We’ve spoken recently about the significant profits business energy suppliers are making and we’ve made our point very clear that ultimately if as a business you don’t shop around to get yourself the best deal then you’ve only got yourself to blame. Of course uSwitchforBusiness make it so you don’t even need to spend your own time doing it but that’s not for this conversation...

What I want to talk about is the Shadow Energy Secretary Meg Hillier.

Now we all know that Opposition politics is a carefree, mostly risk-free world, given that nothing you say or do ever really matters...let’s call it the Lib Dem phenomenon. (fair play that they’ve made it into the coalition but do any of us know what they collectively stand for?!)

Anyhow I digress, the reason for this blog is the radical thoughts emanating from Her Majesty’s Opposition about energy supply in the UK.

By way of a bit of background.... the 'Big 6' energy companies are vertically integrated businesses. In that I mean that they generate their own electricity as well as selling it to the likes of us. Ofgem, the regulator, has been under considerable pressure to act on the alleged misbehaviour of the big 6. One action that has already been invoked and has added new transparency to the market is the obligation on the Big 6 energy suppliers to report their profits in segmented accounts... it’s that data that has allowed us to see that from business energy supply alone some £750m of profits flowed to 5 of the Big 6 last year. Nice.

But Ofgem has been pressed to do more, and as they are supposed to enable competition and fairness or in 21st Century corporate speak ‘promoting choice and value for all gas and electricity customers’. (I wonder how many people, hours, days, pounds and frothy cappuccinos it cost to come up with that?) It is unsurprising that there is a political move to come up with a more tangible solution than publishing a couple of pages of accounts.

Ofgem’s idea is to enhance competition by forcing the Big 6 to auction up to 20% of the power they generate. The idea is that independent suppliers (whether existing or new) can buy this power and then sell it on to their customers potentially at lower prices than the Big 6 can. That should raise the temperature of a few boardrooms around the country...literally in fact.

But Meg Hillier, wants to ‘compel’ the the Big 6 to auction ALL of their electricity. She has said “We’re saying: ‘Let’s look at that. Opening it all up may be the way to boost competition and allow new providers in”.

Hmmmm, now politicians are not always logical, considerate, honest, representative or frankly sane... but to any imagination the literal extension of this policy is that the Big 6 will just be generators and not suppliers. Why would they hold onto the element of their business that makes them relatively low margin and whose competitiveness will be undercut by government supported new entrants?

We then have a big gap. Who’s supplying the power? Yes, the networks will continue to run and electricity will continue to flow, but who are these companies that are suddenly energy billing experts delivering customer service excellence to millions of businesses? How do we know they will be better than what we have now? Yes, we’d all like cheaper energy and better service, in fact it would be wonderful to pay as little as we can and never have to think about contacting our energy provider because everything is always 100% accurate, timely and transparent. But this auction idea does nothing to bring that about, whatsoever.

I’ve got some disclosure to make here, I used to run an independent energy supplier and I thoroughly welcome Ofgem’s belated attempts to promote and retain competition in the market. But that is about improving a malfunctioning marke,t not destroying a working model and risking total chaos. New entrants need to be quality, well-run businesses, putting the customer at the centre of what they do and to lead the Big 6 by example. Ripping the market to shreds and putting the onus on new entrant suppliers to grow beyond their capacity and capability too quickly is simply madness.

Ms Hillier rather flippantly added: “Whether we would go fully up to 100% is up for grabs. But 20%t is peanuts, really. It needs to be much higher ... We would work from 100 per cent down, rather than from 20% up, and ask: ‘What would work?’”

Mark Powell, a partner for power and utilities at KPMG was quoted in the FT as saying “If [the Big 6] were forced to auction their electricity, then I think a lot of them would just duck out of the retail business, in the long term, that might not be a bad thing because they’re not always very good at it, but in the short term it would cause chaos.”

