The UK Competition Authority, which is preparing to conclude its investigation into the energy market, says SMEs pay around £500 million more a year than if competition was functioning effectively.
It has voiced concern that 45% of SMEs have been placed on a default tariff – one that has not been actively negotiated – which can be more than twice as expensive as a negotiated tariff.
A recent FSB study found that the main obstacles to businesses becoming energy efficient are: –
- Working from leased or rented premises
- Lack of concern around energy costs and
- Lack of capital for energy efficiency investment
The new service enables FSB members to obtain advice on competitive rates for their utilities, identify the annual saving achievable by switching tariffs and even have new contracts arranged for them if requested.
It was triggered by research suggesting that smaller businesses are being failed by the energy market, with 70% of businesses experiencing difficulty comparing energy tariffs while 43% said they have never switched supplier.
Dave Stallon, FSB Operations Director, said: “Energy is an increasingly important issue for smaller businesses. There are many ways they can make substantial savings through the implementation of energy efficiency measures as well as ensuring they get the best tariff they can on their gas and electricity. Many smaller businesses, however, either don’t believe they can make substantial savings or haven’t trusted the market and the system enough to engage in the process.
“Our new service is designed to give smaller business owners easy to use advice they can trust, to enable them to make savings with the minimum of fuss. We are also very actively engaged with the CMA to improve the energy market for smaller businesses and are offering resources and advice on energy efficiency. In combination, we are confident that our initiatives can help to make a significant difference to smaller businesses’ energy bills.”
FSB Energy will also take care of the paperwork involved in switching – such as terminating existing contracts on behalf of members – saving them time and hassle in the process. And the service reminds members when their fixed price periods end to make sure they never ‘default’ on to more expensive rates.