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Energy prices are set to go up, so why is the number of people switching electricity supplier at a record low?

posted on 01/10/2013 08:57:57 by Jonathan Elliott

Figures released by DECC have revealed that the number of households switching their electricity supplier fell to a record low in Q2 - despite expectations that prices will go up.

Switching on: Energy prices and supplier profits keep rising - so why aren't more people reacting?

Energy prices have been grabbing headlines in the past week, mainly because of Ed Miliband's pledge to freeze gas and electricity prices for a 20-month period if Labour wins the next election.

The announcement has been met with strong criticism from some quarters, including mine, as there is a real danger that all Mr Miliband has achieved in the short-term is to cause a reaction from suppliers that will almost inevitably lead to higher bills for consumers.

So, at a time when everyone should be doing whatever they can to get themselves a cheaper energy deal, I find it disturbing that the number of people switching their electricity supplier is at a record low.

Numbed into submission

New figures released by the Department for Energy and Climate Change have revealed the amount of households that changed electricity provider fell by 17% in Q2. Equally eyebrow-raising is that the statistics showed the number of people switching gas supplier fell by 14% in the same period. Where is this unwillingness to take hold of our bills coming from?

I think the only possible explanation for our collective inertia is that we've been numbed into submission when it comes to our energy bills. This is a belief we have to shake off if we're going to demonstrate our frustration at energy suppliers

Figures that detail how many households are changing their energy providers have been falling ever since 2008. When you consider that gas bills have risen by an average of 41% in real terms since 2007 - and that the cost of electricity has jumped by 20% - it's hard to fathom why people are increasingly unlikely to switch supplier when prices have continued to soar.

I think the only possible explanation for our collective inertia is that we've been numbed into submission when it comes to our energy bills. Year after year, energy companies increase their prices and announce record profits - and it's come to the point where we've almost become psychologically immune to their conduct, losing any desire to engage with their products.


This is a dangerous frame of mind to be in, and it's a belief we have to shake off if we're really going to demonstrate our frustration at the charges the major suppliers are continuing to impose. If current trends persist and the number of people switching providers carries on declining, the pressure on the Big Six to do anything about expensive bills becomes weaker and weaker.

It's because of this that we need to ensure we're taking a proactive approach to the issue. Changing suppliers isn't a difficult process - whether for a home or a business - and given the savings available, it's essential we cash-in rather than let the energy companies take advantage. They need to understand our dissatisfaction.

By bringing increasing pressure to bear on the biggest providers, there's every possibility that they'll be more reactive in an attempt to win back the faith of consumers. This is something that happened in the banking sector recently, with the industry agreeing changes that have made it easier for customers to switch current accounts.

Metro Bank chief executive Craig Donaldson explained that the idea is to improve people's perception of banks, and that making moves directly intended to help the public get better value for money will also serve to widen the choices available.

Yet awareness is just as important, too. As I mentioned above, with so many of us effectively accepting energy price rises as par for the course, the real challenge lies in reawakening the population to the benefits of switching. It strikes me that Ed Miliband had the perfect opportunity to do so in his conference speech, but instead opted to make a promise I'm convinced he'll find difficult to keep.

Image credit: lamdogjunkie

Jonathan Elliott

Jonathan Elliott is Make It Cheaper's CEO and founder. He recognises that small businesses are the lifeblood of the British economy, and is passionate about making it easy for them to save time and money, boost their profits and improve prospects for growth. As a vocal campaigner for fair treatment of SMEs by utility companies, Jonathan collected ‘SME Consumer Champion’ & ‘Most Trusted’ at the 2013 Energy Live Consultancy Awards.

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