Ofgas seeks new powers to promote competition

Ofgas, the gas industry watchdog, is to seek unprecedented powers to clamp down on any anti-competitive behaviour by British Gas, writes Mary Fagan. The regulator wants to include provisions in the company's licence that would allow it to ban suspect activity immediately rather than having to wait until after an investigation, which can take more than a year.

It is understood that draft provisions for inclusion in the British Gas licence have been drawn up but not yet presented to ministers. Ofgas declined to comment.

According to one of the independent gas companies: ''Ofgas is trying to define more clearly what a dominant player may or may not do. It could over time become a different dominant player - such as a regional electricity company which became strong in its own area.''

British Gas's rivals are thought to have complained to Ofgas and to the Government that the regulator's existing powers do not go far enough. They argue that companies can go out of business while a lengthy investigation into British Gas is underway, with no retrospective redress.

If the new powers get the go-ahead, they could have ramifications throughout British industry. The move will infuriate British Gas, which already believes that its regulator will in future have too much discretion over the working of the marketplace.

It comes as the company braces itself for competition in the domestic gas market, to be phased in from next year with the market opening fully in 1998.

The Ofgas proposals will increase pressure on the Government to overhaul competition policy for industry as a whole.

Sir Bryan Carsberg, until recently the director general of the Office of Fair Trading, called for a "prohibition" approach to restrictive agreements and anti-competitive behaviour - prohibiting any such practices and introducing hefty penalties for those who fall foul of the rules.

Under the present system in the UK, nothing is prohibited but "questionable" behaviour can be investigated and subsequently prohibited. Sir Bryan said that gives no incentive to avoid anti-competitive behaviour in the first place.

Earlier this year Oftel, the telecommunications regulator, said it would clamp down on anti-competitive behaviour and may seek wider powers to prevent abuse of dominant market position by BT or any other company. Don Cruickshank, director-general of Oftel, said companies hurt by anti- competitive behaviour have to wait too long for action and redress.

There has been pressure from Mercury and other telephony companies for the introduction of immediate sanctions - including fines to be imposed if a company abuses its market power.Ofgas' plans for change are proceeding in parallel with the passage of the Gas Bill paving the way for domestic competition.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Operations Manager

£30000 - £38000 per annum: Recruitment Genius: They are a financial services c...

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence