Air Transport

– in the Scottish Parliament at 11:17 am on 3rd February 2000.

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Photo of Patricia Ferguson Patricia Ferguson Labour 11:17 am, 3rd February 2000

The next item of business is a debate on motion S1M-483, in the name of Mr Kenny MacAskill, on air passenger and freight links to Scotland, and amendments to that motion. I call Kenny MacAskill to speak to and move the motion.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party 11:28 am, 3rd February 2000

What is the purpose of this motion? It is to highlight the importance in the 21 st century and in a global economy of air links and infrastructure. It has been suggested that the strength of the Scottish economy can be observed in the vibrancy of the Edinburgh to London shuttle, but it should be clear that air links, if not an economic weather vane, are certainly an integral part of economic growth.

We must not compound the problem of our geographic peripherality by imposing a cost penalty on access to our markets. At the moment, however, we restrict access by routing almost everything through London and compound that by having a pricing structure that economically disadvantages our nation in general and individual areas of it in particular.

Air links are not simply about flying our businessmen to London for a mid-morning meeting or packaging our tourists off for a fortnight's break in Benidorm. They are about bringing in business and tourists. For too long we have been looking through the wrong end of the telescope. We must set our sights higher, because in the 21st century nobody owes Scotland a living. We must access the markets and promote our industry.

What do we face at the beginning of the new millennium? Privatisation of the national air traffic control system. Surely the word "national" should indicate the responsibility that the service has to the nation and the clear duty that the nation has to retain it in public hands. I will not say too much on that issue, as my colleagues will speak on it in greater detail, but I believe that there is neither an economic case nor a safety argument for privatisation. I am taken by the comments of the former transport minister

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

Not at the moment.

Gavin Strang said in the Edinburgh Evening News on 29 July 1999 that the three priorities for air traffic control should be safety, safety and safety. He added:

"I do not believe that privatisation should have a role in the future of our air traffic control."

He said that privatisation of air traffic control was not proposed to make air traffic management safer, but was put on the political agenda last July as part of the comprehensive spending review.

It is a pity that the Minister for Transport and the Environment has chosen not to say what her position is or who speaks for the Labour party in Edinburgh. Moreover, who speaks for the Edinburgh East and Musselburgh constituency Labour party—Dr Strang or Nurse Deacon? Are they for or against privatisation?

In preparing for this speech, the SNP conducted significant research to try to find out whether any other nation has privatised its air traffic control system. We had been misled by Dr Strang, who had misdiagnosed the situation. He had said that no other country had done so, but I can reveal to this chamber that Fiji has sold its air traffic control system to Australia. That is an absurdity.

In this part of the chamber, we had assumed that the unedifying race to privatise any asset that stood still long enough had ceased, but what have we seen? Harold Macmillan said that the Tories were selling off the family silver; new Labour is selling out the family safety.

Secondly, I will address the issue of job losses at Federal Express. It is a bit like the Hampden fiasco.

Photo of Phil Gallie Phil Gallie Conservative

What about the Wembley fiasco? [Laughter.]

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

One month the Executive trumpets a supposed success, the next its cover is blown and the gaffe is shown.

What has happened? On 25 August 1999, the eminent and esteemed new transport minister, Lord Macdonald of Tradeston, told us:

"Prestwick's emergence as an economically important air cargo hub could be encouraged by granting US companies 'fifth freedom' rights there, while continuing to pursue a wider deal—and this is what we have done today."

So proud was the Department of the Environment, Transport and the Regions in its boasts that its press release, a copy of which I have here, is entitled,

"Prestwick cargo cleared for take-off."

The proposal did not even get to the end of January before it crash-landed at Prestwick causing casualties to the work force in Ayrshire. Ayrshire and Scotland have been sold out to preserve the interests of bigger corporations in the south of England.

Photo of Cathy Jamieson Cathy Jamieson Labour

Does the member agree that although the decision by FedEx was regrettable, it was made for commercial reasons and that FedEx appears to be more interested in securing rights at Stansted than in the future of jobs at Prestwick?

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

I will explain when I come on to that matter.

Glasgow Prestwick international airport will tell inquirers that it can turn around cargo in four hours, whereas it takes 48 hours to do that at Heathrow. Rather than having companies pulling out and workers being laid off, the area and the work force should be booming.

Let us examine the situation. I received a short call yesterday from a quasi-autonomous non-governmental organisation seeking to blame FedEx. I then received a call requesting that I speak to a representative of FedEx. Although I was engaged on other matters at the time, I arranged to meet the representative last night for a lengthy chat. I understand that Mr Scott of the Liberal Democrats took advantage of the opportunity to speak to the representative this morning before he flew out.

I understand that FedEx met the Minister for Transport and the Environment in July, prior to Lord Macdonald's gushing declaration. I was advised that FedEx had offered to meet her on several occasions between then and the recent announcement of job losses, but that she had declined. I asked whether FedEx had met other members of the Executive about this crisis and was told that it had not. That is an absolute disgrace. When Scottish jobs are on the line, is it not the duty of the Executive at least to discuss with the employer the possibility of action or assistance? The Executive did nothing.

Success was claimed south of the border and Labour sought to bask in its afterglow up here, but when everything goes belly up, Labour shies away. We will not let it do so. Air transportation may be a reserved power, but Scottish jobs remain a devolved responsibility, and this is nothing short of a shameful abrogation of responsibility. At the meetings that matter on air transportation, the First Minister, the Minister for Transport and the Environment, and the Minister for Enterprise and Lifelong Learning sit voteless, voiceless and anonymous, like the three wise monkeys—hear no crisis, see no crisis, speak no crisis.

I return to Cathy Jamieson's intervention: what is the background to this? FedEx did not arrive in August—it has been here for 10 years. It was not a new business start with the possibility of exponentially boosting air freight from Prestwick. FedEx's main European hub is not at Prestwick or Stansted but at Charles de Gaulle in Paris—because it does not have full UK rights. In a nutshell, it operated big and small spokes. Prior to August and since 1978, the routes were Prestwick to Charles de Gaulle and back via Stansted.

