Cheaper Electricity & Gas costs covered by loyal customers

Cheaper electricity and gas offers are costing long standing loyal customers over £150 more than they should be paying every year, MPs have been told.

However cheap deals for switching to another energy company are soon lost when energy firms ramp up their prices to claw money back, the Commons Energy Select Committee were told

About eight out of ten families that stay with the same provider – do so not knowing that the extra cash they pay out is used to attract new business.

Labour MP John Robertson said: “There are 85% of customers who don’t switch. What do they get for being loyal?” He added: “The perception of you guys is that you’re all a bunch of money-grabbing so-and-sos.”

Robertson’s remarks came after Stephen Fitzpatrick, the head of new provider Ovo Energy, told MPs that Britain’s big six energy giants were abusing loyal customers who did not like switching tariffs.

Fitzpatrick said: “We’re seeing an increase in the big six selling products to new customers at a loss in order to squeeze out new competition.”

He added: “It is predatory pricing to stifle competition.

“This is the biggest problem in the electric and gas sector. You could have two houses next to each other, using the same amount of energy, with one paying hundreds of pounds a year more than the other.”

He added that the poorest and most vulnerable people were those least likely to switch energy suppliers. Many of the cheaper gas and electricity deals are given on 'internet only tariffs' customers who don't switch are the older generation may not have access to the internet so keep paying more, yet they are the ones who need it most!

Britain’s top energy chiefs yesterday rejected Mr Fitzpatrick’s claims – but there was an admission they had not always treated customers properly.

85% of customers are paying too much for their bills to cut the costs paid by 15% of new customers who switch. Customers should be spending around £150 a year less.

EDF director Martin Lawrence admitted the big six had been “too clever” trying to rake in more profits in the past. He said: “(Have we) woken up and smelt the coffee? I think you’re right.”

Only time will tell, however there is one supplier that is different in the UK...