From 1998 there will be gas choice up and down the country, and competition will be introduced into the domestic electricity supply market. In the future, we may even be able to shop around for water in the same way.
In theory, all this competition is great news for consumers - save money and at the same time take your revenge for all those fat-cat pay rises, service deficiencies and other horror stories. Only last week the Consumers' Association condemned the utilities for being too quick to cut off customers and, in some cases, for using heavy-handed debt collection tactics. Last year the electricity companies forced entry into nearly 25,000 homes to cut off supplies or install "prepayment" meters, it said.
Given the genuine cost savings to be made, heavy promotion by the newcomers (even including doorstep selling) and the fact that most utilities are not exactly top of the pops, a high take-up of these new services might be expected. But this has not been the case to date.
For example, in gas competition trials running in the West Country since early last year, and despite savings of pounds 80 a year on offer to people who switched, only 15 per cent of households have done so.
So what's the problem? Clearly many people are simply still not aware of the money-saving possibilities, while others don't believe or trust the newcomers. Add in a large dollop of apathy, too.
Proper communication of the changes to these markets is surely the key. The newcomers obviously have a vested interest in spreading their part of the message. But this should also be a matter for watchdogs and consumer bodies, not least because of criticism of the sales methods adopted by the newcomers and the confusing array of deals on offer.
Ofgas, the gas regulator, has produced a leaflet, but during last year's trial the leaflet wasn't ready until months after the new gas companies had started signing up consumers, according to Which? The Ofgas information was also criticised as being too general, and even now a detailed booklet is only available to those who ring the regulator. The Gas Consumers Council is still working on a leaflet with the pipeline arm of British Gas, TransCo. The Telecom Users Association (TUA) produces a weighty tome that compares BT's various competitors, but this costs a chunky pounds 60 (pounds 30 to members) and the TUA is not aware of any other similar source of information, or even a basic leaflet explaining why these services exist.
Consumers have to accept that to benefit from competition they need to shop around. With the new gas suppliers, for example, switchers should note that prices are not controlled in the same way as those of British Gas. The cheapest supplier today may not be tomorrow. So beware of being locked in.
But for a government keen to emphasise its achievements, giving more information on utility competition would also seem a good way to underline the often-doubted consumer benefits of privatisation.Reuse content