Airports: Economic Regulation

My right honourable friend the Secretary of State for Transport (Philip Hammond) has made the following Ministerial Statement. In the Queen’s Speech the Government announced their intention to reform the framework for the economic regulation of airports. Today I am announcing that legislation to implement these reforms will be introduced early in the next Session. Reforming the framework for airport economic regulation will help improve the quality of service that passengers receive at designated airports and contribute positively to economic growth. As I set out in my Statement to the House on 21 July 2010, we plan to replace the existing statutory framework for regulation at designated airports with a more flexible licence-based system. This will give the CAA the powers it needs to become a more responsive regulator—for example, to deal with events such as the severe weather this winter. The reforms will also strip out unnecessary regulation and support passenger-focused investment in existing airport infrastructure. I am keen to ensure that there is a smooth transition to the new regime and we will work with the CAA and industry to achieve this. In particular, the Government will not be making changes to the basis on which the current price caps at Heathrow, Gatwick and Stansted are set.