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Don't leave businesses out in the cold

With the government set to announce action domestic energy bills, Make It Cheaper CEO and founder Jonathan Elliott explains why businesses need to be included in any reforms. 
As rival political parties scramble to formulate popular energy policies in a bid to win over the public, it's frustrating to see businesses being left out in the cold. Very few column inches have been dedicated to the impact that rising gas and electricity costs have on small firms.

The problem with this lack of coverage is that it paints a particularly skewed picture. Domestic bills may have soared, but this year some SMEs have seen their electricity prices jump by as much as 16%. With other firms witnessing a 20% leap in gas charges, it's clear that businesses face a tough challenge when it comes to energy.

Time for action

Research we've conducted supports this claim, with SME owners recently revealing that they consider energy to be the most unfairly priced of all their expenses. Indeed, respondents to our survey explained that they're eager to see the Chancellor prioritise the issue in the Autumn Statement.

The same figures also show that 69.7% of businesses believe the government's current focus on energy bills will result in them paying more for their gas and electricity in 2015, reaffirming the belief that little is being done to protect small firms from the latest round of price rises.

So, as the authorities continue to explore costs in the domestic space, along with the FPB we are proposing a simple move that would cut SME energy expenditure by as much as 5%.

Loosening the levy

That move is to make independent business energy suppliers exempt from the Climate Change Levy (CCL) - an idea inspired by the domestic side of the industry, where gas and electricity providers with less than 250,000 customers do not have to pay the ECO tax. Here's how it would work.

Under the current setup, all energy companies that supply SMEs with power have to pay the same environmental taxes irrespective of their size. It's a system that makes it difficult for new suppliers to break into the market, stifling competition and keeping prices high across the board.

By making smaller energy providers exempt from the levy if their number of business customers is below a defined threshold, these independent companies would not have to pass the costs of the CCL on to consumers. In short, they'd be able to offer SMEs cheaper bills and present an attractive alternative to the Big Six.

Simple steps

It's a measure that's relatively easy to implement, and it's one that would enable small firms to see tangible benefits.

Yet as the government continues to focus on reforming green levies to reduce domestic energy bills, the fear is that SMEs will once again be overlooked.

That would be a shame. If the coalition is looking to prove it's serious about increasing competition in the energy market, making independent suppliers exempt from the CCL could benefit both the industry and businesses at a time when small firms are expected to continue leading the economic recovery.

Don’t forget the Forum can provide advice and support to help members save up to £900 on utility bills. For further information call us on 0845 130 1722. 

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