Energy customers switch suppliers
April 2, 2008
More than five million domestic energy customers looking for cheaper deals switched suppliers in 2007, according to regulator Ofgem.
The figure was the highest for five years and came ahead of the latest raft of gas and electricity price rises.
The "vigorous competition" in the industry has resulted in Scottish and Southern Energy becoming the second biggest energy supplier in Britain.
The National Audit Office says the market, opened in 1999, is worth £17bn.
'Switch and save'
Ofgem claims that 5.1 million households switched supplier in 2007, compared with 4.8 million during the previous year and 4.3 million in 2005.
"The number of customers switching ... shows that suppliers who don't offer competitive prices and good service will lose customers," said Ofgem chief executive Alistair Buchanan.
The regulator said that there was competition over tariffs, including fixed-rate deals, online account deals and green electricity tariffs.
It claimed that, on average, anyone yet to switch and who paid by cheque, cash or plastic could save £92 on their annual bill.
Market probe
Scottish and Southern Energy, which raised its prices on 1 April, has overtaken E.On to become the second biggest energy supplier in Britain after British Gas.
The regulator claimed this was evidence of competition, but it has already launched an investigation to examine whether the market is working effectively for consumers.
All of the big six energy suppliers have raised gas and electricity prices for domestic customers in 2008, often by double-digit percentages, pushing the average annual household bill above £1,000.
Consumer group Energywatch said that the good news on switching should not mask the issue of rising bills.
"For millions more consumers switching to a cheaper tariff is either fraught with difficulty or just plain impossible," added Adam Scorer, Energywatch director of campaigns.
"No-one can seriously think that switching, by itself, provides the answer for Britain's besieged energy consumers."
Audit report
He added that many of the best deals were online and so were unavailable for low-income groups without computers at home.
The National Audit Office also claimed in a report last week that complex tariffs made it tough for some vulnerable consumers to switch suppliers of household services.
It raised concerns over the lack of "easily accessible, trustworthy, relevant, understandable and comparable information" for consumers.
A pilot scheme has been launched by Ofgem in various parts of the country with Citizens Advice to encourage customers in low-income groups to switch.
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