Director General of Gas Supply (Hansard, 13 June 1995)

§ Mr. Heseltine

In September 1993, Ms Spottiswoode was appointed Director General of Gas Supply with effect from 1 November 1993 at the advertised salary of £70,000. This has risen to £73,725 through annual increases of 2.75 per cent. in April 1994 and 2.5 per cent. in April 1995. She was allowed to hold up to two non-executive directorships, subject to my approval and so long as any appointment did not involve a greater call on her official time than I judged appropriate. Her pension arrangements were to be broadly equivalent to the civil service pension scheme arrangements.

Subsequently, in December 1993, in response to the MMC report on gas supply, I announced my decision, subject to passage of the necessary legislation, to require the separation of British Gas trading and gas transport activities, and to accelerate to 1996–98 the introduction of competition into the domestic market. In November 1994, the Government announced that they would bring forward the necessary gas legislation in the current parliamentary Session.

The Gas Bill would substantively increase the director general's responsibilities and work load. Apart from the licensing of new domestic gas suppliers, shippers and gas transporters, she is being given new powers under the Competition and Service (Utilities) Act 1992 in respect of the industrial and commercial gas market. She is also taking over the DTI's responsibility for regulation of gas meters and gas quality.

Against this background, and following discussions with the director general, her salary is to be increased to £90,000 backdated to November 1994 when the decision on legislation was taken. It has also been agreed that she will be able to hold only one non-executive directorship, which will involve an annual commitment of not more than 12 to 20 days; and I shall need to be satisfied that the appointment will not prejudice the performance of her functions as director general.

There have been separate discussions on pension arrangements. The director general has opted to make her own independent pension arrangements to which Ofgas will contribute a sum equivalent to 19.5 per cent. of salary. This is broadly the cost of the comparable pension provision under civil service arrangements.

The remuneration of each utility regulator is a matter for individual negotiation. Information on the current salaries of the regulators of the main utilities is being placed in the Library of the House by the respective sponsoring Departments. I believe that overall the proposed changes in Ms Spottiswoode's remuneration are reasonable and fair in terms of both the changes to her own job and the remuneration of other regulators.