FSB demands energy price cuts for businesses

29 January 2015

The Federation of Small Businesses (FSB) has questioned the exclusion of business customers from reduced energy tariffs, following an announcement that the 'big six' energy firms will be cutting prices for domestic customers.

British Gas, EDF, E.On, Npower, Scottish Power, and SSE have all announced reductions in gas prices between 1.3 per cent and 5.1 per cent this month.

Mike Cherry, FSB national policy chairman, said: “Why are small businesses unfairly left out in the cold again? We need assurances by the big energy firms that the decreasing cost of wholesale oil and gas prices will be passed on to business customers, just like domestic customers.

“FSB members frequently say how the cost of energy is a make or break issue. There is far less transparency around pricing in the business market, making it hard for small firms to know if they’re getting the best deal.

“This latest development will only enhance the view of many of our business members that they are receiving a second-rate service from suppliers.”

The reduction in domestic energy tariffs follows a demand from business minister Matthew Hancock for energy companies to cut their prices, after wholesale gas prices fell 30 per cent lower than the previous year.

A spokesman for E.On told SM it reassessed prices for small business electricity and gas customers and decreased them at the start of January. An Npower spokesman said domestic and business tariffs were "essentially incomparable", and there should be a greater onus on business owners to engage in how they use and purchase energy.

Andrew Bainbridge, chairman of the Major Energy Users’ Council, told SM he was more concerned about the inability of a new government to effectively manage a handover of energy purchasing and supply.

“As the UK faces an imminent government handover, the fear is that the catch-up to be made between administrations could prove extremely detrimental to businesses. The MEUC is setting up a Utility Markets Policy Group in an attempt to manage this deficit.”

Bainbridge added a more crucial issue for UK businesses will be water services entering open competition in 2017. “Reforms could lead to a tougher operating environment, and many businesses have no risk management policies to protect themselves in the event of drought or floods. The MEUC is advising our members on how best to protect themselves accordingly,” he said.

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