Competition and Markets Authority finds SME profits down due to energy prices
Following a year-long investigation into Britain’s energy market, the Competition and Markets Authority (CMA) has found that millions of homes and businesses have been over paying for their energy.
According to the report’s findings, if action had been taken earlier to ensure that competition was functioning effectively, then Britain’s small businesses would currently be £500m better off.
The CMA has made no indication as to what definitive action it plans to take in reforming the energy market, but it has been suggested that a ‘safegaurd tariff’ could be introduced for domestic, microbusinesses and SME customers to secure prices until proper action can be taken.
In the report the CMA also admits that recent attempts to simplify the energy market have failed to engage customers in switching. To remedy this, the CMA has suggested that an Ofgem-led price comparison website could be created and extended to cover microbusinesses. This move seems to have been prompted by Make It Cheaper's work with the CMA, during which we indicated that microbusinesses could benefit more from domestic tariffs sourced by a price comparison website than contracts offered by non-domestic suppliers.
Britain’s electricity prices have risen by 75% - and gas by a staggering 125% - within the last ten years
Britain’s electricity prices have risen by 75% - and gas by a staggering 125% - within the last ten years, yet the cost of wholesale energy has fallen by 26% year-on-year. Despite this inconsistency, Energy UK - the organisation which represents the ‘Big Six’ energy companies - has insisted that energy customers have not been “ripped off”. However, they have also acknowledged the definite benefits of switching contracts for a better deal.
A spokesman said: “Customers have not been overcharged but money may still be saved when people shop around for deals that suit their individual circumstances.
“It is easy to switch and a few minutes online could save households money and get them the deal that is right for them.”
Make It Cheaper’s SME energy expert Nick Heath said: “Around one million businesses are in the dark about how their energy contract measures up to the rest of the market. With a shocking half a million small firms paying nearly twice the standard rate, and 45% of microbusinesses on expensive default electricity tariffs, it’s important that Britain’s business owners take control of their energy.
“Proactive switching is essential in business to prevent spiralling costs and boost profits, while restoring a semblance of competition and securing lower prices for Britain’s UK energy customers.”
To ensure you’re getting a fair deal on your business electricity and gas, call 0800 970 0077, or visit Make It Cheaper for a quote.
James is an online content creator at Make It Cheaper. Having previously created a variety of content for a number of websites and media outlets, James focuses on making it easy for SME owners to find interesting and engaging content - as well as useful guides and online tools.You can email James at firstname.lastname@example.org