§ Mr. Wattsasked the Secretary of State for Transport whether, in view of the Monopolies and Mergers Commission's report on the British Airports Authority, he proposes that the British Airports Authority should continue to use revenue from its commercial activities to subsidise its traffic operations; what measures he has in mind to prevent the British Airports Authority using its monopoly power to exploit cornmercial activities; and if he will make a statement.
§ Mr. RidleyI welcome the report by the Monopolies and Mergers Commission the publication of which was announced today by my hon. and learned Friend, the Parliamentary Under-Secretary of State for Trade and Industry. I welcome in particular the Commission's conclusion that in respect of its commercial activities the British Airports Authority is not pursuing a course of conduct which operates against the public interest. It is a very detailed and comprehensive report which I shall wish to consider carefully, and discuss with the British Airports Authority, before deciding what specific actions are required. I shall report to the House in due course.
I have made clear that to prevent any abuse of its monopoly power when in the private sector the British Airports Authority's successor will be subject to regulation. This will include periodic investigations by the Monopolies and Mergers Commission of all of its airport-related activities.
On the question of cross-subsidy I should point out that revenue from commercial activities makes an important contribution to the overall finances of the BAA, and to the extent that this cross subsidises traffic operations, allows traffic charges and thus air fares to be lower than they 586W would be otherwise. We have made clear that we shall wish to ensure that, insofar as our international obligations require us to do so, airports's commercial activities (duty-free and tax-free shops, airport restaurants, car parks etc) will continue to contribute towards meeting airport costs.