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How will British Gas help those facing higher energy bills?

British Gas

British Gas has announced a 12.5% increase in its standard tariff electricity prices pushing up energy costs for 3.1 million households. What will British Gas be doing for those affected by the increase?

British Gas announced today that it will raise its electricity prices by 12.5% from 15 September. This move will push energy costs up for many of its 3.1 million customers on its standard tariff.

This increase brings the total cost for a typical household on a standard tariff to £1,120 per year.

Is it any wonder that hard-pressed consumers will be hugely disappointed to see prices rise again? No. These same customers have been waiting for the government and energy industry to tackle costly standard variable tariffs (SVTs) and instead they have seen their bills go up again.

A year of discontent

While this is the first price increase British Gas have announced in almost four years, it makes them the last of the Big Six to announce its price increases. In February both nPower and Scottish Power pushed up prices which we described as a ‘bitter pill’ and ‘shocking’. In March, SSE and E.On caused outrage when they pushed up their prices. EDF followed in April with its disappointing hike in prices. That disappointment in the energy industry grows today.

After two years of investigation into the energy market by the Competition and Markets Authority, Ofgem (seeking to implement remedies to tackle the problems in the market), and the Government (committing to ensure markets work for consumers and to reduce energy bills), nothing substantive has happened to bring down prices.

Time to engage customers

In November last year we asked energy companies to send us their plans for how they will ensure their customers stuck on poor value deals are moved. British Gas responded to this with its intention to contact those on its standard tariff.

Despite all the debate we are still in the same situation and the industry’s response has been inadequate

Given it was just over six months ago since suppliers outlined their plans to engage with customers on SVTs, we’d like to know what progress they have made in reaching out to the millions of people affected by prices rises, and what they are doing to help them all to get onto better deals? As a customer, will this news encourage you to switch or stay with British Gas?

Have you been contacted by your energy supplier about moving from their standard variable tariff?

No (82%, 827 Votes)

Yes (18%, 185 Votes)

Total Voters: 1,012

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However, in today’s announcement, British Gas did refer to engaging SVT customers. The supplier stated that it has submitted proposals to the Ofgem to phase out the standard variable tariff and ‘level the playing field so that all suppliers contribute to the Warm Home Discount”.

We all agree that this market is not working for consumers. The Government needs to urgently look at what it does to help customers that are paying over the odds. The discussion needs to end and we need to see definitive action.

Comments

Here is what my current energy supplier e.on says about smart meters:

Say goodbye to unexpected bills and taking your own meter readings – smart meters are here.

– No more meter readings
– Always receive an accurate bill
– Track your energy usage with your Smart Energy Display (SED) – included with your smart meter installation

I did not want a smart meter because I’ve been able to read meters since I was a child and have managed to submit regular readings online for years. Unfortunately, they were already fitted when I moved home.

While it is true that bills will be accurate it does not mean that energy companies will not let customers build up credit as a result of excessive direct debit payments. On 10 March, e.on got round to refunding me the£274.55 credit in my account but now up to £154.76 and when the next bill is due on 18 September I expect that I will have paid considerably more than I have used. On 8 October my current contract comes to an end. 🙂

Thankfully I can afford to have an energy company holding on to my money, but what about those who might be forced to pay high bank interest charges because an energy company is sitting on their money?

Being asked to vote on ” have I been asked to switch from standard tariff?” A very badly phrased question, as we are not on standard tariff, so why should I be asked that? Therefore I can not and will not vote.
We are with British Gas for both gas and electricity, and both are fixed until late 2018. Every time we get a bill, it does tell us whether we are on their best tariff, and you can also check that on their website. It does also tell you on the bill if you could get a better deal from another supplier, so they are following the various recommendations re informing customers. I suspect many don’t read beyond the bottom line figure on the bill.
BUT what is the point of going to a cheaper supplier if the customer satisfaction, by your own Which surveys, is rubbish? ( A bit like the phone and broadband cost comparisons, where your cheapest gave diabolically awful service!)
And as others have said, if you switch, it’s not at all long before your new company also ups their prices. We have always had good service from British Gas, sp unlikely to change, whatever the inducements. That’s not to say that any price rises should be fully justified.

