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Utilities stay a price driver for a majority of small companies, in accordance with new analysis by the Federation of Small Companies. Its newest Small Enterprise Index exhibits over 57% of small companies cited utilities as the primary trigger for rising enterprise prices in Q3 this 12 months, down barely from 62% the earlier quarter.
Reminiscences of final 12 months’s power worth disaster haven’t pale for small companies, and this illustrates the necessity for firmer motion from Ofgem to guard the small enterprise neighborhood towards mis-selling power contracts and being trapped in unaffordable tariffs as we head into winter.
Microbusinesses ought to be given extra flexibility to cancel a contract via entry to a 14-day cooling off interval. This may put them on par with home prospects.
Standing expenses proceed to be a difficulty – we have now heard examples of a small backyard centre paying £1.20 standing expenses per day. FSB wish to see a freeze on standing expenses over the winter interval as a result of present financial local weather.
Some small companies are nonetheless trapped within the excessive, fastened power tariffs from 2022 and unable to learn from the decrease wholesale power costs we see immediately. In a single case, an unbiased retailer pays 75p per kWh for electrical energy whereas a small pool membership is charged 66p.
FSB Nationwide Chair Martin McTague stated: “Whereas the autumn in October’s power worth cap contributed to the slowdown in inflation, it’s vital to level out that enterprise tariffs will not be protected by the cap, and lots of small companies are nonetheless dwelling with greater utility payments, placing them below persevering with stress.
“Giving microbusinesses the flexibleness to cancel a contract via a 14-day cooling off interval would deter pressurised gross sales ways and assist keep away from a number of the difficulties we noticed final 12 months when small companies discovered themselves trapped on excessive fastened tariffs.
“Freezing standing expenses is one other method to assist lower power payments. This can be a charge small companies should pay no matter their power utilization and has been utilized by power suppliers as a back-door option to inflate costs. We due to this fact welcome Ofgem’s session on doubtlessly altering the standing expenses system.
“The place related, we proceed to name on power suppliers to undertake our Ofgem-backed proposal and permit small companies that are nonetheless trapped in fastened contracts signed throughout final 12 months’s market peak to increase their phrases however at a decrease and blended charge – between their unique fastened charge and the decrease wholesale power costs we noticed immediately.
“Small companies are taking a look at Ofgem for a significant safety this winter. We stay up for persevering with partaking the regulator on this additional.”
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