Ofgem proposals ‘much needed’ to deliver fairness to hospitality businesses

By James McAllister

- Last updated on GMT

Ofgem proposals to expand protections ‘much needed’ to deliver fairness to hospitality businesses

Related tags Ofgem Energy costs Energy suppliers Finance Government ukhospitality

Proposals by Ofgem to expand rules on standards of conduct to all businesses and increase transparency for those using third-party brokers have been described as ‘much needed’ to hospitality operators.

The energy regulator announced yesterday (7 December) that it has launched a statutory consultation on the proposals, which also include expanding who can access the energy ombudsman beyond microbusinesses.

It comes after Ofgem made a series of recommendations and proposed regulation changes earlier this year​ to better protect customers in the non-domestic sector.

“Businesses are no different from any energy customer and should be able to expect excellent service and fair prices,” says Tim Jarvis, director of markets for Ofgem.

“However, we have heard from too many businesses, particularly small and medium sized ones, that this isn’t always the case.

“[These] proposals will ensure better deals, better protection and more clarity for businesses – so they have the best chance of thriving at this difficult time.”

Under the proposals, existing rules on standards of conduct will be expanded to cover businesses of all sizes, which Ofgem says will ‘make clear that suppliers should put customers first’ and also allow the regulator to take action if an energy supplier does not behave well towards any customer.

Rules around transparency on what consumers are paying for third party services will also be extended to all business consumers, with Ofgem proposing to expand the requirement for energy companies to separately show the costs of using a broker to all businesses.

Additionally, it has called for businesses with up to 50 employees to be able to take complaints about suppliers to the energy ombudsman.

UKHospitality, which has long called for Ofgem to investigate unfair practices in the energy market​, welcomed the new proposals.

“The treatment of hospitality businesses by some energy suppliers has been nothing short of disgraceful throughout this [cost-of-living] crisis,” says Kate Nicholls, chief executive of UKHospitality.

“These proposals are much needed and will provide some essential protection for businesses.

“Bringing all businesses under the umbrella of the standards of conduct will ensure a level playing field in the business energy market and, crucially, mean action can be taken when certain standards are not met.

“I would urge Ofgem to go further in their plans to expand the energy ombudsman and allow all businesses to have the ability to take complaints to it.

“Improving the transparency of broker fees is very positive and will put a stop to instances where businesses had been misled or unfairly treated by some brokers, which had become increasingly prevalent. 

“These are all measures that UKHospitality advocated for, and I’m pleased that Ofgem has listened to the concerns of hospitality businesses. It’s imperative that these proposals are formally introduced as soon as possible – enhanced protections for businesses can’t come soon enough.”

The consultation is now open and will close on 31 January 2024.  To get involved and have your say, please email: AbaQbzrfgvpErgnvyCbyvpl@bstrz.tbi.hx​.

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