One in four small businesses consisting of less than ten members have reported that their energy supplier has rolled over their contract without their knowledge, according to a survey by the Federation of Small Businesses.
MP Caroline Lucas is heading the campaign to give small businesses an energy supply rollover period of 30 days, ousting the current constricting one year contract length. The Private Member’s Bill is also pushing to ban the practice of rolling over energy contracts without informing the client, or before allowing them to shop around first.
A spokesperson for the business savings experts Make It Cheaper had this to say about the energy rollover Bill:
“This topic has been long-debated with a full review coming up next on Ofgem’s to-do list and it’s even the subject of a Parliamentary Bill.
“Our view on that is that no business likes being rolled onto more expensive contracts but the alternative for the vast majority – that are not actively managing their energy contracts – is to end up on ‘Deemed’ rates when the existing contract comes to end. This scenario is a far worse fate as you can see from these typical business energy rates:
“We welcome Ofgem’s forthcoming Rollover contract review but we also know from Ofcom’s decision to do away with Automatic Renewing Contracts on 1st January 2012 that any potential benefits to the consumer can take years to filter through because of pre-existing fixed term contracts taking precedence.
“Meanwhile the ‘elephant in the room’ – which is that too few businesses are proactively engaging in the market – is being overlooked. We believe that engagement, rather than regulation, will be a faster and more effective route to happier SME energy procurement and are working with suppliers such as E.ON and CNG to voluntarily improve and promote customer engagement. “
