HC Deb 10 April 1986 vol 95 cc364-400

Order for Third Reading read.

4.30 pm
The Secretary of State for Transport (Mr. Nicholas Ridley)

I beg to move, That the Bill be now read the Third time.

We had the debate on the Eyre report at the beginning of last year and on the White Paper in June last year, and then we had Second Reading of the Bill followed by a full Committee stage but without a guillotine or timetable motion, and a very full day yesterday on Report, as I am sure hon. Members will agree. I think that nobody can say that the policy has not been subjected to major and continuing parliamentary scrutiny and voting.

The main actors in this long drama have had very full speaking parts. There were those who come from areas where airports are a matter of burning political controversy, including my hon. Friends the Members for Saffron Walden (Mr. Haselhurst), for Harlow (Mr. Hayes), for Hertford and Stortford (Mr. Wells), in the Stansted area, and the right hon. Member for Manchester, Wythenshawe (Mr. Morris), my hon. Friend the Member for Manchester, Withington (Mr. Silvester), the hon. Member for Stretford (Mr. Lloyd) and many others from the north-west who have been firm advocates of the interests of Manchester airport. We have also had represented the interests of the airlines and those who are passionately concerned in their affairs. My hon. Friends the Members for South Hams (Mr. Steen), for Tayside, North (Mr. Walker), for Ruislip-Northwood (Mr. Wilkinson) and for Hayes and Harlington (Mr. Dicks) have all played a full part in the drama.

These varying interests have come and weaved together and split apart, appeared in various costumes and disguises, passed through sinister phases of wetness and dryness, and they have been the main actors, but there have also been minor characters who have merely sat around the stage, listened and waited—the hon. Members for Aberdeen, North (Mr. Hughes) and for West Bromwich, East (Mr. Snape), my hon. Friend the Minister of State with responsibility for aviation, my hon. Friend the Under-Secretary of State for Scotland and myself—who have merely been attendants of this great drama. I pay tribute to them all—except perhaps myself—for their steadfastness under fire, for their skill in debate, repeating arguments, if I may say so, over and over again with ever-increasing skill and conviction and for their ability to stay up late at night.

We come now to the epilogue. The Bill is almost identical to the proposals set out in the White Paper of June 1985. It has been improved in detail in debate and tested in the Lobbies—both the Division Lobbies and the commercial lobbies—but it has emerged virtually unscathed. Perhaps I may be forgiven for saying, almost sotto voce, that we got it right at the beginning.

One of the main concerns in the debates has been the effects on local authority airports of privatising the British Airports Authority as a whole. Hon. Members on both sides of the House have claimed that we are seeking to privatise a monopoly which would be able to crush the development of other airports, notably Manchester. Hon. Members accepted the logic in aviation terms of keeping the BAA's Scottish airports in common ownership and operating them as a system. I believe that the same logic applies even more forcefully to the BAA's south-east airports. If Heathrow is to remain the world's leading international airport, which we all hope it will, while continuing to serve the needs of smaller domestic operators, and if Gatwick is to develop as a European hub, we need to maintain the south-east airports as a system with co-ordinated development and operations.

The question we have debated is whether the new owners of BAA will be able to use their power to take unfair advantage of competitors and to price them out of the market. Under the Bill, we have ensured that they cannot. The Bill spells out in detail the range of regulatory measures available to the Civil Aviation Authority which will enable it to prevent unfair competition between airports. I believe that whatever happens in the London system will make little or no difference to what happens in the north-west, and vice versa.

Nevertheless, the Bill incorporates protection against predatory pricing that could harm another airport's business. With the amendments that we introduced on Report, that protection has been strengthened to give a firmer reassurance still that such competition as there is between airports in different parts of the United Kingdom will be open and, above all, fair. Manchester airport, in particular, will have no grounds to fear unfair competition from a privatised BAA, and most certainly it has no need to fear that predatory pricing at Stansted will harm its business. If a complaint about predatory pricing is made to the CAA, it will judge pricing policies at Stansted as if it were a free-standing airport. I believe that we have the best of both worlds. The United Kingdom will keep the economic and aviation benefits of a strong south-east airport system. The regulatory mechanisms in the Bill will ensure that that strength is not used to the detriment of sound airport development in other parts of the United Kingdom but is targeted towards beating our European competitors who are always trying to muscle in on our business.

I am sure that the privatisation of the BAA will bring very real benefits for the airline industry and its customers. There will be greater freedom for management—for instance, access to private capital—and private sector operation, combined with the regulatory system which we are proposing, will encourage more innovative management and lead to efficiency gains and greater responsiveness to customers.

These are not the only benefits. Privatisation will also further our objective of creating wider share ownership. This will be an important factor in the arrangements for the flotation. Employees will be encouraged to take a stake in their own future by purchasing shares in their company. The details of the employee share scheme are still being discussed, but I would expect it to offer benefits on a similar scale to those offered to British Telecom employees—£70 worth of free shares per employee; two free shares for each one bought, up to a total of £200 worth of free shares; and a 10 per cent. discount on up to £2,000 worth of shares—as well as priority rights of application for full price shares. Together with ongoing schemes, to be introduced by the company, this will encourage employees to participate directly in their company's future profitability.

Major local authority airports will also benefit from the Bill. They are, in most cases, substantial and successful businesses, and the Bill will ensure that they can be operated as such. They will be free to seek services from whoever offers the best deal rather than being locked in to services provided by local authorities. Their management will be able to operate with far more commercial freedom and be less subject to the whims of local vested political interests.

Local authority airports, such as Manchester, East Midlands and Bristol, have a record of rapid expansion in recent years. They have capacity for further expansion and we have undertaken to continue to encourage further development in response to demand. We believe that the opportunites offered by the Bill, including the opportunities—I stress "opportunities", for we intend to encourage, not compel—for involving the private sector in the management of these airports, in the provision of capital for their development and in their ownership, if the present owners wish to take those opportunities, will stimulate and encourage that expansion. That can only be to the benefit of the localities and the regions concerned.

In contrast with this attractive and exciting prospect, the Opposition have typically sought to preserve the status quo. That would not help regional airports, any more than the Opposition helped them when they were in office. We have massively increased the capital allocations for regional airports, and, by liberalising aviation markets, we have produced a very large increase in flights from regional airports. The Bill lays the foundations for their continued future business development and success.

As the airline industry grows, airport capacity will be increasingly under strain. The fallback powers in part III are needed to ensure the balanced development of the finite airport resources we have and to provide effective means of dealing with problems that may arise at congested airports.

The White Paper drew up the agenda for air traffic regulation at airports. The major need at present is for traffic distribution policies for the London airports system. In accordance with that White Paper commitment, we have sought the advice of the Civil Aviation Authority, which in turn has consulted widely—some 322 separate bodies—on a variety of options. The authority is now in the second phase of consultation, having invited scrutiny of its draft conclusions and recommendations. The CAA's draft advice has naturally generated some strong feelings. It would not be right for me to comment upon them now. This is only draft advice. It would be quite wrong for me to comment on a draft report which may yet be materially changed in the light of comments, suggestions and recommendations received from consultees. The Government have no intentions of prejudging the authority's judgment by taking a premature view.

Let me re-emphasise our overweening undertaking that traffic distribution rules will be introduced only if and when and where they are clearly needed. We are in favour of solutions emerging naturally wherever that is possible. We shall continue to encourage solutions of the industry's own making, and we shall not—it has never been our intention—frame the traffic distribution rule powers in such a way as to force an airline to serve a particular airport.

The reserve powers in part III of the Bill extend the duties of the CAA. The authority is charged with advising the Government on traffic distribution rules, air traffic movement limits and slot allocation schemes, and it would also be for the CAA, following a direction under clause 30, to prepare a slot allocation scheme if one were needed. It is appropriate, therefore, that the CAA should operate under special objectives and guidelines in undertaking its functions under clauses 28, 29 and 30. Clause 31 is designed to create those guidelines.

Although clause 31 has not attracted the same attention as some of its near neighbours in this part of the Bill, it is none the less pivotal in creating the framework within which the CAA will be able to offer balanced advice. Clause 31 requires the CAA, in giving advice to the Secretary of State on traffic distribution rules, ATM limits and slot allocation schemes, and, in preparing such schemes where the authority has been so directed, to take account of and to have regard to a number of very important matters. These are the international obligations of the United Kingdom which the Government notify to the CAA under clause 31; the Government's advice on international relations considerations; the need to secure the sound development of civil aviation in the United Kingdom; the interests of users of air transport services; and policy considerations notified to the authority by the Government.

I should hope that our broad purpose in framing those matters, which are to be taken into account, is clear: to protect our international interests—remembering always that the bulk of the United Kingdom civil aviation industry operates in the international dimension—and to secure the right deal for our civil aviation industries and their customers. I would ask the House to bear in mind, too, the policy considerations which we set out to the CAA in asking it to undertake its current review of traffic distribution in the London area.

These were to make efficient use of existing and planned airport facilities and available air space; to enable air services to be operated where they best meet the needs of the travelling public; to support the objective of increasing competition between airlines, in the interests of users; to ensure satisfactory access to Heathrow and Gatwick for domestic services; to maintain London's position as a major international centre, and within that to maintain Heathrow as London's main scheduled service airport while continuing to develop Gatwick as an effective second hub; and to avoid undue dislocation to the airlines using London's airports.

I think that the House may find in these objectives an important earnest of the manner of policy considerations which may be appropriate in the context of clause 31 and which may therefore condition the advice which the CAA offers.

Part IV of the Bill has also aroused a good deal of interest. We have made clear the details of the new regulatory regime on the face of the Bill, so that everyone—the CAA as regulator, airport operators, airlines and passengers—knows exactly where he stands. The Bill makes clear the types of anti-competitive and monopolistic practice that will not be tolerated, and it gives the CAA sufficient powers not only to stamp out such practices but to provide appropriate remedies for anyone who has suffered from them.

The Bill provides the statutory underpinning for the future of our airports policy. It provides powers for the Government to fulfil their strategic responsibilities towards one of our major national resources; it provides the opportunities for airports to reap the benefits of a commercial and businesslike approach to airport management; and, not least, it provides strong and continuing protection against monopoly abuse for the airlines and passengers our airports serve. The Bill will ensure that the United Kingdom's airport industry continues to be the envy of the world.

In reinforcement of what I said at the beginning of my speech—that perhaps we have got it right—this is the first time that I have made a speech on airports policy when no right hon. or hon. Gentleman has sought to interrupt me.

I commend the Bill to the House.

4.46 pm
Mr. Robert Hughes (Aberdeen, North)

I join the Secretary of State in paying tribute to those right hon. and hon. Members who have taken part in our numerous debates both in Committee and on Report. The discussions have been detailed and sometimes very hard hitting, but they have always been good natured. I think that we all enjoyed the Committee stage, especially when we learnt about the personal hygiene habits of the Parliamentary Under-Secretary of State, the hon. Member for Worcestershire, South (Mr. Spicer), who told us about the frequency of his baths. But that enjoyment paled into insignificance because of the Opposition's disappointment that in Committee no major concession was made by the Government. We were also unable in Committee to inflict any major defeat on the Government. However, last night the Whips were very worried when, at about 11 o'clock, it looked as though the Government were facing their first defeat on the Floor of the House since they came to power in 1979.

When the Second Reading vote took place, Government Back Benchers went into the "Aye" Lobby with varying degrees of support, ranging from qualified enthusiasm to downright scepticism and extreme scepticism about the effects of the Bill. Since then the doubting Thomases have multiplied—so much so that the sceptics on the Government Back Benches are now in the majority. I do not know how they will be able to steel and brace themselves to go into the Lobby and vote for the Third Reading. They know as well as I and as well as the Secretary of State that the Bill's contents fail to match up either to the Secretary of State's rhetoric about the virtues of private ownership or to any kind of rational airports policy operating in the national interest.

Part I sets out the manner in which the British Airports Authority is to be sold off to the private sector. In so far as the British Airports Authority's seven airports are to be kept together as a system of airports, I welcome the fact that they are to be held together in a holding company. It makes sense to keep them together, whatever the ownership of the BAA may be and however much we may disagree about its ownership.

