Tuesday, July 27, 1999 Published at 09:40 GMT 10:40 UK
Air traffic sale takes off
Air traffic controllers' union opposes plans for privatisation
The UK Government has confirmed it plans to sell off the majority of the air traffic control system - Labour's first privatisation since coming to power.
The government is to retain a 49% "golden share" in the organisation and air safety regulation will be run independently. Up to 5% of shares for sale will be reserved for NATS staff.
But the move to private ownership has provoked a hostile reaction from union officials who fear it could undermine air safety.
The deputy prime minister insisted the government had listened to these fears in the past year.
"Safety in the air remains the government's overriding priority and we are committed to ensuring that the UK's excellent safety record is maintained," he said.
"The government will have statutory powers to instruct NATS in the event of a crisis or for national security."
'Safety ethos will be eroded'
"We fear that happen with air traffic control. Over a period of time the present safety ethos which is there in the National Air Traffic Services will be eroded.
"The pressure for profit will undermine the basis of the safety-based organisation."
The former minister who first announced the privatisation last year has also revealed he has doubts about the whether a sell-off can provide sufficient guarantees on safety and security.
Gavin Strang MP said that the government's attempts to describe the sell-off as a "unique privatisation" rang true as no other country had privatised its air traffic control.
He said the sell-off was motivated by financial considerations when the over-riding view should be safety.
Shadow Transport Minister Bernard Jenkin, speaking later on Tuesday in the House of Commons, attacked Mrs Liddell for her handling of the part-privatisation.
The announcement had "all the hallmarks of another convoluted compromise" after "two years of Labour dither and delay on this issue", the Tory MP said.
He also demanded to know why the government remained so reluctant to describe its action as a privatisation.
"If it walks like a duck, quacks like a duck, it is a duck," he said. "If the government is transferring 51% of shares in the organisation to the private sector, why is that not a privatisation?"
Delays at air traffic centre
It is expected the partial privatisation will bring in about £500m to the government's coffers.
Potential bidders for the remainder of the flotation could include British electricity distributor National Grid, French electronics and defence group Thomson-CSF and British services group Serco.
The government delayed progress on implementing its plans for NATS to undertake further consultation after announcing its intention to sell it off last year.
NATS, which employs 5,200 staff, is currently owned by the Civil Aviation Authority, which also has responsibility for air safety at present.
A parliamentary committee also recommended the sale be deferred until the CAA's new air traffic control centre at Swanwick is up and running.
The new centre has been dogged by delays and is now expected to open in 2002 at the earliest.
The all-party Environment, Transport and Regional Affairs Committee said its performance would be a crucial to private sector investors.
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