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| Competition fears over bus sector | Competition fears over bus sector |
| (about 1 hour later) | |
| The local bus sector has been referred to the Competition Commission by the Office of Fair Trading amid concerns over higher fares for passengers. | The local bus sector has been referred to the Competition Commission by the Office of Fair Trading amid concerns over higher fares for passengers. |
| The OFT said evidence suggested limited competition may be leading to higher prices for users in England - except London - Wales and Scotland. | The OFT said evidence suggested limited competition may be leading to higher prices for users in England - except London - Wales and Scotland. |
| The move follows a five-month investigation into the £3.6bn industry. | The move follows a five-month investigation into the £3.6bn industry. |
| An OFT spokesman said the issues it had identified "clearly justify a full investigation". | An OFT spokesman said the issues it had identified "clearly justify a full investigation". |
| Findings include: | Findings include: |
| • The majority of local routes are operated by a small number of large bus companies | • The majority of local routes are operated by a small number of large bus companies |
| • There were higher fares in areas where operators with a strong market position are not challenged by a large, well-resourced rival | • There were higher fares in areas where operators with a strong market position are not challenged by a large, well-resourced rival |
| • Many complaints alleged predatory behaviour by incumbent firms designed to eliminate competition from new entrants | • Many complaints alleged predatory behaviour by incumbent firms designed to eliminate competition from new entrants |
| • Low numbers of bids for supported service contracts in many areas, with just one bidder for a quarter of tenders. | • Low numbers of bids for supported service contracts in many areas, with just one bidder for a quarter of tenders. |
| OFT chief executive John Fingleton said the investigation had unearthed a range of evidence which suggested the sector was "often not working as well as it should". | OFT chief executive John Fingleton said the investigation had unearthed a range of evidence which suggested the sector was "often not working as well as it should". |
| "This may be resulting in higher prices for bus users," he said. | "This may be resulting in higher prices for bus users," he said. |
| "In addition, this is a market where an estimated £1.2bn comes from public subsidy so restricted or distorted competition can potentially have a significant impact on taxpayers. | "In addition, this is a market where an estimated £1.2bn comes from public subsidy so restricted or distorted competition can potentially have a significant impact on taxpayers. |
| "We believe that the issues we have identified clearly justify a full investigation and we therefore propose to refer this sector to the Competition Commission." | "We believe that the issues we have identified clearly justify a full investigation and we therefore propose to refer this sector to the Competition Commission." |
| The OFT is asking for comments on its decision, to be received by 15 October 2009. | The OFT is asking for comments on its decision, to be received by 15 October 2009. |
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