Smaller gas and electricity suppliers will benefit from a cut in red tape in time for next year, Energy Minister Charles Hendry has claimed.
In a bid to increase competition in the gas and electricity supply market, small firms will no longer have to take part in two Government schemes aimed at cutting the carbon and energy costs of UK households.

Firms with 250,000 customers or fewer will no longer have to take part in the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP), which aim to reduce carbon and cut energy costs.

Previously the schemes applied to suppliers with as few as 50,000 or more customers. However following a consultation DECC chose to raise the threshold to 250,000 customers, in order to help improve competition for smaller companies to compete with larger energy companies.

The schemes had been seen to place a disproportionate burden on small suppliers, acting as a barrier to market entry and reducing incentives to grow.

Mr Hendry said: 'Currently, over 99% of people get their energy from just six big companies. Reducing red tape for smaller suppliers will help them grow and encourage new players into the market. Increased competition can help bring down prices and encourage innovation, benefitting energy consumers.

'It's vital that we improve energy efficiency without placing disproportionate costs on small suppliers. We have listened to small suppliers, studied the evidence and gone further than our initial proposals, to give competition a bigger boost.'

Both CERT and CESP will run until the end of 2012. The Department of Energy and Climate Change is considering how to design future schemes to minimise burdens for all suppliers.