Wednesday, August 20, 2008

Re-nationalise BAA, don't break it up

The Competition Commission has called for BAA, the Spanish company that owns several of Britain's leading airports, including Heathrow and Gatwick, to be broken up. But the answer to Britain's airport woes is not allowing yet more profit-hungry plcs to own and operate our airports, but simply to re-nationalise BAA. Here is my First Post article from last summer on why renationalisation makes sense.

Across the political spectrum there is widespread agreement that Britain's airports, with their long queues, lack of seats and tacky, shopping mall atmosphere, are a national disgrace. But the solution is not to break up BAA's monopoly and introduce 'more competition' as some have suggested. The answer is to simply take BAA back into public ownership.

Sir Terence Conran, who designed Terminal One at Heathrow and the North Terminal in the 1960s, has contrasted the brief he received from the owners of the airports back then - the British state - with the instructions Lord (Richard) Rogers, the architect of Terminal 5, got from BAA.

Conran was told to put in as many seats as possible, with the priority being to make passengers 'relax and feel at ease'. At Terminal One there were only three shops.
The privatised BAA told Rogers to put in as few seats as possible: there will be only 700 seats for a terminal handling an average of 80,000 passengers a day when it opens in March 2008. BAA wants people to pay to sit down at the terminal's expensive cafes and restaurants - not sit down for free, eating their own sandwiches.

The approach perfectly illustrates the difference in ethos between a publicly-owned company, for whom profit is not the be all and end all, and a privatised one.
We can't blame BAA for treating every square foot at Heathrow as a profit centre: it's a private company which wants to maximise returns for its shareholders. But we can blame the politicians foolish enough to sell off BAA in the first place. Allowing other profit-hungry plcs to compete to run our airports would only mean more of the same.

If we really want Heathrow and our other airports to be comfortable and reasonably easy to negotiate, we need to change the whole philosophy under which they operate. And that means returning them to their most appropriate owners: the British public.


Richard Havers said...

Neil, one of the most sensible posts on the subject. There is a load of tosh being talked by many. The idea that the break up is a panacea is absurd. If people read the small print of the report they'd see that the CC are asking many more questions than they can have answers for.

Anonymous said...

Neil, do you think that it would be a good idea for Heathrow to be owned by the Greater London authority in a similar fashion to how Manchester airport is owned by the 10 Greater Manchester boroughs (Manchester 55% and the other nine 5% each)

Equally Stanstead and Gatwick could be owned by the nearby counties.

Neil Clark said...

Hi Richard: many thanks! I totally agree re the break-up.

pjd- the most important thing is that the airports are not run by profit hungry plcs who will not regard every square meter of the airport as a 'profit centre' I'd have no problem with them bring municipally owned. I don't know if you ever saw this remarkably stupid article on Manchester Airport in the Spectator by the fanatically neoliberal Tory MP Graham Brady.

He wrote:
"... the idea of the state running our utilities, airlines or railways now seems archaic and even faintly ridiculous. Under both Conservative and Labour governments we have transferred everything from telecoms to road haulage and defence research to the private sector. Yet next door to my Greater Manchester constituency there is a thriving modern plc worth
£3 billion which remains in the public sector without anyone batting an eyelid"

The interesting thing is that he then goes on to acknowledge that Manchester Airport is quite excellent!

"Manchester airport is a magnificent gateway to this resurgent city and a powerful motor for the economy of the whole northwest of England. While Heathrow is increasingly vilified as a ‘third world’ travel experience, we Mancunians are actually rather proud of our airport. It is at the forefront of efforts to achieve environmentally sustainable growth in aviation and has plans to make its entire ground operation ‘carbon neutral’ by 2015. Passengers consistently vote Manchester one of the world’s favourite airports and it is the third busiest in the country after Heathrow and Gatwick. This is a modern, profitable business — but its anachronistic ownership structure stands as a monument to old-fashioned municipal socialism"

Brady is so ideologically blinkered that he cannot see that the reason why Manchester is consistently voted one of the world's favourite airports is precisly because of its ownership- there passengers are made to feel at home, unlike at Heathrow and Gatwick which are soulless shopping malls.

Anonymous said...

The Competition Commission manages to conflate the benefit competition between airports might provide airlines and the benefits that might accrue to passengers (none I can think of).

Allowing municipal governments to own airports (as with Manchester) would allow them to compete for airline business, whilst safeguarding good standards of passenger service.

Public ownership in itself is not a guarantee of quality: witness Moscow airports, where the one owned privately and the second owned by the city administration far outstrip in quality the grim place owned by the Moscow Region - though the latter improves grinding slow.

Anonymous said...

The airports in Minneapolis are publicly owned, and run by a commission created by Minnesota State law. While they have Federal regulations with which to comply, the airports are state-run. The Metropolitan Airports Commission seems to do a reasonable job of running the airports. I don't know how it works in other states.

Generally speaking, federal governments suffer from "mission creep" in my opinion, taking on far more things than that for which they were originally chartered. So I'm glad that Minnesota is running the airports in Minneapolis instead of Washington.

Neil Clark said...

thanks for that, douglas. People always think of the US as being the country where neoliberal dogma has most hold, but I'm afraid that it's Britain which holds that distinction.

Roland Hulme said...

jolies-couleurs said... "Public ownership in itself is not a guarantee of quality."

Never has a truer word been spoken.

Neil Clark said...

roland: here's the deal. You spend a month travelling by train across the UK and then try doing the same thing in France and Belgium. Then come back and tell me that ownership doesn't matter. The railways in France and Belgium are better and more consumer friendly because they are run as public services; the ethos in Britain's privatised system is entirely different.

Roland Hulme said...

Oh, Neil. British Rail was screwed up LONG before it got privatised. SNCF, the wonderful French rail service, is truly a testiment to well managed nationalisation - but it's HEAVILY subsidised and the result of half a century of investment.

Instead, even when it was still a national industry, British Rail was dogged by decades of neglect. When it was sold out, it was a sorry old animal. Private industry inherited that dog. They didn't make it.

Although I'd agree, when it comes to something as important as a national rail network, it's probably best to put it in the government's hands so they can invest money in it (something the private sector is unlikely to do.)

Neil Clark said...

roland: no-one will deny that British Rail was starved of the sort of investment that other European railways received. But taking that into account, it did a remarkably good job, in terms of quality of service. Privatisation has made the situation much, much worse. The taxpayer is paying around FOUR times more in terms of subsidy to the private rail operators than they did to British Rail and the service is far, far worse. And the great scandal is that Britain is trying to enforce railway 'liberalisation' on the other countries of the EU and inflict on European railway passengers the nightmare that passengers in Britain have to endure on a dialy basis.