HL Deb 14 February 2002 vol 631 cc1178-82

11.12 a.m.

Lord Bowness asked Her Majesty's Government:

Whether the transfer of national air traffic control services to Swanwick has been successful.

Lord Filkin

My Lords, I am pleased to say that on 27th January the Swanwick centre in Hampshire, which is one of the most advanced air traffic control centres in the world, began successful operations.

Lord Bowness

My Lords, I thank the Minister for that Answer. Would he be prepared to tell the House whether that successful transfer is in any way threatened by the reported financial situation at NATS? It has been reported that the banks have threatened to withdraw their support if the Government do not guarantee the company's position. Furthermore, NATS itself has been reported as having given warning of its possible financial collapse if it cannot raise very substantially its own charges; to say nothing of further reports about the need to modernise the NATS computer systems such a short time after the opening of the new centre. Is not this a matter on which the House should be advised, if only to allay those worries?

Lord Filkin

My Lords, I can state categorically that there is no threat to safety or air traffic security as a result of the challenge that has been posed to NATS in the light of the tragic circumstances of 11th September. As one would expect, the volume of air traffic has reduced consequent on the 11th September tragedy. We do not know for how long that reduction in traffic will persist. There clearly is a challenge to the board and shareholders of NATS to ensure that their investment plans in the future can be sustained at the level that they would wish. All shareholders, with the Government—who of course are shareholders—are working well and positively to address that issue by a variety of means. I can assure the noble Lord that he should not believe everything that is written in the papers on this matter.

Lord Hughes of Woodside

My Lords, I apologise to my noble friend for not giving him advance notice of this question. Can he tell the House what is happening at Prestwick? The project has apparently been postponed because of what happened on 11 th September, but, as air traffic is expected to increase, would it not be highly dangerous not to proceed with Prestwick? As the passage of the Bill on NATS was contingent on Prestwick going ahead, will that promise be kept?

Lord Filkin

My Lords, I am delighted to hear the implication that I always get advance notice of any supplementary question from the Benches behind me. I hope that all noble Lords will pay attention to that because it would be most helpful. In practice, the Government's commitment to the two-centre strategy for air traffic control is still strongly in place. We believe that it is right and necessary. Quite clearly there has been a reduction in air traffic volumes and there is not the same level of urgency for the second centre to be brought on-stream immediately. Nevertheless, some of the preparatory work is going ahead at present. Site works and piling are under way and a new radar processing system is currently being installed. We expect that, in good time, the second centre, at Prestwick, will be opened.

Lord Glenarthur

My Lords, has there been any increase in capacity as a result of the transfer of the London control centre to Swanwick? If not, when does the Minister expect that increase in capacity to arise?

Lord Filkin

My Lords, there has been a very substantial increase in capacity. As I signalled, this is one of the most advanced air traffic control systems in the world, which, as far as we can predict, should make it possible to cope with traffic growth for the next 30 years. Over the past few weeks there has been a sensible process of progressive implementation of the system to ensure that air traffic controllers are fully conversant with the new systems and the new environment and have confidence in them before volumes are raised to the full level. So far, it is going extremely well.

Lord Clinton-Davis

My Lords, will my noble friend define what he has said a little more? He said that Prestwick would be available "in good time". What does he mean by that? When will work start there? Will he be a little more specific than he was in the debate on the air traffic control system? Will my noble friend take it from me that the work that has been done at Swanwick is admirable? It places British air traffic control in a very good situation.

Lord Filkin

My Lords, I thank my noble friend both for his question and his comment on Swanwick. It has been a success. We shall not go over the delays and the implementation challenges, but now that it is up and running it is an excellent centre. One must commend all those involved in bringing it on-stream and into operation. As to Prestwick, the position is basically clear. As I signalled in an earlier answer, work is progressing although not at the full level. The original plan was that it would come on-stream about 2007 or 2008. There may be a couple of years delay, but there is clearly no immediate operational need for the full centre. However, our commitment to it remains firm.

