CMA: Microbusiness Energy – What Will Change?
The Competition and markets Authority have predicted that their SME customers paid out an extra £220 million on their energy then they should have between the years of 2012 and 2014 – £180 million of that was paid by microbusinesses (those employing less than 10 people).
The shocking amount they paid extra has been recalculated since March when they first found the amount to be £280 million. As the final report has been shared businesses should now understand that energy suppliers across the UK are now obliged to publically share their prices for microbusinesses which 45% are already on default prices. Suppliers are no longer allowed to corner microbusinesses into a pricey rollover contract.
Although the report has been published many microbusinesses “appear to show limited engagement” they also have a lack of interest when it comes to switching between energy suppliers.
Fact: If your microbusiness has a default tariff of which you have been a part of for 3 years you will be contacted and urged to switch. Suppliers will be able to contact you in regards to switching, to explain how much money you could save if you switched and they will offer to find the best deal. However, you are able to opt out of their system to avoid any persistent calls/texts/emails.
During 2013, just under half of microbusinesses (45%) were on a default energy tariff which they had not personally negotiated. The report, published in June also highlighted that their rollover tariffs were between 29% and 36% higher than retention tariffs for business electricity whilst business gas was between 25% and 28% higher during 2012 to 2014.
The report states;
“Overall, we have identified a combination of features of the markets for the retail supply of gas and electricity to SMEs in Great Britain that give rise to an AEC (Adverse Effect on Competition) through overarching feature of weak customer response from microbusinesses.”
Why is this important?
The review carried out by the CMA on the energy markets will apply solutions that will improve it all for microbusinesses and domestic customers. The changes will assist microbusinesses to seek a better deal for their business energy by increasing their chance of comparing the best prices out there which will help them switch.