TRANSFER TO BE TO COMPANY OWNED BY CROWN

HC Deb 09 May 2000 vol 349 cc669-719

'.—(1) Any property, rights or liabilities shall only be transferred under a transfer scheme to a company which—

1. (a) has been formed and registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986; and
2. (b) is wholly owned by the Crown.

(2) For the purposes of this Part a company shall only be regarded as wholly owned by the Crown if each of the issued shares of the company is held by—

1. (a) the Treasury,
2. (b) the Secretary of State, or
3. (c) the nominee of a person falling within paragraph (a) or (b).

(3) A company to which any property, rights or liabilities have been transferred under a transfer scheme shall not issue any shares or share rights unless such shares or share rights are issued to the Treasury, the Secretary of State or a nominee of either of them.

(4) Subject to subsection (5), neither the Treasury, the Secretary of State nor a nominee of either of them shall dispose of any shares or share rights in a company to which any property, rights or liabilities have been transferred under a transfer scheme.

(5) Subsection (4) does not apply to any disposal by the Treasury, the Secretary of State or a nominee or either of them to any other such person.'.—[Mrs. Dunwoody.]

Brought up, and read the First time.

4.47 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Alan Haselhurst)

With this it will be convenient to discuss the following: New clause 36—Transfer to be to not for profit company— '.—(1) Any property, rights or liabilities shall only be transferred under a transfer scheme to a not for profit company. (2) The transfer of property, rights or liabilities under a transfer scheme may be by such means, including sale or lease, and on such terms as the Secretary of State, with the approval of the Treasury, may determine. (3) A transfer scheme shall not come into force unless a draft of the scheme has been laid before and approved by resolution of each House of Parliament. (4) A not for profit company to which any property, rights or liabilities have been transferred under a transfer scheme shall not—

1. (a) issue any shares or share rights; or
2. (b) pay any dividend or profits to its members.

(5) For purposes of this Part, "not for profit company" means a company—

1. (a) which has been formed and registered as a company limited by guarantee under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986; and
2. (b) the membership of which, in the opinion of the Secretary of State includes those who are representative of providers, employees and users of aviation, air travel, air navigation and related services.'.

New clause 37—Parliamentary approval of transfer scheme— '.—(1) A transfer scheme made by the CAA or the Secretary of State shall not come into force unless it has been approved by a resolution of each House of Parliament passed on a motion moved by or on behalf of the Secretary of State. (2) No such motion shall be moved by or on behalf of the Secretary of State unless at least seven days before the date on which the motion is to be debated by either House of Parliament he has caused a report to be laid before both Houses which—

1. (a) sets out the progress which has been made in respect of any project for the development of facilities connected with national air traffic services which was commissioned by the transferor before the date on which this Act received Royal Assent; and
2. (b) confirms that the Treasury have given their consent to the proposed transfer.'.

New clause 26—Disposal of shareholding in designated company— '(1) The Secretary of State shall procure the disposal of at least 51 per cent. of the shares in the designated company referred to in section 49 by way of an offer to the public of such shares and shall secure acceptance for an application for admission to the Official List (within the meaning of Part IV of the Financial Services Act 1986) in respect of such shares. (2) The terms on which such shares are offered to the public, as to price and otherwise, shall be such as the Secretary of State considers appropriate for the purposes of—

1. (a) securing the best price reasonably obtainable for those shares;
2. (b) securing widespread ownership of such shares by individual members of the public as well as institutions.

(3) Any transfer or issue of a share or shares pursuant to such offer or any subsequent transfer or issue of a share or shares in the company in question shall have no legal effect (and in particular the transferee or allottee of such share or shares shall not be registered as a member of the company or exercise any rights in respect of such share or shares) if such transfer or issue would result in the legal or beneficial ownership of a majority of shares carrying voting rights in, or control of, the company passing to a person who is not a British citizen. (4) For the purposes of subsection (3)—

1. (a) a company shall be deemed to be controlled by a person or persons who singly or together have the right to appoint or remove a majority of the company's board of directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters or if it is deemed to be controlled for the purposes of section 840 of the Income and Corporation Taxes Act 1988;
2. (b) a company shall be deemed to be controlled by a person if it is controlled by a company or companies controlled by such a person.

(5) The Secretary of State shall give to any such company as is referred to in section 48(1) above whatever directions may be necessary for implementing the provisions of this section. (6) The Secretary of State shall only take action under this section or section 49 or exercise any power in respect of the transfer or issue of shares in such company as referred to in section 48(1) if he has first obtained the agreement by resolution of both Houses of Parliament.'. Amendment No. 421, in clause 40, page 26, line 5, leave out from "which" to end of line 24 and insert— 'contains provisions for the transfer of—

1. (a) any of the CAA's property, rights or liabilities or of all or part of its undertaking; or
2. (b) the property, rights or liabilities of a company (the transferor) which is wholly owned by the CAA or all or part of the transferor's undertaking;

to a company which is wholly owned by the Crown.'. Amendment No. 438, in clause 42, page 27, line 30, leave out from "unless" to end of line 31 and insert— 'a draft of the scheme has been laid before and approved by resolution of each House of Parliament in accordance with section [Transfer to be to not for profit company].' Amendment No. 452, in page 27, line 32, after "that", insert— 'and to section [Parliamentary approval of transfer scheme].'. Amendment No. 439, in page 27, line 33, leave out from "force" to end of line 37.

Amendment No. 440, in page 27, line 40, at beginning insert— 'The Secretary of State may modify a scheme before it is laid in draft before Parliament and'. Amendment No. 422, in page 27, line 40,, leave out— 'or transferee (other than the Secretary of State)'. Amendment No. 441, in page 27, line 42, leave out "to approve and modify".

Amendment No. 453, in clause 43, page 28, line 12, at beginning insert— 'Subject to section [Parliamentary approval of transfer schemes],'. Amendment No. 442, in page 28, line 12, after "section", insert— 'shall not come into force unless a draft of the scheme has been laid before and approved by resolution of each House of Parliament in accordance with section [Transfer to be to not for profit company] but, subject to that requirement,'. Amendment No. 423, in clause 45, page 29, line 25, leave out from "scheme" to end of line 34.

Amendment No. 424, in clause 46, page 30, leave out lines 25 to 27.

Amendment No. 425, in page 31, line 1, leave out Clauses 47 to 49.

Amendment No. 454, in clause 49, page 32, line 9, at end insert— '(2A) The Secretary of State must ensure that the Crown does not dispose of any of the shares it holds in the designated company unless he is satisfied that a scheme is in place to ensure the completion of any project which—

1. (a) concerns the development of major facilities connected with air traffic services, and
2. (b) was commissioned before the coming into force of this section by the CAA or a company wholly owned by the CAA.'.

Amendment No. 397, in page 32, line 16, leave out subsection (4).

Amendment No. 455, in page 32, line 33, after "subsection", insert "(2A),".

Amendment No. 456, in page 32, line 35, after "subsection", insert "(2A),".

Amendment No. 396, in page 32, line 37, leave out subsection (9).

Amendment No. 426, in clause 50, page 32, line 39, leave out subsections (1) to (3) and insert— '(1) The Secretary of State, with the approval of the Treasury, may make loans of such amounts as he thinks fit to a company which is wholly owned by the Crown and to which any property rights or liabilities are transferred under a transfer scheme.' Amendment No. 444, in page 32, line 39, leave out subsections (1) to (3) and insert— '(1) The Secretary of State, with the approval of the Treasury, may make loans of such amounts as he thinks fit to a not for profit company to which any property rights or liabilities are transferred under a transfer scheme.'. Amendment No. 427, in clause 51, page 33, line 29, leave out subsections (1) to (3) and insert— '(1) The Secretary of State or the Treasury, may guarantee the discharge of any financial obligation of a company (the transferee) which is wholly owned by the Crown and to which any property rights are transferred under a transfer scheme.'. Amendment No. 445, in page 33, line 29, leave out subsections (1) to (3) and insert— '(1) The Secretary of State or the Treasury may guarantee the discharge of any financial obligation of a not for profit company to which any property rights or liabilities are transferred under a transfer scheme.'. Amendment No. 428, in page 33, line 43, leave out subsections (6).

Amendment No. 429, in clause 52, page 34, line 21, leave out subsections (1) to (3) and insert— '(1) The Secretary of State, with the approval of the Treasury, may make grants towards the expenditure of a company which is wholly owned by the Crown and to which any property rights or liabilities are transferred under a transfer scheme.'. Amendment No. 446, in page 34, line 21, leave out subsections (1) to (3) and insert— '(1) The Secretary of State, with the approval of the Treasury, may make grants towards the expenditure of a not for profit company to which any property rights or liabilities are transferred under a transfer scheme.'. Amendment No. 430, in page 34, line 37, leave out subsection (6).

Amendment No. 431, in page 34, line 40, leave out Clause 53.

Amendment No. 447, in page 35, line 27, leave out Clause 54.

Amendment No. 432, in clause 54, page 35, line 27, leave out subsections (1) to (3) and insert— '(1) For the purposes of the provisions of the Companies Act 1985 listed in subsection (2) none of the persons listed in subsection (5) is to be regarded as a shadow director of a company which is wholly owned by the Crown and to which any property. rights or liabilities are transferred under a transfer scheme.'. Amendment No. 433, in page 36, line 8, leave out subsection (5) and insert— '(1) For the purposes of the provisions of the Companies (Northern Ireland) Order 1996 listed in subsection (4) none of the persons listed in subsection (5) is to be regarded as a shadow direction of a company which is wholly owned by the Crown and to which any property, rights or liabilities are transferred under a transfer scheme.'. Amendment No. 434, in page 36, line 27, leave out subsections (8) to (11).

Amendment No. 435, in clause 60, page 40, line 23, leave out "47, 48" and insert— '[Transfer to be to company owned by Crown]'. Amendment No. 448, in page 40, line 23, leave out "47, 48 or".

Amendment No. 436, in page 40, line 28, leave out "47" and insert— '[Transfer to be to company owned by Crown]'. Amendment No. 449, in page 40, line 28, leave out "47 or".

Amendment No. 437, in page 40, line 30, leave out lines 30 and 31.

Amendment No. 450, in clause 63, page 41, line 5, at end insert— '(dd) not for profit company'. Amendment No. 451, in page 41, line 13, at end insert— '(2A) "Not for profit company" has the meaning given in section [Transfer to be to not for profit company].'.

Mrs. Dunwoody

It is important to say at the outset that I have put my name to nearly all the new clauses and amendments, and I hope that the House will be able to decide on the implications of the various suggestions that have been made. I have made it clear that, personally, I do not approve of timetables. The decision about the management of National Air Traffic Services is so important and fundamental that I hope that we will have time to put all the vital points.

The new clause suggests one way in which the electorate as a whole can be absolutely certain that the most fundamental of our rights—the right to know that air safety is in the hands of those who understand and control it—is fully taken account of in legislation.

The Transport Sub-Committee appears to have become the villain of many of our debates. When it discussed this subject, which it did not once but on three separate occasions, it took account of the fact that there were several factors that made it clear that we could not continue with National Air Traffic Services in its current form. There was a need to change, but we thought that the suggestion that NATS should go out to the public market and find money should be examined in the context of its reorganisation.

After all, what does NATS do? It is a fully integrated service, not only providing flight information and weather services but fundamentally controlling the movement of aircraft in the airspace over the United Kingdom, in conjunction with the Ministry of Defence. Given that aircraft use is increasing at a rate of between 5 and 6 per cent. a year and a growing number of people are using increasingly congested air space, if we allow any slippage in the high standard of safety that we enjoy, we shall contribute to a potentially difficult situation.

The Select Committee felt that NATS should have the right to raise the money that was essential for its development and that it could best do that either as a publicly owned corporation or in the other ways that we suggested in our report. We did not feel that there was any suggestion that NATS was not capable of providing high-quality services. Not only are air traffic controllers highly trained and working under enormous pressure, but they are men and women of great expertise and they do not provide a service based on the interests of the shareholders of a particular company; their job is performed wholly on the basis of safety and they are responsible to the entire United Kingdom for the maintenance of high standards.

Having looked at various ways in which other countries across the world have reorganised their air traffic services, the Select Committee felt that the best way to ensure that those high levels of safety were maintained was to keep NATS either as a non-profit making company or, better still, as a publicly owned corporation. That has been made very clear.

It is not true that NATS is not able to act as an adviser or take consultancy work from other air traffic services elsewhere in the world. I received a written answer today which makes it clear that it is already doing precisely that. It is not true that, under the new system, NATS would be able to continue operating as it does now because of something called the golden share. I am afraid that the history of Government privatisations that relied on golden shares is not that Governments maliciously set out to change the conditions under which sales take place, but that, once a strategic partner is in control of the company, it can change the terms and conditions and the way in which the company works. Safety should not depend on a fiduciary duty not to the general public but to shareholders of a particular private company.

I recently attended a lecture where the representative of an airline made it clear what that airline's interests were in pursuing the sale of NATS, by saying to the air traffic controllers who were present, "You must remember that many of the decisions that we take have a direct impact on our commercial affairs and it is therefore essential to us that you are much more understanding of, and responsive to, the needs of individual airline companies." That was not said out of any malice aforethought, but it was a clear indication of the problem that a national air traffic services company would face.

It is important for us to understand that, unlike airports, which can open more shops or expand the services that they offer customers, or airlines which can change the way in which they operate or offer cheaper fares, NATS has one basic and vital function—to ensure safety. It exists to maintain the safety of aircraft in the skies and as they enter and leave our airports and to control air traffic from the continent and across the Atlantic. It exists to ensure that, when we get on any aircraft, we are certain that the men and women operating the movement of those aircraft are answerable only to those who maintain high safety standards and not to anyone seeking to make a profit out of their organisation.

I can give many instances of how the Committee looked at the details. I can answer many of the points that have been made. It is vital that the House asks itself why, before the previous election, the Labour party opposed the sale of NATS. Why did we say that our air was not for sale? It was not because it was an easy, cheap, propaganda point to attract voters but because we understood that, unlike almost any other service, this service is vital to the maintenance of safety and control in the skies over the United Kingdom.

I beg right hon. and hon. Members not to make the mistake of thinking that a simple company reorganisation will maintain the same standards in the future that we have had in the past. Whichever of the three new clauses—35, 36 or 37—right hon. and hon. Members vote on tonight, I ask them to remember that they do so on behalf of every person in the country and, above all, that they do so for the right of the citizens of the United Kingdom to be safe for every moment that they are in the sky.

Mr. Don Foster (Bath)

Many right hon. and hon. Members wish to speak. I am delighted to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) and, like her, I will be brief.

The hon. Lady makes it clear that the matter must be decided by the House as a whole. She will recall that, on Second Reading, a number of Labour Members brought forward a reasoned amendment in opposition to the Government's proposals. Unfortunately, at that time, they did not believe it appropriate to move the amendment. It was in fact moved by Conservative Members, and was voted upon—[Interruption.]

Mr. Deputy Speaker

I am sorry to interrupt the hon. Gentleman, but there is some device here which is making a noise. Can it please be silenced as quickly as possible? Madam Speaker has made it absolutely clear that this is quite improper. [Interruption.] I think that I have seen the source of it.

Mr. Foster

Before that brief interruption, I was saying that there was an opportunity to vote on the issue on Second Reading. The opportunity was not taken then, and we have it again today.

What I believe unites Members on both sides of the House is the wish to see changes in the arrangements for National Air Traffic Services. First, I think that everyone agrees that NATS should be separated from the Civil Aviation Authority. Secondly, I suspect that everyone will see that there are benefits to be gained from introducing into the operation of NATS expertise from the private sector, particularly in relation to management. Thirdly, I suspect that we all agree that there is an urgent need to find ways of enabling NATS to gain funds for future investment, preferably without such funds coming within the public sector borrowing requirement.

