Norman Kerr: ‘Urging consumers to switch and save is not what we need to hear’

AT LONG last, in the eyes of many consumers, the Westminster government seems to have listened to the outcry from the public and charities working on their behalf and taken the first steps in calling energy suppliers to account.

The question is, what has this summit achieved and will it bring any relief to consumers this winter?

For many consumers, the prospect of another bad winter is a frightening thought. Energy prices have increased some 117 per cent over the last seven years – more than any other basic commodity that we need for everyday life and wellbeing.

When the liberalisation of the gas and electricity markets came along, we were promised that the ability to change supplier without fuss, chasing better deals, would place us, the consumer, firmly in the driving seat.

That might have been the case for a while, but it all changed around 2003 when prices started to creep upwards and now we have seemingly reached crisis point.

The public outcry over rising profits announced by all our major suppliers at very inopportune moments, just before winter, just after bills go up, again, has prompted a raft of probes by the regulator, Ofgem and now yesterday’s energy summit called by Number 10.

The outcome is predictable, even with the Prime Minister calling for a “trusted, simple and transparent” market.

Urging consumers to switch and save is not what we need to hear when recent research found that four out of ten people who switched got a poorer deal, mainly because they did not understand the complicated tariff structure.

The offer of free insulation to vulnerable consumers by the companies is welcome, but let’s be honest, it’s not free, it is paid for by you, me and every other consumer by means of a levy on our bills which the companies collect and spend.

In other words, they spend our money, not theirs.

A promise of not raising bills again this winter gives some comfort, but then with increased profits suppliers can make this promise without it hitting their bottom line.

What do consumers need to have faith in the market?

What do they need to ensure that they get the right deal that gives them the energy they need to stay warm and dry at home?

After all, a warm, dry home is a basic human right, is it not?

Consumers and consumer groups need to continue the pressure on Ofgem and the government.

Fewer and less complicated tariffs, more transparent dealings, clearer bills and, if companies really want consumer trust, then they should carry out a review of every customer’s account every year, pro-actively offering advice on which tariff and payment method is right for them.

Until that time, consumers will continue to view all suppliers with suspicion and mistrust.

• Norman Kerr is director of Energy Action Scotland