British Gas finally cuts prices for families

British Gas has responded to wholesale gas price cuts by cutting prices by five per cent – but consumer groups have warned that customers could still get better value for money by switching their deal.

Prices will fall for those who use British Gas. Picture: John Devlin

The average customer of the firm, which trades as Scottish Gas north of the Border, will see their bill fall by £35 to £1,123, but dual-fuel standard-tariff customers will see their annual bill cut by less than three per cent, energy experts said. It is expected that the reduction could spark a price war with other suppliers, resulting in lower prices across the board for utility customers.

Wholesale prices have plummeted in recent months, but consumer groups have criticised the Big Six energy companies – which include British Gas, SSE and ScottishPower – for failing to follow suit.

British Gas, which has around 800,000 customers north of the Border, said it had announced the cost reduction ahead of the winter months, when householders use more fuel. One in four households in Scotland is in fuel poverty, which means they are struggling to afford to adequately heat their home.

Margaret Lynch, chief executive of Citizens Advice Scotland, said: “We welcome the price cut from British Gas today and hope that other suppliers follow their lead. Fuel poverty blights the lives of nearly 40 per cent of Scottish households who struggle to heat their homes due to high costs, low incomes and poor insulation. Reducing costs, particularly for people with pre-payment meters and for vulnerable people, is a vital step in tackling fuel poverty.”

Ann Robinson, director of consumer policy at uSwitch.com said: “This is a bold move by British Gas which could spark a major price war between suppliers.

“Wholesale energy costs, which make up around half of bills, are at their lowest levels in five years and so reductions can and should be in double-digits.”

A report out last week from the Competition and Markets Authority (CMA) found that around 70 per cent of the nation’s energy customers are sitting on the most expensive standard tariffs with many of them never switching to a cheaper deal.

The difference between the cheapest deal on the market and the highest price on offer from the Big Six energy firms is around £350.

The cut, which comes into effect on 27 August, is the second price reduction from British Gas this year, bringing bills down by an annual average of £72.

Which? executive director, Richard Lloyd said​: “The CMA was clear in its recent investigation that energy customers have been overpaying for far too long so it’s right, if overdue, that British Gas is starting to cut its prices. Other suppliers must also now do more to give their customers a fair deal.”

Mark Hodges, managing director of British Gas, said: “We are committed to offering competitively priced products.”