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Economy Economy

Consult on how to extend our safeguard tariff cap to micro-businesses.

Last updated: 10:36pm 9 September 2019

As part of broader reforms to the business energy market, we will consult on how to extend our safeguard tariff cap to micro-businesses.

Conservative Party Manifesto 2017, p.21

Our verdict

The safeguard tariff cap was introduced in April 2017 for prepayment gas and electricity domestic customers. It set an upper limit on the price of a unit of energy, preventing suppliers from overcharging customers.  As one of several measures to back small businesses, this is a promise to “consult” on extending the safeguard tariff cap beyond domestic customers so that it offers protection to micro-businesses too.

In February 2018, the government introduced a bill to the House of Commons which proposed extending the protection of the safeguard tariff cap beyond prepayment customers, but its focus remained exclusively on domestic customers, not businesses. A government impact assessment at the time said:

“To ensure equal treatment, the Government’s approach is to apply the tariff cap to all domestic energy suppliers.”

Following a consultation process over the following months, the bill gained Royal Assent in July 2018 and became the Domestic Gas and Electricity (Tariff Cap) Act 2018. As its title suggests, the act makes no provision for micro-businesses, focusing solely on domestic energy customers.

We’ve found no evidence of plans or consultation regarding extending the safeguard tariff cap to micro-businesses. We’ll keep tracking to see what develops, but for now this is ‘not started’. Follow this policy for future updates.

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