British Gas to shed 1,000 jobs with closure of half its showrooms

Click to follow
The Independent Online
BRITISH Gas plans to close around half its 425 showrooms with the loss of about 1,000 jobs. The move, expected to be confirmed later this week, will mark a further step towards restructuring the company into five distinct businesses.

The revamp of the retailing division will also encompass a move enabling domestic customers to pay bills at post offices.

The Post Office, which has 20,000 outlets, said yesterday that 'outline agreement' had been reached with British Gas for handling bills. Use of the service, however, is likely to be small - one- third of British Gas's 18.5 million customers pay via direct debits and most of the rest pay by cheque.

The job losses at British Gas will be part of a previously announced headcount reduction of 25,000 as part of a five-year, pounds 1.6bn restructuring to combat the end of the company's monopoly over domestic and other small users by 1996. Full competition involving industrial users will come two years later.

Norweb, the Manchester-based electricity company, yesterday signalled its intention to attack the industrial gas market by setting up Norweb Gas.

Norweb, which will be partnered by Utilicorp of the US, has contracted major gas supplies, including gas landed from the South Morecambe field at Barrow-in-Furness. It first moved into the gas market in 1992 and traded to small businesses under the name Northern Gas.

Norweb has 4.7 million electricity customers and plans to take advantage of the deregulation of the gas market among businesses that use more than 2,500 therms a year and pay annual bills exceeding pounds 1,100. It aims to attract 7,000 gas customers this year and to target domestic gas customers by 1998.

Malcolm Faulkner, Norweb's marketing director, said: 'People are often surprised to learn that an electricity company is involved in the gas business and that we can usually cut their gas bills by at least 10 per cent.'