The Energy Advice Line has welcomed a government initiative to protect failing but viable small and medium-sized firms from having their energy supplies disconnected.
Under the plans, struggling SMEs will have their gas, electricity, water and essential IT services safeguarded while administrators put together a financial rescue package.
Suppliers will have their payments guaranteed before other creditors so that they can be certain their bills will be prioritized. Only if bills remain unpaid 28 days after the rescue package has been implemented will they be allowed to disconnect services.
Julian Morgan, managing director of the Energy Advice Line, one of the UK’s leading price comparison, switching and advice service for energy consumers, said the plan would come as a relief for small firms.
“Many businesses that are struggling financially are fundamentally sound but need emergency help to get back on track," he said. "This is impossible if businesses can’t continue trading, and of course they can’t continue trading without essential services like gas and electricity.
“This initiative makes sound economic sense, not just for the UK as a whole, but also for the small firms and their suppliers. It means that many businesses could be saved from financial ruin, jobs will be protected and suppliers will be more likely to be paid. It’s winning policy all around.
“The plan also sends a signal to suppliers that disconnecting energy supplies with undue haste does not help anyone and that flexibility is key.
“In our experience, this initiative has the potential to help a large number of small and medium-sized firms get through difficult times.”
Insolvency specialists hope that more types of suppliers will be added to the list to prevent them from “trying to steal a march on other creditors and take advantage of their importance to struggling businesses.”
The proposals, tabled in Parliament this week, are expected to come into effect by October 2015.
The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.
The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.
For further information visit www.energyadviceline.org.uk