Part I is insufficient to promote a coherent airports policy. No one is surprised at that because we know quite well that the Government have no airports policy. Part II sets out the first stage of what the Government intend to be the privatisation of local authority owned airports. It will compel airports in the local authority sector to become Companies Act companies if they qualify with an annual turnover of more than £1 million.

In so far as there is any relationship between parts I and II of the Bill, the Government are forced to fall back on mouthing the empty phrase that they are to stimulate efficiency and competition. Even this Secretary of State very occasionally faces reality. The result of facing reality is that parts III and IV set out controls over competition policy. The Secretary of State has direct control of traffic distribution rules. He has the power to limit aircraft movements at certain airports, to direct the Civil Aviation Authority to prepare schemes for allocating capacity at airports and to subject the airports to economic regulation. He may control landing charges. Then there are the duties of the Civil Aviation Authority, and the references to the Monopolies and Mergers Commission. These add up to a truly labyrinthine system of checks, balances and controls.

I wonder who drafted the Bill. Did the Secretary of State himself supervise the drafting of parts I and II, then go off on holiday and discover on his return that the whole thing had been tampered with and that his political philosophy had been distorted, either by his hon. Friend the Parliamentary Under-Secretary or by his civil servants who had even more sense? Whoever it was, the fact is that the Bill will prevent competition.

However much the Secretary of State argues that his regulatory powers will he applied in what his hon. Friend the Parliamentary Under-Secretary always refers to as a "de minimis" fashion, it is also true that the construction of the Bill will affect the sale price. At this stage in the Bill's progress we have the right to know what price the Government expect to receive for the sale of the British Airports Authority. Throughout the proceedings we have asked the Government to come clean and tell us what they expect to get but they have refused to give us even an inkling of the expected sale price. This reticence may be compared to the total retreat of a tortoise into its shell.

The Minister must now tell us what the price is likely to be. It is a matter not of principle but of practice, because I am sure that the House would not wish to give the Bill a Third Reading if the BAA were to be sold for a fraction of its true value. I doubt that even the driest Tory Member would find it easy to agree with such a profligate treatment of public assets. The Minister must give a direct answer about what price he expects to get.

Mr. Ridley

Since the hon. Gentleman asks that question in order that he can compare the figure with what he thinks the authority is worth, would he now tell us what he thinks we ought to get for it?

Mr. Robert Hughes

I have been trying to find out what the price might be. I read carefully the report prepared by Kitcat and Aitken which examined all aspects and policies of the BAA and what it might fetch. Although it has been slightly revised since that stage—November or December 1985—the report concluded that it was impossible to assess the figure. It is a different matter, however, for the Secretary of State. If he has embarked on this exercise without having considered what the sale price might be and with no expectation of what he might get, such action amounts to dereliction of duty. The Secretary of State will not admit to that.

The fact is that estimates vary. The lowest figure that I have seen or heard is £400 million. Some estimates suggest between £500 million and £600 million. One estimate, which I am sure is wildly inaccurate, is that the Government might get as much as £1 billion for the authority. As in all such matters, the truth probably lies between the two extremes. We must ask what the Secretary of State wants. We must match his expectations with the actual figure if the sale goes ahead. I am not convinced that it is such a good proposition. I think that when he comes to float BAA he will not find as many willing buyers as he supposes.

I have two points to make about part II of the Bill, in relation to local authority airports. The first is a passing reference to the exchanges today and yesterday about the issue of hybridity, raised by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). I am not challenging Mr. Speaker's ruling, but the issue that was raised is that the question of hybridity is not a clear-cut one. We ought to encourage the request of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) that the matter should go to the Select Committee on Procedure, so that it may examine the question of hybridity. I hope that the Government will want to follow that course.

The second issue is the manner in which local authority airports are being treated. The Bill compels airports with an annual turnover of £1 million or more to become Companies Act companies. Clauses 20 and 21 make it clear that any capital raised by a local authority by way of a loan from any source, or capital raised from the sale of equity shareholding, will count as prescribed expenditure under the Government's control of local authorities for as long as the majority' ownership rests with the local authority or a consortium of local authorities. That will directly affect the ability of these airports to compete on fair terms with the BAA airports.

This distortion of competition is yet another facet of the Government's failure to have a national airports policy. I go further and say that it is yet another facet of the Government's pathological distrust and dislike of local government. That is bad enough, but the real intention is to compel local authorities to divest themselves of their majority shareholding and to abandon their own policy of objectives, in order to follow his own. The Secretary of State is using extortion and blackmail to impose his will on democratically elected bodies which have successfully provided airport services for the benefit of their own areas and for that of the nation. He appeared in his speech to accept that local authority airports have, by and large, been successful. Many have been a success even by the Secretary of State's standards of commercial interest. What he seeks to do here is quite disgraceful. The Secretary of State should be ashamed of himself.

I do not know whether the right hon. Gentleman is leaving the Chamber. He advised me earlier that he might have to leave while was speaking, so I am grateful that he warned me. I see that he is staying. I am even more grateful. In setting out his objectives which have been written into the Bill, the Secretary of State told us that the Bill was part of an overall design to further share ownership by employees and the public at large. We know that the Secretary of State puts that forward with his tongue in his cheek, because he spends all his spare time debunking the currently fashionable Tory idea of "caring capitalism".

Everyone is entitled to his own opinions, but no one is entitled to his own facts. I commend that to the Secretary of State because his opinions are not borne out by the facts. Perhaps I can give a brief example of the way in which his objectives, however much he believes in them, do not match up to the facts. When British Aerospace was floated, the total number of shareholders was 157,829. Twelve months later the total number had gone down dramatically to 27,175. Of the total flotation, 44,000 shareholders held fewer than 100 shares. One year later only 3,279 held fewer than 100 shares.

Mr. Terry Dicks (Hayes and Harlington)

Such figures are useless unless we know why they have changed and why people bought or sold shares. Just to give such figures is meaningless.

Mr. Hughes

The figures are not meaningless. The point I am demonstrating is that the aim of having wider share ownership has not been met because the number of people who bought shares and who have held on to them has reduced dramatically. At the time of the flotation there was only one shareholder who held over 1 million shares; 12 months later 13 shareholders held over 1 million shares. Clearly shareholding has become concentrated in fewer and fewer hands and in bigger and bigger holdings. That is the reality of privatisation. The theory of a wider share-owning public is bunkum in practice. People have sold their shares at a profit because the Government have never got the sale price right in any of the privatisation sales. They have always sold at well below a reasonable price which the market could bear. Immediately after the sale the shares jumped in price and people sold to take a quick profit. If that is what the Secretary of State wants, that is up to him. But he should not pretend that the objective of a wider share-owning public has been met, because obviously it has not.

The Bill will do nothing for the balanced development of BAA airports or of local authority airports, or of the combined airports system. It will do nothing to encourage better facilities at airports or traffic growth. If its effects were to be as neutral as I have described, perhaps we could dismiss the Bill as being irrelevant, redundant and of no account; we could say that it is another piece of legislation that is cluttering up the statute book. But it is much worse. The Bill will have harmful effects on airports policy and on customer services. It is no accident that it will damage the wellbeing of employees of the BAA and of local authority airports alike.

We believe in encouraging municipal enterprise. The proper place for a national transport infrastructure is within the public sector. That is where the airports should be. If the Bill has any merit—I have not so far found any real merit in it—its construction will allow us to apply our transport policy for aviation and airports quickly and efficiently when we become the Government. However speedily we return to Government, even that is not enough to persuade me or my colleagues that the Third Reading should not be opposed. Therefore, I invite my right hon. and hon. Friends to join me in the Lobby tonight in voting against the Bill.

5.2 pm

Mr. James Hill (Southampton, Test)

I shall not keep the House very long because this is a short debate. My right hon. Friend the Secretary of State has made it clear in his opening address that the Bill is balanced. All the vicissitudes of the commercial market have been covered. When the Government are selling off a monopoly, there has to be a serious braking system on any excesses by that monopoly. Anyone who has been involved in aviation or who has been employed at an airport will realise that that is one of the most monopolistic areas of commerce.

So far the debate has been brought down by the Opposition spokesman to a question of how much we shall get for the airports. In every debate about turning a public holding over to a private company that issue comes up. The system of the market place is that at the beginning many people invest in an institution because they are told that they will make a profit; that applies to the employees of whatever institution is involved. That is human nature. Again it is human nature that if one is a little hard-pressed, as many people may be after some time, they will try to divest themselves of their shares at the profit-taking time.

I agree that we cannot float a public sector company and expect to have 3 million individual shareholders for ever. That is not the point. Conservative Government policy is that shareowning should become more widespread. There is no reason why the 3 million shareholders in, say, British Telecom should not have taken their profit. Although they may have gone out of one company, they may well be enticed into another company such as British Airways or the British Airports Authority.

Mr. Michael Meadowcroft (Leeds, West)

Will the hon. Gentleman take on board the other point that in many cases municipal airports have suffered great debts which have been borne by the ratepayers but if those airports become profitable the local authorities will get no recompense for the public money which they have to put in? Therefore, the gain will go to those who have speculated accurately with their own money. They, not the local authority, will get the bargain.

Mr. Hill

I do not think there is anything in the Bill to prevent those ratepayers buying shares in the BAA public sector company.

The position in Southampton is different. The airfield, Eastleigh, which was owned by the Ministry of Civil Aviation, was sold to the private sector just after the war. Although it has not made much progress as a regional airport, it has remained as an airport that serves not only the south, but the Channel Islands. It has also accrued to itself many industrial complexes on the airport site. So it is job-promoting as well as being an airfield. Many of the local government airfields have failed on that score. Local authorities have not encouraged their airport managers to examine the commercial side of running the airports by attracting industrial development on their periphery.

On the dissolution of BAA, we should say today, if we never say again, that the British Airports Authority has done an extremely good job. I am proud of the airports that I go through, such as Gatwick and Heathrow. At Heathrow what I knew as a market garden before the war became an airfield with a series of caravans. The expertise, administration and know-how of the BAA have turned it into a great capital asset. The Opposition will say immediately that that involved taxpayers' money. When we talk about the price that the Government will receive; we can only thank the British Airports Authority for slowly but surely bringing that capital asset forward and enabling it to compete with other major airports throughout the world. No one who has seen over the new terminal 4 can say anything other than that it is a very good terminal which will provide competitive services for the next five to 10 years.

The monopolistic nature of a British airport is defined by the control of the Civil Aviation Authority. In British aviation—this may apply to other countries—a company is only as efficient as the CAA will allow it to be. I am thinking particularly of a flight which I shall have to make in two weeks' time to Venice on parliamentary business. That is one of the things that we all have to do from time to time. It will mean leaving my home for several days.

I have to drive to London airport, leave the car there and fly to Venice, but the only service back to the United Kingdom goes into Gatwick. So a man with a car at Heathrow arrives at Gatwick, with all the problems of travel in between.

Mr. Bill Walker (Tayside, North)

Is my hon. Friend aware that it is possible to take a helicopter between the two airports?

Mr. Hill

That raises another point of contention which has been mentioned several times. First, when it was in being the normal, impoverished hon. Member could not afford to pay and, secondly, it no longer exists as a service. Therefore, we now rely on the coaches on the M25 in order to get back to our cars.

Mr. Toby Jessel (Twickenham)

Is my hon. Friend aware that my constituents will all wish him an extremely happy time in Venice provided that on his return journey he goes from Gatwick to Heathrow via the M25 and does not attempt to carry out that part of his journey by helicopter?

Mr. Hill

I am only too pleased to agree to that because I have no other option. Although I know that the infrastructure between Gatwick and Heathrow is now so much better, it is a problem of time and hon. Members are busy people and have too much to do in the course of their long working week.

Having said that, I must get back to the issue of the CAA and transfer to the private sector. This is just one item in a continuing programme which this very able Conservative Government have brought into being. I am particularly looking forward to the distribution of these shares and, as an ex-employee of British Overseas Airways, to the distribution of shares to British Airways. These are not strange things to the electorate. We have declared our intention that, apart from one or two small institutions, we are for giving the country the opportunity to pull back some of the capital assets, on which there has been little or no return. Indeed, in some cases they are costing the taxpayer money. I believe that we are doing a splendid job in our overall programme of privatisation.

