20 December 2016

Microbusinesses on expensive energy tariffs will get better deals under plans confirmed by the Competition and Markets Authority (CMA).

In order to help people who have been on a default tariff for more than three years – who are currently paying some of the highest prices in the UK for their energy – suppliers will be required to provide Ofgem with relevant information to help these customers switch to a better deal.

Ofgem will then make this information available under strict controls to competing energy suppliers so they can offer cheaper deals direct to customers based on their actual energy usage.

These offers will only be made in writing and customers will be able to opt out of the scheme whenever they want.

The CMA found that the very smallest businesses have been paying around £180 million a year more than they would in a more competitive market - with around 45% stuck on expensive default tariffs.

Ofgem is already working with consumer groups and suppliers on developing a small-scale pilot of the service, to start next year, before rolling it out nationally.

Roger Witcomb, Chairman of the Energy Market Investigation, said: "We’re helping small businesses to see which prices are available to them, and ensuring they can’t be locked into the most expensive contracts."

At present when some microbusinesses come to the end of an agreement with a supplier, they can be transferred onto more expensive "rollover" contracts.

The CMA has ordered that, from next year, suppliers will have to stop using high exit fees to lock these firms into contracts. Suppliers will also have to publish their prices so that microbusiness customers can get a much better idea of what they should be paying for their energy - and what alternatives they have.