Total Gas & Power
Total Gas & Power is a business energy supplier, wholly owned by Total SA. It has been a leading business ...Read More
The provisional findings of a comprehensive year-long investigation of the energy market will make very interesting reading for UK small to medium sized businesses.
Divided between two lengthy reports that examined the energy market for both domestic consumers and small to medium sized businesses, the Competition and Markets Authority (CMA) found “considerable variation in the prices” paid by SMEs, including microbusinesses. It estimated that fairer competition could save UK SME customers £500 million a year, although it added that this “may be an underestimate of the extent to which prices have been above competitive levels”.
The CMA found that much of the problem stems from businesses not being engaged in choosing their energy contracts, an observation that will come as little surprise to overworked owner-managers.
There were “positive signs of a recent increase in switching between suppliers” but this came with concerns “many microbusinesses appear to show limited engagement and that they have limited interest in their ability to switch energy supplier”. Strikingly, a massive 45% of microbusinesses were on default electricity tariffs (i.e. placed on a tariff that had not been actively negotiated) in 2013.
Unnecessary overpayment was particularly marked with rollover tariffs (tariffs that customers would pay if they took no action at the end of an existing fixed-term contract), retention tariffs (tariffs that customers actively renegotiate with their existing supplier at the end of an existing contract), and deemed tariffs (a tariff paid until a customer, typically in new premises, contacts its supplier to enter into its first contract).
The CMA report points to a lack of transparency. Roger Witcomb, Chairman of the energy market investigation, said: “The confusing way energy is measured and billed can make comparing deals understandably daunting.”
Third Party Intermediaries (TPIs) were highlighted as a potential help to business customers. However, the actions of some less scrupulous organisations have led to a number of complaints to official bodies (although SwitchMyBusiness.com, as the highest rated business energy compare and switch provider on Trustpilot, is not included in this rogues gallery).
Despite these complaints, the CMA expressed “concerns that the less engaged customers on these tariffs are not exerting sufficient competitive constraints on energy suppliers”, highlighting the potential to be shunted into default tariffs (auto-rollovers and replacement contracts), or if they are receiving energy supply in circumstances where they have not agreed a contract (deemed and out of contract tariffs).
This weak customer response, especially from microbusinesses, amounts to an adverse effect on competition, giving suppliers “a position of unilateral market power concerning their inactive microbusiness customer base which they are able to exploit through their pricing policies”.
The findings of the report are long overdue, according to SwitchMyBusiness.com CEO Ivan McKeever. “UK small and medium sized businesses have been the forgotten sibling of corporates and consumers for too long. As SME specialists we understand that smaller businesses lack the time to compare business energy tariffs and switch suppliers. We back the CMA’s report and hope that its recommendations are put into action in a timely fashion.”
Among the CMA’s recommendations are measures to reduce barriers to information in the SME energy markets and prohibiting the auto-rollover of microbusinesses. The latter point is something that SwitchMyBusiness.com has previously campaigned for and is currently researching.
In the meantime, businesses can get a no-fuss, no-obligation price comparison and switch suppliers in just 20 minutes. Our service is focused on small to medium sized businesses and we always strive for clear, reliable service. Give us a call on 0330 0100 251 or fill in the form on the top right of this page to find out why we are the top rated switch provider.
thank you nicole for your kind help to…
"thank you nicole for your kind help to set up my business electric account fantastic service and your personal touch thank you"This review was posted by Sam Raju on the 19th of February 2018
Aaron Gallagher recently helped me…
"Aaron Gallagher recently helped me switch the gas and electricity supply for our business. He was extremely helpful and well informed which was great for me as I know nothing in this area! He saved us a small fortune and dealt with all of the switch for us which again was extremely helpful as it wasn't completely straightforward. Thanks again for you help Aaron, it was so appreciated."This review was posted by Rachel on the 17th of February 2018
A better deal for our Village Hall
"I recently used this company to get a better energy deal for our local village hall. Other companies were quite pushy but Lorraine and Bhavni from SwitchMyBusiness were much more professional. They sent me useful information by email enabling me and the village hall committee to make a decision about which supplier to use. The switch was done by phone and when the energy provider sent the paper work to the wrong address Bhavni sorted it out straight away. I saved over £1000 for the charity."This review was posted by Irene Winter on the 16th of February 2018
"Lorraine was great and very helpful. We negotiated and received a good deal on our supply."This review was posted by Edwina Nash on the 16th of February 2018
The SME Personal Switcher
"The SME Personal Switcher, Lorraine Carey was really helpful."This review was posted by Cross Fabrications on the 16th of February 2018