Small businesses pay £500m a year too much
A look at the 2015 CMA review of the UK Energy Market
Earlier this week, the Competition and Markets Authority (CMA) confirmed what millions of households and businesses already knew. Year on year we have been overcharged for our energy, and the Big Six have charged customers around 5% more than a properly competitive free market should have allowed.
The CMA’s report – initiated by OFGEM a year ago after very high profile complaints that retail prices were not reflecting changes in the wholesale market and most publicly resulting in Ed Milliband’s pre-election price cap proposal – is relatively bland and unremarkable. It gives a clean bill of health to the wholesale energy market, for example, and says integration between generators and suppliers is fine. But the key finding is that small businesses are losing £500m a year. If those statistics are robust, a regulatory response from OFGEM should be forthcoming.
Amber Rudd, the secretary of state for energy and climate change, welcomed the CMA report and recommendations. The findings now go out to consultation with a final document promised by Christmas Day.
“We’ll consider the report and respond soon and we won’t hesitate to take further action where the market is not delivering a fair deal for consumers – including doing more to support switching, ensure the swift roll-out of smart meters, and increase competition in energy markets,” said Rudd.
The Institute of Directors, however, has said the current plans for a switch to Smart Meters are “a disaster waiting to happen”.
Parliament’s Energy and Climate Change Committee agrees, with MPs concerned that allowing each energy company to come up with its own smart meter solution, rather than adopting an industry-wide approach, could lead to inefficiency and further delay – already evidenced by the fact that meters installed by one company are incompatible if you switch supplier (as recommended by the CMA) and will require a new meter to be supplied and fitted.
Businesses need to shop around
Only about 10% of us do what the CMA suggested we should: actively research the supplier marketplace and chop and change to get the best deals. Why Not? Because the energy marketplace is wrapped in confusing jargon and research takes time – which most of us prioritise in actually running our businesses.
And that’s why we help you
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Or give us a call on 020 8835 3535. Let’s see how much we can save your business this year on energy costs.
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