The study, from business saving adviser Make It Cheaper, shows that firms can pay more than 220 per cent over the lowest business electricity rates.

Although the company claims the average small firm could save £1,121 annually by shopping around for the best deal on their electricity bill, just 7 per cent of businesses switched electricity provider last year, according to the research.

The study also warns that small firms are being trapped into high charges by a confusing contract renewal system, in which businesses have just a small window of opportunity to change suppliers before being automatically rolled on to a new contract, at a significantly higher rate.

Jonathan Elliott, managing director of Make It Cheaper says, ‘Through a lack of awareness of electricity rates, and a failure to shop around for the best deal, small businesses are being hit with a lethal combination that is having a de-energising effect on the entire sector.

‘It is alarming that SMEs can pay such a vast variety of prices for what is essentially the very same product. This collectively represents a huge amount of lost capital, that would be far better invested in growth in this stagnant economic climate for small businesses.’