What Is The Microbusiness Strategic Review?
Ofgem launched this strategic review to highlight and mitigate the adverse treatment of micro-enterprises in the retail energy market. Ofgem identified a number of key harms that prejudiced smaller businesses. These included inadequate advice, ‘hidden’ brokerage costs, and unsatisfactory dispute resolution procedures.
Microbusinesses make a significant contribution to the UK economy. Consider the figures:
- There are over 5 million microbusinesses in the UK
- They provide 21% of the country’s employment
- They account for 14% of the nation’s turnover
- Microbusinesses consumed £4.2bn with the major energy suppliers in 2021
We know Covid-19 knocked many microbusinesses hard. The ongoing volatility in the energy market has forced consumers to bear sharply increased prices. And many microbusiness contracts remain overly complex.
Through 2020 and 2021, Ofgem consulted widely and heard from stakeholders throughout the industry. These included suppliers, consumers, third-party intermediaries, Citizens Advice, and Ombudsman Services. There was consensus that existing supply licence obligations didn’t go far enough in mitigating the key harms affecting microbusinesses.
In March 2022, Ofgem announced new actions aimed at strengthening existing rules and improving protections for small enterprises.
Business Energy Comparison can fully support these measures as they align with our focus of making complex markets less confusing through informed business utility comparisons, together with expert guidance and support.