British Gas to meet HSE over cutting safety budget to £1m

British Gas is to meet with the Health and Safety Executive next week to discuss reductions in part of the pipeline safety budget from £9m to £1m . The cuts emerged at the end of last year in a storm of publicity.

Harry Moulson, managing director of Transco, the pipeline arm, said he asked for the meeting. Mr Moulson said: "I believe all the data is in favour of our case." He said that Transco spends £1bn a year on safety and pointed out that the cut has already been called a "pinprick" by Clare Spottiswoode, the Director General of Gas Supply.

The pipeline row exacerbated the furore surrounding British Gas since it revealed a 75 per cent increase in pay for its chief executive, Cedric Brown, along with salary cuts for some employees and a decision to end payment of bills at showrooms.

The controversy is expected to come to the fore again later this month when Mr Brown is due to give evidence on his proposed pay rise to the Employment Select Committee.

Separately, Transco is offering to diffuse discontent among its rivals over charges for use of the pipeline by paying for an independent audit of Transco's assets and costs. The asset base, said by British Gas to be £17bn, is a key factor in setting prices, which are at present capped at inflation minus five percentage points. Independent gas shippers argue that £17bn is much too high.