ROY HAYTHORN says:
2 August 2017

This goverment is not going to help us on these price rises they have been on about it the last few years and done absolutely nothink so now i have come to the conclusion we need it nationlised ie state owned to keep prices down theres no other way because this goverment is not listening to us enougth is enouhgth no more price rises or we kneed to devise a plan and do somethink about it because before long none of us will be able to afford to use gas or electricty its an outrage to working people we have got to pile the pressure on these companys and this existing goverment and be seen to get somethink done

David says:
2 August 2017

I am currently on the best fixed price tariff on the market and it is with BG. Unfortunately it runs out on the 3rd October – so I have to start looking in the next couple of weeks (6/7 weeks from end of contract to prevent penalties for early closure) for the best rates available. You have to be prepared to switch and finding the best deals are easy – just join money savings expert Cheap energy club – Martin Lewis’s team will do all the hard work for you. The Cheap Energy Clubs collective switches usually provide the best prices around! I am however resigned to paying at least £100 / year more for my next fix, unless the cheap energy club pulls a rabbit out of the hat in the next few weeks.
Come on Martin Lewis we are waiting for your next collective switch tender / offer.

Unfortunately I will have to stay with British Gas as I have a special deal with my electricity until March 2018. I understand this is something the government has introduced for pensioners – if I change suppliers will I be able to take this deal with me?

If costs are going up then they have to be paid for. Keep one’s powder dry before jumping, one might fall off the cliff!

I have both gas/electric fixed until late 2018. also a smart meter so free elect on saturday until march 2018. Anone on STD, is silly, use what is there, all other suppliers all change upwards. The increase of £100+ is central government and BG is just a small part of a large company, who are required to pay dividends.

I hope that the rise in tariff will be used to fund the energy bills of those who are less able to pay even at the current rate.

I’m afraid I disagree. I do not think a commercial company has the ability to decide whether a customer is deserving or not; hopefully they will not have the personal information necessary for them to make that judgementon. If I am to subsidise or help deserving people, that should either be through charity or through the state benefits system that is set up to support needy cases from my taxes.

I have been with British Gas for 30+ years, and I have no intention of changing now. As a 73 year old O.A.P I feel that then my present contract runs out and I ring B.G. they will give me a new contract that will carry me though, that I will be able to afford and with the way I work with B.G. at present will keep me on the straight and narrow. I truly believe that 30 years ago I made the right choice and I stand by my convictions. When I send in my meter readings on the 28th of every month, I know that I am being well cared for by a company I can trust, a company who does not leave me hanging on the end of a phone for 2 to 3 hours just to talk to a rep, If B.G. are busy, they tell me and arrange a call back system and I feel confident that they will call me back and sort out my problem there and then. This is the way I feel that every company should do its business. As an ex serviceman we told it as it was, no round the houses, and no back peddling, we called a spade a shovel. And B.G. are the same, they held back prices for as long as they could while other energy companies hiked there prices, now B.G. have had to follow, yes it will cause some headaches and as we are on a pension, I may have to tighten the old belt and give up a few things to pay my bills, but as I am already trying to loose weight this will be a help, and as for heating in the winter, both my wife and I go out every day, and we do have a great library that is warm and cosy so we can save on our heating bill. But we will get through it, we all have to pay our taxes and major bills which we know will rise year on year, particularly in Somerset, our council is so slap dash with money they squander out council tax for a past time. Pensions will never go up with inflation and my naval pension has only increased by 1% a year for the past 8 years , If this government want to put a cap on everything, let it be 1% but that must include there pay packet as well, It will never happen, we all know that members of our government are out for everything they can get, so we are stuck with it.

Am on payment meters for both I always get the same amount every week so I don’t see any difference

We are at a loss what to do really. They are all ripping people off and I think the Government should make sure we are being treated fairly in these awful days of austerity.

Utilities should not be privatised,in my opinion.Like everything else in life now,the consumer is being targeted in order to line fat cat’s pockets.

