HL Deb 23 June 1986 vol 477 cc74-108

7.28 p.m.

Read a third time.

Clause 15 [Transfer schemes]:

Lord Underhill moved Amendment No. 1: Page 13, line 1, after ("(2)") insert ("or with such advice as may have been obtained from independent financial advisers by the principal council who submitted the scheme.")

The noble Lord said: My Lords, we are in certain difficulties in dealing with this Third Reading in so far as one appreciates how important are the issues of social security; yet at the same time one has to be fair (if that is the right word to use) to the airport operators and not least to the local authorities. It is not my usual practice to make what might be called a lengthy speech in proposing an amendment, but in moving this Amendment No. 1 it is necessary to cover a fairly wide field.

The purpose of the amendment is to provide local authorities with the opportunity to seek independent advice on the way company formation issues are handled in general and the preparation of transfer schemes in particular. The amendment also provides for any such independent advice to be taken into account by the Secretary of State before the determined scheme is submitted to him by a local authority.

The amendment is necessary for two basic reasons. First, there is the need to ensure that schemes reflect the interest of individual airports, that schemes are prepared properly and that all facets of company formation are considered: for instance, tax and fiscal planning. A similar amendment was withdrawn at the Report stage after the noble Earl, Lord Caithness, had referred to draft guidance on the establishment of airport companies which the Department had issued that same day.

Nothing was then known of the contents of the guidance notes. Local authorities have now had the opportunity to examine the document and they are concerned over quite a number of points. I am advised on these matters by the Joint Airports Committee of Local Authorities. It is for that reason that I have to cover a number of points to show the problems arising from the guidance notes issued on the very day that we took our Report stage.

In explaining the terms of the Airports Bill, the document is both accurate and comprehensive, but local authorities expected to see a practical guide to company formation. In this respect, the guidance notes are very disappointing and, I am advised, in some major respects misleading. The document does not acknowledge the complexities of the issue, which the department seems to treat as just another mechanistic exercise. Paragraphs 12 to 14 of the document deal with valuation and the impression is given that valuing an airport is just the same as valuing houses or vacant land. In fact, the document advises local authorities to make use of the district valuer. The fact that airport-related valuation is a specialised exercise is ignored, and I am advised that there are only three or four firms in the country with the experience and expertise to do this job of airport valuation.

Also, it is not good enough for the department to indicate in paragraph 18 of these notes that local authorities should consider the tax implications of transfer schemes. The tax dimension will determine the best way of handling a transfer and the basis on which an airport is to be valued. This will differ for each airport depending on the individual circumstances.

There is no advice given in the document about the various ways of dealing with transfer values, each one of which has its own influence on the scale of allowances which can be generated. This is just one reason why each local authority concerned needs independent expert advice, to which reference is made in the amendment.

Local authorities have repeatedly expressed concern at the tight timetable and, in this connection, the noble Earl said on 10th June that he recognised that the timetable was a tight one. But he asked noble Lords, to think back to the speed with which the Greater Manchester district councils managed to establish Manchester Airport plc, and that was even without the benefit of Government guidance".

He said that at col. 156 of the Official Report. In fact, I am informed that it took the Manchester authorities over 12 months to assemble the detail of the package to set up the Manchester Airport plc.

The former Secretary of State said that six months would be required to do this job. In effect, the guidance notes have reduced this period, for the schemes now have to be submitted by the end of November and the Bill is not yet passed. Bearing in mind the need for inter-local authority consultations and the decision-taking that must take place, local authorities will have two to three months in which to prepare a complex scheme. That is totally inadequate.

The guidance notes also refer in paragraph 17 to working capital, but, again, they fail to recognise that the airport companies will have different needs, which will be reflected in their financial profiles. The point is not without significance to the local authorities themselves, for the initial provision of working capital will be a cost borne by them. I must ask: Will this expenditure be taken into account for rate support grant purposes in 1987-88? The Government's decision, which the noble Earl reported to us at the Report stage, to introduce a new GREA to cover airport debt charges retained by local authorities was given a general welcome. However, I must repeat some of the questions posed at the Report stage.

In a letter to local authority associations explaining the new GREA, the department stated that this will be taken into account in settling the aggregate Exchequer grant to local authorities. When the matter was raised on Report, the noble Earl said at col. 162: The amounts calculated in this way would be added to the individual authorities' overall GREAs to ensure that the entire notional cost of financing past airport debt is met with the rate support grant".—[Official Report, 10/6/86.]

This is clearly impossible under current grant arrangements. Therefore, bearing in mind that in 1986–87 the Exchequer grant is only 46.4 per cent. of relevant expenditure compared with 60 per cent. in 1980–81, we must ask again: Will there be new money to meet this question of GREA? This point was also raised by the noble Lord, Lord Diamond. Will the central government grant be increased to allow for this? If not, then the new GREA is not the concession that we thought it was when announced by the noble Earl.

Further, paragraph 23 of the guidance notes demonstrates that pension increase costs to staff who have ceased employment before transfer will be borne by the local authority. These can be very high indeed and one airport estimates that the figure could be as high as £200,000. It is important that the financing arrangements for local government through the GREAs should reflect this. There may be other costs arising as a result of setting up the new companies and the transfers which should also be covered by any new GREA arrangements. Will that be done?

At all stages, amendments have been tabled with the aim of excluding a number of smaller local airports from the provisions of the Bill. Although Ministers have resisted these amendments, in the Committee stage the noble Earl, Lord Caithness, undertook to consider cases from individual airports who would argue that they should not be served with a direction. Many airports are taking this invitation very seriously, but they are very concerned to note the department's advice on company formation, which states bluntly that the Secretary of State intends to issue a direction to all airports caught by the appropriate clause. Therefore, I must ask the noble Earl to confirm that the offer made on 15th May stands and to undertake that the department's advice to local authorities is amended to reflect this.

There have also been lengthy debates at all stages of the Bill in this House and in another place on the role of elected members as directors of airport companies. At no stage did the Minister endeavour to discourage councillors from becoming directors, but the draft advice which has been sent out states: that councillor/directors will be in a position of dual responsibility in which conflicts of interest could all too easily arise".

It then goes on to warn that it remains the responsibility of directors to see that their role as councillors does not colour their actions as directors in relation to the company".

I ask noble Lords to note that it refers to "colour"— not to "improperly colour". This advice ignores the fact that, at least initially, the controlling authority will be the sole shareholder and that directors are appointed by the shareholders to run the company efficiently and viably and in line with the strategic objectives set by the shareholder, which will be the local authority.

The Government are absolutely right to advise prospective directors of their duties and obligations, but wrong to do so in a way which would unreasonably discourage elected members from fully participating in the running of the companies which their local authorities will own in the first instance. I ask the noble Earl: Does he accept that what I have just said should be the position?

I have indicated just some of the items in the guidance notes which have caused great concern to local authorities, and other examples could be given. But I think sufficient has been said to cause the Government to reconsider their intentions. First, I urge the Government to withdraw the guidance notes pending discussion between the department and independent experts. I ask that the timetable for the formation of companies should be adjusted accordingly, and that there should be a new approach to company formation to minimise the problems which may ensue.

Secondly, sympathetic consideration should be given to the new GREAs, taking on board all the additional costs which will fall upon local authorities, an I there should be an assurance that there will be new money provided to enable this to be done.

Finally, I propose the acceptance of this amendment to encourage local authorities themselves to obtain independent advice. The guidance notes are even silent on this issue. But I believe that what I have said indicates that such advice is absolutely essential. I therefore beg to move Amendment No. 1.

Lord Tordoff

My Lords, perhaps I may intervene very briefly at this stage just to underline what the noble Lord. Lord Underhill, has said in relation to the smaller airports. Certainly at the Committee stage I felt that we were getting sympathetic responses from the noble Earl in relation particularly to some of the smaller airports. But from what I have heard it seems that the guidance notes go back on the tone which was becoming apparent then. I may be wrong, and I have not had much chance to look at the guidance notes because as noble Lords know I have been away for the past week. But this is an opportunity for the Minister to reinforce the sympathetic noises that he was making at the Committee stage, particularly in relation to the smaller airports. I hope that he can do so because the financial burden on them is likely to be very considerable in terms of the changes that are likely to accrue from this Bill.

I hope that the noble Lord, Lord Underhill, is wrong in suggesting that it is the intention of the Secretary of State to press on with designating all these airports over the £1 million limit and that in fact he will use his powers within the Bill to phase the changes in such a way that smaller airports in particular can have a chance to be dealt with in a much more sympathetic fashion. It is in that sense that I ask the Minister to respond to this Amendment.

The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness)

My Lords, I am very grateful to the noble Lord, Lord Underhill, for explaining so clearly and lucidly the purpose of the amendment because it could be interpreted that a purpose of the amendment was to limit the discretion of the Secretary of State to exercise his power to modify a scheme or substitute one of his own. I am glad that that was not in the mind of the noble Lord, Lord Underhill. We welcome the opportunity to permit local authorities to consult and take advice from independent parties. As a surveyor myself I should certainly have welcomed the opportunity to be consulted by a local authority on valuation matters. Of course one does not expect local authorities to have all the necessary expertise. They have to go out for advice and this advice must be listened to.

When considering transfer schemes we shall be very willing to consider that financial advice and other advice employed by the local authorities for the purpose of transfers. I can give that assurance to the noble Lords, Lord Underhill and Lord Tordoff. But it would be wrong of me to suggest that my right honourable friend the Secretary of State will necessarily be influenced in his decisions by that advice; but he will be aware of the point of view of at least that financial adviser to that council. That advice will perhaps not be transparent but will be evident in the transfer scheme put forward by that council.

