The government doesn’t write to an entire industry unless it sees a problem.

That is exactly what has happened following the recent letter from Ed Miliband to energy brokers and third-party intermediaries across the UK.

Against the backdrop of renewed volatility in wholesale energy markets, the message is clear: standards in parts of the broker market remain a concern, and scrutiny is increasing.

What the Government Is Saying

The letter sets out a number of expectations for brokers and intermediaries.

In simple terms:

• Pricing must be fair, transparent, and reflect genuine market conditions
• Customers must clearly understand contract terms, including how pricing can change
• Brokers should distinguish between factual information and opinion when advising
• Commission structures should not incentivise higher-cost contracts

It also confirms that the government intends to bring brokers under formal regulation by Ofgem when parliamentary time allows.

This is not new legislation, but it is a clear statement of direction.

The Real Issue: How Brokers Are Paid

The most important part of the letter is the focus on commission.

In many cases, broker commission is built into the unit rates offered by suppliers. That in itself is not unusual. The issue arises where the structure of that commission creates an incentive to recommend one contract over another based on remuneration, rather than suitability.

This was a known issue during the 2022 energy crisis, where some businesses were locked into long-term, high-cost contracts under pressure, often without fully understanding the cost implications.

The current market volatility creates similar conditions.

That is why commission transparency and alignment of incentives are now firmly in focus.

What This Means for Businesses Right Now

If you are reviewing or renewing an energy contract in the current market, there are a few practical points to keep in mind:

• Do not rush into a decision based on short-term market movements or headlines
• Ask how your broker is paid, and whether that affects the options presented
• Make sure you understand the full contract structure, not just the headline rate
• Be cautious of being pushed towards longer-term agreements without clear justification

Energy contracts are not one-size-fits-all. The right decision depends on your appetite for risk, your usage profile, and your wider business priorities.

Where We Stand

As an independent business energy consultant, our approach has always been to operate transparently and in the best interests of our clients.

• Commission is fully disclosed
• Fee structures are clear and agreed upfront
• Advice is based on suitability, not supplier incentives

It is the direction the wider market is now being pushed towards but one we have always adopted.

What Happens Next

The government has made it clear that formal regulation of brokers is coming.

When that happens, it is likely to include:

• Greater transparency requirements
• Tighter rules around commission structures
• Oversight of broker conduct and advice

In the meantime, letters like this serve as both guidance and warning.

Final Thoughts

Periods of market volatility tend to expose weaknesses in how energy contracts are sold and managed.

The key question for any business is simple: is the advice you are receiving aligned with your business interests, or the broker’s?