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New rules will end automatic rollover contracts for small firms

Private sector bosses have welcomed the introduction of new energy measures for microbusinesses, which come into force today (26 June).

The measures follow the Competition and Markets Authority’s (CMA) two-year investigation into the energy market, which found 45 per cent of small businesses were stuck on standard variable tariffs.

In June last year, the CMA published a list of recommendations, which suppliers must comply with from today onwards.

These include ending the practice of locking small firms into automatic rollover contracts and publishing details of all the tariffs available.

And also from today, microbusinesses will only need to provide two relevant pieces of information – a postcode and rate of consumption – to get a personalised quote.

The chairman of the Federation of Small Business, Mike Cherry, said the new measures are a “step in the right direction”.

“Published prices and a ban on unfair auto-rollover terms should bring some much-needed fairness and transparency to the energy market for microbusinesses,” said Cherry.

The director of economics at the British Chambers of Commerce, Mike Spicer, added: “Businesses, like residential users, can save significant amounts by testing the market for their energy. The remedies announced by the CMA, particularly the halt on automatically rolling companies onto fixed-term tariffs will help ensure that fewer are paying more than they should.”

The chairman of the Energy Market Investigation, Roger Witcomb, commented: “Small businesses rely on keeping overheads down to survive, so to find that nearly half of the microbusinesses across the country were on pricey default deals was worrying.

“That’s why the CMA ordered energy suppliers to stop automatically rolling small business customers onto fixed-term tariffs and to help their customers more easily find information on the deals available. These, alongside 30 other measures resulting from the investigation, will help energy customers make sure they are on the most competitive deal in future.”

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