I believe that the House is united on those three points. The question therefore is: what is the most appropriate way of ensuring that NATS continues to operate as it does at present, as an organisation that has safety as its No. 1 priority? There are a number of ways of moving forward. The Government have proposed a part-privatisation model. The Conservative party has in the past proposed a complete privatisation model. The model that Liberal Democrats believe to be the most appropriate way in which to achieve the three key objectives to which I referred, and of ensuring that safety remains the paramount issue for the future of NATS, is by establishing an independent, publicly owned company. As we argued strongly in Committee, that particular model would enable the separation of NATS, the introduction of private sector expertise and the ability to raise funds, while ensuring that safety remained the key issue.

5 pm

The Government's proposals have attracted criticism from many quarters. The hon. Member for Crewe and Nantwich has rightly referred to the work of the Transport Sub-Committee, which has issued three reports on this issue. On one occasion, the Committee had a majority of Conservative Members; on two occasions, there was a majority of Labour Members but, each time, the Committee came to the view that the most appropriate way forward was certainly not the one proposed by the Government.

The proposals have also been criticised by airline pilots; they should know—perhaps better than anybody else—about the issues. The British Air Line Pilots Association has been implacable in its opposition to the Government's proposals. The national air traffic controllers, through their union, the Institution of Professionals, Managers and Specialists, have consistently and implacably opposed the proposals. The Parliamentary Advisory Council for Transport Safety is clearly opposed. I hope that there will be opposition from a large number of Government Back Benchers. The proposals certainly do not meet the requirements of the Conservatives nor the requirements and desires of the Liberal Democrats.

On a free vote, there would be no chance whatever that the Government's proposals would go ahead. The hon. Member for Crewe and Nantwich said that the matter was of such vital importance to the public at large that the whole House must decide on it. I very much hope that the Government will ensure that there is sufficient time to vote on new clauses 35, 36 and 37 and that the vast majority of Members on both sides of the House will vote for each of them.

Dr. Gavin Strang (Edinburgh, East and Musselburgh)

Like the hon. Member for Bath (Mr. Foster), I served on the Standing Committee. We are discussing hugely important issues. As he pointed out, the Liberal Democrat members of the Standing Committee supported a publicly owned corporation as an alternative to the Government's proposal. That is what new clause 35 would provide.

In her usual powerful and persuasive way, my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) argued that the new clause would meet some of the Government's concerns that the service should borrow directly in the private sector.

New clauses 35, 36 and 37 contain three separate propositions—I shall say a few words about each. New clause 35 deals with the independently owned public corporation. New clause 36 provides for the setting up of a trust along the lines of NAV Canada. Such a trust would include representatives of the airlines, the users, the customers, the trade unions and all who have an interest in the matter. If an independently owned public corporation is not acceptable to the Government, the trust would offer a way of meeting their objectives.

The third proposition—in new clause 37—is quite different. If the Government are not able to accept either of the other models—although I hope that they will accept one of them—surely, at the very minimum, they would agree that we must not take the privatisation route until the new centre at Swanwick and the new Scottish centre at Prestwick are operational.

Those are the three propositions before the House. If the Government are not able to accept them, it is vital—as my hon. Friend the Member for Crewe and Nantwich said—that the House is able to vote on each of them. It would be a travesty of democracy if we were not able to vote separately on each provision. I trust that there will be co-operation to do that.

My hon. Friend dealt with the models for an independent publicly owned company. Such a trust would achieve the Government's objectives because it would split NATS from the Civil Aviation Authority, and allow it to borrow in the private sector and—if the Government want this—to invest overseas. It would achieve all those objectives, so I hope that the Government will be able to accept one of the two models proposed.

If one of those models is not accepted, it is vital that, at the very least, the Government do not move towards privatisation before the Swanwick and Prestwick centres are operational. However, I emphasise that I think that it would be a great mistake to go ahead with the partial privatisation.

As we have been reminded, it was not just anyone but an all-party Select Committee that said that the option in the Bill was the worst of all possible options. Why has no other country in the European Union or the world privatised its air traffic control system? The prime reason, I suggest, is national security. Fortunately, the domestic civil security risk has not been great recently, but the risk of hijacks or bombs on civil planes remains. If the system is publicly owned, there will be better co-operation with the police and the security services than if it were run—this is what the Government intend—by a private commercial company.

The other aspect of national security is the military. The co-operation between National Air Traffic Services and the Royal Air Force is a model for the world. An international crisis could emerge and we might want to take complete control of our airspace. The Government might be clear that that is what they want to do, but control of the operation could remain with a foreign company. That is possible under the Government's proposals and the aims of that company in such a crisis might be different from those of the British Government. No other country in Europe has privatised its air traffic control system because of such national security considerations. To secure maximum co-operation with the security services, the police and the Ministry of Defence, it is best to retain the system in public ownership.

My hon. Friend powerfully made the case for the second model. Privatising the air traffic control system is not like privatising an airline. A privatised airline can provide additional services, improve in-flight catering and do all sorts of things to maximise the return on the capital deployed so as to obtain more private profit. Air traffic control is all about keeping planes apart, but a private company would want a greater return on the capital deployed—Ministers have said that that is the intention—and it would extract profit from the system for private shareholders. The worry is that the only way that it could achieve that is by driving down costs. In time, that could impact on our safety standards, which have been the highest in the world.

The Government have not persuaded the travelling public and many Labour Members and they have not persuaded the pilots or air traffic controllers. The key dialogue in air traffic control is that between the pilot and the air traffic controller, and the Government would make a great mistake if they proceeded with a policy that is opposed by airline pilots.

I urge the Government to reconsider and accept one of the alternative models—the independent publicly owned company or the not-for-profit trust.

Mr. David Chidgey (Eastleigh)

I shall not detain the House long, but I wish to point out how much I agree with the views expressed by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who moved the new clause, and the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang). I was reminded very much of the previous Parliament in which I had the privilege of being the Liberal Democrats' spokesman on transport and I sat on the Opposition Benches with Labour Opposition. Members on the Opposition Benches at that time were in total agreement that we should not sell off NATS, so it is strange that this Government now subscribe to the views of the previous Government. I find that rather sad. It is a shame that the Government have not found time to reassure the House by explaining why things have changed since they were in Opposition and since Labour made pledges at its annual conference. I accept that it is entitled to make pledges and that it is a part of politics to do so. However, why have the Government not told the House why things have changed and why it is not possible to maintain their pledges? Why is the organisation for sale when it was not previously? It is disreputable that the Government have not had the confidence to explain to us as a body why we should see the way forward from their point of view.

I have always subscribed to the view that we should bring in the private concepts of an independent publicly operated company. That is a way of introducing the necessary cash flow and revenue. However, we have never seen the need to privatise the system merely to provide more money and to put the operation of National Air Traffic Services and safety at risk.

My final point is constituency based. Some Members may realise that the Euro centre at Swanwick is just over the border of my constituency. I am sure from correspondence that I have had with many of my constituents who work at the centre that they were not expecting to see such a policy. They are genuinely concerned about how they can maintain levels of safety in their work that keep airline operators and airline passengers confident within the proposed regime.

I am not raising party political points. Instead, I am referring to genuine concerns that are felt by people who are highly professional, highly trained and extremely responsible in what they do. I ask the Government to listen carefully to the views of that body of opinion, which has no political axe to grind. It merely wishes to continue to serve the public to the best of its ability.

Ms Sandra Osborne (Ayr)

I support amendment No. 454, which stands in my name. It would have the effect of ensuring that major planned development by National Air Traffic Services must be completed. I have a specific interest because, as most Members are aware, the new Scottish centre, which will secure 700 jobs, is in my constituency. As the issue is of such importance to my constituency, I am prepared to prioritise it over other issues. I have to insist that the Government support my amendment, otherwise I shall be unable to support the Government.

I have spoken about NATS on numerous occasions. I have raised many of the issues of concern that have been brought to me by constituents and by representatives of trade unions and the work force at Atlantic house. Ministers are well aware that the proposed public-private partnership does not meet with the approval of the work force for many of the reasons that I stated on Second Reading, which have been repeated this afternoon.

I shall concentrate my comments on the repeated suggestions, especially over recent weeks, that the new Scottish centre will not come about if the public-private partnership goes ahead. I have questioned Ministers on numerous occasions. My right hon. Friend the Prime Minister has twice publicly reiterated his commitment to the two-centre strategy. As recently as last week, he said that the strategic partnership agreement would guarantee the construction and the continued operation of the new Scottish centre at Prestwick. That was his reply to my question.

As I stated on Second Reading, the work force at Prestwick does not believe that the centre will go ahead. That is hardly surprising because there has been a chronic lack of investment in NATS for many years. That was underpinned by the failed attempts at full-scale privatisation that were made by the Conservatives. I do not believe that the new Scottish centre would go ahead with full privatisation, and neither does anyone else. The period during which no progress has been made in building the centre has resulted in cynicism among the Prestwick work force.

It was announced in 1993 by the Conservative Government that the project would go ahead on the basis of a private finance initiative, but there is still nothing on the ground. The PFI turned out to be unworkable. It would have cost at least twice the original budget of £200 million. It has had to be abandoned in spite of the best efforts of the Government to make it work, along with NATS officials. As hon. Members have said, since then, various Select Committee reports have been published, and the Government have conducted a consultation on the future structure of NATS. The initial contract was signed during that period and £60 million of public money has been released to fund the first phase of the contract. However, there is still nothing on the ground.

5.15 pm

The first phase will consist of building a software system, some design work and eventually, a little initial building work. It is well known that a strong body of opinion in NATS itself feels that there is not any special need for the Prestwick centre. That, too, stems from the previous Government, who called into question the two-centre strategy and asked for a review, which concluded that the two centres were needed. The Labour Government accepted that when they came into power and have made a strong political commitment to providing the centre in Scotland as a replacement for the present facility at Prestwick.

I repeat this evening what I have already told my right hon. Friend the Secretary of State: that is exactly what the people of Scotland expect from a Labour Government. However, it is also feared that a strategic partner will, at some point in the future, renege on the commitment to the two-centre strategy because of the cost and need for profit. There is also anxiety about future contraction of the number of air traffic control centres in Europe. From the outset, I have said that my priority as a local Member of Parliament is securing the 700 jobs in my constituency. For three years, I have made a robust case for considering the options that are proposed in the new clauses.

However, it is clear that the Government intend to proceed with the public-private partnership for National Air Traffic Services. In the circumstances, I am sure that colleagues will seek further assurances on various aspects of the proposals. Indeed, I know that there have been discussions, especially on safety. When the partnership was first proposed, I made an undertaking to ensure that the views of the work force were heard in government. No one in government, from the Prime Minister down, can deny that I have made every effort to represent those views.

At this stage, I wish to ensure that the new Scottish centre is secure now and in future by asking the Government to go a stage beyond guaranteeing the two-centre strategy in the strategic agreement. I hope that Ministers are minded to accept my amendment, which would entrench the new Scottish centre in primary legislation and enable me to do what my predecessor, Phil Gallie, totally failed to do: secure 700 highly skilled jobs at Prestwick and £25 million for the Ayrshire economy.

Dr. Desmond Turner (Brighton, Kemptown)

First, I want to reinforce what several hon. Members have said to the Secretary of State: no one questions the need to move NATS forward. The Government's agenda on creating investment, levering in private finance and updating the system is accepted without question. It is simply a matter of how we set about doing that.

In opposition, Labour Members rightly poured scorn on framework legislation introduced by Tory Governments that did not say what it would really do. Similarly, it is a source of regret that the Bill does not say what it will do, although we all know. Hence new clause 37, which would have the virtue of requiring proposals for NATS to be brought to Parliament for a vote by both Houses before any transfer could take place. That practice is the backbone of democracy.

Why are so many Members of Parliament objecting to the public-private partnership? Those objections are not restricted to Labour Members, but are reflected in the views of many Opposition Members.

Basically, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) said, the objections boil down to safety, safety and safety again. NATS's whole reason for existence is to promote safety, and so far, nothing has been allowed to stand in the way of that, the result of which has been the development of a safety culture in NATS of which we can all be proud. It is the fact that the men and women working in NATS want it to be safe that makes it safe.

The Government have said that safety will be kept in public hands through the separation of regulation, but I have to tell the Secretary of State that that does not mean much—first, because regulation has effectively been made separate already, and taking NATS out of the CAA merely formalises that arrangement; and, secondly, because, as we all know from recent rail tragedies, the fact that safety regulation exists does not guarantee safety. Nothing can truly guarantee safety, but we can try to get as close as possible to guaranteed safety; whether it is achieved depends on whether the overriding culture of the organisation is the promotion of safety.

Mr. Mark Todd (South Derbyshire)

My constituency borders East Midlands airport; indeed, my home lies under the flight path. At that airport, air traffic control is handled entirely by the private sector—by the owners of the airport, which is a large and growing international airport. Should I be concerned?

Dr. Turner

I am glad that my hon. Friend has made that important and valid point, but it does not undermine the case against the PPP. East Midlands is a relatively small airport that has relatively little traffic movement compared with major airports such as Heathrow and Gatwick. NATS controls more than 70 per cent. of passenger movements by air in this country. It also controls all en-route cover. Finally and most importantly, NATS sets the standard that private air traffic control operators at less major airports have to follow. I am saying, not that my hon. Friend's constituents should feel unsafe, but that they might not feel as safe if NATS were privatised. Therefore, my hon. Friend's point does not undermine my argument.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Has my hon. Friend seen a letter in The Guardian from Paul Noon, the general secretary of the Institution of Professionals, Managers and Specialists, in which he points out that 87 per cent. of passengers at all UK airports are handled by NATS?

Dr. Turner

I thank my hon. Friend for that intervention—I had not seen the letter, which underscores my argument.

At issue is not whether NATS should be moved forward, but the means by which we finance its development and the mode of governance we establish. We are all happy to lever in private finance and get NATS out of the public sector borrowing requirement, so that public funds can be used for other priorities. That is fine; no one in the House cavils at that for one moment. However, there are plenty of alternative ways of skinning this cat, and two of them are before the House in the form of new clauses 35 and 36.

Either of those proposals will suit the situation. They have their different merits; we know, for a start, that the trust model, as exemplified by NAV Canada, works. It has been in operation for several years, it has been highly successful, it has raised safety standards, and the costs of air traffic control in Canada are falling. As far as anyone can tell, it is totally successful. Such a model would achieve all the things that the Secretary of State wants, and would not bring the profit motive into conflict with safety.

It has been said in this argument that people who are unhappy with the public-private partnership are unhappy for ideological reasons. I assure the Secretary of State that that is not so. I am perfectly happy with PPPs. One does not hear a great deal of complaint about such partnerships for hospitals, because people want their hospitals. However, we do not ask the PPP building consortium for hospitals to supply specialist medical services—do we?—because that is obviously not appropriate.

Happily, my constituency is benefiting from PPPs for schools. That is great; I am very glad—it is the only way to get those schools that quickly. However, nobody is asking the building consortium to do the teaching—are they? A PPP is proposed for the tube, but operation of the tube, as the Secretary of State clearly said, is to remain in public hands. The Secretary of State was most emphatic about that, and safety was one of the considerations. If that argument is good enough for the tube, if safety is critical to the tube, it is doubly critical for the much more complex matter of air traffic control.

It has been argued that because airlines are private, and fairly safe, the Government's proposal must be all right. Of course, if one does not think that an airline is safe, one does not have to fly with it. One flies with an airline that has a good safety record. One can choose one's airline, but one cannot choose one's air traffic control service. That is the difference.

