Thursday, 21 August 2008

Government Gets Something Right Shock!

Thought that might get your attention...

Of course, it's not any of the parts of Government that are accountable to the Great Snotgobbler...

No, it's the (indepedent) Competition Commission (CC), which has recommended the break-up of BAA, the (near-)monopoly airport operator which owns Gatwick, Heathrow and Stanstead, and Edinburgh and Glasgow Airports. Because, as anyone unfortunate enough to fly from those airports knows, the service it offers is a pile of shit.

What most passengers probably don't know, because BAA's charges are hidden (along with the Government's ridiculous taxes, in the prices charged by airlines for the crime of wishing to leave this rain-sodden, socialist-wrecked piece of shit of a country we live in), is that they have been earning monopoly rents from the excessive charges they have been demanding from airlines. And the 'regulator', the useless Civil Aviation Authority (CAA) has done fuck-all about it.

So the Competition Commission, in its interim report, has demanded the break-up of the BAA monopoly. See - economists can be useful! ;-)

Now, what is the Government going to do about the CAA? Today's press reported that the Dept. of Transport was 'surprised' by the strength of the CC's report - despite the gist of its findings being reported for some time - yet another triumph for the Labour Government, which of course is totally against overly-close relations with Big Business (Bernie Ecc... cough, cough).

What the DoT meant to say was, 'We are going to do fuck all about the CAA because it is doing a wonderful job'. As ever, the Government - like its Great Leader - is 'listening'....

The problem with the CAA, like the water regulator after Ian Byatt left, is that it is too soft on monopolies who provide shit services. Just look at the level of price increases allowed for BAA - 23.5% real, followed by RPI + 7.5% for 4 years (note, not CPI, the supposed real level of inflation reported by the Snotgobbler), in order to pay for British Airways' new, ahem, 'wonderful' T5! And they say that BA is not supported by the Government, as, say, Air France is...

[Incidentally, having seen the CC's original report, the CAA did it's best to ensure its future survival by jumping on the 'break up BAA' bandwagon... what the fuck was it doing before? 'Dr' Harry Bush, its 'Group Director of Economic Regulation', is a political animal (formerly a senior bod at the Treasury, where the Bishop gathers he was responsible for the joys of public-private 'partnerships'... and no, that has nothing to do with gay sex or Harriet Harperson...), so is clearly simply trying to save his - and, maybe, the CAA's - skin.]

I have no problem with good service being rewarded - but the investment must be made first, and the service (whether a more pleasant airport, shorter queues, or less leaks from pipes, etc.) should noticeably improve before price increases are allowed. Not the other way round - otherwise the incentives are all wrong.

And don't get me started on the returns that are allowed on what are, essentially, risk-free investments (because, like the Inland Revenue, 'customers' can't go elsewhere). Why the fuck should we - because it is us, the airlines' customers, who pay for the subsidies to BA increased charges - pay a return that's higher than the risk-free rate on something that we are paying for (as the repayments of loans used to fund investments are factored into the prices allowed, and there is nowhere else for customers to go). Now, when BAA is broken up, we can think again about the appropriate rate of return. But we need to get tough on these cunts.

Rant over :)

Or I thought it was, until I read, in this FT piece, that the unions were opposed to BAA's break-up. Because, of course, some of the biggest beneficiaries of monopolies are unionised workforces (as we saw with the old nationalised industries - and the weeks / months spent waiting to have telephone lines installed, etc.).

If you needed confirmation that the CC are right, this should be it...


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