The noble Lord, Lord Underhill, mentioned some of the points that have been raised with regard to the guidance notes issued to councils by my department. I can confirm that these are draft guidance notes. They are for consultation. One would not expect there not to be any sort of reaction from the councils. I can also tell the House that a whole day's seminar has been arranged with the local authorities next Monday specifically to look at the kind of points which the noble Lord, Lord Underhill, has mentioned. I hope that this will be helpful to both sides.

I turn to the timetable which the noble Lord, Lord Underhill, mentioned. As the councils have known our airports policy since the White Paper of June 1985, and since the Bill was introduced into another place in January of this year, there has been sufficient opportunity for the councils to prepare the way for the proposed transfers that are to take place provided the Bill is accepted by both Houses and passed.

Perhaps I may deal with the point raised by the noble Lords, Lord Tordoff and Lord Underhill, with regard to the smaller airports. It would have been quite wrong of us not to have submitted advice in accordance with the Bill. That would have been totally illogical. I do not think I could withdraw the advice to suit something that I said at an earlier stage and which I confirm tonight—of course we will look at every scheme on its merits, including a scheme to be exempted. I hope that that is some reassurance. But the policy is as stated in the Bill. It is, we believe, a good policy; but if there are special circumstances for an airport, that airport is quite free to put forward that advice. It will be looked at very carefully. However, that is no guarantee, I must say, that the special pleading will be accepted; but it will be considered.

The noble Lord, Lord Underhill. asked me whether the resources to finance a special GRE would be additional or a reallocation of the rate support grant. The answer, as ever with local authority finance, is not entirely straightforward. The rate support grant total is not determined in relation to a multitude of separately identified spending needs but in relation to an acceptable level of local authority exependiture, the appropriate level of government support and the requirements for specific grants. The GREs are used to distribute the rate support grant. That said, the House can be assured that the amount for the new GRE for airport debt will not be at the expense of other GREs. It will be added to the total grant-related expenditure on which the rate support grant settlement will be based. I cannot anticipate the Government's decision on the aggregate Exchequer grant to local government but can confirm that the additional GRE will be taken into account. I hope that that is helpful to the House at this stage.

I am afraid that I cannot answer in detail the other points on the draft guidance raised by the noble Lord, Lord Underhill; but I shall carefully look àt it and if I can help in any way, and if the points can be raised and discussed at the seminar next Monday at Birmingham airport, I hope that we shall proceed to a satisfactory conclusion. I hope that with that assurance meeting the spirit of the amendment proposed by the noble Lord, Lord Underhill, he will see fit to withdraw it.

7.45 p.m.

Lord Underhill

My Lords, I am grateful to the noble Earl for his definite reply to the point raised by the noble Lord, Lord Tordoff, and I, because that will give some encouragement. It is rather unfortunate that that was not mentioned in the guidance notes. It would have been much more helpful to the authorities concerned if they had been told in the guidance notes that the Minister is prepared to consider a scheme if they believed they had a case for exemption. It seems that unless somebody tells them or reads Hansard, the authorities would know nothing about the possibility of this opportunity. But I welcome the reconfirmation that the noble Earl has given. Did I understand from what the noble Earl said that the seminar is to consider the whole question of the Bill and also the guidance notes themselves with the local authorities concerned?

The Earl of Caithness

The guidance notes, my Lords.

Lord Underhill

My Lords, that of course is encouraging; but it will also set back the timetable. If the Minister is going to demand that all the schemes are in by the end of November, and we are going to have a seminar on Monday and presumably it will be something more than just a mechanistic exercise—it is really going to be considered before the final advice note is issued—then obviously the question of the timetable comes into the consideration. But I hope that all local authorities will take the opportunity to bring forward the points which they gave to me to raise today, plus many others, which are now in the minds of JACOLA.

I appreciate what the Minister said about GREA and that it will be taken into consideration. Obviously that will be a big argument to be dealt with, presumably with the central committee representing local authorities when the whole question of the rate support grant for the following year is under consideration. However, let us keep in mind that even the promise of a GREA to deal with this matter will meet only 50 per cent. of the debt charges, because I cannot imagine the Government going beyond their 46.4 per cent. of any relevant expenditure. Therefore, part of the additional costs will still have to be met by the local authorities. I hope that point will be considered.

In the light of what the Minister said, and in view of the time factor, I shall withdraw the amendment and hope that the seminar produces results which will bring about a change in the Government's guidance notes. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 [Local authority financial controls in England and Wales]:

Lord Underhill moved Amendment No. 2:

Page 19, line 23, at end insert—

("( ) It shall be the duty of the Secretary of State so to exercise his functions under section 72 and section 78 of the Local Government Planning and Land Act 1980 (which relate to the fixing of, and giving directions in relation to, prescribed expenditure of local authorities) in respect of local authorities who are controlling authorities as to secure that the prescribed expenditure of each such authority is maintained at such a level that (having regard to the other functions of the local authority) the prescribed expenditure is such as to enable the authorities—
  1. (a) to further the reasonable interests of users of airports operated by public airport companies; and
  2. (b) to promote the efficient, economic and profitable operation of such airports; and
  3. (c) to encourage investment in new facilities at such airports in time to satisfy anticipated demand by airport users;
    • and the Secretary of State shall exercise the duty imposed by this subsection in the national interest.").

The noble Lord said: My Lords, I think it is agreed that no other clause has generated such controversy in connection with this Bill than what was Clause 20. Over 20 amendments have been tabled to the clause since the Bill was first introduced in the other place. It is not just the local authorities who have been unhappy with it; even the Government have been moved to make their own amendments. In fact, one of the notable things about the Bill—and a number of other Bills—is that despite the long discussions in the other place in Standing Committee the Government find it necessary to bring forward amendments in Committee and on Report. When these are improvements we are prepared to applaud the Government, but when the Government are clearing up something which has been forgotten about obviously we have cause for criticism.

One of the problems for local authorities has been the lack of consistency in the arguments deployed by the Government to justify this clause. There have been attempts to argue that it is necessary because the public sector borrowing requirement should now encompass private sector resources. It has also been suggested that the clause broadly confirms the levels of control which are exercised today. However, at no time have the Government sought to answer two basic points. First, the clause imposes new and additional controls over corporate structures which are to operate, in the words of the Government, at arm's length from the local authorities. The Department of Transport has confirmed that the creation of Manchester Airport plc, means that its capital expenditure is no longer subject to control under Pan VIII of the Local Government Planning and Land Act 1 '80".

That was all right; but the new clause will now impose new controls over the new company. Therefore, that statement is cancelled out.

Secondly, there is the fact that the Government are adopting different controls for different corporate structures. For the BAA, when the successor company is wholly owned by the Government, control over expenditure takes, shall we say, the form of a nod and a wink by the Secretary of State. There can be no other interpretation of the provisions of Clause 9(1) and in particular the duty of the Secretary of State to exercise his power of control in the national interest. But for the local authority airports, control is fundamentally different. Airports will be forced to compete with highway authorities for funds. Their expenditure will be embraced by the definition of "prescribed expenditure".

These additional constraints more than outweigh the concession introduced by the Government that internally-generated revenues will no longer be subject to control. Taken together, the controls are more detailed. They represent more of a constraint than those which exist today.

The Government are adamant that these controls should remain even though they are far more restrictive on the local authorities than those to be employed on the BAA successor company. On the other hand, one must be fair and say that local authorities also recognise that in the past they have had no cause for complaint about the Government's record on airport investment. That has been good. There are few examples of the Government refusing to sanction airport expenditure where it has been demonstrated to be worthwhile and economical. However, for a number of reasons the local authorities are worried that this might change. I hope they will exercise these points at the seminar next Monday; it will be a full day.

First, the Government are changing the system and the controls. No longer will a pool for schemes of national and regional importance exist for airport investment. The new controls are more rigid and less flexible. Secondly, it will be easier for the Government to reduce the incidence of airport expenditure. Allowing the local authority airport companies complete freedom to spend their own money will simply mean a reduced call on borrowing approvals sanctioned by central government. Thirdly, how tight the purse strings are to be pulled will depend on the Government's motivations. There may be a desire to see public expenditure further reduced. There may be a desire to switch funds away from airports into, say. maintaining the roads. There may also be a desire to squeeze the local authorities in order to encourage them to privatise their airports. That is something which a number of noble Lords feared when we had our Second Reading debate.

The point of the amendment is very similar to the arguments deployed on Report by the noble Lords, Lord Harris and Lord Boyd-Carpenter, and the noble Earl, Lord Dundee. It is vital that our network of airports is administered and developed in a way which reflects the national interest. All noble Lords will agree that they must not become a political football.

What is proposed, therefore, is the imposition of a duty upon the Secretary of State to take into account certain key factors which any reasonable person would subscribe to in the way that the expenditure of airports is controlled. These factors are set out in paragraphs (a), (b) and (c) of the amendment. They are the reasonable interests of users, the need to promote the efficient and economic operation of airports, and the importance of providing facilities to satisfy anticipated demand. The Secretary of State will still be able to take into account the wider public expenditure issues. It is for that reason that the amendment refers also to the national interest.

The amendment has been modelled upon the duty imposed on the CAA in relation to the economic regulation of airports under Clause 39(2). The amendment would do a great deal to reassure local authorities and the aviation industry in general and it would underline Parliament's commitment to the regional airports. It will be seen that the amendment in no way changes the authority of the Secretary of State, but asks that these points should be taken into consideration when determining what should be the prescribed expenditure. I beg to move.

