Outsiders vital to gas inquiry

Evidence from external consultants used by Ofgas over its pricing proposals for British Gas's pipeline business, TransCo, could prove crucial in the forthcoming Monopolies and Mergers Commission inquiry.

Claire Spottiswoode, head of Ofgas, said the external advisers - used for their experience and objectivity - had recommended a far tougher regime than the one she eventually put to British Gas.

One adviser was Sir Nigel Rudd, chairman of East Midlands Electricity and founder of Williams Holdings. Ms Spottiswoode said Sir Nigel had said the management of British Gas should be able to comfortably implement the final version of Ofgas's proposals.

As chairman of East Midlands Electricity, Sir Nigel's views will carry considerable weight with the MMC if he is called to give evidence. Another coup may be previous MMC panellist, Professor Michael Beesley, of the London Business School, who advised Ofgas on economic issues for its report.

Ms Spottiswoode also dismissed British Gas's insistence that the previous MMC 1993 report should be the benchmark for her inquiries.

"The 1993 report gave us the freedom to proceed along our current lines," she maintained

She also denounced British Gas for its failure to negotiate over TransCo. "Sometimes, they seemed to be living on another planet," she said.

Ofgas will publish its terms of reference for the MMC inquiry a week tomorrow.

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