Confusion or lethargy?
Energy Secretary Chris Huhne was quoted in The Times last week observing that many consumers spend less time shopping around for their energy supply than they would for a £25 toaster, and urging them not to “just sit back and … succumb to the myth that all energy tariffs are the same”.
For this Mr Huhne was assailed by an outraged popular press and a plethora of industry commentators. Customers are faced by a “a thicket of tariffs that are way too complex to understand, or they will see six shades of grey” said Consumer Focus. MoneySavingExpert Martin Lewis said that the energy industry needs to make it easier for people to switch, “rather than keeping customers in the dark”. Labour called the comments “outrageous”. By the time Mr Huhne made his speech this week to Liberal Democrat party conference he was back to calling for changes to the billing policies of the major energy suppliers, and denying the accuracy of what The Times had reported in the first place.
However, the evidence suggests that Mr Huhne might in fact have been onto something. Ofgem’s latest ‘Customer engagement with the energy market’ survey finds that a full 85% of consumers who have switched found the process ‘very easy’ or ‘fairly easy’. Just 4% found it difficult. Contrary to being perplexed by tariffs, 76% are confident that they understand the key features of their new deal. And more than three-quarters of those who haven’t switched say it is because they are happy with their current supplier.
But energy policy is becoming political again and Mr Huhne clearly didn’t feel comfortable taking the side of the energy companies. Not least as, after his risky strategy of attacking News International over hacking paid off, Labour Leader Ed Miliband is scenting political success in positioning the Party as the scourge of ‘powerful vested interests’ as he calls them. Needing a new target to make this work, the former Energy Secretary has turned his guns on the energy companies, saying the market needs a shake up – ignoring the fact that he had the power to do so (and didn’t) just 18 months ago.
So it will be interesting to see the what Government will do over time to improve perceptions of switching, and of the market, and how it will address the reality that many people apparently don’t even try to switch in the first place. Ironically, one of the reasons for that might be that consumers are constantly being told by the media and by consumer rights advocates that the whole process is incredibly difficult and pointless – a very mixed message that is not, it would seem, even supported by the facts.