British Gas to scrap pricey standard energy tariffs but it's no consumer champion

Owner Centrica's shares were unmoved by the announcement, which tells you all you need to know

British Gas says it plans to scrap standard variable energy tariffs (Getty)

British Gas and bad headlines go together like Christmas and ludicrously expensive TV ads.

There were lots of the former when this industry bad guy decided to hike prices by 12.5 per cent in August, for example. This despite the Government considering price caps. It was one of the more tone deaf business decisions we’ve seen in recent years.

But wait, what’s this? British Gas owner Centrica now wants to be seen as a champion of “reform” in the energy industry and the consumer’s new BFF.

Appearing via the London Stock Exhange’s Regulatory News Service (RNS) are “proposals to deliver a fairer and more sustainable energy deal for customers”.

Well, huzzah! So that means an immediate reversal of the price cut, right?

Erm, well, no. The windy justification for that made by British Gas managing director Mark Hodges remains up on the British Gas website. I’d recommend it if you’re suffering from insomnia.

Still can’t sleep? How about the windy and self-serving statement his boss, Centrica CEO Iain Conn, makes as part of the windy and self-serving RNS announcement.

The part of it that has generated headlines is a promise to abolish standard variable energy tariffs (SVRs).

Buying energy via an SVR is ruinously expensive, but millions of people still do it, hence the Government’s interest in capping it.

According to Mr Conn it “contributes to lower levels of customer engagement”, whatever that means.

So, to get them excited about their bills, the company will in future offer a range of new fixed deals when theirs come to an end and work jolly hard at engaging with them. Where this doesn’t work, because people have jobs to go to and families to feed, they will be put on an “emergency” or “default” tariff.

But there’s more: British Gas also promises simpler billing and improved customer service (I know, I know, we’ve heard that one before) and it will try to be nicer to vulnerable consumers. Isn’t that wonderful?

Of course, there is an ulterior motive to all this, which is to head off that price cap. “Politicians, regulators and energy companies acting together can do better than simply imposing a temporary cap or freezing household energy bills. Working in partnership, we can create a fairer, more competitive energy market for the long term,” says Mr Conn.

Working in partnership, of course, means reforming the market in his company’s favour, and that of the big six energy providers more generally.

That’s what he’s after when Centrica calls for the Government to create a “level playing field on social and environmental costs”, for example.

If ministers felt moved to respond to his calls, I’d point them in the direction of uSwitch.com, whose head of regulation Richard Neudegg worries that Centrica’s offer doesn’t amount to all that much.

He fears that the “emergency” or “default” tariff may end up as another poor-value standard tariff with a different name.

If Centrica wanted to make a real impact, as opposed to a PR impact, it could, you know, cut its prices. While British Gas’s SVR is the cheapest (by a bit) among the big six, none of its deals are in uSwitch’s top 10, which is dominated by smaller providers.

It is significant that Centrica’s shares barely moved in response to the announcement.

The latter rather speaks volumes about how much this is really worth to the energy consumer.