EASTLEIGH MP BACKS FULL INQUIRY BY COMPETITION COMMISSION (Eastleigh Liberal Democrats)

Eastleigh Liberal Democrats <enquiries@eastleighlibdems.org.uk>

EASTLEIGH MP BACKS FULL INQUIRY BY COMPETITION COMMISSION

October 13, 2009 6:03 PM

Eastleigh MP Chris Huhne has written to the Office of Fair Trading to urge a full inquiry into the local bus wars.

The OFT can refer the matter to the Competition Commission, which has the power to levy fines and order companies to behave themselves if they are found to be acting in a monopolistic manner.

Chris Huhne appealed to constituents to write to the Office of Fair Trading before the end of the consultation urging a full inquiry.

"The way that Black Velvet has been driven off improved routes is just a scandal, and there should be a full inquiry to stop this sort of behaviour in its tracks.

"It is not just important for bus travellers in South Hampshire, but across the whole country as Solent Blue Line is part of one of the biggest British bus groups, Go-ahead. If they can do it here, they can do it anywhere" .

ENDS

Notes:

1. Constituents can write to the Office of Fair Trading here ...

Local bus services team, 2C/3

Office of Fair Trading

Fleetbank House

2-6 Salisbury Square

London

EC4Y 8JX

Or email: localbusmarketstudy@oft.gsi.gov.uk

2. The full text of Chris Huhne's letter to the OFT is here:

I am writing in my capacity as Member of Parliament for the Eastleigh constituency to advise you of the situation regarding local bus services in the Eastleigh area and to request as part of your consultation that the matter is referred to the Competition Commission.

A small company in my constituency called Black Velvet Travel Ltd, operating out of 4a High Street, Eastleigh SO50 5LA, employs some 14 bus drivers with 12 buses running two local routes in Eastleigh, plus some special college services for the local sixth form college. As such, they are a very welcome addition to the local transport scene because of the lack of competition previously in a market completely dominated - with minimal fringe competition - by the Go-ahead subsidiary Solent Blue Line.

Black Velvet attempted to compete on two free commercial routes with no subsidy - unlike the routes they are on now - and were subject to predatory behaviour by their larger competitor and the dominant player. This included putting on a specially liveried service - presumably to avoid tarring the main brand - running just ahead of the new Black Velvet service, causing Black Velvet to make a loss, and then withdrawing their own service. The result is that bus passengers locally have suffered from the withdrawal of an improved bus service.

I very much hope that you will refer this matter to the Competition Commission as it seems to me to be of more than merely local concern. First, this is likely predatory behaviour from a subsidiary of one of the largest bus companies in the country, and if they are allowed to get away with it in Eastleigh, it could become a pattern elsewhere. Secondly, this is an area with a very high car commute rate and there is a substantial public policy interest in improving public transport options.

Thirdly, the anti-competitive behaviour is not only demonstrably reducing bus passengers' options, but is also hitting employment, which would be higher with more frequent bus services. Fourthly, this was the first attempt of a small competitor to break into non-subsidised routes, and a failure to protect them would send out very bad signals to other potential competitors about the costs of entry if SBL's behaviour is unchecked and uninvestigated.

I would be grateful if you would advise me of the outcome of the OFT's consultation.

With best wishes,

Yours sincerely,

Chris Huhne

Member of Parliament for Eastleigh