Ofgem has helped make it easier for consumers to switch energy provider – now British businesses deserve a better deal too
The Which? Energy survey this week exposed yet again the woeful customer service record of the ‘Big Six’ energy companies, with smaller suppliers head and shoulders above their larger rivals.
Despite this, it is heartening to see consumers looking for better deals, and with four million switching supplier in 2015, Ofgem should be applauded for its sensible regulation of the industry.
But what if I told you that there are millions of energy customers, spending on average £3,384 per year, who are completely unprotected. That’s a huge market, totally unregulated, and dominated by the Big Six.
Given the questionable practices of some energy firms in the past I imagine you would be surprised, but what I have described is the business energy market in the UK, and it needs to change.
Businesses are assumed to be able to conduct their own due diligence on energy suppliers, but as anyone who has ever run a business knows, trawling through an energy contract is a long way down on the list of business priorities. As a result, businesses are left to fend for themselves and suppliers are free to impose seemingly arbitrary price rises, confusing payment terms and lengthy contracts.
The bad practice of the Big Six is costing the economy. A recent Competition and Markets Authority report found that charges imposed on businesses totalled an extra £100m when they didn’t switch.
Not that changing supplier is particularly easy – unlike consumers, British businesses don’t have a ‘cooling off’ period, their contracts can last up to an eye-watering five years and they don’t have an option to exit a fixed term deal, all of which are protections afforded to consumers.
What’s worse, particularly for SMEs and their cashflow, is the relentless change in energy pricing. As a carehome owner in my twenties I experienced this first hand – I nearly fell off my chair when I received an unexplained 35 per cent increase in my energy bills, with no way of exiting my contract or contesting the rise.
So is there light at the end of this rather bleak tunnel? The answer, like the consumer energy market, has begun to come from smaller suppliers. Businesses have completely lost respect for the Big Six and have begun to turn to boutique business energy providers, who are fair, transparent and focused on the customer.
It is these smaller suppliers who are leading the change in the energy markets, and businesses need to realise that there is a different way.
Breaking the stranglehold of the Big Six won’t be easy but momentum is firmly on our side. It’s our mission to ensure business owners never have to worry about their energy supplier, and we will get there.