British Gas boss calls for 'social tariff' and end to energy bill postcode lottery

The bosses of Centrica and E.On have called for sweeping reforms to how UK energy bills are calculated, following years of price shocks that have left millions of UK households struggling to make ends meet.

Chief executive of British Gas owner Centrica, Chris O'Shea, called for a progressive social tariff - which would have both industry and Government subsidising reducing bills for the poorest households. Sitting alongside E.On boss Chris Norbury, he called for an end to the much-derided standing charges, which slap additional costs onto every household's daily bill.

These charges are applied regardless of how much energy a customer uses, covering the other costs of supplying energy to homes, such as administration and billing, but penalising those who have cut their energy usage. O'Shea said: "What's in consumers' interests is something that is understandable and very straightforward..."

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He told the Energy and Net Zero Committee on Wednesday: "The easiest thing is abolishing standing charges and have no zonal pricing. And then have a progressive social tariff. Why do people have to play a postcode lottery?"

He also revealed that only 56 per cent of Centrica customers have smart meters, more than a decade on from the technology's rollout in 2011. The Centrica boss continued: "We think that in order to have the proper smart grid required to keep costs low in the future... everybody should have a smart meter. One of the things we should consider is whether this is a voluntary programme or whether this is a mandatory programme."

Campaign groups have called for a social tariff for several years. The proposed measure is broadly