Gas cuts warning

The Gas Consumers Council has called on British Gas to restore standards of service and warned against cutting costs at the expense of customer care. The GCC, which recorded a 19 per cent increase in complaints about the company in 1994, said it would be looking for reassurances in the British Gas annual report due out today.

The report is certain to add to the furore over pay and perks for company directors as it will lay bare all salaries and benefits enjoyed by directors of British Gas.

The company has been at the centre of controversy since the end of last year when it revealed a 75 per cent increase in the basic pay of its chief executive, Cedric Brown. British Gas also attracted sharp criticism over planned cuts in the pipeline safety budget and over a decision to end payment of bills at gas showrooms.

Ian Powe, director of the Gas Consumers Council, said: "The GCC will be looking for evidence of intent, in the chairman and chief executive's statements, that British Gas devoted cash and people to restoring service standards to their previous level.

"Customer care costs money. Overall every one per cent reduction in financial resources devoted to customer services contributes nearly £20m to the bottom line - a tempting prospect [for the company]," he added.

Mr Powe said British Gas could be in danger of losing its Government Charter Mark if it gave higher priority to cost cutting than customers. The Citizen's Charter Unit is expected to make a judgement on the company within weeks.

British Gas has blamed the fall in service standards on the need to restructure in the face of competition in domestic gas supply. The Government plans to open up the £5.7bn domestic market in phases from next year, with full competition by the end of 1998.

Investment Column, page 34