Trade bodies are demanding urgent action to make the business energy market more transparent in order to help tackle rising costs for small and medium-sized enterprises (SMEs).
Ahead of a key session of the Business and Trade Select Committee’s upcoming review of the Government’s Industrial Strategy on 28 April, industry groups are warning that systemic transparency failures are driving up costs for SMEs at a critical moment for the economy.
Sarah Edwards MP, a member of the Committee, recently launched The TNT Charter – Trust & Transparency in Business Energy,calling for improved trust and transparency within the business energy market. Her comments echo concerns raised by major industry groups, including The Association of Convenience Stores (ACS), The Federation of Independent Retailers (Fed) and the Federation of Small Businesses (FSB), who warn that a lack of clarity in pricing continues to drive up costs for SMEs.
Trade bodies argue these are not isolated issues but signs of a market that is failing smaller firms.
The warnings come as energy costs remain volatile, with recent global shocks pushing up fuel prices and leaving some UK businesses, particularly in rural areas exposed to sharp increases and supply uncertainty.
Industry groups including UK Hospitality and the Federation of Small Businesses are now urging the Government to fast-track regulation of third-party intermediaries (TPIs), arguing that brokers operating without sufficient oversight are contributing to confusion, poor deals and higher costs.
Ministers have pledged reform but have yet to provide a timeline, fuelling frustration across the business community.
Sarah Edwards, MP for Tamworth and member of the Business and Trade Select Committee, said:
“Small and medium-sized businesses are the backbone of our economy, yet too many are facing unnecessarily high energy costs due to a lack of transparency in the market. It is vital that we rebuild trust by ensuring clear pricing, proper oversight of intermediaries, and a system that works fairly for businesses of all sizes. I will continue pressing both ministers and Ofgem to urgently introduce the regulation needed to protect businesses and restore confidence in the market.”
Association of Convenience Stores Chief Executive Ed Woodall said:
“Independent retailers often have the same level of resource and expertise about the energy market as domestic consumers, but do not benefit from the same protections. With almost one in ten retailers reporting they have been overcharged by their energy supplier, the gap in these safeguards is having real consequences. Businesses need transparency across every element of their energy contract, enforced by the regulator, so they can understand what they’re paying for, challenge it where necessary, and take proper control of their costs.”
Hetal Patel, National President of the Fed, said: “Rising energy costs hit our businesses hard because of the energy intensive way they operate – eating into margins and ultimately threatening their viability. Improving transparency in the energy market, making it more competitive, will help control these rising costs. The Fed backedthe campaign at its launch in Westminster in February and is now urging the Government to act.”
Tina McKenzie, policy chair at the FSB, said: “Small business owners already have a lot on their plates – having to spend hours trying to work out if they are being offered a fair price for their business’s energy needs is a complication they just don’t need. Transparency allows for better levels of true competition, and reduces the risk that small firms will end up stuck on unsuitable or exploitative tariffs. The legislation to bring in more oversight of energy brokers can’t come soon enough, and will improve small businesses’ confidence in the fairness of the energy market.”
Chris Owen, energy policy lead at the British Retail Consortium, said: “Retailers are facing some of the highest energy costs in Europe, with ongoing volatility in the Middle East continuing to push prices upward. As an energy-intensive sector, the price of gas and electricity impacts everything from refrigeration and heating to transport and logistics, making them particularly exposed to rising costs. The Trust and Transparency Charter was a good start but further reforms are still needed. This includes making energy billing even more transparent, tackling the growing burden of non-commodity costs and standing charges, and ensuring retailers can benefit from support schemes available to other energy-intensive industries.”
