Poor face higher gas bills after break-up

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The Independent Online
PENSIONERS on the basic state pension face a 21 per cent rise in gas bills when the domestic gas market is opened to competition, according to research published today.

Stephen Byers, Labour MP for Wallsend, has produced detailed tables compiled for him by the Commons library, showing the likely impact on household charges of the break-up of British Gas's monopoly. They reveal greater increases for the poorly-paid than had previously been supposed.

Households on gross incomes of under pounds 60 a week - typically pensioners receiving only the state pension - using 260 therms a year would see bills rise by 21 per cent.

Pensioner couples on the basic state pension of just over pounds 90 consuming 480 therms a year face a 7 per cent increase, while households on gross weekly incomes of between pounds 320 and pounds 370, using 530 therms, face a 3.4 per cent rise. Not everyone will suffer. Households whose incomes exceed pounds 50,000 using 870 therms a year would have their charges reduced by 3 per cent. In all, 12 million consumers will pay more and 6.2 million will pay less.

The research was based on figures contained in the Monopolies Commission report into British Gas; the company's most recent published operating statistics, for 1992; the official Family Spending 1992 guide and The Economist Measurement Guide, also for 1992.

Mr Byers' tables corroborate claims made by the Gas Consumers' Council that poorest consumers will suffer the most when the Government ends the gas monopoly. They are also expected to be confirmed in the Government's delayed consultative document on the future of the market.

At present, competitors to British Gas cannot supply consumers using under 2,500 therms a year. The Government wants to abolish the monopoly by 1998.