National Air Traffic Services Ltd. (Hansard, 27 July 1999)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

The Government issued a consultation paper in October 1998 outlining our preferred option for a public private partnership (PPP) for NATS as set out in our White Paper on the future of transport. We are grateful to those organisations and individuals who responded to our consultation. Their views have been taken into consideration as part of the policy development process for this PPP.

NATS' operational strengths, and its safety record, are among the best in the world but it needs a wider range of management skills, and access to capital, to meet the challenges of the future, in particular the ever-increasing rise in traffic. The Government want to build on NATS' strengths, bring in new management skills such as project management expertise, improve aviation safety, secure long-term investment of £1 billion over 10 years, including completion of Swanwick and the New Scottish Centre, and retain public accountability in a strategic industry.

We have a number of principal objectives for the PPP. These are:

to maintain and build upon the excellent record of aviation safety in the UK, which was reflected in the Select Committee's recent report;
to ensure that NATS has adequate funding for investment and to provide it with the commercial freedom to develop its business within a robust framework of economic regulation; and
to maintain effective civil/military joint working of the national air traffic system for the benefit of all users and to accommodate national needs in crisis, war and emergency.

The Government are also keen to ensure that best value is obtained for the taxpayer, the NATS' employees should have the opportunity to acquire an interest in the undertaking in which they are employed and to which they have contributed so much, and to preserve the pension rights of both existing and retired employees.

The Government have concluded that NATS should be separated from the Civil Aviation Authority (CAA), which will then become the independent, separate safety regulator of air traffic services. This separation will ensure that safety regulation and service provision are undertaken in separate organisations, as the Select Committee has recommended over many years. This will help to maintain and build on some of the most stringent safety standards in the world.

We intend to effect this new and innovative PPP through the introduction of a strategic partner who will acquire a controlling interest in NATS. The company will then become a New Partnership Company, structured to create a genuine partnership between the public and private sectors and involve the employees, airlines, and other stakeholders in a new Stakeholder Council. Subject to legislation, the PPP could be put in place by the end of the year 2000. Full details of our conclusions thus far are contained in the Government's report on the response to the public consultation, a copy of which has today been placed in the Library of the House.