Tuesday, April 22, 2008

BAA Monopoly may not be a good thing. No... Really??

The Privatisation model adopted by the Conservatives was, well, conservative. Although they talked a lot about the value of the free market, in practice they tended to privatise monopolies intact. British Gas for example was privatised as a single business despite the very obvious conflicts of being a supplier, a distributor and a maintenance company in one. This was certainly noticed at the time- indeed the then Alliance spokesman on energy is mentioned by name in the enabling bill as advocating the break up of the business- which is, I think unique in the annals of British legislation.

In the end, what the government chose not to do, the market forced on the company, and eventually the sheer unwieldiness of the integrated gas business forced its break up into separate entities for each of the basic underlying businesses: transit, end-user supplier, maintenance etc.

Another monopoly that was privatised intact was the British Airports Authority: privatised as BAA PLC. Why anyone could have failed to notice that keeping Heathrow, Gatwick and Stansted under common ownership was hardly likely to foster competition and better services is beyond me. The fact that BAA can not set prices for slots at the airports in an economic fashion has led to each airport becoming a giant shopping mall with a runway attached- but the airports increasingly lack the kind of infrastructure that other airports offer as standard- easy transit between terminals for example.

So this morning we have the news that a Commission has suggested that common ownership of both London and regional airports "may not be in the best interests of the consumer" - You don't say?

Next week- news that the Pope may be a Catholic and more revelations on the excretory habits of bears.

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