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UK SMEs Reach ‘Energy Tipping Point’

New research launched today by business community Ingenious Britain, in conjunction with business money-saving experts MakeItCheaper.com, finds UK SMEs at an 'energy tipping point', angry and frustrated with their suppliers. Business owners, managers and key decision-makers across the UK have overwhelmingly stated that they have lost trust in their energy providers and are fed-up with continually rising prices which they believe to be unfair.

Just 36% of the 500 UK SME decision-makers responding* said they trusted their energy provider - less than any other provider of business services including: banks (50%), insurance providers (51%), solicitors (69%) and accountants (77%). This lack of trust and negative perception is driven by recent accusations of price fixing (58%) and the continued announcement of record profits amongst energy companies (57%). The research shows that, should allegations regarding price-fixing be proven, SME business owners and managers would overwhelmingly seek compensation - 84% said compensation should be provided and 77% said they would seek a claim.

Other key findings emerging include:

  • Relentless price rises:Eight out of 10 (79%) SME decision-makers have seen a hike in their energy bill over the past year and a similar proportion (80%) believes this rise will continue over the next 12 months.
  • Bills are unfair:Three quarters (75%) claim that their energy prices are unfair and disproportionate, with 36% believing that they could be getting a better deal from their existing supplier.
  • Barriers to switching:Just over half (51%) are planning on switching in the next 12 months, with just under half (44%) believing that switching supplier is a difficult and complicated process.
  • Government could do better:71% of SME decision makers believe the government is not doing enough to help SMEs get a better deal from energy providers. Only 25% of those searching for help used government resources, with the majority looking to the private sector for help, either via price comparison sites (49%) or third party business advice sites (23%).

Mark Moore, founder of Ingenious Britain, said:

Energy providers are losing the trust of their business customers, particularly SMEs. This research shows widespread malaise and discontent amongst business owners and managers across the UK. 2012 was a bad year in terms of reputation for energy companies, with Libor-style pricing allegations in the news and the announcement of record-high profits, so it's no wonder the business community is frustrated.

Jonathan Elliott, managing director of MakeItCheaper.com, added:

Whilst I don't think we're about so see a Class Action launched, we do expect to see more businesses voting with their feet. The 51 per cent of businesses looking to switch in 2013 is higher than the 46 per cent that the regulator, Ofgem, has reported to have ever switched** and so it looks like this will be the year that hard-pressed SMEs finally get even with their suppliers.

Businesses interested in switching should visit www.makeitcheaper.com or call 0800 970 0077 for free and impartial advice.

- ENDS -

* The research was conducted in December 2012 by independent research company: Vision Critical.

** Research conducted by Accent on behalf of Ofgem, published in November 2012 as part of the 'Retail Market Review'. Download PDF

About Ingenious Britain

Ingenious Britain is leading business advice and community website. It is designed around, focused on, and created for UK small businesses and their needs.

About Make It Cheaper

Established in 2007 and based in Central London with 126 staff, Make It Cheaper is the number one destination for businesses to get a better deal on their utilities and other services. Acting on behalf of customers with total impartiality and free-of-charge, Make It Cheaper offers year-on-year savings across a range of products including: business energy, telecoms, insurance and merchant services (chip & PIN). By switching suppliers or helping to renegotiate deals with existing ones, it will typically save over 30% of costs - as well as a considerable amount of time that its customers can then spend on running their businesses. Make It Cheaper has been in the Sunday Times Fast Track 100 for the past two years and its 2012 Net Promoter Score was 74%.

Further information: Nick Heath 020 7654 0730 / 07720 297972 / nick.heath@makeitcheaper.com

Sample data

Q. Look at the following organisations and consider your business relationship with each of them. To what extent do you trust them?

 TotalRegionGenderAge
LondonRest of SouthMidlands / WalesNorthScotlandNorthern IrelandMaleFemale18-3435-4546-5556+
BASE: All Respondents50171123128132407318183141115116129
Bank251367763581341559687545555
50%51%63%49%44%33%57%49%52%62%47%47%43%
Insurance provider2563871646217415610072506668
51%54%58%50%47%43%57%49%55%51%43%57%53%
Energy provider182265341491121166670393637
36%37%43%32%37%28%29%36%36%50%34%31%29%
Solicitor34650958490225220126101728291
69%70%77%66%68%55%71%69%69%72%63%71%71%
Accountant388491059999297253135968698108
77%69%85%77%75%73%100%80%74%68%75%84%84%
Facilities management300427978752242049698726565
60%59%64%61%57%55%57%64%52%70%63%56%50%
Fixed line/broadband provider3094184708723420610388677183
62%58%68%55%66%58%57%65%56%62%58%61%64%
Mobile contract provider290367769822241979389666273
58%51%63%54%62%55%57%62%51%63%57%53%57%
Landlord (if you rent rather than own your business premises)244296955711641687680614954
49%41%56%43%54%40%57%53%42%57%53%42%42%
Pension provider256337265632031768084555265
51%46%59%51%48%50%43%55%44%60%48%45%50%
Recruitment consultancy/agency213365052551731456882533840
43%51%41%41%42%43%43%46%37%58%46%33%31%
Merchant services (e.g. Chip and PIN provider)285426871752451978889666367
57%59%55%55%57%60%71%62%48%63%57%54%52%

Q. Which, if any, of the following have negatively altered your opinion of energy companies?

 TotalRegionGenderAge
LondonRest of SouthMidlands / WalesNorthScotlandNorthern IrelandMaleFemale18-3435-4546-5556+
BASE: All Respondents50171123128132407318183141115116129
Recent accusations of pricing fixing2903771727926518810261656896
58%52%58%56%60%65%71%59%56%43%57%59%74%
Announcement of record profits2853475737918617810751697689
57%48%61%57%60%45%86%56%58%36%60%66%69%
Environmental concerns921421282171613134231718
18%20%17%22%16%18%14%19%17%24%20%15%14%
Increasing Direct Debit payments without authorisation15420364637123916345284140
31%28%29%36%28%30%43%29%34%32%24%35%31%
Preventing you from switching66111420174-372927131313
13%15%11%16%13%10%-12%16%19%11%11%10%
Other (Please specify)1724731-892528
3%3%3%5%2%3%-3%5%1%4%2%6%
None of the above5781812136-332413151514
11%11%15%9%10%15%-10%13%9%13%13%11%

Q. If energy price fixing was proven - do you think businesses should be compensated?

 TotalRegionGenderAge
LondonRest of SouthMidlands / WalesNorthScotlandNorthern IrelandMaleFemale18-3435-4546-5556+
BASE: All Respondents50171123128132407318183141115116129
Yes420601031041133372761441069796121
84%85%84%81%86%83%100%87%79%75%84%83%94%
No43791593-271627772
9%10%7%12%7%8%-8%9%19%6%6%2%
Don't know384119104-1523811136
8%6%9%7%8%10%-5%13%6%10%11%5%

Q. If energy price fixing was proven and compensation was available - would you pursue a claim?

 TotalRegionGenderAge
LondonRest of SouthMidlands / WalesNorthScotlandNorthern IrelandMaleFemale18-3435-4546-5556+
BASE: All Respondents50171123128132407318183141115116129
Yes38658959398357259127979683110
77%82%77%73%74%88%100%81%69%69%83%72%85%
No424914132-2715255102
8%6%7%11%10%5%-8%8%18%4%9%2%
Don't know7391921213-324119142317
15%13%15%16%16%8%-10%22%13%12%20%13%

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