Clause 5 - Prohibition: exemption

Part of Civil Aviation Bill – in a Public Bill Committee at 4:45 pm on 28th February 2012.

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Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport 4:45 pm, 28th February 2012

I would be happy to do that. I am grateful to the hon. Gentleman for raising the points. I acknowledge that there is a degree of complexity in the clause. The overall result of our reform of airport economic regulation will be to inject far more clarity than there is currently, but yes, in this clause, there is some complexity. One of the main reasons for that is the Government’s decision to keep open the option of inter-terminal competition in future. That was touched on in the discussions with witnesses. The Competition Commission is not currently saying, “Let’s go ahead with it,” but it is something that it has considered in the past. It is in use at some airports in the United States, JFK being the obvious example.

The Competition Commission’s view was that it would be useful if we kept this open as an option for the future, so the Bill is drafted to ensure that if, in future,  the Competition Commission decided that the best way to protect the interests of end-users was through competition within airports, it would not be necessary for the Government of the day to return to Parliament to ask for an amendment to the regulatory regime to enable that to happen. The Bill does not in any sense mandate inter-terminal competition. It merely means that we are doing our best to futureproof the regulatory system, so that if a future Competition Commission decided that that was the best way to protect passengers, the regulatory system would be capable of dealing with that.

On the specific point about the Heathrow Express, which has come up a few times, I understand BAA’s technical concerns about the matter. We are keen to explore them with BAA. As I said this morning, I am confident about important surface infrastructure such as the Heathrow Express; there is every likelihood that that would continue to be on the regulated asset base. As I said in response to the point raised by the hon. Member for Blackley and Broughton, it is probably not possible for me as a Minister to give 100% cast-iron guarantees on that kind of thing. There is a degree of legal risk whatever one does, but with regard to investments of that type, they are on the regulated asset base at the moment, so one would expect that to continue under the new regime, because the Heathrow Express is manifestly a provision that benefits end-users.