Okay, technically it's not a discount (they will charge passengers more if they check a bag) and it's only on a few routes in Europe- Amsterdam, Dubrovnik, Jersey, Tunis and Turin - but they'll eventually do it for all short-haul flights out of Gatwick. GBP15 to check a bag or GBP20 if you wait till after you book.
Basically, it's getting to be like most U.S. airlines. You pay a price for the ticket and then if you want to check a bag you pay more. Instead of calling it ad add on fare, BA is calling it a discount for hand luggage only. But it's really the same.
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http://www.which.co.uk/news/2013/02/ba-launches-discounts-for-hand-luggage-only--311266/