I end by making a plea to the Secretary of State. The conflict between the profit motive and the safety culture, which is inevitable in the structure that he is proposing, need not arise. Does he understand that, although many Labour Members will support the amendments and new clauses—effectively voting against the Government—most of us are extremely loyal Government Back Benchers, and it is a matter of great pain to us to find ourselves forced into so doing? Personally, I am satisfied that the PPP, as set forth, involves a very serious possibility of endangering lives in future. My conscience will not permit me to ignore that. I fancy that the same is true of many hon. Members.

5.30 pm

Mr. David Wilshire (Spelthorne)

I had not intended to speak until I heard the hon. Member for Brighton, Kemptown (Dr. Turner) express my fears. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) began the debate by making clear what I regard to be the fundamental issue at stake: safety.

During the debate on the timetable motion, I reminded hon. Members who were present that the most recent crash at Heathrow was in my constituency. Because of that, and because of the seriousness of the issues raised by the hon. Member for Kemptown, I have not the slightest wish to play party politics in the debate. I believe that I speak on behalf not only of all 23,000 of my constituents who voted for me at the election, but of all 19,000 who voted for the Labour party, and all 6,000 who voted Liberal Democrat. I am convinced that we all see the matter in the same way.

I shall not make a speech. I merely ask the Secretary of State one clear, simple question, which I shall be eternally grateful if he will answer in an equally simple and straightforward way, so that all my constituents can be clear about what the Government are proposing. The question is this: will the Secretary of State's proposals make things safer for my constituents? That is all they want to know. All the other arguments are peripheral to the question whether they will be safer if the Secretary of State's wishes prevail tonight. I should be grateful if he would give me a clear answer when he responds.

Mr. Todd

I shall be brief. My difficulty in the debate has been the focus on safety and the direct relationship of that argument to the question whether the private sector controls any part of the service. As my intervention indicated, that is partly based on my local experience.

I should declare that my brother-in-law is an air traffic controller who works for the private sector. I have spoken to him about his role and he has given his opinions, which have had little bearing on mine. Nevertheless, I have listened to someone who had some expertise in the matter.

Clearly, although the 13 per cent. mentioned by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) is correct, in many instances the private sector provides the totality of the air traffic control service at particular airports—not for the en-route traffic, but at particular airports. I cannot see why there is an objection to the introduction of private finance to other aspects of the air traffic control service.

Aircraft are constructed and maintained by the private sector, and airports and airlines are run by the private sector. The air services are controlled by the private sector now.

Mr. Tam Dalyell (Linlithgow)

East Midlands is an important airport; so is Edinburgh airport. The pilots tell us that there is no problem going into Edinburgh, Glasgow or East Midlands. The problem is going into the fourth busiest airport in the world—Gatwick—and the busiest airport in the world—Heathrow. The issue is control over the overcrowded skies on the approach to the city of London.

Mr. Todd

I thank my hon. Friend for that intervention. He qualifies the position somewhat, by saying that it is a matter of the scale of the operation, not the principle involved. That is a useful development.

My concern is about the emphasis that has been placed on safety as the overriding reason for excluding private sector finance. As I said, we already have plenty of examples of that in the provision of air services in this country.

Mrs. Dunwoody

I am grateful to my hon. Friend for giving way. Does he seriously think that if there is a legal duty on air traffic controllers to consider the interests of their shareholders, they will behave in exactly the same way as if they have a responsibility to consider only the safe passage of air transport in the United Kingdom?

Mr. Todd

I thank my hon. Friend. I worked in the private sector virtually all my working life, and I never regarded myself as having a legal duty to have regard to the shareholders. I had a legal duty to carry out the tasks given to me. I was not involved in the safety aspect, but I also had a responsibility to my own conscience. I would not expect that to be overridden in any circumstances.

Dr. Desmond Turner

Will my hon. Friend give way?

Mr. Todd

I am being more generous than others, but I shall give way.

Dr. Turner

I am grateful to my hon. Friend for returning the compliment. The debate is not about private finance per se, because there is no specific opposition to the use of private finance. The debate is about private, for-profit governance. I hope that my hon. Friend will deal with that point.

Mr. Todd

Indeed. I would have preferred a debate about the relative merits of the Government's model in ensuring corporate governance to focusing on safety as the key aspect of our discussions. My hon. Friend has begun to move in that direction, and that is welcome. There are genuine questions about which model produces the best means of modernising NATS.

I am inclined to support the Government's approach because of the prospect of more robust management in the service, based on the new en-route centre project. I have long held the view that the management of highly complex technology projects in the public sector has been almost universally poor. We must tackle that problem, and that is the second reason for my support for the Government's position: it offers a better prospect of producing successful, high-technology control systems for our airspace.

I have listened carefully to the debate, and I have read the Select Committee report, which was informative. However, none of the arguments deals with the points that worry me. First, the private sector in this country already has safety models. I do not believe that I should return to my constituency and tell my constituents that they should be alarmed by the prospect of the private sector controlling the airspace over their homes.

Mr. John Smith (Vale of Glamorgan)

My hon. Friend has been generous in giving way. Does he know that NATS operates in a private environment at some airports and provides not only air traffic services but Ministry of Defence and en-route services, albeit not on the scale of the operation at Gatwick?

Mr. Todd

That is an important point. Many services that NATS wins—that is a key word—in a competitive tendering process, are won on a commercial basis. They are subject to commercial contracts, which the relevant airline operators award.

My short contribution has lengthened because of interventions, but I have tried to make the point that the private sector model is not a problem per se. However, I shall listen to the rest of the debate carefully and learn from it, because I am interested in the model that will best produce a modern and effective air traffic control system to secure as far as possible—it cannot be guaranteed—the safety of air travellers and those who live near flight paths.

Mr. Martin Salter (Reading, West)

After 18 months of imploring Ministers from the Prime Minister down to reconsider plans to privatise the control of this country's airspace, I am sad to face the prospect tonight of voting against my Government for the first time to keep faith with a clear pre-election pledge that I gave my constituents and that the Labour party gave the public.

Government is a messy business; it is about doing what works, making compromises, listening to a broad range of views and acting accordingly. In my short time in this place, various Bills have received a bumpy ride, not because of the tactics of Opposition Members, much as they would like to believe that they were responsible, but because of the legitimate anxieties of the Government's supporters. I am thinking in particular of lone parent benefit, welfare reform, the Freedom of Information Bill and the Immigration and Asylum Act 1999.

In almost every case, the Ministers in charge listened carefully to the concerns and, after due modification, we ended up with better legislation and a happier parliamentary Labour party. I regret that I am unable to report any such substantial progress on the private-public partnership for National Air Traffic Services. In fact, there will be no partnership and the Bill alarms us even more because the Government propose to sell off 75 per cent. of NATS shares. That is some partnership—a 75:25 split. It is nothing short of privatisation and it breaks the bond of trust that we made with the electorate, the travelling public and the men and women who gave us the finest, most efficient and safest air traffic service in the world.

I have listened to the arguments about private finance and will deal with them later, but I must tell those who laud the fact that non-NATS staff in the private sector handle a few air traffic movements that the logical extension of that argument is full-scale privatisation of the service, not a part privatisation. If that is what people want, they should say so.

I thoroughly endorse the new clauses, especially new clause 36, which proposes the trust model. I want to examine briefly the case against the Government's proposals and in favour of establishing that trust, as recommended by the Labour-dominated Transport Sub-Committee. Several cases can be made against the PPP, even in its 49 per cent. form. There is a political case: it clearly breaches the spirit of what we said before the election. There is strong opposition in the House and the country. The last opinion poll data showed that 72 per cent. of the public oppose even the partial privatisation of NATS. This is a matter of trust in more than one sense.

There is an economic case against the PPP, even in its original form. As the Select Committee report and all the other data made clear, aircraft movements have increased by 7 to 8 per cent. year on year. The industry is highly profitable, but it is a safety industry. In 1998–99, it returned pre-tax profits of £64 million. In many years, it has returned a surplus to the Treasury of between £30 million and £40 million. We shall forgo that if we go down this road. The capital receipt, at the upper end of the estimates, would perhaps be some £600 million. Let us set that against the Budget surplus and the increased revenues to the Exchequer, which we all welcome.

There is a safety case, but I shall not emphasise it. Perhaps it has been emphasised too much—my hon. Friend the Member for South Derbyshire (Mr. Todd) nods—and there are powerful political, economic and military and defence cases against the proposal. Our airspace is controlled by the public sector—not from East Midlands airport—so there is a tremendous sharing of military intelligence and information with the armed forces and our NATO allies. Imagine what would happen if we sold off 75 per cent. of the shares in our airspace to, for example, a Serbian-owned company. Imagine the reluctance to undertake the military co-operation that served us so well in the Balkans conflict.

The Government have clear objectives—I have always said that they are entirely laudable—but we desperately need the lateral thinking to deliver those objectives without breaching a pre-election pledge and without the dangers of privatisation. They rightly want to take NATS out of the public sector borrowing requirement. They want it to break free from Treasury orthodoxy. We have achieved that with the Post Office; we can deliver it with either of the models in new clauses 35 or 36.

5.45 pm

The Government want to deliver an investment stream. We all want to do that, and it can be done by means of either the trust or the IPOC—independent publicly owned company—model. We want to achieve a separation in respect of the CAA and the operational requirements of NATS. In effect that happens already, but hon. Members should bear in mind the fact that the CAA lays down only the minimum standard, while NATS operates far above that standard. It is dishonest to suggest that we are providing a safer service as a result of that separation. If we returned to CAA standards, we would be delivering a worse service, so that argument does not stand up.

Yes, we need private-sector management. I am not an ideologue in that regard. I have taken on colleagues in this place who have argued for the return of the Atomic Weapons Establishment at Aldermaston to the Ministry of Defence, which is the last organisation that should run it. It is a question of who runs the service best. How do we achieve the balance between public concern for public safety and the dynamism of private-sector management? The answer lies in the Select Committee's recommendation of a "not for profit trust".

What will the trust model deliver for us? It will certainly deliver the cash. It worked in Canada, which established NAV Canada in 1995. NAV Canada operated successfully for more than five years, and in the first year delivered from the banks and the private sector an investment stream of $3 billion. The trust model works. It does not compromise safety; it is not subject to takeovers by foreign banks, foreign powers, foreign nationals or Asil Nadir—or any other person in the queue to fund the Tory party. It delivers accountability. It is outwith Treasury rules, so there is no need to compete for hard-earned public resources for schools, hospitals, firefighters and so on. It is politically in line with what we are achieving following our pre-election pledge. Perhaps most tellingly, it has support from surprising quarters. If the government had decided to adopt this trust model, I doubt there would have been any opposition from the CAA or NATS. Who said that? None other than Mr. Bill Semple, NATS chief executive, on 22 March 1999. So there we have it: the case for the trust, and the case for keeping our bond of trust.

For the last time, I implore the Government to think again. The case for privatisation has not been made. The Government have not only lost the argument, but failed to take with them the air traffic controllers and pilots on whom our lives depend when we take to the skies. They have failed to convince the public, 72 per cent. of whom are against the proposals, and they have failed to convince their supporters in this place. Only as a result of the legitimate work of the Whips, to whose efficiency I pay tribute, will Members go into the Lobby to support the Government's proposals—in many cases against their better instincts, and in many cases against their consciences. I know that, because I have had conversations about the issue for months.

The safety of the skies, and the safety of my constituents who live under the Heathrow flight path, is too important to be sacrificed on the altar of political virility. This is a privatisation too far—for goodness sake drop it, and drop it now.

Mr. Sam Galbraith (Strathkelvin and Bearsden)

I want to concentrate on amendment No. 454, tabled by my hon. Friend the Member for Ayr (Ms Osborne), but first let me make a few comments about the debate that has taken place so far.

Clearly, everyone agrees that the status quo is not an option; the question is, what is the best model to choose? I have listened to some of the arguments against the Government's proposal. The security argument struck me as slightly tenuous and dubious. I have attended debates on similar issues, and security red herrings have always featured. As I consider the argument advanced today to be such a red herring, I shall not say much more about it.

The safety argument is valid, in that we must not do anything to compromise safety. However, I was rather turned off the safety argument when we got into the debate about only 17 per cent. of air traffic control being in the private sector. I did not quite follow the logic of saying, "If it is a small place, you could have a profit motive, but if it was a busier place you could not." I did not quite understand. That seems an argument about numbers. It might be about the experience on staffing levels, but it did not seem to be simply about private ownership. That was one of the things that swayed my mind.

Mr. Dalyell

The trouble is what the pilots who are going into Gatwick and Heathrow believe. All we can report is that they believe that overall control gives them the confidence in a stressful situation.

Mr. Galbraith

Belief is an important factor that we should always consider, but belief is not necessarily fact. People used to believe that the world was flat, but that did not make it flat. Therefore, people's belief is a different issue in these matters.

I do not have to go through all the arguments that people have.

Dr. Strang

Like many of us, my hon. Friend probably flies into Heathrow quite a lot. If he were to stand on the A4 on a Sunday evening, look up in the sky and see all the planes queueing up and coming into the airport, he would realise that there is no comparison between the challenge faced by the aircraft traffic control system there and that faced by some of the small airports. However, it is not just about Heathrow and Gatwick; it is about all the en-route traffic that is the responsibility of NATS.

Mr. Galbraith

I agree. There is no comparison. There is a difference, but the principle that I have been hearing is that if the service is privately owned, there is a threat to safety and, if it is publicly owned, there is not. It should apply across the board. It is not something that we can start chopping up, saying, "It depends on the amount of aircraft that goes in or out." What is the level? Fifty per cent? Seventy-five per cent?

Dr. Desmond Turner

rose—

Mr. Galbraith

I have obviously started a debate.

Dr. Turner

Does my hon. Friend agree that it is vital to control any form of risk and we are dealing with a highly safety-critical area? At present, in, if you like, meaningful large-scale air traffic control—which sets the standard—there is no risk element from profit motive coming into contest with the safety prerogative. Pressure on air traffic control systems can only increase; the risk elements can only increase. Is it not unwise to introduce another potential risk element to the equation?

Mr. Galbraith

Again, I do not quite follow the logic. Risk will vary with any reason. If it is risky at one level, it is risky at the other. Degrees of risk might vary, but I do not follow the logic and where the dividing line comes.

Mrs. Dunwoody

Will my hon. Friend give way?

Mr. Galbraith

This is amazing. I am more than delighted to give way to my hon. Friend.

Mrs. Dunwoody

If my hon. Friend were operating in a private hospital as a neurosurgeon and were told that it was more important that he operated much more frequently to make a bigger profit, would he rather operate in a private, profit-driven hospital or in the national health service?

Mr. Galbraith

The thing that controlled my work in the public sector was laziness because I could not be bothered working too much, so I will just leave it at that.

I drive home the point. What is the level of traffic that makes it dangerous to be owned privately, but not to be owned publicly? Let us have a figure. [Interruption.] Much more than could be coped with? What level is much more than could be coped with?

Mr. Michael Connarty (Falkirk, East)

One more.

Mr. Galbraith

That is a false logic.

On the argument that the service must be publicly owned for safety reasons, I do not have to go through all the various examples, but the publicly owned Chernobyl comes to mind. I do not think the argument follows.

