British Gas faces fresh criticism as complaints rise
Wednesday 10 February 1993
Sir James McKinnon, director-general of Ofgas, also accused the company of 'monopolistic attitudes' and of 'wriggling and squirming' over its price controls. He spoke of lethargy and resistance to change and of an 'era of tension' between British Gas and the watchdog.
Earlier this week, British Gas announced a price freeze from April, while claiming that it is entitled to make an increase 'in line with inflation'. Sir James said he had received scant information from the company on why the price had been frozen rather than cut. 'I am not prepared to accept that flimsy information,' he said.
Under its current price control formula, British Gas must keep price increases to inflation minus five percentage points, which should mean a cut of 2 per cent in gas bills. The company argued that factors including increases in gas costs - part of which it can pass on to customers - more than offset the inflation cap.
However, Ofgas said: 'If the company's gas purchasing costs rise then that may be a result of mismanagement by British Gas.'
Ofgas also accused the company of refusing to offer gas contracts to smaller customers, including schools and other publicly funded bodies. Greg McGregor, deputy director-general at Ofgas, said that contract customers can save around 20 per cent compared with customers paying normal tariff prices, but that British Gas will only offer contracts to very large customers - those using at least 25,000 therms a year.
Mr McGregor accused British Gas of enhancing its profitability by overcharging smaller customers. He said schools and local authorities were in constant contact with Ofgas demanding fair play. 'For schools that are strapped in their budgets it is understandable that they feel really aggrieved.'
Sir James, who intends to leave Ofgas later this year, warned against any relaxation in the regulation of British Gas. Critics of regulation in the UK have called for changes in the system, but Sir James said: 'We fear that focus may be lost. You may not have the tension and acrimony but equally you may not have the results we have achieved.'
He believes that only constant pressure has achieved price reductions of 20 per cent for 18 million customers since 1986, and allowed significant competition in the industrial gas market. 'This is a classic case of failure to bring about a change in monopoly management culture,' he said.
The report said disputes over bills, service and related charges caused most trouble. In one case, a Birmingham woman received a bill for pounds 987 even though her only gas appliance was a cooker, and a couple from south London living on invalidity pensions were held liable by British Gas when pounds 100 was stolen from their meter.
The report drew a sharp response from British Gas, which said only one in 35,000 of its customers made a serious complaint. Ofgas attacked British Gas 'spin doctors' for playing down the significance of the increase.
- 1 Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
- 2 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 3 HeForShe campaign: Iceland to follow up Emma Watson speech with UN women's rights conference – for men only
- 4 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 5 Teenagers irritable because early school hours mess with their biological clocks
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Five facts you never knew about your (almost obsolete) tax disc
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
£120 - £125 per day: Randstad Education Luton: Are you looking for part time/ ...
£120 - £130 per day: Randstad Education Chelmsford: Are you a quailed Teacher ...
£120 - £125 per day: Randstad Education Luton: Currently looking for teachers ...
£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...