HOUSEHOLD gas bills could come down by £15 a year under proposals announced by gas regulator Ofgem.

A draft price control plan published by Ofgem would cut the amount Transco, the firm that runs the UK's gas pipelines, can charge gas suppliers.

Its revenue would be cut by 14 per cent next year, and then by two per cent annually until 2007, under the proposals.

Transco's charges make up over a third of a supplier's gas bill.

An Ofgem spokesman said the planned cuts would be good news for consumers. He said yesterday: "It is a very competitive market out there.

"Companies are competing all the time for market share, so we believe they will be forced to pass the savings on to consumers."

The GMB union warned that the spending cuts that were being sought by the regulator would be impossible to deliver without job losses and cuts in pay.

National officer Brian Strutton said safety could be compromised, adding: "We do not believe that consumers would want to jeopardise their own safety for the sake of 30p a week off their gas bill.

"These proposals are simply ludicrous."

Chris Bolt, Transco's head of regulation, said yesterday that the company still planned to recruit 1,000 staff in the coming year, and it was too early to say how Ofgem's proposals might affect this programme.

Transco, part of the Lattice Group, is set price and savings targets every five years by Ofgem.

The regulator said it believed Transco only needed £3.6bn for capital and replacement expenditure. Transco said in a recent strategic business planthat it needs to spend at least £5bn on its network.

Mr Bolt said he was concerned that the two calculations were out of line, but that Transco would be speaking to Ofgem throughout the course of the summer about the proposals.

Transco is expected to reply to the proposals next month. The regulator is expected to publish its final proposals in September.