Gas Industry (Retailing and Contracting) (Hansard, 18 January 1972)

§ Sir J. Eden

Yes. Historically, there has been little competition from the private sector in these activities, other than in central heating installation. The Government wish to encourage a flourishing private sector throughout the whole range of appliance retailing and contracting activities carried on by the industry. For this to take place on a sound basis, the process needs to be a gradual one avoiding the risk of disruption or dislocation of services to the public. This means that, where they do not already exist, the conditions need to be created in which a healthy private sector of the business will develop naturally.

A first essential to the creation of such conditions is to ensure that gas revenues are not used to subsidise the gas industry's operations in the fields of retailing and contracting. My review, in which I have had the full co-operation of the Gas Council and boards, has shown that the accounts for these activities are not clearly separated at present, with the result that their profitability is not apparent. I have therefore agreed with the Gas Council that the accounts for these activities will be recast to show 137W clearly their costs, revenues and profitability. I expect the proposed British Gas Corporation to adopt the new form of accounting from the outset. It has also been agreed that these activities will be required to earn a proper commercial rate of return. The resulting development of a healthy private sector, buying and selling in fair competition with the gas industry, will I believe provide the best service for the public.

The Gas Bill provides for a general power for the Government to direct the corporation to discontinue activities and dispose of assets which are not essential to its primary business. This is a reserve power and its inclusion in the Bill does not indicate any present intention of making use of it.