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Government must back small firms as Tesco enters market

Dear Sir,

Tesco’s venture into the heating and boiler market will concern many people, as they have a track record of destroying competition and screwing down prices.

My concern is that they appear to be saying they are setting up partnerships, when in effect they are looking to sub-contract work out on a labour only basis to a cut-price schedule of works, ie the lowest bidder will get the contract.

This may be attractive to some of the larger contracting firms but is a long way from being any sort of partnership that would help small local heating companies.

The Tesco model is similar to that of British Gas, whereby they do the marketing and selling and then sub out the labour-only work.

The positive side of this is that any marketing that Tesco does will raise awareness and possibly expand the market.

My guess is that the gullible public will be sucked in by offers of free clubcard points, but the discerning purchaser will continue to seek out suitably qualified local heating engineers who will be better able to tailor the work to their customers’ needs and provide a more cost-effective and efficient solution.

This initiative by Tesco is clearly in preparation for the Green Deal, and no doubt many more such schemes will emerge from the woodwork between now and October.

Industry concerns that large players like Tesco could come into the market and try to dominate it alongside the energy suppliers has been raised with government ministers.

I was told by energy minister Greg Barker in a meeting just before Christmas that for the Green Deal to be a success the government needs small installers more than we need the government.

The Prime Minister has also stated that “Britain’s small businesses are one of the country’s greatest assets. Their success is absolutely vital to delivering the jobs and growth on which the future of the economy depends.

“And the government is determined to do everything we can to get behind them”.

It is about time that these fine words from our political leaders are turned into something more tangible and believable.

Peter Thom, Green Heat