Small businesses call for fair energy pricing

Small businesses get a bum deal compared to consumers when it comes to buying energy, the British Chambers of Commerce warned today.

The facts:

The Westminster-based small business lobby group says individuals get a range of protections and guarantees from energy suppliers that are not available to businesses. It called on OFGEM, the energy regulator, to right the balance especially given the threat to business of rising energy prices across the board.

Legislation governing business and consumer energy contracts differ in four key ways. There is no legal requirement for energy companies to publish business tariffs, but a requirement exists for consumer tariffs, making it easier for them to find the cheapest deals.

Domestic contracts can be switched every 28 days, but firms can be bound for up to five years and are giving scant warning when contracts are due for renewal. Consumers get a cooling off period on verbal contracts and back billing is capped at one year. Business share neither of these benefits.

The BCC called on OFGEM to use a probe into energy provision to investigate the lopsided rules. It says it is also concerned about the pending abolition Energywatch, the consumer champion for energy, which receives 32,000 calls a year from businesses seeking advice and information.

They said:

"With the economy slowing and energy bills on the rise, it is totally unacceptable that hard pressed businesses are left so open to exploitation by energy suppliers. OFGEM's investigation into the industry must hold the suppliers to account over the very apparent lack of transparency and fairness in their dealings with business,” said BCC director general David Frost.

"Energywatch is currently providing a crucial service to thousands of businesses who are confused and frustrated by energy suppliers. If a 'super consumer group' is to be established, as the government plans, there is little doubt in my mind that this service will be all but lost, leaving companies at the mercy of the suppliers. An obvious solution would be establishing a separate watchdog, dedicated to assisting businesses."

We say:

It’s just a bit strange that small businesses get such a poor deal when it comes to essential services. Banking gives a consumers a better deal than businesses too, and we struggle to understand why.

We hope the government and OFGEM will see sense and give small firms some protection, especially in light of the tough trading conditions and cost pressures we all face.

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By News Desk  on   Aug 11,2008

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Keywords

energy    BCC    OFGEM    small business    consumers    bills   

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