As energy prices rise, switching rates plummet
Are people giving up on the energy market?
25 October 2013
An inquisitive member of CSE’s Research team, Dr Toby Bridgeman, spent his lunch hour today comparing data from the Government on numbers of people switching electricity or gas supplier with official fuel price data covering the last 10 years. The result is two stark graphs which reveal much about declining public confidence in the energy market.
On each graph – one for electricity and one for gas – the blue line (left-hand axis) shows the numbers of people switching supplier in each quarter since 2003, while the red line (right-hand axis) shows the electricity/gas price index up to May 2013 (so not including the latest price increases).
Toby explained his findings: “In theory, the more the prices go up, the more you’d expect people to switch to find a cheaper deal. But this analysis of the official data shows that, even if that happened once (between 2005 – 2008), it certainly isn’t happening any more.”
CSE’s Chief Executive, Simon Roberts, said, “These graphs reveal just how much public trust in the energy market has eroded over recent years. The issue isn’t so-called green taxes or the costs of policies to insulate our homes. It’s about the public giving up on a market because they no longer believe it will offer them a fair deal from companies acting in their customers’ interests.”
Data from Department of Energy and Climate Change
Quarterly domestic energy switching statistics (QEP 2.7.1)
Retail prices index: fuels components monthly figures (QEP 2.1.3)