May I move on to say a few words on behalf of the amendment tabled by my hon. Friend the Member for Ayr? I hope that the Government will consider accepting it. The whole matter has been dogged for a number of years—it was particularly the case under the previous Government—by a lack of commitment to the two-centre strategy. It has constantly cropped up. The issue has arisen again. It is producing great uncertainty and doubt in Ayrshire, including in my hon. Friend's constituency. She is to be highly commended for, and congratulated on, her sterling work for her constituents and on fighting for jobs and investment, something which her predecessor never did, or was not capable of doing. I hope that we can lay the issue to rest and build the provision into the fabric of the Bill, so that the matter can no longer be used as a red herring.

The question of how best to operate the service is a difficult one. Everyone is agreed that the status quo is not an option. I happen to think, particularly having listened to the debate and the false logic involved, that the Government have got it right. That is why I will be happy to support them in the Lobby.

Mr. John McDonnell (Hayes and Harlington)

I speak from a constituency interest, as well as from a party interest, I suppose. Heathrow is in my constituency. Many of my constituents live under the flight paths. Many of them work at Heathrow, so I have a direct constituency interest and in no way apologise for raising the issue of safety again.

Not a single constituent in my constituency with any involvement in the aviation industry supports the proposal. I have consulted at length within my community. I have met not just trade unions, but members of the community who have worked in the industry for a long time as individuals. I have met air traffic controllers.

We gave commitments before the last general election. Letters went to some of my constituents informing them that the air was not for sale. They believe that a singular act of political disingenuity is being done today.

Air traffic controllers in my constituency have served the country well. They have given us possibly the safest form of transport over the years and the safest aviation industry in the world. Our amendments seek to retain NATS as a public service in some form. They try to commit us to the promise that we made before the last general election.

The proposal will enable NATS to operate within a commercial structure that will provide the commercial freedom that the Government seek and that the Deputy Prime Minister considers desirable. It is not an argument for the status quo. We have already dealt with that discussion. We all accept the split between the CAA and NATS. It is a compromise; both the IPOC—the independent publicly owned company—and the trust are compromises. It is a desperate plea from me and from many of my comrades and constituents.

Last Thursday, at the London elections, I met lifelong Labour supporters who were not voting Labour for the first time in their lives. We had a virtual strike among campaign activists because we had stopped listening to them. The amendments are a plea to the Deputy Prime Minister and others to listen to what our people are saying. They do not want any further privatisations. No matter how much we try to dress this one up—I have put the arguments—whether it be as a part sale, a public-private partnership, the introduction of commercial disciplines and incentives or whatever, the general public and Labour supporters in particular throughout the country view it as a privatisation and—I echo what has been said—a privatisation too far. They are right because, as has been said, we now find that, in the legislation, the potential private sector stake is not restricted to the initial allocation of shares.

When we discussed that before, I was anxious about only 49 per cent. being retained by the Government. Five per cent. was to go to staff and 46 per cent. to the private sector, but, in future, according to the legislation, there will be no restriction on the privatised NATS issuing further shares to raise finance. The only bottom line on the eventual size of Government shareholding is 25 per cent. At that point, 70 per cent. of shares will be in the hands of the private sector. I call that privatisation; I believe that most people will believe that it is full privatisation.

6 pm

As for employee shareholding, yesterday, in a letter from Lord Macdonald, we were informed: Staff shares can only be sold to other staff or a staff trust. I cannot find anything in the Bill that guarantees that.

After a certain time, 75 per cent. of the shares could be in private hands. The private hands could be those of the private sector strategic partner that the Deputy Prime Minister has prayed in aid in supporting the legislation, the Airline Group. Eventually, that group could possess control.

Mr. Peter L. Pike (Burnley)

Is my hon. Friend aware that, when the Trustee Savings Banks Act 1985 was passed, certain time-limited safeguards were provided on the maximum size of any one shareholding? Once those safeguards lapsed, the entire shareholding situation changed, and, very rapidly, TSB went with Lloyds.

Mr. McDonnell

My hon. Friend is an experienced Member. He makes a valid point and offers a history lesson that we should all bear in mind as we debate the proposal.

As I said, the Airline Group has been prayed in aid in support of the proposal. Of course it supports the proposal. It could gain control not only of the NATS company, but of the air itself. A few months ago, in The Observer business section, a leak revealed that the beneficent, altruistic Airline Group, which wants to become the key shareholder under the proposal, has initiated a discussion on how the airlines comprising the group could receive preferential treatment and access via NATS, which they would jointly own and control. I believe that the Airline Group is proposing a physical and financial cartel. The legislation, however, contains no provision to prevent such a cartel from being created.

Interestingly, yesterday's letter from Lord Macdonald reveals that, although the Government are willing to countenance a NATS board where the private sector may have 75 per cent. control, there will be no representation on it for trade unions. Instead, trade unions will be offered a stakeholder consultative council in which they will be but one interest among many. That is not a partnership, but a sell-out. It is a takeover.

I make no apology for raising the safety issue. After the railways were privatised, we had Southall and Paddington, which is down the track from my constituency. I lost constituents. Those disasters put beyond doubt the link between privatisation and public safety. The public sector should have the preponderant role in guaranteeing public safety. In the past fortnight, we have even had reports of complaints about private bus companies' safety policy in recruiting drivers.

In this debate, we have discussed balances of proportionality in safety. Just to put it beyond doubt, the fact is that those who know the aviation industry tell us that there are doubts about safety in the private sector. In 1999, the Environment, Transport and Regional Affairs Committee reported on aviation safety, and it drew the Government's attention to the safety risks posed by commercial pressures in the aviation industry. I invite hon. Members to read that report, which states: in spite of the protestations of the airlines that "safety [is] our most important priority…[we] do not seek competitive advantage as far as safety is concerned", concern remains that in the event of conflict between safety considerations and profit margins, airlines may favour their profit margins. Aviation safety is already a concern.

In theory—let us get the theory right—there is a view that commercial pressures within a privately owned company create risks to safety. It does not require a great theoretical leap to understand why. A private company's first priority is profit; every other factor is secondary and short term. The public-private partnership needs to produce a return for its shareholders. The company will not be able to increase charges, so profits can be maintained only by reducing costs, which entails reducing staff and cutting equipment.

The Government do not accept that that creates a risk. However, when I take off in an airplane with my family, I want to hear reassurances about safety not from the Deputy Prime Minister, but from pilots, backed up by professional air traffic controllers. Those who are strongest in opposing the proposal are pilots, air traffic controllers and our own Transport Sub-Committee.

It is not as though the Committee has not had a good go at this type of proposal. Year after year, we have had reports—they could not have been more categorical— advising the current Government, and the previous one, that this proposal is the worst possible option. It is the worst because it privatises part of the regulation system. Air traffic controllers are a part of that system—keeping people apart and dealing with commercial competition between airlines—but we are selling them out.

As has already been said today, no other country has privatised its air traffic services. The Government have seized on the comments of a visiting Dutch Minister, who said that his country may consider such a proposal and that it is an interesting option. Pardon me, but I do not think that that constitutes an international riot clamouring for privatisation.

The Government have circulated detailed notes on discussions on safety that were held last week between unions and the Government. I am grateful for them, but I also note that they show that the unions refused to sign up to the proposal or to state that they were satisfied about safety. Today, they have reiterated in their briefings to us that they do not support the proposal, which they believe will increase risk to the travelling public.

Let us be honest with people. How did the proposal arise? It was made because, in the previous general election campaign, the Tories found a black hole in our budgetary plans. The telephone call went out to each Front-Bench team to find a few hundred million, and the proposal was plucked out of the air. Let us not kid ourselves about it. The proposal is a political disaster and, potentially, a physical disaster.

My constituents are the ones who are most at risk. They will never forgive a Government who put dogma before their safety. As has already been said, those who have attacked my constituents for their opposition to the proposal have attributed to them two motives, the first of which is industrial. However, the fact is that my air traffic controller constituents are passing up a £13 million handout because they want to keep the skies safe.

Ideology is supposed to be the second motive for opposition to the proposal, but I say that ideology is forcing the proposal on us. There are now some Labour Members who think, "Public sector bad, private sector good." As a previous leader of our party said, when theory gets pickled into dogma, we wind up with a Labour Government privatising our air.

Brian Cooper was one of the train drivers who died at Paddington. He was my constituent. Based on my memory, I will never support a further privatisation. I will vote for this group of amendments.

Mr. Donald Gorrie (Edinburgh, West)

I should like to respond to the speech by my fellow countryman, the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith), but also to animadvert on the absence of some of my other countrymen. The Scottish National party made a big issue of the proposals in the Scottish Parliament, where it has no authority over them at all, but SNP Members have declined to appear in the Chamber to participate in today's debate. Some of them may come to vote, but I have seen none in the building.

The three main arguments on the subject, to which I have listened with great interest, boil down to a safety issue, a political continuity issue and the fact that those who know about the subject say that they disagree with the proposals. National security is an additional issue.

Like the rest of us, the hon. Member for Strathkelvin and Bearsden can make up his own mind on safety. However, the argument that airplanes flying into Heathrow and Gatwick will be safer if air traffic services are under commercial pressure to make a profit is not an intellectual concept that I can sign up to.

The political continuity argument is important, but the hon. Gentleman did not deal with it. Things change. It is legitimate for a party to change its position in the light of changing circumstances. Ministers' position would be legitimate if they could say, "We promised in the past that we would oppose privatisation or partial privatisation of air traffic control. However, things have changed in the following ways, and we have therefore changed our mind." That would be legitimate, but Ministers have not done it. They have merely adopted this new policy. I think that such ditching of promises contributes to the low turnouts at elections. There is a clear connection between the public being turned off—or scunnered, as we say in Scotland—by politicians who, collectively, do not stay firm on what we have said we would do.

Mr. Robert Syms (Poole)

Like Scottish student fees.

Mr. Gorrie

We have delivered on Scottish student fees. I would be happy to argue with the hon. Gentleman about that at another time.

With all due respect, neither the hon. Member for Strathkelvin and Bearsden nor I know all that much about radar and air traffic control. The people who do know about it are all against the Government on this. Surely it is compelling that those who work in the area and have no axe to grind in terms of profit are all on the same side. The House should support them, and not listen to Ministers who seem to be driven by some extraordinary remote control.

Mr. Geraint Davies (Croydon, Central)

I wish to make a short speech in favour of the Government's proposal. I declare a personal interest, in that, over the years, I have flown thousands of passengers on holiday—using NATS, of course—and I have a vested interest in keeping them alive.

Any private operation has a concern for safety in terms of commercial viability and being sensitive to customers. There are a number of common objectives across the House, including the guarantee of heavy investment to secure the best air traffic management and safety system in the world. The system must become a benchmark for best practice. Beyond that, we want to extend our operations into European air space and to be a model for other air traffic control systems.

We do not have a standstill situation. It is not good enough for people to say that we have the best system in the world, and that it will remain the best in the world. Britain is the biggest hub for international airlines in the world, and business is growing by 6 per cent. a year. To continue as we are is not a sustainable option. The reality is that the system is becoming more complex and more congested.

Who has the resources in terms of skills and technology—as well as cash—to sort it out? What is the best incentive structure for efficiency and safety? Not every speaker has approached the issues in an upfront way.

Frankly, in certain airports, NATS needs to deliver safety systems that are not being delivered. In Edinburgh, we want a new NATS to bring in a requirement for night-time approach radar at affordable prices. That service should be deliverable to all significant airports as congestion grows.

Those who think that NATS is great and that everything is all right should know that this is a moving picture, and we need a system that delivers increasing standards and provisions. Those who speak about increasing congestion at Heathrow and Gatwick are right, and that is the very reason why we need a mechanism for more investment and skills.

Mr. Connarty

My ears pricked up when I heard my hon. Friend mention increased services in Edinburgh. Is there any suggestion or evidence that those could not be delivered by the trust model or by a wholly publicly owned company if it were allowed to get the money from the private sector?

Mr. Davies

We need increasing standards and resources from the CAA. We need also to be confident that those complex services are delivered. I am trying to show that the model put forward by the Government satisfies all those criteria. It is not enough to say that we can fund safety, and we need to investigate the matter carefully. I recognise the sincerity and commitment of those who argue for fresh resourcing for the current system, and I respect their position. However, I ask everyone to listen to all sides of the debate.

6.15 pm

There is some consensus in the industry—across the airlines, the pilots and the unions—in terms of a public-private partnership. One would not have thought that from listening to some of the speeches today. Some of the unions—including the pilots—are sympathetic towards public-private partnership. There is a debate about corporate governance, and there is consensus that extra cash should not necessarily be at the whim of individual Governments, who will have priorities such as the NHS.

There is consensus on the need for certainty in investment flows. There is consensus on the opportunity for risk transfer into areas where risk can be managed more effectively, such as information technology systems. There is a view that there is something to be added from the private sector. The horizons for air traffic control should go beyond UK airspace, or any European airspace, and into other airspace. With the current dynamics of the industry, it is not enough simply to think about planes flying over Britain.

I am not of the view that the private sector necessarily does project management better than the public sector. The Croydon tramlink—a public-private partnership—is four months late. However, the point is that the cost of the delay is with the private sector, not the public sector, and there is a lot of pressure to deliver. Nobody is saying that the private sector manages everything well, but there is an issue of risk transfer and of who does what best.

People have focused on the tensions between safety and profit, and between operational standards and costs. Those are relevant, and it is not enough to dismiss them.

The Select Committee recommended that the CAA should be separate from NATS, and everyone agrees on that. That separation of regulation from operation has been introduced on the railways and is much to be welcomed. Ministers must underline the fact that the CAA's guidance and operation should be transparent so that people know what is happening and that safety is being enforced.

We have debated whether the profit motive is in collision with the idea of investing in safety. If the new NATS has ambitions to take over European airspace and to sell itself as a model of best practice, surely it is in its commercial interest to invest in safety, as safety is its business.

Mr. John Smith

Is there not a more fundamental point? The product of NATS is safety; the very service that NATS provides is safety. There is no safety dimension: NATS could not survive unless it delivered safety.

Mr. Davies

My hon. Friend is right, and that is why there is an incentive to innovate in safety. NATS must sell safety and be the safest system in the world, with new technology to provide better safety and fewer congestion delays. That is its motivation.

One of the amendments refers to a not-for-profit model, and the airlines are keen on that model. If they buy NATS—I am not averse to that—the airlines can make their money by investing in NATS and by reducing delays at airports by 10 per cent, after which they could make an enormous profit by selling tickets to people flying on their planes.

The amount that the airlines would have to invest in the system is not all that great, and they have £24 billion worth of aircraft sitting on the tarmac in Britain. The idea that they would not invest in safety, in information technology and in efficiency does not stand up. Given the fact that they are vertically linked in the air business, it is not easy to put a limit on how much they would bid.

We must also consider the management of technology. I have served on the Public Accounts Committee for the past three years, and week in, week out, we see examples of public sector management of very large IT infrastructure programmes going massively wrong. There are cultural issues and issues about whether we are paying civil servants enough to secure the skills to compete and negotiate on an equal level, but that is another debate. The private sector is in a position to manage the skills and the IT risks.

There are complex issues of cash, IT, management and, ultimately, safety. My view is that the interests of securing our future as the international hub of air transport with the best record of safety and efficiency will be served by the model that the Government have proposed.

Mr. Frank Field (Birkenhead)

On a point of order, Mr. Deputy Speaker. In your judgment, if we are to have three votes on this group, will we not need to conclude the debate by about 7 o'clock?

Mr. Deputy Speaker

That is an observation that may be widely agreed with in the House. We shall observe what we shall observe in due course.

Mrs. Fyfe

I congratulate my hon. Friend the Member for Ayr (Ms Osborne) on her campaign over the years to secure hundreds of jobs in her part of the world. If she has succeeded in that endeavour, that is no mean achievement.

