We need a watchdog to champion consumers
THE Coalition came to power promising fewer government agencies, but the sale of Bord Gais Energy creates the need for a new quango to supervise the gas sector.
It is all very well selling the semi-state, but we now need a referee to make sure that our private gas and electricity companies act in the best interests of the consumer.
This is a simple truth that former British Prime Minister Margaret Thatcher understood well, despite her fondness for the free market. When she privatised British Gas (the company that became Centrica and bought Bord Gais Energy yesterday), she also created a quango to keep an eye on British Gas.
It worked pretty well. As a college student, I once got a summer job in London in the 1990s working for that quango, which was then called the Gas Consumer Council and is now known as Ofgas. Even as a student with other priorities, I could see that what Ofgas did was important and worthwhile.
Consumers would ring up in tears as they faced having their gas cut off for not paying bills. Others would ring up because a leak threatened to destroy their homes. Policies had to be devised to ensure that the gas company did not act unfairly or kill pensioners by cutting off gas during cold spells. Other policies had to be devised to ensure pricing was fair or that the companies could earn enough money to invest in the expensive infrastructure needed to spread gas to every part of the country.
We have a regulator of sorts in the Commission for Energy Regulation, but this is really only a quango for economists worrying about competition issues. What we really need is somebody to champion the consumer as well.
As the aborted ESB strike reminded us, energy is important. It can be a matter of life and death. It is too important to leave to the free market, but a regulated free market will probably do a better job than the state sector, which has rarely shown much customer focus or strategic insight.
It seems that the Bord Gais Energy deal is a good one for the State from a financial perspective. Now, the Government should create a proper regulator to protect the interests of consumers as well.