Tuesday 20 August 2019

Centrica will scrap standard variable tariffs for new customers

The energy giant said it would remove SVTs for new customers and offer fixed-term competitive tariffs.

British Gas customer compensation
British Gas customer compensation

By Ben Woods, Press Association Chief City Correspondent

British Gas owner Centrica has said it will scrap standard gas and electricity tariffs (SVT) for new customers as it put forward a string of reforms designed to be “significantly more effective” than a Government price cap on energy bills.

The energy giant said it would also offer simpler bills and a new fixed-term competitive tariff, which will include a fixed-term default tariff for customers.

Centrica’s group chief executive Iain Conn said the reforms were not triggered by the Government’s threat to cap energy prices, despite claiming that price controls would set the energy market back.

It comes as Britain’s Big Six brace for a raft of regulatory changes after the Government announced that a price cap will be imposed on poor-value energy tariffs.

Speaking on BBC Radio 4’s Today programme, Mr Conn said: “We have actually been working on these proposals for many months now.

“We have been saying for the last 18 months that we think the best solution for this market is to end evergreen contracts, contracts that don’t have an end date.

“We obviously had to pause when Theresa May announced her intention to cap the market but we have now announced today a comprehensive set of actions to reform the market, starting in our case with the removal of the standard variable tariff.”

He said the Government should prohibit open-ended contracts and remove the cost of green energy costs from household bills.

Mr Conn said: “The cost of renewable policies in everyone’s bills and other Government subsidies and incentive schemes has now reached over £5 billion a year.

“It’s going to be costing next year, in our estimate, about £200 in everyone’s bill, that’s getting on for 20%.

“We think it’s much fairer to find another way of paying for it because people who find it most difficult to pay for their energy are really struggling with this component.”

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