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Government to support SMEs in energy disputes

Published:  08 April, 2024

The government has announced it will support British businesses to settle energy disputes.

Small organisations with fewer than 50 employees will be entitled to free support from the Energy Ombudsman on disputes with its energy suppliers. It will extend the service to cover 99% of all businesses in Great Britain.

The move will also enable businesses and other organisations to settle disputes with its energy broker via the Ombudsman, without the need for costly legal proceedings, as part of changes set out by the government and Ofgem.

Households and companies with fewer than 10 employees can already use the Ombudsman to settle disputes with energy suppliers. The expansion to this service coupled with the reforms from Ofgem will come into force later this year, enabling small businesses to seek redress from suppliers and brokers over unfair terms in future energy contracts.

Kate Nicholls, chief executive of UKHospitality praised the initiative, stating: “I’m very pleased that Ofgem has taken steps to enhance protections against unfair treatment by energy suppliers.

“UKHospitality and our members have been raising serious concerns about this issue for the past two years and this is a significant victory in our work to deliver a better energy market for hospitality businesses.”

In February, UKH published a survey which found that a quarter of hospitality businesses said they were in danger of running out of money with no cash reserves left, while a further 29% had less than three months of cash reserves remaining. A total of 85% also said rising energy costs were a huge worry.

“The lack of protection for businesses was obvious for all to see and these changes demonstrate that our concerns have been heard loud and clear by the regulator.

“Extortionate energy costs have been a huge restraint on businesses over the past two years and the behaviour of some energy suppliers exacerbated that already challenging situation.

“I hope these measures go some way to mitigating these costs and protecting businesses, but I’d continue to urge energy suppliers to be proactive in supporting their business customers,” Nicholls concluded.