I am with BG and have been for many years,,the prospect to changing to another supplier, wears me out,,
having done this at a previous address,,

I have just had the smart meter system put in with my prepayment meters,,and I feel as though the electricity is being used faster than when I was topping up with the talus key into the old meter,,

I might contact them to find out the current tariff they are charging me,,,and is it the same as the old meter,,,

They have got a major cheek to put the cost of the electricity up so much,,,and maybe they should be stopped,,so what can we all do to make them stop and think?,,,should we all change or threaten to change,,and so leave them without any domestic electricity customers,,,or should we all see if the sainsbury’s offering is any cheaper,,,even though they are a part of bg,,,

The obscene pay the bosses get if not necessary,,after all they cannot spend that much in one year.
I worked at BG before the thatcher sell off,,,and things went downhill from there.

What can we do to stop the money grabbing behaviour,,,and make them more responsible for their customers welfare,,,

I am a BGE customer and am currently tied into a fixed tariff until November so will reconsider my options then.

I’m tied into British Gas until May next year. If I switch I have to pay £30 X 2 total of £60 which I can I’ll afford if I switch before my contract ends. It’s disgusting they have me in handcuffs this practise should be stopped.

Did you have no choice but to accept a fixed-term contract, Karen? The lower prices come with strings, or handcuffs as you perceive them. But look . . . it might not be as bad as you fear:

The planned electricity price rises announced by British Gas are for their Standard Variable Tariffs – people on fixed-price and fixed-term contracts will not be affected until their contracts end at which point they can switch without penalty.

I feel that the way the media has blown up this story has left people confused and very worried as some of the relevant facts have been left out.

Just a thought, how many switches insist on a smart meter being installed?

I presume all switches are conditional on the new company accepting the new customer, so perhaps they can so insist.

The advertising of smart meters should mention that there is no requirement to have one: http://www.which.co.uk/consumer-rights/advice/do-i-have-to-accept-a-smart-meter

Do any of the adverts mention this?

I think Alfa’s good question should be referred to the Which? Switch Team. They should know what conditions are attached by the different companies.

Thanks for the link wavechange.

We don’t have a smart meter but do have a smart controller for heating, hot water and a light bulb.

Considering the problems that thing has had, I really don’t want a smart meter and now BG has put the price up it may be time to switch.

These smart things just ain’t as smart as they should be.

I think we should all have smart controllers that automatically switched us all to the cheapest supplier and energy tariff. We have been told that the energy industry is ‘broken’ and that would sort it. 😉

I’m not sure what a smart controller for a light bulb does. 💡

I have seen companies advertising that will do this for you. Can’t remember where. I believe we will always need the ability to switch in a competitive society, even if tariffs become fewer, because prices will still differ. Personally I would rather keep this under my control, and I’ll continue looking at Which?Switch as my 1 year fixed price deals come to an end.

Re Comparison sites, I asked Which? the following:
“Re: Energy – Retail Market Regulation
The CMA have suggested that comparison websites do not need in future to show every available tariff, but perhaps only those that they can switch you to and receive a commission. Ofgem are considering this and due to rule on it in the next few weeks.
Does Which?Switch show every available tariff? Will that continue even if Ofgem rule it is not necessary?”

Which? replied:
“Which? Switch provides consumers with a transparent and impartial way to compare energy tariffs and find the best gas and electricity provider for your needs. We show all those tariffs made available to us by energy suppliers. This may exclude tariffs that are exclusive to other comparison sites. We currently have no plans to change this.”

We have one smart light bulb. The smart controller (Hive) turns the light on and off at times of our choosing (well, sometimes when it works properly). We can also program it to change colour, so normal light most of the evening then it turns blue late at night. Not too keen on the other colours.

Hive have just replaced one of the parts so hopefully it will work properly now. 3 nights in a row now 🙂

alfa, have you worked out whether Hive ( I think it is charged monthly?) makes savings sufficient to recover its cost, or is it mainly for convenience?

We bought Hive outright on special offer a few weeks before they released a new version. Had we known we would have waited for the newer product and on hindsight wish we hadn’t bought it at all. It seemed a good idea at the time as we didn’t have a proper thermostat and were using more gas for heating than we needed.

