Spottiswoode drawn into pay row
Wednesday 08 February 1995
Ofgas confirmed that it has been approached by the committee with a view to Ms Spottiswoode appearing on 7 March. She is the only regulator yet earmarked by the committee to give evidence into its inquiry into remuneration in the utilities.
Two weeks ago, the committee interrogated Cedric Brown,. chief executive of British Gas, over his controversial 75 per cent pay increase to almost £475,000. The issue regained prominence on Monday when it emerged that Ed Wallis, chief executive of PowerGen, made more than £1m last year through exercising share options, in addition to his £400,000 pay.
The Labour Party has called for increased powers for the regulators to control "boardroom excesses and greed". Ofgas said, however: "Our line is that the Government sold the companies to the private sector. It is very much a question for the utilities todecide what to pay their people."
The companies defend the pay levels on the grounds that they are set by independent remuneration committees and not by negotiation with the executives themselves.
Ofgas also holds the view that Mr Brown's salary cannot be seen as damaging for consumers. British Gas has raised prices less over the past few years than it could do under its regulatory price cap, and according to the regulator, could charge about £70mmore. British Gas must at present keep annual price increases to inflation minus 4 percentage points.
Ms Spottiswoode is expected to give a robust performance before the Commons committee. She has already attracted criticism for refusing to allow some expensive environmental schemes to be funded through the domestic gas bill, and has strong views about what her powers should be.
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