§ Mr. Snape
I beg to move amendment No. 13, in page 14, leave out lines 13 and 14.
The effect of the amendment would be to limit the constraints imposed on directors under subsection (2) to 291 abandoning their participation in discussions on contracts between the company or a subsidiary and the council and voting on any such contract. In response to a similar amendment that we moved in Committee the Under-Secretary of State for Scotland said that the Billwill allow members of principal councils, who are also airport directors, to take part in the consideration of matters relating to their airports, other than matters of contracts or proposed contracts between the airport company and the council. This was done deliberately to allow the maximum informed discussion on airport matters."—[Official Report, Standing Committee J, 6 March 1986; c. 411.]He later said that the Government would consider whether they could move some way in the direction suggested by the amendment. The Minister implied that the part of the clause which the amendment would delete applied only to subsection (2)(b). Confirmation is required from the Under-Secretary.
There are similarities between what the Government seek to do in this Bill and the Transport Act 1985, which requires the establishment of operating companies for the provision of bus services and places similar constraints to those in this Bill on the ability of elected councillors who are directors of the operating company to discuss and to vote at council meetings on matters related to the company. The Transport Act includes a section which enables the Secretary of State for Transport to issue a dispensation from those constraints. The Under-Secretary replied in Committee to an amendment designed to insert a similar clause in the Bill.
§ Sir Peter Blaker (Blackpool, South)
I intervene briefly to seek clarification of the effect of the clause as it stands, because of my interest in Blackpool airport, which has not been mentioned today. Like many other holiday resorts, Blackpool has an airport. Historically, holiday resorts have provided the infrastructure for their regions for the benefit of tourism and more recently for conference business. This goes back to the last century, and is not confined to airports.
Sometimes, the airports run at a deficit. Blackpool airport runs at a loss, although this year the loss is very small. We hope to move more regularly into profit in future if the exploration for further gas resources and oil in the Irish sea is successful.
The consequence of Blackpool running its own airport in the circumstances and for the purposes that I have described is that it is frequently discussed by Blackpool borough council. It is not irrelevant either that the airport provides more than 300 jobs. Therefore, it is important to Blackpool council and to the airport to know exactly the effect of the clause. As I understand it, while the clause means that a councillor who is also a director of the airport may not take part in discussions on a proposed contract between the council and the independent airport, and may not vote on a question involving a contract, he may take part in discussions which involve other airports matters; for example, airport policy, which is discussed frequently by Blackpool council.
This is an important question, not only on its own merits, but especially because of the point made by my hon. Friend the Member for Southend, East (Mr. Taylor) when he referred to what the Secretary of State said on the Second Reading about the duty of directors lying principally to the company and not necessarily to the 292 council, if they are councillors. I should be grateful if my hon. Friend would confirm that my understanding of the clause is correct.
§ Mr. Ancram
It might be helpful to my right hon. Friend the Member for Blackpool, South (Sir P. Blaker) if I briefly restate the purpose of the clause, although his reading of it was very accurate.
The purpose of clause 17 is to safeguard the highest standards of probity in the conduct of public business as it relates to public airport companies. Clause 17(2) is concerned with maintaining those standards at meetings of councils when the affairs of airport companies are under discussion.
Like the Transport Act—the hon. Member for West Bromwich, East (Mr. Snape) is correct in saying that there are some similarities—the clause prohibits councillors who are also directors of associated public airport companies from voting when matters of contract between their council and their company are under discussion. Like the Transport Act, it prohibits their taking part in discussion on any such contracts, but, unlike the Transport Act—and my right hon. Friend the Member for Blackpool, South made this distinction—it allows them freedom to take part in discussion and consideration of matters other than matters of contract—indeed, the sort of matters to which he was referring. This was a deliberate change to allow the maximum informed discussion on airport matters. I hope that that will satisfy my right hon. Friend's constituents.
I have to say to the hon. Member for West Bromwich, East that I think that we have gone far enough. I do not think that we should remove the prohibition on councillors, who are also directors, voting on airport matters other than contracts. apprciate that I undertook in Committee that the Government would consider whether we could move towards providing a path for the Secretary of State to issue exemptions from the provisions of clause 17(2). We gave very careful consideration to that matter. Having listened carefully to the arguments in Committee and to the arguments put forward by the hon. Gentleman tonight, I do not think, on balance, that the potential benefits outweigh the dangers of enhanced liability to conflicts of interest. It is for that reason that we do not propose to amend the clause.
Like the hon. Gentleman, I re-read the debate in Committee. It appears to me that the misunderstanding that may have given rise to the debate in the Committee was that there was no distinction between this Bill and the Transport Act. I hope that tonight I have at least cleared that up. In the light of what I have said, I hope that the hon. Gentleman will withdraw the amendment.
§ Mr. Snape
The Department of Transport's circular 4/1985, which deals with these matters, says:
Members wishing in exceptional circumstances to vote on any matter or to speak on a matter excluded from the dispensation … may apply to the Secretary of State".What is the difference between the two pieces of legislation so far as this dispensation is concerned? Why is it regarded as permissible under the Transport Act 1985, but as something perhaps dangerous—if that is the right word—under this Bill?
§ Mr. Ancram
I do not want to rehearse the arguments that we had in the Committee on this subject. I think it was 293 a matter of agreement between the two sides in Committee that this is an area in which probity is very important. The Transport Act was rather stricter in these terms than this Bill. It was felt that in terms of the management of airports councillors who were directors should be allowed to take part in discussions relating to airports, but where voting is concerned—and obviously voting has some implications in itself—the restrictions should be made.
§ Amendment, by leave, withdrawn.