Date: 21st March 2006
Released by: ANDREW TURNER

A Government Minister has suggested that the Office of Fair Trading be asked to judge whether Wightlink’s ‘dominant position’ in the cross-Solent market is ‘abusive’, in a parliamentary answer to Island MP Andrew Turner.

Referring to fare increases since the takeover of Wightlink, Mr Turner had asked Transport Secretary Alistair Darling whether instead of launching investigations only after the ill effects of a dominant position become apparent, the OFT should keep local transport monopolies under review.

Mr. Darling replied that he appreciated the problem that Mr Turner had raised but:

“I am not sure that I would want the Competition Commission to keep a constant watch over everything that might constitute a monopoly. I imagine that its resources would have to be significantly increased were that to happen. The best thing to do in relation to this particular case, if the hon. Gentleman is so minded, is to raise it with the authorities.”

Mr Turner said afterwards,

“I have been in correspondence with the OFT since Wightlink changed ownership but today I pointed out to the Minister that the £230 million cost to MacQuarie of their takeover of Wightlink could only be met by their customers, and that rapid fare rises could impact adversely on the Island’s economy and individuals who have to travel, particularly for healthcare.

“He is right to say that the OFT can only investigate an ‘abusive’ monopoly, but we are increasingly obtaining evidence not only that Wightlink occupies dominant positions in a number of markets, but also that its use of that position is not in the public interest. I will certainly be writing again to the OFT when I have collated that evidence.”

END

Contact: Andrew Turner 01983 530808

Follows: Extract from House of Commons Hansard, 21st March 2006:

Local Transport Monopolies

Mr. Andrew Turner (Isle of Wight) (Con): What discussions he has had with the Office of Fair Trading on local transport monopolies. [59776]

The Secretary of State for Transport (Mr. Alistair Darling): My officials meet regularly with the Office of Fair Trading. It is for the competition authorities to consider whether a local monopoly is abusing its position and having a detrimental effect on consumers.

Mr. Turner: Wightlink, which enjoys what the OFT calls a dominant position in the cross-Solent ferry market, has just been sold for £230 million, which can only be recouped from its customers. Fares have increased significantly, potentially damaging the local economy and causing hardship particularly to those who have to travel because of a need for health care. Does the Secretary of State agree that instead of launching investigations only after the ill effects become apparent, the OFT should keep local transport monopolies under review and ensure a fair deal for local communities?

Mr. Darling: I am grateful to the hon. Gentleman for having raised his concern directly with my Department. I appreciate the problem that he sets out. I think that the competition authorities last looked at the position on the Isle of Wight in 1995, although there was a further review in 2000. The test is not whether there is a monopoly but whether those involved are abusing the position. As I understand it, there are three operators on the Isle of Wight, two of which are bigger than the other one. If the hon. Gentleman, or anyone else on the Isle of Wight, has a particular problem, he might want to raise it with the OFT.

On the hon. Gentleman’s general point, I am not sure that I would want the Competition Commission to keep a constant watch over everything that might constitute a monopoly. I imagine that its resources would have to be significantly increased were that to happen. The best thing to do in relation to this particular case, if the hon. Gentleman is so minded, is to raise it with the authorities.