Small firms hit by energy contract rollovers

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The Federation for Small Businesses (FSB) said it would continue to support an MP’s campaign to limit the timescale of energy contract rollovers for 'micro' firms, despite Parliament rejecting a proposed Bill last week.

Caroline Lucas, Green MP for Brighton Pavilion, saw her Micro Business and Energy Contract Rollover Bill – designed to tackle the practice of energy companies' rolling over contracts and locking small firms with fewer than 10 employees into un-negotiated and often expensive terms for a full year – fail at the second reading stage last Friday.

However she said she would continue her fight and the FSB said it planned to carry on backing her campaign.

The FSB said its research revealed one in four small firms had found their contracts had been rolled over without their knowledge, with 82% saying they would back the abolition of such rollovers.

John Walker, the FSB’s national chairman, said micro firms are often unaware of the terms relating to contract rollovers and his organisation believed the practice was being used “to unfairly lock micro businesses into unfair contracts.

"The smallest firms need much more protection from these unfair practices. It is something which government and [regulator] Ofgem must tackle to give small firms a better deal at the hands of the big six energy companies.”

Meanwhile Lucas said energy firms ought to be “held to account” for rolling over contracts.

“It’s deeply unfair that, while micro businesses often consume products and services in a similar way to domestic consumers, they do not enjoy the same level of regulatory protection.”