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Friday, 21 January, 2000, 17:07 GMT
Brian Souter: Stagecoach's straightman

By BBC News' Bob Chaundy

He has built his Stagecoach company from a couple of second-hand buses bought with his father's redundancy money into a global transport empire within 20 years. Yet Brian Souter drives a coach and horses through common perceptions.

His decision to donate 500,000 to the campaign against the government's proposed repeal of Clause 28, which demands that local authorities do not promote the acceptability of homosexuals in schools, stems from deeply-held religious convictions.

Souter is a member of the Church of Nazarene, an austere branch of Methodist evangelism with some 2,000 adherents in Scotland. This son of a bus driver was brought up on a Perth council estate defying the traditional comforts of television, drink and tobacco.

Souter at press conference Brian Souter, the devout capitalist
He says he is not homophobic but doesn't believe in promoting homosexuality. And if that seems like a contradiction, it is just one of many that litter Brian Souter's life and career.

As journalist Christian Wolmar writes in his 1999 book "Stagecoach", which charts Souter's rise, this puritan turns out to be "the typical class joker with a mischievous sense of humour. A meeker, more polite and humbler man it would be impossible to meet".

Though he is passionately supportive of a piece of legislation brought in by a right-wing Conservative government, Brian Souter is a millionaire who sends his children to state schools, believes in free education and health services for all and is a generous supporter of the SNP.

Capitalism is based on greed
Brian Souter
But for a man disposed to love his neighbour, Brian Souter's business practices ensured he drove his neighbours off the road.

He and Stagecoach's co-founder, his sister Anne Gloag, ruthlessly exploited the opportunities afforded by Margaret Thatcher's deregulation of local transport in the 1980s.

He snapped up some of the hundreds of newly-created small bus companies and then set about a policy of running as many vehicles on as many routes as possible until his rivals went out of business.

Front of Darlington free bus His free buses in Darlington killed off the competition
His tactics included operating buses just before and just after a rival service and at a cut price. In Darlington, he even flooded the place with free buses, successfully driving his rival out of town.

The Monopolies and Mergers Commission later described these tactics as "predatory, deplorable and against the public interest".

TV producer John Mair, who studied Stagecoach's ruthless business practises for Granada TV's World in Action says: "Souter is a genius. When the Conservatives offered up the opportunities for arch-capitalism he took them seriously."

In defending his position, Brian Souter once told Scotland on Sunday "ethics are not irrelevant but some are incompatible with what we have to do, because capitalism is based on greed".

His attitude to his workers is also contradictory. He cut bus drivers' wages when they were above the market rate and, in the early days, often made them work long hours.

Yet, as Christian Wolmar points out, his company pension scheme is the best in the industry and his employees get free shares every year. He recently announced that some 12,000 of his employees own a personal stake in the firm.

Close-up Souter Souter, the business "genius"
"It is something which gives me great personal satisfaction", he said, "because it means everyone is benefiting, not just a few City shareholders."

Brian Souter recognises trade unions and was a unionist himself while working on the buses in his student days. Yet, when his East Midlands Bus Company drivers were poised for an overtime ban, he threatened to fly in scab labour and they backed down.

Fending off accusations that Stagecoach was the company from hell, he says he was simply doing what his rivals were doing, only better, Souter expanded his business into trains.

Stagecoach put bids in for every one of the 25 rail franchises that resulted from privatisation and won two of them. Initially it was a disaster.

He's a maverick like me
Richard Branson
Too much pruning resulted in so many cancellations on South West Trains that it caused an uproar.

But gradually Stagecoach got on the right track and their trains began making a steady profit.

The purchase of the train leasing company Porterbrook sealed Stagecoach's success. Nearly all the company's securitisation got an AAA credit rating and Souter was able to use its contracts to guarantee bonds.

Stagecoach train Stagecoach expanded from buses to trains
He has raised more than 540 million this way, enabling him to expand the business even more, particularly overseas to places as diverse as Sweden, Malawi, China and the United States.

But so far his overseas ventures have met with mixed success and this, together with heavy borrowing and the decision to acquire a 49% stake in Virgin Trains, with all its adverse publicity, has made the City a little edgy.

Stagecoach has now fallen out of the FT-SE 100, which it had been justly proud of reaching in such a short time.

But Brian Souter appears undaunted. It seemed only a matter of time before he would look skyward. In October he and his sister bought another 49% stakehold, this time in the small Cambridge-based airline, Suckling Airways. It is now called ScotAirways.

In the meantime, controversies like the current one over Clause 28 may be short-lived, but with a character as contradictory as Brian Souter, as likely as not, to use the vernacular, there'll be another one behind.
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