8 p.m.

The Earl of Caithness

My Lords, like the noble Lords opposite, we want to see flourishing public airport companies and we will continue to provide the same generous support, to which the noble Lord, Lord Underhill, referred, for worthwhile investment in local authority airports as we have done in the past. Indeed, the special capital allocations for airport development made by my right honourable friend under the provisions of Section 73 of the Local Government Planning and Land Act 1980 for the specification of projects of national or regional importance have considerable regard for the criteria which noble Lords specify in their proposed amendment.

I assure the House that priority is given to expenditure needed for the safety of passengers and users of the airport. The economics and financial return on developments are assessed and the ability of a development to provide capacity or facilities necessary for anticipated future demand is considered. All this is done in the national and regional interests, as well as that of the passenger and ratepayer.

It is worth recording that since the Government came to power special allocations in excess of £200 million have been made for projects of national or regional importance—commonly known by the delightful acronym of PONORI. I can confirm that PONORI will continue. That is one of the points that the noble Lord, Lord Underhill, raised.

The noble Lord also raised the point that we were introducing new controls. This is not true; they are not new. They are similar to those which apply to nationalised industries where there is control over external capital finance. There is no control over internally financed investment. Therefore, we see this as a relaxation of control over airport investment.

But we can take it a stage further because the noble Lord, Lord Underhill, said that there was a difference between how we were treating the BAA and the local authorities. This is not so. As long as they are both in the public sector, both are subject to the same controls on external finance; but the moment the BAA is privatised and made a plc it will escape from government controls, because it has left the public sector. Indeed, the same will apply to local authorities when they sell but 51 per cent. of their shareholding. So I think that we are treating both parties on an equal basis.

The noble Lord, Lord Underhill, then went on to say that he was concerned that we should act in the national interest. I hope that he will not have forgotten that I intend to introduce, and hope the House will accept, Amendment No. 8 and the consequential amendment, Amendment No. 10, which place a duty on the CAA with respect to the implementation of recommendations concerning airport capacity. I understand that this measure applies to all airports, and not just to BAA airports. That observation covers another of the points raised by the noble Lord, Lord Underhill.

I think it should go without saying that my right honourable friend the Secretary of State will exercise his powers to determine capital allocations in the national interest. There is no need to spell out this obligation in the way in which the noble Lord suggests, in view of the amendments that I have tabled in my name. I hope that he will be reassured and will withdraw his amendment.

Lord Underhill

My Lords, it is notable that when we wish to insert something in the Bill it is regarded as unnecessary, but when something is already in the Bill the Government find some reason why it is right for them to have put it in, but we must not put it in elsewhere.

The Earl of Caithness

My Lords, with respect, we listened very carefully to the arguments of the noble Lord at earlier stages of the Bill, and that is part of the reason why we brought forward the amendment.

Lord Carmichael of Kelvingrove

It is too persuasive, my Lords.

Lord Underhill

As my noble friend says, the noble Earl is too persuasive, my Lords. If one considers the points I have made on the question of the CAA under Clause 39(2) concerning the economic regulation of airports, these are the three points mentioned as being matters which the CAA must take into consideration. On these Benches we are saying that the prescribed expenditure in connection with the local authority airports should also be considered in the light of these three points. I am sorry that the Government cannot see the sanity, common sense and fairness of why that which is good enough for the CAA provision should not be in the provision for the local authorities.

I ask the noble Earl to look carefully at Clause 9(1) and then to look at the provisions now in Clause 22. There is a difference. Why should the local authorities be so concerned with what they regard as new controls? I can assure your Lordships that this is no invention of the Opposition. The local authorities have been very worried about the new controls, and that is why so many amendments have been tabled both in your Lordships' House and in the other place. The seminar will take place on Saturday—

The Earl of Caithness

On Monday, my Lords.

Lord Underhill

On Monday, my Lords—and it will be a very long day if all the points which are to be considered are given due attention. I hope that the Government will be arranging for an extension because these are the sorts of points which, together with the guidance notes, I am certain they will want to deal with at this seminar. Having put these points forward and heard the Government's reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 [Matters to be taken into account by CAA]:

Lord Carmichael of Kelvingrove moved Amend-ment No. 3:

Page 31, line 8, leave out ("in") and insert ("throughout").

The noble Lord said: My Lords, the House may remember that an amendment to achieve what I believe this amendment will do, perhaps with a little more elegance, was moved at the earlier Report stage of the Bill. I was surprised at the amount of support that it received. The amendment was not put to a vote as it was not really a life and death issue; but, nevertheless, it was very important. I was surprised at the number of people who spoke to me afterwards and said that there was a point to be made there.

The point that I am making is that instead of providing for this in all parts of the United Kingdom it should now be done "throughout the United Kingdom". It is merely a reminder to the Civil Aviation Authority that the healthy growth of airports and indeed of the air traffic industry itself can best be achieved by considering the whole of Great Britain. It is a small point, but it means a great deal to many people—certainly to me.

I hope that the Government will accept this new form of words which, as I say, is perhaps a little more elegant than the rather clumsy wording of the earlier amendment. I beg to move.

Lord Boyd-Carpenter

My Lords, this amendment imposes a duty on the Civil Aviation Authority which I think is somewhat misconceived. As it stands, the Bill includes among its duties the need to secure the sound development of civil aviation in the United Kingdom. As I understand it, that means the necessity to provide in this country an efficiently developed civil aviation industry. However, in the nature of things that industry will not operate throughout the United Kingdom. It will have to operate in areas to which people wish to fly and therefore in which airlines seek permission to land. There are areas in this country where there is no such demand.

It is a small point, and I hope that your Lordships will not feel it necessary to waste much time on it. I much prefer the very proper duty imposed under the Hill. We want a good civil aviation industry in this country and we do not want to have that development perverted or twisted so as to spread it into parts of the United Kingdom where on aviation grounds there is no need for it to be developed.

Lord Lloyd of Kilgerran

My Lords, there are two grounds on which I presume to intervene so late in the evening. First of all, I should like to thank the Minister Very much indeed for the letters and copies of letters from many places which he sent to me after the helpful discussions which took place at Report stage, when my noble friend Lord Tordoff was not able to be present. What has also inspired me to speak, if I may say so, has been (to use a word that the noble Lord, Lord Boyd-Carpenter. used when he referred to me only last week in another context) the somewhat "naive" intervention of the noble Lord, Lord Boyd-Carpenter, on this very simple matter. It seemed to me that this was a realistic and practical little point which Members of this House would find no difficulty in accepting: that we should substitute the word "throughout" for the word "in", on the lines of the argument cogently put forward by the noble Lord, Lord Carmichael.

Lord Ferrier

My Lords, may I ask the mover of this amendment whether at the back of his suggestion is the thought that we must safeguard the position of Prestwick Airport in Scotland, and for this reason the word "throughout" is therefore acceptable to him instead of "in"?

Lord Carmichael of Kelvingrove

My Lords, I think that the point I am trying to make in the amendment is to emphasise that the Civil Aviation Authority should look at the whole of the United Kingdom. Obviously, Prestwick would be one of the places that would be considered, and the question of the development of Prestwick would be taken into account. The insertion of the word "throughout" is really a matter of emphasis. I am sorry that the noble Lord, Lord Boyd-Carpenter, has taken it so exactly. Our language is rich because in this way one can emphasise such points. I think there is a feeling in the House that this is a good amendment.

Lord Boyd-Carpenter

My Lords, will the noble Lord accept the point that if you are legislating you have to legislate exactly?

Lord Monson

My Lords, unlike the noble Lord, Lord Boyd-Carpenter, I think that there is considerable merit in the amendment, for this reason. If and when the Channel tunnel is eventually built, it will tend to concentrate economic activity in the South-East of England to an even greater extent than is the case at present, to the detriment of the rest of the nation. That being the case, some obligation to encourage the development of civil aviation through-out the United Kingdom, including the periphery, would go some way towards counterbalancing such an undesirable tendency.

Viscount Davidson

My Lords, I thought that I could be brief. I must reassure my noble friend Lord Boyd-Carpenter that, if this amendment is agreed to, the wording will be that: the CAA … shall have regard to the matters referred to in subsection (3)", one of which is: the need to secure the sound development of civil aviation throughout the United Kingdom". "Shall have regard to" is an important phrase.

The noble Lord, Lord Carmichael, has pressed for an amendment of this nature throughout your Lordships' consideration of this Bill. On each occasion I have resisted his amendment in its various manifestations, while at the same time stressing the Government's deep and continuing commitment to the well-being of regional aviation. The noble Lord has, however, made an eloquent case for an expression of that commitment on the face of the Bill. I have been impressed by his arguments. The noble Lord has moved a short but pithier amendment today, designed to represent a clear statement of the Government's best intentions towards regional airports and regional air services. We regard the role to be played by regional aviation as a major plank in our wider civil aviation policies. In that light, I have great pleasure in accepting the amendment on behalf of the Government.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for that reply.We were meeting each other across the table and splitting hairs. I am glad that he has ultimately agreed to this modest but useful amendment, which I believe will be well received throughout the industry.

On Question, amendment agreed to.

Clause 43 [References to Commission in relation to imposition or modification of conditions]:

8.15 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 4:

Page 43, line 11, leave out ("the following objective, namely the furtherance of).

The noble Lord said: My Lords, this amendment is not dissimilar to one moved by my noble friend Lord Williams of Elvel at Report stage, except that this one deals with a much narrower point. It deals with submissions by the CAA to the Monopolies and Mergers Commission or with the instructions that it is suggested should be given to the MMC in order for it to reach its judgment.

