British Gas will cease to sell auto-rollover contracts from 1 September 2013. Current industry practice sees small businesses get moved onto new, often more expensive contracts if no action is taken when the original contract ends.
A new process for renewing the contracts of existing customers without using an auto-rollover will begin in June 2014. Customers will be offered a variety of fixed-term and variable options when their current plan comes to an end.
If they do not choose any of these options, they will be moved onto a short-notice, variable tariff.
British Gas first to scrap rollover
Stephen Beynon, managing director of British Gas Business, said: “Increasing numbers of our small business customers have told us they don’t like the way the energy industry automatically moves them onto new contracts, so we’ve decided we will lead the way and put an end to this practice for our customers.
“We’re the first supplier to announce an end to auto-rollover contracts and we’re calling on the industry and the regulator to work together to ensure that all customers have a transparent choice of products that never include auto-rollover.”
Cameron welcomes the move
Prime Minister David Cameron welcomed the move, saying that small businesses are the “engine of our economy” and everything should be done to create an environment in which they can flourish. Auto-rollovers have been another “big issue” facing small business, he said, which is why a cross-industry group was set up on the issue two months ago.
“I am therefore delighted to welcome British Gas’s leadership and I hope that other suppliers will rapidly follow suit,” he added.
British Gas was also the first supplier to stop selling auto-rollover fixed-term products to residential customers, back in 2010. The company has also committed to cutting back-billing for business customers to one year by the end of 2014.
Energy giant E.ON recently called for all rollover energy contracts for small businesses to be banned after industry regulator Ofgem announced it is to postpone a new rule on contract end dates.