The government is finalising measures to help microbusinesses find better energy offers. It comes after a Competition and Markets Authority (CMA) investigation revealed they have been paying around £180 million a year more than they would in a more competitive market – with around 45% stuck on expensive ‘default’ tariffs.
Microbusiness customers who have been on a default tariff for more than 3 years are among those paying the highest prices for their energy according to the CMA.
Auto-rollover contracts, exit fees and a lack of transparency over prices have all being highlighted as factors contributing to higher energy fees.
How can energy tariffs be monitored?
Suggested measures include a database of customers who have been on a default tariff for more than three years which will be provided to suppliers so that they can provide cheaper offers.
Roger Witcomb, Chairman of the energy market investigation, said:
“The database remedy will bring cheaper price offers directly to those customers who have been paying too much for a long time. There are much better offers out there and we’re requiring the suppliers of those customers to make it easier for their competitors to get access to them.
“We’re also tackling problems that can lead to very small businesses paying more than they should. They will be able to see all the prices that are available to them, and will no longer be locked into the most expensive contracts.”
Businesscomparison.com energy expert Steph Salusbury comments:
“I welcome the fact that the CMA recognises the value of a comparison service and the proposed changes to the auto rollover method and timings of the switching window. This allows website services like Businesscomparison.com to engage with micro business owners that have been on standard tariffs long term.
“Businesscomparison.com users are able to compare tariffs and make a switch. Having the option to view tariff rates on a comparison journey is hugely beneficial for the consumer to understand their current costs. Having knowledge and control is the key and this makes it easier for customers to choose the right deal for their micro-business needs.
“Expensive auto renewal contracts are unfortunately common in many B2B contracts. These practices would not be allowed for domestic consumers so we need to make sure this is not accepted for businesses, this is a start but we have a long way to go.”