FSB urges Ofgem for fair energy contracts

As reported by City AM,  the Federation of Small Businesses (FSB) calls on Ofgem to address rising utility costs for small businesses, emphasising the need for contract flexibility and a freeze on standing charges amid concerns about inflated prices

FSB national chair Martin McTague said small businesses are still battling high utility bills despite the fall in October’s energy price cap.

“While the fall in October’s energy price cap contributed to the slowdown in inflation, it’s important to point out that business tariffs are not protected by the cap, and many small firms are still living with higher utility bills, putting them under continuing stress,” he said.

Of 816 surveyed small businesses, over 57 per cent said utilities were the main cause for rising business costs in the third quarter of this year, according to the FSB’s latest Small Business Index.

The FSB is calling on Ofgem to provide flexibility for small businesses in terms of being able to cancel contracts through a “14-day cooling off period” and putting a freeze on standing charges.

Some small businesses are still stuck in the high fixed energy tariffs from last year, and McTague says standing charges have been used by energy suppliers as a “back-door way” to inflate prices.

He added: “Where relevant, we continue to call on energy suppliers to adopt our Ofgem-backed proposal and allow small firms which are still trapped in fixed contracts signed during last year’s market peak to extend their terms but at a lower and blended rate – between their original fixed rate and the lower wholesale energy prices we saw today.”

An Ofgem spokesperson told City A.M.: “We are committed to supporting an energy market where business customers receive excellent service, pay fair prices, and can rely on stable suppliers.

“That is why we opened up a consultation earlier this year on how we can better support business customers in paying their energy bills.

“We will very soon be consulting on licence changes to address the main concerns that businesses, their representative bodies and other stakeholders raised and we have also recently started consulting on how energy standing charges should be spread across the system.”