News

The shadow business secretary, Chuka Umunna, recently pledged to the FSB (the Federation of Small Businesses that is, rather than the revamped KGB!) that a Labour government would prevent energy companies from rolling companies onto more expensive contracts automatically and without notification, helping reputable business energy brokers in supporting their clients.

His comments follow an announcement by the industry regulator Ofgem, that a decision on the matter will not be made until later this year. This is disappointing news for business groups; they have been lobbying hard to end this practice once and for all.

The automatic rolling over of contracts was previously limited by Ofgem to one year from small firms with a £5,000 a year spend in electricity and up to £10,000 on gas; this forms part of a set of initiatives to help SMEs access a better deal from the energy companies.

Ofgem has shyed away from a complete ban on the practice as it plans to carry out a detailed assessment on what the impact would be of taking this course of action.

Following pressure from business groups, Ofgem has taken action to tackle the unfairness of the energy supply market, but concerns remain about the ability to switch supplies easily. With rollovers, many small firms find themselves stuck in a contract which doesn't offer the most competitive deal for their business.  

New standards on how suppliers should treat small companies have been drawn up following discussions with the businesses themselves. Contract details will be made clearer and end dates will be made explicit to make firms more aware of when they should start shopping around for a new contract. Having more time to let suppliers know they want to switch will also benefit thousands of businesses.

At Utility Helpline, we'll watch developments with interest. As a reputable business energy broker, we've always supported our customers in their efforts to save money, matching them up with the best deals available in the market. As part of our best practice ethos, we remind firms about contract renewal dates well in advance, ensuring they do not fall foul of automatic rollovers.