Energy giant British Gas will scrap its standard variable tariff (SVT) price category by April for new customers.It comes after draft legislation designed to lower the cost of energy bills was published by the government.The Draft Domestic Gas and Electricity (Tariffs Cap) Bill would give energy regulator Ofgem the power to cap SVTs.Rival energy firm E.On has already said SVTs will no longer be the default option for customers coming to the end of their existing tariffs.SVTs are usually among the most expensively priced tariffs. British Gas is estimated to have about six million customers on the tariff.’Comprehensive’Announcing the change, Iain Conn, chief executive of British Gas parent firm Centrica, said: “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.”Although the development only applies to new customers, Mr Conn said the company was keen to move all its customers off the SVT. “We will contact all of our customers at least twice a year to encourage them to move away from the SVT,” he said.British Gas contacted all its SVT customers in the first half of 2017, and it says that 10% switched away from the tariff.The company has also said it will:Provide new offers “to respond to customers’ changing needs”
Proactively offer customers a choice of fixed-term tariffs at the end of their contract
Introduce a new fixed-term default tariff
Contact customers on legacy Standard Variable Tariffs and offer them better deals
Introduce simpler bills for all customers
Improve customer service
Mr Conn told the BBC’s Today programme that it had been working on these proposals “for many months now”.And he denied that action had been taken because of government threats to impose price caps on the energy market.”We have been saying for the past 18 months that we need to end ‘evergreen’ contracts – those which don’t have an end date,” Mr Conn said.He said the new measures announced were “a comprehensive set of actions”.”But we also need a fairer way to pay for the changing energy system by removing Government policy costs from energy bills,” he added.