19 January 2012


Occasionally I'll read something that concerns me. This is usually because the author knows his subject matter and outlines diligently a major flaw in a subject or highlights continued ignorance of the part of people who should know better. On this occasion Passenger Transport dedicated 5 pages for Go North East's former managing director Peter Huntley to write at length about the Competition Commission's Inquiry into the competitiveness of the bus industry.

If you follow the bus industry, it won't have escaped your attention that there's been a row brewing for over a year now as, in the midst of recession, the Office of Fair Trading said it was referring the industry to the Competition Commission as it believed there could be a case of the industry no longer operating in the competitive manner that was envisaged in the early 1980s.

Bus companies are of the opinion that the CC simply does not understand the industry. They point out that no official recognition has been made by the CC that the main competitor to the bus is the private car. Plenty of busmen have detailed their misgivings of the inquiry (LEYTR chairman Paul Hill is no exception) but in my opinion, none more so than Peter Huntley in his Passenger Transport piece.

His article centres on his two-day experience being grilled by the CC Inquiry. It is littered with phrases like "... I, once again, struggled to move us back from economic theory to reality"; "Go North East was apparently damned for competing but was equally damned for withdrawing from competition where this proved not to be profitable."

Free of the corporate shackles, Huntley is able to offer us an insight into the process from someone at MD level. Watered down theories such as: "Frustrated by past inability to actually identify collusion there was a determination to explore every contact made with anyone else in the bus industry over a full five-year period" are stated, questioning the Inquiry's raison d'etre.

Huntley's article set about answering seven hypothetical questions. The first of which gave a flavour to the article: 1. The Competition Commission had already decided that it was going to find 'evidence of collusion' before it started this project and was simply looking for the easiest background to 'sex up' the 'evidence' of this. Second was: Despite the evidence of substantial and growing direct and indirect competition between operators, the commission decided to ignore any evidence that did not accord with its predetermined view of collusion.

Huntley's Go North East had done a 'route swap' of sorts in the Tyne Valley (the official term is a 'back to back' parallel purchase) with neighbouring competitor Arriva, in a deal fully endorsed by the OFT who was satisfied that 90% of the competition between the operators would continue as a result. So unlike other bus company MDs, Huntley and his Arriva counterpart were quizzed more vigorously by the CC as two supposedly competing companies had sat down and orchestrated who would have what route.

This is not lost on Huntley who sets about wording his seventh and final question: The fear and concern of the North Tyneside Quality Partnership proposals that the commission expresses is in direct contrast with the similar initiative to co-ordinate and improve overall service to the public in Oxford, which has been praised by our public transport minister, Norman Baker.

That someone who held a position of managing director can be left with such an impression of the CC's inquiry genuinely worries me. Huntley left Go North East officially on New Year's Eve so is able to write without being parochial to his former employer. Yes, this is one man's view but it is not only representative of the industry as a whole, it goes beyond the misgivings bus companies have whom I've spoken to. I am genuinely concerned that we have a Competition Commission that does not adequately know what competition is.

The final word to Huntley: "An independent evaluation commissioned by Stagecoach, Nexus and ourselves showed that Nexus [Tyne & Wear PTE] could save money, the public could have better services and longer term sustainability could be delivered. But my colleagues at Stagecoach, who have more than enough experience of the Competition Commission, wisely assessed the risk as too great".

The CC is so impenetrable that trend-setting maverick Stagecoach is running scared!

Passenger Transport website

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