Lord Hodgson is a Conservative peer and author of the new Civitas paper, ‘Britain’s Demographic Challenge‘.
The concern about the dramatic increase in the price of gas and electricity is understandable. But it has been made more acute by the level of dissatisfaction and frustration with the complacent way too many utility providers have treated their customers. In recent years, this relationship has become increasingly one-sided. It has been redrawn to benefit the supplier at the expense of the customer – and needs changing.
Consider, for example, the helpline experience. It goes something like this. A customer has an issue they would like resolving. So they call the “helpline”, but are presented with a recorded message. “Your call is important to us,” the tinny voice intones, “but we are experiencing an unusually high volume of calls at present, and you may have to wait 15 or 20 or 30 minutes.” Helpfully, they suggest you “may find it easier to use our online service”.
Of course, there will be times of heightened call volume. But the frequency with which users are forced to endure variations of this message suggests that utility companies have understaffed help lines. An even worse outcome might be that they have deliberately understaffed the help lines to force customers to use online services where they can be dealt with more cheaply.
An online service may be able to deal with “vanilla” questions. But many people have individual questions to which the computer cannot give a proper answer – they need to explain their problem to a real live, trained person.
If they persevere with the “helpline” for the required 15 or 20 minutes (with consequent costs for their telephone bills) and make contact with a human being, the result is often no more satisfactory. That is because, if there is no immediate answer to the question, the helpline desk may say that the records need to be checked so a return call will need to be made. But, as is often the case, if that return call is not made, the customer has to begin all over again, since all the companies refuse to give out staff names to enable any customer follow up.
The upshot of all this is that the customer feels undervalued and helpless. Whilst I do not present statistics, I strongly suspect that every reader of this article will recognise and have had first-hand experience of the scenario above. None of these problems need rocket science to solve – proper disciplined management, adequate numbers of trained staff, improved systems, and a better understanding that even where the service provided is a critical one, ultimately, the old adage applies: ‘the customer is always right’. This is the basis upon which any good businesses is built.
The present economic/price turbulence and the special pleading of the industry gives the Government an opportunity to ensure that a reset in this supplier/customer relationship can begin without delay. There should be service level agreements widely publicised and rigorously enforced to cover telephone waiting times, customer call backs, and proper early accessible redress procedures. At the same time, the Government might like to consider the financing structure adopted by many of our utility companies.
The stable nature of their underlying business means that they can sustain very high levels of debt – the interest on which is tax deductible under the UK’s tax law. Consequently, utility companies are only being marginally profitable before tax – the bulk of any operating profit having been creamed off in interest. If the debt is owned by another company in the same group, it essentially represents a tax free dividend. That means less corporation tax payable to the Exchequer.
Although the Prime Minister has made it clear she is happy to be unpopular, considering one or two popular policies might be a helpful route out of her current doldrums. An inability to resolve issues relating to the provision of fundamental services like water, heating, and electricity causes significant levels of unnecessary stress and anxiety.
The Government has rightly stepped in to ensure people can heat and light their homes. It should also ensure they can quickly and seamlessly interact with relevant service providers.