Rap for sneaky energy giants
Big suppliers ‘keeping cheap deals quiet’
MPS yesterday accused energy giants of fattening their profits by not telling customers about cheaper deals.
During a fiery hearing at Westminster, bosses of three of the biggest suppliers admitted they contacted customers on rip-off standard variable tariffs (SVR) as little as four times a year in some cases. Meanwhile, smaller supplier First Utility gets in touch 13 times a year. Labour’s Rachel Reeves, head of the Commons Business, Energy and Industrial Strategy Committee, tore into British Gas which has more than two thirds of its customers on costly standard tariffs – 43% of them for more than three years. Sarwjit Sambhi, managing director of Centrica’s home unit which includes British Gas, claimed: “I don’t think customers would appreciate being contacted 13 times a year.” But Reeves snapped: “You are quite happy to have 69% of your customers on standard variable tariffs because that is where you make your profit.”
British Gas last month pledged to scrap SVRs, but only for its new customers.
The hearing took evidence from Centrica, E.ON, SSE and First Utility on Government proposals to cap SVRs. Sambhi admitted the move would dent its profits.
Labour MP Peter Kyle also slammed suppliers for charging SVR customers more than those on fixed-price deals, asking: “Why should customers who get the same product in the same way pay £200 a year difference a year?” He also accused suppliers of “profiting on the back of vulnerable customers”, as older and poorer households were less likely to use comparison sites and switch. Stephen Forbes, chief commercial officer at SSE, insisted a rise in switching rates and the existence of 60 suppliers meant “competition is working”. Alex Neill from consumer group Which? said: “All energy suppliers must do more to tackle unfair deals. “And the very least they can do is communicate clearly and consistently with their customers about better deals.”