Chuka Umunna, the shadow business secretary, has made the pledge to the Federation of Small Businesses (FSB) hard on the heels of a decision by Ofgem, the industry regulator, to defer a decision on the issue until next winter.
Ofgem has limited automatic rollover of contracts to one year to more companies in a package of measures designed to give small businesses a better deal from their energy supplier, but says it is “duty bound” to review the impact of an outright ban before making a decision.
The FSB, while applauding Ofgem’s efforts to create a level playing field with the big energy suppliers, is disappointed at the absence of “concrete action” to make it easier to switch suppliers.
John Allan, the federation’s chairman, said: “Perhaps above all, we now need to see action to tackle the ability of energy suppliers to trap small firms into uncompetitive contracts via the use of contract rollovers and we look forward to working with Ofgem to end this practice once and for all.”
Mr Umunna promised the FSB at its annual conference last week that a Labour government would not only bar the rollover but would limit back-billing to one year and would insist on suppliers offering realistic repayment plans for small businesses falling behind with bills and not “immediate demands for full repayment”.