HC Deb 09 April 1986 vol 95 cc271-82
Mr. Teddy Taylor (Southend, East)

I beg to move amendment No. 9, in page 10, line 36, at end insert

'and if the local authority owner has not already made arrangements for the airport to be managed on a commercial basis by a suitably qualified and experienced operator who is not an employee of a local authority.'. I am grateful for the opportunity of raising a minor amendment which is vital to the borough of Southend and to at least one other airport owned by a local authority in this country. I am particularly grateful for the support given by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop).

The Minister will be aware that I and my colleague in Southend, the Secretary of State for Trade and Industry, have expressed concern over a small aspect of the Bill. However, I should like to make it abundantly clear that I fully support the objective of the Bill, which is to privatise the British Airports Authority and, more importantly, to bring commercial criteria into the management of services provided by local authorities.

The amendment is simply designed to exempt from the plc requirements those airports, I believe only two in number, which have already been transferred to full commercial and profitable management by the local authority owners. The Minister will be aware from his recent visit that Southend airport is managed commercially and profitably, to the advantage of Southend and its ratepayers, by British Airports International. We have a superb manager, Mr. Gareth Evans, who has transformed the finances of our airport. It is running successfully, profitably and well, and in the interests of the travelling public and the ratepayers of Southend.

The Minister will be fully aware that Southend borough council does not interfere in any way with the running of the airport. I am sure that that will be confirmed by my right hon. Friend the Secretary of State for Trade and Industry who has been constantly in touch with the Department as, of course, have I and Southend borough council. I am sure that my right hon. Friend would also confirm that, far from being opposed to privatisation and commercial practices, the Southend borough council is, in some ways, the ideal borough for those who think that we should have commercial management of our activities. We led the privatisation of local authority services. We introduced the first major privatisation of the cleansing department. That saved the ratepayers about £500,000 in its first year. We have also privatised many of our services. Believe it or not, we have even privatised our successful and world-famous pier. There has been a major new investment in it, a new train has been established and we are delighted that Princess Anne is opening our new, modernised pier in a few weeks.

Southend has led the field in privatisation and I think that hon. Members will be delighted to hear that, while other councils have been shoving up their rates time and again, Southend borough council reduced its local rate burden this year and I think that it should be congratulated on that.

When we have an airport running commercially by commercial managers without interference from Southend borough council I appeal to the Minister and ask what possible advantage there can be to Southend, the airport, the ratepayers or the travelling public in forcing the council to establish a plc. It seems to be utterly pointless. On Second Reading the Minister told us not to worry because all the shares could be retained by the local authority. It will be a rather strange company with only one shareholder, but the Minister said "Do not worry, all the shares can be retained by Southend borough council."

As you are well aware, Mr. Deputy Speaker, setting up a plc is an expensive business. In Southend, we like to watch our pennies and we ask the Minister what possible advantage there can be to anyone in forcing Southend to establish a plc. I fully accept that in other areas where the local authorities run the airports and perhaps do not do it very successfully or do it at a considerable loss, there is a case for telling them that they have to change and that they have to privatise, put in a plc and change their ways. But why on earth should we in Southend be forced to do that when the airport is already run commercially and profitably?

It is only fair to say to the Minister that in Southend we are becoming a bit worried about the attitude of the Department of Transport to Southend borough council. We have asked it to do only three things recently, and we have got egg on our face every time. We appealed to the Minister on this issue. One of our most successful services was that from Southend to Frankfurt in Germany. There was a plane to Ostend and then a bus from Ostend to Frankfurt. Despite the wonderful Common Market, which is appreciated by many Ministers, the German Government withdrew the licence for the bus service. We appealed to the Government and asked whether they could get any bus service, run by Germans, French, Austrians or Italians. Sadly, the Government were unable to do so, and the service folded. We were rather unhappy in Southend that when we asked, "Could you please do what we are always told the Common Market can do and give us a bus service run by anybody from Ostend to Frankfurt?" the Government were unable to help.

We appealed to the Government again, saying, "Can you help our transport by getting a third Dartford tunnel?" Instead we find the Government expending all their energies on building the silly Channel tunnel, which nobody wants.

Thirdly, we asked the Government whether we could privatise one of our two railway lines to London. We said, "We are so keen on privatisation in Southend: one of our services is run by British Rail. Can a private firm do the rest?" In their manifesto, the Government said that they would encourage British Rail to privatise passenger services. We wanted a little information from British Rail about the figures. We said to the Government, "Will you ask BR to give us the figures?" The Government said no and that BR was too busy. The privatisation scheme collapsed.

