| Type | Defunct |
|---|---|
| Industry | Utilities |
| Fate | Demerged (1997) |
| Predecessor | Area Gas Boards |
| Successor | BG plc and Centrica |
| Founded | 1986 |
| Products | Gas |
| Website | www.britishgas.co.uk |
British Gas plc was formerly the monopoly gas supplier and is a private sector in the United Kingdom.
Contents |
In the early 1900s the gas market in the United Kingdom was mainly run by county councils and small private firms. At this time the use of an inflammable gas (often known as "Town Gas") piped to houses as a fuel was still being marketed to consumers, by such means as the National Gas Congress and Exhibition (1913). The gas used in the 19th and early 20th centuries was Coal gas but in the period 1967-1977 British domestic coal gas supplies were replaced by Natural gas.
In 1948 Clement Attlee's Labour government reshaped the gas industry, bringing in The Gas Act 1948. The act nationalised the UK gas industry and 1062 privately owned and municipal gas companies were merged into twelve Area Gas Boards each a separate body with its own management structure. Each Area Board was divided into geographical groups or divisions which were often further divided into smaller districts. These boards simply became known as the "Gas Board", a term people still use when referring to British Gas.
During the 1950s the use of gas increased greatly with British Gas creating high street showrooms to promote the use of gas. By the 1960s the UK was importing 300,000 tons of liquefied natural gas from Africa every year.
Surveys in the North Sea had shown that there were large reserves of natural gas and in 1966 the decision was taken to convert the UK from town gas to natural gas. The next year the first natural gas from the North Sea had arrived and over the next 10 years British Gas carried out a massive conversion programme converting appliances from town gas to natural gas.
In January 1973, British Gas was restructured by the Gas Act 1972 which centralised the company creating the British Gas Corporation and turning the area boards into regions of the new company.
The Conservative Government led by Prime Minister Margaret Thatcher introduced the Gas Act 1986 in which led to the privatization of the company, and on 8 December 1986 its shares floated on the London stock market. In the hope of encouraging individuals to become shareholders, the offer was intensely advertised with the "If you see Sid...Tell him!" campaign. The initial public offering of 135p per share valued the company at £9 billion, the highest equity offering ever at the time.
The government created an industry regulator, the Office of Gas Supply (Ofgas), to protect customer needs. It later became part of the Office of Gas and Electricity Markets (Ofgem).
In preparation for the opening of the gas supply markets to competition in 1996, British Gas plc had to go through a major restructuring which separated the company into five divisions.
In June 1991, chairman Robert Evans sparked controversy by accepting a pay rise of 66% - 10 times above the rate of inflation at the time. This took his salary from £222,000 to £370,000, a pay rise which was condemned by the Labour Party as "sheer unbridled greed". This followed allegations of greed against the organisation a month earlier when it reported a 42% rise in pre-tax profits.[1]
Following the restructuring, with shareholder approval, British Gas plc was demerged to form two separate companies on 17 February 1997.
Shareholders received one BG share and one Centrica share for every British Gas share.