The Roles of the British Competition Authorities in Influencing Bus Industry Structure
C C Roberts, Liverpool John Moores University, UK
The 1998 UK Government White Paper set out to "produce better public transport, with easier, more reliable connections" through "a modern integrated transport system" whilst addressing the issue of "inadequate regulation of monopoly supply". Concern over monopoly supply has grown with the progressive consolidation of ownership of the British bus industry in the period following its fragmentation and privatisation after the 1985 Transport Act. The two bodies empowered with addressing issues of monopoly supply, the Office of Fair Trading and the Competition Commission (prior to 1999 the Monopolies and Mergers Commission) have been very active over the period since the 1985 Act, influencing industry structure on either a direct or an indirect basis. In spite of this, the industry has consolidated into one dominated by the five large bus groups and, on a local basis, generally dominated by a single operator.
This paper sets out to examine the impact of the competition authorities on the structure of the British bus industry as a stand alone policy, but also widens the study to consider anomalies between this, transport policy and service quality issues. The paper draws on recent original discourse by a selection of key managers and officials involved in the bus industry privatisation and consolidation processes, as well as views from a number of sources on the impacts (positive and negative) of monopoly supply. Supplemented by reference to other published work on the subject, a number of contrasting perspectives are raised. Specific mention is made of recent changes in legislation and their impact on the industry. It is concluded that monopoly supply within the bus industry is a natural phenomenon, and one which has historical precedent in the pre nationalisation era. This has major implications for public policy towards the bus industry in the light of current transport policy.
Association for European Transport