§ Mr. HendryTo ask the Secretary of State for Transport what conclusion he has reached on his Department's review of the system of economic regulation of airports; and if he will make a statement.
§ Mr. NorrisThe review considered how the system of economic regulation established in the Airports Act 1986 had worked to date, and whether there was scope for improving the process of regulation. It was not concerned with the principles or methodology of regulation.
Following consultation, my Department has identified a number of measures to improve the way the system works, including clarification of the procedures for regulation of airports and for handling of complaints, improved availability of information, and clarification of the criteria for designating airports under section 40 of the Airports Act 1986 for closer economic regulation. In addition, some measures have been identified which will require legislation; these will be taken forward when the opportunity arises. The main such change concerns the roles of the Monopolies and Mergers Commission and the Civil Aviation Authority in the regulation of the designated airports; it is proposed to adopt a regime based on what has become the "standard" model for the regulation of utilities. It is expected that the next quinquennial reviews of BAA's south-east airports and Manchester airport will proceed under the existing system.
In the light of recommendations from the Select Committee on Scottish Affairs, we have also considered whether Glasgow and Edinburgh airports should be designated for the purposes of economic regulation. We have found no evidence of abuse of monopoly position or inefficiency and we have therefore concluded that there is no case at present for designating these airports.
I am placing the report of the conclusions in the review in the Library.