By Daniel Hunter
Small businesses are being held back by the rising cost of utilities and fuel and need more support in next week’s Budget, the Forum of Private Business is arguing.
With reducing business costs one of the main pillars of its Get Britain Trading 2012 campaign, the Forum has also submitted evidence to Ofgem’s Retail Market Review, which is exploring ways to better protect business energy customers, including helping them to be more aware of their contract terms, improving their experience when switching energy suppliers, as well as increasing confidence in third-part intermediaries and boosting trust in suppliers.
The Forum is lobbying to ensure micro and small businesses are treated fairly by utilities companies following recent steep increases in utilities prices.
The not-for-profit employer organisation is calling for a business-focused utilities code of conduct that contains the same protections for businesses that are currently enjoyed by domestic customers, particularly from roll-over contracts where businesses find themselves tied to often more expensive deals with little or no warning — severely restricting their ability to shop around for a better deal..
Ofgem is currently looking at extending the SLC 7A licence condition to all small firms.
At present, it limits the ability of energy companies to roll over micro businesses, classified as firms with fewer than 10 employees.
“This Budget is an opportunity to provide real support for small businesses over steep utilities prices and help them stem the rising costs that are threatening to undermine their ability to grow and create jobs,” said the Forum’s Senior Policy Adviser Alex Jackman.
“Better billing practices providing the same kind of protection for business customers as domestic users would be widely welcomed. In particular, we want to see all small businesses guarded against companies exploiting the use of roll-over contracts."
On fuel, the Forum wants the Chancellor to introduce a fuel price stabiliser to provide consistency over transport costs, and believes the Government should consider excluding the fuel duty element from VAT charges on fuel.
“On fuel, in addition to pushing for tax incentives we have long called for a fuel stabiliser to regulate prices at the pump and help business owners to better control fuel costs and feel the Budget is the perfect time to put such measures in place,” Mr Jackman added.
The Forum’s research shows that 75% of small businesses want more transparent billing practices with the same level of information provided to domestic customers and 73% specifically require the contract date or status as a reminder.
In all, 63% of members surveyed called for suppliers’ contract termination times to be standardised, 58% said they should be able to dictate repayment terms when a supplier has made a billing error and 55% argued for more compensation following mistreatment by utilities companies.
Further, 50% of respondents want suppliers’ contact details on bills to allow them to complain more easily, 43% would like to receive a renewal letter via recorded delivery and 39% believe a full explanation of key terms and conditions upon signing a contract would help them.
The Forum’s budget submission comes amid concerns that spiralling business costs are hindering small business growth and job creation. The organisation’s research shows that 94% of businesses have experienced recent energy cost increases, 92% a rise in transport costs and 82% increases in the cost of raw materials and stock. Excessive administrative demands have meant that 45% of businesses have been unable to focus on cost cutting.
The Forum is also pushing for data on utility customers' complaints to be published regularly and strict timeframes for suppliers to make the information available, more powers to allow Ofgem to protect businesses from mis-selling and an accreditation scheme for voluntary codes of practice within the TPI sector, covering third-party intermediaries.
In addition to lobbying to create a business landscape conducive to success and growth via Get Britain Trading 2012, which was welcomed recently by the Business Minister, Mark Prisk, at an event in Parliament, the Forum has joined forces with Chess Telecom to free firms from rollover contracts.
Forum members are being offered a guarantee of no rollover deals - and also best price - on telecommunications services.
“Small businesses are facing a barrage of cost increases from almost every corner, hitting their profitability and their prospects for economic growth," Warren Pryer, Sales Director at Chess, commented.
“We wanted to give business owners the peace of mind that they will not be tied into a contract for longer than they originally expected. In addition to that, our Never Beaten on Price Guarantee ensures that if they are approached by an alternative provider offering what looks like a cheaper like-for-like quote, Chess will beat it, or if we can't - which is very unlikely - we'll let the customer switch immediately without penalty.”
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