British Gas to lead a fairer deal for British energy customers

British Gas, the country’s largest domestic energy provider, today announces a series of industry leading moves to help make buying energy more simple, transparent and fair for consumers.

Phil Bentley, Managing Director of British Gas, has acknowledged the need to rebuild the public’s confidence in the energy industry.

As a result of this, and after consultation with its independent Customer Board, British Gas is today setting out the first in a series of changes for its customers by:

* Making it easier for customers to buy their energy with just two simple tariff types - fixed and variable;

* Helping customers save money on a better deal;

* Including a full breakdown of the costs that go into providing energy on customer bills, including green levies and company profits; and

* Taking the lead on the facts about the future of energy prices in Britain; to support this, there will be a new advertising campaign.

These are the first stages of the lead British Gas is taking to win back the public’s confidence in the energy industry.

British Gas will continue to make further improvements to improve simplicity and transparency for customers in the domestic energy market over the course of the next six months. Further details will be announced in due course.

Phil Bentley, Managing Director of British Gas, said:

"It’s time for change. It’s clear that the energy industry is facing a crisis of trust and we have all got to work much harder rebuild public confidence. Customers have given us a very clear message; they want simple tariffs, transparent bills and a fair deal on energy.

“But we’ve also got to have the honest conversation about the future of energy in Britain. That means being much clearer about the cost of producing and providing energy to customers’ homes, the rising cost of green levies, the impact of rising demand in international markets - and, the profits the industry makes.”

These proposals have been developed following extensive customer research. Phil Bentley, Managing Director of British Gas, is also writing to customers asking for their views about what can be improved in the British energy market and how British Gas can keep changing for the better. British Gas customers are being invited to contact Phil directly by emailing phillip.bentley@britishgas.co.uk.

ENDS

Notes to Editors

Simpler tariffs

As a first step, British Gas is today simplifying its energy tariffs, so customers can build a simple tariff that best suits their needs in three simple steps:

1. Customers now have a straightforward tariff choice - fixed and variable;

2. They can then choose how they want to manage their energy account - online or with paper bills and free access to British Gas call centres; and

3. Finally, customers choose how they pay, spreading payments, or paying just for what is used, by direct debit, cheque or cash.

Clearer bills

British Gas is also improving bills and is committed to providing a full breakdown of all costs and charges associated with providing energy to customer’s homes. This will be delivered in three stages:

1. From this month, the energy provider will include a complete breakdown of all the costs that make up a customer’s bill.

2. British Gas is working with customers and consumer groups to redesign energy bills and remove the existing two-tier structure.

3. British Gas is leading the roll out of smart meters, with more than 400,000 already installed in its customers’ homes and businesses; in the future all domestic energy customers will benefit from smart meters, which provide accurate bills and real-time information for customers, helping them keep control of their energy usage

The future of energy

The ways in which energy providers source gas for their customers has changed. Britain is no longer self sufficient. Around half of all of Britain’s supplies are imported, and Britain must compete with other international markets, such as Japan, where wholesale prices are 50% higher.

British Gas is reducing the extent to which its customers are exposed to changes in global prices by investing in future sources of energy for Britain. Earlier this week, British Gas announced a £13 billion gas supply contract with Norway’s Statoil. Following the signing of this 10 year deal, the total value of future gas supplies British Gas has secured for the UK now stands at more than £50 billion. British Gas needs to be a profitable business in order to do this.

The cost of investment in delivering a low carbon future for the UK cannot be ignored. More than £200bn is required to replace old and high carbon energy infrastructure by 2020. This investment will have an inevitable impact on the costs to consumer. The cost of transporting energy and green initiatives rose by 10% in the last year, and is expected to increase by nearly a third next year. British Gas believes customers deserve an honest conversation about these costs and how they will impact their bills.