We have had those three refusals from a Minister whom we regard as a real Tory, who believes in privatisation and enterprise. We are beginning to wonder why the Government are picking on us and not helping us in any way in our requests. In this case we ask why we are included in the provision. Why not leave us out?

I should like to know what the Secretary of State meant on Second Reading by saying: The directors of the airport company will have a duty under the Companies Acts to act in the best interests of the company, which may not necessarily coincide with the interests of their own local authority."—[Official Report, 27 January 1986; Vol. 90, c. 695.] That is what sends a shiver down our spines. The one thing that we have asked our airport and our commercial managers to do is have some regard for the people of Southend in the way in which they operate the airport.

Of particular concern to my constituents and those of my right hon. Friend the Member for Southend, West (Mr. Channon), who has taken such an interest in the matter, as he always does in Southend affairs, is the possibility of increased night flights and increased airport noise. Obviously my right hon. Friend the Secretary of State for Trade and Industry, cannot speak on the matter, although I am sure that he would love to do so, but I am sure that we would both like to say: can we have an assurance that, if we are forced to set up a plc, the local authority will still have the power, as a local authority, through planning procedures, to control any upsurge in night flights, which would cause serious concern to the people of Southend? That is one thing on which we need an assurance.

Will the Government put any pressure on Southend borough council, if it is forced to become the sole shareholder of this remarkable new plc, to sell the shares to anybody else? Having built up a successful airport, managed privately and profitably, will we be forced to sell the shares to anyone else?

In view of the great confusion about what is required by the Government and why it has been required, will the Minister be willing to have a discussion with us so that we in Southend could try to find out from him what is involved? I may have been slightly unfair, because it may all be a misunderstanding. Perhaps the Government intend to accept my sensible amendment. We in Southend do not object to the Bill. It is a policy that we have been applying. It is a move towards commercial practice, privatisation and so on. We accept this. We do not oppose this, but we have gone ahead of the Government and have decided that our airport should be managed commercially and privately by and organisation which is not controlled in any way by the Southend borough council and does not have any employees of the Southend borough council.

11.15 pm

What possible advantage can there be in forcing the borough council to spend some of its carefully collected resources on setting up a plc? I know what the Government are trying to do in this clause and I support it but I think they may have made an error in including Southend.

Mr. David Ashby (Leicestershire, North-West)


Mr. Taylor

I can think of no possible argument—

Mr. Ashby

Does my hon. Friend agree that the job of the local council is to provide services and that it is not part of a local council's duty to start providing and running businesses? An airport is run as a business and therefore is it not right that the business should be floated off and not run by the local council?

Mr. Taylor

We do provide commercial services. If my hon. Friend had a local authority which was as successful as Southend, he would have a greater smile on his face. I wonder whether his local authority cut its rates this year? Has his local authority privatised most of its local services?

Mr. Ashby


Mr. Taylor

My hon. Friend would be better employed in inviting his local authority to come on an official visit to Southend to see how a local authority should be run instead of criticising what I am saying.

Southend is a loyal supporter of the commercial policies of the Government and we believe we have given a lead to local authority management in privatisation, profitability and commercial practice. We ask the Government to relieve us of this nonsensical duty to establish a plc with one shareholder. It will bring no benefits to Southend, to the travelling public or to the ratepayers. I hope the Minister will accept this minor amendment.

Mr. Robin Maxwell-Hyslop (Tiverton)

My hon. Friend the Member for Southend, East (Mr. Taylor) has deployed the general case which could be applied with equal force to Exeter airport, which is owned by Devon county council.

Exeter airport is extremely ably managed by a commercial company, British Airports International, under an able and experienced manager. It is not only run as an excellent and increasingly excellent business, but it ties in with the policies of the county council under successive administrations—first Conservative and presently a coalition between the Liberals and the Labour party. The county council's policy on this issue has not changed with the change in political control.

All that will be achieved by including Exeter airport within the scope of the Bill will be to interpose an expensive company structure between the present extremely efficient commercial management and the county council. The county council needs to work closely with the airport's commercial management for the purpose of road improvements and the supply of facilities such as policing, through the police authority.

