Trade associations representing high street businesses, including barbershops and hairdressers, have written to the Chair of the newly formed Energy Security Committee to plead for urgent action to save them from energy costs.
In a joint letter to Angus MacNeil MP, Chair of the newly formed cross-party Energy Security and Net Zero Committee, organisations, including the National Hair & Beauty Federation, have outlined the cost pressures arising from non-domestic energy supply. They push the group to convene an urgent inquiry into supplier behaviour and save small businesses across the country from ruin.
Together, the organisations represent businesses supporting millions of jobs across the country and have each raised the alarm about the extreme burden placed on them by rocketing energy costs in the past year.
Now, the groups have joined together to warn of the potential huge losses that will be felt in communities and on high streets across the country if nothing is done to protect businesses such as barbershops from high energy costs and poor practice by suppliers.
In a joint statement a representative for the organisations said:
“Business owners across the country are feeling powerless at the hands of energy suppliers. They have seen energy bills rise exponentially in the past year and.. this pain is set to continue. Some businesses had little or no choice but to lock into extremely costly contracts at the height of the energy crisis and many will be paying over the odds for the next 12 months and beyond.
“These local businesses are well-loved assets, central pillars in their neighbourhoods, and if it weren’t for energy bills wiping out their profits, would be running successfully thanks to the ongoing custom and support of their communities.
“We are urging the Committee to use its powers to recognise this crisis as a real tangible threat to the existence of businesses across the country and convene an urgent inquiry into the conduct of suppliers.”
The organisations’ letter
In the letter, they share how small businesses were “left with little or no option to sign new energy contracts when wholesale energy prices were at their highest in the second half of 2022”. What’s more, the “reduction in support under the Energy Bill Discount Scheme” is of no help either.
They have also experienced “poor behaviours” from energy suppliers, such as “placing impossible demands”, using “threatening and aggressive sales tactics”, not passing on “the full cost of wholesale price reductions” and refusing to discuss concerns with customers “until they fall into debt.”
Although working with with Ofgem and the Government to find solutions to these issues, the organisations “are frustrated that this work has been impacted by a lack of meaningful engagement amongst the energy suppliers who… claim publicly they are working on solutions that, in reality, are not forthcoming.”
Individually or collectively, they have called on the Government over the last six months to: try to find a “window of renegotiation for those businesses locked into extremely high rates, direct suppliers to offer an option for ‘blend and extend’ contracts to spread the cost burden and, as a last resort, put in place a hardship fund for those businesses at the most severe risk of failure.”
Unfortunately, only “one or two companies have stepped forward to provide help of this type – the rest have sadly not.”
Furthermore, they suggest that “Ofgem themselves are clearly constrained by the regulatory framework through which they operate” and this prevents them from “implementing effective changes fast enough” and “regulate the non-domestic energy market into the future.”
They implore at the Chairman once again: “Given the urgency of this situation and the dire threat our members face, we are jointly calling on you… to conduct an urgent inquiry into the conduct of energy suppliers during the energy cost crisis.”
On a more positive note, the NHBF’s latest State of the Industry Survey recorded positive changes – see for yourself here.