Labour threatens to clamp down on bus firms

The Labour Party yesterday went on the offensive over transport policy, threatening to re-regulate the bus industry if it won power at the next election and hitting out at the proposed alliance between British Airways and American Airlines.

Graham Allen, Labour transport spokesman, told a conference organised by the party to present its transport policy platform that one of its priorities would be to end the practice of rival bus operators running deliberately overlapping services in an attempt to win market share.

"One fundamental thing is to end on-the-road competition," Mr Allen said, adding that Labour wanted to provide certainty and stability for the bus industry.

Since the Conservative Government began deregulating the buses in 1985, the industry has undergone a revolution which analysts say has slowly led to the emergence of a number of big, efficient bus firms.

The pace of consolidation has increased rapidly in recent months. Ealier this week Cowie, the Sunderland-based motor dealer, became Britain's third largest bus operator when it paid pounds 302m for British Bus.

But the process has also had side-effects. Critics and supporters of the liberalised industry agree that to date there have been only limited benefits for passengers. Poor integration has created new problems with service quality and standards, rather than solving old ones.

Separately, Labour's shadow transport minister, Clare Short, claimed that the planned alliance between British Airways and American Airlines would be against the public interest.

"My considered view is that it would be wrong to permit this merger - which will create a virtual monopoly - without proper consideration of the public interest," Ms Short told the conference.

She said she believed the plan amounted to a merger, not just an alliance, and should therefore be investigated as such. She was writing to transport minister Sir George Young to ask for an inquiry by the Civil Aviation Authority. "This important decision must be properly considered and properly made ... We need proper scrutiny." she said.

The CAA can only investigate commercial matters if instructed by the Government.

The transatlantic alliance, unveiled last week, requires the approval of US anti-trust regulators, who are linking such approval to getting a liberalised "open skies" bilateral agreement to create a free market on Anglo-US air routes.