Viscount Astor

My Lords, does the Minister agree that the part-privatisation of NATS was largely debt financed, which has left it with a highly leveraged balance sheet? As the Government currently hold a 49 per cent stake in the National Air Traffic Service, do they agree with its proposal that it should raise its charges by an average of 5 per cent a year for the next three years?

Lord Filkin

My Lords, the level of charges that NATS is entitled to impose is not a matter for me or for the Government. The cap is set by the Civil Aviation Authority rather than by the Government. In this circumstance, one would expect that a company of this kind would be looking at all options to see whether it could reduce expenditure, increase income and strengthen its equity. No doubt those are some of the issues being considered.

The Earl of Caithness

My Lords, despite what the noble Lord has said, is it not a fact that there have been increased delays in air traffic since the transfer to Swanwick? On two occasions recently, I have been delayed for more than two hours and the blame has been firmly put on Swanwick rather than on anyone else.

Lord Filkin

My Lords, as is the tradition of the House, one always expresses deep regret that any noble Lord has been delayed for any reason whatever. The statistics I have show that there were in the very early days some delays as a result of settling-in the new systems. But the figures I have been given are that the average delay per flight is now three-and-a-half minutes compared to an average before the switch to Swanwick of two minutes. Clearly that is a movement in the wrong direction, but it is hardly of great significance. I mentioned previously that there has been progressive implementation. The centre is not being loaded fully at this stage. It is being governed back so that air traffic controllers have plenty of time to get used to the systems. That is what is causing the slight delays. We can be confident that these will be eradicated relatively rapidly.

Lord Brooke of Alverthorpe

My Lords, I declare an interest as a non-executive director of NATS. Does the Minister agree that any delays related to Swanwick that are currently being experienced were built into the planning process for the introduction of the new system? Secondly, will he join me in commending all those involved in devising and introducing what is probably one of the most complex systems in Europe? It is equally important to recognise that the transfer of this system from its former establishments to Swanwick was one of the most complex arrangements that could have been undertaken. Will the Minister also take note that, in the current year, charges in the UK have gone down, while charges elsewhere in Europe, particularly following the events of 11 th September, have increased substantially?

Lord Filkin

Yes, my Lords, I agree that the reason for the delays is essentially that an extremely prudent approach was taken to bringing the new centre on-stream. I signalled that point earlier, although I did not put it quite as explicitly. Judgments were made that the centre would process only a certain amount of traffic at any one time in an attempt to ensure that there was not an excessive load on air traffic controllers. That has led to very slight delays. It is a highly prudent way of bringing such a system on-stream. The staff and management are to be commended; so far, the process has gone extremely well. Let us trust that it continues to do so. With regard to charges, the current formula by which NATS is governed is a cap of RPI-minus X—it is slightly complicated—whereas in Germany and elsewhere this year charge increases of 10 per cent or more have been imposed.

Lord Burnham

My Lords—

Baroness Thomas of Walliswood

My Lords—

The Lord Privy Seal (Lord Williams of Mostyn)

My Lords, it must be the turn of the Liberal Democrats.

Baroness Thomas of Walliswood

My Lords, surely the Government must be interested in the fact, even though they cannot influence it, that—as the noble Viscount, Lord Astor, has reminded us—the plan for a progressive reduction in charges by annual amounts of 4 and 5 per cent over several years has now been abandoned by NATS in favour of a planned increase in charges over the same period.

Lord Filkin

My Lords, the Government are interested in the situation in a number of ways—as a shareholder, and as a government with an overarching concern regarding these issues. The reality is that, while air traffic volumes are down, the revenues to NATS—whether or not it is in a PPP— will also be down. In a worsening situation in terms of income, there are only two options: either income charges. go up, or other forms of funding are introduced. There is a strong argument that the costs of air travel should he borne by the users rather than more generally. There is certainly a debate to be had with the CAA—and I am sure that NATS will put the case—about the need to reconsider the level of the cap.

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