Mr. Ridley

I hestitate to ask my hon. Friend this because I might be accused of doing a "commercial", but does he realise that the bus company which provides the service from Gatwick to Heathrow is for sale?

Mr. Hill

That would be a very expensive way for me to get back from Gatwick on the night of my return, but I am sure that a consortium of world travellers within the House could consider it.

Members of the Opposition forget too quickly the privatisation success of the past. They all know about the National Freight Consortium, but they try to avoid talking about it, and there have been many other successes. I am thinking particularly of the Associated British Ports flotation, which was a magnificent success. I know that I am drifting a little, having gone from airports to seaports, Mr. Deputy Speaker, but I ask the Opposition to look at the success stories, of which there are many, and I am sure that the present case will be even more successful.

We had a debate yesterday on amendments and a was quite horrified by what some of my hon. Friends were saying in their attempt to end the duty-free shops, which, as was rightly pointed out, are a crucial part of this commercial undertaking. I am sure that anyone who purchases a group of airports such as this will be delighted not only to keep the existing duty-free shops but to extend them further. It is only too apparent when one goes abroad that certainly the French at Charles de Gaulle airport have the right idea with their duty-free shops. They have parades of shops at which everything imaginable is sold. This is what the airport traveller wishes. He may be early for his flight or his flight may be delayed, and he has time to kill. I see no reason why an airport authority should not extend this to providing a cinema or a night club. Should I go further, indeed? Perhaps I had better not.

Mr. Robert Hughes

Does the hon. Gentleman approve of the practice at some German airports of having porn sex cinemas—which, I hasten to add, I have seen only from the outside?

Mr. Hill

I do not think that the weary traveller should attempt to do anything that would take away his last remaining strength, because, as we all know, it is not just a matter of reaching one's destination. One then has to take a coach for a long distance, and by the time one reaches one's hotel one has forgotten about those delights that had been suggested by the Opposition.

Nevertheless, when one puts one's mind to what can be done regarding facilities at airports, it is clear that the BAA has only scratched the surface. We are perhaps underprovided with hotels at some of these airport sites, and I believe that prices are a bit too high because there is no competition. Certainly an impoverished hon. Member cannot pay £60 to £80 for a night's board and lodging—without breakfast, I might add. So I think that more development, and certainly enterprising development, will be the order of the day.

I have no reason to suggest, and I am sure that no hon. Member would suggest, that anyone who could get together a consortium capable of competing for these airports would be a fool. He would have to make a very careful commercial assessment. He would also have to make a very careful assessment of how he was going to attract airlines to his consortium on a permanent basis.

The grave weakness of most of the speeches when we are discussing privatisation is that we talk about these men as though they are mad speculators of some kind who will come in with £1,000 million and buy, and then sell the next day. They are very clever, highly advised members of the City, and the City itself will look at this with great favour.

I have only one regret—that I did not spend some considerable time in the Committee. I feel that I could have kept the Committee going a little longer, if it had been the wish of the Whips to put me on it. Nevertheless, this is a very interesting Bill and I wish it every success.

5.19 pm
Mr. Alfred Morris (Manchester, Wythenshawe)

The hon. Member for Southampton, Test (Mr. Hill) said that he would be brief. I hope to be very brief.

When this Bill had its Second Reading it was rightly opposed in the strongest terms by the Opposition. We took the view that at best it was irrelevant and at worst prejudicial to the needs of Britain's civil aviation industry. It was a view shared by many Conservative Members. They made plain their view on Second Reading in January, and again last night on Report, that there were many deficiencies that required correction before the Bill goes to another place. Yet, in spite of all our efforts to introduce some consistency and common sense into the Secretary of State's attitude to the Bill, it is largely unamended. All the deficiencies and the inconsistencies remain.

I now want briefly to identify some of the major inadequacies. Part I of the Bill will seriously prejudice the development of airports outside the south-east. Notwithstanding all the Secretary of State's well publicised promises to eliminate subsidies to Stansted, there is now no doubt that the subsidising of that airport will continue on a massive scale for many years to come. Leaving aside what was said from the Opposition side in the debate last night on subsidising Stansted, he was brilliantly exposed from his own side of the House. The right hon. Gentleman's stance, coupled with the inherent weaknesses of part IV of the Bill, make it abundantly clear that his own 1985 White Paper, which emphasised the importance of fair and equal competition between airports, is nothing more than a "paper policy".

It was shameful of the Secretary of State to make no attempt last night to answer in any way the many serious questions put to him. He portrayed an ignorance which right hon. and hon. Members in all parts of the House found staggering. He is obviously quite incapable of grasping the simple point that being able to see a subsidy does not make it go away. Nor does it become any less damaging to airports outside the south-east. If the right hon. Gentleman finds my judgment harsh, let him read in cold print what his hon. Friend, the hon. Member for Ruislip-Northwood (Mr. Wilkinson) said of him in his speech on my amendments last night. The hon. Gentleman said of the Secretary of State's policy that it is … detrimental to good regional development in Britain. I believe that the policy stinks. The north of Britain is woefully economically deprived. There is a huge economic gulf between the south-east and the north. Why should people be artificially attracted to airports such as Stansted, which they do not wish to use, when the north is crying out for jobs and the infrastructural development that is associated with airports?"—[Official Report, 9 April 1986; Vol. 95, c. 257.] I have never heard a more scorching criticism of a Minister from the Benches behind him.

The so-called commitment to introduce private capital into regional airport development has also been exposed as a total and utter sham. The right hon. Gentleman's commitment is so strong that the effect of part II of the Bill will be to bring under strict central Government control an independent trading company which is now operating in the open market.

The Secretary of State referred last night to the "Manchester airport authority". He might have to swallow hard but must now face up to the fact that his nomenclature is wrong. As usual, he is out of date. Manchester Airport plc, to give the enterprise its true title, commenced trading on 1 April. It is operating independently of the local authorities and the Government. For the time being at least it does not need the support of the Government. Not that it ever did.

To listen to the Secretary of State last night, Mr. Deputy Speaker, you might have thought that he was the sole author of Manchester airport's success. We were told that he has been falling over himself to support the airport. If that is right, why did it take over four years for the Government and the Civil Service to acknowledge the airport's real status? Until January 1985 they were arguing that there was no major role for Manchester airport to fulfil in the national context. If the Secretary of State has been handing out licences enabling airlines to operate services into Manchester like toffees, why did it necessitate lengthy and major cross-party parliamentary campaigns to support almost every licence application that has been before him?

I pay tribute tonight to Conservative Members who joined hands with us in campaigning for the new routes.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer)

I cannot contain myself much longer. I have never heard a speech which is so distorted and biased, but I shall make my own speech later. I can answer the right hon. Gentleman's question. He asked why it took campaigns for the licences to be granted, and the answer is that most of those campaigns started well before the bodies concerned had ever approached the Government for the licences.

Mr. Morris

The hon. Gentleman is clearly stung by my quote from the hon. Member for Ruislip-Northwood. The Minister said he had never heard a more distorted presentation. I hope he agrees with me that there was never a more scorching criticism of any Front Bench than that which was delivered by his hon. Friend last night.

On the question of licences, let us take the case of Singapore. There was active all-party campaigning to achieve the new route from Manchester to Singapore. There were complaints from Singapore about the attitude of the Department of Transport. The Minister must appreciate that hon. Members on both sides of the House have done much more than some Ministers to promote the expansion of Manchester international airport.

Mr. Michael Spicer

rose—

Mr. Morris

I am not giving way again. The hon. Gentleman will have an opportunity to reply to the debate. I hope that he will then acknowledge the strenuous efforts of hon. Members on both sides of the House to promote the development of Manchester international airport. If the Secretary of State had been allowed to have his way over 12 months ago, British Airways would not now be operating out of Manchester.

The airport's success is exclusively attributable to the people of Manchester and the vigour and resourcefulness of the airport's local authority owners. It is those qualities which will again be put to the test by the Secretary of State's attitude to Manchester and the regional airports. They must now compete with a subsidised Stansted and with their hands tied behind their backs. It is, of course, an unequal contest. Yet it is one that we must face up to, and we shall. Indeed there is no alternative, because the airport is our principal hope of rejuvenating our devastated regional economy.

On Second Reading there were Conservative Members who made it clear, that while favouring the principle of the Bill, they were deeply concerned about the detail. The Bill will leave this House tonight for the other place in broadly the same form as it was introduced. It is a bad Bill and it will make bad law. Everyone's concerns about the Bill remain. I wonder how many Conservative Members will join us in opposing its passage this evening.

5.27 pm
Mr. Toby Jessel (Twickenham)

As always, I listened with great interest to the right hon. Member for Manchester, Wythenshawe (Mr. Morris), particularly when he spoke about Manchester airport. All of us, including those of us who represent constituencies in the south-east, want more traffic to go through Manchester airport. That would be good for Manchester, for industrial development in the north of England, and for the spread of employment. It would also help to relieve airport congestion in the south-east. We all want that; the House is united on that.

Manchester airport has been doing rather well. Year by year its number of passengers has increased, although I cannot say steadily, as there has been a disproportionate increase in the past year. Last night, my hon. Friend the Member for Davyhulme (Mr. Churchill) told us that the number of destinations reached by scheduled flights from Manchester had doubled in the past 12 months. That is very impressive, and it should continue. But no Member of Parliament for Manchester or the north-west has ever explained why he wants to put a lid on expansion at Stansted—thus allowing traffic to be attracted to Manchester—but not on expansion at Heathrow. The case of those hon. Members who represent Manchester and of their sympathisers would be much more convincing if they had some sympathy for my constituents, and the many others who live on the western side of London, who suffer from the noise and congestion caused by air traffic and if they tried to put a lid on that.

Mr. Alfred Morris

We are talking not about putting a lid on Stansted but of removing subsidisation; we are talking about fair competition. Many of my constituents and people all over the north are sick and tired of having to change planes at Heathrow in order to go to foreign destinations. They want to help the hon. Gentleman to relieve the pressure on Heathrow and other London airports.

Mr. Jessel

Then why does the right hon. Member never say that he is against the fifth terminal at Heathrow? He and his friends are always saying that they want a fifth terminal at Heathrow, and thereby want to increase its size and capacity. That proposition seems totally inconsistent with what the right hon. Member has just said. Until I hear a convincing explanation from him of that point, I am afraid he will not persuade me that he is single-minded and whole-hearted in the objectives he claims to pursue.

I welcome the general objectives of the Bill. Before I finally decide how to vote on the Third Reading, I want to know from the Minister a little more about how the Bill will affect the interests of my constituents, especially in relation to noise, which upsets a great many of them. Every day there are 750 flights in and out of Heathrow. The peace, quiet and health of the people in the area ought to receive a high priority, but I am afraid that it does not receive as high a priority as it should. The Government should pursue policies not merely to maintain the noise at its present level, but to reduce it substantially and permanently.

Mr. Dicks

How many people moved into the constituency after the development of Heathrow at lower prices than they would otherwise have had to pay arid are now seeking some protection in order to get the maximum benefit from that situation?

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. I understand the anxiety of Members to make constituency speeches, but the number of people who have moved in and out of the area is not really related to the provisions of the Bill. We are discussing the Third Reading and must direct our speeches to the provisions in the Bill.

Mr. Jessel

In the light of your ruling, Mr. Deputy Speaker, which naturally I accept, I may seek to raise this matter on the Adjournment in order to deal with my hon. Friend's point, which is important but which is not, I accept, relevant to the Bill.

I bring up a relevant point that has been triggered off in my mind by what was said by my hon. Friend the Member for Southampton, Test (Mr. Hill) in his notable speech just now, when he referred to the financial importance, in the context of this Bill, of duty-free drink. Will the Minister consider a completely new suggestion which I will make and which I believe comes within the ambit of this Bill? I hope that he can assure me that nothing in the Bill excludes my suggestion, which is that the profits from duty-free drink at the airports, which are dealt with in this Bill, should be used to provide for the payment of the cost of double glazing of the windows of my constituents, who could thus be protected from aircraft noise.

