Local shops have welcomed new government plans to protect small businesses from rogue energy brokers, as part of sweeping reforms to improve fairness and transparency in the UK’s energy market.
The Department for Energy Security and Net Zero has announced that energy regulator Ofgem will be appointed to oversee third-party intermediaries (TPIs) — including energy brokers and price comparison sites — marking the first time these services will be formally regulated.
Under the proposals, Ofgem will be empowered to clamp down on predatory sales tactics and misleading contracts that have seen small firms overpay for energy deals in exchange for inflated broker commissions. The reforms aim to ensure that businesses and public organisations are offered fairer contracts, clearer information, and better routes to redress.
The move comes alongside plans to strengthen the Energy Ombudsman, halving the waiting period before complaints can be escalated from eight to four weeks and forcing suppliers to pay compensation if Ombudsman rulings are not implemented quickly.
Energy Secretary Ed Miliband said the reforms would “end the wild west of ‘cowboy’ brokers charging sky-high fees for contracts handed out to companies,” while ensuring faster access to compensation for both households and businesses.
Ofgem’s Director for Consumer Protection and Competition, Beth Martin, said extending regulation to brokers would “significantly strengthen protections” and create “a more secure energy market – offering businesses and households greater peace of mind.”
The Association of Convenience Stores (ACS) has s welcomed the announcement, describing it as a long-overdue step to safeguard retailers who rely on brokers to negotiate energy contracts.
“We have been calling on Ofgem and the government to do more to protect convenience retailers from rogue brokers for over a decade, and we’re pleased that action is finally being taken to regulate this market,” ACS chief executive James Lowman said.
“Energy brokers can provide an important service for retailers that saves them time and money, but not all brokers operate to the same standards. We look forward to continuing to work with Ofgem to ensure these proposals benefit retailers and stop unfair practices in the energy market.”
For many small retailers, the lack of regulation has meant limited recourse when brokers mis-sold contracts or inflated commissions. Some have faced unexpected bills and aggressive sales tactics, with little protection compared to domestic consumers.
The Federation of Small Businesses and the British Chambers of Commerce also welcomed the measures, saying they would help restore trust in the energy market and give firms confidence that contracts offered are fair and transparent.
Once implemented, the reforms will allow Ofgem to monitor and enforce compliance among brokers, while expanded Ombudsman powers are expected to speed up complaint resolution times and improve compensation enforcement – steps the government says will “put consumers first” across the energy sector.