I wish that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) was still in the Chamber. He accused those who disagree with him of being illogical. When I see him, I will have to ask him what adjective he would apply to someone who has considered an issue for considerably less time than those who work in the industry and provide the service, yet thinks that he knows better than they do what is good for the service.

This is not a partnership, as others have said. It is a privatisation. The Government's holding can be reduced to 25 per cent. without the House being consulted again. Some day we will not even have that 25 per cent. The then Government will say, "What are you complaining about? You went three quarters of the way down this road." Joseph Chamberlain said 100 years ago that he did not want water to be held in the private sector because some things … are too important to leave to bodies whose first motive is profit and whose first fiduciary duty is to their shareholders. I would not disagree with him.

I am not saying, "All private bad, all public good," but there is a difference, and one day it could be a crucial one. I sought some figures from the Library to compare the safety records of the public and private sectors. I was told that 85 per cent. of private sector employees were employed in establishments with occupational health measures, compared with 100 per cent. of public sector employees. The proportion of employees covered directly by such measures were 66 per cent. and 99 per cent. respectively. That is a useful measure of how the private sector can often be good on safety but can also fall down on it. The public sector is certainly under more pressure to deliver totally on safety.

If the pilots are not convinced, I am not convinced. I do not believe that the two alternative proposals can be brushed off with a one-line statement that neither fits the needs of the service. I would hope to hear more from the Government.

Before the 1997 general election, our party said: Our air is not for sale. I featured that in my election campaign, and I will not go back on my word to those who voted for me unless I see good reason for doing so—and I do not see sufficient reason here.

Mr. Lembit Öpik (Montgomeryshire)

Does the hon. Lady agree that glider pilots, the British Gliding Association and the General Aviation Manufacturers and Traders Association are concerned that if the airways are sold off, they will be sold out, and probably pushed out of the sky?

Mrs. Fyfe

The hon. Gentleman makes an important point.

No other country in the world has privatised its air traffic control. Are other countries not faced with hard choices, too? We keep on hearing from the Government, when they want to do something that is unpopular and unwanted by their own supporters, that we are making a hard choice. On some things, we should make a choice that people like, then fewer people might stay at home at elections.

Why are the Government flying in the face of public unhappiness at this step? Why are we ignoring those who work at NATS and those who fly the planes? They have not merely gone through the motions of opposing the Bill: they have campaigned ceaselessly. They are serious about this. There was a time when a Labour Government would have listened more carefully to those who actually do the work.

I have been reading the Government's briefings and I gather that a not-for-profit trust would be allowed to compete for the contract. If such a trust would be acceptable, why cannot the Government accept a new clause that allows us to go straight for that option and keep the private motive out?

Mr. John Redwood (Wokingham)

I support my hon. Friend the Member for North Essex (Mr. Jenkin), who has done a superb job in piloting the Opposition case, and I look forward to what he has to say later. I support new clause 26, to which he may speak if he catches your eye later, Mr. Deputy Speaker.

In past debates on these matters, I have always declared the fact that my wife works for British Airways, but I can assure the House that she no longer does so. She has resigned from British Airways, so she is no longer privy to the ways of the board or beholden to the company.

One of the big issues that has come out in this fascinating parliamentary debate is what the Government are trying to achieve. Is it a privatisation or is it not? As I urged several privatisations for love on previous Conservative Administrations, and for profit on Governments elsewhere in the world, when I was in business, perhaps my remarks may have some interest and merit.

It is clear to me that privatisation occurs if control passes from the Government to a private sector interest. By that test, this is self-evidently a privatisation. The Government may try to dress it up in the new language of public-private partnership, but on this occasion that is either misleading or a load of ideological claptrap. This is a privatisation and it must be judged as such. We must apply the normal tests: whether it will be sold to the right people or group of interests; whether it will be sold at the right price; whether it will be run better than if it had remained in the public sector; and whether there might be a better way of serving the public interest and securing gain for the public purse.

In all my experience of privatisations around the world, this is by far and away the worst model that I have ever seen. It manages to combine all the worst features of privatisation and avoid practically all the good ones. That is why my hon. Friend the Member for North Essex is right to say that the official Opposition cannot support this version of privatisation and was right, in his ever-helpful spirit, to suggest a better alternative.

The models on offer from Opposition Members—the independent trust and the public corporation—which we have heard debated at some length, represent a much better interim position, at least, than the Government's version of privatisation. It would be far better to leave it alone or to keep it under the new control and ownership that has been suggested by Labour Members until it could be privatised properly than to do what the Government propose.

6.30 pm

The proposals are a kind of punk Thatcherism. The Government have a strange love-hate relationship with the Thatcherite message. As one who was proud to be involved during the 1980s and thought that a lot of good things happened then, I now recognise that it was a long time ago. The Government should recognise that the problems and solutions of this century are rather different. If they wish to be Thatcherite, however, they should try to understand the essence of the Thatcherite experience instead of producing a punk version that true Thatcherites cannot possibly support.

A proper privatisation would surely seek to maximise wider share ownership, make sure that the British national interest was secure and protect the organisation from the possibility of being sold on the cheap to a single foreign interest. I have never come across a Government who wished to sell control for only 46 per cent. of the shares. One would at the very least expect them to sell 51 per cent. of the shares to the controlling interest.

The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)

The Conservatives gave it away.

Mr. Redwood

The Secretary of State dares to say that, but the Conservative Administration gave away shares to company employees, which was a good thing to do. They did not give them away to people from outside who had the money to buy. They were careful to protect important public interests from foreign acquisition by using golden shares that worked.

I am concerned that the present Government are inventing a golden share that may well not work and may not protect the national interest. There is a strong possibility that the Government will end up selling 46 per cent. and a controlling interest for less than 46 per cent. of the true value. The numbers that they have trotted out so far and have got into a tangle over show that they envisage a sale at fire sale prices when there is absolutely no reason to sell an important national asset at a knock-down price.

I do not wish to intrude on the debate about how Labour Members feel about supporting or not supporting the Government who stated clearly before the election that the air was not for sale. My right hon. and hon. Friends and I made no such statement, so we do not have that problem when deciding how to vote tonight. It is an important issue. I can speak from experience of supporting a Government who occasionally broke their word. I know how difficult it was and what an uncomfortable feeling it was. I always felt better when I stuck to what the Government had originally said and did not let down my voters by going along with the change of tack or script.

I hope that the Government are aware that there is unity across the Floor of the House tonight on whether or not this botched and muddled privatisation should go ahead. The House should categorically say no; it is the wrong privatisation at the wrong time. It is stripping a national asset on the cheap. It is punk Thatcherism of the worst and that is why there will be surprising unity in the Lobbies tonight on this issue.

Jane Griffiths (Reading, East)

It has been fascinating to listen to my constituency neighbour, the right hon. Member for Wokingham (Mr. Redwood), talking about punk Thatcherism, which may be an insult to punks and Thatcherites alike. Perhaps I am naive in these matters, but I cannot understand how an organisation that operates in the private sector, as NATS does, can be privatised and how we can describe the Government's proposals as privatisation. However, as the word has been bandied about, I shall let it go.

In an intervention, my hon. Friend the Member for South Derbyshire (Mr. Todd) referred to the number of airports in the private sector that are not part of NATS and asked whether he should be concerned. Other hon. Members said that as only small numbers of air movements were not controlled by NATS, it did not really matter. However, if one air movement at any airport was not conducted safely or was not subject to proper controls and that aircraft fell out of the sky, we should all be concerned.

Mrs. Dunwoody

As soon as any aircraft moves out of any airfield it is immediately taken over by an air traffic controller from the National Air Traffic Services who controls its flight wherever it goes.

Jane Griffiths

I understand that and I thank my hon. Friend. However, my point relates to the numbers. I have figures for 1998, the most recent year for which there are complete statistics, which show that some 22 million passengers were carried for at least half of their journey outside the control of NATS. That is a lot of people by anyone's understanding. Almost half the air traffic movements in that year were, at least partially, not under the control of NATS. There are airports all over the country where NATS does not operate. They are in or near the constituencies of many hon. Members on both sides of the House. However, I have never heard of an hon. Member going to one of those airports and saying to the people there, "It is a pity, but you are not quite as good as the boys and girls at Heathrow and Gatwick. You are a bit second class and it is not good enough."

Thinking about those matters leads me to seek reassurance from my right hon. Friend the Secretary of State. If all those people are working as air traffic controllers—and there may or may not be problems—will the new safety system that the Government propose for NATS affect the regulation of those operating outside NATS? Will it create more of a division? It does not seem to me that it will, but I should like some reassurance.

We have heard some dud logic today. Is safety an issue? Of course it is because safety is the product of air traffic control. Air traffic control exists to make the skies safe, but one cannot be a little bit safe. Either something is safe or it is not. It is like saying that one cannot be a little bit pregnant. Safety, however, can never be totally guaranteed no matter what system we have. There were horrendous rail crashes under British Rail and subsequently after privatisation.

Unsafe practice is bad practice, whether it happens in the private sector or the public sector. I am not ideological about it, and I do not believe that any right hon. or hon. Member should be. We should all be concerned about moving into the 21st and 22nd centuries with good, safe, dynamic and vibrant air traffic control. So much in the Bill has not been discussed because we have been talking about air traffic control, which matters a lot. We should vote on the amendments as people's views are important, but it is a pity that the issue has overshadowed so many other good things that we are doing in transport. I shall not be supporting the amendments.

Mr. Dalyell

In his serious and thoughtful speech, my hon. Friend the Member for Croydon, Central (Mr. Davies), who takes a different view, referred to some pilots sharing the general views of the Government. Like you, Mr. Deputy Speaker, I travel every week between London and Scotland and on 17 occasions now—as will be borne out by the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) and others—I have sent my executive card or my diamond card to the captain to ask whether he is prepared to have a word about air traffic control. On every occasion the captain has said yes, other than when he is engaged in training. I have asked the following question: "Do you, captain, back up the views of the British Air Line Pilots Association?" and on every occasion the answer has been emphatically, "Yes. We think that Chris Darke and his colleagues are right and we are very deeply concerned." Senior captains of British Airways have used the word "dangerous". It is not my word—it is theirs.

Mr. Geraint Davies

May I make it clear that I said not that the british air line pilots association, Chris Darke and all pilots agreed with the Government's prescription, but that they agreed that a form of public-private partnership was the way forward? The debate is not about public-private partnership but the nature of corporate governance. The issue is whether the two converge. My hon. Friend will find that I am not disagreeing with what he says.

Mr. Dalyell

I am grateful for that correction.

Time presses, and I wish to ask my right hon. Friend the Secretary of State this question: why has he failed to persuade the pilots if his scheme is so watertight? They are serious people. Why is BALPA so opposed to it? We need an answer to that question.

Let me share one other thought. What will people in this country think of the House if we are seen to impose on controllers and pilots, against their best judgment, a scheme that they do not want? Heaven help us if there is a crash, let alone a mid-air crash. What would people think of the House of Commons doing that?

Mr. Pike

I am glad to have the opportunity of saying a few words in the debate. I speak as one who has not yet been convinced about which way to vote. We have not yet heard the Government's case. Although I have considerable sympathy with the new clauses, I have not been completely convinced that I should vote against the Government tonight. I have not yet voted against the Government, but they have still to convince me to go through the No Lobby.

My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) spoke earlier in the debate. The reports of the Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs, of which my hon. Friend is the Chairman, have probably influenced my views on the issues more than the debate so far.

Obviously, safety must be paramount. I would not for a moment accuse my right hon. Friend the Secretary of State for the Environment, Transport and the Regions of not believing safety to be of the utmost importance. My hon. Friend the Member for Brighton, Kemptown (Dr. Turner) spoke about having a choice of planes. If airlines are not safe, there is something sadly wrong with a system that allows planes into the air. I do not particularly want to be on the ground, whether I have a choice or not, if the plane above me is about to crash. That worries me.

On the forms of ownership, golden shares have become meaningless. Most of them were time-limited, and some have already lapsed, so that does not convince me. Share ownership for staff after privatisation has not been all that important. The worker-management buy-outs that took place in some sectors, which some of us strongly supported, ultimately sold out to Stagecoach, so that form of succession did not last very long.

When we compare what is offered by the Bill and what is offered by new clauses 35 and 36, there does not seem to be much difference when it comes to the public sector borrowing requirement. I understand the Government's attitude, as it would ensure that the necessary investment can be made. However, it is time that the Government found a way of financing capital requirements for Government and public spending as opposed to revenue expenditure, without merging the two. It is nonsense that the Government should not be able to borrow on the normal market for long-term finance without such borrowing being included in the PSBR. It is nonsense to make a judgment in the year in which the expenditure is incurred.

6.45 pm

The real difference is the cash that we will get for the shares—whether it will be 50 or 75 per cent. The Government do not need that money at this stage. The first tranche of money from the recent sale of the mobile phone network bands, which will be available over the next 20 years, is more than double what we will get for the sale of these shares. My right hon. Friend will argue that we need to spend money on hospitals and schools. However, I do not believe that the money from the sale of these shares is required.

I remain unconvinced of the Government's case. I ask my right hon. Friend, even at this late stage, to think again about these provisions and say that he is prepared to consider them before the Bill is dealt with in the other place. We still have time to find a compromise. New clauses 35 and 36 propose what I believe to be solutions that the Government should not totally reject.

Dr. Norman A. Godman (Greenock and Inverclyde)

I promise that I will be brief—I simply wish to make a couple of points.

I have signed the three new clauses. I hope that my right hon. Friend the Secretary of State for the Environment, Transport and the Regions will give sympathetic consideration to the case put so eloquently by my hon. Friend the Member for Ayr (Ms Osborne). As my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) rightly said, my hon. Friend the Member for Ayr has fought this campaign in a remarkably sustained and tireless way, quite unlike her predecessor, and she and her case deserve to be listened to.

In a debate such as this, which is largely, if not completely, confined to Labour contributions, I am reminded of the words of a retired deputy in Dail Eireann. He said that, as a Government Back Bencher, he always felt that, if he praised the Government, he would be accused of sycophancy by some, but if he had the temerity to criticise the Government, he would be accused of treachery by others.

I hope that my right hon. and hon. Friends who have signed the new clauses will not accuse me of sycophancy when I say that my old friend the Deputy Prime Minister is utterly committed to the very highest safety standards. I first met him in the mid-1960s when he and I, along with my hon. Friend the Member for Hull, North (Mr. McNamara), fought campaigns to enhance the safety of merchant seamen and fishermen. So I have every confidence in my right hon. Friend—so does my family, which is made up of fishermen and their wives, daughters and sons—where maritime safety is concerned. For me—and, I am sure, for my family—that extends to his commitment to rail and air safety.

I will now be accused by some of treachery for saying that I have some criticisms of the Bill. I genuinely believe that the trust option offered in this civil-minded debate is the best way forward for the Government. I asked my right hon. Friend a question at a meeting, and then disappeared before he had the opportunity to answer it. I offer my apologies to him publicly for that, but I had visitors from Australia to see to. The question was: why are we out of kilter with so many other states? Some of those states have right-wing Governments, but all of them seem to believe that such services should remain public.

I have to be honest and point out that I am old, and thus old-fashioned enough to believe that some institutions, organisations, services and facilities should remain in the public domain. I believe that of the Prison Service and of NATS. I am happy to come out of the closet and say that, ideologically, it is better that some services and some resources are managed in the public interest by public servants—servants of the state. I shall not apologise for being old-fashioned in my views.

Furthermore, I have long opposed private finance initiatives and public-private partnerships for the building of schools and hospitals—I am sorry that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) is no longer in the Chamber. I have had to accept a PFI for the building of a service for geriatric patients in my constituency, but I have publicly voiced my opposition to private involvement in such an essential service.

I hope that my friendship with my right hon. Friend the Deputy Prime Minister will not be diminished, but philosophically and ideologically, I think that the Government are wrong. I say that with great reluctance because I have great respect for, and trust in, my right hon. Friend. All my hon. Friends who have spoken in favour of the new clauses have emphasised safety; they are right to do so. I do not take issue with those who support the Government, but safety measures should remain in the public domain. I shall always believe that. That is why I shall support the new clauses, even though they will not be accepted by the Government.

However, I do ask the Government to take heed of the powerful case eloquently presented by my hon. Friend the Member for Ayr. They must concede that case. I hope that my right hon. Friend will reconsider that and other issues.

As I am such an old-fashioned ideologue, perhaps it is just as well that I am not seeking reselection, but I hope that my right hon. Friend will listen to those who argue against him in this civil-minded debate.

Mr. Alan Keen (Feltham and Heston)

As time is limited, I shall concentrate briefly on the crux of the issue. Since my election to this place in 1992, I have often been asked what it is like to be in Parliament. My standard answer is that it is better than going to work. I know that we work long hours in this place, but I worked in the private sector for the whole of my previous working life and it is pretty tough there—efficiency is achieved through drive and ruthlessness.

My hon. Friend the Member for South Derbyshire (Mr. Todd) said that he wanted robust management—so do I. I want robust management in the design and installation of the IT systems and in their testing and re-testing. However, I want that robust management to end at the interface between managers who have to answer to shareholders and the people in front of screens who talk to pilots for hour after hour. I do not want robust management there. That is the crux of the debate.

There are parallels with PFI in hospitals. I strongly support PFI in such cases—so no ideology is involved. However, as my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) pointed out, we do not allow the people who build hospitals or those who have 25-year contracts to clean them to be involved on the clinical side—carrying out operations.

My objection to the Government's proposals is based on that one issue. I repeat that I want to remove robust management—chasing profits and applying cost pressures—from that interface. I do not want such management to control the individuals who have the crucial job of talking to pilots.

Some hon. Members have asked whether there is a difference between a small and a large airport in relation to safety. I have lived within five miles of Heathrow airport for 37 years. Those who do not live around the airport cannot fully understand the dangers. I lived close to the area of the Staines plane crash. Of course, that was nothing to do with air traffic control; it was a faulty plane. The trial taking place in Holland reminds us of the devastation that can happen on the ground—never mind a collision in the sky. My constituents suffer from aircraft noise day in and day out; a plane lands or takes off every 90 seconds. They deserve the best service that we can give them.

For the third time, I repeat that we do not want robust management to affect those people who sit in front of the screens doing that vital job. If we want our Olympic athletes to break world records, we take every worry away from them so that they can focus on their running or whatever event they are competing in. The people in front of those screens as just as important—indeed, they are much more important than Olympic athletes. We should treat them in the same way. They should not be subject to the pressures of the private sector.

Mr. Michael Connarty (Falkirk, East)

I join my other colleagues in commending my hon. Friend the Member for Ayr (Ms Osborne) on her speech on amendment No. 454. She has worked tirelessly to convince the Government that, whatever other structures are put in place, they must manage a two-centre strategy. Given that she is a Parliamentary Private Secretary—as I was for a year—I realise how difficult it must have been for her at times to convince the Government. Governments obviously assume that they have the votes of PPSs, who will be loyal. My hon. Friend has worked hard and I commend her on the amendment. It represents one last throw of an important dice—to include in the measure a commitment to the people of Prestwick and the workers there, so that they can be confident that, whatever the management system, there will be a second air traffic control centre.

I seek one assurance from the Deputy Prime Minister. The amendment includes the words "was commissioned". How does my right hon. Friend interpret that? Does it mean that projects that are only at the planning stage? If the planning stage has already been initiated, will the project be encompassed under the provision? That is an important point, because Prestwick is at that stage—no bricks and mortar have been laid, so the project is at an early stage.

I prefer new clause 37 because it would require a report to the House on the progress of those establishments before any commitment is given on transferring assets or shares—it would be the belt and braces for that operation. I should like either new clause 35 or new clause 36 to be passed because they offer a better structure than that proposed by the Government—whether the percentage share is 46:5:49 or 75:25.

A couple of small matters keep coming up. It has been said that, because the rates for air traffic control are set by Europe, a publicly owned corporation could never finance its investment of £1.3 billion. In that case, why are no other EU air traffic services in the private sector? They, too, have to set their rates under European controls.

The hon. Member for Croydon, Central (Mr. Davies) made an important point. If there were better IT efficiency in NATS, there would be a greater flow through airports; there would be fewer delays and income would increase. That would be true of the private sector—it would be a public or a private option.

On management, the amendments on the trust model state clearly that all those involved in management would be from the private and the public sectors. The motivation would be the same for a trust or an IPOC as it would be for anyone else.

Why is a public plc acceptable for the Post Office and not for NATS? As a member of the CWU—Communication Workers Union—parliamentary panel, I have to ask whether the measure is a Trojan horse. If air traffic control is privatised, will there be full privatisation of the Post Office? Will the Secretary of State explain the meaning of clause 49(4), if it does not mean that 75 per cent. will be owned by the private sector and 25 per cent by the public sector? Is that not privatisation?

There is a difference between regulatory control and private profit. I recently picked up an example in the Financial Times which said that airlines in America have asked for a decrease of 10 per cent. in the amount of fresh air that circulates in cabins. They have done than to save millions of dollars in the cost of the fuel that is used to circulate the fresh air. If they are willing to make that cut, they will be willing to make others.

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My final point is one that I have made time and again. I am against the proposal in principle. When we campaigned against water privatisation in Scotland, we were opposed not just to the method, but to the principle. I am against the proposal, and I believe that the Government will pay the consequences, because the people who voted us in are against both the principle of the privatisation and the method to be used.

Mr. Bernard Jenkin (North Essex)

I am the 22nd Member to take part in the debate, which has been an exceptional parliamentary occasion of great credit to the House as a whole. We have had an extremely good debate.

Part of the concern expressed by Labour Members reflects a point made by the hon. Member for Falkirk, East (Mr. Connarty) about whether the proposal is or is not a privatisation. Part of the concern has revolved around the issue of safety, but Conservative Members do not accept that there is any inherent conflict between safety and the right kind of privatisation. As has been pointed out, our airlines and airports are already in private hands and they are part of profitable enterprises, and civil aviation just happens to be the safest form of transport. A sensible privatisation scheme would present no safety threat at all.

I wish to speak initially to our new clause 26, which sets out the policy on which the Conservative party stood at the previous general election. We have proposed a full flotation of NATS to create a great new British company with effective golden share arrangements that would protect the business from unwelcome foreign takeover and provide the widest possible share ownership among the British public.

Labour's proposed public-private partnership, however, is something of a mess. The Secretary of State has many friends, but not, I fear, on this issue. Although we reject the notion that safety is incompatible with private ownership, we have several concerns about the proposed scheme and its circumstances.

As my right hon. Friend the Member for Wokingham (Mr. Redwood) pointed out, this public-private partnership provides poor value for the taxpayer. National Air Traffic Services is probably worth between £1 billion and £1.5 billion and the PPP offers release of loans of about £300 million and net proceeds of £15 million from the sale of operational control of the business. A straight flotation would raise considerably more for the taxpayer, especially if sold in stages rather than in one go. Furthermore, sale proceeds are likely to be significantly enhanced after 2002 when the Swanwick centre becomes operational. Our amendment therefore also argues for delay.

Labour's PPP will not extend share ownership. It is a complex part trade sale, forced on NATS to try to disguise the reality that it is just privatisation by another name. A straight flotation would create thousands of new shareholders.

The strongest bidders appear to be foreign companies: Lockheed Martin, which is NATS's key supplier, is from the United States; Raytheon, which is working with the state-owned German air traffic control company, DFS, is also from the US; and Thompson CSF, with its avionics subsidiary, Airsys, is a French virtually state-owned company. The only UK bidder appears to be the Airline Group, but there is no guarantee that its bid will be successful. The PPP will create not a new British company, but probably a foreign-owned subsidiary, and that does not appear to be in the national interest.

Sale of control to a trade bidder carries extra risks. A straight flotation provides for continuation of the same business, but under the same management. A trade investor offers the downside risk of adverse interference in the management of the company and, in particular, in procurement issues. NATS could finish up tied to a less satisfactory supplier of equipment and there are also risks of transferring control to a state-owned entity in another country.

Moreover, the shareholding structure of the PPP creates its own uncertainties about who will be in control of the business. The Government intend to hold more shares than the so-called strategic partner and the draft articles of association for the partnership company and the draft strategic partnership agreement are both complex documents. In this privatisation, confused responsibilities about who is responsible for safety could give rise to safety concerns. NATS's management are excellent and they have no need for outside expertise from a trade investor.

Recent developments in European Community law mean that a sale at this time also presents a threat to national security on two fronts, and I totally reject the idea that this point is a red herring. First, after the PPP, the UK Government will not be able to determine who owns the controlling interest in NATS. The Bill provides for a golden share, but, in July 1999, the European Commission issued an opinion on golden shares in former state-owned companies as a preliminary to infraction proceedings against BAA's golden share. The Commission says that such shares are illegal under European Community law because they infringe provisions on the free movement of capital and the freedom of establishment.

Secondly, it is likely that the provisions in the Bill, which provide for the intervention of the Secretary of State to protect national security, are also invalid under EC law. NATS deals with military flight plans and has knowledge of the whereabouts of military assets at times of international tension and during hostilities. Although that issue will be dealt with in a later debate, I point out that Royal Air Force chiefs of staff have expressed concern that sensitive intelligence information could be compromised.

In short, Labour' s PPP is deeply flawed. Moreover, the assurances given by the Government are false. They continue to mention the strategic partner, but why does clause 53 refer to the possibility of flotation? In Committee, the Minister told us that recourse to immediate flotation can be made under the Bill in the event that a suitable strategic partner cannot be found.

Why do the Government continue to talk about the retention of 49 per cent. when clause 49, now that it has been amended in Committee, specifically spells out that the Government's shareholding could be reduced to 25 per cent? What will happen if there is a rights issue then? What is clause 49 worth when it has a Henry VIII provision stuck in it so, at a stroke of pen, the Government can, at a later date, tear up the golden share and the share restrictions provisions in the clause? It is incumbent on the Secretary of State to tell us exactly what the golden share is for, given that the European Commission has made it clear that it regards it to be illegal under European Community law.

The Government's PPP is a bad privatisation that we cannot support. The Select Committee described it as the worst of all the possible options. The Conservative party invented privatisation, but we have never been the party of privatisation for its own sake. Privatisation should be a means of improving efficiency and effectiveness, but Labour's privatisation carries risks and disadvantages compared to our scheme.

The Deputy Prime Minister has brought this so-called PPP to the House only because the Treasury is forcing him into the privatisation against his will. It is flawed by the Government's attempt to pretend that they are not privatising something when they are. Having promised before the election that our air is not for sale Labour is now promising a back-door privatisation. Our amendments sets out our policy for the privatisation of NATS—the solution that the aviation industry would truly prefer once national security issues have been resolved. We will vote to try to stop the Government from making a mess of one of this country's vital safety industries.

Mr. Prescott

I think that everyone will agree that this has been a good debate. It has reflected Members' real concerns about change and about the possibility of a public-private partnership, as set out in the Bill, for air navigation services. I welcome all the contributions that have been made to the debate. I have disagreed with some comments and agreed with others; that is inevitable on these occasions. The Government have some differences both with the official Opposition and with the opposition on the Government Benches, but I shall choose to direct myself to the Bill.

The hon. Member for North Essex (Mr. Jenkin), who spoke from the Opposition Front Bench, talked about a wonderful privatisation programme, of which, as he readily said, the proposal before us is not a part. The history of selling the public assets of the United Kingdom is not something to recommend when dealing with further privatisations. In whatever area, privatisation cost the country billions of pounds. The assets sold off were undervalued, as the Public Accounts Committee has made clear. I would not want to put forward any privatisation proposals of that sort.

I am pleased, however, to support proposals that will allow the development of National Air Traffic Services and introduce measures to enhance air safety, at a time when the volume of air traffic is increasing extremely quickly. It has increased by about 20 per cent. in the past five years. This is clearly a growth industry in which safety is a major consideration, and I think that we all agree that there is a good safety record.

I shall take up some of my hon. Friends' comments about the commitment and promise that "Our skies are not for sale". We did not state in the Labour party's manifesto that there was a commitment to do this or not to do it, but it was said at the general election that after the decision to take on two years of the financial programme of the previous Administration, the question had to be asked, "What about the privatisation to which the previous Government were committed?"

We took the view that we would not privatise NATS but would pursue a public-private partnership. That was at the heart of the election, and the point was made by my right hon. Friend the Chancellor of the Exchequer. This is not something that we have sneaked into the House. There was debate, which is a matter of record. It is possible to read exactly what was said at the time.

The proposals that we are discussing are an important part of the Bill, which I am proud to endorse. The Bill will bring improvements to the railways, bus services, and local transport provision. Two key themes are improvements in public transport, which is once again a growth industry after decades of neglect, and an emphasis on the public and private sectors working together for the best overall solution.

Much of the debate, quite properly, has been about safety. I have spent much of my 30 years in the House—I am grateful for the comments that have been made in that regard—dealing with safety issues in all industries. That is a matter of record. Some of my efforts have been successful; others have been less successful. However, it would be most unusual for me to make a proposal that threatened the safety of air navigation. If that is not enough to convince the House, I shall explain why the proposal will make air navigation far safer. Nothing is more important to the Government, or to me personally, than safety in transport.

Everyone who has contributed to the debate, as well as the Select Committee on the Environment, Transport and Regional Affairs, has made it clear that the status quo is not acceptable—that is, that the roles of the operator, which is now responsible both for regulation and for operation, should be separated. The Select Committee said that the status of the CAA with NATS as a subsidiary was not acceptable.

The Committee has been making that recommendation since the late 1980s. I agree with it, but I go further. The Government do not accept that the status quo is good enough for safety. There is a conflict of interest, and a change must be made, which is embodied in the Bill. We also consider that the status quo is not sufficient to meet the long-term investment needs of NATS, which will be the key to maintaining safety, better project management and the ability to grow.

7.15 pm

When we consider the safety record we see that there has been an increase in airprox near misses over the past 10 years. Near misses over those 10 years have increased by almost a third. That is alarming. However, there has been a tremendous growth in air traffic. A fair analysis of safety would mean setting the number of incidents against the growth of aeroplane passenger traffic.

Against that background, it is essential that the new technology and the two-centre approach, which the previous Administration announced, is introduced if we are to improve safety. Swanwick has been delayed for five years, it is £400 million or £500 million over budget and it has still not been implemented. Perhaps someone should have been concerned to ensure that the project was properly financed and properly implemented. It might have played a part in reducing the number of airprox incidents that we are now seeing. The amount of money that is invested in safety is just as important as skills and equipment.

The issue is whether NATS can secure sufficient long-term investment and handle it efficiently. I have examined the record, and it is my judgment that it has not done so. We must change that. In that context, the status quo is not satisfactory.

Dr. Jenny Tonge (Richmond Park)

The Deputy Prime Minister has mentioned three times already that there has been a huge growth in air transport in this country. Does he agree that if terminal 5 is allowed to go ahead, there will be a huge growth in movements in and out of Heathrow?

Mr. Prescott

I have to deal with appeals on such planning issues, so I cannot make any comments now. The hon. Lady will have to wait until the report comes out.