There is bound to be a necessary and close link between the two. Exeter airport may be taken within the ambit of the Bill. Neither the amendments which would have removed it in terms of turnover—the £6 million turnover amendment or the £3 million turnover amendment—have been selected. That is not an avenue open to us to debate or indeed to divide on. Instead, on page 10, after line 36, our amendment states:

and if the local authority owner has not already made arrangements for the airport to be managed on a commercial basis by a suitably qualified and experienced operator who is not an employee of a local authority. The Government ceaselessly enjoin on local government, including Devon county council, the utmost economy in its administration. That is the posture that is achieved at the moment vis-a-vis Exeter airport. So, to reject the amendment would be to go counter to the explicit injunctions of my right hon. Friend the Secretary of State for the Environment upon Devon county council as to how it is to arrange its affairs so as to run them at minimum cost.

I am not disputing the suitability of the Bill for the great London airports and many large airports throughout the country. However, it is too often a bad habit of the Government to look at structures in London or the great conurbations and, having satisfied themselves that those require a certain legislative solution and framework, to apply that willy-nilly throughout the United Kingdom, whatever the local conditions may be.

It is most probably the case that when the Bill was drafted the Government did not have in mind Exeter and Southend airports and their particular circumstances, and, of course, officials in Departments never like making exceptions. We would not wish to hybridise the Bill by making the exceptions by name. That would have been an extremely mischievous form of amendment and it would rightly have been rejected on those grounds. But the amendment does no violence at all to the purpose of the Bill. It is the best solution for efficient commercial management of the airports concerned and that is why, if my hon. Friend the Under-Secretary—I see that my right hon. Friend the Secretary of State is not with us—is not empowered to accept it, we shall seek to divide the House.

Mr. Snape

I am fascinated by the view expressed by the hon. Member for Southend, East (Mr. Taylor) in pleading exemption for his airport. That argument is fairly familiar to me. I went to Exeter—I include the hon. Member for Tiverton (Mr. Maxwell-Hyslop) in this—in November last year to speak at the national conference of the Joint Airports Committee of Local Authorities, and a Conservative councillor from Southend made virtually the same points as the hon. Member for Southend, East, although not as well, but one would not expect that.

That councillor asked what a Labour Government would do about an airport such as Southend, which, as the hon. Gentleman has said, has been virtually privatised by the decision of the local authority. While commiserating with that councillor and the hon. Gentleman on the lack of business acumen of Conservative councillors in Southend, who evidently lost an arm and a leg, as the saying goes, trying to run an airport, I said then, and I say now, that a Labour Government would leave the decision on how its airport was run to Southend council. If it felt that the private sector could better run that airport, that is what local government is about.

We do not fear our political opponents making such decisions, but why should Conservative Back Benchers, no matter how distinguished, make special pleas on behalf of their airports? To use the phrase of the hon. Member for Tiverton, to interpose an expensive company structure on the airport to which he referred applies equally to other parts of the country. I do not see why we should specifically exempt the two airports to which the hon. Members for Southend, East and for Tiverton have referred.

We come back to the central question of principle. One either believes in local government democracy, or one does not, and the Government do not. They do not believe in local democracy even in a fairly Right-wing pro-privatisation council such as Southend. The hon. Member for Southend, East read out a litany of allegations against the Government's attitude and their interference in decisions taken by a Conservative-controlled council in a town which has, I am sure, been under Conservative control for many years, if not for ever. That is a salutary lesson for the hon. Gentleman. I feel sorry for him. Life would have been easier for him in many ways if the electors of Glasgow, Cathcart had kept faith with him. He would have been Secretary of State for Scotland now. Instead, as the representative of an English constituency, he has to learn that the Government have no faith in the principles of local government democracy. Regardless of the policies pursued by a local authority, the Secretary of State for Transport knows best. He will ensure that Southend and Exeter airports fall within the remit of the Bill, regardless of the wishes of members of his own party in those areas.

The hon. Member for Gedling (Sir P. Holland) is not with us at present. A few years ago he made his reputation, such as it is, by talking about the number of quangos in Britain, how deplorable they all were, and how the Labour Government persisted in adding to their number. I hazard a guess that if the hon. Member for Gedling was still pursuing that political ploy he would be able to compile a list of quangos created and appointed by the Secretary of State that would exceed the number of quangos created by the last Labour Government. It does not suit his political views for the attention of the public to be drawn to such matters at present, but the hon. Gentleman and his hon. Friend are having to learn a bitter and salutary lesson. Their Government have no faith or interest in local government democracy, and that applies to Conservative-controlled councils as much as to Labour-controlled councils.

