Labour's solutions to the energy industry's trust crisis

With the greatest customer engagement programme about to begin, albeit slightly later, through the rollout of smart meters, trust is going to be a major challenge. Edelman's work, specifically on trust, provides sombre reading for the energy industry.

Their Trust Barometer for the year ranked the energy sector 8th, with only the media and banking coming off worse as the bad guys of the corporate world. What compounds the problem for the industry is that 57% of people will assume bad news they hear about a company they already distrust is true compared with a quarter if they trust them. It is also made clear that even the most genuine apology won't undo damage with only 15% believing good news about a company they distrust. A rather bleak starting point.

Shadow Secretary of State for Energy and Climate Change, Caroline Flint set out the three reasons why this situation is the way it is, and presumably the focus for how Labour would change that. Simply put, the industry has done this to itself and only through a prolonged and concerted effort that admits wrongdoing and achieves more than an apology will it gain the trust of the public. The market is also to blame and until it's reformed effectively it will continue to be a barrier to transparency. Thirdly, the regulations, and Ofgem as the referee of them, have been too weak and the whistle not blown soon enough or often enough - to use the analogy of Consumer Futures' Richard Hall.

As you'd expect, Flint was quite bullish in insisting the so-called 'Big 6' must "admit they have no one left to blame but themselves" she was also clear in setting out the view that a dynamic and transparent energy market that works for the public was critical. What also needed to work was Ofgem and she was equally scathing of what she believed to be failed attempts to regulate by not tackling predatory pricing, ignoring warnings of inappropriate doorstep sales tactics and mis-selling, and not addressing the need to enforce fair profits.

Stephen Fitzpatrick, founder of Ovo, was also less than positive about some of his competitors, saying that his company's positive customer interaction is based on a "very intelligent and sophisticated method...It's called telling the truth." Presumably Ovo's customers can verify that they do indeed trust the company and they feel it is telling the whole truth.

The tide of opinion has clearly shifted against energy companies over the last decade and over the next 10-15 years, with a huge amount of investment and increased engagement required, this needs to be repaired.

The challenge for the networks is that the whole industry is viewed by most consumers as the same thing. We will need to educate customers of the differences, set out networks costs clearly, show our investment and explain why it is necessary for keeping the lights on and our homes warm. If we are to carry out the rewiring of Britain required, connecting new renewable energy sources to the transmission grid and delivering the smarter network necessary to support the adaptations for the distribution network then public awareness and acceptance will need to be worked for.

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