11th September 2013
Small businesses will no longer be locked into 'automatic rollover' energy contracts after five of the UK's 'big six' energy companies agreed to end the practice.
British Gas, npower, SSE, EDF and E.ON have all agreed to abolish the practice of 'rolling over' energy contracts without the business's knowledge.
The Federation of Small Businesses (FSB) welcomed the move following a five-year campaign to bring about the change.
A quarter of the FSB's small business members have been locked into rollover contracts once their fixed-term deals expired. In many instances, this resulted in them being unknowingly signed-up to an additional 12-month contract with un-negotiated price increases.
Unlike domestic consumers, business customers are responsible for contacting their current or new supplier if they want to switch or negotiate a new contact.
Business energy contracts typically last between one and three-years, with many unaware of the window for negotiating, switching or ending contracts.
John Allan, national chairman for the FSB, said: "After campaigning on this issue for over five years it's great to see that four million small businesses will no longer risk being placed on unfair rollover contracts. These contracts often took small businesses by surprise and could lock them into un-negotiated higher prices for energy."
"The FSB is grateful for the support of the Prime Minister and Number 10's energy working group in making this happen. We are looking forward to further cooperation with Number 10 so small businesses can get a better deal at the hands of the big six."