‘Prime Minister, if prices don’t fall, this energy summit will be a failure’

'Prime Minister, if prices don't fall, this summit will be a failure'

'Prime Minister, if prices don't fall, this summit will be a failure'

There was an elephant in the room at yesterday’s energy summit. So when I got my chance to look in the whites of David Cameron’s eyes I mentioned it: "Prime Minister, if bills don’t come down this winter, the public will see this summit as a failure."

He nodded like a man who knows he’ll bear the brunt if some choose between heating and eating this winter. After all, if I’m being swamped with Tweets on it, I suspect constituency mailbags are jammed too.

At a typical £1,300/year gas and electricity is a far more tangible problem for UK voters than the Greek crisis. Yet don’t hold your breath for price cuts, although most energy companies will freeze prices this winter, which may help a little if a long cold spell pushes demand high. Then again, after two price hikes in the last year, it’s cold comfort.

Ultimately rich energy tarts like me who play the system, pay £200-£300 less than those who are poor, scared, disenfranchised or confused. 

The easy fix is to force firms to cut all standard tariffs, but the political cojones aren’t there to push up against the big six providers and make that happen, though plans to simplify tariffs may reduce the difference in the long run.

Instead, right now Energy Minister Chris Huhne wants people to switch and save. And in lieu of prices cuts, the Government’s new Check, Switch and Insulate campaign is EXACTLY the right thing to do.

Then again I would say that, I’ve been yelling for people to do it for ten years now – so seeing the politicians pull this from the hat as the grand fromage solution at this highly publicised summit was frankly, slightly depressing.  

Plus, as I explained to the meeting, you can’t just say ‘switch’, as too many have been burned in the past due to issues like…

  • Mistiming. Too often politicians and regulators urge people to switch once a big company’s announced price hikes. This is actually the worst time to switch, as the company you switch to follows suit and hikes its prices the next week. Instead it’s best to wait until all the big firms have hiked prices so there’s a level playing field for comparison (like now – it’s currently  the PERFECT TIME to switch).
  • You gain not save. When prices are rising 25%, if you save 20%, you still need to shell out more than before, even though it’s £100s less than you would’ve done otherwise. Unless this is explained, when people switch and find they’re paying more, they think they’ve been diddled.
  • Catch up kills cash-flow. If you owe anything to your existing provider when you switch, you still need to pay it. While this doesn’t increase costs, it can be a cash flow nightmare

 See more issues in my Why people don’t switch blog.

Any campaign must tackle real world problems like these, as well as follow through on plans to speed up transfers and block price rises after switching for six months.

Even so, right now the big call has to be COMPARE NOW to see if you can gain £100s, (see how at www.moneysavingexpert.com/gaselec ) and why not speak to elderly relatives who are less likely to switch and help them too. Plus many are also eligible for free insulation.

Finally, spare a moment for the big energy company boss who made an emotional appeal that we must all work together to help energy companies be trusted again. I may’ve upset him when I said I’d tell consumers NOT TO trust their energy company. After all, with some customers paying £100s more than others for the same thing and Which? showing call centres are giving out incorrect tariffs, surely before we trust them, they need to become trustworthy.

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