Is The Big Switch a Big Swizz?
Oh, the good old Big Switch. Set up with absolutely no concern for the potential £millions of referral fees for Which?’s pocket, the Big Idea behind the Big Switch was that everyone could get together and secure the most money-saving energy deal possible. Now, the winner has been announced- but it's not the 280,000 people who signed up.
Co-operative Energy, which entered the energy market just one year ago, has offered market-leading tariffs that cost £1,048 per year for the average household paying by Direct Debit, and £1,144 per year if they pay by cash or cheque.
Executive director of Which!, Richard Lloyd, said: “The Big Switch has moved the energy market and secured a better deal for thousands of people, reaching people who have never switched before.”
He added, “the fact that one of the smaller suppliers, Co-operative Energy, was able to win shows that collective switching can help shake up the market for consumers and marks an important step on the road to energy market reform.”
Smaller suppliers beating the big boys? Big Switch co-partner 38 Degrees went even further saying “the Co-op offered us a better price than giants like British Gas. Maybe that's got something to do with their different business model.” Well, it could be a different business model, or it could be that British Gas, along with SSE, Ovo, Utilia and Ecotricity declined to participate in the Big Switch, over concerns of profiteering and predatory pricing that would adversely affect current customers.
Still, all 280,000 people who signed up have now got a really good deal haven’t they. Er, no.
Not only will the ‘best’ deal be limited to the first 30,000 people to sign up (just over 10% of the total), it isn’t even the best deal on the market. And the second choice deal for the other 90%? You could have signed up for that (EDF’s 'Blue +Price Promise tariff') weeks ago. According to uSwitch, First:Utility still offers the cheapest energy plan in the market today coming in at £21 a year cheaper than the price the Co-op is offering and £27 a year cheaper than EDF Energy's plan at £1,027 a year.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said "the Big Switch was a brave and bold move, but the outcome is disappointing. 280,000 people signed up, and yet the winning deal will only be offered to 30,000 on a first come, first served basis. This means that the lucky few will be leaving the process with a deal that is more expensive than the cheapest plan on the market, while those who get the fall back offer of EDF Energy's Blue+ Price Promise plan will be getting a tariff that is already readily available on the market and that they could have signed up to weeks ago.
She continued, "moreover, it's highly likely that there will be people who are already on more competitive tariffs. This is why we would urge everyone who has signed up to the Big Switch to run an independent price comparison, making sure to check the whole of the market. This is especially important for those who have switched before as the deals they are already on may actually be more competitive."
Which% and 38 Degrees will email all those who completed their registration for The Big Switch and give them a personalised estimate letting them know how much they could save with the new deal. People will have until 28 May to decide whether they will make the switch. Good work chaps.