British Gas makes major energy announcement impacting thousands of UK households

British Gas is to take on the customers of failed Tomato Energy, the regulator has announced. Tomato Energy collapsed last week, leaving the industry watchdog to step in to protect supply for the provider's 15,300 households and 8,400 business customers.

Ofgem said energy supplies for existing Tomato Energy customers would continue as normal after they were switched over to British Gas on Sunday. Any funds in the accounts of current and former domestic customers of the supplier would be protected, where they are in credit.

Domestic customers would also be protected by the energy price cap with their new supplier. Tomato Energy customers will be contacted over the coming days about the changes, the regulator said. Those who wished to switch supplier could shop around but were advised to wait until the transfer had been completed.

Customers will not be charged exit fees if they decide to switch to another supplier. It is understood that the company, which employs around 100 people, will formally appoint administrators in the coming days.

Rohan Churm, director for financial resilience and controls, said: "Minimising the disruption to customers is our top priority when a supplier exits the market, so I am pleased to confirm British Gas has been appointed to take on customers of Tomato Energy, and will work to move their accounts in the coming days and weeks.

"While I know customers may be concerned, they do not need to worry - any domestic credit balances are protected and there will be no interruption to their supply during this period.

"Tomato Energy customers will be placed onto a competitive tariff, and when the switch is complete, they can consider what's right for them and can shop around for other deals. They will also face no exit fees if they choose to switch to another supplier."

Tomato Energy was banned from taking on new customers in April after building up debts of £3 million.

It was then hit with a proposed £1.5 million fine from Ofgem last month for failing to meet financial resilience rules, and the firm filed a notice of intent to appoint administrators at the end of October.

Chris O'Shea, group chief executive of British Gas parent company Centrica, said: "Tomato's demise marks the 31st supplier to collapse since 2021.

"Ofgem's inaction on financial resilience has left customers exposed for too long, and every household in the UK has faced a £100 bill as a result of these failures.

"Urgent reform is needed. Ofgem must ensure all suppliers are robust, comply with capital adequacy rules, and ring-fence customer funds to prevent this cycle from repeating.

"Recent reports suggest Ofgem has relaxed the rules for large suppliers in financial distress, even as Tomato was allowed to fail. We need greater transparency to understand what is happening, enabling customers to decide whether suppliers deserve their trust.

"We are proud to step up for Tomato Energy's customers - their energy supply is secure, their credit balances will be protected, and we will make their transition to British Gas seamless."

The latest collapse comes after Rebel Energy went bust in April, with the supplier of last resort safety net being used to protect its 80,000 household and 10,000 business customers.