HL Deb 26 April 1990 vol 518 cc661-2

3.7 p.m.

Baroness Burton of Coventry asked Her Majesty's Government:

Whether, in view of the press release of the Office of Fair Trading, dealing with the commercial policy of the British Airports Authority, of 15th February, they will amplify their answer of 8th June 1989 (H.L. Deb., cols. 935-6), and whether they can give any details concerning date and duration of the review of BAA's London airports referred to in the press release.

Viscount Davidson

My Lords, the Director General of Fair Trading announced on 15th February that, following BAA plc's review of its commercial policies, he would not be asking the Monopolies and Mergers Commission to carry out a monopoly investigation. Under the Airports Act 1986 the commission's regular, five-yearly review of BAA's. operations must be completed in time for the Civil Aviation Authority to impose the regime for the next five-year period, starting in April 1992. I believe that the MMC's review will get under way towards the end of the year.

Baroness Burton of Coventry

My Lords, I have much respect for the Director General of Fair Trading and understand the reason why he decided not to recommend referral to the Monopolies and Mergers Commission. However, many well-informed people regret that decision. Is the Minister aware that Sir Gordon Borrie spoke of the wide-ranging complaints that he had received and said that a monopoly investigation would have been timely? Do the Government realise that the central complaint is that the British Airports Authority is pursuing monopoly profits at the expense of its customer airlines and their passengers?

Viscount Davidson

My Lords, it will be for the commission to decide how to arrange its work. One might expect it to follow its normal procedures in carrying out a review including the announcement of the start of the review and provision for people to make their views known. In addition, the Civil Aviation Authority is required to seek comments from interested parties before imposing a new regulatory regime. No doubt the noble Baroness will be pleased to hear that.

Lord Underhill

My Lords, will the noble Viscount confirm that my reading of the 1986 Act is correct; namely, that notwithstanding the provision for the five-yearly review the CAA may at any time seek reference to the Monopolies and Mergers Commission? Secondly, am I right in saying that when this issue was first raised (I think it was on 15th March last year) I was informed by either the noble Viscount or his noble friend Lord Brabazon that the Bus and Coach Council had sought a reference from the Office of Fair Trading? Can he say what happened to that reference?

Viscount Davidson

My Lords, I think I answered that earlier question. I understand that following discussions with the Office of Fair Trading the BAA has substantially modified its proposals for bus and coach charges which have now been agreed with the operators for the next three years. I think that answers the more general question he asked and shows that the BAA can raise matters with the OFT at any time.

Baroness Burton of Coventry

My Lords, I thank the noble Viscount for the information that he has given us already. Can he go a little further? Can he tell the House whether any statement will be made publicly during the progress of that inquiry? If it is to start at the end of this year, am I correct in thinking that it may take two or three years to complete?

Viscount Davidson

My Lords, I believe that it will take two years to carry out. The commission must report by 1992 when the new regime will come into force. Section 43 of the Airports Act 1986 requires the commission to consider both the maximum amounts which the airport operator should debit by way of airport charges for the next five years and, more generally, whether the operator has pursued any operation or course of conduct which is against the public interest. I am aware that that does not answer the noble Baroness's question as to whether it will be reporting during the progress of the review. I shall have to find out and will write to the noble Baroness about it.