The Bill states that the MMC: shall …have regard to the following objective, namely the furtherance of the reasonable interests of persons granted such rights".

That form of words has never been used before with reference to the MMC.

The noble Earl when replying to a similar amendment earlier said that the words were used in Clause 37(2)(a), which in the present print of the Bill is Clause 39(2)(a). I looked that up and discovered that that was true. He also said that Section 4(1)(b) of the Civil Aviation Act 1982 contained those words. A matter of an hour or so ago I thought that I would go to the Library and take a copy of that. Under the title: "Regulation of performance by CAA of its functions", it states: to further the reasonable interests of users of air transport services".

Clause 39(2)(a) states: to further the reasonable interests of users of airports within the United Kingdom".

That is all very well. But what is wrong is that all this concerns the duties of the CAA, and that is perfectly reasonable. But in this case it is suggested that the MMC should: have regard to the following objective, namely the furtherance of the reasonable interests of persons granted such rights".

It is totally different to ask the MMC to have specific responsibility to look at the furtherance of any interests when it is examining a possible monopoly or merger. It should be looking at the total interests. As I understand it, its remit and powers are to consider all the facts and not to follow one objective or another, except the objective of the common good.

With great respect, it seems to me that the Minister has been misled by those references which were to the powers and responsibilities of the CAA. My noble friend raised that important point earlier. It is a constitutional point. Clause 36, line 37, of the definitions states: 'the Commission' means the Monopolies and Mergers Commission", and there is no reference at all to the fact that the CAA is involved in Clause 43(5)(b).

I hope that the Minister will look at that matter carefully. He promised last time that he would look carefully at the words to see whether he could make a change or bring forward another form of words. To give the MMC particular objectives other than those that it already has in its charter is quite wrong. I hope that the Minister will look at that carefully. I beg to move.

Lord Tordoff

My Lords, in supporting the amendment I draw your Lordships' attention to the fact that the objective of this part of the Bill is consumer protection, I assume, whereas, as presently worded, the clause seems to give protection to, for instance, the franchise holder operating on a contract based on a tender with the airports authority.

This is a difficult area. People operating a franchise at, for instance, a BAA airport have a temporary monopoly. It is in the interests of the airport authority to get the best deal for itself, which may not be the best deal for the consumer at the end of the day. Presumably that is why the MMC is brought into the act.

Although the removal of those words does not go the whole way, it goes some way to redress the proper balance. It would keep the interests of the consumer in the forefront without interfering with a contract which has been freely drawn up between the franchise holder and the airports authority on the basis of a competitive tender.

This is a difficult area to legislate for. I can see why the Government are finding it a little difficult to get the right words. I think that the amendment goes in that direction and that is why it has my support.

The Earl of Caithness

My Lords, as the noble Lord, Lord Carmichael of Kelvingrove, said, the amendment is worded differently from the amendment that noble Lords opposite put down on Report. I fear that he forgot to mention that the principle behind it is the same as the one which they pressed to a Division and on which their amendment, Amendment No. 41, was defeated. Indeed, the specific point upon which the noble Lord, Lord Williams of Elvel, felt that he had to seek the view of your Lordships' House was the term at the heart of this present amendment—the word "furtherance". That is the very word which I said I would take to have a look at.

There are two main arguments in favour of this amendment. The first is that the clause as drafted in some way jeopardises the MMC's traditional and respected objectivity in deciding upon the public interest. As I explained on Report, that is not so. The key words are, "have regard to"; not—and I must stress this—"have sole regard to". That means that the furtherance of the reasonable interests of concessionaires will not be the only factor which the MMC weighs in the balance. It will be one of many, as is always the case. The objective in question simply puts on record one of the matters that should be weighed in the balance in circumstance where the MMC is investigating business practices which relate to concessionaires.

The second argument concerns the words, "furtherance of reasonable interest". Noble Lords opposite claim that that is some sort of positive discrimination in favour of concessionaires and that furthermore "furtherance" is a concept which has no precedent in other similar legislation. However, the noble Lord, Lord Carmichael, reminded the House of the two precedents that I have and I beg to differ from him. I do not think that they are misleading precedents; I think that they are good ones.

I admit that in normal competition law there is no direct terminological precedent, but the intentions are exactly the same. I refer the noble Lord, if I may, to Section 84(1) of the Fair Trading Act 1973 which talks about promoting various interests and objectives, as does Section 3 of the Telecommunications Act 1984.

If I may, I shall ask your Lordships to look at Clause 39(2). There one sees that the MMC has to have regard to the CAA's objectives and promote the interests of the BAA and take into account airport users' interests. In this part of the Bill we are bringing to the MMC's attention just one instance, the concessionaires, to put them on an equal footing with the other parties to whom the MMC's interest has been drawn by Clause 39(2) of the Bill. If the concessionaires were not put on an equal footing, they could equally be ignored by the MMC to the detriment of airport users.

I must return to a point which I made at an earlier sage. The particular point of concessionaires was discussed in Committee in another place. The matter was decided upon with the help of the Opposition and the Government were defeated. The point was introduced into the Bill as a result of the defeat in which the Opposition parties joined, and to delete the matter at this stage would be entirely contrary to the wishes of another place. I think that we now have the balance right.

Your Lordships know well that I do not support unnecessary additions to the Bill. Since so many activities are carried out by concessionaires, an effective system of economic regulation must cover those activities and, because of the potential for monopoly abuse, must also cover the furtherance of concessionaires' reasonable interests in the same way as it covers the reasonable interests of the airport users to which I have already referred.

To delete the word "furtherance" would arguably weigh the scales against concessionaires—airport users' interests would be for furthering, whereas those of concessionaires would not—at the exact and only point in the Bill where it is necessary to give the MMC guidance about its attitude towards concessionaires. The Bill as it stands gives equality of treatment to both. To my mind that consistency is the right approach. I hope that with that the noble Lord will be able to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, I am disappointed in the reply of the noble Earl the Minster.

I thought that it was clear from what I tried to say that there was no intention that concessionaires should not be given reasonable treatment by the MMC which has, as I understand it, a good reputation for looking at things with great fairness. Here I suggest we are trying to upset that balance of fairness by giving the actual instructions on what it will pay specific attention to as against merely looking at something in the round.

I have taken note of the references made by the noble Earl the Minister to the Fair Trading Act 1973. I accept that he referred to that in the belief that it was correct, but I disputed whether his earlier examples were apposite. I still believe that the duties and responsibilities of the CAA are miles away from the duties and responsibilities of the MMC. That is surely one of the matters that is well enshrined in our law and is also becoming well enshrined in European law.

I feel that we have a case here and that the Bill is being unnecessarily cluttered up. Far from adding to the Bill, I am merely asking the noble Earl the Minister to reduce the Bill by about a line and a quarter. I feel that this is such an important point that I must put it to the vote.

8.26 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 53; Not-Contents, 55.

Airedale, L. Kaldor, L.
Banks, L. Kilbracken, L.
Barnett, L. Kilmarnock, L.
Beaumont of Whitley, L. Lockwood, B.
Birk, B. McNair, L.
Blease, L. Mayhew, L.
Boston of Faversham, L. Monson, L.
Burton of Coventry, B. Morton of Shuna, L.
Carmichael of Kelvingrove, L. Mountevans, L.
Cledwyn of Penrhos, L. Nicol, B.
Crawshaw of Aintree, L. Northfield, L.
Cullen of Ashbourne, L. Rochester, L.
Dean of Beswick, L. Seear, B.
Elwyn-Jones, L. Serota, B.
Ennals, L. Shackleton, L.
Ewart-Biggs, B. Silkin of Dulwich, L.
Fisher of Rednal, B. Stallard, L.
Gallacher, L. Stoddart of Swindon, L.
Gifford, L. [Teller.]
Gladwyn, L. Strabolgi, L.
Glenamara, L. Taylor of Blackburn, L.
Graham of Edmonton, L. Tordoff, L. [Teller.]
Grey, E. Turner of Camden, B.
Hampton, L. Underhill, L.
Houghton of Sowerby, L. Whaddon, L.
Jeger, B. Williams of Elvel, L.
John-Mackie, L. Ypres, E.
Arran, E. Kinnoull, E.
Ashbourne, L. Lane-Fox, B.
Belstead, L. Layton, L.
Biddulph, L. Lindsey and Abingdon, E.
Boyd-Carpenter, L. Long, V. [Teller.]
Brabazon of Tara, L. Lyell, L.
Brougham and Vaux, L. Macleod of Borve, B.
Caithness, E. Molson, L.
Cameron of Lochbroom, L. Montgomery of Alamein, V.
Carnock, L. Munster, E.
Davidson, V. Napier of Ettrick, L.
De La Warr, E. Norrie, L.
Denham, L. Orkney, E.
Dundee, E. Sanderson of Bowden, L.
Elliot of Harwood, B. Seebohm, L.
Elliott of Morpeth, L. Shannon, E.
Faithfull, B. Sharpies, B.
Ferrier, L. Skelmersdale, L.
Fortescue, E. Stanley of Alderley, L.
Gardner of Parkes, B. Swinton, E. [Teller.]
Glanusk, L. Trefgarne, L.
Glenarthur, L. Trumpington, B.
Harmar-Nicholls, L. Vaux of Harrowden, L.
Hooper, B. Vickers, B.
Kaberry of Adel, L. Vinson, L.
Killearn, L. Wynford, L.
Kimball, L. Young, B.
Kinloss, Ly.

