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Consumers should vote with their feet, says Energy Advice Line

More consumers should vote with their feet and leave energy suppliers that fail to offer the best deals, according to the Energy Advice Line who compare business energy prices.

Managing director of the price comparison, switching and advice service said consumers could help drive competition in the energy market by withdrawing their business from companies with the most expensive prices.

Mr Morgan’s comments follow the announcement by energy group Centrica that more than 300,000 British Gas residential customers had switched to other suppliers after it increased tariffs by 9.2% on average from November. It said a further 100,000 had quit the group this year, but that customer switching was “stabilising” after it had scaled back its price rise by 3.2%.

Mr Morgan saidthe decision by British Gas (Centrica’s residential arm) to backtrack on its planned price rise had not been directly caused by consumers switching. However, the volume of customers who had moved to competitors had been a wake-up call for the supplier.

If your energy supplier introduces tariffs that you don’t agree with then you are free to switch

“The number of consumers who left British Gas in disgust at its price rises was significant,” Mr Morgan said. “Customers told the company loud and clear that they would not tolerate unjustifiable price rises and they left in droves. This has helped contribute to the 6% fall in British Gas profits. Consumers might feel that that the Big Six suppliers are too large and powerful for them to be able to effect change. But these results show that consumers can have a real impact on the bottom line of even the largest companies. More consumers need to vote with their feet.”

Although British Gas profits fell by 6% in 2013, with 2% of its residential customers switching to competitors, the energy giant still recorded profits of £571 million. Across the Centrica group, operating profits were 2% lower at £2.7 billion in 2013. The group’s shares have plunged by more than a fifth since autumn following Labour’s pledge to freeze energy prices if it wins the election in 2015. Shares were driven down further after Energy Secretary Ed Davey called for a full-scale investigation into the energy market that could see British Gas broken up.

“Consumers have the power to change the energy market for the better, but they have to participate in the market for that to happen,” Mr Morgan said. “This means taking control of their energy bills by staying up-to-date with energy prices and regularly shopping around to find the best deals and switching when appropriate. This is the only power consumers have to use their muscle, and they should be using it in greater numbers. The vast majority of consumers still don’t regularly switch suppliers.”

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