Since 1978, FedEx has had rights to go to nine centres—what are called beyonds in the trade. Were and are those centres the main hubs, the vibrant economic bases, of Europe and the European Union? For sure they include Germany, the Netherlands and Belgium, but thereafter they are Iran, Jordan, Syria, Lebanon, Turkey and India. I do not wish to be disparaging of those nations, but they are not economic powerhouses. FedEx wanted fifth freedom rights throughout the UK, particularly in Stansted, to pick up and go beyond on routes from the USA.

In August, nothing was agreed. Labour trumpeted its achievements and FedEx pressed on, on the basis of good will and negotiations. To be fair to Lord Macdonald, the small print of the press release of 25 August says:

"Discussions with the US will include consideration of Federal Express's parallel application for full rights".

Although FedEx welcomed fifth freedom rights at Prestwick, it wanted similar rights at Stansted. It welcomed continuing negotiations and proceeded in expectation of a successful conclusion—an opening up of the skies. FedEx made that very clear.

Notwithstanding the PR hype and fawning praise Labour heaped upon itself, no deal was concluded, no document was signed and no jobs were secured. New Labour claimed to have built a future, but it was built on sand. What FedEx saw as an advantage for itself would also have been an advantage for others—its competitors would have been boosted by Stansted's operation being opened up. It was made abundantly clear that the price for Prestwick was fifth freedom rights in the UK. Labour trumpeted a success, but the jury was still out. At national level, Labour was still negotiating with the USA, with parallel discussions with individual operators. Labour decided to play poker with the USA and Prestwick was a chip to bet with.

Lord Macdonald was negotiating not for Tradeston, but for London. What were the other bargaining chips in that game of international poker? The USA wanted fifth freedoms and the UK companies that lobbied Lord Macdonald wanted access to US domestic markets. Those UK companies wanted not to boost incoming freight and trade, but the right to fly in the US domestic cargo market.

The opportunity to boost companies that wanted access to the American cargo market was the goal, not the growth of Prestwick as a cluster zone. The British Cargo Airline Alliance represents the interests of those companies and none are located in Scotland—they are located at co- ordinates south, such as Bournemouth and Stansted. They are nothing to Scotland and do not represent our interests. They are Channel Express, a supplementary air operator; Atlantic Air, which operates one scheduled flight from Liverpool to the Isle of Man; and Air Foyle—its speciality is filling up large planes of east European origin. What do they want?

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

I am trying to. Those companies want not fifth freedom rights but access to the US domestic cargo market. Lord Macdonald gambled that he could get that for those companies and boost them. The bluff was called and Scotland and Prestwick paid the price.

Fifth and even sixth freedom rights are not a threat, but an opportunity, for Scotland. What Scotland needs in fifth freedom rights is not unusual in Europe. The USA has long-standing agreements with the Netherlands and Luxembourg. On 22 December 1999, while negotiations between Lord Macdonald and FedEx were still going on, Portugal signed an open skies agreement with the USA. At the same time as we were being sold out, Portugal was signing up for economic advantage.

We have seen it all before in Scotland. As a West Lothian boy, I saw it at BL Bathgate. The day that factory closed every product that was assembled there was still being produced—but south of the border. We saw it at Ravenscraig when Scotland was sold out for Shotton and Llanwern. We saw it when Rosyth was sacrificed for Devonport.

The fact of the matter is that an independent Scotland would not allow that to happen to Prestwick. We would put Prestwick, not the interests of big business south of the border, first. It does not need to be this way; we can fly Scotland into the 21st century. The solution, as I said earlier, is political will, political power. We can make Scotland fly, so I condemn the motion and I condemn the Executive.

Photo of Patricia Ferguson Patricia Ferguson Labour

Mr MacAskill, I was expecting you to move the motion. [Laughter.]

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

I move,

That the Parliament recognises the vital importance of air links and air infrastructure to Scotland and the Scottish economy in the 21st century; acknowledges the potential for economic growth through improved air links; condemns the proposed privatisation of National Air Traffic Services and Her Majesty's Government's failure to ensure that FedEx remains at Prestwick, and calls for government action to retain air traffic control in the public sector, save associated jobs and promote economic prosperity by increasing direct air passenger and freight links to Scotland.

Photo of Murray Tosh Murray Tosh Conservative 11:40 am, 3rd February 2000

I think that Mr MacAskill was wound up from the moment he took to his feet.

In moving my amendment, I must comment on the extraordinary situation in which a major public policy matter is before the House of Commons and in the public domain, but our Executive has not lodged a motion in its own name defending its own Government policy. I wonder what conceivable reason there can be for that. Are the Liberals speaking for the Executive here? Why is the Labour party silent? Will the Labour party really try to smuggle its position through this debate, hiding behind an amendment that notes the views of the Liberal Democrats?

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I notice that the Conservatives really struggle with the idea of devolution. They are supposed to be on board about devolution. Do they understand it? Will Mr Tosh address the point that there is a UK Government that has nothing to do with the Scottish Executive?

Photo of Murray Tosh Murray Tosh Conservative

I understood that, under devolution, parties in this Parliament were entitled to speak up in defence of their party policy here and in other places. Mr Rumbles's position comes close to saying that devolution means that the policy of the Labour party in this Parliament is not to support the bill that is before the House of Commons. That is an extraordinary confusion that Mr Rumbles has planted in this chamber.

Let us talk about the Liberal position. In another chamber, the Liberal party has spoken adamantly against any private capital approach to air traffic control. In the House of Commons, Michael Moore has insisted that it is a scandal on air safety grounds. Does the Liberal Democrats' amendment say that? It notes "that there are concerns". They do not dare speak out here in support of the policies that they issue in another place. I shall come to the SNP's policies in just a moment.

