British Gas owner Centrica to scrap standard variable tarrifs for new customers

British Gas owner Centrica to scrap standard variable tarrifs for new customers

British Gas owner Centrica is scrapping standard gas and electricity tariffs (SVT) for new customers ahead of British Government plans to impose a price cap on the costly energy products.

The Big Six energy supplier also vowed to introduce simpler bills and a new fixed-term default tariff for British customers who do not shop around for the best deal once their contract finishes.

It said the reforms would be enforced by the end of March next year.

It came as the energy giant called on the Government and Ofgem to engage over the reforms to help create a fairer market without price controls.

Centrica urged the energy watchdog to follow its lead and remove SVTs from the market to encourage more customers to switch tariffs.

While group chief executive Iain Conn recognised the need for the market to improve, he said price caps would only set the industry back.

He said: "Today we have set out the unilateral actions we will take to improve the UK energy market for our customers.

"This starts with the withdrawal of the standard variable tariff which contributes to lower levels of customer engagement.

"We also believe that further measures by Ofgem and the Government are required so that together we can create a market that works for everyone, where there is improved transparency and a fairer allocation of costs currently included in the energy bill.

"We have long advocated that the end of the standard variable tariff is the best way to encourage customers to shop around for the best energy deal.

"But we also need a fairer way to pay for the changing energy system by removing Government policy costs from energy bills."

Britain's Big Six are bracing for a raft of regulatory changes after the Government announced a price cap will be imposed on poor-value energy tariffs.

It follows an investigation by the Competition and Markets Authority (CMA), which found 70% of Big Six customers are on pricier SVTs and could save £300 by switching to cheaper deals.

Around 4.5 million of Centrica's 8.3 million customers - or about 60% - are currently on SVTs, with 70% of profits coming from the company's SVT customer base.

Among the reforms, Centrica said it will provide customers with a range of competitive fixed-term tariffs, with no exit fees pinned to the default - or emergency - tariff.

It will also encourage SVT customers to switch by targeting them with better deals.


More in this Section

Europe’s easing timetable is intact with coronavirus spread under controlEurope’s easing timetable is intact with coronavirus spread under control

Phil Hogan mulling candidacy for WTO chiefPhil Hogan mulling candidacy for WTO chief

EasyJet and Carnival poised to exit FTSE 100 as virus hammers travel firmsEasyJet and Carnival poised to exit FTSE 100 as virus hammers travel firms

Coronavirus: Ibec demands faster reopening of the economy and reduction of two-metre ruleCoronavirus: Ibec demands faster reopening of the economy and reduction of two-metre rule


Lifestyle

Even in the drug-filled, debauched annals of the rock and roll memoir, Mark Lanegan's Sing Backwards And Weep stands out.Mark Lanegan: Drugs, Liam Gallagher and me

Donal Dineen was the man who first brought David Gray and many other emerging artists to our ears. He’s had a lower profile in recent years, but has returned with a new podcast, writes Eoghan O’SullivanDonal Dineen: Pushing the buttons on a new podcast

Is there are science to back up some of the folklore we have grown up with?Appliance of Science: If a cow sits down does that mean it will rain?

This time last year Whiddy Island in West Cork was bustling with people who had caught the ferry for the short trip from Bantry to ramble the island’s boreens as part of the Bantry Walking Festival. Not so this year.Islands of Ireland: Whiddy in the same boat

More From The Irish Examiner