Ban rollover energy contracts, says FPB

The Forum of Private Business (FPB) has urged Ofgem, the energy watchdog, to reconsider its views on prohibiting rollover energy contracts.

Ofgem is currently conducting a review into the energy supply market.

FPB research has revealed that 84 per cent of businesses that responded said that utility costs were "a major concern".

Almost half (47 per cent) claimed that energy costs are a "serious" or "very serious" issue.

With the Ofgem investigation due to be completed by 15 September, Phil McCabe of the FPB said: "Time is running out for Ofgem to take on board how unpopular and damaging rollover contracts can be."

Mr McCabe added that the group's members have reported that businesses are being given extremely inadequate notice periods on their energy contracts and that often they are being forced to pay higher rates.

He commented: "These 'evergreen' contracts stifle competition within the energy market because they prevent business owners from shopping around for a better deal. Ofgem should help struggling small business owners to control their utility bills, not wilt under pressure from the big energy companies."

The FPB has already criticised Ofgem's reversal of its original decision to outlaw rollover contracts for businesses.

The business group has also expressed its concerns that Ofgem's draft recommendations, which would see the introduction of specialised contracts and an obligation on the part of energy suppliers to provide 30-day notice periods so that businesses can renegotiate contracts, would only apply to firms employing fewer than 10 staff and not to other small businesses.