Bus inquiry changes chairman over 'conflict of interest'

Dr Peter Davis had been appointed to chair the group carrying out the inquiry which was referred to the commission by the Office of Fair Trading this month.

He has been replaced by Diana Guy, a qualified solicitor who was a partner, and later a consultant, at Theodore Goddard, now part of Addleshaw Goddard. During her career she specialised in European Union and competition law.

The commission said one party had raised concerns about Davis's position arising from his involvement in the merger inquiry into Preston Bus, which had been referred to the Competition Appeal Tribunal. The commission said it is satisfied that the objections raised are without foundation.

It said it does not accept that Davis's involvement in the Preston case would in any way compromise the independence and impartiality of the group investigating UK local bus services, including Scottish transport operators First Group and Stagecoach.

However, it said the commission recognises the importance of parties having confidence in the fairness of its processes.

It explained that in the interests of ensuring a "speedy, efficient and uncontroversial start to this important market investigation" it has been decided that Davis will withdraw from the group.

First Group and Stagecoach have criticised the OFT's decision as "pointless" and a waste of taxpayers' money. The OFT said its study into the local bus market uncovered evidence of "limited competition" between companies.

The watchdog found that this is resulting in "higher prices and lower quality" for passengers and "poor value for money for taxpayers".

The commission has greater powers than the OFT and can impose changes.

Its investigation will cover both commercial operators and services run by local authorities, including Lothian Buses, a publicly-owned company with Edinburgh City Council as its major shareholder.