British Gas cuts pounds 40 off bills in South-west

British Gas is today expected to announce cuts in charges worth an average of pounds 40 a year for households in South-west England in a bid to win back domestic customers from rival operators.

This will be the first time British Gas has introduced different prices for customers in different parts of the country. But it will become an increasingly familiar feature as competition in the domestic gas market rolls out nation-wide.

Initially, the price reductions are likely to be limited to households that pay by direct debit - the area of the market where British Gas has suffered the heaviest loss of customers.

Since competitive trials were launched in the South-west region last April British Gas has lost 19 per cent of its customers to rival operators who are undercutting its standard tariffs by 15 per cent to 25 per cent. But the figure for those paying by direct debit is even higher at about 25 per cent. About 95,000 of the 500,000 domestic gas users in the area have switched to one of 10 rival suppliers.

Today Centrica, the supply arm of the newly demerged British Gas, is expected to announce it is introducing new tariffs in the South-west for direct debit customers which are 10-13 per cent below its standard tariff. This will still leave it more expensive than rival suppliers but it will halve the gap between Centrica and its cheapest rivals.

At present Centrica is allowed to offer direct debit customers nation- wide a 6 per cent discount on its standard tariff. This is worth just under pounds 20 a year on the average pounds 330 household bill.

The discount for direct debit customers in the South-west is expected to be roughly doubled. The charges will take effect immediately and Centrica is thought to be preparing to launch a local press and radio advertising campaign as early as tomorrow.

The proposed new tariffs have not been approved by the gas industry regulator, Clare Spottiswoode of Ofgas, and could result in a clash. Ms Spottiswoode could outlaw the price reductions if she decides the gas market in the South-west is still not fully competitive.

Centrica is expected to argue that competition has been firmly established with a quarter of its direct debit customers now lured away by rival suppliers. In addition, Ofgas surveys in the region have shown that customers are fully aware of the opportunities available, with nine in 10 able to name at least one rival supplier and eight in 10 of those who have switched supplier saying it was a very simple exercise.

However, rival operators have already served notice that they will fight to prevent Centrica being allowed to offer lower prices, arguing that competition is still not properly developed. Calortex, which has about 40,000 customers in the South-west, says competition is not yet sufficiently established.

A second phase of trials began among another 600,000 customers in Dorset and the former county of Avon on 10 February and the trials will be extended to a further 900,000 households in Kent and Sussex from 7 March.

Observers believe Centrica may lose market share more quickly in the south of England because there are more customers with larger bills paying by direct debit than in the South-west. Last month, rival suppliers in the South-west came under fire from the Gas Consumers' Council for discriminating against customers on low incomes or benefit support by offering wealthier direct debit households prices which were up to 34 per cent cheaper.

Comment, page 15

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
tv
Sport
footballShirt then goes on sale on Gumtree
Voices
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
art
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine