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Friday, May 22, 1998 Published at 22:37 GMT 23:37 UK



Business

Beating the competition
image: [ Go, British Airways new cheap subsiduary ]
Go, British Airways new cheap subsiduary

By Evan Davies, BBC economics correspondent

What a week for competition.

Competition in the domestic gas market completed its national roll-out - at last taking in those who live in London and the south-east.

And British Airway's new cheap and cheerful subsidiary, Go, rolled its first passengers down the runway (replete with slogans on the side of the planes, such as 'Go today', unleashing a competition with Easyjet to see which could be the most naff).

So much competition. But has it spawned lots of dynamic new services?

Not if you believe the impression given in the media about it. In fact, you could be forgiven for thinking that the increase in competition has done little more than prompt a lot of tedious complaining.


[ image: Easyjet fears the competition from Go]
Easyjet fears the competition from Go
In the airline business, Easyjet's dynamic proprietor Stelios Haji-Ioannou has been making a highly publicised bid to obstruct BA from launching Go.

His grounds were the "world's favourite airline" might use its muscle to drive the likes of him out of business and then Go back to charging high prices as normal.

More striking have been the complaints about gas competition.

Local news in the south-east focused on the unfortunate case of someone who signed up to a terrible boiler-maintenance contract at the same time as switching gas supplier.

There have been complaints about unfair selling techniques and criticism of the excessive complexity of the prices on offer.

Choice is the key

Well, maybe it is time to give people some basic advice to stop the complaints.

If everybody just followed a few simple rules, then we could probably avoid endless news items about how awful these competitive markets are.

For example, if the complexity of a competitive market upsets you, then stay with the old monopoly provider.

No one forces you to shop around, and you are entitled to pay more for your gas if you want to.

At the same time, ask for details of what you are buying before you sign anything.

Then you won't find yourself lumbered with a product you didn't want. It isn't really that difficult.

Competition is inevitably a messy business.

That's not an unfortunate side-effect; it is the very essence of it.

The price is right

Of course, competition can be a dirty business too - Stelios is right to keep a close watch on British Airways.

And the authorities would be right to ignore him until BA does something blatantly predatory.

But although competition is untidy, it is beneficial for consumers in the vast majority of sectors in our economy.

I am perhaps a bit untypically nerdy when it comes to these things.


[ image: Get your gas anywhere]
Get your gas anywhere
But according to the spreadsheet I have complied to calculate the different gas suppliers' prices for different types of user by switching gas supplier I shall save about 19.71 a year - or about 11%.

Okay, so 11% a year is not very much in the big picture - but I would be pretty happy if I could save that across the board on my spending (and I'd be pretty angry if I found I was paying 11% more for everything).

It may not shake the world, but hardly something to complain about.






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