The Labour party has no fear of local democracy. Under a Labour Government, if Southend council decided to operate its airport in line with the decisions of locally elected councillors, it would do so with our blessing. The Conservative party has spent most of its largely dishonourable history talking about decentralisation. It is a pity that the Government do not put those ideas into practice, instead of insisting on nationalising airports that are run by their political friends—and, as we have just heard, very properly run.

Sir Peter Emery (Honiton)

Exeter airport was in my constituency before the most recent alteration of boundaries moved it into the constituency of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). The airport has been privately managed, and managed very successfully, with the co-operation of Devon county council. The Government have not enabled it to be as much improved as we would have wished, but it has built up a great degree of business. It is establishing a record of service to the south-west, especially in the summer months when international airlines now fly there for the holiday trade.

I can understand the Government's wishes to have powers within the Bill which they could implement if management was not good, or if the operation was unsuccessful or was held by the county and was not working well. However, I would have hoped that the Government would be wise enough to see that where local authorities with airports under their control have put them out to private management, and, as my hon. Friend the Member for Southend, East (Mr. Taylor) said, really privatised them in form, the powers under the Bill should not be used for those airports.

I hope that the amendment will not be necessary, and that instead we may have an assurance from the Minister that where we have a properly operating commercial organisation running a local airport he will encourage it to continue, without have to use any "draconian" powers to force it to do things which might be unnecessary. I hope that we may have that assurance, because it would be very helpful.

11.30 pm
Mr. Stephen Ross

I have great sympathy with these amendments, but, like the hon. Member for West Bromwich, East (Mr. Snape), having been a member of the Select Committee on Transport and having visited Manchester and Birmingham often, as indeed other airports, I have to admit that they are extremely well run. Anyone who has been to Birmingham recently will say that the management of Elmdon airport is of the highest calibre. These organisations are being forced to set up plcs. It is an expensive operation. I have seen what I think was merchant bankers' advice to Manchester. There was a substantial figure involved and their advice was not to do it. Obviously, Manchester will be forced to do it by this Bill.

I ask the Minister to think again about the other amendments—which were not called tonight but which were debated in Committee—putting a limit on the throughput, or on the £1 million or £2 million turnover. I do not know the figure for Southend or for Exeter. I am sure that they are extremely well run. They should not be forced to change their present structure, when they have been run in a way which is considered very satisfactory by both local Members and the councils involved. I hope that one day we shall even manage to do something in the Isle of Wight; we are hoping to get Brymon to join us with one of the planes from Exeter or Plymouth.

I would ask the Minister, when he replies, to give some undertaking to reconsider this and try to introduce amendments in the other place to cover the issue. It is wrong to force these people into this sort of expenditure when they have done a perfectly good job, and are running the airports efficiently, either personally or through subsidiary companies.

Mr. Steen

I agree with the comments of my hon. Friends, particularly in relation to Exeter airport, which I use fairly frequently.

If the Minister feels that he cannot go along with these amendments, what we would like him to say is that a way can be found whereby Exeter and Southend, among others, which are, in effect, already privatised, can become plcs without extra expense. The Government must not encourage further public expenditure on operations that are already privatised. The Government are, quite rightly, very concerned to cut public expenditure. They should not now force more public expenditure on local authorities and airports which are, in effect, already privatised. We want to hear from the Minister tonight that he will find some formula, by the time this Bill gets to another place—

Mr. Ashby


Mr. Steen

I will give way in a moment. I hope that the Minister will find some formula whereby the extra costs which must be incurred by these two airports, at least, do not fall upon the ratepayers.

Mr. Ashby

Would my hon. Friend not agree that if these local airports were properly privatised, with their equity placed on the market and offered to the public, such expenditure would not fall on the public purse but on the private purse, and all the problems which he envisages would go away?

Mr. Teddy Taylor

Mr. Deputy Speaker—

Mr. Deputy Speaker

Order. The hon. Member must confine himself to one speech. He cannot intervene on an intervention.

Mr. Steen

Before I respond to my hon. Friend, Mr. Deputy Speaker, I am sure that my hon. Friend the Member for Southend, East (Mr. Taylor) can help me.

