The idea is to phase out the current bear garden atmosphere of the current prime minister’s questions which all party leaders acknowledge generate much

The idea is to phase out the current “bear garden” atmosphere of the current prime minister’s questions which all party leaders acknowledge generate much more heat than light.t Moves to encourage better legislation such a “first reading” committee to examine bills in draft form; shorter summer recesses and more civilised working hours; and the power to table parliamentary questions in the recess.Ms Taylor will make it clear that it is Labour’s intention to consult with all parties on the proposals and to ensure that they secure a consensus for the plans.She will say, according to one Labour source last night, that the aim is to make Parliament “more relevant, more efficient, more open, more comprehensible to people, and less confrontational.”. Philip Rogerson, British Gas’s deputy chairman, said it was now “highly probable” that it would reject Ofgas’s proposals, trigggering an automatic inquiry by the MMC at the end of July. He denied, however, that this would compromise the planned demerger of TransCo and British Gas Energy into separate quoted companies next March. Ofgas said TransCo had scope to achieve 4 per cent productivity gains a year to compensate for the lower revenues it will be allowed.The new formula also cuts the amount of depreciation British Gas can charge a year and the return shareholders are able to earn by lowering the value of TransCo’s assets from their present pounds 18bn to pounds 9bn-pounds 11bn.British Gas said it did not accept Ofgas’s proposals nor the basis on which they were calculated and took a swipe at both Ms Spottiswoode and Ofgas’s consultants, accouncants Coopers and Lybrand and consulting engineers WS Atkins, for their lack of understanding of business.There is a mechanism in the formula to correct for underspending or overspending on capital expenditure – an area where Ofgas says TransCo has been over-estimating forecasts by 30 per cent. The gulf between the two sides makes an MMC referral look inevitable.

Industrial and commercial companies could make savings ranging from pounds 600 a year for small firms to pounds 40,000 a year for a company with an annual gas bill of pounds 500,000.However, British Gas chairman Richard Giordano, questioned whether any of the price reductions would feed through to end customers and suggested that they more likely to widen the profit margins of independent suppliers competing with British Gas when the domestic market is opened to full competition in 1998.The regulator said the proposals “represent a fair balance between the interests of cosnumers and the interests of shareholders”, adding that the targets were challenging but achievable.But British Gas said the proposals represented “the seizure of shareholders’ income on an unprecedented scale” and could undermine confidence in the entire regulatory system while putting at risk the safety, reliability and efficiency of TransCo’s transportation system. The shock announcement of new price controls on British Gas’s pipeline business, TransCo Interanational, are far more severe than had been expected and could jeopardise both the company’s planned demerger next year and the introduction of full competition in the domestic gas market from 1998.
The new price formula will reduce TransCo’s revenues by pounds 650m-pounds 850m next year – more than its profits in the last two years and bigger than British Gas’s total dividend payment last year.British Gas shares plunged 27p to 201p – their biggest one-day fall apart from during the stock market crash in 1987 – as investors panicked about its ability to continue paying dividends under the new formula.The new controls, due to take effect next April and run for five years, will cut prices TransCo charges to gas shippers by 20-28 per cent in the first year and then keep prices to RPI-5 in each of the following years.Ms Spottiswoode, director general of gas supply, said the curbs would mean pounds 30 off average domestic gas bills next year and a reduction of pounds 40- pounds 50 by the end of the five-year period. But a spin-off would leave Pearson holding less valuable book publishing and lesiure assets, as well as its Mindscape subsidiary.. Reports over the weekend about the possible spinoff helped push the shares up 13p yesterday.These assets – which include Thames Television, Grundy Worldwide and US-based ACI – are believed to be among the most attractive.It is also believed that Pearson Television’s Mr Dyke would be interested in seeing a separate listing for his subsidiary, and is uncomfortable with the “culture” of Pearson’s head office. More than pounds 1bn was wiped off the value of British Gas yesterday as the industry regulator Clare Spottiswoode unveiled “draconian’ new price curbs which are almost certain to result in the company opting to go to the Monopolies and Mergers Commission. “It is clear that no one is taking responsibility for the disaster at Mindscape,” said one.The company has received proposals from two sets of advisers – Barings and McKinsey – laying out ways of enhancing shareholder value. These include a radical break-up plan, creating several companies out of one.

Henderson Crosthwaite, the City broking firm, has calculated a breakup value of up to 900p a share, compared to last night’s close of 712p.Among the proposals is a plan to spin off the company’s television interests, worth about pounds 700m. While shares have shot up in recent days, they have still underperformed those of other media companies in recent years.News that Mindscape would post losses of up to pounds 46m this year particularly infuriated some shareholders. “He has made a real effort to transform the company,” said one. “But he has not always been able to carry his board.”Pearson has been the subject of intense speculation in recent months, as the market lay bets it would either be taken over or forced to accept radical demerger proposals. Pearson declined to comment on the substance of investors’s comments, although the spokeswoman confirmed that shareholders have been asking about succession plans.In recent months, Mr Barlow has overseen a restructuring of operating units, introducing clearer lines of management control.