Let us be clear about this. Safety in air traffic control is a function of investment, and that investment must be put in place.

Photo of Murray Tosh Murray Tosh Conservative

It is a function of regulation, which is there, and a function of culture, which is also there. The important issue is investment in a second air traffic control centre, but neither the SNP motion nor the Liberal amendment

Photo of Murray Tosh Murray Tosh Conservative

No.

Neither the SNP motion nor the Liberal Democrat amendment adequately addresses that issue. The position of the Conservative party is clear. [Laughter.] Jim Wallace may laugh, but I think that he knows that our position is clear. For many years, we have embraced the idea of a second air traffic control centre at Prestwick. The previous Conservative Government was well down the road to preparing a private finance initiative. We have no difficulty in supporting a public-private partnership. We have no difficulty in accepting commercial freedoms for National Air Traffic Services similar to those proposed for the Post Office. We accept that massive investment is needed, that the money is simply not there and that it must come from the private sector.

We regard it as ludicrous and scaremongering to suggest that a private capital approach would in some way imperil the safety of air passengers. In that respect, I am actually quite happy to support the founding principle behind the Labour Government's House of Commons bill, and I am surprised that the Executive is not.

Let us deal with the SNP. How would it fund a new air traffic control centre? SNP members come here and spend Gordon Brown's war chest several times every week. They are going to raise the money from the public sector. How? How will they fund it? What is the SNP's approach? We heard very little from Kenny MacAskill because, since he lodged his motion, the world has moved on and we have a better issue with which to bash the Government in the Ayr by-election—FedEx.

Kenny MacAskill is a curious combination. Sometimes he is the oldest of Labour, a pure tax-and-spend, old-fashioned socialist. Today, what is he? He is the unashamed apologist and spokesman for a multinational American company that has ratted on Prestwick airport this week, has issued 17 redundancies to its local staff and is going to sack another 40 people. This is an airline that has been here for a decade, and which won a significant concession from the UK Government in advance of all negotiations between the two countries to get rights to fly from Prestwick. Now, within months, the company has flown off.

Photo of Michael Russell Michael Russell Scottish National Party

I want to give Mr Tosh a chance to pause for breath. May I make the point that, as a South of Scotland MSP, he will have had a letter from FedEx, which says:

"We continue to be surprised that a Government so committed to ensuring that the UK is globally competitive remains firmly wedded to an aviation policy clearly focused around a small number of interests concerned with access to Heathrow to the detriment of Scottish jobs".

Will Mr Tosh condemn the Government for that policy, instead of defending it?

Photo of Murray Tosh Murray Tosh Conservative

Mike Russell's comments prove that he can read and that he has no more grasp of this issue than does Kenny MacAskill. Clearly, in any game of poker, there are two parties. FedEx has been playing a game of poker with Prestwick airport, and with Scotland, and deserves condemnation for what it has done.

Photo of Murray Tosh Murray Tosh Conservative

If the SNP wants to do something for Prestwick airport, and if it wants to do something for the Ayr constituency—which is what this debate is all about—it will support our amendment calling for urgent action to ensure that alternative carriers are allowed to carry freight.

Mr Salmond may smirk. There are three companies who want to carry this freight. One of them already has fifth freedom rights. We want to be sure that that freight can go by other carriers. This is an continuing matter and, frankly, the issue of independence is irrelevant, because, in the context of an independent Scotland, the SNP will neither raise the investment that is required, nor be able to influence UK-US negotiations on fifth freedoms.

It is time to get real. It is time for the SNP to stop this posturing and fishing for votes, and address the real issues and come forward with a motion that is about a strategy for airports, rather than a strategy for votes for the SNP.

I move amendment S1M-483.1, to leave out from "acknowledges" to end and insert:

"and, acknowledging the potential for economic growth through improved air links, supports the development of a new Air Traffic Control Centre at Prestwick funded by private capital, calls for the acceleration of the Scottish Airports and Air Services Study and effective surface access strategies for Scotland's major airports, and calls for urgent assurances that other freight operators will be authorised to carry freight traffic currently carried through Prestwick Airport by FedEx."

Photo of Tavish Scott Tavish Scott Liberal Democrat 11:47 am, 3rd February 2000

I was just thinking that I go home on a Saab 340 turboprop every week, and at least I know now that there are more than two things that are wound up on an average morning.

I will speak to the Liberal Democrat amendment in my name—and I say this for Murray Tosh's benefit—which sets out the Liberal Democrat position that:

"the Liberal Democrats are opposed to the development of the air traffic control system by public private partnership".

That is clear, even if Mr Tosh is having some difficulty with comprehension this morning.

Photo of Tavish Scott Tavish Scott Liberal Democrat

No, he can hold his horses.

I would welcome a serious debate about external transport links and our air infrastructure but, unfortunately, we have not had that this morning. This debate is not about air links, freight to and from Scotland, air passenger duty or the Scottish airports and air services study—matters that we should discuss, but have not had the chance to discuss this morning. This debate is about the Ayr by-election. There are no two ways about it.

The SNP's apparent diminishing popularity obviously has called for desperate measures. The BBC reported yesterday morning that the SNP had launched a premier chatline. Members may have heard that story on "Good Morning Scotland". Apparently, callers press 1 for a chat with Alex Salmond, 2 for a chat with Dorothy-Grace Elder, and, obviously, they press 999 for a chat with Kenny MacAskill.

I want to concentrate briefly on air traffic control, because it is an important issue. I agree with Murray Tosh when he says that there is a need for more investment—no one doubts that—but we disagree on how that investment should come about. It is predicted that the number of flights will increase by 15 per cent in the coming 15 years. The question is how we make the investment.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I wish to make some progress, Mr Salmond.

