Comment: It's not too late for British Gas to reconsider

Comment

Short of an about-turn by the laughing regulator (Clare Spottiswoode), the board of British Gas looks to be gearing up for a major sense-of-humour failure later this week. Unless the director general of Ofgas agrees to modify significantly her final set of price controls over the TransCo pipeline business, Dick Giordano and his merry men intend to stomp off and put their case to the Monopolies and Mergers Commission.

It is important, at this point, to note that we have been here many times before. Recent history is littered with examples of how privatised utilities have been irreconcilably opposed to proposals by their regulators, only to cobble together some miraculous accommodation at the last moment.

This time, however, it does look like more than a game of brinkmanship. The two sides have become so entrenched in their attitudes and uncompromising in their public utterances that it is hard to see how either can back down without heavy loss of face.

The regulator, with one eye on survival after the next election and the other on the pounds 28 cut in bills she has dangled before domestic gas users, believes she has right on her side. The company maintains it cannot accept the Ofgas proposals even if it wanted to. Quite apart from amounting to expropriation of assets, they would render TransCo incapable of running the pipelines in a reliable and safe manner. Not much room to cut a deal there.

The difficulty for British Gas is that this is just one of the many fires it is fighting. Its public image remains lamentable, as the latest debacle over the disconnection of paying customers shows. Meanwhile, it is still trying to untangle the take-or-pay mess, cope with the introduction of competition into its monopoly markets and, lest we forget, demerge into two separate companies.

It was in part these distractions that scuppered the deal in Scotland with Hydro-Electric, and yet here is British Gas prepared to submit itself to a six-month MMC inquiry. For Ms Spottiswoode, on the other hand, this is pretty much the only game in town save for the other price review she is conducting into the supply arm of British Gas. She has nothing to lose by standing firm, whereas British Gas cannot be sure of gaining anything by going to the MMC.

It is still not too late for the board to reconsider. It may gain a little loose change by going to the MMC, but this is unlikely to counteract the lost management time and opportunity involved in tying itself up for six months or more in such an all-embracing investigation.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific