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British Gas to scrap variable tariffs for new customers

Parent company Centrica says it will introduce simpler bills amid proposed reforms.

British Gas are changing their tariffs.
British Gas are changing their tariffs. PA

Centrica, the owner of British Gas, says it will scrap standard gas and electricity tariffs (SVT) for new customers as part of a string of proposed reforms designed to be "significantly more effective" than a Government cap on the price of energy bills.

Simpler bills and a new fixed-term competitive tariff, which will include a fixed-term default tariff for customers, will be offered by the energy giant.

Centrica's group chief executive Iain Conn has refuted claims the changes were a response to the Government's threat to cap energy prices, even though it is thought the price controls would have a negative impact on the energy industry.

The Government has previously announced a price cap on poor-value energy tariffs, as part of regulatory changes.

Iain Conn says his company have worked on the changes for a while.
Iain Conn says his company have worked on the changes for a while. PA

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."

New customers won't be offered SVT.
New customers won't be offered SVT. PA

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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