Analysis for the Guardian shows most companies charging customers the same after switching them to ‘cheaper’ tariffs
The UK’s big six energy companies have been accused of dirty tricks after analysis for the Guardian revealed that they are routinely charging customers almost exactly the same amount after switching them off controversial default tariffs.
In the face of Theresa May’s plans to impose a price cap on standard variable tariffs (SVTs), which more than half of energy customers are on despite their steep prices, companies such as British Gas, E.ON and SSE have pledged to phase out such tariffs and shift billpayers onto better value fixed deals.
The chief of energy regulator Ofgem has welcomed such moves as a sign of progress in the energy market.
But data compiled for the Guardian shows that in the case of market leader British Gas, the most expensive fixed deal – that many customers are being moved on to – is identical to its SVT, at £1,099.84.
It is understood that when customers contact their supplier to change their tariff, most are moved to the most expensive fix that the company offers. Each company’s cheapest fixed deals are often only available through comparison sites.
E.ON charged £1093.35 for both its SVT and most costly fix, while the gap for ScottishPower was just £8.49 and npower’s was £37, the figures obtained by challenger supplier Octopus show. SSE was slightly better, with a £54.73 gap, and EDF’s gap was £82.83.
The data suggests the companies are engaged in what is largely a rebadging process rather than a genuine effort to cut customers’ bills by switching them to more competitive products.
John Penrose, the Tory MP who pressured Theresa May to confirm a cap last October, said: “The big six need to do more than just a cosmetic exercise. No one should be fooled if they’re just moving customers from one rip-off tariff to another, with a different label on the tin.
“The only way we’ll put a stop to these dirty tricks is with an energy price cap, so I’m delighted the government is about to bring one in.”
British Gas on Thursday cited the price cap as one reason it is shedding 4,000 jobs, although its consumer energy arm’s profits only dropped 1% despite losing 750,000 customers to more competitively priced rivals.
More than half of British Gas customers are on SVTs, with similar shares for E.ON, EDF and npower. SSE has the highest proportion, and Scottish Power the lowest.
The data compiled by Octopus on big six pricing tactics is a snapshot taken of tariffs offered on 18 February in the London region. It excludes fixed tariffs with extras, such as boiler cover.
While the gap is small or non-existent in most cases between the SVT and the most expensive fixed tariff, the big six do offer cheaper fixes to lure in new customers. For example, British Gas’s cheapest fix is £200 below its SVT.
Although the figures are taken on a single day, an examination of the companies’ tariffs over a 90-day period ending on 18 February showed the pricing behaviour is not an anomaly.