‘Business owners powerless at hands of energy suppliers’
A joint letter sent to chair of the newly formed cross-party Energy Security and Net Zero Committee chair Angus MacNeil, calling for the group to conduct an urgent inquiry into supplier behaviour to ‘save small businesses from ruin’.
The alliance of groups included the British Beer & Pub Association (BBPA), the Association of Convenience Stores, National Hair & Beauty Federation and the Federation of Small Businesses.
Extremely costly contracts
A joint statement from the organisations said: “Business owners across the country are feeling powerless at the hands of the energy suppliers.
“They have seen energy bills rise exponentially in the past year and despite heading into warmer months this pain is set to continue.
“Some businesses had little or no choice but to lock into extremely costly contracts at the height of the energy crisis and many will be paying over the odds for the next 12 months and beyond.”
Urgent inquiry
The committee was called on to open an inquiry into supplier conduct in a bid to help firms battle the ongoing energy crisis.
They added: “These local businesses are well-loved assets, central pillars in their neighbourhoods and if it weren’t for energy bills wiping out their profits, would be running successfully thanks to the ongoing custom and support of their communities.
“We are urging the committee to use its powers to recognise this crisis as a real tangible threat to the existence of businesses across the country and convene an urgent inquiry into the conduct of suppliers.”
In April, the BBPA said Ofgem was moving at a “glacial pace” when it came to disciplining suppliers, putting hundreds of thousands of firms at risk of collapse.
The letter in full:
Dear Mr MacNeil
We are writing to you today to express our urgent concern and frustration in relation to the impact of unprecedented cost pressures arising from non-domestic energy supply to small businesses and to call for your urgent support to ensure that these businesses do not fail in the light of this challenge.
Collectively our organisations represent small businesses spread throughout every constituency in the UK.
As you know, small businesses – including pubs, hair and beauty businesses and convenience stores – are at the heart of every local community and support millions of jobs across the country.
Many of the businesses we represent were left with little or no option to sign new energy contracts when wholesale energy prices were at their highest in the second half of 2022. This situation, coupled with the significant reduction in support under the Energy Bill Discount Scheme, now threatens the livelihood of many small businesses who from April this year have been seeing enormous and in many cases unsustainably expensive, energy bills once again resulting in an acceleration of business failures.
Our members continue to report a raft of poor behaviours from energy suppliers. Such behaviours include (but are not limited to); placing impossible demands on individual businesses to secure new energy contracts, use of threatening and aggressive sales tactics, failing to pass on the full cost of wholesale price reductions and refusals to discuss legitimate concerns raised by customers on affordability until they fall into debt and a rapid increase in non-commodity linked standing charges which have not fallen in line with the fall in wholesale prices.
We have been working with Ofgem and [the] Government for some time to find solutions to the issues our members are facing.
We are frustrated this work has been impacted by a lack of meaningful engagement among the energy suppliers who seem happy to claim publicly they are working on solutions that in reality are not forthcoming.
We have, either individually or collectively, over the past six months called on the Government to; direct suppliers to offer a window of renegotiation for those businesses locked into extremely high rates, direct suppliers to offer an option for “blend and extend” contracts to spread the cost burden, and as a last resort put in place a hardship fund for those businesses at the most severe risk of failure.
While one or two companies have stepped forward to provide help of this type – the rest have sadly not.
