Recent research which suggested that the big six energy companies have collectively overcharged their customers by £7.3 billion over the last five years is a challenge to those who believe in Capitalism and free markets. As a Conservative I believe in both but this ought not to mean carte blanche for oligopolies.
Along with many others I notice each year that the insurance for the family’s cars has risen sharply against the previous year. I also notice that when challenged the price falls back, usually the existing insurer is able to match any quote from other companies even if its starting price was more than 50% higher. Banks likewise have a terrible reputation for offering their loyal customers the worst deals.
Part of the answer is, of course, for customers to shop around for better deals, new customers do get special treatment but there is also a case for balancing the scales to protect consumers. I was recently appalled by the aggressive messages I received from Scottish Power which was demanding from me 14 times the amount due when I changed supplier on an empty property. There seems to be no comeback on bullying large companies who happily penalise customers if they make a mistake but are slow even to apologise, let alone compensate, when they are at fault.
Oligopolies benefit partly from inertia but also because it is hard to change, direct debit makes it all too easy to delay doing anything until it is too late. Governments ought not to set prices but they can legitimately ensure that each side to a contract is fairly treated, this is not happening as shown by the energy companies’ extortion. It needs to change.