Posted by: Alison Thain17/04/2012
Our deputy prime minister, Nick Clegg, has, I believe, made an important step forward in an area of huge importance to millions of homes, announcing a deal with the big six domestic energy providers. However, why only one step, when two or three might have helped millions more, including some of those most in need of support?
Having tried to engage with energy firms in the past, through Fabrick’s Fair Fuel Summit in 2008, but having found progress exceptionally hard to come by, I can see where one step forward is better than none at all in this important area.
So, what additional steps would we like to see? I believe there is a wish list to choose from and any or all would be an improvement upon the current state of play, where around 70 per cent of homes are reportedly on the wrong tariff and paying up to £100 per annum too much.
Mr Clegg’s agreement has seen the providers agree to inform customers on an annual basis of the best deal open to them. How hard, when we are talking of six companies, could it be for the government or regulator Ofgem to highlight the best deal on the market? It would certainly increase competition and encourage better tariffs if there was an open competition to have the UK’s best deal.
Admittedly, with fuel tariffs, one size generally does not fit all. An agreement to simplify tariffs to make it easier for consumers to understand might have had more value than the one we have been presented with.
And why shouldn’t one size fit all? It is important to note that the companies will inform the consumers of the best deal open to them, based upon their usage. Perhaps there is a reason why fuel tariffs differ from one customer to another, but I fail to see why uniformity cannot be brought to the market.
None of this, however, helps those in our communities who are on payment meters. It is often the case that these people are among the most vulnerable in our society, and most deserving of help to improve their financial situations.
It is important not to remove customer choice from the equation, but a wholehearted attempt by the coalition to tackle this issue of fuel poverty must ensure those choices are clearer and that ramping up the competition has a real effect on the cost involved for everyone.
Alison Thain is chief executive of Fabrick Housing Group
Alison Thain, chief executive of north east-based housing association Fabrick Housing Group, gives her perspective on key issues facing the housing sector.