delays and uncertainities caused by delays, that there should be the fullest possible consultation. Throughout the country everyone had the opportunity of submitting to the Department his views on the two consultation documents. British Airways took a wholly neutral attitude. It made no representations to us to the effect that we should not proceed along these lines or that we should do so.

I now turn to the points made in the debate. I shall attempt to answer them all.

Mr. Canavan

Can my hon. Friend clarify exactly what the STUC said during discussions? Is part of the reason why it was in favour of BAA rather than CAA that the industrial relations of the BAA are better and that the SNP and the Tories oppose the BAA changeover because both the Tories and the SNP are opposed to trade unions?

Mr. Davis

I do not want to hot up this issue unnecessarily. The basis of the STUC submission was that it favoured an integrated transport policy. It saw the BAA as being more readily able to achieve that. The CAA was already a fragmented operation. This was the crux of its submission.

The hon. Member for Edinburgh, West seemed to be arguing two different cases at the same time. He was anxious about redundancy in one argument and concerned about too much cost being involved—presumably by overmanning—in another. He cannot have it both ways. He argued a contradictory case.

The hon. Member said that senior civil servants decided on this policy two years ago and that Ministers simply owed their policies to articulate expressions made in support of them by senior civil servants. That is not the way that my right hon. Friend approaches his job.

The hon. Member asked for a far more extensive review of Scottish airports. That would be ludicrous. We have already had this prolonged period of consultation. Everybody has had the opportunity to make submissions to the Department, and we have had more than a thousand of them. I do not believe that creating further uncertainty would be the right approach. There is no case for a further extensive review.

The right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll essentially made the same points and I shall bracket them together. They make an unholy duo. They were concerned about the significance of air travel for their constituents. They were critical on the points concerning flexibility of employment duties. I agree absolutely, and I understand from the BAA that there would be no question of breaking down the existing flexibility that operates. Where one man is doing a couple of jobs it is in the BAA's interest to continue with that.

The BAA prides itself on running its activities profitably. A justifiable tribute was paid to it by the hon. Member for Cathcart, who obviously was not impressed by the argument he heard earlier from the hon. Member for Edinburgh, West about the BAA. The BAA would want to carry out its undertaking with its usual standards of efficiency and profitability. There would be no joy in its undertaking the sort of bureaucratisation of the Highlands and Islands airports that some hon. Members have flippantly described.

Mr. Teddy Taylor

Does the Minister accept that what he said about my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) is just not fair? There is a great deal in which we believe that the BAA does well. On the question of flexibility, did the Minister get the agreement of the STUC to the continuation of the present practices of the CAA?

Mr. Davis

The STUC did not go into details with me, nor would it have been proper for it to have done so until a decision is made. Then it becomes a matter for negotiation. But the STUC understands how the operations work. There was no suggestion that this sort of procedure should not be persued.

I was invited to visit Tiree and Islay. I shall try to go there. I have, however, visited more airports in the United Kingdom than any other Minister holding this position. I shall make the visit if I can, notwithstanding the beguiling influence which I fear from the hon. Member for Argyll. I cannot make a commitment that I shall do so. However, these airports have been visited by numerous people and I have had full reports about them. I do not dispute the arguments adduced in that regard in the House tonight.

The hon. Member for Argyll proposed that Loganair or some other operator might operate these services in the future. I am not convinced that that is a viable operation that we should consider, but I will not rule it out simply because it was suggested by the hon. Member. We shall, of course, look at what he said.

My hon. Friend the Member for West Stirlingshire (Mr. Canavan) rightly pointed out the importance of State intervention in the running of the Highlands and Islands airports. That is a most important factor. The hon. Member for Cathcart said that it was sometimes unwise to be seen to advocate plans which have been put forward by experts. That is a bit of a cheek coming from him. It was his Government who implemented plans put forward by experts for the reorganisation of local government and the National Health Service, both of which have cost this country a great deal of money.

The hon. Gentleman asked me what consultation has taken place. I have already dealt with that in some detail. He went on to ask me whether the British Airports Authority would be prepared to take over four of the airports. That, I believe, is not something that the BAA would wish to do. I think it is concerned about running a tidy operation, certainly. There is the possibility of looking at Sumburgh separately. That is something that we might have to do, but I do not think that we ought to embark upon consideration of that proposition at this stage.

