- Speaker #0
When we go and speak to the companies, they know they have to talk to us. They can't just ignore us. They have to have a conversation with us. They have to provide us with data. And when we publish a report or we publish a campaign or launch a campaign, it's something that those organisations know is underpinned by a legal basis. It's not just a charity or a consumer group saying something. That also means we've got responsibility.
- Speaker #1
Some believe that markets will correct themselves via an invisible hand that adjusts, flows and serves the common interest. But in practice, correction usually needs a strong arm, someone with the spending, the evidence and the independence to force it. In Great Britain's energy and postal sectors, that someone has a legal mandate. Citizens Advice is the statutory consumer advocate. Combining rights-based advice to individuals with a duty to gather evidence and challenge firms, regulators and government when a market is failing people. Citizens Advice has just published Building Better Markets, an argument for extending that mandate into every essential market where people cannot easily walk away. Communication, water, insurance. The flexibility and smart energy services now emerging from the transition itself. So my guest leads the team inside Citizens Advice that has used this model to shape some of the most consequential decisions in energy regulation, including the energy price gap and successive network price controls. Tom Lau has spent 16 years across essential services regulation, moving between suppliers, trade associations, regulators and consumer advocacy. He's here to make the case for statutory independence as a condition for market legitimacy and to test how far that condition can travel beyond the sector where it was initially built. Tom, welcome to the show.
- Speaker #0
Thanks for having me, Marie. Great to be here.
- Speaker #1
Thank you, Tom. So, Tom, you have moved between energy suppliers, thread associations, regulators, and now the consumer side at Citizens Advice. Actually, we met a very long time ago in previous lives, probably, when the UK was still part of the EU. You were also representing the voice of consumers in European, let's say, fora. So what have these experiences made you maybe more skeptical or more generous toward the institution you now hold accountable?
- Speaker #0
Yeah, absolutely. My very first role at Energy 16 years ago was that. consumer focus which was the statue advocate for energy before it moved over to citizens advice about 10 years ago and all of my roles in energy i think i've had a consumer angle and whether i've been working for a body regulator energy supplier and i think one of the things on that question is of skepticism or generosity i think driving change is really hard and requires a really relentless focus on doing what's right and one of my sort of guiding principles has been to be more kind or generous to people in general because it is hard so as the staff traffic we must hold people to account we must hold organizations to account and they need to deliver for consumers but the way we do that is in a constructive way so we go after the issue we go after trying to fix the problem rather than going after people it's not people normally people obviously make decisions but ultimately it's doing it in the right constructive way to make sure we get the right outcomes for consumers.
- Speaker #1
Yeah, I like this idea of... you know, being kind. And actually, it's really about, like, being human and taking care of each other and just, like, noticing that things are happening and we have our own blind spots and organizations have their blind spots. And we need to make sure that, you know, these blind spots are made visible to fix the places where they don't really deliver. So that's also very interesting because the... previous episode of this podcast was with the lina candle and the blueprint for inclusive energy services in the italian energy market so that really circles back to through this idea that it's not about opposing like the supplier but it's really about being very constructive and gathering the evidence to allow for markets to to deliver better such essential services like in a way that is fair and sustainable socially for for everyone right
- Speaker #0
Absolutely. I mean, it's been rare. It does occasionally happen, but it's been rare in my career where someone's pointed something out and said, this is not working well. And someone's gone, you know, I'm not going to fix it. It's not my problem. Normally people go, I didn't realise that, or thank you for bringing that to our attention. We will look at it. And obviously they have other priorities and things they need to do. But the very fact that someone like us is there raising these issues that we're hearing firsthand from consumers via our advice service, as well as any... research we do we take it to the government we take to the regulators we take the energy companies and they generally welcome it because it does give them a new perspective i say there are some instances where people have gone no we don't agree but that's also part of this process is they may disagree they may have a different perspective on what we're saying there may be a reason why they're doing what they're doing but you know we that as long as that's a healthy debate and a constructive debate then that is part of the overall process yeah
- Speaker #1
and uh what's interesting also in your career throughout the past 16 years is that sometimes it takes time, right, for an idea or a change, like a very systemic change to happen, right? Because you start collecting the evidence and then you see that it's much bigger than what you initially thought and then you realize across different stakeholders, different sectors, et cetera, that the problem exists. And then, you know, you have, like, you build the momentum. And arrives the moment where you build this momentum and when regulators or businesses are ready to act. And that may take more time than what you would have wanted initially, but that happens.
- Speaker #0
I think a lot of advocacy work takes multiple years. I mean, the longest example I can think of from my career is that back in 2010, one of the first things I worked on was energy brokers taking advantages. basically of small businesses in the UK energy market. And it's taken nearly 15 years for Ofgem to actually start directly regulating those energy brokers. Not all of them are like that. It's always a subset of, there tend to be bad apples in this space, but it's taken that long, over a decade and a half to go from, there's clearly a problem here, to actually the answer must be direct regulation, which is what we were saying at Consumer Focus 15 years ago. So. From start to finish, that work will probably be three years if we meet that time frame. So you can't have to be just that's the relentless point. You just have to keep raising these issues, keep pointing them out to people because eventually change will happen. It's a very progressive view of the world that things will get better. But you have to keep pushing it. You can't just publish a report and hope that things will change. You have to keep raising the issue over and over again, sometimes over a decade or more to actually get that change happening.
- Speaker #1
Yes. And what you've seen, like from your work in the energy sector, is that the problems, there may be equivalent problems in other sectors, like you just mentioned, the priority access register to be across different services. Was it, let's say, one of the basis why you now call for this Building Better Markets initiative that would really lift citizens' advice work in other sectors than... the one you were traditionally focused on, which is mostly energy.
- Speaker #0
Yeah, so I think we've got a longstanding view that we are a cross sector as a charity. Descentivice has existed for almost 100 years. 1939 is when we were originally founded. We haven't been a statutory advocate for all that time because that concept is a newer one. But we've been around for a long time. And we support people across a wide range of issues, helping them with debt, with rent issues. with welfare sort of support and benefits issues so we cover a really really broad base beyond where i spent my time focusing on energy and so we get these people tens of thousands hundreds of thousands of people coming to us every single year for advice and on the energy side we can take some of that advice that we're giving and the issues we're seeing and we can take it and make change happen um on the advocacy side but there's other sectors where we can't like we can try and raise things but we've got a relatively small policy team looking at those sort of non-statutory areas, so telecoms, for instance, where we can see issues, we can try and do some work on them, but we are resource constrained and we don't have the legal powers that we have in the energy team. So we did this piece of work with London Economics, who are the consultancy over here, who did their own sort of quite conservative estimates on our value, both on the advice and the advocacy side, which is underpinning that Building Better Markets report. And the sheer scale of the benefits on the advice side. 100 million pounds of benefits over the last five years to consumers. On the advocacy side, over 400 million pounds worth of benefits to consumers from three case studies. So if you apply that across other sectors of the economy, housing, telecoms, financial services, and you start scaling that up, then the potential benefit to consumers from having a statutory advocate, if we can replicate what we've done in energy and we are confident we could, is actually really, really significant. and it gives people that ability then to sort of redress the balance because you know we've done research where one in ten people believe that government does enough to protect ordinary consumers when it deals with big businesses like banks and energy companies. That's 8% of consumers have that sort of view. And actually 7% and 10% think that the company is in the stronger position in any distance between the consumer and the large essential services providers. So our role is to be in the middle of that and essentially trying to redress the balance so people have more confidence that the right thing is going to happen for them.
- Speaker #1
Yeah, that's really interesting. You touch upon a concept that I think not many listeners are familiar with is the idea of a statutory consumer advocate. Right. So it goes beyond a consumer organization like it, which has a kind of remit. It's like an official mandate in a way to deal with certain issues. Can you explain maybe a little bit better why, how it, where it comes from, especially in the energy sector?
- Speaker #0
So we have very clear. legal obligations and powers set out in two or three different bits of legislation, which basically makes our role an official role to represent consumers, both domestic, small business and heat network consumers. Most recently, that's been added to our statutory duties. And we have legal powers where we can request information from a wide range of participants in the energy sector, including government and regulator, but primarily it's the companies you will get information from. We can also raise super complaints to the competition and markets authority. And that advice role that we have is also set out in statute. So our extra help unit will help consumers who are perhaps more vulnerable in more complex cases. That is something that's set out as a statutory role we have to provide. So we have this very, very clear legal role, which means that when we go and speak to the companies, they know they have to talk to us they can't just ignore us they have to have a conversation with us they have to provide us with data and you know when we publish a report or we publish a you know a campaign or launch a campaign it's something that those organizations know is underpinned by a legal basis it's not just a charity or consumer group saying something that also means we've got responsibility so we're very conscious that statutory role means there are some things that we have to be careful about what we might say so we don't we don't enter politics for instance we don't We... tend to stay out of politics altogether. That's something that is just not appropriate for someone with a statutory basis to start commenting on. But that isn't actually a major constraint for us because actually a lot of the work we're doing anyway is entirely focused on sometimes quite technical issues, but issues that are a long way from politics anyway.
- Speaker #1
Okay. That's very interesting because sometimes talking with consumer organisations they say, yeah, we don't feel very listened to. We have a legitimate basis for an issue to be raised and, you know, for a change to happen. But we feel a bit lonely, right? So we feel a bit lonely and that the regulator doesn't listen, take the time to listen to us or the companies, the businesses, they don't really spend time to listen to us. And, you know, that's interesting because it's also something I've seen across different markets where there is like a statutory ombudsman. Like in the UK, you have an energy ombudsman, for instance, and the places where you don't have this statutory ombudsman. So you have basically, let's say, a consolidation of bodies that can handle complaints. So maybe it's within the regulator, but it's a very tiny office. So, you know, all these consumer messages get completely diluted because there is no one to actually bring these messages forward. And... aggregate them in a way that makes sense also for policymaking. Because again, we're not talking about politics, but really policymaking, right? So that's quite an interesting example. And, you know, I wanted to make a step back here because I think that in a way, the UK is quite advanced. In many ways, the UK is quite advanced compared to other countries where you don't really have this culture of representing and of bringing forward the voice of the mass in a way.
- Speaker #0
Yeah, I mean, I think there is an opportunity for the European Union member states to adopt a similar model. I mean, one thing I was I was thinking about before the call is whether there's any obvious barrier to adopting statutory advocacy and advice in EU member states. And I can't think I just don't think there is, because we were the statutory advocate, you know, consumer focus before Energy Watch, before all that, whenever we were in the EU. So it must be possible to have statutory advocacy. and be an EU member state. Like those two things must be possible simultaneously. So, I mean, I don't know the legal regimes in other member states very well, but I imagine it is... totally feasible in all of them to set up something like Sitton's Advice and have that sort of very independent, very clear legal basis for making sure consumers' voices are heard in those essential markets. Energy to start with, but there'll be other sectors where, as I've said, it's really useful to have that voice and making sure that consumers' voices is heard right across government, right across the companies and with any regulators in that space as well.
- Speaker #1
Yeah, that's very interesting, right? It goes into this kind of social dialogue conversation and the need for social dialogue to happen. And it's not only about the union, but it's about really people in all of their spheres of life. And one of the key points I hear is like, we are not only consumers, we are also workers, we are parents. There are so many things that we need to do and we cannot be experts in every single field of our life. So now it's maybe time for you to explain a little bit better why the Building Better market is calling for every essential market to have an independent statutory consumer advocate. So what are in your view these essential markets and how do you plan on making this work? Because I mean, that would be so much more work. for you, right? It would be bigger and that's exciting.
- Speaker #0
Well, I think in some ways on the advice side, it may not be a huge increase or a huge difference from what we're already doing because we do get people coming to us with issues. So we will do our best to provide advice to them, whether it's in housing or telecoms or even actually in the water sector. In the UK, there is a statutory advocate for water separate to us for historic reasons going back about 20 years. And we get people coming to us with water issues so we deal with thousands of inquiries even though there's actually a advocate somewhere else who does water so we we get those inquiries coming in we will help people with whatever issues that they come to us with wherever we possibly can the bit that doesn't then happen is on the advocacy bits um so we don't then we aren't able then to go in in the round take those issues forward so if we see lots and lots of problems we may occasionally be able to do a report and go and talk to government but we are capacity constrained and we don't have the same legal powers. So I think the reason we've picked the sectors we've picked in building better marks is because we started from the position of what's important to people. So it's very difficult to live a life in the economy in 2026 without some housing element, without some connection to financial services, without some telecoms communication issue. Broadband would be part of that. Mobile might be another, but also old fashioned telephony as well. The water sector has obviously already got that traffic, but it's a key. part of people's ability to live a good life. And then we already have energy in terms of electricity and gas. So those are things you absolutely need to be able to live a life. And now the sectors that we focused on, I mean, there's other things that you could probably look more broadly and think about, you know, health, for instance, as yeah, there are areas you could go beyond, but... We felt like in terms of markets, they were the ones in the UK context, certainly where it made sense for us to be. There was that voice. So I think that's where it's come from. In terms of how we get there, and I think the change, it would take a good couple of years. We're probably looking at 2028, I think, is sort of the timeframe we're looking at here. Government would have to make some legislative changes. They'd have to, well, firstly, agree that this is a good thing to do, then make some legislative changes, then resource us sufficiently to take on the advocacy role. and have the right mechanisms in place. So I think in the next two years, it would be doable, but it does require a government saying, yes, we agree that there needs to be a better consumed voice in the markets that we're focused on.
- Speaker #1
I find the sector that you picked, so we said housing, insurance, also, let's say, some adjacent services to the energy sector, and there was a force. What was it?
- Speaker #0
Was it telecoms? Is that the one?
- Speaker #1
Yeah. Yeah, perhaps telecom. But I find it's so interesting because that's exactly like they are the most pressing topic at the moment, right? Because they are all linked to, let's say, the way our economies do work now. They are linked to climate change and how to adapt to climate change and stay protected. Like, for instance, so we are recording this episode in the day after the State of the Union by... Ursula von der Leyen, and she mentioned an alliance of working with insurers to insure the question of climate risk, climate adaptation and stuff like that. And, you know, my first thought was, OK, that's really good that this dialogue is finally happening. But if there is more granular work asked at EU level, maybe that would also imply that some regions are identified as most at risk. So people will have to pay higher premiums, etc. And how would you ensure the fairness of it? So I was like, okay, so there is a... All new conversations starting here that goes way beyond, let's say, like installing solar panels and what happens if they don't really deliver or the relationship with your electricity supplier or gas network supplier if you have an issue, right? So there are so many new things and parallel things happening at the same time. It makes a lot of sense to have a voice that can say you okay, here and there, there are connections we need to make, and let's bring them forward because we know how to make it. We know how to make sure the people's voice are being listened to and that the outcome is fair for everyone.
- Speaker #0
Oh, absolutely. I think the interconnections are absolutely there. I mean, it's very difficult even today if you want to have electricity. Solar panels, heat pump, EV charger, all of those things tend to be connected to broadband, for instance. So you need a reliable broadband connection to be able to make the most. You can typically use them manually as well. There's some basic functionality beneath that. But to really make the most of it, to have the most control over those items, you do need to have good working broadband. And so, in effect, yes, if you think about a heating system where it's a hydronic heating system where you've got radiators and hot water, you also need really good quality water. as well in that system. You need to have reliable access to water alongside having the electricity side as well. So these things are definitely interconnected and you can get into questions around insurance and the payment of these. Some of these things will be paid for on finance. So there's a strong interconnection that we already see from our existing role. I think the other main advantage to what we're proposing with this idea of having a sort of statutory advocate covering all essential services is is it's easier for consumers to know where to go when they have a problem. Because today, if you're a consumer, you've got an issue. For energy, you hopefully know to come to us. And it's on people's bills that you can come to us for advice. And if you Google advice for energy, we should be one of the top search results. That may not be true currently for other markets. But as I say, people do come to us for a whole bunch of different reasons. And we think because of our name recognition, Lots and lots of people in the UK know who we are. So for example, 80% of consumers recognise Sins Advice as a brand and have got a positive association with us. If they want to come to us, it's like a single front door. So we can help them with multiple issues as well. Because typically people don't just have one problem at a time. But often these things can spiral so that, say you're in financial difficulties, you won't just be in financial difficulties with your energy company. You likely may be struggling to pay for your telecoms. Your broadband may have been cut off. you may have um issues paying your water company as well so like coming and having one place where you can have a conversation and help working through what to do next rather than having to go to two or three or four different organizations separately because you know they've all got a role we think it's much cleaner for consumers and they're much more likely to reach out much more likely to come through that single front door if they a know about it and b is one place they have to go Yeah,
- Speaker #1
yeah, yeah. That's very interesting. And that's so much like way. more systemic as a way, more like potentially changing how things deliver. One interesting, I think one big question for me is the how. I understand that the funding of the citizens advice come really like as a statutory consumer advocate. It comes from industry levies. It's... It's always like the question, like whenever you have someone skeptical, it's like, yeah, but it sounds nice. But how do you deliver that? How do you fund that? So Citizens Advice gets funded through industry levies, right? At the same time, there is a big question. What protects that kind of funding model? And like, because you need to find the right balance between dependency on the very industry it's meant to hold accountable, right? So how does that work, really?
- Speaker #0
Yeah, so you're absolutely right. So the way we are funded is through a levy on the energy sector for the statutory advocate role. It's a small amount of money, it's pennies on bills. And I guess the first thing is just to reiterate the value you generate from that, and then I'll come back to the independence point in a second. Because for every £1 invested in the energy consumer service on the advice side, we're generating over £12 in value, whether that's directly to consumers and financial benefits. reduce costs for the energy sectors. So there are benefits to the actual sector here, you know, since he funded it on, it's ultimately funded by consumers because it's on consumer bills. And then also there's even a reduction in, we've found in cost to the NHS, the National Health Service in the UK, because, you know, we're helping people with their wellbeing because they're getting issues sorted rather than struggling with debt and with problems that they can't solve directly with those companies. But on the question of independence, so it's, We've never had an issue. with our independence because we've got a legal basis and we've got very clear legal mandates to do things. First and foremost that protects you from any sort of conflict of interest, I think that which is really really crucial. Secondly, I think the people who work for Statutory Advocacy, who tend to want to work in this kind of role, are very independent. They see a need for that independent voice, they're very consumer focused, they're very keen to see. improvements in what's happening so it's never i've never seen it be an issue um in in sense vice or if it's predecessor uh organizations like consumer focus for people to to worry about the you know the levy aspect of it um i think the other thing is that um because the levy funding does come via consumer bills if anything that gives us more of a reason to do what we do and do it really well um i'm very conscious uh you know i think i'm fiercely independent when it comes to this sort of work is... One of the things that I pride myself on is that I will critique anybody. I will ask questions of anyone. I will, I don't really take anything at face value. I'm always trying to understand, well, hold on a minute. Is that true? Let's dig a bit deeper. And I think one of the absolutely key things in all of this is that thinking that you've got a cost that's going on consumer bills, it might only be very small, but we need to deliver because if we don't deliver, then why is that money on bills? Bills are high, right? So even pennies on the bill. Unless you're delivering value for money every single month, every single year, there's a question of whether it should happen. So it drives us more than anything else.
- Speaker #1
Yeah, yeah, yeah. That's really, really interesting. And we are also at a moment in time where there are a lot of budget discussions, a lot of everything is questioned, right? So I think it's important to have this kind of also honest take on... what it is. But yeah, I find it very interesting also that the structure, let's say the governance structure of Citizens Advice allows you to be independent from the government as well. And so for almost a century, you've been able to deal with different governments, different political priorities, et cetera, to build the case for consumers. So that's also perhaps a I'm sure that gets... a bit overlooked, but that's equally important.
- Speaker #0
Absolutely. I think the very fact that we've got this long history of doing good for people and doing that at a local level and being very visible and helping people whenever they're in trouble, which can happen to any of us at any time. Having Sins of Ice there as part of a sort of safety net is absolutely crucial. It's actually one of the things that goes beyond politics. I think that's been proven over the last nearly 100 years of our existence. And the changes of government haven't changed, say, how Sins Advice operates. And we continue to... to do good and on the statutory advocate side yeah i say the passion of the people working for us to to make things better i had a planning day with my team yesterday so i lead the energy networks and systems team we were thinking about what we're going to do for the next 18 months and what areas we want to focus on and the passion coming through from the team of like you know we're we're outgunned in terms of like you know if you look at the energy companies that have got more resource, significantly more resource than we do. The regulator has significantly more resource. The government has significantly more resource. And yet we still make these sorts of big material differences, both on the advice side and on the advocacy side, because we've got really good, passionate people. So that's probably the other lesson, I think, if other member states in the EU, for instance, were thinking about this. It's how do you set this up in a way that you can recruit the right people? Because you're not, frankly, going to be able to pay the salaries that are there in the private sector. It's not you'll be you'll join Sins of Ice. in terms of these statutory advocate roles to make money you're doing it to make a difference and we've got an excellent group of people who are you know essentially doing the work of two or three people quite often and doing it as well if not better than some of their peers in the private sector because of the passion they've got and the drive they've got to make that difference that's
- Speaker #1
that's amazing and i think uh yeah i think uh any person working for you should be very proud and should listen to this episode and listen to the kind of words you have to tell them. I mean, you're a living example that you can move from different sectors and always come back to citizens advice because of the passion you bring in. Right. So that's quite the inspiration.
- Speaker #0
I'll make sure when the episode is live, I'll make sure to share with them. See what they say. They'll be somewhat embarrassed when they're watching it.
- Speaker #1
Of course. So, Tom, we are reaching the end of this really, really nice episode. you I just have one question, like one takeaway, maybe. So if one regulator, one government department, one essential market provider listening today acted on one single idea from this building better markets this year, which move the needle most for the people your evidence represents?
- Speaker #0
So I'm going to give two answers, but one's based on the EU. some of the member states that I know you'll be thinking about and then also I think in the UK context. So on the EU side I think look at what the statutory advocate role looks like in energy in the UK and think about your legal framework about what that would then look like if you wanted to replicate it in your member state because the value we have delivered I think demonstrates just how much use there can be from having that statutory basis both on the advocacy and on the advice side. In the UK, I'm context, if there's anyone from the UK government listening, read the Building Better Markets report, look at the underlying London economics data, and you can see there is such a strong case for expanding our existing role into other essential markets, such as housing, telecoms, financial services, to create that single front door for consumers. So slightly cheating by giving two different answers, but I think on the UK side in particular, there is a real opportunity to rebalance this. entirely of those sectors in favor of consumers in a way that can only be good for those consumers and can only be good for the economy overall, because people are getting better outcomes and they're getting a higher level of service, which can build trust in the sector as well. So it is good, not just for us, not just good for consumers, but it's good more broadly.
- Speaker #1
Yeah, I love that. And I love the focus on trust as well, which is such an important part of my work and the topic I've been really... focused on in the past years and maybe a thread throughout all the episodes and all of the missions I've worked on and jobs I've worked on. And I think it's really like building this trust. Like we are not alone, that there are a lot of challenges, but there are things that together we can do. We are that... And people are saying some organizations are environment. They listen to you. That's, I think, a really important takeaway for everyone.
- Speaker #0
We're here if people need us. Absolutely. That's a good final message to leave people.
- Speaker #1
Okay. Thank you so much, Tam. I hope to see you soon in Brussels or maybe in London. And yeah, keep on doing work. Thank you. Energetic explores the people, policies and institutions shaping Europe's and the world's energy transition. I am Marine Cornelis. If you found this conversation valuable, you can share it with colleagues working on housing, governance and consumer protection. You will find references and further reading in the show notes. Until next time.