High Energy Bills; Small Businesses At Risk Of Closing

High Energy Bills; Small Businesses At Risk Of Closing

Almost 100,000 small businesses are at risk of closure in the wake of ruinously high energy bills.

More than one in ten small firms are locked into long-term gas and electricity contracts signed when prices were at their peak last year. Yet energy suppliers and brokers are refusing to renegotiate even though wholesale prices have slumped in recent months.

The news comes as British Gas’s parent company revealed a ten-fold increase in half-year profits to almost £1 billion.

Businesses allege they were strong-armed into signing multi-year contracts out of fear that prices would increase further after the energy crisis.

Paul Wilson, policy director at the Federation of Small Businesses (FSB), said: ‘I’ve seen examples where businesses have signed up to deals that I found surprising, in terms of the prices paid or the length of the contract or both.’

Restaurant owner Morfudd Richards took out a two-year contract last summer when she opened her second venue, Greenberry Hill, in North London.

She was paying 18p per kilowatt hour for electricity before prices spiked. Now she is locked into a rate of almost 69p, with monthly energy bills of more than £7,000.

British Gas told her she would need to be paying 70p per kilowatt hour to be eligible for its ‘blend and extend’ contract renegotiation scheme. When The Mail on Sunday contacted the company, it said there was no exact criteria that determine whether or not firms can renegotiate their contracts.

spokesman claimed that businesses are being dealt with on a case-by-case basis but it was too early to say how many firms had been approached or the amount of support they had been given.

Other suppliers face similar accusations of greed and intransigence.

The situation is made more complicated for firms that use energy brokers, who are paid to find customers the best deal but get commission from energy suppliers. The FSB estimates that one in three businesses with fewer than ten employees use brokers.

Ofgem last week called on the Government to increase regulation of energy brokers and demanded greater transparency on the commissions they receive.

Businesses have been hit hard since Government support was reduced in March.

Source: MailOnline News

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