There has been considerable debate about traffic using privately run or publicly NATS-controlled airports. The argument has not greatly benefited the House, but at the same time it has been a good debate. NATS controls much more air traffic than anyone else, whether in terms of movements or of numbers of passengers, but the fact that it is larger does not necessarily mean that it is safer.

Private sector companies, or non-NATS organisations, in Humberside, for example—the airport in my area—enable Concordes to land. Airbuses and jumbo jets land at Luton. Whether controllers are dealing with 10 or 400 people or with a jumbo or a small jet, I am sure that there is equal concern for safety. I think that that has emerged during the debate. The argument that private air traffic controllers are less safe than public controllers in NATS has been rejected.

It has not emerged from the debate that NATS bids for private contracts. Presumably it does so with a profit motive. The assumption that profit undermines safety is not proven. Our experience in visiting airports is that it does not. All the discussion in the world, and all the cockpits that my hon. Friend the Member for Linlithgow (Mr. Dalyell) has visited, do not change that essential point. As for chats with pilots—I do not disagree with the idea that pilots are important people to take into account—I can recall pilots saying, "Don't privatise BAA; it will be less safe."

Mr. Redwood

Will the Deputy Prime Minister give way?

Mr. Prescott

Not now. I apologise. I am dealing with the real opposition.

When I was talking to a pilot about these matters, he admitted that safety had improved since the privatisation of BAA. I do not want to advance the argument that private is good and public is bad, or vice versa. I want to come to a judgment on whether we are introducing measures to make the industry safer.

The new clauses and amendments focus on whether a different company structure can achieve that objective. We have made it clear that we seek to introduce the public-private approach. New clauses 35 to 37 and new clause 26 provide different options. Full privatisation is represented by new clause 26. My right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) seeks to retain a Companies Act company. The NAV Canada solution means that shares in the company cannot be sold, but there is a sale to a non-profit company. No shares are involved. So we are being offered a state corporation, a sort of trust corporation and the full privatisation that I have mentioned.

I am confused when it comes to how Members will vote for all these propositions, unless it all amounts to a belt-and-braces job and, if they lose on the first one, they will move on to the next. I hope that they will not touch the third one.

The Government believe in a public-private partnership. That is not a privatised approach but it is a different form of the public-private approach. It involves shares in the private sector, and is a different form of the public-private partnership from the one that I have developed for the London underground. There are horses for courses. It is a different partnership from the one I have developed for the channel tunnel rail link, which I had to rescue from the terrible mess created by the previous Administration. All those measures involved £20 billion.

Those who said that the money would come from telecoms include, I think, my hon. Friend the Member for Burnley (Mr. Pike). However, that money has been spent at least five or six times already. Nobody needs to be convinced that Labour knows how to spend money; the difficulty is in pointing out where we raise the money that we spend. There is a history to that argument.

The £20 billion has been raised from an industry that has an income flow, which means that there is less pressure on the public sector to raise revenue or capital for hospitals and schools. The £500 million that would be raised from the sale of NATS is equivalent to putting a pound on pensions. Judgments must be made about public expenditure priorities and the Government will take such considerations into account in their public expenditure programmes.

Mr. Redwood

It is generous of the Deputy Prime Minister to let me intrude on private grief. He would agree that the Treasury would be over-generous if it offered £5 notes for £1—it might mean that there was an election coming up—but when the Government offer to pass on control of £1.5 billion of assets for £300 million, are they not offering £5 notes for £1? Those are the figures that the Government have supplied. Is not the sale of those assets, over the heads of British management and employees and probably to a foreign stakeholder or shareholder, a big slap in the face for those British managers and workers?

Mr. Prescott

If the hon. Gentleman has read our response to the Select Committee report or our letters to the Committee, he will know that that is complete nonsense. The argument about those figures concerns a judgment about debt and equity, which we have dealt with before. I shall take no lectures from the hon. Gentleman, who was a member of the Government who, as the Public Accounts Committee has pointed out, undersold most of our assets by billions of pounds. He now has the audacity to lecture us about selling off assets. Whatever the intention of the previous Administration, those sales were hardly good for the taxpayer.

Mr. Jenkin

Will the right hon. Gentleman give way?

Mr. Prescott

No, I must make progress.

Mr. Jenkin

rose—

Mr. Prescott

Sit down.

A public-private partnership, or any of the alternatives, must satisfy the Government's criteria. First, we want to separate NATS operation from CAA regulation—there seems to be agreement on that in the House—not only to maintain safety but to enhance it. I shall return to that point. We also want to maintain the national security objective, to secure the long-term investment that I have referred to, to introduce stability to the investment programme and to get better project management skills.

I have heard the talk about Rover's management skills. Considering the problems that I inherited as Secretary of State, it is no wonder that in some of our public sector industries, projects are not completed on time and are over budget by billions of pounds. It was estimated that the two centres for NATS would cost about £600 million, but they will now cost us over £1 billion and the project is five years late. I could give several examples that demonstrate that although the public sector culture is plainly good for safety, the public sector is not too good at handling projects. The taxpayer has to make up any difference—to the tune of £1.5 billion in the case of the Jubilee line extension.

A public-private partnership for London docklands light rail is on time, is as efficient as it is effective and imposes no extra cost on the taxpayer. We must take such examples into account when considering the quality of management. I have been a defender of the public sector all my life, but it costs a great deal more than the private sector, and we must ask why. Various explanations have been given, but I am faced with the practicalities.

When considering a public-private partnership, we decided on a trade sale, to which the hon. Member for North Essex referred, to a strategic partner. The hon. Gentleman did not seem to think that that was a good idea. So why did the Conservative Government sell Rover to BMW for £1? When English, Welsh and Scottish railways came along, there were three companies to be sold. The American buyer said that it would only buy the lot. Not only did the Conservative Government give it the lot, but they gave it £250 million to take it away. [Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. There are many private conversations taking place in the Chamber. The right hon. Gentleman is addressing the House, so hon. Members should listen to what he has to say.

Mr. Prescott

I certainly believe and intend to show that a public-private partnership with a strategic partner will provide a strong framework of public accountability.

Mr. Jenkin

May I point out that if the right hon. Gentleman chose to pursue the NAV Canada proposal, the Government would still receive a capital receipt for the sale of the business. NAV Canada raised a large sum in bonds to pay for the business, so the public sector still received a capital receipt.

Mr. Prescott

I hear that defence, but my point was that although a strategic partner was involved, the business was sold to one operator. There are several examples of that, so I find it difficult to understand why the hon. Gentleman cannot accept the idea of a strategic partner. Indeed, his proposal would not allow for that: the hon. Gentleman wants to float shares in a full privatisation. That is a straightforward position, and it is argued that that is best for the taxpayer, but I am bound to say that the record of privatisations does not bear that out.

New clause 35, which was moved by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), makes it clear that we should take the option of state ownership. It would permit the separation of the provision of a service from its regulation, but would do little else. It would retain the service in the state sector and would therefore lead to problems in acquiring public investment. The service would have to apply for the Treasury for resources. There would also be all the difficulties of being unable to get a programme established for more than two or three years. The service would have to compete with others requiring public expenditure.

Those problems have undermined the public sector in this country. Inadequate finance for the quality of service required is a reason why the quality of public services has got worse. We are desperately seeking to change that. The public sector suffers from stop-go investment, as I suggested, and that has dogged most of the transport industry for a long time.

Swanwick is a classic example of a project that is over budget, over time and, frankly, will not even produce the facility that we want. Indeed, it is dogged by concerns of one form or another. My hon. Friend the Member for Ayr (Ms Osborne) told us about the two-centre operation, pointing out that a privatised service might not retain two centres.

I listened carefully to what my hon. Friend had to say, and she made a powerful case tonight for what she has been advocating for a long time. There is no disagreement between us on the matter. In fact, the Prime Minister made it clear at the Dispatch Box that he accepted the spirit of her amendment and that her proposals would be written into the strategic agreement. The strategic partner would be required by the Government to build the second centre. The proposal would involve a golden share, directors and articles of association, as we pointed out to the Select Committee. I understand the fears expressed by my hon. Friend, and the concern about the matter in Scotland. On behalf of the Government, I accept her amendment.

Ms Osborne

I just want to be absolutely sure about this. Is my right hon. Friend saying that he unequivocally accepts my amendment and that it will be added to the Bill?

Mr. Prescott

Yes, my hon. Friend has re-emphasised my point. Her amendment will become a Government amendment, so I hope that that does not cause her embarrassment.

My right hon. Friend the Member for Edinburgh, East and Musselburgh spoke to new clause 36. The new clause and the amendments associated with it seek to achieve a different end from the Government's. They would involve the separation to which I referred, and would establish a strategic partner, but restrict it to being a not-for-profit company. That is a bit like Virgin saying that it would run the lottery on a not-for-profit basis—I shall leave aside the fact that my right hon. Friend would want a bit of profit for investment and equity.

My right hon. Friend cited NAV Canada as a working example of that model. That suffers most of the drawbacks of a state-owned option. A letter sent to us makes it clear that the assets were sold by the state, and there is no accountability. Although the agreements and safety regulations do not say so, NAV Canada is privatised. All the assets that were owned by the state, and which in all other countries are still owned by the state, have been sold to a trust company. People have been appointed from the unions and other companies to sit on its board, but the trust company runs the service. There is no accountability to the Government, or Government ownership. Agreements have to be struck about defence—an issue that I should have thought would be of some concern to the House. Such an arrangement does not provide the proper degree of accountability; I believe that there must be accountability, which is why we are writing it into the process.

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Dr. Strang

At a meeting a week or so ago, we heard an address by the trade union director of NAV Canada, who explicitly stated that NAV Canada was answerable to the relevant Minister.

Mr. Prescott

That Minister can issue directions along the lines of, "On safety, you must do this." However, NAV Canada does not raise money from the Government; it raises it from the private sector and is free to do so. In addition, it can do whatever it likes in respect of prices and profits—the Government have no control over those aspects. My point is that the arrangement brings all the problems that are associated with many trusts.

I remember that when I first entered Parliament in the 1970s, there were problems with the Merseyside docks, then controlled by a trust. People got hold of it, forced down the prices and the brave Selsdon men would not allow it to be rescued. Eventually, they were forced to mount a rescue. That trust arrangement had failed to provide adequate investment or proper accountability to Government. That would not be a satisfactory way to deal with air traffic control, with all its defence implications and investment requirements; nor would such an arrangement allow the business to invest abroad.

I always take the cost-plus approach to public investment. An arrangement such as the one proposed could not be controlled; it could set its own prices and exploit its monopoly position—unaccountable to anyone, it would simply pass on all the costs. That is not the sort of culture that will produce the efficiency and investment that the modern aviation industry needs.

Dr. Lynne Jones (Birmingham, Selly Oak)

Do my right hon. Friend's comments about the lack of accountability of trust bodies apply to registered social landlords, to whom the Government propose to transfer council housing?

Mr. Prescott

There are all sorts of trusts, including hospital trusts. There are always problems to be addressed. My point is that, while a trust body could raise the capital to make the necessary investment, it could not provide the sort of flexibility, management and efficiency that we want. Furthermore, I believe that the Government should have some control and that the industry should be accountable. We can argue about percentages—49 per cent., or whatever it might be—

Mr. Deputy Speaker

Order. It is a small matter in the circumstances, but would the right hon. Gentleman please face the Chair?

Mr. Prescott

I apologise, Mr. Deputy Speaker.

We do not accept that a public-private partnership would jeopardise safety. The airline operators told the Select Committee that the Government's proposals would enhance aviation safety and they stated why that was. People say that the airline operators would say that, but I cannot accept that the 13 major UK airline operators are indifferent to whether or not an aeroplane crashes, or to their safety record. To say that they are is silly and dangerous and undermines the very concept of safety.

Safety regulation will remain firmly in the public sector in a reformed Civil Aviation Authority. We shall ensure that we remain the safest providers of air traffic control services in the world. There was some doubt about whether such an approach would be effective, but the CAA is a public body and I thought that everyone accepted that safety should rest with a public body, not with the body that is responsible for operations. Therefore, the CAA has to do the job.

Safety is of paramount importance, which is why we have made it clear that the CAA is to set minimum standards. As my hon. Friend the Member for Reading, West (Mr. Salter) said, there are higher standards than those enforced by the CAA. However, we have made it clear that all the standards that currently apply will continue to do so. Furthermore, we have transferred safety from the operating body to the public body—the Select Committee asked for that major change and we have made it. We have done more, by making it absolutely clear to the companies involved they cannot provide air traffic control services unless the CAA safety regulation group is satisfied that they can do so safely.

The CAA will continue to conduct regular inspections and audits. The competence and medical fitness of all operators will be tested annually. Procedures and equipment used by controllers must be approved by the CAA, and it will control maximum working hours. A company will not be able to make controllers work longer, because their hours will continue to be controlled by regulation—nothing will change. Given the growth in the industry, it is likely that more air traffic controllers will be required in future. The point is that controllers cannot be made to work more hours. The type of equipment used will be set down in the licence and controlled by the CAA. Therefore, nothing changes in respect of controllers and their equipment.

We met trade union representatives and discussed all those matters. Let me make it clear: the unions did not endorse our proposal and I did not ask them to. However, we have adopted important safety measures, continued existing measures and then gone further, in response to union concerns. Safety will be mentioned in the strategic partnership agreement; a NATS board director appointed by the Government will have specific responsibility for safety; and a safety monitoring committee will be established, chaired by a Government-appointed director. The safety management system that includes elements that exceed statutory minimum requirements will remain in place. The CAA's audit arrangements will be extended to ensure that there is an annual audit of safety management. Finally, training and development standards will be improved. Those are the safety concerns of people in the industry and we have met those concerns. I have not asked the unions to endorse the Government's proposal for a public-private partnership. However, the unions have endorsed those safety improvements.

We have a gold-plated arrangement. First, we have separated the public safety regulator from the service operator, as everyone wants us to do. Secondly, we have strengthened the strategic partnership agreement and the articles of association. Thirdly, the Government will appoint to the board directors who have specific responsibility for safety. By any stretch of the imagination, those measures represent an improvement on current safety standards. I do not accept that safety will be weakened, even though we can argue about how far we should go to improve it. The Bill will ensure far better safety standards than I inherited and than were prevalent when I started with the public-private partnership.

Mr. Dalyell

Given my right hon. Friend's comments of the past five minutes, how come he has failed to persuade IPMS and BALPA?

Mr. Prescott

They were the ones that argued that BAA should not be privatised, saying that it would be less safe, but they changed their minds. I had to argue the Government's case for this PPP, but I listened carefully to workers and operators in the industry.

My hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) mentioned the fishing industry. When we tried to improve safety in that industry, those who opposed our measures most fiercely were the fishermen. They gave us all sorts of reasons why they did not believe in it—for example, that it would cost a lot more. However, on safety we have to do what is right. That is the obligation that I have accepted and I can live with its being unpopular, just as I can live with leaving a safer system than I inherited.

I have heard a lot of tosh about the public and private sectors. Do hon. Members feel less safe when they get on board a private-sector aeroplane than they did when British Airways was a public company? When that airline was publicly owned, did they choose it because they believed it was safe? Perhaps they are the sort of people who felt better on reading the old local authority notices that said, "This is a nuclear-free area." It is a load of nonsense—[HON. MEMBERS: "Come over here."] The Conservatives invite me to cross the Floor, but I am just trying to make a point within the context of the amendments.

