Chris Huhne is right to claim we're too lazy to change energy tariff, but his analysis spells trouble for the Green Deal
Initially I misinterpreted the front page of The Times on Saturday and its proclamation: 'Consumers too lazy to cut fuel bills, minister says.'
I guessed it was Chris Huhne who had found his way into the headlines ahead of his Lib Dem conference speech later today, but I assumed the minister had picked up on a story we ran a couple of weeks ago about a survey of 2,000 people undertaken by energy giant E.ON which revealed that many householders are "too lazy" to undertake basic energy efficiency measures such as insulation.
Picking up the paper I soon realised that the collective indolence Huhne was referring to was in fact our reluctance to switch energy suppliers in pursuit of more attractive tariffs - a practice he estimates could save the average household up to £300 a year - not our failure to take advantage of insulation and other measures that would similarly save us money in the long run.
In fairness, you can see why I made the mistake; from the headline he could have been talking about either issue.
Huhne's assertion that most people spend more time "shopping around for a £25 toaster" than they do for an energy tariff that could save them hundreds of pounds drew predictable howls of outrage from The Mirror and The Daily Mail, both of which willfully misinterpreted the point that was being made in order to report that the millionaire energy secretary was blaming the general populous for rising energy bills.
But his comments deserve a more nuanced analysis, particularly given the implications they may have for energy efficiency schemes that are absolutely critical to DECC's assertions that its low carbon policies will not lead to crippling energy price hikes.
Huhne's suggestion that most households "do not bother" to shop around for better energy tariffs may have been expressed using language that allowed the tabloids to cry "gaffe", but he is basically right.
The lack of competition in the energy market is partly the result of decades of weak regulation and the oligopoly secured by the Big Six, but it is also the result of an entrenched purchasing mentality that routinely stops people from seeking out better deals for certain goods and services.
It is the same mentality that makes you more likely to change your husband or wife than your bank account, or leaves you stuck with the same insurance company or water supplier for years on end regardless of how often they send you the wrong bill or torment you with sales calls.
Whether you prefer to call it laziness, consumer inertia or innate conservatism, this reluctance to switch is a recognised phenomenon that study after study has confirmed; we are all prone to it (myself very much included).
It is the reason why energy companies, insurers and mortgage companies tempt you in with attractive offers that last one or two years, just as it is the reason banks go to great lengths to attract students who, once hooked, are unlikely ever to switch their allegiance.
The issue is not whether this happens, but what the government is proposing to do about it. Huhne must be aware that his plea for consumers to become more engaged and search for the best deals will be picked up by only a fraction of his audience. He is battling with human nature and consumer behaviour; simply telling people to be less lazy will have next to no impact beyond offending those who take perverse pleasure in always being offended by politicians (yes, Daily Mail readers, I mean you).
In The Times interview Huhne hints at policy measures, such as moves to make it easier for people to switch energy suppliers and legislation to force energy providers to offer bills that are simpler to understand. Similarly, his electricity market reforms are intended to make it easier for new entrants to challenge the dominance of the Big Six and introduce more genuine price competition into the market, but all of this will take time.
More concerning still is the basis for my original assumption that Huhne was talking about energy efficiency and the proposed Green Deal scheme rather than switching suppliers. The fact is that, if people are too lazy to go online and switch to a cheaper tariff to save a few hundred quid, they are far too lazy to clear out the loft, select a suitable installer of insulation and arrange time off to let the workmen in.
As that E.ON survey showed, 10 per cent of people "can't be bothered" to insulate their cavity walls and lofts, nine per cent have too much clutter in the loft, and three per cent worry that not having a ladder makes installing insulation too much hassle.
The government is pinning a huge amount on its Green Deal scheme, which promises to allow households and businesses to install energy efficiency measures at no upfront cost and then pay for them through premiums on their energy bills that will not exceed the savings they realise.
The policy was at the centre of the recent spat between DECC and Number 10 over the likely cost of clean energy policies, the department insisting that domestic energy efficiency savings will mean average bills will rise by only a small amount, while David Cameron's new energy advisor, Ben Moxham, argued that these projected savings could prove optimistic.
It is also central to the government's green job creation hopes. Huhne is likely to argue in his speech this afternoon that it will create up to 100,000 new jobs (although I am hearing whispers from some of the high street firms repeatedly touted by the government as potential participants in the Green Deal that they would prefer ministers not to use their names quite so eagerly given that they are still awaiting details on precisely how the scheme will work and are not yet decided how big their investment in Green Deal services will be).
But while the Green Deal has huge potential the evidence is mounting that the scheme will work at the desired scale only with significant sticks and carrots to force people to overcome their natural laziness.
The government has repeatedly signalled that it is aware of the risks posed by slow take up and is working hard on measures that will help overcome this consumer inertia. They are certainly not without possibilities. Green groups and businesses are proposing a variety of measures, including tax breaks for those who improve the energy efficiency of their homes, various giveaways such as vouchers, regulations making it harder to sell inefficient homes, or tough new rules mandating councils or landlords to implement Green Deal energy efficiency makeovers.
Given the extent of our collective indolence when it comes to energy efficiency I'd guess that we will need all of the above and more if the UK is to deliver deep cuts in building energy use.
I'd also argue that, with just over a year to go until the introduction of the flagship scheme, the government needs to confirm the details of how it plans to promote the Green Deal pretty sharpish. Hopefully we'll get some more details in this afternoon's speech, along with clearer indications on how the new subsidy regime for renewable energy will work and greater insight into the operations of the planned Green Investment Bank.
After all, I doubt Huhne would appreciate it if business leaders decided that ministerial laziness was the reason they are still waiting for confirmation on the scheme's finer points.
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