Resolved in the negative, and amendment disagreed to accordingly.

8.34 p.m.

Clause 52 [Special provisions relating to groups of airports]:

The Earl of Caithness moved Amendment No. 5: Page 55, line 1, after ("imposed") insert ("or modified").

The noble Earl said: My Lords, I beg to move Amendment No. 5 and, with the leave of the House, speak to Amendments Nos. 6, 7 and 11. These are technical. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment Nos. 6 and 7. Page 55, line 2, after ("40(3)") insert ("or (4)"). Clause 58, page 58, line 17, leave out ("as respects") and insert ("with respect to").

The noble Earl said: My Lords, I beg to move Amendments Nos. 6 and 7 together.

On Question, amendments agreed to.

Clause 68 [Monitoring of aircraft movements]:

The Earl of Caithness moved Amendment No. 8.

After Clause 68, insert the following new clause:

("Duty of CAA with respect to implementation of recommendations concerning airport capacity.

  1. .—(1) If, after considering any recommendations made to him by the CAA in pursuance of section 16(2) of the 1982 Act (recommendations concerning airport capacity), the Secretary of State so directs, the CAA shall take such steps as it considers appropriate for the purpose of encouraging or facilitating the provision (whether by an airport operator or any other person) of any facilities or services that are necessary for the implementation of those recommendations.
  2. (2) The steps taken by the CAA in pursuance of subsection (1)—
    1. (a) may, without prejudice to the generality of that subsection, include the furnishing of information, the provision of assistance to persons requesting it and the provision of advice (whether or not requested); but
    2. (b) shall not include the carrying out of any works of construction or alteration or the defraying of, or the making of any contribution towards, expenses incurred by any other person in carrying out any such works.
  3. (3) Before embarking on the performance of its duty under subsection (1) with respect to any recommendations the CAA shall consult the airport operator in the case of any relevant airport as to the manner in which that duty is to be performed by the CAA.
  4. (4) Without prejudice to the generality of section 11 of the 982 Act, a scheme or regulations under that section may make provision for charges to be paid in respect of the performance by the CAA of its duty under subsection (1) above with respect to any recommendations, and for such charges to be paid by—
    1. (a) the airport operator in the case of any relevant airport, and
    2. (b) any person for whom assistance or advice has, at his request, been provided by the CAA in pursuance of that duty;
      • but if such provision is not made by any such scheme or regulations the CAA shall be entitled to recover an amount or amounts in respect of any expenses reasonably incurred by it in performing that duty from such one or more persons falling within paragraphs (a) and (b) above as the CAA considers appropriate.
  5. (5) An airport is a relevant airport for the purposes of subsection (3) or (4) if—
    1. (a) the recommendations referred to in that subsection relate to the airport, or
    2. (b) the airport is subject to economic regulation under Part IV, and it and any new airport to which those recommendations 92 relate would be airports serving the same area in the United Kingdom;
      • and the reference in paragraph (b) above to airports serving the same area in the United Kingdom shall be construed in accordance with section 31(6).
  6. (6) Section 4 of the 1982 Act applies in relation to the performance by the CAA of its functions under this section.").

The noble Earl said: I beg to move Amendment No. 8 and, with the leave of the House, speak to Amendment No. 10.

My Lords, I gave a commitment at Report stage, in the wake of an enlightened debate on an amendment—Amendment No. 23—moved by my noble friends Lord Dundee and Lord Kinnoull to come back to your Lordships' House on the question of the provision of airport capacity. I have looked again at the arguments made at Report, and have had further meetings with noble Lords interested in this question.

The Government's firm view remains that airport operators will have a very strong commercial incentive to provide the necessary services and facilities to meet demand. Revenues at airports and hence profitability are directly linked to the throughput of passengers. Because the regulatory regime will act to restrain the level of charges, airport operators' major source of increased profits will be volume growth. Their future profitability will depend crucially on the provision of capacity to accommodate this growth.

In addition all airport operators experience some competition. At the London airports it is competition with Continental hubs for the lucrative inter-lining traffic. If sufficient capacity is not provided, this traffic will go elsewhere. It is therefore in the operators' own interests to provide appropriate facilities.

Nonetheless, the Government recognise the very real concerns which have been voiced in your Lordships' House and have therefore prepared a new clause to go into the Airports Bill. The new clause would impose a fresh duty on the Civil Aviation Authority, expanding upon the authority's existing duty under Section 16(2) of the Civil Aviation Act 1982.

Under that section of the 1982 Act the CAA already has a duty to consider the need for airport capacity and to make recommendations to the Secretary of State. Under the new clause which this amendment would put into the Airports Bill, the Secretary of State in receipt of such a recommendation would be able to direct the CAA to take appropriate steps to encourage or facilitate the provision of such facilities and services as are necessary to give effect to its recommendations.

The Government regard this additional provision in the Bill as a valuable buttress to the clear economic incentive that airport operators already will have to provide capacity in a timely manner.

As a further buttress, the Government intend also to put into the memorandum of association of the successor company to the BAA, an object to provide or cause to be provided at airports under its control (or the control of any of its subsidiaries) such services and facilities as are necessary or desirable to satisfy anticipated demand by the users of those airports.

I make no claim to originality in declaring this intention. In fact, it echoes a suggestion made to the House by my noble friend Lord Kinnoull during the Committee stage in the House, when he quoted a letter which Sir Peter Masefield had written to The Times on 15th April, advocating such an objective.

We may not always be original but at least we listen to your Lordships. I hope that the combination of these two additional measures meet the concerns voiced at Report stage. I thank your Lordships for the constructive suggestions in this matter and commend this amendment to your Lordships' House.

Lord Underhill

My Lords, this appears to us to be a reasonable amendment. I noted that the noble Earl referred to the BAA memorandum; but from my reading the provision would apply to all airports. The CAA can take action following a request from the Secretary of State on all airports, not just those under the BAA. So far as I understand the amendment, the CAA will be limited to the furnishing of information, the provision of assistance, and the provision of advice. It has no power itself to carry out any of the additional facilities that might be required. We also note that the CAA has the obligation to consult the airport operator before taking any steps. That seems to us to be very reasonable.

However, can I put this point to the noble Earl? The CAA are given a very wide discretion by this clause. The cost of the action taken by the CAA will be recoverable from airport operators or any third party developer. That I think is made clear in the amendment. It appears to us that the CAA should either be required to make charges by way of regulations or if it seeks to recover its costs without making a scheme or regulations, it should either agree with the airport operator the sum to be paid to it or, in default of agreement, the matter should be determined by the Secretary of State.

It would be very helpful if the Minister could give some assurance that the CAA would not be entitled to recover from the airports any costs which it incurs in attending and being represented at public inquiries into new airport developments. Practically all new airport developments would have to be the subject of planning inquiries. In all major airport inquiries in the last 10 years the CAA has attended to give evidence as an independent expert. If it were the case that its costs and expenses were being paid by one of the main parties to the inquiry, it might well undermine public confidence in the independence of the CAA and thereby the credibility of its evidence.

Therefore, it would be helpful if the Minister would confirm that this amendment applies, first, to all airports and not just to BAA airports and, secondly, if he could clarify the point regarding planning costs which the CAA itself might incur in attending inquiries.

The Earl of Dundee

My Lords, I am very grateful to my noble friend the Minister for what he has said and for the skilful solution that he has provided to what has been a difficult problem. This problem has been how to safeguard the timely provision of airports' capacity in a way which at the same time would not be counter-productive. On the one hand, there was the concern that the various measures and incentives contained in the Bill until today did not go as far as they should and ought to go further. Airport owners will always want to promote the national interest if they can, but under the Bill their first responsibility is to their shareholders, and what is the best policy for the first consideration might not always be so for the other.

It can easily be envisaged that in the event, for example, of a world recession airport owners might well be discouraged by high interest rates from a long lead investment and in the short term, whether or not there is a recession, it is often more profitable not to expand and develop, since new capital does not have to be found as a result. Certainly in the previous draft, as also in the present one, as my noble friend reminded us just now, the provision of capacity is encouraged through economic incentives to the owner, through the economic and regulatory powers of the CAA, and through the planning process.

Yet these safeguards are neither sufficient in themselves nor in combination to protect the proper development of British aviation at all times. While it might always be alleged that commercial interests would somehow never actually conflict with national interest at any time, under the previous draft the Government would have been powerless to intervene if in fact the two had ever conflicted. Hence the case for going further and for introducing some amendment accordingly. On the other hand, how do you succeed in going any further with this type of matter without producing some counter-productive effect?

There are obvious difficulties arising from reserve powers when given to the Secretary of State or from the imposition of statutory duties on the airport owner. In either case the wrong balance can easily be struck. This might then cause the commercial value of an airport company to suffer and equally it might lead to an undesirable level of interference with normal aviation decisions.

However, my noble friend's amendment achieves the right balance and in a far better way than the related amendments which I tabled at previous stages of your Lordships' Committee. In the first place, under the amendment, the Secretary of State will relate directly to the Civil Aviation Authority and thus not directly to the airport owner. Secondly, and deriving from Section 16(2) of the Civil Aviation Act 1982, the CAA has an existing power strengthened and thus does not need to have a whole new power invented. As a result, the effect of the amendment is that the provision of capacity can now be looked after in the last resort without thwarting or frustrating commercial interests and routine decisions in the normal course of events.

It is also very useful to have put into the memorandum of association of the successor company of the BAA the objective to which my noble friend referred of providing necessary capacity and facilities. No doubt this objective may not be legally binding, yet it corresponds to and complements my noble friend's amendment concerning the CAA's strengthened powers. Thus, in combination with this amendment, it serves to give clarification and guidance.

