HL Deb 15 March 1989 vol 505 cc228-30

2.39 p.m.

Baroness Burton of Coventry asked Her Majesty's Government:

Whether they are aware that the Civil Aviation Authority has received complaints from the Bus and Coach Council concerning proposed plans by the British Airports Authority plc to increase charges to bus operators taking passengers to London's main airports, and that these have been referred to the Office of Fair Trading, and, if so, whether they have been informed of the present position or received any indication that reference to the Monopolies and Mergers Commission is under consideration.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

My Lords, I understand that the Civil Aviation Authority and the Office of Fair Trading both received representations from the Bus and Coach Council towards the end of last year. The Director General of the Office of Fair Trading is making inquiries in order to establish whether a formal investigation is appropriate and whether a reference should be made to the Monopolies and Mergers Commission. We must await his decision.

Baroness Burton of Coventry

My Lords, will the Minister tell the House whether any of these proposed charges have been implemented already, and, if not, whether they are likely to be implemented before the Office of Fair Trading makes its report? If I were to give the Minister details of the charges proposed to these captive customers, I hope that he would be as horrified as I am. Does he know any of the figures involved?

Lord Brabazon of Tara

My Lords, on the first point of the noble Baroness, I understand that the BAA does not propose to bring in any of the new charges pending the findings of the Office of Fair Trading. I am aware of the scale of charges proposed. That is a matter for the BAA in the first place but it is now for the OFT to decide whether it should investigate.

Lord Underhill

My Lords, the Minister referred to complaints from the Bus and Coach Council which were being considered. Do I understand correctly that Section 36 of the Airports Act 1986 makes provision for relevant charges? In a later section it provides that if the CAA—not any other complainant—so thought, it is empowered to raise the matter with the Monopolies and Mergers Commission? Is that the position?

Lord Brabazon of Tara

My Lords, without reference to the Act I am not sure that I can confirm that position. However, the Airports Act 1986 opened up the industry to the competition legislation of the Fair Trading Act 1973 and the Competition Act 1980, to which the industry was not subject before the Act.

Baroness Burton of Coventry

My Lords, with reference to the Minister's answer, do the Government approve of the way in which the British Airports Authority exploits its monopoly position, especially since privatisation? Arising from that, does he know that the franchise charges at Heathrow and Gatwick are so high that duty free shopping there is among the most expensive in the world?

Lord Brabazon of Tara

My Lords, so far as concerns BAA exploiting its position, we are satisfied that the provisions for economic regulation in the Airports Act 1986 are sufficiently vigorous. They are subject to five-yearly reviews by the MMC on a wide range of the airports' business. That would encompass charging the proposed charges for coaches. Duty free is a commercial decision for BAA. I understand that its policy requires a saving of at least 40 per cent. on average UK high street prices. Duty free, of course, is a discretionary purchase on the part of the customer.

Lord Williams of Elvel

My Lords, would any reference to the Monopolies and Mergers Commission be under the Airports Act or under the Fair Trading Act? If it is under the Airports Act, can the Minister explain the role of the Director General of Fair Trading?

Lord Brabazon of Tara

My Lords, the Airports Act opened up the industry to competition legislation and made the Fair Trading Act and the Competition Act applicable to it, which it was not before. It is under those Acts that this reference was made.

Baroness Burton of Coventry

My Lords, can the Minister guide me? Is there any way in which we can find out when the Office of Fair Trading is likely to make this report to avoid our having continually to put down Questions to the Minister asking for the same information?

Lord Brabazon of Tara

My Lords, I cannot say I am afraid. That is in the hands of the Office of Fair Trading and is not a matter in which I can intervene.

Lord Underhill

My Lords, can the Minister confirm or deny whether the Civil Aviation Authority has itself referred the matter to the Monopolies and Mergers Commission, because that would appear to be rather important?

Lord Brabazon of Tara

My Lords, I do not believe that the Civil Aviation Authority has referred this matter to the Office of Fair Trading. As I said in my original Answer, the Bus and Coach Council asked for this to be looked at. If I am wrong, I shall write to the noble Lord.