Small business owners have been overcharged nearly 15 per cent for gas and electricity, as a new investigation reveals that the ‘Big Six’ energy suppliers gained £1.2bn through swindling unaware customers.
The Competition and Markets Authority (CMA) has released the findings of its yearlong study, in which the authority investigated some of the UK’s biggest energy companies, including British Gas, EDF, E.on, NPower, Scottish Power and SSE.
The study investigated operations conducted by the energy firms between 2009 and 2013. The report found that overall prices for energy were 5 per cent higher than the competitive level.
The report provides an insight into how small business owners are treated differently to regular customers, with the report stating ‘‘for SMEs, the evidence suggests that average prices have been substantially above the levels we would expect to see in a well-functioning competitive market.’’
The ‘Big Six’ were found to be overcharging SME owners for their energy bills by 14 per cent, meaning that the small businesses community were paying around ‘‘£0.5 billion more on an annual basis than would have been the case had competition functioned more effectively.’’
Gas has been the most expensive source of energy for business owners in recent years, with margins on sales of gas to SMEs (10 per cent) were higher than those on sales of electricity (8 per cent).
‘‘This is a damning indictment of how the energy market is failing consumers, with the biggest suppliers taking advantage of millions of households who have also been hit with the costs of government energy policy,’’ commented Which? executive director, Richard Lloyd.
The CMA suggests that business owners fail to go out and look for the best price on their energy bills. Microbusiness owners fail to get enough access to price comparison websites (PCWs), meaning that they don’t get a complete overview of prices across each market.
The report does defend energy suppliers in some cases, stating that ‘‘suppliers have recently made it easier for SME customers to get quotes, although we do not know if customers are widely aware of this development.’’
The CMA has already set out an initial list of possible measures that small business owners can use to help find themselves a better energy deal. The consumer watchdog is now expected to publish final recommendations to the government by the end of the year.