Although this site is dedicated to saving you money on your gas electricity and phone bills, we thought that you might like to know a few of the facts concerning the privatisation of these major UK industries. Without these privatisations, none of us would be able to switch our fuel or phone supplier in order to get the best deal, we'd be back in the dark ages when there was no competition and suppliers were allowed free rein on fuel prices.

The UK gas market was privatised in 1986 with a promise that British Gas would have up to 25 years of monopoly of the UK domestic market. Just 14 years later, in April 2000, all 19 million domestic customers were free to choose their gas supplier. Since that time, some 8 million of those 19 million British Gas domestic customers have switched supplier.

Nobody can argue that privatisation wasn't a good thing for the man in the street. Since privatisation in 1986, average prices for gas have fallen by 32%. Furthermore, since domestic competition began in April 2000, the average annual domestic gas bill has fallen from £375 to £308 (18 per cent)

Unfortunately, there are a number of clouds on the horizon. Wholesale gas prices are closely linked to the price of oil and gas in Europe . Recent price fluctuations reflect the price rises in Europe where the majority of the market is still unregulated. Wholesale gas prices have doubled in the last two years and this will have to be reflected in any price control that Ofgem sets on British Gas, allowing them to pass on justifiable costs.

The UK electricity industry was privatised 3 years later than Gas, in 1989 and the domestic electricity market was fully opened up to competition some 10 years later in 1999.

Since the electricity market was opened up to competition in May 1999, 11 million out of the regional electricity companies’ 26 million domestic customers have switched away from their old monopoly supplier and the average annual domestic electricity bill has fallen from £268 to £238 (11 per cent). Since privatisation in 1989, average prices of electricity have fallen by 25% and in the same period the wholesale price of electricity has dropped by 40%. This huge drop in wholesale prices can be explained by a combination of factors such as falling fuel prices, a generous capacity margin and increased competition in generation.

It is now 20 years since the privatisation of the telephone service, yet British Telecom still retains 71% of the market share. The increasing take-up of Carrier Pre Selection services contributed to a fall in BT’s fixed line market share of voice calls to 57%. The telecoms sector has been regulated by Oftel (recently changed to Ofcom) since the privatisation of BT in 1984.

There are now approximately 170 public fixed telecommunications providers, 5 mobile providers, 59 mobile service providers and 700 internet service providers here in the UK. However it is taking much longer to convince people of the benefits of switching supplier compared to the home energy sector.

This link leads you to the MoneySupermarket.com web site that reviews all of the Gas Electricity and Telephone plans offered by the various energy and phone suppliers

1989 Electricity industry privatized

March 1991 60% of National Power and Powergen floated on stock market

June 1991 Hydro and Scottish Power floated on stock market

June 1993 Northern Ireland Electricity floated on stock market

March 1995 Remaining 40% of National Power and Powergen floated on stock market

Dec 1995 National Grid Group floated on stock market

April 1996 Domestic gas customers first able to switch supplier

July 1996 British Energy floated on stock market

May 1998 Domestic gas market fully open to competition

Sept 1998 Domestic electricity customers first able to switch supplier

Oct 1998 Opening of the interconnector gas pipeline between Bacton , East Anglia & Zeebrugge, Belgium

Jan 1999 The roles of the Office of Gas Supply and the Office of Electricity Regulation merged to become OFGEM.

May 1999 Domestic electricity market fully open to competition

June 1999 Ofgem formed

Oct 1999 Introduction of new gas trading arrangements to the wholesale gas markets

Jan 2000 Utilities Bill introduced in the House of Commons

Nov 2000 Energywatch formed

March 2001 New Electricity Trading Arrangements (NETA) introduced for wholesale electricity

April 2002 National Grid and Lattice agree terms of merger to become National Grid Transco

2002 Domestic price controls lifted

Oct 2002 Ofgem applies financial penalty of £2million to London Electricity for misselling electricity

Oct 2002 National Grid Transco formed following completion of merger

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