The hon. Gentleman spoke about landing fees and blandly asserted that the BAA might increase landing fees. It is that sort of assertion that really does not help in a debate of this kind. Bare assertions do not necessarily reveal the naked truth, and it does not help merely to make that sort of blind assertion. Indeed, I must tell the House that when the CAA puts forward proposals for increased air traffic services, this meets with tremendous disapproval from local authorities and others who are concerned. That is not unnatural.

We are really concerned here with whether the taking over of these airports by the BAA would lead to increased charges. In my view, the arguments are really against simple assertions, and there is nothing to support the suggestion that the BAA would suddenly, because it descended on these airports, add enormously to their charges. This has been the constant theme, however, in the debate and in the representations made to me.

What we have to face, clearly, is that some people suggest that nothing at all should be done to increase aerodrome charges. Whether we carry on under the CAA or have a transfer to the BAA, there can be no guarantee given that there will be no increase in aerodrome charges. Aerodrome charges reflect—or should reflect—the cost of running aerodromes. If I may stress the point, it is important to distinguish between, on the one hand, increases in costs which are directly attributed to a BAA takeover which would not otherwise occur and on the other hand, increases in costs which will occur irrespective of who owns the acrodromes.

We have no evidence that transferring the aerodromes to BAA would result in increased costs, and no evidence has been adduced tonight, nor could it be. It must be recognised, however, that for a variety of reasons costs will increase, even under the CAA. But there are those who suggest, as I say, that aerodrome charges should still be held down and I want to say a word on that.

In general, it is our policy that those who use air services should meet the cost of providing them, either directly through air fares or indirectly through the profits made on commercial activities such as the sale of duty-free goods. We recognise that this policy cannot apply, in its pure form, in the Highlands and Islands. Those in the region who rely on air transport as an essential social service cannot be expected to meet the full cost of the service, which therefore must be subsidised. But for many passengers, especially at the aerodromes serving the oil industry, the air service is a normal commercial operation and there is no reason why the taxpayer should subsidise such passengers.

We have to strike a balance between subsidies to keep down air fares, on the one hand, and the varying ability of different categories of passengers to pay an economic rate, on the other. It is not axiomatic that a subsidy has to be applied to aerodrome charges. There are other ways of keeping down fares where this is considered necessary. We have these various issues very much in mind but they are essentially separate from the question of who should own the aerodromes.

There are other points with which I wish to deal, but that would be unfair to those hon. Members who want to take part in other debates. Perhaps I may summarise briefly the three points that I have made. It is said that the BAA has no experience of running small aerodromes. When it took over Aberdeen, which is not a small aerodrome in comparison with the aerodromes that we are talking about—but perhaps it bears a relationship to Sumburgh—it took over that operation with distinctive success.

It is said that the BAA is somehow an enormous entity operating from London whereas the CAA is a sort of Freddie Laker of public enterprise. That is almost the terms in which this matter has been put to me. Again, that is far removed from the truth. The CAA is a very much larger body than the BAA, and the BAA has done much to ensure that there is a local responsibility, particularly in Scotland.

Lastly, I want to deal with the effect on unemployment. I assure the House that the BAA has given me an undertaking that working conditions and the people who are currently employed in the airports themselves are matters which it takes seriously. I ask hon. Members not to dismiss that assurance.

More particularly, if the transfer takes place it is right that the BAA should be given the opportunity of showing the country that it is capable of operating these airports successfully. I therefore believe that I have made out a case on the other side.

Mr. Teddy Taylor

I do not agree.

Mr. Clinton Davis

The hon. Gentleman would not find any case put forward by a Labour Government appealing to him. His basic principle is to reject anything which a Labour Government do regardless of its merits. I do not take that observation very seriously.

I believe that these are important issues and that we are right to debate them. We have not made up our mind about them. I have put the argument as strongly as I can on the other side so that the country does not have a one-sided perspective of what has taken place. I hope that our proposals which will be announced shortly will be given a reasonable opportunity to work. We understand that we cannot win. We are talking about a national airport strategy as against the chaos that has hitherto existed when constituency interests have impinged on this, and the Government understand that it will be difficult to convince everyone.

But, in taking our decision, our concern primarily will be to ensure that the Highlands and Islands aerodromes are operated as safely, efficiently and economically as possible for the benefit of the communities which they exist to serve. I believe that to be a worthy objective.