Mr. Taylor

Does my hon. Friend the Member for Leicestershire. North-West (Mr. Ashby) appreciate that once again his intervention has been inadvertently designed to mislead the House? The Minister made it abundantly clear on Second Reading on 27 January that these companies would continue to be wholly owned by the relevant local authorities. So we are not selling to different shareholders. We will have one shareholder company owned by the ratepayers of Southend. To that extent once again the intervention is mischievous and designed simply to delay the House.

Mr. Steen

Rather than get involved in the dispute between my hon. Friends, I shall sit down because it may be a suitable time to hear what the Minister has to say.

Mr. Tony Lloyd

The Minister may save himself some anxiety because I shall come to his aid by saying how much I endorse the amendment proposed by the hon. Member for Southend, East (Mr. Taylor). Irrespective of whether it has much to commend it in the interests of Southend as an airport, it certainly has a great deal to commend it in regard to Manchester airport. It will not have escaped the Minister's notice that Manchester airport is run by a private company totally at arm's length from the local authority. The local authority made arrangements for the airport to be managed commercially by a suitably qualified and experienced operator who is not an employee of the local authority.

I welcome the amendment and look forward to the hon. Gentleman pressing it to a vote. He would have the support of all hon. Members who have the interests of Manchester at heart because it would take Manchester airport outside the Bill. I have considerable sympathy with what the hon. Gentleman is trying to do, which is to defend the interests of the area which he represents. I endorse that because that is his role in the House. I wish to do the same for the airport in my area. The hon. Gentleman and I are at one in recognising that the effect of the Bill will be totally mischievous. It has little merit for the airports at Southend, Manchester and Exeter.

Mr. Snape

I do not seek to interrupt the able speech of my hon. Friend without good reason. Is he aware that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) has said that the Bill will impose an expensive company structure on Exeter? Does my hon. Friend agree that it will also impose something similar on Manchester and other airports unless the amendment is accepted because considerable extra corporation tax and value added tax will result as a direct consequence of the airports being included in the Bill? Where is the efficiency there?

Mr. Lloyd

My hon. Friend has made an important point. What makes it even more ludicrous than Conservative Members may realise is that Manchester has already incurred considerable expense because of the Government's action in having driven it to set up its present structure. Despite the fact that Manchester has paid for some of the best—qualified company lawyers in Britain to give advice on the optimal structure to serve the interests of shareholders, the travelling public and the nation, the Government are not satisfied. They have a doctrinaire view of airports policy.

The Government have a particularly peculiar view of a company's relationship with a local authority. They do not accept that an airport run by a company at arm's length from a local authority should have a company structure which is recognisable in any shape or form as being equivalent to a company which ordinary company law establishes. The Government have a warped view of a company. They insist that local democracy is as nought and that the local authority—be it Southend, Exeter or Manchester—is not in a position to make arrangements for its own area and community. Because the Government do not trust local democracy, the owners of Manchester airport, who are the ratepayers in the former Greater Manchester area, will be put to considerable expense.

I endorse the views of the hon. Gentleman in moving this amendment. I only regret that the Government do not wish to recognise that there will be burdens on the smaller airports. The hon. Member for Isle of Wight (Mr. Ross) raised the point in Committee that we should do something for the smaller airports. Because the Government do not accept those arguments and because they will impose these costs on smaller airports and in no circumstances allow a loophole which would operate in the interests of Manchester, I regret to have to say that I suspect that the hon. Gentleman's amendment, ingenious as it is, will get very short shrift from the Minister.

Mr. Michael Spicer

I concede straight away that, as my hon. Friends the Members for Southend, East (Mr. Taylor) and for Tiverton (Mr. Maxwell-Hyslop) have said—and I know that this view is held by my right hon. Friend the Member for Southend, West (Mr. Channon) and by my hon. Friend the Member for Honiton (Sir P. Emery)—British Airports International has done a remarkable job at the two airports referred to. The achievement at Southend is particularly remarkable because a loss-making airport has been turned into a profit-making airport. That is a very successful operation, and I certainly want to associate myself with the tributes that have been paid in this connection.

I am quite sure that Exeter is doing a good job. I have visited the airport and, like the hon. Member for West Bromwich, East (Mr. Snape), I have been impressed by what is happening there. It must be said, however—and I am sure that this will be conceded by my hon. Friends from the west country—that the Exeter airport is still making a loss of about £360,000 out of an annual income of approximately £1 million. My hon. Friend the Member for Tiverton says that it is just under £2 million. His information may be better than mine, but I shall get confirmation of my figures.

