Bus probe looms; OFT orders inquiry into fares and competition issues.

SINCE buses were deregulated 20 years ago, fares on Merseyside have risen by 85% while usage has plunged by 50%.

It''s a similar story around the country, which is why the Office of Fair Trading has announced plans to order a competition probe into the entire sector. Deregulation has proved a nightmare with so-called predatory tactics, including upping the frequency of buses to "crowd out" rivals or timing buses to run just in front and sometimes also just behind a rival's.

The OFT also said bus groups could increase competition by cutting fares significantly or running buses for free. They could also refuse to take part in multi-operator ticketing schemes to limit the scope for entry or expansion by smaller operators.

At the moment consumers suffer, with the potential for fares to remain artificially high.

On Merseyside, it is hoped the situation will be redressed when transport authority, Merseytravel, takes control of bus services. The idea will be to seek a single operator, like in London, which means much more control can be exercised over routes and fares.

David Brown, lead director for Passenger Transport Executive Group, spoke on behalf of transport authorities when he said: "The evidence that the OFT has found of higher fares where there are local monopolies, and of smaller operators being subject to anticompetitive behaviour by larger operators, is symptomatic of all that has been wrong about 20 years of bus deregulation.

"The best way forward is to use the powers in the Local Transport Act to ensure that local authorities have more influence over local bus services, in order to protect passengers'' interests."

A spokesman for one of Merseyside''s big two operators, Arriva, said: We will need to study the report in detail, but are happy to comply with any consultation."

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Arriva says it will comply with any inquiry into bus industry issues