Sales of duty-free drink are buoyant. Every year they rise, yet it is noticeable that it costs almost as much to buy a bottle of drink duty-free at the airport as it would cost in a shop outside. On the surface, that fact would appear to negate the advantage of buying duty-free, but the public does not perceive the situation in that way. Whenever people travel, friends and family expect them to return from their journey with a bottle of duty-free, and are surprised if they do not. It seems that this expectation of a gift of duty-free drink upholds the sale of duty-free drink despite the cost of dragging it about the skies. Extra costs are involved, because carrying the extra weight of the duty-free drink about the skies wastes aviation fuel. I once heard a worldwide cost of £1.25 million as the value of fuel wasted on such cargo carried uselessly, since duty-free drink could have been bought on arrival rather than on departure at the airports dealt with in the Bill.

It seems certain that the sale of duty-free drink is buoyant, although the rationale for it has long since disappeared. The idea originated in the purchase of drink at sea. Excise duties were imposed on the purchase of drink ashore and in territories, but it was always duty-free off land and at sea. That situation was extended to aeroplanes as well, and eventually extended to the purchase of drink in airports. I believe that that rationale has disappeared, but I am sure the system will continue because people are so used to it and like it so much that it would be politically impossible for a Government of any colour to get rid of it.

The revenue from this source to the British Airports Authority and its successors under the Bill is substantial. Indeed, I understand that it produces a major proportion of the profits of the BAA. I suggest that this money should be used to provide double glazing for the windows of my constituents, who suffer from aircraft noise, living underneath the flight paths from Heathrow. Double glazing is not a complete solution to the problem of aircraft noise, because an open window or a garden cannot be double glazed, but it would mitigate the nuisance somewhat.

Hitherto, the geographical limits for the noise insulation scheme have been determined by a noise footprint based on the so-called noise and number index. Ministers in the Department of Trasport have recently recognised that the noise and number index is likely to be out of date.

The noise and number index is a formula from the 1960s that included as a measure of nuisance a weighting both for the number of flights and the average peak loudness of each flight. Some of us have long believed that the weighting between those two factors in the formula is wrong. That really did not matter during the 1960s and the early 1970s when the frequency of flight and average loudness were increasing together. If the weighting between the two elements in the formula was wrong and they were increasing together, it did not produce any significant distortion.

From the 1970s onwards, the frequency was increasing but the noise from each aircraft started to diminish with the introduction of wide-bodied aircraft, although certain very noisy aircraft such as Concorde have continued and will continue. That seems to suggest that the noise and number index is out of date as a measure of aircraft noise nuisance.

I am sure my hon. Friend the Under-Secretary of State is absolutely right to question the continuation of the noise and number index as a measure of noise nuisance, and to suggest a different formula which he has called the Leq, a subject on which he has recently put out a consultation document. Contingent on the result of that consultation, if he decides to replace the noise and number index with the Leq index, that completely destroys the historic basis for the provision of noise insulation grants as determined by the noise and number index, using the noise footprints which have hitherto been respected and continue to be invoked by the BAA, the Civil Aviation Authority and other bodies but which will probably soon be dropped.

Therefore, there is a case for looking again, under the Leq measurements, at the noise nuisance that my constituents suffer. I believe that the Leq measurement would show a larger proportion being entitled, under the criteria previously used, to double glazing than has hitherto been the case. So I believe I have made a strong case for applying part of the profits from duty-free drink to double glazing of windows of my constituents in Twickenham.

Does my hon. Friend the Under-Secretary of State uphold the position foreshadowed in the White Paper with respect to air traffic movement limits and the number of flights at Heathrow? The eddies of air behind the increased number of wide-bodied aircraft mean that greater spacing is needed between aircraft that are landing and taking off. That will result in fewer flights able to use Heathrow.

How will the reduced numbers of aircraft interact with runway capacity? My right hon. Friend the Secretary of State for Transport consistently told the House in the airport debate in January—

Mr. George Park (Coventry, North-East)

On a point of order, Mr. Deputy Speaker. You have already tried to tell the hon. Member for Twickenham (Mr. Jessel) to speak to the Third Reading. Is it possible to get him to do so?

Mr. Deputy Speaker

There are wide powers in the Bill. I am following closely the speech of the hon. Member for Twickenham (Mr. Jessel). He must relate what he says directly to the Bill.

Mr. Jessel

Thank you, Mr. Deputy Speaker. I was trying to ask my hon. Friend the Under-Secretary of State whether the Bill was likely to affect my constituents in the context of aircraft noise. I was relating that point to the number and type of flights which would be influenced by the Bill's provisions. I was referring especially to the interaction of capacity at Stansted, Heathrow and Gatwick.

Mr. Frank Cook (Stockton, North)

On a point of order, Mr. Deputy Speaker. The comments by the hon. Member for Twickenham (Mr. Jessel) are not just proof of transgression but are a repetition of transgression. Is the hon. Gentleman trying to breed from his mistakes?

Mr. Deputy Speaker

Hon. Members would be well advised to leave it to the Chair to decide whether an hon. Member is in order.

Mr. Jessel

I must take exception to the bogus point of order—

Mr. Deputy Speaker

Order. The hon. Member should continue his speech. Many hon. Members want to raise points and the hon. Member should give them time to do so.

Mr. Jessel

Thank you, Mr. Deputy Speaker. I was referring to the Bill, which bears directly on the capacity of Gatwick, Heathrow and Stansted. The Bill is directly concerned with the financing of Stansted. That aspect has been considered at every stage of the Bill's passage. Hon. Members do not want to hear those arguments because they do not like them. I shall find some reason to interrupt their speeches as well on irrelevant grounds.

The fifth terminal at Heathrow would be a major destructive force on the western side of London. It would affect many of our constituencies, including that of my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), who as a Whip cannot be expected to speak in the debate. My right hon. Friend the Secretary of State said that one of the Bill's main aims was to provide access to all the airports with which the legislation deals. Heathrow is one such airport. Access would be hampered if capacity were increased. Excessive traffic generated by the demand to use the airport would cause congestion on the radial route along the Cromwell road in west London to Heathrow and on the orbital route around London, the M25. Untrammelled capacity at Heathrow could choke those routes.

I hope that my hon. Friend the Under-Secretary of State will give a full reply to all my points.

5.44 pm
Mr. Michael Meadowcroft (Leeds, West)

I do not want to follow the convoluted points of the hon. Member for Twickenham (Mr. Jessel). The noise-aircraft ratio is not the problem—it is simply a matter of a marginal seat.

The Secretary of State said that this was the epilogue of the debate on the Bill. I was surprised that he drew an analogy from a prayer, as though he were relying on that for his success. It was more of a valedictory. I suspect that it meant he was sending the Bill with his good wishes along the corridors to the other place. The right hon. Gentleman failed to commend the brave rebels in the Conservative party for their assistance in the process of healthy opposition to the main points of the Bill.

In tabling reasoned amendments, Liberal Members gave three reasons why the Bill was not satisfactory. As the Secretary of State has pointed out, the Bill has reached Third Reading largely unscathed from the Committee and Report stages. We argued, first, that, if there is a monopoly, it should be in public rather than private hands. It can be argued that if a body is not a monopoly there need not be any dogmatic reason why it should be in public rather than in private hands.

My second argument against the Bill is that it fails to encourage diversity. It is strange that Conservative Members are not prepared to encourage a flexible approach by the smaller-scale airports which would benefit from avoiding a uniform solution. It is odd that there is no possibility of a mixture of private and statutory collaboration. As the right hon. Member for Manchester, Wythenshawe (Mr. Morris) pointed out, a case can be made for regional decisions on the right solution for a particular airport. It is not fair to say to those who have promoted Manchester over the years, "You will be put in the pot like everyone else and will be given the same solution even though you have succeeded so admirably."

Thirdly, there is an apparent failure to understand the importance of municipal pride and enterprise. The hon. Member for Southampton, Test (Mr. Hill) misunderstood the point I made about building up municipal airports. He said that the money will go back to the people as shareholders. The money has been put into the airports by all the ratepayers according to the proportion they pay in rates, but it will come back to only a tiny minority. Conservative Members are fond of saying that the number of shareholders is increasing, and I am glad that it is, but only 2 million out of the 56 million people are private shareholders. It is hardly a consolation to ratepayers in some of the municipal airport areas to say that the money will come back to them as shareholders.

Mr. Hill

Is the hon. Gentleman saying that ratepayers who have invested in the municipal airports will all lose money, or will they receive an additional benefit?

Mr. Meadowcroft

That is a fair point. The answer is that it varies. The forecasts over the years have been too optimistic. I suspect that the future for the economy as a whole is not as bright as some of those who wanted to invest large capital sums expected. The £20 million invested in the development of Leeds-Bradford airport was based on an estimate of 800,000 extra package tour holidays from Leeds-Bradford by the year 1987–88. I do not believe that that number will be reached.

Ratepayers' money was invested in those airports in good faith. Once the shares are offered on the open market, the advantages will not return to the city as a whole. One sacrifices local pride at onē's peril. The Liberal party is not dogmatic about economic structure. It is difficult in many cases to defend aspects of public ownership.

The Government were faced with those three major points in the reasoned amendments but failed to answer any of them.

The alternative to public ownership is not necessarily to privatise. There are different ways of having hybrid schemes which would not fall foul of the rules of debate in the House. There are different ways of having collaboration between public and private bodies and different ways for the smaller airports to have some sort of co-operative structure. None of that has been essayed in the Bill as it is now before the House. That is why I believe that the reasons we put forward on Second Reading were accurate. None of those reasons has been met and I hope that the House will refuse to give the Bill a Third Reading.

Mr. Deputy Speaker

I am grateful for the hon. Gentleman's brevity.

5.50 pm
Mr. Terry Dicks (Hayes and Harlington)

I am one of the main rebels against the Bill. I expressed my doubts about its contents on Second Reading, in Committee, as Opposition Members who served on the Committee will know, and yesterday on Report. I still feel strongly about it. I agree completely with the principle of privatisation, but there are many things wrong with the Bill. Earlier my right hon. Friend the Secretary of State said that because he had the votes in the Lobby the Bill must be right. That is not the case. The Government just got their whipping right. They called a three-line Whip and a payroll vote. That is the bread and butter of politics, and one cannot grumble too much about that.

At this stage let me at least pay tribute to my right hon. Friend the Secretary of State and my hon. Friend the Parliamentary Under-Secretary of State because they have listened to what has been said. They have not acted very much on what has been said, but at least they listened. In Committee, and again yesterday, even if the points made have not been written into the legislation, at least those of us concerned were able to make our points clearly.

I pay particular tribute to the Minister concerned with my amendment, which sought to give some protection to concessionaires. Although, with the help of Opposition Members and some of my hon. Friends, the amendment was passed in Committee, the Government were able to remove it yesterday. However, in doing so, at least the Minister has met some of the concessionaires and me, recognised some of the points we made, and made some movement towards meeting our requirements. I am genuinely grateful for that. It is not often that a Back Bencher has an opportunity to get an amendment through in Committee with the support of Opposition Members. It was something special. Although the amendment is not now in the Bill, at least the Minister acknowledged that I had a point and the Government have moved a little towards it.

I must take this opportunity to say what the concessionaires give to the British Airports Authority. In 1984–85, £98 million came to the British Airports Authority as income from concessionaires. Two thirds of the BAA's commercial income came from concessionaires, but the Bill makes no reference to them in any shape or form—at least not at the moment, although it will when the amendment goes through in the other place. The concessionaires were not thought to be relevant and were not looked upon as users of the airport. However, as I said, we have made the point and we have had some concessions, so we must be reasonably happy about that.

My hon. Friend the Member for Southampton, Test (Mr. Hill) spoke about better utilisation of airport land and facilities. He spoke about cinemas and other facilities. That concerns many of us because we believe that a great deal of airport space should be used to provide airport-related activities. Some of us are concerned that, in looking for a quick return on their investment, shareholders will be pushing the BAA into providing just those facilities that my hon. Friend mentioned, when they should be pushing the BAA to provide better airport-related facilities, not cinemas and bigger duty-free shops.

Some of us feel strongly and are bitterly disappointed that the Bill will not provide for the breaking up of the London system. We believe that Stansted should be made to stand on its own. Despite the pressures placed on the Government yesterday, that is not to be. I am sure that my right hon. Friend and hon. Friend will be aware that those of us who are involved will be watching the financing of Stansted very closely, not only because we think that it should stand on its own, but because we must look to the needs of the regions, especially Manchester airport, which must not be seen to be pushed aside because of the Government's direction on Stansted. Woe betide the Government or anybody else if we see that, despite the assurances, money is going to Stansted that should not go there and that Manchester and other airports are losing as a result.

