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Energy secretary advocates 'collective switching'

Energy secretary Ed Davey has published advice for energy consumers on ‘collective switching’ to get a better deal.

It also covers guidance for organisations wanting to launch their own collective energy purchasing schemes.

Businesses, consumer groups, local government groups, housing organisations, charities and energy regulator Ofgem also attended a round table meeting chaired by the energy secretary in Westminster to discuss how to help consumers club together to cut their gas and electricity bills.

Mr Davey said: “I want to help make collective purchasing become a permanent feature of the UK energy market.

“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.

“Now I want to see more providers coming up with schemes with the scale and reach to help the most vulnerable consumers. Local authorities and housing associations could have real role to play here, helping their tenants cope with living costs.”

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.

“And because the intermediary can aggregate together consumer demand, it can give customers much more muscle in markets than they have when switching alone.

“Other countries have already shown that collective switching can deliver significant consumer benefits, chiefly greater convenience and better value.

“There is real scope for similar schemes to be developed in the UK and we hope many organisations will be interested in finding out how this innovative model can work in their area.”

The meeting, which was chaired by the energy secretary, saw officials, industry and consumer representatives put their heads together on building momentum behind ‘collective purchasing’, whereby consumers sign up en masse with third party organisations to get better deals from energy suppliers.

The roundtable heard presentations from Which? on their Big Switch scheme, which has almost 290,000 people signed up; Cornwall Together on their scheme involving the Eden Project, Cornwall Council and Cornwall and Isles of Scilly NHS among others to buy gas, electricity, and heating oil collectively and target fuel poverty; and iChoosr, which has pioneered collective switching for utility services in Belgium, The Netherlands and Germany.

Organisations listed to attend included Age UK, BIS, British Gas, Charities Buying Group, Community Buying Unlimited, Cummunity Energy Extra, Consumer Focus, Co-op Energy, Cornwall Council, Cornwall NHS, Eden Project, Energylinx, Energy Extra, Energy UK, E.ON, First Utility, Green Energy UK, Hyde Housing, Incahoot, iChoosr, Local Government Association, MoneySavingExpert.com, MoneySupermarket.com, National Energy Action, National Housing Federation, New Local Government Network, Northern Housing Consortium, Ofgem, Peabody, Switchgasandelectrcity.com, TheEnergyShop.com, ThePeoplesPower, Unison, Unravelit.com, Uswitch, and Which?.