BURY'S private hire taxi "cartel" could be smashed by Government competition watchdogs.

Inspectors from the Office of Fair Trading have visited members of the newly-formed Bury Private Hire Association and warned them about price-fixing.

They acted following a front-page exclusive in the Bury Times two weeks ago which revealed the association's formation, and following a complaint.

The association is made up of nine firms which between them comprise much of the town centre trade in Bury and their first act was to put up fares.

The firms are: Harveys Bury Cars, Star Taxis, Moorside Taxis, Rammy Taxis, Tram Cars, Peel Taxis, Tiger Cars, Royal Metro and Civic Cars. They announced new rates of £1.60 for the first mile, and £1.50 each mile afterwards. Unlike public hire black cabs, whose rates are fixed by the council, private hire operators can charge what they like.

They defended the rise on the grounds of rising costs: of fuel, insurance, MOTs and licensing fees.

Mr John Vickers, OFT director general, said: "Small businesses like private cab firms are not excluded from the 1998 Competition Act. The Act outlaws anti-competitive behaviour such as price-fixing by all businesses whether large or small in most sectors of the economy.

"All allegations of this type will be investigated by the OFT.

"No assumption should be made at this stage that there has been an infringement of competition law in the Bury case. We will not be in a position to decide that until we have all the facts."

Mr Raymond Porter, proprietor of Bury-based Harvey's Taxis, confirmed that the OFT had visited and left questionnaires.

But he denied that the association was a "cartel" or had anything to do with price-fixing.

"The fares we announced were price guidelines, and not all the firms are doing that. I know that three of them are charging more than the rest of us. I cannot see how that can be illegal."

He added: "The association has been formed for the safety of the drivers, and also so we can make decisions together when the town hall proposes legislation which affects us all."

Mr Porter said members would send back their forms by the end of January and wait for the OFT's verdict.