The Labour government of 1964 changed the emphasis. A White Paper of 1969 criticised licensing procedures and argued for the co-existence of public, mixed and private sectors within the industry. It recommended the establishment of a 'second force' or private company providing a substantial number of scheduled services. A Civil Aviation Authority (CAA) would regulate the whole sector and an Air Registration Board would deal with safety.
The recommendations were effected in the early 1970s under Edward Heath's Conservative government. British Caledonian Airways was formed by a government-approved merger and given some of BEA's business. The Civil Aviation Act of 1971 created the Civil Aviation Authority and the British Airways Board, to function as a holding company for BOAC and BEA. In 1974, both of these companies were dissolved and merged into the modern British Airways. The Authority was given a broad remit to ensure that services met demand cheaply and profitably.
During the 1920s and 1930s, airports developed erratically and were distributed unevenly across the country. The 1945 White Paper on civil aviation envisaged ownership of airports by the Ministry of Civil Aviation. In 1947, the government announced a policy of acquisition. In practice, however, the policy was slow to develop and subsequently the Conservatives followed a policy of selling off airports acquired under the Labour government.
A 1961 White Paper on aerodromes showed that 22 airports were owned by the state. It envisaged the further sale of assets, apart from major international airports. These would be managed by a British Airports Authority, which would also plan and oversee future development. The Authority, which was set up as a self-financing body, took control of Heathrow, Gatwick, Stansted and Prestwick in 1966. Heathrow was substantially developed during the 1950s. The government decided to proceed with Gatwick Airport in 1954. The government's decision to develop London's third airport at Stansted was controversial.