It's time to put a stop to shunting in the bus lane

City & Business

THERE'S something suspicious about people who pay for newspaper advertisements to put a personal point of view. Richard Gere and Cindy Crawford hit a new low for the genre by announcing in full-page ads that their marriage had never been stronger, only to have it hit the rocks a few weeks later.

So when Brian Souter took out a series of full-page ads in the Scottish press in April, I was sceptical. Mr Souter is no Hollywood actor, but a former bus conductor turned accountant who heads Stagecoach, which has grown from nothing to be Britain's biggest bus operator. He is personally worth well over pounds 50m.

His grouse was an uncomplimentary BBC Scotland documentary about some of the company's anti-competitive practices. His ads lambasted the producer's methods as questionable, accused a former employee of bias and dismissed the programme as sensational and tabloid. He concluded piously: "The most offensive aspect of the programme was the attempt to imply that our business practices were inconsistent with our Christian faith."

The programme had every right to question Mr Souter's business practices. The Monopolies and Mergers Commission ruled last week that the company's behaviour was "predatory, deplorable and against the public interest". Strong stuff.

The MMC inquiry was into Stagecoach's operations in Darlington. The competition watchdog found that Stagecoach had acted to put a smaller, weaker rival out of business. It went on a recruitment drive to poach the rival's drivers, offering them pounds 1,000 bonuses to jump ship. It ran free services on its rival's routes. Sure enough, the rival went bust.

The funny thing about capitalism is that while it is generally good for the consumer that businessmen should strive to put each other out of business, it's usually bad for the consumer if they succeed. Ongoing battle means keen prices and good service. The end to war means higher prices and lower service as the victor basks in cushy monopoly.

Forget the friendly local image. The bus industry is a hotbed of anti- competitive behaviour. The Office of Fair Trading received 569 complaints about anti-competitive practices by bus companies between 1986 and 1994. It has carried out eight formal investigations. Fifteen cases have been referred to the MMC.

What is it about the bus industry that encourages the worst excesses of tooth and claw capitalism? The main reason is that bus companies find it hard to differentiate their services enough to influence customer choice. Passengers board the first bus that comes along, regardless of whether there might be a more comfortable or even cheaper bus along in a minute. Small, under-capitalised operators with old buses can successfully poach passengers from bigger rivals offering a comprehensive service with modern buses. The larger companies take the view that the only response is to put them out of business. By its very nature, bus operating encourages bad behaviour.

Does this matter? Yes. The British make five billion bus journeys each year. Many of the poorest people rely on a cheap, reliable bus service. And predatory behaviour in the short term often leads to congestion, pollution and sometimes compromised safety. In the long term it raises fares. Our inadequate competition rules do little to deter predation. Stagecoach, for example, is merely being asked to give undertakings not to engage in future predatory behaviour. This isn't enough. Culprits should be heavily fined. Even the bus operators' own association, the Confederation of Passenger Transport, wants fines brought in. And the industry needs a single, speedy, no-nonsense regulator. An "Ofbus" couldn't cost more or be more bureaucratic than the current set-up where four different organisations - the OFT, the MMC, the Department of Trade and Industry and the Traffic Commissioners - unsuccessfully try to curb the industry's excesses.

Too many sweets

EVERYONE is trying to claim credit for persuading Siemens to choose Tyneside for its new pounds 1.1bn microchip plant. It beat off challenges from Austria, Portugal and Eire to win the prestigious project, which will create 1,800 jobs in a region devastated by industrial decline. Much has been made of the grants offered by the Government. These include pounds 30m in direct assistance plus other unspecified sweeteners. Estimates of the total package range as high as pounds 200m.

Was this really necessary? Only Siemens can tell us for sure, and they are hardly likely to. But nowadays grant assistance comes way down the pecking order when multinationals make investment decisions. Quality and availability of the workforce is much more important. Low wage levels, good transport and infrastructure and minimum red tape all weigh more heavily than sweeteners.

Siemans would have chosen Tyneside long ago as its preferred site. Its manoeuvrings over the last few days have just been to wrest the highest possible grants from a government desperate to announce some good economic news.

It would be churlish to knock the Tyneside deal. But there remains the suspicion that taxpayers have unnecessarily lined the pockets of shareholders to secure a deal that was already secure. The sooner the world ends inward investment grants - the ultimate zero sum game - the better.

Jordan's ego trip

WESTINGHOUSE'S $5bn agreed bid for CBS has been overshadowed by Disney's moves on ABC. As we report on page 3, the Disney deal may or may not work out, but at least there is logic to it. By contrast, the Westinghouse deal looks driven wholly by ego.

The aim is to transform Westinghouse from a heavy industrial conglomerate into an entertainment group producing TV programmes and software. A radical change, and rather a costly and pointless one.

If Westinghouse's chief executive Michael Jordan wants to run a media group, surely it would be easier for him to seek a new job. If shareholders want to be TV proprietors surely it would be simpler for them to switch investments.

The transmogrification will be wonderful for corporate advisers, who will advise on asset disposals and acquisitions. It will be exciting for Mr Jordan. I can't see anyone else benefiting much.

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam