Energy Costs - Before you join the "Don't Pay Campaign"​ you really need to understand exactly what you're getting in to, its not pretty.

As the energy crisis continues to simmer under cover of the summer heat, this week saw some organisational shake ups hitting the headlines. On Thursday, one of the Ofgem directors, Christine Farnish, resigned over the controversial price cap issue, stating that the regulator had failed to “strike the right balance between the interests of consumers and interests of suppliers.” I think many of us can certainly see where she’s coming from. Consumer champion Martin Lewis has similarly complained that Ofgem has sold the rights of consumers “down the river” as the price cap looks set to rise by a ghastly 85% in October. To say the issue is causing a stir currently with commentators and the political class would be an understatement, but what do the people on the ground think about this? In my last article, I wrote about my surprise in the lack of visible public protest over the issue. It really feels like we’re approaching a flashpoint. So, where are the campaigns?

The Don’t Pay movement is a non-payment campaign. They’re looking to get 1 million people in the UK to pledge to cancel their direct debits from October 1st if major intervention is not made by the government or watchdog Ofgem in tackling spiralling energy costs. The October 1st date is pertinent as this is the date when the price cap increase will start to be felt on our pockets and purses. Don’t Pay’s anonymous organisers have said the inspiration for the movement is from action taken in 1990, when 17 million people refused to pay the Poll Tax, helping bring to an end the Margaret Thatcher government of the 1980s.

My charity supplies deeply knowledgeable advisers for the national Consumer advice service, alongside the other wonderful work we do. This includes a Specialist Energy Team who are tasked with helping people navigate the complaints processes of energy companies where problems arise. Its perhaps not surprising then that the price cap problem has been on the lips of our callers and in the concerned ears of our staff for many weeks.

Now that the initial anger towards the mooted price cap change has perhaps subsided, mouths are increasingly moving towards “what can be done about this?”, and it’s this development in many people’s thinking that has taken the Don’t Pay movement from 4,000 pledgees in June to 109,000 at the time of writing. Impressive stuff, and yet there’s a “but” coming from me.

As with many well intentioned, large-scale, direct-action movements like this, it unfortunately isn’t without its shortcomings or consequences for the individuals who take part in the pledge. In typical, cruel twist of fate fashion, the consequences for non-payment are most likely to be felt by those on lower incomes, or by those who rely on credit facilities regularly, which tends to be, you guessed it, people on lower incomes.

The first misnomer that the campaign makes is by drawing comparisons to the Poll Tax revolts of the 1990s which say 17 million refuse to pay. While this isn’t incorrect, the implications for not paying the council tax back then were unlikely to have as many short-term impacts on those who took part in the movement when compared with the Don’t Pay movement of today. I’ll go into a bit more detail about some of the reasons why – for all its noble intention – the Don’t Pay movement is a risk, one that we must all calculate:

·        The first issue is that if you cancel your direct debit with your supplier, they could place you in ‘breach of contract’. The Limitations Act 1981 in the UK (often used interchangeably with the more popular, Stateside ‘statute of limitations’ description) means that a ‘breach of contract’ dispute can last for up to 6 years or be taken to the small claims court within this period. The breach of contract may lead to your supplier placing you on a higher tariff, and the supplier could try to chase you for non-payment for up to 6 years. This is more likely to lead to additional trauma from having to constantly be reminded of the problem, and always feeling like you’re in a never-ending dispute.

·        Non-payment of energy bills will lead to you building up arrears with your supplier, which you are then liable to pay as per the terms of the contract you agreed with your supplier, in many cases terms agreed way before astronomical figures were involved. If these build up, a supplier can pass on your debt to a debt collection agency or move to install a prepayment meter. This can lead to you being off supply or even disconnected. This would be a huge inconvenience at best or fatal to many at worst.

·        It’s worth bearing in mind that energy debts could affect your credit rating too. This may impact your ability to access lending in the future, or push you in to a high cost lending solutions. This is particularly detrimental to those who rely on debt facilities to get by. Prepayment meters also tend to have higher tariffs, which means they can be more expensive than a credit meter.

I realise for many, including myself, that doing simply nothing about this situation will not suffice, and I dearly sympathise with that outlook. I would always encourage anyone struggling with energy costs to first speak to your supplier and ask them to negotiate a repayment plan before you do anything else.  Ofgem regulations require them to work with you to come to a solution. Try to negotiate a deal that works for both of you, establishing what you can afford and finding a way to pay off any debts you’ve built up.

If you or someone you know needs help with this, I’d implore you to contact the national Consumer Service, who can be contacted on 0808 223 11 33. They can help talk through what options you have and give you the best chance of negotiating well with your supplier.

Today may seem like the day for Don’t Pay, but we must, in spite of all, think about the consequences for tomorrow. Instead, write to your local Member of Parliament, to the Of-gem Regulator, to the Secretary of State for Business, Energy and Industrial Strategy The Rt Hon Kwasi Kwarteng MP, make a noise on social media, rattle a few cages, find out about opportunities for local activism, peacefully protest if you are so inclined, but above all else think really, really carefully before you join the Don’t Pay Campaign and find yourself in even deeper.