Travelcard forces rethink on London bus deregulation

MINISTERS are urgently rethinking plans to deregulate London's buses because of fears that a free-for-all between rival operators would spell the end of Travelcards for bus passengers.

The review reflects anxiety that the issue could be a blow to Tory hopes in London council elections next May.

Ministers are reluctant to exclude legislation on bus competition from the Queen's Speech in November, especially since John Major wants deregulation to be a centrepiece of his parliamentary programme. Nevertheless, one Whitehall source said there was no guarantee that bus deregulation would be in the speech.

One option is for legislation which would allow competition in services covering short distances but for most main routes to be run by one, or perhaps two, private operatorswho would have an obligation to honour the London Transport Tube/bus Travelcard.

Travelcards bought in British Rail stations can be used for rail, Tube and bus journeys. They can also be bought for use only on buses and Tubes.

The rethink follows a leaked warning from a committee set up by John MacGregor, Secretary of State for Transport, that the BR/LT Travelcard could disappear as a result of bus deregulation and rail privatisation. The committee added: 'This is not an attractive scenario.'

Steven Norris, who is the minister responsible for transport in London, has made it clear that he wants the Travelcard maintained, and the BR privatisation Bill lays down that franchisees should participate in such a scheme where it exists.

But Alan Watkins, London Transport's chief executive, told the Transport Select Committee in April that it would be impractical to operate the Travelcard after deregulation because it would mean agreements among 40 or more separate operators.