LONDON, July 29 (Reuters) - Britain's energy market regulator Ofgem proposed measures on Wednesday to tackle what it called unscrupulous energy brokers so small businesses could get fairer energy deals.
Two thirds of Britain's roughly 5.6 million microbusinesses, which have fewer than 10 employees and less than 2 million euros ($2.4 million) annual turnover, used an energy broker to choose their existing energy contracts, Ofgem said.
The regulator said the brokers they dealt with did not always operate transparently and many of these small companies ended up locked into poor value energy deals.
The regulator said a small number of these microbusinesses paid more than they needed to brokers in commission charges.
Ofgem's proposals include requiring energy suppliers to ensure brokers are clearer about their commission fees and key contract details. Microbusinesses would also be able to resolve any disputes with brokers via an independent body.
"Providing greater transparency and tackling unscrupulous brokers will help microbusinesses get a better, fairer energy deal," said Philippa Pickford, Ofgem's director of future retail markets, consumers and markets.
"This is more important than ever as microbusinesses emerge from the challenges posed by the COVID-19 pandemic," she said.
Ofgem estimates the proposals will help about 1.5 million microbusinesses with their electricity or gas supply contracts.
($1 = 0.8527 euros)
(Reporting by Nina Chestney; Editing by Edmund Blair)