23 FEBRUARY 2002, Page 7


There are few sights more nauseating than that of a trade union leader trying to say `I told you so'. When the news came through that the National Air Traffic Services (Nats) was in financial trouble and was being offered a £60 million rescue package, the reaction of the first union official to pop up on the BBC's radar screen was predictable: 'I firmly believe that air traffic control and the safety of both passengers and those who live near and work in Britain's airports are far too important to be trusted to the vagaries of market forces or indeed shareholder interest.'

The preposterous idea that privatisation puts profit before safety was a commonplace long before Nats was born. Whenever the far Left hear the word 'profit' they visualise Captain Smith at the helm of the Titanic, his mind more on the White Star line's share price than on the faint outline of the iceberg looming up ahead; naturally, they are uninterested in the fact that before 1912 the shipping line hadn't suffered an accident in 30 years.

The mantra 'profit before safety' is not just wrong; it is menacingly wrong. The skies are not less safe since air traffic control was part-privatised last summer. (It may just be coincidence, but hasn't that old staple of news reports, the near-miss over Slough, become a little less common in recent months?) Nats is not in trouble because the government put profit before safety but because it seems to have had barely any regard to profit at all. The vision of Nats shareholders sitting in restaurants, grease and champagne dribbling from their chins while, high above, Virgin's 747 to Baltimore is diving to avoid a head-on with Buzz's cheapo shuttle to Amsterdam, is far-fetched — not least because Nats was always going to struggle merely to break even.

The part-privatisation deal was so constructed that British Aerospace, one-time favourite to take the majority share in Nats, took one look at the figures and turned away in bewilderment. The airlines which ended up paying a hefty £800 million for a 46 per cent share in Nats hardly had a licence to print money: over five years the airlines were committed to reducing the fees they charge for the use of British

airspace by 17.5 per cent. To cut corners on controllers or radar equipment was forbidden. Their only hope of a profit was to increase administrative efficiency — and that would work only if a booming market for air travel continued to boom.

Of course, the opposite has happened, and the airlines now find themselves digging into their own pockets to support a service which until recently was propped up entirely by taxpayers. Those who complain about taxpayers having to 'bail out' private companies seem to forget that if air traffic control were still a branch of the state, taxpayers would still be making up the shortfall in fees resulting from the recession in air travel — only the sum would be buried deep in the government's accounts and nobody would notice.

The government's meanness in its construction of Nats is indicative of its schizoid attitude towards private capital. It sees in privatisation not the opportunity to create world-class businesses freed from interference by state bureaucrats, but merely the chance to raid shareholders' pockets and a means to exempt itself from having to run troublesome public services. Who can blame the banks, which are reportedly ready to foreclose on Nats' debts, when they have seen how the government treated RaiItrack? After the Paddington crash, ministers immediately sought to place blame upon the company, siding with those union leaders who, as ever, cried out that it was a case of people killed by greed. The government's contribution made it impossible for Railtrack to survive a further rail crash. Duly, after Hatfield, Mr Byers decided not only to let it go under, but to snatch its assets from beneath the noses of its shareholders in the process.

It has never been clear. given Labour's historical opposition to privatisation — even as New Labour it bitterly opposed rail privatisation in 1995 — why the government should want to plough on with marginal, unpopular part-privatisations of air traffic control and the London Underground. The suspicion is that ministers secretly enjoy putting the boot into private companies. They want to see services in private hands not because it will make those services work better but because it makes life easier for them when things go wrong. Rather than having to cancel their holidays, take the flak and meet awkward people like trade unionists, they can simply pour scorn on the private company involved and say it's not the government's problem.

It is thanks to this attitude that Nats is probably doomed. Inevitably, sooner or later there will be another near-miss over Slough. The unions will jump up and say it's all because of private greed. The government will half nod in agreement and say that Nats has got to get its act together. The banks will see the writing on the wall and recall their loans. The government will take Nats into administration, and another raid on shareholders' assets will have been completed.