We are also disappointed that we did not get a better reassurance from the Minister with regard to the activities of the scheduling committee. As I said yesterday, the airlines at Heathrow—I speak especially for Heathrow because it is in my constituency—are happy with the scheduling arrangements. I have a feeling that things will not change very much, but perhaps we could have a firmer assurance from the Secretary of State or the Minister with regard to the scheduling committee's activities. I am aware of the problems of runway capacity and the timing of incoming and outgoing flights. However, I hope that the Secretary of State will make it clear that the present scheduling committee arrangements will be allowed to continue unfettered and that any intervention on his part will be as a very last resort.

In a sense, the Bill touches on the position at Heathrow and its future development. I do not accept the concern of my hon. Friend the Member for Twickenham (Mr. Jessel) but he has never missed an opportunity—good luck to him—to advocate his constituents' problems about airport noise. I made the point—and you quite rightly rebuked me for it, Mr. Deputy Speaker—that we never know how many people buy houses at lower prices in an area with aircraft noise and then expect higher values for them. I want to emphasise that not every hon. Member representing a west London constituency is concerned about airport noise. Some of us have taken a wider view of the civil aviation industry, and the airports especially.

Mr. Bill Walker

Jobs.

Mr. Dicks

Yes. As my hon. Friend says, we are also concerned about jobs. I do not care where jobs are created as long as they are created.

I am fully aware that the consultants are now looking into the infrastructure problems around Heathrow with regard to access. We know, even before the fourth terminal is open, that something needs to be done. I am sure that the Minister will tell us later that the possibility of a fifth terminal is not completely ruled out. We need immediate action on the infrastructure problems. We need some help towards the provision of the Hayes bypass, which will not only help my constituents but ensure easier and better access to Heathrow. Heathrow is the world's major international airport. It must be kept that way and left unfettered as far as is humanly possible.

I want to issue a final warning to the British Airports Authority and the parent company which will take over later. The BAA may have moved from being a public monopoly to a private monopoly. It may be gleefully thinking, "We have done it again. We have persuaded the Department of Transport to do exactly what we want when we want." I and many of my hon. Friends will be watching closely. Sir Norman Payne, his fellow directors and senior managers should not think it is over yet. We shall be watching them closely. One false step and we shall be after them.

5.57 pm
Mr. Tony Lloyd (Stretford)

I shall preface my remarks by saying that I hope that all my hon. Friends and Conservative Members will have the chance to speak, because some of them have taken an interest in the Bill all the way through. I regret that some of the speeches earlier were self-indulgent and used up much time.

Despite the fact that the Secretary of State has told us that he feels that the Bill is right, it is quite clear, from the massive amount of criticism that it is still attracting from both sides of the House, that the Bill has little credibility within the House. It has been pointed out that it was only because of the Government's own placemen, those seeking advancement, and their ability to whip through the payroll vote that they were able to hang on to their majority. It was a serious rebuff that on a number of amendments the majority dropped as low as it did. That reflects the fact that the Bill is irrelevant to national airports policy, which is basically what we accused it of being on Second Reading. It is especially irrelevant because of the way in which it treats the different airports in the airport system.

I will not go at length into arguments that took place last night, but the idea that we should enshrine the right to private monopoly in legislation is a new concept, even for the Conservative party. I know that it greatly upsets some of the Conservative Members who feel that their principles are being betrayed by the Government. They are quite right to feel betrayed. It is dangerous that an under-regulated private monopoly has been created within the British Airports Authority.

I contrast that with the almost childlike obsession of the Department of Transport and its political masters with Manchester airport. Many of the actions that were taken against municipal airports were guided by the vendetta against Manchester. The elaborate nature of the financial controls are designed, ultimately, to drive Manchester from its position as an independent private company back into this peculiar corporate structure which the Government have given us.

The use of those controls will prevent Manchester from borrowing and will prevent the development of Manchester airport. The Government hope that they will be able to force the local authority into privatisation. I regret that the economic future of Manchester, the north-west and Scotland will be jeopardised by the Government's ideological trap. They laid the trap and have fallen into it. Restrictions on capital are extremely dangerous. I hope that, even at this late stage, the Government will reconsider the stupidity of imposing such controls.

There are other issues that affect general airport policy. On the Secretary of State's desk there is a submission from the passenger transport authority in the Manchester area and from British Rail for a rail link to Manchester airport. The details of that submission have been published. Can the Minister tell me whether the Secretary of State is prepared to meet an all-party delegation to discuss the rail link? We could make progress on a matter that is important for the future of the airport. Will the Minister also agree to publish the details of the submission for a rail link to Stansted, which is a matter of great importance?

Mr. Michael Spicer

I am grateful to the hon. Gentleman for giving way at this point. I shall answer his question straightaway in case I forget to do so later.

The Department of Transport is deeply involved in the discussions that are taking place. Whether an all-party delegation should meet my right hon. Friend or other Ministers is, perhaps, not the issue. The Department is assessing the viability of both potential rail links. I am not sure what point the hon. Gentleman was seeking to make on the matter. The matter is the subject of intense discussion and analysis.

Mr. Lloyd

I refer the Minister to the brief exchange between him and my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). That exchange concerned the Department's helpfulness to Manchester with regard to applications for new routes. The Minister said that the Department of Transport was beyond reproach. However, I share the view of the Singapore Government that its application for a new air route with Manchester was finally granted by the Department, after two refusals, due to the massive amount of pressure which was raised in Manchester. There were also delays before Iberia were ultimately granted an application for flights to Manchester. Such actions do not give one great faith in what goes on at the Department of Transport.

I am aware that the Department is actively involved in the discussions on the proposed rail link to Manchester airport, but I ask that there should be an all-party meeting so that the Government's thinking on the matter is known. In that way we can make progress. If such a meeting could take place it would be helpful. I will let the Minister dwell upon that matter.

The Bill does not address itself to the problems of our airport systems. We still lack an airport policy. When the Labour party comes into office such a policy will be a matter of considerable urgency. We shall use some of the powers that exist in the Bill to create an effective structure to meet the nation's air transport needs. Sadly, such needs will not be met by the present Secretary of State.

6.4 pm

Mr. John Carlisle (Luton, North)

I will not follow the parochial arguments of the hon. Member for Stretford (Mr. Lloyd) about Manchester airport. He will understand if my remarks concern Luton airport.

The hon. Member for Stretford paid a tribute to those who have been involved with the Bill through all its stages. I must apologise to the House because this is my first intervention on the Bill. The simple reason is that my hon. Friend the Member for Luton, South (Mr. Bright) would normally be here to speak for the interests of his constituency. Unfortunately, my hon. Friend is indisposed and I am an inadequate stand-in to represent him and the airport. I hope the House will forgive me if my knowledge of the Bill is scant compared to that of other hon. Members.

I am sorry that my hon. Friend is not present, as he has shown enormous enthusiasm for the Bill. Such enthusiasm regrettably caused my hon. Friend to fall out with the leader of Luton council, who opposed the Bill. My hon. Friend the Under-Secretary of State may have witnessed such opposition on his recent visit to Luton. The arguments which have been put forward by my hon. Friend and by the Government in Committee have allayed some of the worst fears of Luton borough council. There is a much broader welcome in Luton for the Bill.

We are extremely proud of our airport. It is extremely well run and we are not afraid of the opportunity to become a plc. I am pleased to report to the Minister that the feeling in this constituency is more welcoming to the Bill than it was some months ago. The importance of Luton airport to the district cannot be under-estimated. Last night, that was highlighted in an intervention by my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) when he said that Luton airport was the second largest employer in the town. The prosperity of the airport is crucial to the prosperity of the town and the area.

We agree in principle with the Bill and agree that airport management can be strengthened by an intake of new directors. We are anxious to use the new sources of finance which will be made available by the Bill. When the plc is formed, I believe many local people will wish to buy shares and become part of one of the greatest assets of the area.

We welcome the assurance on pension rights given by my right hon. Friend yesterday evening. There has been much concern from one particular union. I have not been able to get that union's reaction to the altercations in the House yesterday but it appears that my right hon. Friend's words have allayed the worst fears. However, my right hon. Friend did not go as far as some unions wanted. His assurances were reasonable and should be welcomed by thinking people.

My hon. Friends the Members for Bedfordshire, North (Sir T. Skeet) and for Bedfordshire, South-West (Mr. Madel) and myself supported an amendment because of our fears of the development of a continuing subsidisation of Stansted. The Minister will be aware that there will be much concern in Luton about the unfair competition of Stansted and its effect upon Luton. Luton has been affected more than any other airport because of its proximity to Stansted. My hon. Friends and myself felt obliged to go into the Lobby against my right hon. Friend the Secretary of State because we felt our fears were not allayed by his assurances. I was pleased to support the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and my hon. Friend the Member for Manchester, Withington (Mr. Silvester). We want to encourage scheduled flights from Luton and we are not afraid of unfair competition. If Stansted continues as a subsidised airport and is not made to stand on its own feet—the Bill will not completely force it to do so—we shall be permanently worried about competition and our attempt to attract the 5 million passengers as envisaged by my right hon. Friend will be even more difficult. Nevertheless, we are ready to take up the challenge.

I hope that my hon. Friend the Minister will have time to answer three questions, but, if not, I hope that he will write either to me or to my hon. Friend the Member for Luton, South. Luton borough council and I are worried about the financial arrangements in clause 20. At present the airport has a debt of some £17 million which needs an annual servicing of £2 million. We are worried that because of the Bill the servicing of that debt will have to be retained by the ratepayers, rather than taken on by the plc. If that is the case, it will have a devastating effect on Luton ratepayers. With the loss of £2.5 million in rate support grant, the ratepayers would face a massive rise of 60 per cent. in an attempt to find £4.5 million in the coming financial year.

I am cognisant of my precarious election positon and of that of my hon. Friend the Member for Luton, South, and I know that my hon. Friend the Minister is anxious that we return and represent that town in the House. If a 60 per cent. rates increase were proposed, probably in election year, we would have difficulty in persuading the electorate that the Bill was the best thing since sliced bread. Will my hon. Friend remind the Secretary of State that that is causing great anxiety in Luton? Can he assure me tonight that the plc can take on the servicing debt? If not, I hope that he will write to me or my hon. Friend the Member for Luton, South.

My second question is about clause 17. I apologise to the House that thanks to the good service of a Labour Whip I went home last night at a quarter to 11, so I was not present for the altercations on clause 17. It provides the basis for airport directors to remain as councillors and participate in council meetings. There is great concern about the composition of the council in Luton, where we have 23 Conservative members, 17 Labour members, seven Liberal members and one Independent Labour member. In such circumstances, if members of the council are appointed as airport directors, as we expect them to be, their interests on the council and in airport matters could conflict with clause 17. Can my hon. Friend the Minister clarify that position, which I also raised on Second Reading? Does he consider that position to be similar to that in the Transport Act 1985, or is there no way that those airport directors can take part in any proceedings on airport business in the council chamber?

My third anxiety relates to the time for proceeding towards a plc. I ask him on behalf of the borough council whether, when we proceed towards the plc, we can have a little more time and flexibility. He will understand that a vast number of different departments, such as the finance department, the environment health department, the architect's department and, even, the recreational services department, are involved in a local authority airport such as Luton. Those various departments will need a certain amount of time to unscramble the various operations that they perform at the airport. Considering the provisions of the Bill and, particularly, my right hon. Friend's comments in Committee, we believe that that unscrambling will take some time. I do not know whether he appreciates the problems that we could face. It will not be simple to assimilate the new procedures, but, obviously, we shall do so as efficiently as we can.

We wish the Bill the best of speed in the other place, and I ask the Government to consider the necessary amendments that I have proposed. It is a first-class Bill, and certainly one which the people of Luton heartily welcome.

6.15 pm
Mr. Peter Pike (Burnley)

I must disagree with the line pursued by the hon. Member for Luton, North (Mr. Carlisle), and I certainly shall not vote for the Third Reading of the Bill tonight.

