Citizens Advice response to BEIS opt-in and testing opt-out switching consultation
We think opt-in switching offers a solution which has a strong evidence base and can - when carefully designed - reach segments of consumers who would otherwise continue to remain on default arrangements. This particularly includes digitally excluded consumers who can’t switch easily online, and those in the private rented sector who can face more limited switching windows when first moving into a property. This would represent a relatively incremental change to current market arrangements, albeit an important one to reduce barriers for certain consumers.
Opt-out collective switching is a far more challenging proposition, with fundamental questions over consent and consumer choice. The benefits for participants overall could be significant, however as the consultation acknowledges, substantial practical issues would need to be addressed and the concept thoroughly tested before it could be considered as a viable mass-market option for implementation.
The recent, unprecedented rise in wholesale prices, subsequent withdrawal of attractive acquisition tariffs, and failure of many suppliers should rightly lead to a period of reflection on the wider retail energy strategy. These events pose a challenge to the proposed switching based policy solutions in particular. However, as conditions change and acquisition deals return to the market, the detrimental outcomes experienced by loyal customers are also likely to re-emerge.
The impact of the policy proposals on net zero-focused propositions will also need to be carefully considered. In the longer term, suppliers are often keen to stress that they want to offer energy deals which bundle low-carbon technology or services, and which by their nature will require a longer-term commitment.