We welcomed this Office of Fair Trading (OFT) report, which was published on 12 December 2006. As part of their statutory role, the OFT actively investigates markets that do not appear to be meeting the needs of consumers and publishes the results of these inquiries. Market studies are undertaken in areas where there are concerns that a particular market is not working well for consumers but where competition or consumer regulation enforcement action does not appear, immediately, to be the appropriate response.

While we note that the focus of the report is related to the functions of the independent competition authorities, we recognise the value of an early response to the three particular issued aimed at Government, namely:

Government should publish criteria for de-designation of airports.

The Civil Aviation Authority (CAA) should advise the Department for Transport (DfT) whether to de-designate Manchester airport before the statutory price control reference to the Competition Commission (CC) is due.

Government should consider transferring decisions on designation to the CAA.

These recommendations are fully in line with Government policy that regulation should only be necessary when a competitive environment cannot deliver benefits to consumers. The DfT published a consultation document on the de-designation criteria on 26 February 2007 and once the outcome of this is known, they will undertake a further consultation on the de-designation of Manchester and Stansted airports. However, we believe it would be premature to consider transfer of decisions on designation to the CAA in advance of a reference by OFT of the supply of airport services to the CC—which OFT also announced it proposed to do in its report. The airport services market could be significantly altered by the outcome of such a reference.

The full Government action plan copies of OFT’s report will be placed in the Members’ Library. In preparing this response, we have worked closely with the relevant Government Departments, in particular the Department for Transport, which is responsible for policy on airports in the UK.