The Secretary of State said that the lack of interventions signified agreement with the Bill. However, my hon. Friend the Member for Aberdeen, North (Mr. Hughes) was absolutely right in saying that the Government had made so few concessions that Labour Members felt it was pointless to intervene, especially with the present Secretary of State who, as in debates on the Transport Bill, may have listened, but failed at all stages to take any notice and to make any concessions.

I certainly agree with the Secretary of State that we should have an airports policy for the United Kingdom which will attract airlines and air traffic, especially international and intercontinental flights, to British airports rather than to Frankfurt or other continental airports. That is essential. However, I do not agree with him that the Bill goes in that direction. I do not believe that it will solve our civil aviation problems. It fails to provide a national airports policy, to develop our regional airports and to solve our present problems.

I have grave reservations about the proposal to privatise the BAA—owned London airports together. I cannot see why Gatwick, Heathrow and Stansted should all come under one owner in the private sector. Obviously, I do not agree with privatisation to start with, but if they must be privatised, I do not see why they cannot be split up. Nor do I see why Stansted should not be left to stand on its own feet, especially if there is potential for it to develop. At every stage I have opposed that encouragement, but the Government have a stubborn bias and continually widen the rift between north and south. I know that they will encourage the growth of that airport at the expense of our regional airports. If the Government believe that Stansted should grow, why should it not fight for that growth on its own merits?

The Secretary of State's policy of privatising the airports together and creating a monopoly in London conflicts considerably with his position last year on the Transport Bill when he decided that the National Bus Company had to be privatised, but not as a whole, although it faces municipal and private competition. On that occasion there was a good case for privatising the company as an entity as it faced considerable competition.

The Bill fails adequately to safeguard the position of employees. Despite the Government's concession on pensions last night, I am still gravely concerned about the future of employees, whether employed by municipal airports or the BAA. Once again, the Government intend to make privatisation work through worse conditions for existing and future employees in the industry, and by not giving them the sort of conditions to which they are entitled or a guarantee as to the type of pension scheme which most employees have at present.

The Secretary of State told us that agreement had not yet been reached on the shareholdings for employees and the type of concessions that they are to be offered. Once again, the Government have failed with regard to employee participation. If they genuinely believe in employee shareholding, why do they not also provide for employee directors to sit on the boards of the privatised industries? The percentage of shares that will be taken by employees will be so small as to have no impact on the future of the companies.

My final point is about Manchester airport. My hon. Friend the Member for Stretford (Mr. Lloyd) and the North of England Regional Consortium have made the case forcibly and concisely for Manchester and the other regional airports. Their comments were used yesterday, and so I will not refer to them today. Over many years, the Manchester authority has exercised foresight by making massive capital investments when it appeared that those investments would take some years to bear fruit. The forecasts were usually proved to be pessimistic, and the position rapidly moved into profit. The Bill, however, places grave limitations on Manchester airport's ability to spend capital in the future. Such restrictions will inhibit the growth of Manchester as a plc owned by the Manchester local authorities. I acknowledge what has been done in the past. We have a great airport with tremendous potential. I believe that, given sufficient freedom, it could develop.

My final point arises on all privatisation debates. The BAA will be privatised, and the Government will receive a capital sum. The Government have spoken about the BAA's record over many years. That record is extremely good, in spite of the shackles that the Government have imposed on publicly owned industries. The proceeds will be used once, and the income thrown away for year after year. Such assets should remain under public control, whether that of the BAA or of the municipal authorities, and we should encourage the growth of airports in that way, giving full encouragement to the development of our regional airports as well as the London airports.

6.23 pm
Mr. Bill Walker (Tayside, North)

I declare an interest as director of two aviation companies. I have also tried, throughout the passage of the Bill, to look after the Scottish interest as a Scottish Member on the Government Benches. I believe that some of my Scottish colleagues are, in their kindest thoughts, calling me "airport Bill". They often call me other things, and I much prefer "airport Bill".

The Bill will bring about substantial change. It is an interesting and exciting Bill, but, as the Government know, I still believe that there are some deficiencies in it. I put down amendments both in Committee and on Report. I believe that, in its present form, the Bill will not increase competition. I believe in competition. I know that the Government are wedded to competition. Sadly, if anyone imagines that the Bill in its present form will increase competition, that view must be based on hope rather than experience. By privatising the BAA, we are turning a public monopoly into a private one.

When I talk about the BAA, I can always feel the eyes of the BAA on the back of my neck. I do not dislike what the BAA has done. It has done well. I agree with my hon. Friend the Member for Southampton, Test (Mr. Hill). Under its terms and conditions and the rules under which it has operated, the BAA has done a very good job. However, I understood that the Government policy that was to be embodied in the Bill was to be that of improving competition, providing great opportunities for the investment of public funds, and encouraging more openness in the system. Such a policy will not he achieved. I understand the limitations facing the Government when they consider how to privatise the BAA. When attempting to privatise an organisation, one needs to have the support at least of the workers or the management. If, perhaps, the employees are hostile, one needs the support of the management. If both management and employees are hostile, a difficult job becomes almost impossible.

That is why, while I supported amendments for the break-up of the BAA, I recognised that in the end we would probably end up with something like the present Bill with seven companies being privatised under one overseeing company. I accepted that, but I was surprised that more was not done in the Bill to allow competition on the airports. Ministers have said that they wish to see such competition, but there is nothing in the Bill to encourage it, and experience in other fields suggests to me that it will not arise. The provisions in the Bill will not produce the result that the Government want.

Many questions remain unanswered. While the Bill was in Committee, I twice asked a question about the local authority airport plcs. The question was never properly answered. Under the arms-length arrangements that will exist after the Bill becomes an Act, the shareholders are the local authority. I asked who would be entitled to attend the annual general meetings. One of the pressure points on any plc is what happens at the AGM. It is necessary to set everything in order so that one can tell the shareholders at the AGM, "Look how good we are." As I understand it, the meetings will be attended by the duly appointed elected councillors. The majority of them may be of the opinion that they should be doing something in a certain way because of their political point of view. They will be perfectly entitled to their views, but how will that affect the pressure that is supposed to be caused by the fact that the airport has become a plc? I wonder whether there will be any pressure, other than pressure to do exactly what the councillors want—which is what the directors may be required to do. That is another weakness in the Bill.

I approve of turning the local authority airports into plcs. I approve of making the BAA a plc. That is the right thing to do. I believe that the Bill will achieve many of the objectives that I would wish to see achieved in a new and enterprising British airports system. That system would include the new BAA plc. In Scotland, there would be the civil aviation airports. Those eight airports would also be operating as a separate plc, as the Bill stands. However, there is nothing in the Bill to suggest that they, the local authority plcs or the BAA will become involved in any competition on the airports themselves. The Bill will not lead to competition. That will be a weakness. We will not achieve what the Government set out to achieve. Notwithstanding that, there is much good in the Bill.

My right hon. Friend the Secretary of State was right to consider in the Bill the problems of traffic distribution. The Bill will deal wisely and sensibly with such matters. Some members of the Committee had doubts about that and tabled amendments to improve the operation of the mechanism. There is no doubt that the Bill retains the present voluntary arrangements which my right hon. Friend mentioned earlier. The scheduling committees will continue until such time as they are unable to resolve the problems. When that time comes, there will be a mechanism to deal with the problem. That is clearly laid out in the Bill. I hope that it will never be used. I hope that the scheduling committees will continue, for the foreseeable future, to continue to make decisions on slots and allocations, because that is the best way to do it.

I welcome that part of the Bill which encourages employee shareholding and my right hon. Friend's comment that a British Telecom-type shareholding will be encouraged for BAA employees. That is a good thing. I wonder whether the Bill as it stands is equipped to encourage the necessary expansion to meet the demands that we expect at Heathrow and Gatwick.

I also welcome, although with minor qualifications, the fact that, once the airports become plcs and the separate companies are set up, the accounts will show clearly how, for example, the Scottish civilian airports are subsidised—they are properly subsidised—and by how much. I welcome that, because those of us in Scotland who care dearly about the infrastructure wish the money to be used sensibly and wisely. I welcome the fact that the accounts will show how Prestwick is operating and how Glasgow, Edinburgh and Aberdeen airports are progressing. I also welcome the fact that we shall see clearly that there will be no transfer of funds from the three airports in the London system for the assistance of Stansted. The treatment of capital expenditure and investment in the new plcs is a big improvement. At present, the treatment of the British Airports Authority's accounts differs from the treatment of revenue and capital in plcs, so the change will benefit the BAA.

In general, the Bill follows the lines that I would have wished. I am unhappy with some parts, but in general the Bill does what I believe should be done. I give it a qualified welcome.

6.33 pm
Mr. Robert Litherland (Manchester, Central)

Having been a member of the Standing Committee that considered the Bill, I witnessed the tremendously rough passage that it received. The Government were defeated twice, and on another occasion only the Chairman's casting vote saved them. To add insult to injury, the three amendments were tabled by Conservative Back-Bench Members of a Committee that was supposed to consist of future Ministers. Many parliamentary private secretaries were present. It is always in the Government's interests if Back Bench Members do not speak, but the Hansard reports of the Committee show that the Government Back-Bench Members were extremely vocal.

One issue on which Conservative Members were vocal was consultation. The first thing that the Committee did was to put right the oversight of the Secretary of State to pay tribute to the BAA workers. We said that they were the finest workers in the world and that they should be given credit for the success of the company. At the same time, we said that there should be proper and meaningful consultation. We asked the Secretary of State to table on Report an amendment to correct the lack of consultation, but nothing happened.

The BAA workers visited the House yesterday, expressed their anxiety about their future and queried what was in store for them in terms of job security and pensions. They are worried that a change of ownership might be detrimental to their well-being and that of their families. We fear that the workers will be faced with a fait accompli and that their anxieties will not be alleviated.

During the debate on consultation, the hon. Member for Tayside, North (Mr. Walker) said: Nothing that I have said suggests that people investing their time and skills is not an investment. Of course, it is an investment. I believe that the greatest asset any organisation has is the people who work for it. We often confuse what companies and organisations do with the people who work for them. Those people are what really matters. I believe that that is what is behind the amendment."—[Official Report, Standing Committee J, 6 February 1986; c. 13.] But the workers are still terribly confused.

Last night, there was another rebellion by more than 30 Conservative Back-Bench Members about Stansted's becoming a free-standing airport. That rebellion should show the Government and the Secretary of State that they have got it wrong. They cobbled the Bill together and even after amendments it remains cobbled. Nothing has changed. The Government Back-Bench Members were not convinced in Committee, nor were they convinced last night.

In his reply to the debate last night, the Secretary of State gave excuses rather than good reasons, and his efforts to suggest that Stansted would not receive a hidden, large and unfair subsidy came across in the pathetic lame excuse that Manchester had outstripped Stansted in its development in recent years and that the Government had assisted Manchester in its progress. If that is the case, why was Stansted given the go-ahead for a rail link while Manchester is still waiting for one? If the Government intend Manchester airport to grow, it should have been given the link long ago.

The Government are in another quandary as to how to tackle the problems of Manchester airport. The Secretary of State agreed that, if all the 10 district authorities could agree, they could set up a public limited company. After receiving legal advice on company procedure, they have now set up a legitimate company and have embarrassed the Government. They have taken the Secretary of State at his word.

The Guardian quoted the Under-Secretary of State as saying:

Local authority airports would be compelled to transfer their airport operations into public limited companies and sell shares to the public at the earliest opportunity. But if local authorities kept a 51 per cent, stake in their airports, the Government would retain a powerful influence over their affairs through existing controls over local authority spending. I hope that when the Under-Secretary replies he will tell us Manchester's position. The council now has 100 per cent, of the shares. Manchester city has 55 per cent. and the districts have 5 per cent. of the shares each. How can a company be brought back under local government restraints when it will have been borrowing from the private market for a number of months? So far the Under-Secretary has not answered that question. Even now he has not listened to one word that I have said. He is having a conversation. He wants only 10 minutes to reply and to answer that question would take much longer. I have been asking the hon. Gentleman questions now for the past five minutes and he has not heard a word that I have said.

Mr. Michael Spicer

I heard.

Mr. Litherland

I thank the hon. Gentleman very much indeed.

