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Be careful what you wish for

Posted on 4 April 2012

For months now, there has been very loud criticism of the big energy suppliers. Government ministers, Opposition politicians, campaigning groups, consumer websites and newspapers have all been trying to out-do each other in bashing the “Big 6”, whether it’s over their seemingly random price changes, confusing tariffs, unclear bills, indecent profits or dodgy sales practices.

We confess to having indulged in some Big 6 bashing ourselves. It’s become a national pastime, like banker bashing.

And people are genuinely anxious and angry. Energy bills were as high this winter as they’ve ever been.

But all this negative coverage may be having an unintended effect. Far from causing people to act to get the best energy deal, it seems that people are being turned off by it. According to statistics just released by DECC, the number of people switching in the fourth quarter of 2011 was at an all time low. The number of electricity switches per month was 305,000 in the fourth quarter, down from a high of 498,000 in the third quarter of 2008. The number of gas switches was 235,000, down from a high of 379,000.

How can we explain this? Maybe people think that all the energy suppliers are as bad as each other; there is no point in switching because whatever price advantage might be offered at the time of the switch will soon be eroded. Or maybe people have had a bad experience of switching; maybe they were arm-twisted into switching by an aggressive sales person and ended up on a higher priced tariff? Or maybe negative news coverage just turns people off?

This shrinking pool of switchers is prompting some price comparison sites to try a new approach: collective switching, of which the biggest example so far is The Big Switch, organised by the consumer body Which? and the campaigning group 38 Degrees. Collective switching raises lots of other questions which we’ll discuss another time.

For now, we’ll continue to spread the word about collective buying, which is at the heart of the consumer-owned co-operative and has been since 1844. In a co-op, people club together to achieve wholesale economies of scale and share in the profits that result.

As we say in one of our slogans: “Switch to Co-operative Energy and you’ll never need to switch again.” Then switching volumes really would go down, and for good reasons this time.

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