View from City Road: Gas 'competition' by the back door

Peter Hain, chairman of Labour's backbench trade and industry committee, seems to be a bit behind the times in his sudden concern, given voice yesterday, over the dismantling of British Gas's domestic monopoly; after all it was announced as long ago as last December. None the less, he's right on one score. It is now more than likely that competition will be forced in without legislation and hence without a full airing in the House of Commons. It is perfectly possible to do this but it might well leave British Gas as the only supplier with social and universal service obligations.

The alternative to legislation is to lower the threshold at which suppliers other than British Gas can sell to a level that would allow a free-for-all in the domestic gas market. In these circumstances there is a strong probability that the smaller and less well-off households would not see the benefit of competition. British Gas would face the prospect of being the supplier of last resort. If the Government is serious about wanting to introduce competition into gas supply, it should find the parliamentary time to do it properly.