HC Deb 20 December 1989 vol 164 c231W
Mr. Baldry

To ask the Secretary of State for Trade and Industry when the Report of the Monopolies and Mergers Commission on cross-channel car ferry services is to be published; and if he will make a statement.

Mr. Ridley

The Monopolies and Mergers Commission report on cross-channel car ferries is being published today. The MMC concluded that a proposal by P and O and Sealink to provide from 1991 a joint car ferry service may be expected to operate against the public interest. P and O and Sealink argued that a joint service was necessary to provide effective competition to the Channel tunnel. The MMC recommended that it should not be permitted.

I accept the commission's findings and this recommendation.

My prime concern is to ensure effective competition. It is clear from the MMC's report that this proposal would have reduced competition in the period before the tunnel is operational. I also accept the commission's view that any joint service intended as more effective competition with the tunnel would not need to be introduced so far in advance of the tunnel's opening.

The competitive environment will look very different when the tunnel is operational. But I share the MMC's view that there are too many uncertainties to establish now whether a joint service might be found to operate in the public interest in the market conditions prevailing after the tunnel has opened.

However, the uncertainties will diminish as we approach the opening of the tunnel. It would be open to the parties to approach the Director General of Fair Trading again then if they wished to make a renewed case for a joint service, and for the director general to advise me on the balance of public interest as it appeared at that time. Then, as now, I will be concerned primarily to ensure the most effective competition. I will have regard to how vigorous competition with the tunnel can best be assured, in the light of how well the current competitive arrangements have operated.