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Government stay for BAA

The Government has delayed comment on whether airports operator BAA is anti-competitive until the Competition Commission completes its inquiry into BAA, to complete in March 2009.

The Transport Select Committee of MPs published its report into BAA in March, and called for its near-monopoly of airports in Scotland and the south west to be broken-up.

In its responses to the Committee's report, the government said it would not be, "appropriate for Government to comment on the conclusions and recommendations of the Transport Select Committee which relate to issues already being addressed as part of that market inquiry, such as ownership."

However, the response did reveal that, "our view is that competition is preferable to regulation which may distort market decisions and stifle innovation. Even where competition acts as a weak discipline on behaviour, regulation should only be preferred if can be expected to deliver a clear net benefit.

"The Government is therefore committed to the principles of the Better Regulation agenda and believes that economic regulation needs to be appropriate and proportionate," it reads.

The government announced a review of airports regulation in April, to run alongside the Competition Commission review.

A decision on whether Stansted will expand into a second major hub to compliment Heathrow will not be made until the consultation, 'Adding Capacity at Heathrow Airport', which closed on 27 February, is analysed.

"As part of the consultation process leading up to the Future of Air Transport White Paper, Government sought views of consultees about the value to the UK of having one or more major hub airports in the South East. This is an important prior consideration for any decision about the long-term provision of airport capacity," the government's response reads.

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