A directive from the Department of the Environment's consultation document said that it was open to authorities to establish wholly or partly owned limited companies. Under the present system capital expenditure by such a company does not count as prescribed expenditure by the authority that controls it, but contributions of a capital nature to the company by the authority do count. Moreover, such companies have freedom, subject to their articles of association, to borrow from the financial markets. We believe that Manchester now has those articles and can borrow from the private market, so how can the Government possibly bring it back under the contraints of local authority finance?

The practical differences between the two types of companies in the Bill are significant and have never been understood by the Government. I am waiting for the Under-Secretary of State's reply to see whether, at last, he has understood what the argument is about. That is why we thought there was hybridity in the Bill. Manchester airport is set up as something entirely different. Manchester international airport no longer exists and a new company has been set up that can borrow from the private market. How can the Government once again bring it under the constraints of a local authority?

6.42 pm
Mr. Alan Haselhurst (Saffron Walden)

I apologise to you, Mr. Speaker, and to the House, for not having been here for the resumption of the debate this afternoon. Unlike my hon. Friend the Member for Tayside, North (Mr. Walker) who was once delayed by an aeroplane, I was delayed by a British Rail train that was not getting there. That explains my late arrival in the House this afternoon.

In some ways the Airports Bill is a Bill of opportunity and lost opportunity. It is an opportunity to put some of our airports on a sounder business footing, and that I welcome. It is perhaps a lost opportunity to put them on a sounder competitive footing. We have fought for that argument. It may be taken up in another place. It was a real and viable argument and I hope that the arguments that were put that did not gain a majority will, nevertheless, be found with hindsight to have been the more compelling.

The Bill is an opportunity to privatise and to put at arm's length from the Government the operation of our airports, and that I welcome. Yet it seems that what the Government have thrust away from themselves with one hand they have been inclined to bind to themselves with the other with the panoply of controls which the Bill enables them to have.

Nevertheless, I speak at this stage of the Bill's proceedings in a slightly more conciliatory spirit than the hon. Member for Manchester, Central (Mr. Litherland), because I generally support the Bill. I welcome the fact that the Government have tightened the provisions to guard against the cross-subsidy factor which has been of such great concern. I am grateful to the Government for particularising the weapon of control of air traffic movements to Stansted which is, effectively, what has been done.

That is not only in the interests of those of my constituents who have been concerned about the possible future extension of Stansted, but it recognises the concerns of the aviation industry as to how such a power might at some future time be used.

I am not sure whether the Bill fully reflects all the interests of the airline as customers of the airports, but enough has been said on that for good sense to prevail and one hopes that working relationships will respect the interests that the airlines have in the use of our airports and that we might see a constructive relationship in the future which does not have some of the difficulties that have attended those relationships in the past.

I cannot help thinking that no part of my constituency could have had greater attention throughout the Bill's proceedings than the airport at Stansted, which is close to the village of Stansted Mountfitchet. It would be surprising if any part of my constituency gets such particular attention again, unless, of course, the Government were to propose to dispose of nuclear waste in the region—heaven forbid.

I bear no rancour over the development of Stansted airport. I wish it success, if modest success. I trust that no one will misunderstand that. I have never been opposed to the development of Stansted. I happen to have a view that a more limited development is the right thing for the industry and for the neighbourhood in which that airport is situated. I continue to hope that we shall be able to achieve in practice over the years the sort of compromise with which everyone can live.

I harbour no ill will to the BAA whose opponent I have had to be at various stages of the Bill. It has misunderstood my motives as it doubtless thinks that I have misunderstood its. However, throughout the Bill's proceedings the argument has been solely about what is best for the British aviation industry and for the best operation of British airports. It is my desire to work with the BAA in my constituency, as I would work with any other employer or supplier of services therein. I am grateful for the cordial relationship with the director of Stansted airport, Allan Munds, who is trying to set relationships in the area on a better footing than perhaps they have been in the past.

I am still inclined to wonder what may flow from the Bill. It will not be the final word on the pattern of Britain's airports. Allusion has already been made to Heathrow. One of the falsest trails that has been set throughout the airports debate has been the question of the competitive position of London, as though that required the full expansion of three airports. Hon. Members on both sides of the House have had to say time and time again that the nub of the argument is whether Heathrow can be made to be the sharpest competitive force against the foreign airport systems. That is what it is all about, and it will come to that in the end. One hopes that nothing in the Bill will preclude the possibility of the maximisation of facilities at Heathrow.

The Government have had difficulty in picking a way through British airports policy. It has pleased the Government to obtain a development at Stansted in the first place. It has pleased the Government to say that the limitation at Heathrow is the runway capacity. I shall not go into those arguments now, but they will not go away. We shall have to turn back to them at some stage. We must ensure that Heathrow, together with the other airports, are all a success in the name of Britain.

I hope for the best for British civil aviation and it is because I do so that I hope for the best from the Bill, and I shall certainly support it in the Lobbies tonight.

6.49 pm
Mr. Roger King (Birmingham, Northfield)

In the three years that I have had the pleasure of being a Member of the House, I seem to have involved myself, by dint of serving on the Select Committee on Transport, with the future of airports. Indeed, that Committee for nearly 12 months discussed the future structure of British airports. I was privileged to take part in those discussions and to compare the running of airports not just in this country but in other parts of the world. Although the Bill does not outline what I would have liked as the preferred solution, I think that it goes a long way to improving the potential of our airports system to compete with the systems in Europe.

I felt that privatised British airports, with Gatwick as a separate undertaking, might be a preferred solution for the London area. None the less, given the criticisms and problems that a separate Gatwick might well have raised, I am happy to accept the Bill as it stands and the controls introduced therein. Never has an undertaking had so many restrictions put on it to ensure as much fair play as possible in the future privatised system.

I mentioned that I was interested in airports. Indeed, airport security is a matter under discussion in the Select Committee. Although our national and international airports are considered to be gateway airports to the world, it must be remembered that they are also gateway airports into this country. I hope that when we publish our findings we shall endeavour to point out the risks of having too much open security visible to everybody, because of the danger of deterring people from coming to this country.

In the course of debates in Committee, many points were raised by hon. Members on both sides. My hon. Friend the Member for Meriden (Mr. Mills) and I had the pleasure of highlighting the problems of Birmingham which I wish now to repeat. My right hon. Friend the Secretary of State was very generous when he summed up our concern about Birmingham airport's £30 million debt as a result of expansion. He was kind enough to say that he would be very flexible about the establishment of a debt-equity ratio. He said:

It is important to find a solution for each airport to suit its financial circumstances. We shall be as helpful as we can in arranging a debt-equity ratio for Birmingham that will be as advantageous as possible."—[Official Report, Standing Committee J, 6 March 1986; c. 454.]

I hope that we can hold him to his word and that Birmingham can prosper as a public limited company, which I am sure it will be.

6.52 pm
The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer)

I suspect the House will not wish me to prolong this debate much further. The debates we have had on this Bill on Second Reading, during 19 sittings of the Standing Committee and until the early hours of this morning on Report have been detailed and at times complex and highly technical. Many of those right hon. and hon. Members who have contributed to the debates have been extremely knowledgeable about the subjects that they discussed, and Ministers have had to be pretty agile just to keep up with them.

Several of my hon. Friends have displayed not only the depths of their knowledge on the subject of aviation but the intensity of their passion in battling for constituency and other causes that they have espoused. Some have taken a last bow, at least for the time being, on the Bill today—my hon. Friends the Members for Saffron Walden (Mr. Haselhurst), for Hayes and Harlington (Mr. Dicks), for Tayside, North (Mr. Walker) and for Birmingham, Northfield (Mr. King), to name but four—and there have been new arrivals in the form of my hon. Friends the Members for Southampton, Test (Mr. Hill) and for Luton, North (Mr. Carlisle). Their contributions have been most welcome.

I can tell the House that the results of those efforts by my hon. Friends have manifested themselves in amendment, and, indeed, improvement of the Bill. My hon. Friend the Member for Saffron Walden was generous enough to mention one of them, although it has to be said that some of my hon. Friends will say that the process has not gone far enough. In doing so, they may themselves underestimate the impact that they have made.

I shall deal briefly with one or two specific points that were raised. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) and his hon. Friend the Member for Stretford (Mr. Lloyd) claimed that we were carrying our some sort of vendetta against Manchester, and that all the licences were despite us rather than because of us. They mentioned, in particular, the question of Singapore Airlines. The formal request of the Singapore Government for access to Manchester was not received until mid-March 1985. Official consultations were held at the beginning of May, at which agreement was reached for the services to start on 1 April 1986. That additional time was needed for the company to make local arrangements and decide on the routeing for its new services. I hope that hon. Members will spend as much time lobbying foreign Governments to let in our airlines as they claim to lobby on behalf of foreign airlines to allow them to come into our airports.

I have two things to say to my hon. Friend the Member for Luton, North. We will be flexible about the debt-equity ratios at airports, but perhaps I might write to him on what would be a complex matter to cover tonight. Councillors who are directors will be able to discuss airport matters but not to vote on specific matters concerning contracts, which seems to be a reasonable compromise.

The Bill that the House now has before it opens the way to the privatisation of Britain's major airports. As such it is a further manifestation of what this Government mean by full and genuine public ownership—the possession of shares and rights in public companies by employees and by the greatest possible number of individual members of the public.

The airports over which the Government currently have direct control and ownership and which they therefore have the right to sell to the public are the seven British Airports Authority airports. Those we shall sell as separate companies under one holding company,. In selling these companies, we shall use every marketing method that we can to help us to reach the widest public.

We are confident that the owners of the 16 local authority airports covered by the terms of the Bill will increasingly see the benefits of introducing private capital. Finance for development, employee participation, management incentives and, if over 51 per cent. of the shares are sold, loss of public sector capital controls are four benefits which spring immediately to mind. Indeed, the hon. Member for Aberdeen, North (Mr. Hughes) raised that specific point. He wondered whether it was unfair that, while they remained in the public sector, they should have those controls. We do not accept that. They have the public sector guarantee behind them, which distinguishes them in the public sector. If they come out of the public sector, they will reap the benefits of privatisation.

Concern has been expressed about the controls once the airports are in the private sector. I give the House the assurance once more that economic and anti-monopolistic regulation will ensure that the new public airport companies do not act anti-competitively and against the public interest.

We have also taken or retained powers to protect the interests of the state in matters of security with respect to the impact made by the operations of the airports on the environment. On the latter point, I would say to the House that we totally accept that a Government as successful as this Government have been in pursuing the interests of aviation—to the point where our international airports are the busiest in the world, where Manchester airport alone is one of the largest in Europe and where our airlines are collectively the most successful outside the United States—a Government with these achievements to their credit, are bound to be highly sensitive to the environmental impact of this growth and success.

That explains in large measure why, at those airports where we have taken direct powers over noise abatement, we are engaged in major reviews of aircraft track keeping, monitoring methods, noise abatement procedures, night restrictions, noise insulation policies and also the noise indices that were mentioned by my hon. Friend the Member for Twickenham (Mr. Jessel). Should the need arise, we shall be able to extend those powers to any airport.

This Airports Bill, to which I now ask the House to give a Third Reading, will, I am sure, prove to be a historic milestone for this country. The privatisation of utilities, such as major airports, will be no mean feat. It would seem that we are now to be followed by other countries, notably the United States of America.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 303, Noes 138.