I visited Prestwick airport with my Westminster colleague Mike Moore in December. We met the chief executive of NATS and the general manager of Prestwick. We listened to the concerns about the need for £350 million of investment in Prestwick. We saw controllers at work. I fly every week, and along with many people I feel literally that our lives are in their hands. I was impressed by the dedication, professionalism and coolness of those staff in difficult circumstances.

There is no doubt about the need for investment. We discussed with the union and staff representatives at Prestwick their concerns about the proposed part privatisation. Why are there so many concerns about those proposals? Air traffic controllers, who have a strong public sector ethos, believe—and made the point forcefully to us—that that will be undermined by commercial pressures. The point was made at Prestwick that the prevailing culture should be one of safety, not profit.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

The Liberals agree with the private finance initiative in schools, as part of the Executive, and they agree with PFI in the health service, as part of the Executive agreement. Does that mean that if air traffic control was a devolved responsibility, they would agree with PFI in that sector?

Photo of Tavish Scott Tavish Scott Liberal Democrat

The Liberal Democrats do not agree with PFI, as Mr Salmond is well aware. The partnership Government has introduced a form of finance for those methods that makes progress on all the concerns that we had at the time of the election.

This debate is on a reserved matter, and I will deal with the issues. Why are pilots also worried about those proposals? Why do the trade unions and operators oppose part privatisation? Those are not irrational, emotive people taking a short-term political view; they are pilots and air traffic controllers who make a cool, professional judgment about those decisions.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I will make some progress, Mr Tosh. I have only five minutes.

The Government states that the public-private partnership model is the only method of making the necessary investment. There are two important points here. First, National Air Traffic Services does not cost the taxpayer one penny. The chairman of the Civil Aviation Authority confirmed that in a recent speech. NATS recovers all its cost because of the structure and the way in which it is financed, and indeed made a profit.

Secondly, there are alternatives. The Liberal Democrats favour an independent, publicly owned company. Those alternatives were outlined in the speech that my colleague Mike Moore made in the House of Commons on 20 December. The Environment, Transport and Regional Affairs Select Committee of the House of Commons also produced many viable alternatives.

The Institution of Professionals, Managers and Specialists, the union that represents more than 3,000 air traffic controllers in the United Kingdom, illustrated that an independent, publicly owned company would protect the NATS safety culture, it would promote investment and it would, above all, allow NATS to remain a publicly accountable organisation.

Last Friday, the Government gave the Post Office the commercial freedom to act, while remaining in the public sector. I am sure that I am not the only member who has received a letter from the chairman of the Post Office in Scotland illustrating the benefits and extolling the virtues of commercial freedom in the public sector.

There are sensible and viable options that could mean the investment that everybody is agreed on, while reconciling the potential difficulty between safety and profit. I will not take lectures from the Tories on this. NATS explained to me at Prestwick that the Conservatives' ideological pursuit of their policies on Prestwick meant that the Scottish centre has been subject to delay after delay.

Photo of Tavish Scott Tavish Scott Liberal Democrat

No.

It is interesting that the Tories' Westminster transport spokesman, Bernard Jenkin, advocated complete privatisation. I see today that Murray Tosh has joined the Hague Conservatives, just in time for the visit this afternoon. The Tories' approach is to flog it and forget it.

It is understandable, given the Ayr by-election, that the SNP has suddenly become interested in this issue. However, for example, the standing committee on the Transport Bill is debating this matter today, but the SNP could not care less. SNP members are not at Westminster, where it matters and where they could change the bill. Where was the SNP on 20 December when the Transport Bill was debated in the House of Commons? Not one SNP member spoke in that debate, when they had the chance to oppose it. They did not bother to turn up. What does the SNP do? It raises this matter in the Scottish Parliament, where members can debate it all day and cannot change anything.

Photo of Tavish Scott Tavish Scott Liberal Democrat

The SNP can no longer be trusted to fight for Scotland on reserved matters. It is never, ever there; it does not care.

I move amendment S1M-483.2, to leave out from "in the 21st century" to end and insert:

"and acknowledges the potential for economic growth through improved air links; notes that the future of air traffic control and associated issues are a reserved matter outwith the remit of the Parliament, but recognises that there are concerns and that the Liberal Democrats are opposed to the development of the air traffic control system by public private partnership; strongly supports a two centre strategy to protect jobs at Prestwick; underlines the need to give the highest possible priority to air safety, and further notes that during the second reading of the Transport Bill in the House of Commons on 20 December 1999, no Scottish National Party MP spoke in the debate, and only one voted against the second reading of the Bill."

Photo of Henry McLeish Henry McLeish Labour 11:54 am, 3rd February 2000

I am pleased to speak in this debate. It is interesting that while Kenny MacAskill was wound up this morning, I do not think that many members thought that he took off. It was a remarkable rant, even by the standard of Kenny's activities this week. Independence was in the news earlier this week—that is still on the runway and is not taking off—and then we had the internet story.

Colleagues may be interested to know that Kenny MacAskill has a wide brief in the SNP. Not only is he transport spokesman, he is now a disconnected sports minister. He suggested that we should all support the German bid to hold a competition rather than the English bid. We could make frivolity out of that, but the serious point is that if his rant today was anything it was a traditional recipe of anti-Englishness, anti-Westminster and, sadly, a refutation of the fact that we are still living in the United Kingdom, with all the attendant benefits that can accrue to us.

What was more remarkable than anything—and it was highlighted by the Conservative spokesman—was that a spokesman of any party should swallow, hook, line and sinker, one company's view of the pending departure from Scotland—

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

Can the minister tell me when he met a representative of Federal Express? If he did not do so, which of his colleagues in the Executive has done so since 25 August 1999?

Photo of Henry McLeish Henry McLeish Labour

What I would like to say—[MEMBERS: "Answer the question."] Before Gus Macdonald made his marvellous intervention on behalf of Prestwick, I met FedEx representatives and I met Brian Souter. In addition to all the other weaknesses and inconsistencies of the Scottish National party, it continues to try to sap the confidence of Scottish industry. It plucks out one immediate problem of FedEx, then belittles the fabulous success story that is Prestwick today. For the SNP's embarrassment, I want to detail that success.

