Shaming of the energy Big Six

Not ONE of their tariffs features in list of 100 cheapest deals on market

NONE of the major energy firms can boast an entry on a list of the best 100 household tariffs.

Most customers of the ‘ Big Six’ – British Gas, SSE, Npower, E.on, EDF and Scottish Power – pay an average of £1,145 a year.

Yet smaller firms are offering dual-fuel deals that are £300 cheaper, research shows. They have 75 tariffs at under £1,000 a year and another 25 packages at under £900 a year.

One of the best deals – £811 – comes from Economy Energy, while Usio Energy charges £812. Outfox the Market has even cheaper tariff – £807 – but it imposes an extra monthly subscription.

Stephen Murray of MoneySuperMarket, which carried out the research, said: ‘This really is a watershed moment and it’s been a long time coming.

‘The retail energy market continues to go from strength to strength, as evidenced by increased switching numbers month on month.

‘There are over 60 suppliers offering competitive tariffs and great customer service and they are taking market share away from the Big Six. The Big Six are simply responding by raising their prices again and again.’ Mr Murray said customers paid a high price for being loyal to well-known brands.

‘Ultimately, whether you’re with a Big Six or emerging supplier, if you’ve stayed on the same tariff for more than a year or two, the chances are you’re paying way too much for your energy,’ he added. ‘We’d encourage you to get online, explore all the great deals available on the market, and switch today. You’ll save £250 just like that, and quite possibly more.’

The larger suppliers do offer short-term deals that are cheaper than their £1,145 standard variable tariffs but even these run into four figures.

The best price comes from E.on at £ 1,053, followed by British Gas at £1,055, SSE at £1,066, Npower at £1,071 and Scottish Power at £1,075.

Small companies do not have the financial muscle of the major players or their call centre capacity. However there is a safety net regime that allows customers to transfer elsewhere if their supplier runs into trouble. Customers can switch by contacting the small suppliers’ websites direct or by using a switching service, which takes a commission from most energy firms when they sign up a customer.

Centrica, which owns British Gas, this week revealed it had lost 110,000 accounts in the first four months of the year as customers rebelled against high bills.

The major energy suppliers have faced a growing backlash over recent increases. Last week Npower became the latest to announce a price rise with a million customers on its standard variable tariff to see bills rise by an average of 5.3 per cent from June 17.

The average price of gas is going up by 4.4 per cent while electricity will jump by 6.2 per cent, meaning those with dual fuel will pay an average of £64 more a year based on typical use. Those on fixed deals or with prepay meters will not be affected.

Npower is the fifth Big Six firm to announce a price rise this year, with British Gas, EDF and Scottish Power all putting up the prices of their standard variable tariffs. E.on hit customers with a backdoor price rise last month.

Shona Eyre, who is a uSwitch. com energy expert, said: ‘In April three of the big six energy suppliers hiked their prices and customers have understandably responded by seeking out cheaper deals elsewhere.

‘Switching energy is quick, easy and could potentially save households £491, so it’s encouraging to see more and more people take control of their bills and find a better deal. Energy switching remains on par with last year’s record breaking numbers.

‘With Npower having recently followed suit and hiked their prices, if you’re one of the 12million homes still on a standard variable tariff then now is the time to fix and lock in a cheaper deal.’

Ministers are putting a Bill through Parliament that will give

‘Taking away market share’ ‘Time to lock in a cheaper deal’

regulator Ofgem the power to cap standard variable tariffs.

This is expected to come into effect before the winter.

The Big Six firms have 75 per cent of the household energy market between them.

Experts said their economies of scale should allow them to offer good value deals, but the latest figures paint a different picture.

The Competition and Markets Authority has previously cautioned that a lack of competition in the energy market has led to overcharging on standard variable tariffs amounting to £1.4billion a year.

THERE was a time when loyal customers could be fairly confident that big-name companies with reputations to uphold would give them a fair deal. No longer.

In an eye-opening report, hailed by some as a watershed for the energy industry, a price comparison website finds not one of the Big Six firms – British Gas, EDF, SSE, Npower, E.on and Scottish Power – has a tariff in the top 100 cheapest deals.

Yes, from one angle this can be seen as a triumph for the free market, with the emergence of cut- price competitors offering relief from extortionate bills.

But in reality, it exposes the ugly side of the business model adopted by the Big Six. For as these companies know, most energy consumers – particularly the elderly – are daunted by the process of switching suppliers and are likely to stick with them.

True, many internet-proficient customers have abandoned them. Indeed only this week, British Gas owner Centrica admitted it had lost 110,000 in four months.

But with their 75 per cent share of the domestic market, the Big Six cynically calculate there are fatter profits to be made from overcharging loyal customers than from competing with smaller rivals.

Heaven knows, their sheer size should allow them to offer competitive rates, through economies of scale. Yet they choose to go on ripping families off, to the tune of some £1.4billion a year. What a shoddy way to treat customers who trust them.

This paper has grave reservations about state intervention in markets. Indeed, we hope that in time, as switching suppliers becomes simpler, free competition will work its magic and bring down prices charged by the Big Six.

But until this happens, these greedy firms will have only themselves to blame if the Government presses ahead with plans to impose a cap on tariffs. By abusing customers’ trust, they’re asking for it.