British Gas owner Centrica has said it will scrap standard gas and electricity tariffs (STV) for new customers ahead of Government plans to impose a price cap on the costly energy products.

The Big Six energy supplier has also vowed to introduce simpler bills and a new fixed-term default tariff for customers who do not shop around for the best deal once their tariff finishes.

The energy giant called on the Government and energy watchdog Ofgem to engage with it over the reforms to help create a fairer market without enforcing price controls.

It urged Ofgem to follow its lead and remove STVs from the energy market to encourage more customers to switch tariffs.

While group chief executive Iain Conn recognised the need for the market to improve, he said price caps on products would set the industry back.

He said: “We believe more action is needed and are ready to play a leading role.

“Today we have set out the unilateral actions we will take to improve the UK energy market for our customers.

“This starts with the withdrawal of the standard variable tariff which contributes to lower levels of customer engagement.

“We also believe that further measures by Ofgem and the Government are required so that together we can create a market that works for everyone, where there is improved transparency and a fairer allocation of costs currently included in the energy bill.

“We have long advocated that the end of the standard variable tariff is the best way to encourage customers to shop around for the best energy deal.

“But we also need a fairer way to pay for the changing energy system by removing Government policy costs from energy bills.

“This will be fairer for everyone and especially those who struggle most with their bills.”

Britain’s Big Six are bracing for a raft of regulatory changes after the Government announced that a price cap will be imposed on poor-value energy tariffs.

Around 4.5 million of Centrica’s 8.3 million customers – or about 60% – are currently on STVs, with 70% of profits coming from the company’s STV customer base.

Among the reforms set out by Centrica, the firm will provide customers with a range of fixed-term competitive tariffs instead of the STV.

It added that it would offer customers a range of different three-year fixed-term tariffs once their contract ends and would target customers on STVs with better deals.

The move comes amid a shake-up in the energy market, as the Big Six providers look set to become the Big Five after SSE and NPower reached an agreement to merge their operations to create a new energy supplier in the UK.

Mr Conn insisted the move was not prompted by the Government’s threat to cap energy prices.

“We have actually been working on these proposals for many months now,” he told BBC Radio 4’s Today programme.

“We have been saying for the last 18 months that we think the best solution for this market is to end evergreen contracts, contracts that don’t have an end date.

“We obviously had to pause when Theresa May announced her intention to cap the market but we have now announced today a comprehensive set of actions to reform the market, starting in our case with the removal of the standard variable tariff.”

He said the Government should prohibit open-ended contracts and remove the cost of green energy costs from household bills.

Shares in Centrica were flat in morning trading on the London Stock Exchange.