Examination of Witnesses (Questions 300-309)
MR JOHN VICKERS, MR JUSTIN COOMBS AND MR GOVER JAMES
WEDNESDAY 15 MAY 2002
300. It is very important because the speed of bus services competing with the car depends on whether you get on and off the bus without slowing the bus's progress down more than stepping off, and so electronic systems are very important. We keep being told that you are the people who are putting that back.
(Mr James) No, not true.
Chairman
301. Can I ask you, Mr Vickers, since you are so pleased with the Competition Act, do you not discuss with the ministers concerned any amendment to the Act? Do you not see any problems of any kind? Have you not encountered any difficulties?
(Mr Vickers) I see the Competition Act as having been a major step forward.
302. Yes, I think you have established that.
(Mr Vickers) The Enterprise Bill proposes to do a number of things. Some are broadly speaking to update and sharpen the focus of provisions that have been in the Fair Trading Act for some years and there are some measures within the Enterprise Bill which I think have the prospect of improving some aspects of operation of the Competition Act. There is also provision there for criminalisation, so indeed it would be a crime to engage in certain dishonest, hard core cartel activities. Nothing is perfect and I do not mean to suggest in any way that I thought the Competition Act was perfect, but if there is need for reform that is a matter for Parliament.
303. Mr Vickers, when, quite by accident, all the tenders in London, which is a different system as we know, shot up by exactly the same amount of money, did you find that an interesting set of circumstances and did you enquire into it?
(Mr Vickers) It is not a set of circumstances with which I am personally familiar.
(Mr James) We did not enquire into it.
304. So your reading did not extend to that?
(Mr James) We may have missed that one, madam Chairman.1
Chairman: I think you may have. It was some millions but of course there are these different partnerships.
Mr O'Brien: Could I ask a question on the issue of competition? In West Yorkshire the PTE put out tenders for bus services and we are advised that when tendering for services to the PTE there was only one tender put forward on many occasions. Has that been investigated?
Chairman
305. I think we have dealt with that, Mr Vickers, because you tell us that you cannot provide artificial competition.
(Mr James) If there is any suggestion that bids are being rigged in some way then we would be quite happy to investigate it.
1 Note by witness: Transport for London subsequently informed OFT that, while there had been a gradual rise in tender costs over time, there was no evidence that this had been the result of any collusion between operators.
306. Mr James, we have this strange idea that when you only get one tender that may have an effect on the provision of services.
(Mr James) We would disagree with that, madam Chairman. If the PTE does have suspicions that bids are being rigged then let them tell us. Ring me up.
(Mr Vickers) If a situation of that kind came about because a pair of operators had agreed, "I will bid for one contract and stay away from the other and you do vice versa",—
Mr O'Brien
307. The fact that there is only one tender—does that not colour your thoughts?
(Mr Vickers) If we had grounds to suspect that there had been anti-competitive agreements between firms to bring such a situation about, then we would certainly be on the case.
(Mr James) We have taken action in a number of cases.
308. The fact that the companies just leave it for one company to tender, does that not suggest that you ought to be looking at this?
(Mr Vickers) If that is the consequence of an a agreement between the companies, that is against the law and we would be delighted to investigate it.
Chairman
309. If they do not meet in hotels, Mr Vickers, we are in some difficulty.
(Mr Vickers) Madam Chairman, that is not the case. However agreements are struck, if they are unlawful we will investigate them.
Chairman: Mr Vickers, I think you have made at least your position quite clear and we are very grateful to you for coming here this afternoon with your gentlemen. Thank you.
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