You go on to refer to "a report saying that British Gas used up to pounds 2bn over 10 years from its regulated pipelines business Transco to cross-subsidise other activities" and that "a 343-page draft report by the accountants Arthur Andersen questions whether British Gas needed to collect pounds 200m a year (at 1992 value) from customers ... saying pounds 30m would have been more reasonable".
However, these figures do not appear in the Arthur Andersen report that was published in February. When the IoS said that "British Gas siphoned off up to pounds 2bn of its customers' cash over 10 years to pay for rebuilding its pipeline network then transferred money to other arms of the business leaving a debt of almost pounds 3bn" there is an implication of a pounds 5bn misappropriation.
This is not only an outrageous statement but quite remarkable considering 10 years of fierce regulation, two MMC inquiries and numerous OFT and Select Committee investigations into the company.
The purpose of the report was to assess the value of Transco's operating and non-operating assets. While the report points to several areas where there may be "potential mis-statement both over valuation and under valuation" in its conclusion Arthur Andersen says: "In general, the asset values determined by Transco in the 1994 asset base are reasonable."
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