We have been told to remember Paddington, but I remember King's Cross and Clapham—public sector disasters. Safety was not better under the public sector in that industry. [HON. MEMBERS: "Come on over."] I shall present the arguments and state our priorities as I think best. I have heard a lot about safety, but no one has said anything about the safety improvements. A lot of tosh has been said about the public and private sectors; my response is to cite the example of the railways. I have never accepted "public good, private bad," or "private good, public bad." I believe that a balance has to be struck so that we can get the best from both, and a public-private partnership is designed to do exactly that. That is what the Bill will achieve.

The Tories' alternative is privatisation—they have made that absolutely clear. They do not want there to be any control or accountability; they simply want to sell the operation for the best possible price. They are indifferent to the safety, efficiency or effectiveness of the industry. We utterly reject such an approach. We shall retain shares through the public-private partnership because we believe that that will provide one form of accountability. That accountability is also expressed in the articles of association, the strategic partnership agreement, a strict operating licence, the continuing Government and employee shareholding, and the appointment of Government directors with a veto in respect of key issues such as safety, major investment and national security.

As I have heard a bit about national security, I might add that the annual report of the Joint Air Navigation Services Council—the body that brings together the CAA, NATS and the Ministry of Defence—which has just come out, says of the Government's proposals: the Council believes they will preserve the successful civil/military relationship that currently exists between NATS and the MOD and ensure that air traffic services are sustained on a joint and integrated basis … I refer to my right hon. Friend the Member for Edinburgh, East and Musselburgh that report of the bodies that have responsibility for defence and national security, which is the subject of the next debate.

We have put into the Bill many checks and controls. I have made my points about safety. I believe that it is absolutely clear that we can enhance the safety of the system. I have made it clear that I accept amendment No. 454 tabled by my hon. Friend the Member for Ayr. That is right; we shall be writing the proposal into the Bill.

We said from the beginning that we would listen to what was said on the changes. Governments cannot be arrogant and ignore matters; they have to make their case in the House. We have made it clear from the beginning that the changes constitute a public-private partnership, and that the two-centre model may be written into the Bill—we have listened on that and accepted it. We have increased and enhanced safety, as requested by the trade unions, after months of negotiation.

All that makes for a good Bill. All that, in my mind, produces a public-private partnership that will meet the needs of the country and the investment requirements of civil aviation, which will be safer, more accountable and over which the Government will have considerable influence and control. Above all, that will provide safe and sustained investment. I commend the Bill to the House.

Mrs. Dunwoody

NATS has no comparison in the private sector. Air traffic controllers do not compete against one another for the control of aircraft—they co-operate. The men and women working in the sector are absolutely certain that the Government's proposal is not the way forward. We believe, as the Transport Sub-Committee pointed out, that there are various ways in which that paying service, which has always been able to return money to the public sector, could operate safely and effectively either as a public corporation or as a trust.

I hope that every Member will decide that they must live with their consciences on the quality of the votes that they cast tonight, and I hope that they will bear that in mind.

Question put, That the clause be read a Second time:—

The House divided: Ayes 99, Noes 307.

Division No. 184]	[7.42 pm
AYES
Allan, Richard	Hughes, Simon (Southwark N)
Ashdown, Rt Hon Paddy	Jones, Dr Lynne (Selly Oak)
Baker, Norman	Jones, Nigel (Cheltenham)
Ballard, Jackie	Keen, Alan (Feltham & Heston)
Barnes, Harry	Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Beggs, Roy
Bell, Martin (Tatton)	Kirkwood, Archy
Benn, Rt Hon Tony (Chesterfield)	Lepper, David
Bennett, Andrew F	Lewis, Terry (Worsley)
Brake, Tom	Livingstone, Ken
Brand, Dr Peter	Livsey, Richard
Breed, Colin	Llwyd, Elfyn
Bruce, Malcolm (Gordon)	McDonnell, John
Burnett, John	Maclennan, Rt Hon Robert
Burstow, Paul	Mahon, Mrs Alice
Campbell, Rt Hon Menzies (NE Fife)	Marek, Dr John
	Michie, Mrs Ray (Argyll & Bute)
Canavan, Dennis	Moore, Michael
Chaytor, David	Oaten, Mark
Chidgey, David	Öpik, Lembit
Clapham, Michael	Prentice, Gordon (Pendle)
Clwyd, Ann	Prosser, Gwyn
Connarty, Michael	Rendel, David
Corbyn, Jeremy	Ross, William (E Lond'y)
Cotter, Brian	Russell, Bob (Colchester)
Cryer, Mrs Ann (Keighley)	Salter, Martin
Cryer, John (Hornchurch)	Sanders, Adrian
Dalyell, Tam	Shepherd, Richard
Davey, Edward (Kingston)	Simpson, Alan (Nottingham S)
Davidson, Ian	Skinner, Dennis
Davis, Rt Hon David (Haltemprice)	Smith, Llew (Blaenau Gwent)
Dean, Mrs Janet	Smith, Sir Robert (W Ab'd'ns)
Dismore, Andrew	Smyth, Rev Martin (Belfast S)
Dobbin, Jim	Strang, Rt Hon Dr Gavin
Donohoe, Brian H	Stunell, Andrew
Dunwoody, Mrs Gwyneth	Swinney, John
Ewing, Mrs Margaret	Taylor, David (NW Leics)
Fearn, Ronnie	Taylor, Matthew (Truro)
Field, Rt Hon Frank	Tonge, Dr Jenny
Flynn, Paul	Turner, Dr Desmond (Kemptown)
Foster, Don (Bath)	Tyler, Paul
Fyfe, Maria	Wareing, Robert N
George, Andrew (St Ives)	Webb, Steve
Gidley, Ms Sandra	Welsh, Andrew
Godman, Dr Norman A	Wigley, Rt Hon Dafydd
Golding, Mrs Llin	Williams, Mrs Betty (Conwy)
Gordon, Mrs Eileen	Willis, Phil
Gorrie, Donald	Winnick, David
Harris, Dr Evan
Harvey, Nick	Tellers for the Ayes:
Heath, David (Somerton & Frome)	Mr. Bill Michie and
Hopkins, Kelvin	Mr. Mike Wood.

NOES
Adams, Mrs Irene (Paisley N)	Allen, Graham
Ainger, Nick	Anderson, Donald (Swansea E)
Ainsworth, Robert (Cov'try NE)	Anderson, Janet (Rossendale)
Alexander, Douglas	Armstrong, Rt Hon Ms Hilary

Ashton, Joe	Eagle, Angela (Wallasey)
Atherton, Ms Candy	Eagle, Maria (L 'pool Garston)
Atkins, Charlotte	Edwards, Huw
Banks, Tony	Ellman, Mrs Louise
Battle, John	Ennis, Jeff
Bayley, Hugh	Fisher, Mark
Beard, Nigel	Fitzpatrick, Jim
Beckett, Rt Hon Mrs Margaret	Fitzsimons, Mrs Lorna
Bell, Stuart (Middlesbrough)	Flint, Caroline
Benn, Hilary (Leeds C)	Follett, Barbara
Bermingham, Gerald	Foster, Rt Hon Derek
Berry, Roger	Foster, Michael Jabez (Hastings)
Best, Harold	Foster, Michael J (Worcester)
Betts, Clive	Foulkes, George
Blackman, Liz	Galbraith, Sam
Blair, Rt Hon Tony	Gapes, Mike
Blears, Ms Hazel	Gardiner, Barry
Blizzard, Bob	George, Bruce (Walsall S)
Blunkett, Rt Hon David	Gibson, Dr Ian
Boateng, Rt Hon Paul	Gilroy, Mrs Linda
Borrow, David	Goggins, Paul
Bradley, Keith (Withington)	Griffiths, Jane (Reading E)
Bradley, Peter (The Wrekin)	Griffiths, Nigel (Edinburgh S)
Bradshaw, Ben	Griffiths, Win (Bridgend)
Brown, Rt Hon Gordon (Dunfermline E)	Grocott, Bruce
	Gunnell, John
Brown, Rt Hon Nick (Newcastle E)	Hall, Mike (Weaver Vale)
Brown, Russell (Dumfries)	Hall, Patrick (Bedford)
Browne, Desmond	Hamilton, Fabian (Leeds NE)
Burden, Richard	Hanson, David
Burgon, Colin	Harman, Rt Hon Ms Harriet
Butler, Mrs Christine	Heal, Mrs Sylvia
Byers, Rt Hon Stephen	Healey, John
Caborn, Rt Hon Richard	Henderson, Doug (Newcastle N)
Campbell, Mrs Anne (C'bridge)	Henderson, Ivan (Harwich)
Campbell, Ronnie (Blyth V)	Hepburn, Stephen
Cann, Jamie	Heppell, John
Caplin, Ivor	Hesford, Stephen
Casale, Roger	Hewitt, Ms Patricia
Cawsey, Ian	Hill, Keith
Chapman, Ben (Wirral S)	Hodge, Ms Margaret
Church, Ms Judith	Hoey, Kate
Clark, Rt Hon Dr David (S Shields)	Home Robertson, John
Clark, Dr Lynda (Edinburgh Pentlands)	Hood, Jimmy
	Hoon, Rt Hon Geoffrey
Clark, Paul (Gillingham)	Hope, Phil
Clarke, Charles (Norwich S)	Howarth, Alan (Newport E)
Clarke, Eric (Midlothian)	Howarth, George (Knowsley N)
Clarke, Rt Hon Tom (Coatbridge)	Howells, Dr Kim
Coaker, Vernon	Hoyle, Lindsay
Coffey, Ms Ann	Hughes, Ms Beverley (Stretford)
Coleman, Iain	Hughes, Kevin (Doncaster N)
Colman, Tony	Humble, Mrs Joan
Cook, Rt Hon Robin (Livingston)	Hurst, Alan
Cooper, Yvette	Hutton, John
Corbett, Robin	Iddon, Dr Brian
Corston, Jean	Illsley, Eric
Cousins, Jim	Ingram, Rt Hon Adam
Cox, Tom	Jackson, Ms Glenda (Hampstead)
Cranston, Ross	Jackson, Helen (Hillsborough)
Crausby, David	Jenkins, Brian
Cummings, John	Johnson, Alan (Hull W & Hessle)
Cunningham, Rt Hon Dr Jack (Copeland)	Johnson, Miss Melanie (Welwyn Hatfield)
Cunningham, Jim (Cov'try S)	Jones, Mrs Fiona (Newark)
Curtis-Thomas, Mrs Claire	Jones, Helen (Warrington N)
Darling, Rt Hon Alistair	Jones, Martyn (Clwyd S)
Darvill, Keith	Jowell, Rt Hon Ms Tessa
Davey, Valerie (Bristol W)	Kaufman, Rt Hon Gerald
Davies, Rt Hon Denzil (Llanelli)	Keeble, Ms Sally
Davies, Geraint (Croydon C)	Keen, Ann (Brentford & Isleworth)
Dawson, Hilton	Kelly, Ms Ruth
Denham, John	Kemp, Fraser
Dobson, Rt Hon Frank	Kennedy, Jane (Wavertree)
Doran, Frank	Khabra, Piara S
Dowd, Jim	Kidney, David

King, Andy (Rugby & Kenilworth)	Primarolo, Dawn
King, Ms Oona (Bethnal Green)	Purchase, Ken
Kumar, Dr Ashok	Quin, Rt Hon Ms Joyce
Ladyman, Dr Stephen	Quinn, Lawrie
Lawrence, Mrs Jackie	Radice, Rt Hon Giles
Leslie, Christopher	Rammell, Bill
Levitt, Tom	Raynsford, Nick
Lewis, Ivan (Bury S)	Reed, Andrew (Loughborough)
Liddell, Rt Hon Mrs Helen	Reid, Rt Hon Dr John (Hamilton N)
Linton, Martin	Robinson, Geoffrey (Cov'try NW)
Lloyd, Tony (Manchester C)	Roche, Mrs Barbara
Lock, David	Rooker, Rt Hon Jeff
Love, Andrew	Rooney, Terry
McAvoy, Thomas	Ross, Ernie (Dundee W)
McCafferty, Ms Chris	Rowlands, Ted
McDonagh, Siobhain	Roy, Frank
Macdonald, Calum	Ruane, Chris
McFall, John	Ruddock, Joan
McGuire, Mrs Anne	Ryan, Ms Joan
McIsaac, Shona	Sarwar, Mohammad
McKenna, Mrs Rosemary	Sawford, Phil
Mackinlay, Andrew	Sedgemore, Brian
McLeish, Henry	Sheerman, Barry
McNulty, Tony	Sheldon, Rt Hon Robert
MacShane, Denis	Shipley, Ms Debra
Mactaggart, Fiona	Singh, Marsha
McWalter, Tony	Smith, Rt Hon Andrew (Oxford E)
McWilliam, John	Smith, Angela (Basildon)
Mallaber, Judy	Smith, Rt Hon Chris (Islington S)
Mandelson, Rt Hon Peter	Smith, Jacqui (Redditch)
Marsden, Gordon (Blackpool S)	Smith, John (Glamorgan)
Marsden, Paul (Shrewsbury)	Snape, Peter
Marshall, David (Shettleston)	Soley, Clive
Martlew, Eric	Southworth, Ms Helen
Maxton, John	Spellar, John
Meacher, Rt Hon Michael	Squire, Ms Rachel
Merron, Gillian
Michael, Rt Hon Alun	Starkey, Dr Phyllis
Milburn, Rt Hon Alan	Steinberg, Gerry
Miller, Andrew	Stewart, David (Inverness E)
Moffatt, Laura	Stewart, Ian (Eccles)
Moonie, Dr Lewis	Stinchcombe, Paul
Moran, Ms Margaret	Stoate, Dr Howard
Morgan, Ms Julie (Cardiff N)	Straw, Rt Hon Jack
Morley, Elliot	Stringer, Graham
Morris, Rt Hon Ms Estelle (B'ham Yardley)	Stuart, Ms Gisela
	Sutcliffe, Gerry
Morris, Rt Hon Sir John (Aberavon)	Taylor, Rt Hon Mrs Ann (Dewsbury)
Mountford, Kali	Taylor, Ms Dari (Stockton S)
Mowlam, Rt Hon Marjorie	Temple-Morris, Peter
Mudie, George	Thomas, Gareth (Clwyd W)
Mullin, Chris	Thomas, Gareth R (Harrow W)
Murphy, Denis (Wansbeck)	Timms, Stephen
Murphy, Jim (Eastwood)	Tipping, Paddy
Murphy, Rt Hon Paul (Torfaen)	Todd, Mark
Naysmith, Dr Doug	Touhig, Don
Norris, Dan	Trickett, Jon
O'Brien, Bill (Normanton)	Truswell, Paul
O'Brien, Mike (N Warks)	Turner, Dr George (NW Norfolk)
O'Hara, Eddie	Turner, Neil (Wigan)
Olner, Bill	Twigg, Derek (Halton)
O'Neill, Martin	Twigg, Stephen (Enfield)
Organ, Mrs Diana	Tynan, Bill
Osborne, Ms Sandra	Vaz, Keith
Palmer, Dr Nick	Ward, Ms Claire
Pearson, Ian	Watts, David
Pendry, Tom	Whitehead, Dr Alan
Perham, Ms Linda	Wicks, Malcolm
Pickthall, Colin	Williams, Rt Hon Alan (Swansea W)
Plaskitt, James
Pollard, Kerry	Williams, Alan W (E Carmarthen)
Pond, Chris	Wills, Michael
Pope, Greg	Wilson, Brian
Prentice, Ms Bridget (Lewisham E)	Woolas, Phil
Prescott, Rt Hon John	Worthington, Tony

Wright, Anthony D (Gt Yarmouth)	Tellers for the Noes:
Wright, Dr Tony (Cannock)	Mr. David Jamieson and
Wyatt, Derek	Mr. David Clelland.

Question accordingly negatived.