Energy boss: 'get everyone on a fixed deal' by scrapping standard tariffs

(c) Sky News 2017: <a href="">Energy boss: 'get everyone on a fixed deal' by scrapping standard tariffs</a>

The boss of a 'big six' energy firm has joined industry criticism of Tory plans for bill caps, suggesting controversial standard tariffs be abolished instead.

Keith Anderson, chief executive of ScottishPower, used the release of the supplier's first quarter results to warn that such Government intervention would harm progress made in the industry to boost competition.

While he is not alone in that view in the sector, his potential alternative is a sign that the industry is feeling the heat from political and regulatory pressure over recent hikes in standard variable tariffs (SVTs).

The charges - which critics say are slow to reflect falling industry costs but quick to respond to rises - are currently paid by the vast majority of household customers UK-wide, despite some progress in efforts to get more switching to cheaper deals.

Industry figures suggest that ScottishPower has the fewest number of customers on standard variable tariffs, in percentage terms, among the 'big six'.

Mr Anderson said: "A potential price cap could harm competition, so the bold move by Government would be to set a deadline to abolish SVTs and get every customer on a fixed-price deal instead."

He added: "The Government could impose a target that two out of three customers should be on a deal by the end of 2018, and all customers on a deal by the end of 2019 with SVT abolished once and for all.

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"Any company that fails to meet these targets should have a price cap not only imposed but retained until all their customers are on deals."

He has joined the chief executive of British Gas parent, Iain Conn, in opposing the prospect of SVT caps - a development which hit the share prices of Centrica (Frankfurt: A0DK6K - news) and rival SSE (LSE: SSE.L - news) on Monday.

ScottishPower blamed warm winter weather and higher costs for first quarter profits falling by £81m at its retail supply arm.

It said its focus on attracting customers to fixed rate deals had helped arrest a slide in customer numbers, with 5.5 million now on its books compared to 5.4 million in the same period last year.