British Gas announces simplified tariffs

The energy giant says it will only offer two types of tariffs and better billing systems in a bid to win back public confidence.

British Gas has announced that it will simplify its energy tariffs and its billing systems. It will now offer just two types of tariff: variable or fixed.

It has also pledged to include a full breakdown of the costs of energy, including green levies and company profits, on customers’ bills.

Customers will then be able to choose if they want to manage their account online or via paper bills.

The company claims it is taking the lead in winning “back the public’s confidence in the energy industry”.

An under-fire industry

The ‘Big Six’ energy companies, including British Gas, have come under fire from industry regulator Ofgem for their large number of tariffs. As well as demanding a reduction in tariffs, Ofgem is also going to force energy companies to adopt a simple unit prices so customers can compare prices more easily.

And a damning investigation by Which? found that companies’ customer services departments were not always offering the best deals to people wanting to switch suppliers. We wrote about this in more detail in this article.

Which? also claims energy companies are charging dual fuel customers who pay by cash or cheque an average of £98.60 more a year than those who pay by direct debit.

A new beginning? 

Earlier this week, E.ON announced that it was conducting a six-month ‘Reset Review’, looking at “every aspect of our relationship with our customers”.

Both British Gas and Scottish & Southern Energy have already dropped discounts for online customers in a bid to cut the number of tariffs they offer.

Campaign group Consumer Focus, which has regularly lobbied Ofgem on energy companies, said of the move towards simpler tariffs: “Energy is a simple product, it should also be a simple market. Reducing the number and complexity of tariffs won’t bring prices down by itself, but it will help people understand their energy costs and get the best deal available.”

The heavy criticism of the energy industry led to an emergency summit in October attended by David Cameron, although the key message from that appeared to be “shop around for the best deals”. But now it finally seems that there will be some action.

Want to switch suppliers? Use lovemoney.com's gas and electricity tool to compare tariffs.

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