Domestic Gas (Hansard, 20 June 1995)

§ Mr. Eggar

I announced on 9 March that the first phase of competition in supplying domestic households, which will start in April 1996, will comprise 500,000 gas consumers in Cornwall, Devon and Somerset. My decision regarding the second phase will mean that in 1997the area for the first phase will be extended to cover a total of 1 million gas consumers in the south west; and competition will be introduced in a second area, also comprising 1 million gas consumers, in the south east.

This will mean that from 1997 a total of around 2 million households will potentially be able to choose which company supplies their gas.

The second phase of the transition will extend competition to about 11/2 million domestic gas consumers 171W in East Sussex, West Sussex, Kent, Dorset and Avon to add to the 500,000 gas consumers in Cornwall, Devon and Somerset from April 1996, who are covered by the first phase.

The south-east received the second most support, after the south-west, in response to our recent consultation document on the choice of initial areas for the extension of competition to the domestic gas market. The chosen areas fulfil the criteria set out by the consultation document. They are clearly defined: both areas may be relatively disadvantaged by the transportation related charges—although the first supplier to declare its intention to enter the market in the south-west is still projecting average savings of 10 per cent. on BG's tariffs; two separate areas of this size will provide a thorough test of the technical and administrative systems in the second phase, ahead of the introduction of national competition in 1998; the areas have a mix of rural and urban areas and cross-section of types of customers.

The consultation demonstrated the widespread support for competition in gas supply with responses from all parts of the country requesting that they be included in the area where domestic consumers first benefit from competition in the gas market.