Large scale businesses have always been able to negotiate price deals with their energy suppliers and, since 2000, so called ‘microbusinesses’ with an annual turnover of less than £1.8 million have been using energy brokers, many of whom are members of the Utilities Intermediaries Association (UIA), to do the same. You pay a fee to the broker who finds you the best deal.
However, in a new energy price scandal, nobody told these small businesses that ‘their’ brokers were also on commission from the energy suppliers whose payments were added to their tariffs and hidden in their energy bills. There are 4,500 business energy brokers in the UK, and over the last 23 years these secret payments, charged to the accounts of the companies who thought the brokers were acting for them, add up to tens of billions of pounds. It is not just businesses. Charities, churches, local councils, even parts of the NHS have been ripped off after locking into these deals.
This practice is not illegal, but it can be argued that it amounts to mis-selling, like the PPI scandal a few years ago. The argument is being tested in the courts. Test cases on behalf of thousands of small businesses are in the pipeline. One energy claims business representing 23,000 firms has a claim against one energy supplier worth £1.5bn. If successful, millions more cases could follow.
When the iPaper broke the story, Energy UK, which represents the energy suppliers, refused to comment. But a representative of the UIA was more forthcoming, saying, “First and foremost it is not quite as clear cut as claiming ‘secret commissions’ as there is such a thing as ‘half secret’, which means that the customer is aware that a fee is being taken but not necessarily aware of what or how.”
Now if you or I went to a price comparison site to get the best energy deal, we would not be surprised if it got commission from energy firms for the customers it sent their way. But, if we were paying that site for their services, we would be entitled to know exactly what we were paying for and how it might affect our bills. This doesn’t seem to bother the UIA. Even if the energy companies lose in court and have to pay out billions in compensation, the business energy brokers still get to keep their dirty money.
As ever, we will be forced to pay the bill via increased energy prices. The energy giants will continue to rake in profits. Their shareholders will continue to collect their dividends and bonuses will still be paid. While we welcome this attempt to use the courts to hold them to account, they will always find new ways to rip us off. The case for nationalising our energy supply has never been stronger. But neither Labour nor Tories will do that. They are as corrupt as the system they serve. One more reason to support the struggle for socialism.