However, there is another serious issue today. The Parliament can, rightly, debate any issue that it wants to debate. It is a fabulous institution, representing the Scottish people, but it will fall into disrepute if the SNP continues to use it for its party benefit, instead of for the benefit of the Scottish people.

I ask the SNP to imagine our colleagues at Westminster debating tuition fees, housing or local government. The SNP would say that such a situation would be ridiculous. The point is that the right of debate here is sacrosanct. In a devolved context, it is surely not right that the SNP should pretend that certain matters are reserved, while asking the chamber to come to decisions on areas that, following the devolution settlement, are for our colleagues from Scotland in the Westminster Parliament to debate. I raise that as a serious issue that the nationalists will never respect. I believe that for the credibility, respect and integrity of this chamber, the SNP should look closely at what it does with the time that has been allocated to it.

Turning to FedEx and the letter that has been circulated, I will use polite language and say that I do not think that it tells the whole story about Prestwick and FedEx.

Photo of Henry McLeish Henry McLeish Labour

I want to set this in the context of Prestwick generally. In 1992, FedEx was handling about 11,000 tonnes of cargo; it is now handling 4,000 tonnes. We have observed a situation in which the tonnage of what was regarded as the world's largest carrier was not increasing. Lord Macdonald intervened last year, and secured a unique deal of fifth freedoms for Prestwick, after a consultation process in which Scotland said, "This would be good for business in Scotland." The Westminster Government accepted that, but we then heard that Stansted should have been given the same rights. However, what the SNP will not say this morning is this: if a substantial number of airports are to be opened up to this cargo deal, it has to be based on reciprocity. The Americans did not provide that reciprocity.

Photo of Henry McLeish Henry McLeish Labour

I will not give way just now.

Why on earth should the open skies policy, the question of Stansted, be the reason that, after nearly a decade in Scotland, FedEx walks away from its commitments to 16 permanent jobs and 40 related jobs—56 in total—and blames it on the Westminster Government? On behalf of this chamber, I say to FedEx, "You are there and you have not left yet. Reconsider your position, because not one part of your argument would justify your leaving Scotland, at a time when Prestwick is enjoying unparalleled success."

Photo of Henry McLeish Henry McLeish Labour

I will not give way just now.

Let us detail that success. In 1992, Prestwick dealt with 16,000 tonnes of freight. In 1998, the figure was 40,000 tonnes. Cargolux has 44 per cent of Prestwick's market share, Air France has 15 per cent, Polar Air Cargo has 13 per cent and Lufthansa has 14 per cent—FedEx has only 10 per cent. Singapore Airlines also uses the airport.

Photo of Henry McLeish Henry McLeish Labour

I want to make this point decisively, because Kenny MacAskill must listen to it. FedEx is leaving a success story. It is part of the fastest-growing cluster in Scotland. One of our key businessmen, Brian Souter, has invested multi-millions in Prestwick.

Photo of Henry McLeish Henry McLeish Labour

No. I am not giving way. I want Kenny to listen to my point.

Brian Souter is also investing in passenger traffic. In 1991, there were no passengers travelling through Prestwick; there are now 600,000 passengers per annum. In 1991, there were 100 jobs; now there are 400.

Photo of Henry McLeish Henry McLeish Labour

If Kenny MacAskill continues to rant, people watching the debate and looking for common sense and maturity from his party will see neither quality.

Prestwick is a success story that Federal Express should recognise. FedEx should not leave on the pretext that the UK Government is responsible. The real issue is Stansted. I urge FedEx to get involved in the unfolding success of the Scottish economy.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

Will the minister clarify what he meant by the continuing negotiations to which he referred? The press release from the Department of the Environment, Transport and the Regions on 25 August notes that

"Discussions with the US will include consideration of Federal Express's parallel application for full rights at Stansted Airport".

It goes on to say that

"the absence of reciprocal rights in the US would have a negative effect on UK carriers and jobs."

What was the reciprocal right that the UK was seeking in the USA? Was it fifth freedoms or was it to allow the British Cargo Airline Alliance the opportunity to carry internal cargo in the United States? Is it true that Prestwick lost out because the Government supported the British Cargo Airline Alliance in its desire for access? What were the negotiations about?

Photo of Henry McLeish Henry McLeish Labour

The simple answer is that the Americans would not concede reciprocal rights of any kind.

Reciprocity is crucial, but the key issue is why Prestwick should get caught up in a fifth freedom issue relating to Stansted. That is the point. Gus Macdonald achieved the fifth freedom objective for Prestwick with no strings attached. That was a huge bonus for Scotland. Why does FedEx want to walk away from something that was done for its benefit?

I do not want to go into technicalities, although I am happy to send details to Kenny MacAskill. Under wet lease agreements, crews and planes can be transferred to other carriers for use at times of peak capacity. The US will not allow any UK carrier to wet-lease its aircraft, despite the fact that the UK provides a reciprocal arrangement. Let us not parade the problems of the US in this Parliament to justify the bogus arguments of the SNP.

We have talked about passengers, freight and investment, but I want to point out that, due to our industrial strategy, we have one of the fastest-growing clusters at Prestwick. BF Goodrich, Woodward Governor, British Aerospace and GE Caledonian are companies that want to do well. It does not help for the SNP to give radio and television interviews, in which it sends out a negative view of Scotland's economy.

Let them read the facts, let them assume and acknowledge that we are making progress. There are many areas in which we want to see further investment. The confidence of a nation is not helped by a group of people who constantly carp, girn and whinge about the real progress that has been made.

