FPB: Lack of energy watchdog could harm SMEs
Nov 22 2011
Some 94 per cent of small businesses surveyed have seen energy bills rise over the past year
Proposals to better protect small businesses from energy companies could be undermined because of the lack of a dedicated watchdog, the Forum of Private Business (FPB) warns.
Following its research showing that 94 per cent of small businesses surveyed have seen energy bills rise over the past year – the biggest cost increases they have experienced – the FPB is welcoming Ofgem's proposals to reform the energy market, which will help UK businesses change their energy supplier more easily.
However, the watchdog Consumer Focus is being disbanded in 2013 and some of its powers will be passed to the Citizens' Advice Bureau (CAB). It follows the demise of its predecessor Energywatch in 2008 and the removal of its dedicated small business complaints hotline.
The FPB is concerned that, unless new Ofgem powers prove adequate, the CAB could prove even less effective at policing any reforms.
FPB senior policy adviser Alex Jackman says, ‘We can only hope that, if established, Ofgem's proposed accreditation scheme for codes of practice would work effectively, but there is a risk that the small business energy market will not be adequately policed.
‘Ofgem clearly recognises our members' concerns – that the behaviour of energy companies towards their small business customers is all too often unfair and unjust, so these proposed reforms are certainly welcome, particularly addressing misselling and extending the protections against rollover contracts enjoyed by micro businesses to all small and medium-sized enterprises.’
The Forum's recent quarterly ‘Referendum' survey shows that rising energy prices represent the biggest cost increases seen by firms over the past 12 months, followed by transport (92 per cent) and the price of raw materials (82 per cent).
Furthermore, 82 per cent of respondents say that overall rising costs have impacted adversely on their business, with 74 per cent reporting that they have inhibited their growth.
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