My view is that there is still some considerable way to go at Exeter. It is quite remarkable that a city in the heart of one of Britain's great tourist areas should have only a minimal amount of inbound, particularly foreign, tourists coming through its airport.

Mr. Maxwell-Hyslop

One of the reasons is that my hon. Friend refused permission for this. The Spanish tourist company that wanted to put down there before going on to Cardiff was refused permission to do so by him. Therefore, it does not lie in his mouth to criticise the absence of foreign tourists.

Mr. Spicer

My hon. Friend is not living up to his normal standards of fairness in this matter. What he said is perfectly true, but the reason is that the Spanish do not give us comparable rights to pick up people at their airports and take them on to different points. The normal rules under which European traffic is conducted provide that one is not allowed to pick up passengers in another country and carry them on within that country. That is standard practice, even if Exeter thinks that its future lies in breaking those rules. To some extent I would accept that our objective is to get far greater freedom in picking up and putting down passengers within other countries, but that is a long way off. My hon. Friend has not put forward a very strong point there.

It is one thing for me to congratulate the airports on what they have achieved through contracted managment, but my hon. Friends go on to ask why the matter should not be left there. Why do they insist on setting up these companies as public limited companies? The answers are very clear. First, it is only if they are set up as public limited companies that they come under the disciplines of the Companies Acts. Involved here is the Companies Acts accounting system.

11.45 pm

More important is the matter to which my hon. Friend the Member for Southend, East referred—the responsibility of directors. He said, somewhat strangely for him, that he could not see that there would necessarily be any distinction between the objectives of a director operating on behalf of his airport company and the objectives of the local authority. I should have thought there might be many places where the commercial interests of an airport were at variance with the interests of the local authority. For example, in investment, dividend and other policies a distinction might well be made. Under the Companies Acts, the directors of a company have a duty to act in the interests not of the local authorities which are the owners but of the company for which they are responsible.

Mr. Teddy Taylor

As a company director myself, I ask whether there is not an obligation to the shareholders of the company. If the Government are going to set up a company, in which the only shareholder is the Southend council, where is the difference?

Mr. Spicer

The interest ultimately comes back to the shareholders, but a distinction has to be drawn. I am sure my hon. Friend, when he thinks this through, will accept that there may well be cases where the council will wish, for instance, to cream off all the income from the airport, whereas the directors, acting as directors responsible for the well-being of the company and of the shareholders, would wish to retain and reinvest those profits. The hon. Member for Stretford (Mr. Lloyd) referred to Manchester in this connection. On this point, I do not think there can be a great difference between us. There may well be a conflict of interest between the financial policy of a council and that of a company.

A more substantial point is that one of the unashamed reasons for the Government wanting to set up public limited companies is that we think that that would make it easier—and it would be beneficial for it to be made easier—for those shares to be sold to the private sector. There is nothing in the Bill and it is not our intention to force local authorities to sell shares, although later amendments ask us to do precisely that. Unless the Government are defeated on that issue, they do not intend to compel the sale of shares. However, we shall deal with that matter soon.

We certainly intend to set up structures with shareholdings which will make it easier to sell those companies to the private sector. There is nothing in our proposals that will make contracted management difficult. We think that our proposals will encourage airports to contract management. One of the incentives may well be the ability at some time for the managers of contracted management companies to have a stake in the airports. That could be a great incentive for them. My hon. Friend will be aware that the arrangements at Southend involve management in the airport's finances and future. We certainly see no reason why that should not be extended to shareholding. That would be a good way for a successful management company to be involved in the future of an airport.

Mr. Steen

Does my hon. Friend believe that if Exeter were privatised, as the Bill would have it, instead of losing £300,000, it might make a profit?

Mr. Spicer

I am sure that it was a slip of the tongue which made my hon. Friend talk of privatisation. We are talking not of privatisation at this stage but of a transfer to Companies Acts companies. I envisage Exeter continuing as it is. Through a contracted management team, which knows an awful lot about running airports, the airport's finances will improve, one hopes rapidly and, once it moves into profit, the contracting management may well wish to take a shareholding. That could well be good for Exeter and the airport's future.

Mr. Snape

For the enlightenment of the Minister's colleagues from that part of the world and us, will he say whether he believes that there is something inherently inefficient in how Exeter is run at present and whether something that is being done wrong has made it lose £330,000 in the current year?