The Executive is very pleased to acknowledge that aviation and air transport are vital to the Scottish economy. We will continue to work with all concerned, including the UK Government, to ensure that we make progress. I will finish as I started. I invite FedEx to reconsider its decision and to appreciate the success story of Prestwick. I invite every member of this chamber to applaud the progress that has been made in Ayrshire at Prestwick. It is good for FedEx, and it is good for Scotland.

Photo of Patricia Ferguson Patricia Ferguson Labour

There is very little time left for open debate, so I ask members to stick strictly to the four-minute time limit.

Photo of Alex Neil Alex Neil Scottish National Party 12:05 pm, 3rd February 2000

Presiding Officer, I am standing in for Adam Ingram who has had a family bereavement. He has a special constituency interest in this debate.

I would like to concentrate on the privatisation of the air traffic control service. Our position is clear—to sell off NATS is nuts. The minister talks about the Scottish Parliament being brought into disrepute. If anything were going to bring the Scottish Parliament into disrepute, it would be a failure of the Scottish Parliament to speak up on behalf of the vast majority of the Scottish people who are totally opposed to the privatisation and sell-off of the air traffic control service.

If anything or anybody is being brought into disrepute, it is new Labour. When the Tories were in power, it was new Labour that led the fight against privatisation. Andrew Smith, its transport spokesman prior to 1997, said: "Our air is not for sale." That was before the election. After the election, new Labour is saying: "The air is for sale to the highest bidder."

George Robertson said that the privatisation, in part or in whole, of the air traffic control service would be outrageous and disgraceful. How can it be outrageous and disgraceful prior to 1997, but okay in 2000, and outrageous and disgraceful to criticise it? Privatising air traffic control would be nuts for two reasons. It would be dangerous and economically ridiculous.

Photo of Alex Neil Alex Neil Scottish National Party

Normally, I would love to let Murray Tosh intervene, but he had 10 minutes and I have only four. I intend to use them.

Murray Tosh said that what matters in terms of safety is culture and investment. The culture of safety is the predominant reason why the only country in the world to privatise air traffic control has been Fiji. Every other country, including the United States, has its air traffic control in the public sector. They have it in the public sector for safety reasons.

Photo of Alex Neil Alex Neil Scottish National Party

We should not underestimate the importance of air traffic control as an industry for the future. Projections for the next 10 to 15 years show a doubling of air traffic worldwide. Over the past year alone at Prestwick and at the Oceanic centre, there has been an 8 per cent growth in the number of flights. Prestwick now handles more than 1,000 transatlantic flights every day of the year. That employs more than 650 people.

Privatisation will lead to profit coming before safety. It would be madness from an economic point of view as well as madness from a safety point of view. If there is one organisation that more than pays its way in the public sector, it is National Air Traffic Services. If its external borrowing limit were raised to the necessary levels, it could fund any investment required. It can and does provide a return on capital to the public sector of around 8 per cent a year.

The move to privatise, which will generate perhaps £350 million of one-off capital investment over a period of 10 to 15 years, will cost the public sector an enormous amount of money and will lead to asset stripping. A total of 60 per cent of the costs of NATS is on staff costs. The only way in which it can be made profitable to get a return for the private investor is to make it unsafe by cutting down staff and by making staff conditions worse. The policy is total madness.

Photo of Patricia Ferguson Patricia Ferguson Labour

The member has come to a conclusion.

Photo of Des McNulty Des McNulty Labour 12:10 pm, 3rd February 2000

The difference between the SNP's approach and that of my party to this issue is summed up by, on the one hand, Kenny MacAskill's almost hysterical posturing and, on the other, the measured, pragmatic stance that has been adopted by Sandra Osborne, Ayr's Labour MP.

Although people might instinctively have preferred a public sector solution for National Air Traffic Services, it is clear to members who have discussed matters that have come before Parliament that investment requirements across the range of public sector services cannot be met entirely from public borrowing. That is a plain financial fact, and public-private partnerships have provided an effective means of injecting sizeable amounts of capital into improvements in service provision.

Investment of more than £1,000 million is now required in air traffic control because of delays under the previous Conservative Administrations—a fact to which Murray Tosh, despite his comments, should own up.

Before the voters threw him out in 1997, Phil Gallie did not contribute very much to Westminster debates, despite the implications of those delays for his Ayr constituency. Since Sandra Osborne's election in 1997, she has fought a strong campaign with the trade unions to secure a sizeable proportion of the new investment for Prestwick. That investment will secure 700 jobs that the Conservatives failed to provide in 800 years of rule— [Laughter.] Well, it felt like 800 years of rule, even though it was only 18 years.

As Sandra Osborne pointed out in her excellent speech on the Transport Bill in December 1999, the question about NATS is not the principle of proceeding with new investment through PPPs, but the form that any PPP should take. Sandra has constantly highlighted the need to consider the implications of any proposal on the work force, the quality of the ensuing service and issues of safety, which must be the overriding consideration for the Minister for Transport, Lord Macdonald.

We must be clear about these proposals. The public sector will continue to control the specification and contracts associated with the air traffic service. The Civil Aviation Authority will remain within the public sector.

As Tavish Scott pointed out, the Westminster debate on transport was on 20 December 1999, when this Parliament was not meeting. Not one SNP member spoke—

Photo of Des McNulty Des McNulty Labour

—and only one SNP member, Alasdair Morgan, bothered to turn up to vote. Perhaps the rest of the SNP MPs were too busy eating their mince pies.

Photo of Des McNulty Des McNulty Labour

However, a month and a half later, the SNP is prepared to devote precious time in this chamber to debate matters for which we have no responsibility. Who can be surprised at that? Certainly not the people involved in the Skye bridge campaign, who have already had an opportunity to experience Kenny MacAskill's fickleness at first hand.

While I am handing out advice, I suggest that Kenny MacAskill and Alex Neil leave fundamentalist rants about public ownership to Tommy the Trot, who is not here today. At least Mr Sheridan has a consistent record of opposing private sector involvement.