As well as congratulating my noble friend on his skill and good judgment in achieving such an effective solution to this difficult problem, I should also like to thank him for the great courtesy and patience with which, between the various Committee days, he was always prepared to consider a succession of different amendments on this theme, and not least to thank him for his constructive attitude in helping to iron out the imperfections which these previous amendments contained.

8.45 p.m.

Baroness Burton of Coventry

My Lords, what is being proposed in this new clause and what the Minister has just said is of course in response to Amendment No. 23, which was moved on Report by the noble Earls, Lord Dundee and Lord Kinnoull, and myself, and which was supported very strongly by the noble Lord, Lord Boyd-Carpenter, who pointed out most graphically what would happen if adequate accommodation were not provided for the British civil aviation industry after privatisation. The noble Lord was insistent that adequate airport capacity must be provided.

Since the Government tabled this amendment I have had another look at Section 16(2) of the Civil Aviation Act 1982 and I have listened to what has just been said by the Minister and by the noble Earl, Lord Dundee. However, I am still not clear in my own mind on the major point that I raised at the Report stage, and I hope that the noble Earl, Lord Caithness, can give a me a clear answer tonight. On the matter of capacity at airports after privatisation, do the Government accept the advice of the Civil Aviation Authority in its paper CAP 522? The chairman of the authority, Sir John Dent, emphasised very strongly indeed that there was a need to provide additional runway capacity before the end of the century. As it takes approximately 10 years to bring a new runway into service, the House would like to know what action the Government propose to take.

I should like to ask the Minister whether he has noted the warning which has been given by the Association of British Travel Agents that the travel industry will be plunged into chaos and disruption unless Gatwick gets a second runway. At col. 184 of the Official Report of 10th June, the noble Lord, Lord Boyd-Carpenter, said: the Civil Aviation Authority knows much more about civil aviation than the Department of Transport ever has or ever will". I would suggest that the Association of British Travel Agents is in the same category as regards the charter industry.

As both organisations stress the need for additional runway capacity, what do the Government propose to do? Is any action at all indicated in the new clause? As I understand the present discussion and proposals now before the House, the Government suggest that the Civil Aviation Authority be given a fresh duty to strengthen its role. I too believe in the CAA and would welcome any additional strengthening, but what I want to know and what the civil aviation industry wants to know is: does this additional strengthening mean that additional weight—and I would ask the Minister to note words "additional weight"—will be given to the views of the CAA on runways, or do the Government not include runways in airport capacity?

The Earl of Kinnoull

My Lords, I should like to add my congratulations to my noble friend and to express gratitude for the manner in which both my noble friend, his honourable friend, and indeed his department have brought forward a very comprehensive amendment to try to meet the arguments that have been advanced during the passage of the Bill. I believe that much of this amendment meets the anxieties that have been expressed by the airlines on this question of capacity and I wish this new clause well, in the hope—because undoubtedly the problems of capacity will remain with us and rear their heads in the future—that this new clause will add something in the way of assistance to civil air transport.

Lord Boyd-Carpenter

My Lords, I too should like to thank my noble friend Lord Caithness, first, for the enormous amount of trouble that I know he has personally taken over this matter between the various stages of the Bill and then for the new clause and the announcement about the inclusion in the articles of association of the BAA. All this constitutes a substantial improvement in the Bill. Your Lordships' House and the civil aviation industry owe this largely to the determined action of my noble friends Lord Kinnoull and Lord Dundee, who have pursued the matter with great vigour and also great parliamentary skill through various stages of the Bill. All this undoubtedly amounts to an improvement in the position as compared with the Bill as it arrived.

There is one small point of fact with which perhaps my noble friend would deal when he replies. As I understand it, his announcement about the inclusion of a new article in the memorandum of association applies only to the BAA company and. not to the others, whereas the general powers given to the Secretary of State and the CAA apply to all the aerodrome owners.

Having said gratefully that this is a considerable improvement, I cannot pretend that it goes the whole way to meet the apprehensions that I share with the noble Baroness, Lady Burton of Coventry, about the fairly near future provision of runway capacity in this country. The noble Baroness referred to the recent report by the Civil Aviation Authority clearly stating that further runway capacity would be required in the London area before the end of the century. As the noble Baroness said, if that is really to be achieved, action will have to start quite soon.

I do not wholly share the confidence of my noble friend on the Front Bench that commercial considerations will see to it that that capacity is provided. There can be a volume of business which, while fully and profitably occupying the airport capacity in the London area, does not allow room for expansion. Any of your Lordships who have had experience of seeking to extend airport capacity, and in particular runway capacity, know very well that great determination, not to say obstinacy, is required to bring about such an expansion.

I have the utmost confidence in Sir Norman Payne and the British Airports Authority as it stands, and I hope and believe that they will have this in mind. They will certainly need support from the Government because of the rather parochial reaction of public opinion in this country to any proposal to increase airports, and in particular runway, capacity. The great British public wants adequate airport capacity reasonably accessible to it so that it can use it on business or to go on holiday—but not near its home. In a small country such as this to achieve a place where this can be provided raises considerable difficulties. Those difficulties demand great determination on the part of those seeking to build and construct them.

Therefore, while it is a good thing to have brought in the Civil Aviation Authority which, as the noble Baroness said, is the expert body on our civil aviation problems, and while it is valuable to have added the Article of Association, I think my noble friend will correct this only in respect of the BAA. These are advances, but I hope that my noble friend the Minister is not going to feel that he has done all that needs to be done.

Either he or his right honourable friend, or his right honourable friend's successors, will before long have to face the problem of additional runway capacity, or see the pre-eminent position of the London airports in international traffic gradually passing to our European rivals with enormous economic loss to this country.

One's confidence in the determination of Ministers to achieve this is not, I must confess, strengthened by the action of the former Secretary of State for Transport in overriding the Civil Aviation Authority's grant of that vitally important helicopter licence between Heathrow and Gatwick. That seems to me a somewhat ominous decision, although one is happy to reflect that that particular right honourable gentleman is no longer responsible for civil aviation.

Lord Tordoff

My Lords, would the noble Lord forgive me for a second? Would he bear in mind that the same right honourable gentleman is now in charge of the environment, which might make the situation even worse.

Lord Boyd-Carpenter

My Lords, that is an arguable view. For once I find myself not wholly out of sympathy with the noble Lord, Lord Tordoff. But at least he is not responsible directly, although he was responsible for one of the most foolish decisions that a Minister has taken for a long time. However, this is not a moment to dwell on that, it is a moment to thank particularly my noble friend Lord Caithness for the hard work that he has done. I believe, from having been fairly close to what has happened, that it would not have happened if it had not been for his personal and individual efforts in the department and with his colleagues. For that British civil aviation, as well as your Lordships' House, should be sincerely grateful.

Lord Mountevans

My Lords, I know that the Minister will not be surprised if I do not entirely come down with all those who so enthusiastically support this amendment. I am not persuaded that the thrust of the amendment, and indeed the mechanics mentioned by the noble Lord, Lord Underhill, are relevant. I almost feel that they are irrelevant. In fact, I feel that they are an unnecessary intrusion into the day-to-day operation of our airports, and in terms of finance an unnecessary burden on those who I think most of us accept are competent to run airports.

The amendment touches on and treats new capacity. I wonder whether the Minister might agree that new capacity is really a matter of market demand rather than a matter of expressions made by the CAA in response to either airports or those other people mentioned in the amendment. Your Lordships will not be surprised that I am not happy with the CAA being empowered by this amendment to encourage the provision of further facilities, or to implement recommendations concerning new capacity.

The Bill at the moment takes us roughly where we should be in terms of capacity, and I am reluctant to see third parties brought in. But my main concern is one raised by the noble Lord, Lord Underhill. The elements concerning the CAA's ability to recover from airports or others such charges as it incurs in respect of attending, or being represented at, public inquiries.

During the past 10 years—in fact possibly longer—the CAA has attended public inquiries in respect of airports but it has always done so as an independent adviser, respected not only for its competence but for the very independence that I have just mentioned. I therefore wonder whether it is right that the CAA should be put in a position by this amendment of having what seems to be an open-ended ability to recover costs from airport operators or third parties. These very provisions, as the noble Lord, Lord Underhill, said, could be detrimental to the respect in which the CAA is held in terms of its independence and impartiality. These very provisions could contribute to the destruction, the lack of credibility, of such evidence as the Civil Aviation Authority might give.

I should therefore like to ask the Minister for an assurance that the CAA will continue to be an independent body in this particular context, and that it may continue to attend inquiries as an independent body, perhaps financing its presence from its own funds. If this is disbarred, may I ask that charges should be agreed in advance with the third parties, because I believe that this, too, would serve to take away the open-ended commitment and would serve to preserve the authority's reputation for impartiality? If that proved impossible, may I ask the Minister for an assurance that the powers to define charges by way of regulation would be the first line in this context? If not, I feel that we may shortly find ourselves with an Airports (Amendment) Bill.

9 p.m.

The Earl of Caithness

My Lords, I am grateful for the general welcome to the amendment given by most noble Lords, but I understand some of the concerns expressed by the noble Lord, Lord Mountevans.

I must apologise if I did not make myself clear when I moved the amendment. Of course my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Underhill, are absolutely right that the new clause, which is the CAA's duty, extends to all airports. The additional part that I inserted as a buttress applies only to the BAA. I am sorry if I did not make myself clear. I hope I have solved that problem now.