The 100% proposal has not been welcomed with open arms by independent suppliers either. Co-operative Energy’s business development manager Nigel Mason has said “Twenty% is a sufficient threshold to satisfy the current needs and the needs for the foreseeable future of new entrants,”.

So what is behind this call for revolution from Ms Hillier? Is it upping the ante knowing that it will never happen, but providing a tough image? Is it a genuine belief that how you promote competition is by compulsorily destroying the business model of anyone who becomes too successful (I hesitate to say good)?

Ultimately we need a competitive energy market, in which businesses can find the best deal for themselves with ease, have security of supply and predictability of cash flow and be able to treat energy like any other commodity they need in their business... flexible, track-able and preferably requiring you to pay only for what you use. Simple really. The businesses can be as big and successful as they want, auctioning off the energy isn’t the answer, strong customer focused, dependable, honest and reliable businesses are, whatever their shape, size and profits.

Having said all of that, I’m really keen to hear what you think of Ofgem’s 20%, Meg Hillier’s 100% and any other ideas you have for delivering working competition in business energy (clean and not libelous please)

Get in contact now and help us bring some sanity back to the debate

Does the temperature in your office make your blood boil? Image by renaissancechambara via Flickr

Air con rage is sweeping the nation...according to our most recent survey three quarters (74%) of workers admit to arguing with colleagues over the temperature control.

Apparently, as many as a quarter of workers (28%) regularly get caught up in run-ins or skirmishes with their colleagues over the temperature dial, and a huge 86% of people also confess to moaning about the temperature at work.

This summer (‘What summer?’ I hear you cry) 56% of those polled told us that they’ve been left shivering at work, with 24% taking jumpers into work even at the height of summer. (One of my colleagues sits at her desk with a hot water bottle whatever the weather.)

It seems like looking for the ‘perfect temperature’ to keep everyone happy is like finding a needle on a haystack. Almost three quarters of workers (72%) said that the temperature where they work is never quite right.

Temperature distractions could potentially harm your business too: 12% said that shivering in the office makes them less productive and  while 47% believe that air conditioning spreads illness.

That’s not to mention the money you could be wasting on electricity. 65% of people complained that the air conditioning in their workplace is excessive and 68% said that they would prefer fresh air instead of air con in their office.

Regional ‘air con rage’:

James Constant, Director of uSwitchforbusiness.com, commented on the findings: 

“Instead of cooling things down, gripes and grumbles over air conditioning are actually sending temperatures soaring in workplaces up and down the country. And we aren’t just talking about icy glares and the odd cold shoulder – three quarters of us (74%) are suffering ‘air con rage’, arguing with colleagues over the temperature control at work.

 “These findings should prompt businesses to look into their own use of air conditioning and consider whether they are throwing away money on wasted energy when in fact many workers are too cold. Interestingly, almost seven in ten people (68%) say that they would prefer fresh air to air conditioning so, depending on the premises, opening up the windows may sometimes be a better option. Ensuring that the air conditioning isn’t too cold, or that central heating in the winter isn’t too high, are just some of the steps that businesses can take to cut down on their energy costs as well as keeping staff happy.” 

Got a story about air con rage in your office? Leave us a comment...

By Ashton Berkhauer

Image by Ben Dodson via Flickr

Today Ofgem, the energy regulator, its latest Consumer Bulletin pulled together by the Consumer First Team to consider all of Ofgem’s recent consumer work.

The good news in relation to this is that non-domestic customers are also included in this remit. Please find below and excerpt from the bulletin:

“Ofgem has increased its focus on business consumers.  We regularly meet with business consumer representatives through our small /medium user and large users groups (SMUG and LUG) to understand the issues facing business consumers in the energy market, and we recently undertook research (Research can be found here: http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=47&refer=SUSTAINABILITY/CP/CF) with a range of small and medium businesses across Great Britain to further understand these consumers.

