UK Politics

Miliband pledges energy bill protection for small firms

Ed Miliband
Image caption Ed Miliband said small business was Britain's "best hope"

Labour leader Ed Miliband has told small businesses he will protect them from "unacceptable treatment" by the UK's largest energy firms.

In a speech in Manchester, he pledged to set up a regulator to stop firms being "rolled" on to higher tariffs and forced to pay "crippling" bills.

He said a Labour government would ensure small firms were given the same legal protections as householders.

But Chancellor George Osborne accused Labour of "phoney" commitments.

'Broken market'

Some of the biggest energy firms raised their tariffs at the end of last year, and energy prices have become a keenly contested political issue in recent months.

The opposition leader's speech comes a day after a competition inquiry into the "big six" energy firms was announced and in the same week as energy supplier SSE said it would freeze prices on households bills until January 2016.

Addressing the Federation of Small Businesses (FSB) annual conference, Mr Miliband said small business was "Britain's best hope" for a lasting and broad-based economic recovery.

He said firms did not have the same level of protection as consumers and promised to give business organisations new legal rights to take cases - such as late payment by firms or government departments - to court on behalf of their members.

On energy, he said a new regulator would have the power to enforce a ban on suppliers rolling firms over on to more expensive tariffs without their consent - or imposing retrospective back-billing for periods of longer than a year.

"We have to mend the broken energy market and freeze bills up to 2017 not just for customers of one company but for all customers of all the energy companies and all customers," he said.

Last October, Labour pledged to freeze domestic and commercial energy prices for 20 months from the middle of 2015 if it wins next year's general election, a move criticised at the time by the energy industry.

'Cutting bills'

Image copyright PA
Image caption Energy is among many firms' largest expenses

Mr Miliband said it was unacceptable that companies did not have "even basic protections that are available to households under the law from unfair energy contracts".

"The next Labour government would ban the energy companies from rolling small businesses on to more expensive tariffs without their consent," he said.

"And we will create proper competition enforced by a new regulator to keep prices as low as possible for the years ahead."

Standards of conduct

Regulator Ofgem said it had already taken action to protect small businesses, including enforcing standards of conduct on billing and switching and requiring suppliers to provide clearer information to customers.

Firms abusing the rules faced much larger fines in future, it added.

Mr Osborne, who also addressed the conference on Friday, said he had announced a plan in last week's Budget to reduce total energy costs for industry by £7bn.

Among steps being taken include a freeze on the "carbon floor" - a fossil fuels tax - for firms, which the government estimates will save medium-sized manufacturers £50,000 a year by 2018.

"We've also cut bills for families by reducing the taxes and green levies, quite often which the last Labour government put on," he said.

"That's a real demonstration of our commitment to create jobs in this country and help families in this country."

Mr Osborne has also launched a consultation on measures to help small and medium-sized businesses which have been rejected for a loan.

The government is considering whether to legislate to require lenders to release information on SMEs (small and medium enterprises) which they reject for finance, so that they can be identified and approached by alternative credit providers.