The noble Baroness, Lady Burton of Coventry, asked me about CAP 522. The airports policy White Paper, as the noble Baroness and the House will know, catered for demand in the London area until 1995, and we believe that still to be the case. As to the injunctions of the ex-chairman of the Civil Aviation Authority in his preface to CAP 522, we naturally keep a careful watch on developments. We do not necessarily agree with everything Sir John Dent states. But we take account of them and bear them in mind, as I am sure will the new chairman of the CAA, particularly in connection with the duty of his authority under Section 16(2) of the Civil Aviation Act 1982. I can tell the noble Baroness that we have not yet come to a decision on CAP 522. We are still discussing it, and I draw her attention to a Starred Question which my noble friend Lord Boyd-Carpenter has down I believe from memory for 2nd July on this matter.

I turn now to the point raised by the noble Lords, Lord Underhill and Lord Mountevans, referring to the CAA and the recovery of its costs. The CAA has a choice in this matter. It can either recover its costs by scheme or regulations under Section 11 of the Civil Aviation Act 1982 or directly where the test is one of reasonableness. The latter leaves the power of adjudication to the courts. They will decide what is reasonable rather than the Secretary of State, and I am sure the House will agree that this is the right way forward. With regard to the costs of the CAA in giving expert evidence to a planning inquiry, these costs will not be recoverable under this clause where the CAA is giving that evidence in its normal capacity as an expert witness.

I disagree with the noble Lord, Lord Mountevans. We have agreed on many things in relation to this Bill, but I disagree with him that the CAA's reputation will be diminished by this new clause. I do not believe so at all. I believe it can act as an expert witness with its normal high standards, and with this new clause it could only be enhanced. It would only be if the CAA were specifically taking a step pursuant to its duty under this clause that the possibility of such costs could be recoverable and that that question would arise. I can only repeat that I am grateful for the general welcome. I hope I have satisfied the fears of the noble Lord, Lord Mountevans. I commend this amendment to the House.

On Question, amendment agreed to.

Clause 74 [Supplementary provisions relating to transfer schemes]:

The Earl of Caithness moved Amendment No. 9:

Page 73, line 17, at end insert—

("( ) For the purposes of this Act, and of Schedule 4 as it applies by virtue of subsection (3), the granting of a lease of any property by a scheme under section 1 or 15 to the transferee under the scheme shall be regarded as a transfer of that property to him by the scheme.")

The noble Earl said: My Lords, as your Lordships know, I had some difficulty in understanding the amendment of my noble friend Lord Dudley, Amendment No. 23, at the Committee stage of the Bill. After considering the Official Report carefully, however, I came to the conclusion that his point probably was that where a local authority owns the freehold of an airport it should, by means of a transfer scheme, be able to create a leasehold interest in favour of the transferee company and retain the freehold.

Our policy on leasehold interests to be held by public airport companies is that only in the most exceptional circumstances would we consider it appropriate for the freehold interest not to be transferred. But if that exceptional case can be made out—and here again I come to the point that we shall consider such matters, which I hope the noble Lord, Lord Tordoff, will be pleased to hear—then we would wish there to be the flexibility to admit of the creation of a new leasehold interest.

To put the matter beyond doubt we propose the amendment in my name. The amendment also extends to Clause 1 as the BAA might also need the same flexibility. I am therefore grateful to my noble friend for drawing this point to the attention of the House. I hope the House will be able to agree with the proposed amendment. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, the Minister said that he studied the amendment of the noble Earl, Lord Dudley, very carefully before he understood it, and he only hopes that he has understood it now. He will appreciate that I had to take advice on the amendment that was put down. I understand on the advice that I was given that the amendment appears to be innocuous, though as the Minister said this has made it a little firmer. The purpose is to ensure that all references in the Bill to transfers of property are to be deemed to include transfers of leasehold interests. I think the amendment can be welcomed because it at least contemplates leases of airport land being part of a transfer scheme.

I think the serious point of the amendment, which is welcome, is that the issue of leasehold transfer is but one example of the need for the Government to recognise the importance of flexibility when considering the appropriateness of terms contained in proposed transfer schemes for regional airports of varying size, asset base and profitability; The Minister has said that, as long as he is there, there will be a wide looking at things and not a narrow interpretation. Therefore, difficult though the amendment is to understand, with his explanation and with the advice I have been given I am happy to welcome the amendment.

On Question, amendment agreed to.

Clause 84 [Short title, commencement and extent]:

The Earl of Caithness moved Amendment No. 10;

Page 79, line 38, at end insert—

("section (Duty of CAA with respect to implication of recommendations concerning airport capacity):")

The noble Earl said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Schedule 1 [Application of Part IV to associated companies of airport operators.]:

The Earl of Caithness moved Amendment No. 11: Page 84, line 44, leave out from ("construed") to end of line 45 and insert ("as references to those provisions as modified by paragraph 2 and paragraph 4(a) above.").

On Question, amendment agreed to.

The Earl of Caithness

My Lords, I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(The Earl of Caithness.)

Lord Underhill

My Lords, perhaps I may briefly make a few comments. First of all, we have had useful debates and discussions on the Bill, but, frankly, it is a Bill which in our view is completely unnecessary. As we said at Second Reading, we regard the BAA as an efficient organisation. It has carried out its duties—and that has been stated even tonight—and there is no indication at all that the local authorities, whatever might be their political complexions, have fallen down on the job at their airports. There has been praise from the Government side for developments that have taken place in various aspects of local authority airports.

I would remind your Lordships that we are the first industrialised nation to have privatised airports as a general policy. I hope that that will be kept in mind. We are pleased that, despite the general opposition to the Bill, the BAA is to be kept as one unit and that there is to be a separate Scottish group. I should like to thank my colleagues, Lord Carmichael of Kelvingrove and Lord Williams of Elvel, who is not here tonight but who has been of great help to us in understanding some of the financial and legal complexities of aspects of the Bill.

This is not the time generally to analyse the Bill. I am pleased to welcome the assurances given about Stansted, the loans and charging, and that there will be no subsidisation, but I regret that that is not in the Bill. Similarly, we are very pleased with the Government's assurances on individual shareholdings, foreign shareholdings and the special share that the Government are going to have. But again we are sorry that that is not on the face of the Bill. The Government have accepted a number of improvements to the Bill, but there are still a number of defects to which I could draw attention, though I do not think I should do so at this hour since we want to return to the social security legislation.

Before I close from these Benches I should like to thank the noble Earl, Lord Caithness, and his colleague the noble Viscount, Lord Davidson, for their courteous attention throughout the passage of the Bill, and, as I think the noble Lord, Lord Boyd-Carpenter, mentioned, the assiduous way in which they followed up certain problems and correspondence. I think that that is appreciated by everyone. We are sorry that the Bill exists, but we appreciate the effort they have put in and the courteous way they have treated the House. We wish that we did not have the Bill. There are still great improvements to be made on the local government side in Part II of the Bill and I hope that the seminar to be held on Monday will result in the Government making changes in their notes of guidance.

Baroness Burton of Coventry

My Lords, I regret the passing of this Bill and it would be hypocritical to say otherwise. But perhaps first of all I may make a pleasant remark, and that is to thank the noble Earl, Lord Caithness, and the noble Viscount. Lord Davidson, for the way that they have conducted this Bill and for the very pleasant attitude that has prevailed throughout.

On Second Reading in another place the Alliance tabled an unsuccessful amendment to decline to give a Second Reading to the Bill. We on these Benches are still of that opinion. I myself remain fundamentally opposed. I remain fundamentally opposed because I believe that the Government's plan to privatise the British Airports Authority has nothing whatever to do with any pressing need to revise the structure and methods of managing the authority or to correct any faults in the airports system. It is primarily a political objective. As I said on Second Reading, when I asked the BAA whom they thought would benefit from this privatisation, the answer straight away, without any thought, was, "Oh, the Government and the shareholders". It was I who had to remind them of the customers and the airlines.

Right through to the end of the discussions on the Bill tonight these fundamental objections have remained and, indeed, they have been enhanced by what the Minister said to me earlier tonight concerning the Civil Aviation Authority. I think that this is a bad Bill. The local authorities do not like it and I believe that our air charter industry is in grave danger because of it. The House knows my views on Stansted. and I continue to believe that the long-term subsidisation essential for the scale of development at Stansted demanded by the Government now—and I hope that the Minister will note the word "now"—will be at the financial expense of regional development.

The British Airports Authority, assisted by the Government, has refused the second runway which is obviously needed at Gatwick and has thereby, in my view, and in that of many other qualified observers, denied Gatwick its full potential development and thus gravely hindered the development of the civil aviation industry in this country. I had already noted the Question by the noble Lord, Lord Boyd-Carpenter, for July, and I hope he will get a satisfactory Answer to it.

I have made a grave accusation, but in view of what the Minister has said to me in reply to my earlier remarks tonight, the accusation is fully justified. I end as I began: I do regret the passing of this Bill.

9.15 p.m.

Lord Boyd-Carpenter

My Lords, I disagree always unhappily with the noble Baroness, with whom I agree on so many other things. I disagree rather more happily with the noble Lord, Lord Underhill, but I disagree with both of them on the question of the quality of this Bill. I think it is a good Bill. To say that is not to cast any reflection whatever on the British Airports Authority, particularly under its present dynamic chairman, or indeed on many of the local authority airports, some of which (notably Manchester) have been very well run and very progressively developed. But the fact that an organisation is good does not mean that it cannot be made better and I believe that the process of privatisation will have that effect.