“From these, and other, interactions we have seen increasing evidence of a number of issues facing business consumers, showing in many cases they may not be getting the best from the energy market. Particular issues include the clarity of contracts and the way the contract notice periods work, objections to switching supplier, the level of ‘deemed’ rates, the transparency of brokers operating in this market, and the back-billing of business consumers over a number of  years.  We are addressing these issues in a range of ways for example our Retail Market Review is reviewing compliance with current rules on contract terms and notice periods. We also held a ‘roundtable’ meeting with suppliers and consumer groups on backbilling to consider some of the causes and to agree the way to tackle this issue.”

So in a nutshell Ofgem has identified a number of simple issues that we or any other self-respecting business owner has known for years in relation to the way non-domestic customers are unfairly treated by energy supply companies:

• Contracts are confusing.
• Contract notice periods are unfair and confusing.
• Unscrupulous use of the objection to change supplier process.
• Confusing nature of deemed and out of contract energy rates charged.
• Concerns about unscrupulous brokers operating (we can definitely help you with that one!)
• Suppliers unfairly billing for energy used over previous periods.

Some of our own research into the thoughts and fears around energy for businesses has flagged much the same. Take a look at this story – Switching business energy supplier ‘harder than moving mortgage’

So I might be alone in my thinking here, but as far as I am concerned, Ofgem has taken too long to admit to the issues which businesses are facing and are taking far too long to do anything about it. But I suppose it’s a case of better late than never!

Some of the problems can be remedied by getting a little bit of help. If you need us, don’t be afraid to get in touch.

by James Constant

Image by frickinmuck vis flickr

I’ve never liked horror movies, I wasn’t even a hide behind the sofa person, I was, and still am, an avoid at all costs man. But I did see one film once called ‘Shaun of the Dead’ – most people found it funny full stop and whilst it did make me chuckle, it also left me to go to bed a little more wary than normal.

There’s something about zombies that have never been particularly attractive to me, perhaps it’s the sight of hundreds of commuters each day with phones to ears and heads in emails that means the vision is all too close to home at times. But at least I always have the option to avoid horror movies (sadly not commuters).

Unfortunately though there is another type of zombie stalking us which is very real and which we can’t just switch off.

These are the so called “zombie companies”, a recent phenomenon which has masked the real state of the economy from the wider public, a reality that UK SMEs know only too well.

These businesses, as with most of us, have relied on record low interest rates and the tolerance of the tax man to delay payments (in the hope of keeping the economy alive). In ‘normal’ economic climates they would have been left to go to the wall but you can’t do that in an abnormal environment because perfectly well run, prudent businesses have been caught up in the net.

The problem we are now faced with is that many commentators believe that the era of support has begun to unravel as the economy has continued to falter with no obvious end in sight. Something’s got to give.

The latest business failure statistics therefore make worrying reading, although the number of company liquidations rose by ‘only’ 4.5% year on year, compulsory liquidations rose by almost 20 per cent in the second quarter, suggesting that creditors are losing patience with troubled firms.

Furthermore Companies House figures show a sharp increase in the number of companies going out of business without even formally filing for insolvency

The FT reports David Chubb, partner at PwC, as saying “I think a lot of businesses have done everything they can to restructure and have now concluded that things won’t improve in the near future and so are quietly being run down, the Companies most at risk are likely to be those that rely on discretionary spending, such as pubs and retail”

So a true horror story that shows no sign of ending.

When faced with the most fundamental of business issues… keeping it going, it’s easy to forget about the lower priority things you’d normally do but which understandably take a back seat. Things like shopping around for a better deal on business comms, or business energy, like cutting back on tea and coffee allowances (don’t do it!! Or you will have zombies for staff and colleagues… see our story here for our findings on this). But though it is difficult to find the time to focus on the things that can be put off… don’t… there’s a big prize at the end and it doesn’t involve zombies, flesh eating monsters or vampires… just good old fashioned homely prudence. Quite the opposite of a horror flick.