It has saved us money being able to control and maintain a chosen temperature any time like reducing it at night or when we are away, but I just wish it was more reliable.

Thanks Alfa. I had seen colour changing lamps but not heard of smart ones.

I have considered switching tens of times over the year but there are no real savings in the long term as these suppliers alter prices a little, make minor changes to contract and how you pay to make it look cheaper then take it in turn to raise prices. A trick to make consumers think there is a free choice and real alternative when there is none. .
I once was a free marketeer and believed that there would be competition for the benefit of buyers, but price fixing and the creation of giant monopolies have left consumers in a helpless position. Changing suppliers is no longer a solution. Look at the price of goods in shops and services like water and communication.

Life essentials like electricity need to be nationalized and run as a service to users, not as commodities the cost of which are manipulated by the big and powerful traders to get progressively more expensive as the number of users multiply.
Those old enough may remember, electricity was a public service once before.

I sometimes wish we could create a state-run energy supplier and see how it performed and how many customers it would attract.

I clearly remember when electricity was a public service – and it was run very well indeed most of the time. However, following privatisation, prices came down and remained stable for a considerable time, a selection of different tariffs became available, discounts were offered for different account features [like dual fuel], and although customer service was bad with some of the new companies overall there was an improvement. Customers also have choice – I note you have reasons not to exercise such choice but many others have and consider it worthwhile. Many posters in these Conversations have said how doing an annual comparison exercise has brought them savings. Doing it with Which? Switch is so easy.

I suspect if we had a nationalised energy supplier then we’d be having conversations bemoaning a state monopoly, and no choice. Apart from political interference near an election to cap or freeze prices to attract the gullible – until it was all over if course.

It would be interesting to see how a state-run energy company would fare in a competitive market, something that was missing prior to privatisation.

Those who were in favour of privatisation, including me, may not have guessed that within not so many years, other countries would significant control over our energy industry.

That’s what I was suggesting – not a totalitarian state energy supplier but a state-run company that would operate alongside the commercial companies. I would still expect the state-run company to generate surpluses for the benefit of the Exchequer and to meet all the obligations imposed on the other companies. Any political manipulation would soon become apparent and back-fire.

We have around 40 energy suppliers already. I doubt they all collude on pricing; many will just be out to make a profit, hence the significant variations in tariffs on offer. Fixed tariffs from 5 of the “big 6” ranged from £873 to £1037 for an average consumer. I see this as a competitive market.

Our governments seem to outsource as much as possible, without exerting proper controls on the recipients. So we’d possibly have commercial companies with no knowledge of the industry taking it on, with sweeteners to encourage them.

You might be right, Malcolm, but my suggestion was to deal with the constant cries to renationalise the energy industry. I was merely proposing that a state-created and state-run company could be added to the existing forty suppliers to see how it thrived. My personal view is that it would fail and that that would nail the nationalisation argument.

Nobody who puts nationalisation forward seems to offer any practical views on how it should operate given the conflicting interests and political dimension. Just assuming it would supply cheaper energy, make large surpluses and provide a better customer service experience is not sufficient. And where would that leave electricity generation and gas production?

I am not claiming that the present system is perfect and cannot be improved upon, and that the economic regulation by Ofgem could not be made more beneficial for consumers, but at least there is something to work on where customers have choices and companies have to compete.

My fixed deal is coming to an end in September and been quoted an increase of 25% on my current deal. I’ve looked around and they’re all in the same ballpark.
Looks like the latest British Gas increase is low in comparison to the rest of the suppliers but no-one talks about them.

Jude says:
3 August 2017

At the moment it’s worth my while staying with them because I’m entitled to the £140 fuel allowance. If this was withdrawn, I’d look again at other companies.

Ofgem have made marginal changes to their “Typical Domestic Consumption Values” (Low medium and high users) used for example by comparison sites where actual consumption is not known.
https://www.ofgem.gov.uk/system/files/docs/2017/08/tdcvs_2017_decision.pdf