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British Gas to scrap its standard variable tariff for new customers

Centrica, the owner of British Gas, has pledged to scrap its standard variable tariff for new customers next year, replacing it with a one-year tariff with no exit fees – but it so far can’t promise the new deal will be any cheaper.

The energy giant says it will scrap its standard variable tariff (SVT), the expensive default tariff many households are put on, for customers whose fixed price deal ends after 1 April 2018.

Instead, if your fixed price deal ends and you don’t choose to move to another tariff, you’ll be moved to a new default 12-month tariff with no exit fees. Centrica says it’s still in discussions with energy regulator Ofgem over this and so cannot say if the default will be a variable or fixed deal, or whether it will be cheaper than its SVT.

Theresa May promised action last month to end “rip-off energy prices”, proposing a price cap on SVTs and other default tariffs – the expensive plans that customers are moved to when cheaper fixed deals end. Britain’s competition watchdog found that consumers were being overcharged by £1.4bn a year, a figure that Centrica contests.

Stephen Murray, the energy expert at, said Centrica’s move highlighted that change within the industry was “much more effective than a one-size-fits-all price cap, which could have unintended consequences such as many of the best deals disappearing, prices finding a higher level, and a growing market of disengaged customers”.

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