Sir Brian hits out at OFT's 'tunnel vision'

Business Correspondent/Personal Finance Editor

Saturday 25 August 2012

SIR Brian Souter took a sideswipe at the Office of Fair Trading's (OFT) "tunnel vision" yesterday as he addressed his last annual meeting as chief executive of Stagecoach, before moving to become chairman next year.

ADDRESS: Sir Brian Souter covered a series of issues in his last meeting as chief executive of Stagecoach.

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SIMON BAIN

Sir Brian was asked by a local transport campaigner why the OFT had blocked a Stagecoach acquisition in North Devon which would have improved local services.

He said: "They are just very ideologically driven and lose sight of what the real public interest is in these places.

"It's a great pity they won't listen more to the local authorities and the user groups as well. "They have got tunnel vision and once they have got focused on something it is very difficult to distract them from it."He added: "I say it's the OFT dog which always goes out and pees on the same tree every morning."Sir Brian also entertained the meeting in Perth with an explanation of why Stagecoach once aborted a plan to operate minibuses with a partner in Moscow.He said: "When we asked about licensing they said it didn't really matter because they were very friendly with the mayor, who happened to be Mr Putin at the time, and when we asked about the 101% tax rate they said not to worry about it, as they really knew the mayor very well."But he was serious in defence of Stagecoach's UK bus record at a time of falling subsidies and economic squeeze.He said: "We have kept fare increases amazingly low considering the big differential in our costs and so far we seem to be keeping our customers."In an allusion to rival FirstGroup, he went on: "Some of our competitors put really big fare increases in and lost a lot of patronage."There are big opportunities in the FirstGroup divestment programme, though we will be careful about the OFT."On Stagecoach's latest coaching deal in the US, where a decade ago it wrote off $1bn (£640m), Sir Brian said that he had been able to buy back from administrators some of the "jewels amid the dogs" that he had been forced to sell in 2003. "We had to package it up and sell it out to get rid of it, this time what Martin (Griffiths) and I were able to do was cherry-pick the good companies and the ones that geographically made sense."Martin Griffiths, who will step up to chief executive from finance director next May, said the group felt "somewhat aggrieved" at losing the West Coast rail franchise to a "very aggressive bid from another company".He said Stagecoach questioned whether the bidder was offering the government adequate security to insure it against the franchise being surrendered.On the future relationship between himself as non-executive chairman and Mr Griffiths as chief executive, Sir Brian said afterwards: "I don't think there is any tension around this vis-a-vis Martin and I.I am taking my hands off the day-today stuff and Martin will ask me when he wants a second opinion."I am going to genuinely be a non-executive working one day a week – whatever I can do in one day."On criticism by corporate governance group Pirc, Sir Brian said: "I don't listen to Pirc but to our stockholders, there is a warm feeling around the company and we have contacted all our major shareholders who are very happy. It's not as though we are bringing in a stranger from another company to run our business."On the future of the rail venture with Virgin, Sir Brian said: "Richard (Branson) is very clear this is him out of railways now. "We have got an open mind."

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Sir Brian hits out at OFT's 'tunnel vision'

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