Call for action on energy bill 'stealth tax'

MP Caroline Nokes.

MP Caroline Nokes.

First published in News

HIGHER energy bills for customers who pay by cash or cheque – rather than direct debit – are a “stealth tax on the poor”, Hampshire MPs will protest today.

Four county MPs will demand action against no fewer than 17 energy companies, accusing them of slapping an extra £114 on the average bill.

They will warn that almost half of people do not pay by direct debit currently – including more than one million who do not have a bank account.

A motion to be debated today demands an urgent inquiry by watchdog Ofgem, reading: “These charges are a stealth tax on the poor.”

The controversy follows an investigation by Tory backbencher Robert Halfon, who has branded it the “great utility rip-off”.

Conservatives Caroline Nokes (Romsey and Southampton North), Julian Lewis (New Forest East) and Caroline Dinenage (Gosport) are demanding action, as is Liberal Democrat Mike Thornton (Eastleigh).

Ms Nokes said: “This is an issue affecting thousands of families in my constituency, because 45 per cent of consumers do not pay their energy bills by direct debit.

“It is often those on low incomes who are hardest hit by these charges, especially those who are on pre-payment meters. I want to see total transparency of energy prices for consumers and for the regulator to take tough action on those energy companies who are treating their less well off customers the most unfairly.” Ms Dinenage added: “I understand that companies do incur extra admin costs when processing other types of payment. However, the amounts seem wholly excessive, particularly for an essential service and when 45 per cent of people do not pay their electricity bills by direct debit.”

Mr Halfon has called for charges to be capped at £24 a year. He found that average electricity bills for those who paid quarterly by cheque or cash were £532 last year – £41 higher than for those who paid monthly by direct debit.

And paying for gas costs those not using direct debit a whopping £896 – £73 more – pushing the average dual fuel bill to £114 higher.

British Gas and EDF (£73 more a year), E.on (£70) and First Utility (£96) are all in the spotlight – but Spark Energy (£390 extra) has been most sharply criticised.

The “big six” firms are already under fire for hiking prices by an average of 5.5 per cent this winter – more than twice the inflation rate – despite rocketing profits.

Comments (6)

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11:34am Tue 4 Feb 14

Ellwood says...

Quote: HIGHER energy bills for customers who pay by cash or cheque – rather than direct debit – are a “stealth tax on the poor”, Hampshire MPs will protest today end quote............ actually, the energy companies have rigged the market with these measures, so thoroughly, that it matters not which way the customer pays, they may be 'fleeced' anyway.
Direct debit paying customers are highly likely to see their bank accounts plundered regularly through overcharges, especially if they are not keeping a watchful eye on proceedings.
Of course, when those customers do realise that they have been overpaying and a significant sum has built up in 'credit', it can take quite a bit of time and some effort to get reimbursement of the funds, that shouldn't have been taken in the first place.
The result of this contrivance is that, by and large, DD can be as expensive as paying quarterly... and amounts to no more than sharp practice by the energy companies.
Quote: HIGHER energy bills for customers who pay by cash or cheque – rather than direct debit – are a “stealth tax on the poor”, Hampshire MPs will protest today end quote............ actually, the energy companies have rigged the market with these measures, so thoroughly, that it matters not which way the customer pays, they may be 'fleeced' anyway. Direct debit paying customers are highly likely to see their bank accounts plundered regularly through overcharges, especially if they are not keeping a watchful eye on proceedings. Of course, when those customers do realise that they have been overpaying and a significant sum has built up in 'credit', it can take quite a bit of time and some effort to get reimbursement of the funds, that shouldn't have been taken in the first place. The result of this contrivance is that, by and large, DD can be as expensive as paying quarterly... and amounts to no more than sharp practice by the energy companies. Ellwood
  • Score: 12

11:59am Tue 4 Feb 14

derek james says...

let's get rid of that other stealth tax whilst we're at it, the green taxes that pay for useless windmills and the like
let's get rid of that other stealth tax whilst we're at it, the green taxes that pay for useless windmills and the like derek james
  • Score: 7

12:40pm Tue 4 Feb 14

Maine Lobster says...

Of course prices for energy could also be much cheaper if the private companies that own these former public utilities weren't paying out dividends to shareholders, making money out of what ought to be a non profit making public service.
Of course prices for energy could also be much cheaper if the private companies that own these former public utilities weren't paying out dividends to shareholders, making money out of what ought to be a non profit making public service. Maine Lobster
  • Score: 2

1:52pm Tue 4 Feb 14

gilbertratchet says...

Maine Lobster wrote:
Of course prices for energy could also be much cheaper if the private companies that own these former public utilities weren't paying out dividends to shareholders, making money out of what ought to be a non profit making public service.
The argument is that a nationalised industry has no pressure to run efficiently. Not saying it works, but that's the argument.
[quote][p][bold]Maine Lobster[/bold] wrote: Of course prices for energy could also be much cheaper if the private companies that own these former public utilities weren't paying out dividends to shareholders, making money out of what ought to be a non profit making public service.[/p][/quote]The argument is that a nationalised industry has no pressure to run efficiently. Not saying it works, but that's the argument. gilbertratchet
  • Score: 1

4:37pm Tue 4 Feb 14

jackois says...

and of course, let's not forget the poor people that have pre-pay meters operated by cards...

friends of mine had one a few years ago and the cost of this was amazing.
and of course, let's not forget the poor people that have pre-pay meters operated by cards... friends of mine had one a few years ago and the cost of this was amazing. jackois
  • Score: 2

4:23am Wed 5 Feb 14

skeptik says...

Back end of a parliament and MPs find concern for constituents. Same old.
Back end of a parliament and MPs find concern for constituents. Same old. skeptik
  • Score: 0

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