That is not now just an assertion of faith: it is evidenced by what has happened and is happening in a number of other industries which under the Government's policy have been privatised in recent years. They are going from strength to strength; they are better, more enterprising and more profitable. I hope and believe that the same salutary and healthy process will apply in this extremely important national activity.

The only other thing I want to say is what pleasure it gives me to see Clause 69 of the Bill, by means of which at least something is salvaged in respect of Sunday trading. No doubt the débacle with regard to the rest of Sunday trading in this country will tend to make the airports even more profitable, because the demand from the public for shopping there will grow. I understand the immunity from the Sunday restrictions applies not only to shops through the Customs and immigration barrier but also to those in the open. If those shops get even more business, that will enable the airports authority to raise their rents and will make the airports even more pofitable. So, whereas the unfortunate right reverend Prelates are going to have to shut the bookshops in their cathedrals and lose the yield from them, the airports, on the other hand—the other form of "sky pilots" if I may so call them—will gain from this. I welcome the latter although I deplore the former.

I should like also to add my tribute to the noble Earl who has been in charge of the Bill—in the intervals, as I understand it, between jumping into the Channel with a parachute and other vigorous activities of that sort. He really has conducted this Bill in a model way and has preserved, as the noble Lord, Lord Underhill, so rightly said a friendly and pleasant atmosphere; yet very largely he has managed to get his way, and that is, after all, the first duty of a Minister. I should like to say, if he will allow me to, that his performance on this Bill augurs extremely well for the conduct by him of even more difficult legislation in the future.

Lord Mountevans

My Lords, I welcomed this Bill on Second Reading and tonight I should like to say farewell to it with affection. Because those who are socially secure may be feeling rather insecure at the moment, I shall be brief: without the element of health they will be as sick as a parrot.

There have been disagreements on some of the amendments and on some of the points of detail on this Bill, but I think those who have the airports industry and its future at heart will be broadly satisfied with the Bill as it leaves us tonight.

I, too, should like to join the noble Lord, Lord Boyd-Carpenter, and indeed almost everybody else, in applauding the noble Earl the Minister and the noble Viscount, Lord Davidson, for their assiduity and their unfailing courtesy. Not only that, but I should like to extend special thanks to their officials, who gave me great assistance with the "shops" amendment which the noble Lord, Lord Boyd-Carpenter, has just mentioned. I think I should like only to wish this Bill well.

Lord Tordoff

My Lords, perhaps I may say two things. First, may I offer public thanks to my noble friend Lord Lloyd of Kilgerran for standing in for me so ably during the Report stage when I was on Select Committee business? I should also like to say that I am pleased that the Third Reading has come during this week and not during last week, when I was also away, although not on business.

May I join in the thanks to the noble Earl, and specifically take this opportunity of thanking him for his assistance on the amendment that was passed at Report stage in relation to the payment for activities at the airports forced upon the airports authority by the Secretary of State—what has been referred to as the "VIP lounge amendment". I am most grateful to him and to his officials for the assistance that they gave on that matter.

I said on, I think, Second Reading that when the noble Earl found himself caught in the crossfire between my noble friend Lady Burton of Coventry and the noble Lord, Lord Boyd-Carpenter, he should run for cover. He has not run for cover, although he has been in the crossfire and I greatly admire him for the way in which he has stood up to the crossfire in the House. I am sure that he has the respect of noble Lords on all sides for the way he had handled this Bill.

It is not a happy Bill. Although there have been moments on this Bill when I found myself in agreement with the noble Lord, Lord Boyd-Carpenter, rare though that may be, I cannot go along with him in his support for this Bill. It is motivated by trying to raise funds for other government purposes, and for very little else, although I have no doubt that the British Airports Authority are pleased to, as they say, have the Government off their back. That may be a worthy objective, but it is not necessarily a good national objective.

In response to what the noble Lord, Lord Boyd-Carpenter, said in relation to other industries or activities that have been privatised, I can only say that, yes, of course, it is very easy to run a profitable enterprise if you are running a monopoly, and if your shares have been put on the market at a price which is lower than their true value. I only hope that it does not happen so far as the British Airports Authority is concerned.

It is interesting that the majority of our deliberations have related to local authority airports, and the dissatisfaction which we have with the detail of the Bill still rests in that area. I hope that the seminar which will take place next week will give some assurance to local authorities that the flexibility, to which the noble Earl the Minister has referred this evening, will be turned into practicalities. With that, and supporting what my noble friend Lady. Burton of Coventry has said about the regret that we have at this Bill going on to the statute book, I nevertheless thank the noble Earl and the noble Viscount for their courtesy and help and wave the Bill farewell.

The Earl of Caithness

My Lords, over the last few weeks, we have enjoyed some 30 hours of debate on the Airports Bill—debate which, as is customary in your Lordships' House, has been courteous and incisive and which has amply demonstrated your Lordships' knowledge of the aviation world and recognition of its importance.

If I may just recap on some of the things we have discussed, Part I, which provides the powers to enable privatisation of the BAA, was discussed extensively. Two particular points of concern emerged, the first of which was that there should be some statutory restriction on undesirable takeovers of the BAA. The Government brought forward proposals to meet this concern in relation not only to the BAA but also to local authority airports.

The second main point which arose was in relation to the question of cross-subsidy of Stansted and whether the airport's development will have a detrimental effect on the development of regional airports. The Government are committed to the development of regional airports, and to ensure that no airport can engage in predatory behaviour which will harm that development have provided powers in the Bill which will enable the CAA to stamp out predatory and harmful pricing policies wherever and whenever they occur. In exercising those powers, the CAA will disregard any commercial advantage that an airport such as Stansted receives through being a part of a larger group. I do not think that such a strong safeguard against predation exists anywhere else.

Part II of the Bill, which will put local authority airports in the commercial world in which they belong, has perhaps taken up more hours of debate than any other. Here, too, several improvements have been made. Apart from the clause which allowed for restrictions on share ownership, which I have already mentioned, there was the amendment of my noble friend Lord Dundee, which added a provision relating to the future arm's length relationship between local authorities and their airports by requiring separate accounts to be kept for service contracts between them. I am most grateful to him for that. Not least among the improvements were the Government amendments agreed to by your Lordships at Report stage.

At Committee stage, my noble friend Lord Dudley raised an important point, and I was pleased that the House was able to accept an amendment this afternoon to meet that point. It was as a result of the close attention paid by noble Lords—the noble Lords, Lord Underhill and Lord Tordoff, among others—to the details of Clause 14 schemes for transferring property and liabilities from local authorities to public airport companies, and in particular the arrangements for past airport debt, that we decided to introduce a new special GRE provision to cover any such debt left with local authorities. This will assist us in establishing viable airport companies, while at the same time taking account of the financial implications for transferor authorities of not transferring debt to the companies. This solution has been generally welcomed.

I was equally pleased to meet a particular point on Part III of the Bill, relating to the CAA's duty to have regard to the sound development of civil aviation throughout the United Kingdom. I trust your Lordships will agree that the Government have reacted positively to the concerns expressed by accepting the amendment of the noble Lord, Lord Carmichael of Kelvingrove.

During our discussion on Part III of the Bill the Government were accused of having too little regard to the environmental implications of their airports policy. I must repeat the assurances I gave then that this is not so, and that the Secretary of State's powers are sufficient for him to ensure that the environmental issues are taken fully and properly into account whenever necessary. As proof of our concern for environmental matters, I offer the Government amendment accepted by your Lordships on Report, which provided for the monitoring of track-keeping by aircraft. This provision will make a significant contribution to the Government's constant efforts to reduce aircraft noise disturbance around airports.

Part IV of the Bill was improved by your Lordships' acceptance of the Government amendments, and this strengthened the Bill's scheme of economic regulation of airports. We can be assured that the CAA's powers in Part IV of the Bill will enable it to guard against and remedy any possible abuse of an airport operator's monopoly, thus providing strong and effective safeguards for airlines and their passengers, and for other airports.

I cannot end without mentioning some other improvements made to the Bill. The most recent among these of course has been the new clause that was inserted into the Bill this evening with your Lordships' approval, giving the Civil Aviation Authority a fresh duty with regard to the provisions of airports capacity. My noble friend Lord Boyd-Carpenter leant powerful and persuasive support to the campaign waged by my noble friends Lord Kinnoull and Lord Dundee on this issue. My noble friend Lord Dundee also successfully moved a new clause to enable the Crichel Down rules to be applied to sales of land acquired under compulsory purchase powers, while the noble Lord, Lord Mountevans, had similar success with the amendment to exempt airport shops from Sunday trading restrictions.

Noble Lords on the Benches opposite, and indeed some of my noble friends, also scored a notable success with their amendment enabling compensation to be paid as a result of directions given under Clause 67. I think what I have just said proves that throughout the passage of this Bill the Government have been willing to accept good, sensible and necessary amendments wherever possible, in order to improve the Bill.

In conclusion, I should like to thank all your Lordships—in particular noble Lords opposite—for your patience and help in steering this Bill through the House. I should like to express my thanks for the patience of those who are about to take on social security for waiting so that we could give this matter the proper airing it deserves. It would be remiss of me not to give a special mention to my noble friend Lord Boyd-Carpenter who has assisted the House considerably with his knowledge and personal experience of aviation matters. We are all grateful to him. I should also like to thank my noble friend Lord Davidson for his continued assistance and support.

I am sure your Lordships will agree that this Bill is

taking off from this House in a better state than when it landed here several weeks ago. Its improvements are a credit to all those who have contributed so constructively to its passage. I commend the Bill to the House.

On Question, Bill passed, and returned to the Commons with amendments.