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82 per cent of consumers back government intervention in energy retail following price hike
Consumers have expressed outrage at the sharp rise announced this week to the cost of the British Gas standard variable tariff (SVT)
In a snap survey, Utility Week asked around 1,000 UK adults if they thought the government should act to stop energy companies from executing such hikes. 82 per cent of respondents said they would back intervention.
Around half of respondents to the survey, which Utility Week conducted in partnership with consumer research company Harris Interactive, said they are currently British Gas customers.
Of these, 51 per cent said they will be affected because they use the SVT tariff. Another 17 per cent were unsure if they will be affected.
Across all British Gas customers responding to the survey, 52.4 per cent said the price rise means they are now unlikely to stay with the supplier.
Asked how the price rise made them feel, consumers expressed outrage, disappointment and worry about how the increased cost of energy will impact their financial situation.
Of those respondents who are not currently British Gas customers, 85 per cent said they are now unlikely to consider British Gas as a supplier.
They also expressed concern however, that their own suppliers will follow suit with further price rises of their own. Two thirds (67 per cent) said they are worried about this.
Responding to the survey findings, Mark Brenton, Harris Interactive’s energy industry expert, said: “The results from this survey clearly demonstrate the potential damage that British Gas’s recent announcement could have on its future prospects in terms of customer numbers and suggests that its market share will fall even further.
“With 28 per cent of customers saying they are very unlikely to remain a customer and 65 per cent of non-customers saying they are very unlikely to consider British Gas if they switch supplier in the future it doesn’t bode well.”
Brenton pointed out, however, that consumer responses to the survey display some misconceptions about the competitiveness of the British Gas offering compared to other large energy companies – many believed that British Gas is among the most expensive of the larger suppliers. But Ofgem’s retail market indicators show that, until this week’s price announcement, British Gas has offered the cheapest SVT deal among the big six energy companies. When the price rise comes into effect in September, it will still be cheaper than the current SVT tariffs of Npower, Scottish Power and Eon.
Brenton also said that, while the high profile nature of the price rise meant there was strong consumer awareness of the move (78 per cent of British Gas customers and 84 per cent of non-customers were aware), relatively few respondents seemed to appreciate the protections the company had offered to vulnerable customers.
“What has been lost in this announcement is that British Gas is not passing these increases on to its most vulnerable customers,” he said. He advised that the firm should focus on communicating this message, as well as its relative cost proposition compared to other big six companies, and that it should promote the benefits of fixed deal contracts to all SVT customers.
On the marked consumer support for market intervention, Brenton said: “In light of an energy price cap not being included in the Queens Speech and much recent debate on this, the research makes it clear where consumers stand on the matter.”
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