For these theorists competition, not passengers, is the reason for having buses says Peter Huntley.

It was with mounting concern that I read the Competition Commission report on the bus industry. Following the logic of its analysis, Brighton (with little sustained competition) is a ‘failure’ whilst Paisley (persistent competition and many new entrants) is the model of success. Can there be a single bus passenger in the UK who would agree with the commission’s conclusion?

Like many organisations without any ‘real world’ context the Competition Commission places its own reason for existence (competition) at the centre of the universe and assumes that this is the ultimate objective for life as we know it. Customer satisfaction data – ignored. Passenger use and choice data – ignored. Comparative and historic trend and cost data – ignored.

Stimulation of competition is apparently the sole reason for having a bus industry and the arrogance and disdain for the actual users of bus services is clearly evident from the absence of the basic question ‘what does the passenger want?’ from the £25m analysis.

This is not to say that there are not failings that need to be addressed. The over-centralised command structures of some major bus groups has resulted in instructions to local bus companies to apply arbitrary service cuts or fare increases, which have both damaged local markets and damaged those businesses themselves. We must hope that this misguided management approach has now been binned. Similarly, any company that wilfully obstructs a genuine desire by a local transport authority to offer passengers more choice with multi-operator tickets (as opposed to reducing choice by banning operators from offering cheap tickets), or who attempts to unfairly exploit ownership of a bus station, should be tackled head on. But parliament has of course already passed legislation on these very issues.

In perhaps the most bizarre suggestion of the report, in an amusing fit of reverse-logic worthy of the late Douglas Adams, the commission’s answer to markets that cannot aspire to its model of competitive perfection is the imposition of state-controlled local monopoly conditions (Quality Contracts). For the economic purists this ‘solves’ the problem by eliminating any possibility of competition or innovation and removing the market altogether.

For Passenger Transport readers who want some historic reference on just what a Competition Commission report can do, I suggest reading any impartial history of the public house market following the imposition of the commission’s ‘ideal’ model for stimulating competition. That sector has never recovered from the attention of economic theorists.