Why is Mr Prescott determined to introduce new risks into air travel?

Click to follow
The Independent Online

The report yesterday of a near miss between two aircraft at Heathrow highlights the enormous political risks being taken by the Government in its rush to privatise the National Air Traffic Services (Nats).

After all, there is already widespread public suspicion of the privatisation of safety-related industries in the aftermath of the Ladbroke Grove rail disaster.

On the opening day of the enquiry last week, Robert Owen QC questioned the failure to improve safety after a series of signals had been passed at danger in the Paddington area. He said rail companies had been concerned that any new restrictions might reduce capacity of the station and, as a result, lose income for Railtrack and the train operators: "There would certainly appear to have been a conflict between issues of operational safety and commercial considerations."

As he was speaking, Labour MPs were preparing for the second biggest revolt of this Parliament, with 34 eventually voting against and some 40 abstaining in anger. Led by the air controllers' union, the campaign of opposition will continue in the Lords when the Transport Bill reaches the upper house later this summer, where the union is confident the proposal will be defeated.

In opposition, Labour had been opposed to the privatisation of Nats, which provides 95 per cent of the country's air traffic control. But, strangely, in one of the few bits of excitement during the election campaign, the issue briefly came to the fore when Labour let slip that the sale might be necessary in order to plug a hole in government finances. That was the cause of some deep blushes all round, especially for Andrew Smith, the former transport spokesman and now a Treasury minister, who had famously told the 1996 Labour Party conference, "our air is not for sale".

Following a review after the election, Labour, backed by senior Nats managers eager to obtain the fruits of privatisation, pressed ahead with the sale, though in a slightly diluted version. The Government is to sell 46 per cent to a trade partner, and a further 5 per cent to staff and retain the rest, including a "golden share". As with the scheme to privatise the Tube, the Government has called this a "Public Private Partnership" but, in fact, it is really a partial sale with the likelihood that, as with other privatisations, the rest will eventually be sold

Selling half of Nats would bring in £350m, but this is hardly significant compared to the recent mobile phone bandwidth bonanza of £22bn - and Nats has some £300m of debt that the Government has accepted might have to be written off. Consultants will cost a further £30m and there is no hole to fill today in government coffers. The Government argues now that the sale is necessary to get much-needed investment, some £1bn over 10 years, out of the Public Sector Borrowing Requirement.

The small concession of turning an outright sale into a partial one has done nothing to stem the tide of opposition against the plan. In a recent poll, 72 per cent of respondents said that they were opposed, with only 16 per cent expressing support.

The big issue, of course, is safety.The Opposition knows full well that this is an emotive issue which can win over hearts and minds. And, as Railtrack, Thames Trains, and the rest of the rail industry has learnt to its cost, accidents are bad for business. British Airways, with its excellent safety record - no fatal accidents since privatisation in 1987 - knows this, too.

But as we have seen with the fragmentation and privatisation of the railways, the effect of radical changes on an industry with well-established traditions and methods of working can be unpredictable. New and unforeseen risks can be created.

Peter Reed, a former general manager at the Civil Aviation Authority who helped draw up the Government's original consultative paper on public-private partnerships, has said that significant risks will be introduced into the system. In an eerie echo of Mr Owen's address, he wrote: "Heightened commercial pressures will influence Nats's behaviour in fundamental ways, just as they have had an impact in other privatised sectors - the key issue is that, where possible, trade offs exist between costs and operational standards, the benefit of the doubt will increasingly tend to fall in one direction."

The sale is dogged by other problems, too. A new en-route centre at Swanwick in Hampshire has been delayed for at least five years and will not open until the winter of 2001/2 because of software problems, with the cost soaring from £350m to £620m. Moreover, the Government's promise of a centre in Scotland - necessary for political rather than operational reasons - means that a further £350m will be needed.

So the privatisation is not going to get the Government much money; there are genuine safety fears; and there are alternatives to getting the much-needed investment out of the Public Sector Borrowing Requirement. Why bother?

John Prescott, the Deputy Prime Minister, appears to have made a deal with Gordon Brown very early in this Parliament to pursue the privatisation in return for a variety of concessions from the Treasury over theearmarking of revenue from congestion charges and fuel tax duty rises. Moreover, the issue has become something of a virility test for Prescott, a term interestingly used by two insiders interviewed for this article.

Had those two aircraft smashed into each other at Heathrow on 28 April, killing several hundred people, Nats privatisation would have been kicked so far into touch that Blair's grandchildren would not have lived to see it happen. The argument that the accident had happened while Nats remained under public control would be lost on the public who, quite rightly, would see the proposed changes to Nats as having already introduced extra risk into the system and further changes likely to introduce more.

There is a lot of bemusement in political circles about why Blair is so intent on pushing ahead with an unpopular move. By pursuing the privatisation for no good reason other than Treasury dogma and some backroom deal between Brown and Prescott, Labour is exposing itself to a completely unnecessary risk, all for the sake of, at best, £350m. While the safety concerns may be overblown, they are real, and putting the fate of the Government at the mercy of an air crash seems politically illiterate.