Collective switching can give consumers “more muscle”

The idea of ‘collective purchasing’, where a group of consumers sign up with a third party to get better deals from energy suppliers, was given significant support from Government today. […]

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By Tom Gibson

The idea of ‘collective purchasing’, where a group of consumers sign up with a third party to get better deals from energy suppliers, was given significant support from Government today.

Businesses, consumer groups, local government groups, housing organisations, charities and energy regulator Ofgem attended a round table meeting chaired by Energy Secretary Ed Davey to discuss how to help consumers club together to cut their gas and electricity bills.

Richard Bates, Director of Empowered Consumers at Consumer Focus said: “Many consumers are put off by the prospect of having to switch energy by themselves. Collective switching – where an intermediary can do the hard work on their behalf – offers an alternative, straightforward way of switching. Because the intermediary can aggregate together consumer demand, it can give customers much more muscle in markets than they have when switching alone.”

290,000 people recently signed up to Big Switch scheme from Which?, suggesting consumers have considerable appetite for the idea.

Energy Secretary Ed Davey said it could also put pressure on the Big Six to improve services: “This can be a really useful tool for consumers by making it easier to move to a better deal and to get real savings on gas and electricity bills, as well as helping boost competition.