Mr. Spicer

That is not for me to say with precision, but I am happy to answer the hon. Gentleman. He might have talked to the managers. I suspect that they would say that Exeter's capability to market itself in, perhaps, foreign countries, exists. I think I am right in saying that an airport that does not receive any direct flights from overseas has some scope in terms of marketing its services.

Sir Peter Emery

Although not on a scheduled service, the airport receives direct flights from Spain by the Spanish national airline. The service has been developed by the present contracting company.

Mr. Spicer

I am grateful to my hon. Friend. I should have said scheduled services. I am trying not to imply criticism. I was asked whether there was any scope for improvement, and my humble opinion is that there probably is.

I am confident that the hon. Member for Stretford was not trying to be helpful when he said that if the two aiports were exempted, we would be making two classes of airport above the £1 million turnover threshold. I shall deal with the argument of the hon. Member for Isle of Wight (Mr. Ross) about raising the threshold shortly. A business with a turnover of £1 million is reasonable. Airports of that size employ an average of 40 people. In the private sector, there is not much problem about a business of that size being subjected to Companies Acts disciplines. We do not think that it is unreasonable to ask such businesses to become Companies Acts companies. Of course, the higher the threshold, the greater the number of anomalies.

Before BAI took over, Southend was open 24 hours a day. The new management has cut the hours of opening from 6 am to 10 pm. The new management has discretion over hours, and that is part of the contract that it has with the local council. I assume my hon. Friend is correct in saying that the local council is the planning authority and that the planning authority would ultimately have the power to impose any night bans.

Mr. Teddy Taylor

My hon. Friend must be aware that Southend airport is in the borough of Rochford.

Mr. Spicer

If that borough is the planning authority, it will have the power to impose night bans. The planning authority has the power to impose whatever restrictions it desires.

There is nothing in the Bill to prevent my right hon. Friend from designating these airports, if he so wishes, to be under the direct control of the Secretary of State. I hasten to add that he has no intention of doing that. He has only designated London airports for that purpose. There is nothing in the Bill that would change the present position in connection with control over night flights.

With that assurance and in view of my answers to the various points that have been raised in this important debate, I hope that my hon. Friend the Member for Southend, East will feel able to withdraw the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 32, Noes 187.