Division No. 130] [7 pm
AYES
Adley, Robert Bendall, Vivian
Aitken, Jonathan Bennett, Rt Hon Sir Frederic
Alexander, Richard Benyon, William
Alison, Rt Hon Michael Best, Keith
Amess, David Bevan, David Gilroy
Ancram, Michael Biffen, Rt Hon John
Arnold, Tom Biggs-Davison, Sir John
Ashby, David Blackburn, John
Aspinwall, Jack Blaker, Rt Hon Sir Peter
Atkins, Rt Hon Sir H. Body, Sir Richard
Atkins, Robert (South Ribble) Boscawen, Hon Robert
Atkinson, David (B'm'th E) Bottomley, Peter
Baker, Rt Hon K. (Mole Vall'y) Bottomley, Mrs Virginia
Baker, Nicholas (Dorset N) Bowden, A. (Brighton K'to'n)
Baldry, Tony Bowden, Gerald (Dulwich)
Batiste, Spencer Braine, Rt Hon Sir Bernard
Bellingham, Henry Brandon-Bravo, Martin
Brinton, Tim Hawkins, C. (High Peak)
Brittan, Rt Hon Leon Hawksley, Warren
Brooke, Hon Peter Hayes, J.
Browne, John Hayhoe, Rt Hon Barney
Bruinvels, Peter Heathcoat-Amory, David
Bryan, Sir Paul Heddle, John
Buck, Sir Antony Henderson, Barry
Burt, Alistair Heseltine, Rt Hon Michael
Butler, Rt Hon Sir Adam Higgins, Rt Hon Terence L.
Butterfill, John Hill, James
Carlisle, John (Luton N) Hind, Kenneth
Carlisle, Rt Hon M. (W'ton S) Hogg, Hon Douglas (Gr'th'm)
Carttiss, Michael Holland, Sir Philip (Gedling)
Cash, William Holt, Richard
Chalker, Mrs Lynda Hordern, Sir Peter
Chapman, Sydney Howard, Michael
Chope, Christopher Howarth, Alan (Stratf'd-on-A)
Churchill, W. S. Howarth, Gerald (Cannock)
Clark, Hon A. (Plym'th S'n) Howell, Rt Hon D. (G'ldford)
Clark, Sir W. (Croydon S) Howell, Ralph (Norfolk, N)
Clarke, Rt Hon K. (Rushcliffe) Hubbard-Miles, Peter
Cockeram, Eric Hunter, Andrew
Colvin, Michael Irving, Charles
Conway, Derek Jenkin, Rt Hon Patrick
Coombs, Simon Jessel, Toby
Cope, John Jones, Gwilym (Cardiff N)
Couchman, James Jopling, Rt Hon Michael
Currie, Mrs Edwina Joseph, Rt Hon Sir Keith
Dickens, Geoffrey Kellett-Bowman, Mrs Elaine
Dicks, Terry Key, Robert
Dorrell, Stephen King, Roger (B'ham N'field)
Dover, Den King, Rt Hon Tom
du Cann, Rt Hon Sir Edward Knight, Greg (Derby N)
Dunn, Robert Knight, Dame Jill (Edgbaston)
Durant, Tony Knowles, Michael
Dykes, Hugh Lamont, Norman
Eggar, Tim Lang, Ian
Emery, Sir Peter Lawler, Geoffrey
Eyre, Sir Reginald Lee, John (Pendle)
Fairbairn, Nicholas Leigh, Edward (Gainsbor'gh)
Fallon, Michael Lennox-Boyd, Hon Mark
Farr, Sir John Lewis, Sir Kenneth (Stamf'd)
Favell, Anthony Lightbown, David
Fenner, Mrs Peggy Lilley, Peter
Finsberg, Sir Geoffrey Lloyd, Peter (Fareham)
Fletcher, Alexander Lord, Michael
Fookes, Miss Janet Luce, Rt Hon Richard
Forman, Nigel Lyell, Nicholas
Forth, Eric McCrindle, Robert
Fowler, Rt Hon Norman McCurley, Mrs Anna
Fox, Marcus Macfarlane, Neil
Franks, Cecil MacKay, Andrew (Berkshire)
Fraser, Peter (Angus East) MacKay, John (Argyll & Bute)
Freeman, Roger McNair-Wilson, M. (N'bury)
Fry, Peter McNair-Wilson, P. (New F'st)
Galley, Roy Madel, David
Gardiner, George (Reigate) Major, John
Gardner, Sir Edward (Fylde) Malins, Humfrey
Garel-Jones, Tristan Malone, Gerald
Gilmour, Rt Hon Sir Ian Maples, John
Goodlad, Alastair Marland, Paul
Gow, Ian Mates, Michael
Gower, Sir Raymond Maude, Hon Francis
Grant, Sir Anthony Mawhinney, Dr Brian
Greenway, Harry Mayhew, Sir Patrick
Gregory, Conal Mellor, David
Griffiths, Sir Eldon Merchant, Piers
Griffiths, Peter (Portsm'th N) Meyer, Sir Anthony
Grist, Ian Miller, Hal (B'grove)
Ground, Patrick Mills, Iain (Meriden)
Grylls, Michael Mitchell, David (Hants NW)
Gummer, Rt Hon John S Moate, Roger
Hamilton, Neil (Tatton) Monro, Sir Hector
Hampson, Dr Keith Montgomery, Sir Fergus
Hanley, Jeremy Moore, Rt Hon John
Hannam, John Morris, M. (N'hampton S)
Hargreaves, Kenneth Morrison, Hon C. (Devizes)
Harris, David Moynihan, Hon C.
Haselhurst, Alan Mudd, David
Havers, Rt Hon Sir Michael Neale, Gerrard
Nelson, Anthony Stanley, Rt Hon John
Neubert, Michael Stern, Michael
Newton, Tony Stevens, Lewis (Nuneaton)
Nicholls, Patrick Stewart, Allan (Eastwood)
Onslow, Cranley Stewart, Andrew (Sherwood)
Oppenheim, Phillip Stewart, Ian (Hertf'dshire N)
Oppenheim, Rt Hon Mrs S. Stradling Thomas, Sir John
Osborn, Sir John Sumberg, David
Ottaway, Richard Tapsell, Sir Peter
Page, Richard (Herts SW) Taylor, John (Solihull)
Parris, Matthew Taylor, Teddy (S'end E)
Patten, J. (Oxf W & Abgdn) Tebbit, Rt Hon Norman
Pattie, Geoffrey Temple-Morris, Peter
Pawsey, James Terlezki, Stefan
Peacock, Mrs Elizabeth Thatcher, Rt Hon Mrs M.
Percival, Rt Hon Sir Ian Thompson, Donald (Calder V)
Pollock, Alexander Thompson, Patrick (N'ich N)
Portillo, Michael Thorne, Neil (Ilford S)
Powell, William (Corby) Thornton, Malcolm
Powley, John Thurnham, Peter
Prentice, Rt Hon Reg Townend, John (Bridlington)
Price, Sir David Townsend, Cyril D. (B'heath)
Prior, Rt Hon James Tracey, Richard
Pym, Rt Hon Francis Trippier, David
Raffan, Keith Trotter, Neville
Rathbone, Tim Twinn, Dr Ian
Rees, Rt Hon Peter (Dover) van Straubenzee, Sir W.
Renton, Tim Vaughan, Sir Gerard
Rhys Williams, Sir Brandon Viggers, Peter
Ridley, Rt Hon Nicholas Waddington, David
Rifkind, Rt Hon Malcolm Wakeham, Rt Hon John
Robinson, Mark (N'port W) Waldegrave, Hon William
Roe, Mrs Marion Walden, George
Rossi, Sir Hugh Walker, Bill (T'side N)
Rowe, Andrew Wall, Sir Patrick
Ryder, Richard Waller, Gary
Sackville, Hon Thomas Walters, Dennis
Sainsbury, Hon Timothy Ward, John
St. John-Stevas, Rt Hon N. Wardle, C. (Bexhill)
Scott, Nicholas Warren, Kenneth
Shaw, Giles (Pudsey) Watts, John
Shaw, Sir Michael (Scarb') Wells, Sir John (Maidstone)
Shelton, William (Streatham) Wheeler, John
Shepherd, Colin (Hereford) Whitfield, John
Shepherd, Richard (Aldridge) Whitney, Raymond
Shersby, Michael Wiggin, Jerry
Silvester, Fred Wilkinson, John
Sims, Roger Wolfson, Mark
Skeet, Sir Trevor Wood, Timothy
Smith, Sir Dudley (Warwick) Woodcock, Michael
Smith, Tim (Beaconsfield) Yeo, Tim
Speed, Keith Young, Sir George (Acton)
Spencer, Derek
Spicer, Jim (Dorset W) Tellers for the Ayes:
Spicer, Michael (S Worcs) Mr. Carol Mather and
Squire, Robin Mr. Archie Hamilton.
Stanbrook, Ivor
NOES
Adams, Allen (Paisley N) Bidwell, Sydney
Alton, David Blair, Anthony
Ashley, Rt Hon Jack Boyes, Roland
Atkinson, N. (Tottenham) Bray, Dr Jeremy
Bagier, Gordon A. T. Brown, Gordon (D'f'mline E)
Barnett, Guy Brown, Hugh D. (Provan)
Bennett, A. (Dent'n & Red'sh) Brown, N. (N'c'tle-u-Tyne E)
Bermingham, Gerald Brown, R. (N'c'tle-u-Tyne N)
Brown, Ron (E'burgh, Leith) Lewis, Terence (Worsley)
Callaghan, Rt Hon J. Litherland, Robert
Callaghan, Jim (Heyw'd & M) Livsey, Richard
Campbell-Savours, Dale Lloyd, Tony (Stretford)
Carlile, Alexander (Montg'y) Loyden, Edward
Carter-Jones, Lewis McCartney, Hugh
Cartwright, John McKay, Allen (Penistone)
Clarke, Thomas McKelvey, William
Clay, Robert McNamara, Kevin
Clwyd, Mrs Ann McTaggart, Robert
Cocks, Rt Hon M. (Bristol S) Madden, Max
Cohen, Harry Marek, Dr John
Cook, Frank (Stockton North) Marshall, David (Shettleston)
Cook, Robin F. (Livingston) Martin, Michael
Corbyn, Jeremy Mason, Rt Hon Roy
Craigen, J. M. Maxton, John
Cunningham, Dr John Maynard, Miss Joan
Dalyell, Tam Meacher, Michael
Davies, Ronald (Caerphilly) Meadowcroft, Michael
Deakins, Eric Michie, William
Dewar, Donald Mikardo, Ian
Dixon, Donald Millan, Rt Hon Bruce
Dormand, Jack Miller, Dr M. S. (E Kilbride)
Duffy, A. E. P. Mitchell, Austin (G't Grimsby)
Eastham, Ken Morris, Rt Hon A. (W'shawe)
Edwards, Bob (W'h'mpt'n SE) Morris, Rt Hon J. (Aberavon)
Ewing, Harry Nellist, David
Fatchett, Derek Oakes, Rt Hon Gordon
Faulds, Andrew O'Neill, Martin
Field, Frank (Birkenhead) Owen, Rt Hon Dr David
Fields, T. (L'pool Broad Gn) Park, George
Fisher, Mark Parry, Robert
Flannery, Martin Patchett, Terry
Foot, Rt Hon Michael Pavitt, Laurie
Forrester, John Penhaligon, David
Foster, Derek Pike, Peter
Foulkes, George Powell, Raymond (Ogmore)
Freeson, Rt Hon Reginald Redmond, Martin
Garrett, W. E. Richardson, Ms Jo
Gilbert, Rt Hon Dr John Roberts, Allan (Bootle)
Godman, Dr Norman Robertson, George
Golding, John Ross, Ernest (Dundee W)
Hamilton, James (M'well N) Sedgemore, Brian
Hamilton, W. W. (Fife Central) Shore, Rt Hon Peter
Harrison, Rt Hon Walter Short, Ms Clare (Ladywood)
Hart, Rt Hon Dame Judith Silkin, Rt Hon J.
Hattersley, Rt Hon Roy Skinner, Dennis
Haynes, Frank Smith, Rt Hon J. (M'ds E)
Healey, Rt Hon Denis Stott, Roger
Home Robertson, John Thomas, Dafydd (Merioneth)
Howells, Geraint Thompson, J. (Wansbeck)
Hughes, Dr Mark (Durham) Tinn, James
Hughes, Robert (Aberdeen N) Torney, Tom
Hughes, Roy (Newport East) Wallace, James
Hughes, Sean (Knowsley S) Wardell, Gareth (Gower)
Jenkins, Rt Hon Roy (Hillh'd) Weetch, Ken
John, Brynmor Wigley, Dafydd
Kaufman, Rt Hon Gerald Wilson, Gordon
Kennedy, Charles Young, David (Bolton SE)
Kilroy-Silk, Robert
Kirkwood, Archy Tellers for the Noes:
Lambie, David Mr. Norman Hogg and
Lamond, James Mr. John McWilliam.

Question accordingly agreed to.

Bill read the Third time, and passed.