FSB hails UK energy reforms as 'big win for small firms'

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FSB hails UK energy reforms as 'big win for small firms' (image credit: Thinkstock/Fodor90)

The Federation of Small Businesses (FSB) has welcomed the latest announcement from the Competition and Markets Authority (CMA) regarding energy market reforms that the group claims will help small companies up and down the country in the years ahead.

A decision to implement a new scheme of published comparable tariffs is expected to have far-reaching benefits for businesses across the UK, with the decision set yo help to increase transparency within the UK industry and help to ensure customers are able to secure the most favourable deals to suit their circumstances.

Responding to the news, FSB national chairman Mike Cherry stated that micro-businesses in particular - companies that employ fewer than ten members of staff - as previously, these organisations had to carry out a costly and time-consuming process of negotiating complex deals with multiple energy providers.

However, under this new and streamlined system, these firms will have access to a simplified framework for comparing products and will therefore benefit from increased efficiency and lower costs in managing their energy needs in the years to come.

In addition, the CMA ruling will ensure businesses of all sizes are no longer automatically tied into further fixed-term contracts at the end of their existing product term - thereby ensuring greater flexibility for enterprises when negotiating deals in the energy sector.

Mr Cherry argued: "Third party intermediaries can be incredibly helpful to small businesses searching out fair energy deals. But there is a lack of trust in the industry, partly caused by some TPIs who cut corners or act unethically. This market failure must be addressed as soon as possible. FSB would like to see a regulatory framework for TPIs developed by Ofgem within the next year.

"Bringing fair and transparent energy deals for the UK's 5.4 million small firms will inevitably bring more jobs, increased revenue and improved productivity to the UK as a whole."

He added that the previous system placed too great a burden on many businesses to seek out the best deals for them, meaning switching was a more difficult and costly process and therefore many companies stuck with existing energy providers, even if they weren't receiving the best tariff for them.

However, under the new system set out by the CMA, the FSB hopes that this practice will be reversed.

"Today's CMA decision is a big win for FSB and for small businesses up and down the country. Transparency and fairness should be at the heart of a functioning energy market for small firms," Mr Cherry concluded.