Division No. 129] [11.56 pm
Alton, David Lloyd, Tony (Stretford)
Ashdown, Paddy Loyden, Edward
Banks, Tony (Newham NW) Marek, Dr John
Brown, N. (N'c'tle-u-Tyne E) Morris, Rt Hon A. (W'shawe)
Bruce, Malcolm Nellist, David
Campbell-Savours, Dale Parry, Robert
Canavan, Dennis Patchett, Terry
Craigen, J. M. Penhaligon, David
Emery, Sir Peter Pike, Peter
Fisher, Mark Ross, Stephen (Isle of Wight)
Foster, Derek Snape, Peter
Foulkes, George Stott, Roger
Hannam, John Taylor, Teddy (S'end E)
Howells, Geraint Wallace, James
Hughes, Robert (Aberdeen N)
Hughes, Simon (Southwark) Tellers for the Ayes:
Lewis, Terence (Worsley) Mr. Robin Maxwell-Hyslop and
Litherland, Robert Mr. Bill Walker.
Alexander, Richard Jessel, Toby
Alison, Rt Hon Michael Jones, Gwilym (Cardiff N)
Amess, David King, Roger (B'ham N'field)
Ancram, Michael Knight, Greg (Derby N)
Arnold, Tom Knight, Dame Jill (Edgbaston)
Ashby, David Knowles, Michael
Aspinwall, Jack Knox, David
Atkins, Rt Hon Sir H. Lamont, Norman
Atkinson, David (B'm'th E) Lang, Ian
Baker, Nicholas (Dorset N) Lee, John (Pendle)
Baldry, Tony Lennox-Boyd, Hon Mark
Batiste, Spencer Lilley, Peter
Bellingham, Henry Lloyd, Peter (Fareham)
Best, Keith Lord, Michael
Bevan, David Gilroy Lyell, Nicholas
Biffen, Rt Hon John McCurley, Mrs Anna
Biggs-Davison, Sir John Macfarlane, Neil
Blackburn, John Malins, Humfrey
Blaker, Rt Hon Sir Peter Marland, Paul
Boscawen, Hon Robert Mates, Michael
Bottomley, Mrs Virginia Mather, Carol
Bowden, A. (Brighton K'to'n) Mawhinney, Dr Brian
Bowden, Gerald (Dulwich) Mayhew, Sir Patrick
Brandon-Bravo, Martin Merchant, Piers
Brinton, Tim Meyer, Sir Anthony
Bruinvels, Peter Miller, Hal (B'grove)
Burt, Alistair Mills, Iain (Meriden)
Butcher, John Miscampbell, Norman
Butler, Rt Hon Sir Adam Mitchell, David (Hants NW)
Carttiss, Michael Moate, Roger
Cash, William Morrison, Hon C. (Devizes)
Chope, Christopher Morrison, Hon P. (Chester)
Clarke, Rt Hon K. (Rushcliffe) Moynihan, Hon C.
Conway, Derek Neale, Gerrard
Coombs, Simon Nelson, Anthony
Cope, John Neubert, Michael
Couchman, James Newton, Tony
Currie, Mrs Edwina Nicholls, Patrick
Dorrell, Stephen Norris, Steven
Douglas-Hamilton, Lord J. Oppenheim, Phillip
Dover, Den Oppenheim, Rt Hon Mrs S.
Dunn, Robert Page, Richard (Herts SW)
Fairbairn, Nicholas Patten, Christopher (Bath)
Fallon, Michael Patten, J. (Oxf W & Abgdn)
Favell, Anthony Pawsey, James
Fenner, Mrs Peggy Peacock, Mrs Elizabeth
Fookes, Miss Janet Pollock, Alexander
Forth, Eric Portillo, Michael
Fowler, Rt Hon Norman Powell, William (Corby)
Franks, Cecil Powley, John
Freeman, Roger Raffan, Keith
Galley, Roy Rathbone, Tim
Garel-Jones, Tristan Rees, Rt Hon Peter (Dover)
Goodlad, Alastair Rhys Williams, Sir Brandon
Gow, Ian Ridley, Rt Hon Nicholas
Gower, Sir Raymond Robinson, Mark (N'port W)
Greenway, Harry Roe, Mrs Marion
Gregory, Conal Rumbold, Mrs Angela
Griffiths, Peter (Portsm'th N) Ryder, Richard
Ground, Patrick Sackville, Hon Thomas
Gummer, Rt Hon John S Sainsbury, Hon Timothy
Hamilton, Hon A. (Epsom) Shaw, Giles (Pudsey)
Hamilton, Neil (Tatton) Shaw, Sir Michael (Scarb')
Hampson, Dr Keith Shepherd, Colin (Hereford)
Hanley, Jeremy Sims, Roger
Hargreaves, Kenneth Smith, Tim (Beaconsfield)
Harris, David Soames, Hon Nicholas
Hayes, J. Speed, Keith
Heathcoat-Amory, David Spencer, Derek
Heddle, John Spicer, Jim (Dorset W)
Hickmet, Richard Spicer, Michael (S Worcs)
Hicks, Robert Squire, Robin
Hind, Kenneth Stanbrook, Ivor
Holt, Richard Stanley, Rt Hon John
Howard, Michael Stern, Michael
Howarth, Gerald (Cannock) Stevens, Lewis (Nuneaton)
Howell, Ralph (Norfolk, N) Stewart, Allan (Eastwood)
Hubbard-Miles, Peter Stewart, Andrew (Sherwood)
Jenkin, Rt Hon Patrick Stradling Thomas, Sir John
Sumberg, David Wall, Sir Patrick
Taylor, John (Solihull) Waller, Gary
Tebbit, Rt Hon Norman Wardle, C. (Bexhill)
Terlezki, Stefan Watts, John
Thompson, Donald (Calder V) Wells, Sir John (Maidstone)
Thompson, Patrick (N'ich N) Whitney, Raymond
Thorne, Neil (Ilford S) Wiggin, Jerry
Thornton, Malcolm Wilkinson, John
Thurnham, Peter Wolfson, Mark
Townsend, Cyril D. (B'heath) Wood, Timothy
Tracey, Richard Yeo, Tim
Trotter, Neville Younger, Rt Hon George
Twinn, Dr Ian
van Straubenzee, Sir W. Tellers for the Noes:
Waddington, David Mr. Francis Maude and
Wakeham, Rt Hon John Mr. Gerald Malone.
Walden, George

Question accordingly negatived.

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