LORDS AMENDMENT (Hansard, 27 November 2000)

§ Lord Macdonald of Tradeston

My Lords, I beg to move that the House do not insist on their Amendments Nos. 27, 28 and 29 to which the Commons have disagreed for their reasons numbered 27A, 28A and 29A.

These amendments relate to the deferral of the introduction of the NATS public-private partnership. When the amendments were moved in this House I argued strongly against them, and I am gratified that the Commons endorsed the Government's view.

The purpose of these three amendments is to ensure that no transfer schemes are made or approved before the first Session of the Parliament following that in which this Bill receives Royal Assent.

Transfer schemes involve the transfer of assets, rights and liabilities to relevant parties in readiness for the NATS public-private partnership. The partnership cannot be set up until these transfers have been effected. The amendments therefore have the effect of delaying the public-private partnership until the next Parliament—in other words, until after the next general election. They would also have the effect of preventing the separation of the operation of air traffic 1209 services from their regulation. That is completely at variance with the views of this House, and with those held in another place. The separation of operations from regulation is a key instrument of progress that will enhance the safety regime for air navigation services. It would be very counter-productive to delay that key objective for the sake of political manoeuvring.

I am sure that it will come as no surprise to noble Lords that the Government do not think that this delaying tactic is acceptable. We do not see the need for any further delay in proceeding with the establishment of the PPP. Our proposals have been given ample publicity. Indeed, before the last election the Prime Minister said in his message to the nation in the 1997 party manifesto: We will search out at every turn new ways and new ideas to tackle the new issues … how to put the public and private sector together in partnership to give us the infrastructure and transport system we need". In February 1997, Mrs Margaret Beckett said that NATS was not ruled out as a candidate for the public-private partnership. In April 1997, just before the general election, the Chancellor said that he would consider partial privatisation of NATS, and the Prime Minister confirmed, during the course of a very public pre-election debate, that he would not rule out its sale. That was followed by a public consultation on our White Paper after we had announced the proposal for the partial sale of NATS in June 1998. A Statement was made following that consultation and there has also been a Select Committee inquiry. Therefore, there has been ample time for public scrutiny of the policy, and of its detail.

In addition, it has, of course, been necessary to introduce legislation to enable the partial sale of NATS to take place. There have been thorough debates on this Bill's provisions, both in this House and in another place. This in itself has enabled the Government's proposals to be subject to detailed scrutiny. The Government have listened to representations made to them, both in this House and in another place, and introduced amendments, where appropriate, to meet the concerns expressed. Most recently, we moved amendments on Report to make safety the number one priority under Part I of the Bill, which were warmly welcomed by all three main parties in your Lordships' House.

We have also introduced amendments that reaffirm the Government's commitment to the two-centre strategy, based on Swanwick and Prestwick in Scotland. We have also listened to concerns about pensions arrangements for NATS staff. The Government will explain more about that when we come to the debate on the pensions amendments.

Moreover, the aviation industry is not largely opposed to the PPP, as some might have us believe. The airlines, through BATA, have expressed concern that a delay in the PPP will have the effect of delaying much needed investment in NATS. They are also satisfied that safety will not be jeopardised by the PPP—otherwise they, who bear primary responsibility for their passengers, would not be supporting the 1210 proposal. I am sure noble Lords will seriously consider the views of those airlines, which play such a crucial role in safety matters.

I turn now to the main purposes of the PPP. The proposals that we set out for NATS have been carefully crafted to meet the needs of that company and the national interest. What we are setting up here is a well-balanced, genuine partnership between the public and private sector, so as to secure the best from both. It is not ideologically driven; it is simply the right thing to do. It will set up a new company, bringing in private sector financing for crucial safety systems, and project management expertise, to deliver those systems on time and to budget. But these elements will be added to the operational excellence that we see today in NATS. They will all sit in a company that will pay proper attention to the views and interests of all stakeholders through a stakeholder council—a company with government-appointed partnership directors, who will help to assure the delivery of a strategy for the future of the company which the Government will agree with the successful strategic partner when the PPP is put into place. The new NATS will be a company whose staff will have a significant stake in its effective operation through their shareholdings.

There is also an urgent need for investment in NATS, and for the injection of new project management skills. Important investment decisions need to be made now in respect of major projects, and the ability of a strategic partner to make a meaningful contribution to these may be lost if the PPP is delayed. There have already been delays in introducing new technology at the Swanwick centre, and there is a pressing need for the contribution from the strategic partner, both at that centre and at the New Scottish Centre at Prestwick (the NSC).

NATS has an excellent record on safety but would benefit from a strengthening of its capabilities in respect of the introduction of new technology. A delay in the introduction of the PPP, which these amendments would cause, could jeopardise the prospects for both Swanwick and Prestwick.

Moreover, further delay and uncertainty will not be helpful to NATS or its staff. They have had to live with uncertainty for far too long. The previous administration started questioning the future of NATS some years ago, and announced their intention to privatise. We have tried to put a stop to this uncertainty by making an early announcement concerning the PPP. To add further delay at this stage would be unfair to NATS staff, and could jeopardise the urgent need to step up the recruitment of more air traffic controllers—

§ Lord Macdonald of Tradeston

My Lords, we have had a number of discussions, going back many months, with the staff unions and with lay members from the NATS staff.

During the earlier stages of this Transport Bill, the noble Lord, Lord Brabazon of Tara, divided the House in pursuit of the privatisation of NATS and was defeated. On Report, the noble Lord quoted a precedent for delaying the implementation of transfer provisions. In 1982, during the Telecommunications Bill, the then Secretary of State for Trade and Industry said that neither the transfer of assets and obligations to the new company, nor the issue of shares to the public, would take place before the next general election.

However, there is a major difference between the British Telecom case and NATS. The former was a flotation in which the Government were selling off their interest in the business in its entirety (albeit in two stages). In the case of the PPP, the Government are only disposing of a proportion of their interest in NATS, and will be retaining a stake to ensure that the public interest remains protected. In fact, there will be a legislative requirement on the Government to secure parliamentary approval of the sale of any government shares.

Those are the practical issues. However, the amendments also raise constitutional matters that have wide-ranging implications. I am sure that your Lordships will agree, on consideration, that it would be wholly inappropriate for provisions to be put on the face of a Bill preventing the Government from implementing certain of the provisions of that Bill until the next Parliament. It is for the government of the day to determine the speed at which they can implement their legislation. The House has approved the policies in the Bill by giving the Bill a Second Reading, and these delay amendments are an attempt to undermine at a very late stage the decision of the House on that occasion. Were these amendments to remain on the face of the Bill, we would be straying into very dubious territory in constitutional terms.

This House has, over the years, fulfilled its duty admirably as a body that revises, and subjects to detailed scrutiny, Bills that are referred to it from another place. I am sure that your Lordships will agree that we have made a very worthwhile contribution to the Transport Bill by virtue of the amendments that were introduced by this House. It would be most unfortunate if we were to sully those achievements by upholding amendments that seek to dictate to the Government when their legislation can or cannot be implemented. That is not part of our role, but it is precisely what Amendments Nos. 27, 28 and 29 would achieve.

Moved, That the House do not insist on their Amendments Nos. 27, 28 and 29, to which the Commons have disagreed for the reasons numbered 27A, 28A and 29A.—(Lord Macdonald of Tradeston.)