§ Mr. Powleyasked the Secretary of State for Transport when he intends to issue permission to levy airport charges to the British Airports Authority's airports.
§ Mr. MooreI have granted permissions to levy charges to the operators of Heathrow, Gatwick, Stansted, Prestwick, Glasgow, Edinburgh and Aberdeen airports. I have issued the permissions in accordance with part IV of the Airports Act 1986 and in particular under the powers in section 53; they take effect from today. Copies of the permissions have been placed in the Library.
417WAll seven permissions include conditions requiring, inter alia, that the published accounts of the airport companies show any subsidies to the airport business and the income and expenditure attributable to the levying of airport charges and to operational activities at the airport, as defined in section 30(4) of the Airports Act.
In addition, the permissions for Heathrow, Gatwick and Stansted include conditions limiting the maximum amounts which may be levied by way of airport charges. This regulation will operate by means of RPI minus X formulae applying for a five-year period both to BAA's London airport system as a whole and to Heathrow and Gatwick airports individually. In each case, X has been set at 1, reflecting an incentive to increase productivity, and recognising the very substantial airport capital investment programme planned for the next few years.
The conditions take effect from 1 April 1987.
The regulatory framework will protect airlines, their passengers and other airports from abuse by the BAA airports of their market power. The information to be provided in their published accounts will ensure that, if the airports receive any subsidies, these are identified, thus aiding the investigation by the Civil Aviation Authority of complaints of monopolistic or predatory practices. Price regulation will encourage increased cost effectiveness and efficiency at BAA's London airports—key goals of the Government's privatisation programme. It will also provide assurance for BAA's London airport users on the future charges they will face. Airlines using Heathrow airport will retain into the future the benefits of the real reductions in average payments per passenger achieved over the last five years, and airlines using both Heathrow and Gatwick airports should enjoy, on average, further real reductions over the next five years.
Airports, airlines and their passengers can now look forward with confidence to the privatisation of BAA plc, planned for summer 1987, and the benefits which this will bring.