Big energy firm breaks ranks on unfair tariffs

SSE promises to end 'predatory pricing'

In a victory for consumers and The Independent's Fair Energy campaign, Scottish and Southern Energy is today scrapping its confusing range of deals to challenge rivals' predatory pricing.

The company currently offers 68 different tariffs to electricity and gas customers – but from today they are being slashed to just four.

Last night Alistair Phillips-Davies, director of supply and generation at SSE, admitted: "Buying energy has become too complex. We got it wrong by offering customers too much choice."

The British-owned company – which operates under the brands Southern Electric, Scottish Hydro, SWALEC and Atlantic – has committed to "never engage in predatory pricing". Mr Phillips-Davies added: "This is the most significant change SSE has ever made to its product range."

Three key changes that SSE has announced from today are a new standing charge, a single unit price and a method for SSE customers to compare its tariffs.

The changes will mean there will be no more room for the confusing predatory pricing practice of offering huge discounts to new customers.

But with an estimated four-fifths of people stuck on more expensive standard tariffs, loyal customers effectively end up paying for the discount deals.

Energy watchdog Ofgem has already launched an investigation into accusations that such predatory pricing is rife.

Calculations by comparison site uSwitch yesterday showed that the differential between a standard plan and a discounted deal is currently a massive £279 at Scottish Power, for instance.

The firm charges an average £1,349 to someone on a standard plan who settles up when they get their bill. Meanwhile, someone on an online plan paying by direct debit would be charged a much lower average of £1,070.

Npower is the next worse of the Big Six for price differentials with people on a standard plan charged an extra £211.

EDF, e.on and British Gas all have differentials of between £110-£122, while SSE's has fallen to £69.

Now the firm says its simplified tariffs will allow customers to work out their cheapest deal by just answering just five questions.

A similar move by British Gas to simplify deals last autumn didn't go far enough, according to energy experts. They say the Centrica-owned company still needs too much information from customers, making it difficult for them to find their best deal.

"SSE is setting the pace for the rest of the industry," said Ann Robinson, director of consumer policy at uSwitch. "My hope would be that the other energy companies will follow this lead."

Audrey Gallacher, director of energy at Consumer Focus, also welcomed the move. "A simplified range of products should make it easier for people to understand and compare rates," she said. "The rest of the industry needs to be similarly comparable to allow customers to make informed choices about which firm offers them the best deal," said Ms Gallacher.

Last autumn regulator Ofgem called for energy suppliers to offer just one standard tariff for each payment type.

It said simplicity is needed to give consumers a clearer choice than the 400 tariffs currently available.

Anne Robinson said SSE has made its move ahead of being forced to act.

"This is the direction Ofgem wants the market to move in so it will be interesting to see how SSE's customers react and whether it does give the market the boost Ofgem is hoping for," she said.

Interestingly SSE's move comes the day before the deadline for submissions to Ofgem's Retail Market Review.

But Ofgem admits that it will be months before it will be able to act, with final proposals expected in the summer.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower