British Gas takes the lead with planned utilities cuts

Struggling households across the country have been given a welcome Christmas present with the surest sign yet that the UK's biggest utilities firms are set to make reducing gas and electricity bills one of their major new year resolutions.

Following on from the recent calls from consumer groups for the 'Big Six' to use the falling wholesale price of oil to reduce their tariffs, the energy industry regulator Ofgem has told the firms that they need to pass on such savings by their customers by February 2009 at the latest.

And already, lower rates are available for those consumers willing to make use of the time they get off over the holiday season to shop around and switch energy suppliers.

Notably, British Gas has led the way, pledging to introduce a new tariff offering consumers ten per cent off its standard rates for the next 15 months, with customers even guaranteed that their bills will remain competitively priced in spite of what may happen in the unpredictable energy industry.

As before, the best rates will be available to those consumers able to sign up and pay online.

British Gas's WebSaver 1 deal means that heating a typical home on a medium-usage dual fuel tank will cost around £1,057 a year, around £240 lower than the average UK energy tariff at present.

What's more, should the wholesale price of gas fall in the spring of 2009, as many market analysts predict it will, the WebSaver tariff will also fall, though the firm has also confirmed that those consumers switching energy suppliers before the end of March 2010 will be liable to pay a cancellation fee of up to £60.

However, despite news of these forthcoming price falls, Ofgem is still adamant that more can still be done to help the consumers, particularly those fighting against the threat of fuel poverty.

In particular, the regulator is keen to see the practice of charging customers who use pre-payment meters more than those paying for their gas or electricity by direct debit or online more, with consumer groups arguing that this all too often penalises those without access to the internet - chiefly the elderly and households with the lowest income levels.

More critical still of the country's biggest energy firms, a number of MPs are also calling for them to be taxed on their profits, with the money then used to help those currently in fuel poverty as well as those likely to fall into the trap.

Fabian Hamilton, Labour MP for Leeds North East, argued: "When they put the prices up, they said wholesale gas prices mirror the price of crude oil. So okay, now the oil price has come down? where are the reductions for gas and electricity prices?

"We all represent a lot of people who are vulnerable and fuel poor families. Six million families in fuel poverty - it's a complete disgrace."

As Mr Hamilton suggests, while he recent news certainly represents a step in the right direction, times are still tough for millions of consumers and, as such, shopping around to find the best rate and then switching energy supplier has never been more important.