Small businesses are being urged to switch to cheaper tariffs, after it emerged the ‘Big Six’ energy providers charge more to SMEs than bigger businesses – and that a staggering 80 per cent of Britain’s small businesses still haven’t switched.
Phil Foster, managing director of energy analyst Love Energy Savings, urged businesses to act swiftly and avoid being automatically rolled over onto more expensive tariffs. He said many were still paying too much for their electricity and gas by sticking on standard tariffs.
British Gas said last week it would hike electricity prices on its standard tariff by 12.5 per cent from next month. The five other big suppliers – E.ON, Scottish Power, npower, EDF Energy, and SSE – have come out with similar increases. Industry analysts forecast further rises this winter, with the average annual cost of dual-fuel standard tariffs from the ‘Big Six’ predicted to rise by between seven per cent and ten per cent.
‘Enough is enough,’ says Phil Foster.
‘It’s time to take action to stop profiteering by the ‘Big Six’ energy companies at a time when wholesale energy prices are falling. With British Gas becoming the latest to increase their prices during 2017, it’s more important than ever that businesses review their energy costs to ensure they are on a contract that is working for them. Wholesale electricity prices have fallen slightly during 2017 and changes in the market offer plenty of potential for businesses to shop around for a better deal on their energy costs.’
His plea comes as it was revealed that more than three million households have switched supplier this year – an increase of 14 per cent. However, those taking advantage of switching are still in a minority, with seven out of ten households overpaying.
Phil Foster explains the situation was even worse for small businesses, with eight out of every ten SMEs paying too much. The data was reveals in a report last year by the Competition and Markets Authority, which showed that the vast majority of SMEs were still on standard tariffs.
Phil Foster adds, ‘That bills will continue to rise is becoming increasingly inevitable and failing to review your bills and find a tariff that offers you the best value for money can have significant impact on your business’s bottom line. The gap between the ‘Big Six’ companies’ fixed price deals and their standard variable tariffs has already widened by more than half since November.’