Simon Read: Energy firms must do much more to regain our trust

“If a smaller supplier can cancel price rises because market fundamentals change, why can’t others?”

There was some positive news at last this week from the energy companies. First the mighty British Gas agreed to simplify its charging structure to just two tariffs. Surprisingly they won't be giving customers the choice of – as one wag put it – freezing or going bankrupt.

Instead the firm is cutting back its tariffs to a simple choice between variable and fixed. It also promised to provide customers with a breakdown of all the costs that make up their bills.

It's about time the firm – which remains Britain's biggest energy supplier – started to think about the way it treats customers. This summer alone it increased gas prices by 18 per cent and electricity prices by 16 per cent. That move cost its customers an average of an extra £200 a year.

It's also worth bearing in mind that more than 70 new tariffs have been launched this year by energy firms. That leaves us being confronted with a choice of 400 different tariffs. I know we should welcome choice, but not when it becomes too complex and difficult to choose.

Even using the online comparison and switching sites doesn't really help decipher which is the cheapest option, especially as you know that just around the corner is a new plan which is likely to be better value.

The new British Gas tariffs – which were launched immediately on Thursday for new customers and those already on a variable scheme – should help make it simpler to work out fuel costs. The company's move followed Scottish and Southern Energy's announcement last month that it was reducing the number of tariffs it offered by a fifth.

However, as always, there's bad news for some. Those on low rates are likely to see a price hike when they switch to a new tariff. Also, there will remain different prices according to factors such as whether you pay by direct debit or not.

At the other end of the energy suppliers' market is the relatively tiny Ovo Energy. It has just 69,000 customers compared to the millions that each of the big six firms have. But this week it scrapped plans to increase prices by 3.5 per cent in January.

The reason? Boss Stephen Fitzpatrick explains: "Since we announced the planned increase in our variable prices on 26 October, wholesale costs have fallen. In response to this change in the market we will not go ahead with the planned increase."

The timing of the announcement – just after British Gas' new tariffs were revealed – suggests a possible publicity stunt. But even if so, it's still a very positive move for customers. Wholesale prices have been falling recently, so why shouldn't suppliers look at the possibility of cutting prices? After all, they are very quick to respond to wholesale price increases.

It's a point taken up by Audrey Gallacher, director of energy at the watchdog Consumer Focus. "A smaller supplier such as Ovo may be able to react more quickly, but it obviously can't operate on the same economies of scale as its much larger rivals.

"But if it can cancel price rises because market fundamentals change, why can't others? When wholesale prices fall, you would expect companies fighting in a truly competitive market to start cutting bills."

We're clearly still some way away from a truly competitive market, but putting this week's announcements together point to a growing recognition that customers are reaching breaking point, and won't keep on accepting the seemingly endless increases in charges and terrible service we've experienced in the last couple of years.

Indeed British Gas managing director Phil Bentley admitted that the firm "had not made it easy for customers" and that there was a public loss of trust in the energy industry. We've seen some tiny moves to restore that trust this week. We will watch with hope for some more.

You're safe to drive or not, regardless of your age

It's not just politicians that are out of touch with normal folk, it seems. Otto Thorensen, director general of the Association of British Insurers, this week joined the ranks of the bonkers.

As part of the laudable Road Safety Week he called for the introduction of restrictions on young people from driving at night and in the early hours. Thorensen's heart was in the right place – he was putting forward the suggestion as a possible way to help reduce road deaths – but he really should have thought through his proposal.

Banning drivers aged 25 and younger from driving at night would be preposterous. The simple fact is you're either safe to drive or not, irrespective of age or the time of the day.

It's true that younger people make up a disproportionate number of road casualties. Every day 18 die or are seriously injured on our roads. But there are much more sensible solutions that the insurance industry could back. A crackdown on those caught drink driving makes sense. As does tougher tests for prospective drivers. But by the same token it's worth remembering that plenty of experienced drivers have bad habits too, so why not introduce regular testing for all?

What looks fascinating is the growing number of insurers turning to telematics. This is the black box that sits in your car and measures how you drive. The AA is planning to launch a telematics-linked insurance policy in January, while the Co-op has offered one since March.

Early results from the Co-op are very encouraging. Its Young Driver scheme measures such aspects as speed, braking and cornering. It then gives discounts to those who consistently display good driving habits. The firm says nine out of 10 people on the scheme so far have qualified for the discount, at an average £100 off the cost of a policy.

Giving people rewards for good driving may seem simplistic, but it's clearly effective. The bonkers brigade at the ABI would do better to encourage more take-up of telematics than restricting young drivers.

s.read@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress and 100 others on 'master list' after massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
News
people'It can last and it's terrifying'
PROMOTED VIDEO
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
The eyes have it: Kate Bush
music
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Application Support Analyst / Junior SQL Server DBA

    £40000 - £45000 per annum: Ashdown Group: An established professional services...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Business Development Manager / Media Sales Exec

    £28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...

    C# .NET Developer (PHP, Ruby, Open Source, Blogs)

    £40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...

    Day In a Page

    Alexander Fury: The designer names to look for at fashion week this season

    The big names to look for this fashion week

    This week, designers begin to show their spring 2015 collections in New York
    Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

    'I like Orwell's writing as much as the next talented mediocrity'

    Will Self takes aim at Orwell's rules for writing plain English
    Meet Afghanistan's middle-class paint-ballers

    Meet Afghanistan's middle-class paint-ballers

    Toy guns proving a popular diversion in a country flooded with the real thing
    Al Pacino wows Venice

    Al Pacino wows Venice

    Ham among the brilliance as actor premieres two films at festival
    Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

    Neil Lawson Baker interview

    ‘I’ve gained so much from art. It’s only right to give something back’.
    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
    Fashion walks away from the celebrity runway show

    Fashion walks away from the celebrity runway show

    As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
    Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

    Meet the stars of TV's Wolf Hall...

    ... and it's not the cast of the Tudor trilogy
    Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

    Europe's biggest steampunk convention

    Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
    Don't swallow the tripe – a user's guide to weasel words

    Don't swallow the tripe – a user's guide to weasel words

    Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
    Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

    Daddy, who was Richard Attenborough?

    The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor