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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there