Photo of Des McNulty Des McNulty Labour

Prestwick will survive and thrive as an international freight operator if its potential can be marketed to top companies here and overseas. Its interests are not best served if potential investors see the main Opposition party in Scotland delivering the kind of rant that we have heard today from Kenny MacAskill.

The problem with the SNP position is inconsistency. On the one hand, we have this rhetoric about public sector ownership but, on the other, we have a defence of FedEx. Six minutes of Kenny MacAskill's speech were devoted to 16 jobs that will be lost as a result of a commercial decision by FedEx. However, he did not mention the 700 jobs that will come to Prestwick as a result of Labour's policy and the work of Sandra Osborne in particular.

The SNP has to learn to engage seriously in the debate. If it wants to engage in discussions about air transport strategy, it has the opportunity to do so when those discussions take place at Westminster. I hope that we can have more sensible, intelligent contributions to the wider transport debate. Lots of issues are available for which this Parliament has responsibilities—why does not Kenny MacAskill choose one of them for debate?

Photo of George Lyon George Lyon Liberal Democrat 12:15 pm, 3rd February 2000

As my colleague Tavish Scott said, today's debate should be renamed the Ayr by-election debate.

The issues that we are debating are vital for Scotland, as Kenny MacAskill and Mr Neil pointed out. I want to deal with the privatisation of the NATS system. As Tavish made very clear, the Liberal Democrats are opposed to that privatisation. We believe that real concerns exist over safety, which must be given a high priority. It is not just political parties that are saying that—as Tavish rightly pointed out, unions and management have real concerns about the possible consequences of privatisation.

Photo of George Lyon George Lyon Liberal Democrat

I have only three minutes, Murray; you had your six-minute rant, so you have said more than enough.

We ask that the UK Government reconsider the matter and address the safety issues that have been raised. Alternatives exist; as we have seen with the Post Office, other mechanisms can be used.

As our motion notes, air traffic control is a reserved matter and, as such, the fight needs to be taken up at Westminster. The Liberal Democrats are doing that, with support from many Labour colleagues in the House of CommonsGavin Strang, for example. However, time after time in this chamber, the SNP has chosen to hold debates on reserved matters, as Henry McLeish said. In fact, the nationalists have used nearly 50 per cent of the parliamentary time available to them to debate reserved matters. The same is happening today. The SNP claims that air links and infrastructure are a vital issue for Scotland. I agree, yet when the issue was debated at Westminster on 20 December, on second reading of the Transport Bill, when widespread opposition was voiced by the Liberal Democrats and many Labour members, not one SNP MP spoke.

Photo of George Lyon George Lyon Liberal Democrat

Not one SNP MP spoke for Gavin Strang's amendment against privatisation and only one voted for it.

Photo of George Lyon George Lyon Liberal Democrat

Poor Alasdair Morgan was the only MP whom the SNP could persuade to make the effort to travel to London for this important issue for Scotland. When he got there, such was the importance of the matter that he did not even bother to speak. That demonstrates how important the issue really is to the SNP. Today's debate is nothing more than gesture politics of the worst kind—the kind that brings the Scottish Parliament into disrepute.

I reaffirm today that the Liberal Democrats will continue to oppose at Westminster the privatisation of the air traffic control system. I am sure that they will enjoy the support of some of their colleagues on the Labour benches. It would be a great pity if the battle were lost because one party could not be bothered to turn up.

Photo of Phil Gallie Phil Gallie Conservative 12:18 pm, 3rd February 2000

Despite Des McNulty's words, Hansard records my tremendous involvement in the issue between 1992 and 1997. Perhaps the difference between Sandra Osborne and me lies in the fact that, when she speaks with the Labour Government nationally, she appears to support privatisation, whereas locally she does not.

If we look back over that period, we find that the Conservative Government achieved much in relation to air traffic control systems. The Conservative Government established the two-centre approach, which has been maintained. It also identified a preferred bidder—Lockheed Martin—for the private finance initiative. During the next stage, in September 1997, the phase 2 contract was due to be placed and work started on the site.

The Labour party should be criticised for its handling of the matter. Since 1997, a succession of transport ministers, all from Scotland—Gavin Strang, John Reid, Helen Liddell and now Gus Macdonald—have failed to deliver on this issue. All that they have done, all the way through, is to push the issue backwards.

The new air traffic control centre is essential to the local economy. As Alex Neil pointed out, it will sustain 650 good-quality jobs. However, the local impact is not the most important issue. Nationally, air safety is all important. Whether the air traffic control system is privatised, funded through the PFI or even funded using the same model as the Government is using for the Post Office, Conservative members will support anything that puts money into the project and gets it off the ground.

We recognise the need for the project and the need to improve the flow of air traffic across the United Kingdom. The Conservative Government gave the go-ahead to the Oceanic PFI, which is now under way. Oceanic handles the flow of air traffic into the UK. It is important that we are able to pick up en route.

I identify with almost everything that Henry McLeish said about FedEx, but it is a pity that he did not make the same comments when he was in opposition.

In relation to the United States, I warn members that they should consider what happened to the British Merchant Navy. We opened up our ports and gave freedoms to sea trade. The USA did not, and where is the British Merchant Navy today?

We want the project to get under way. Labour members should support our amendment, which is in line with the objectives to which they profess to aspire.

Photo of Michael Russell Michael Russell Scottish National Party 12:22 pm, 3rd February 2000

Even after only seven or eight months of this Parliament, one recognises some things in the chamber the moment a debate starts. I predicted earlier this morning that we would see panic among those members who have a common interest in defending the union. We saw it first from the unusually agitated Mr Tosh. I have never seen him like that before, but then he is due a visit from Mr Hague later this afternoon—clearly the Conservatives are trying to put the ideological iron into his spine before Mr Hague appears.

There has been panic, too, on the Labour benches. One always knows when there is fear among Labour members, because—

Photo of Michael Russell Michael Russell Scottish National Party

That is certainly true. Moreover, Henry McLeish is put in charge to attack the SNP for talking about things that are forbidden. Then, to ram home the message, a loyalist is found to read out the new Labour line. Today, the lottery was won by Mr Des McNulty, who read out the new Labour line with great aplomb. He also gave me the most unusual opportunity of my political life. [MEMBERS: "No."] Absolutely—and there is more to come.

After all Mr McNulty's affirmations that there would be guarantees and safeguards, I am able to quote, with approval and total agreement, the words of Mr Brian Donohoe, the MP for Cunninghame South, who is a member of the Transport Sub-Committee, as members will know from recent publicity. This is an historic moment. It is the first time that I have done this. He said:

"It doesn't matter what guarantees there are. We've all seen the past history of golden shares. They are worthless".

We are talking today about three vital matters. First, we are talking about public safety. Opposition to privatisation of the National Air Traffic Services has come from across the spectrum and has even involved loyalists such as Mr Brian Donohoe.

It was fascinating today that Mr McLeish did not mention once in his speech any defence of the Government line on national air traffic. The line is indefensible. It is a piece of worthless ideological baggage, scraped from the bottom of the Tory barrel and taken over by new Labour and Gordon Brown for financial reasons. There is no support for the Government line in the United Kingdom or in Scotland.

Photo of Michael Russell Michael Russell Scottish National Party

Not just now, Mr Kerr.

The only defence is that the Government needs money from a get-rich-quick scheme. I am ashamed for the Tories that they cannot see that and that they cannot put public safety before ideology. It is shameful.

Photo of Murray Tosh Murray Tosh Conservative

Is Mr Russell aware that safety in this country is regulated by the CAA, and that in no proposals does that change? Is he not aware that the most pressing safety issue is the lack of investment? Does he not realise that the same issues were raised over the denationalisation of airlines and airports? Does he believe that our airlines and airports are inherently unsafe and lack a safety culture? That is scaremongering of the basest kind.

Photo of Michael Russell Michael Russell Scottish National Party

It is not scaremongering of the basest kind. It is reflecting the public concern about the railways, for example. We need safety first, second and third, not profit first, second and third. If the Tories have not learned that, they will be in the political wilderness for even longer than expected.

The Tories' amendment is worthless. It is designed from ideology and adds nothing to the debate. At least they have lodged it for a reason: to please Mr Hague, who will be here later today.

Photo of Michael Russell Michael Russell Scottish National Party

Well, I am delighted to turn to the Liberal Democrats. The only reason that the argument is coming from the Liberal Democrats is that they have been let off the leash today. They are being let out a wee bit today to take part in this debate—

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Order. Mr Russell, you must not literally turn to them.

Photo of Michael Russell Michael Russell Scottish National Party

I am sorry, Presiding Officer, I just like to see the whites of their eyes. [Laughter.] I notice that a Labour member, Allan Wilson, has joined them on their benches today. The partnership is moving a stage towards completion.

The Liberal Democrat amendment is not an amendment; it is an apology. If the Liberal Democrats were really interested in ensuring that Scottish air transport was effective, they would vote for the motion. They cannot vote for it, however, just as they could not show their principles on the agricultural business improvement scheme.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I will read from the motion in my name. It says that

"the Liberal Democrats are opposed to the development of the air traffic control system by public private partnership".

It could not be clearer, Mr Russell.

Photo of Michael Russell Michael Russell Scottish National Party

We have read it. [Laughter.] Well, as I said in a recent debate, I enjoy reading Liberal Democrat motions and reports—they lull me to sleep. Their amendment is all the usual material, with all the usual inaccuracies. It has all the hallmarks of a piece of work by Government spin-doctors. It was clearly handed to the Liberal Democrats in the same way as speeches are handed out to Labour members. It was handed to the Liberal Democrats because they were given the wee bit of freedom and licence to be dissenters today.

For the Liberal Democrats, principle is the vice that dare not speak its name. They have no principles; they have sold them. Instead of being involved in the argument, they are running away from it. I would like to think that they would want some accuracy.

Photo of Michael Russell Michael Russell Scottish National Party

Mr Morgan attempted to intervene several times when Liberal Democrat members were speaking, but was not allowed to. It is true that five SNP MPs were not present at the transport debate at Westminster on 20 December. Exactly the same number of Scottish Liberal Democrat MPs did not vote in that debate, including the now Deputy First Minster. I think that we could call it a tie.

Photo of Michael Russell Michael Russell Scottish National Party

If, as I heard, Mike Rumbles used the word "hypocrisy"—I am sure that it will not be in the Official Report —I think that it will have to be sent back as a return of service.

There is a most serious situation in air traffic control, which threatens jobs and safety. It should not continue. In passenger transport, the lack of services from Scotland is inhibiting the growth of the Scottish economy.

There is also a great difficulty with freight, a business that Prestwick needs. I said that I was always conscious that, when the Administration was in trouble, we would see Mr McLeish panicking. An indication of that was his old argument: "If you criticise the Administration, you talk down Scotland." The people who are failing Scotland sit on the Labour benches. No amount of spin or bluster—

Photo of Michael Russell Michael Russell Scottish National Party

Let me just finish, Mr McLeish.

No amount of spin or bluster will get Mr McLeish round that fact.

The letter from FedEx is real. The meeting that Mr MacAskill had with FedEx was real. If Mr McLeish wishes to put the points to FedEx that he made earlier—rather than hoping on the off-chance that FedEx will read the Official Report—he should meet its representatives, something that he has so far refused to do.

I urge members to support the motion. If members support the Conservative amendment, they will be dancing to Mr Hague's tune. If they support the Liberal amendment, they will be dancing to Labour's tune—that is the reality of Liberal amendments. Members should support the motion because it stands up for vital Scottish services.