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Call for action on energy bill 'stealth tax'
10:50am Tuesday 4th February 2014 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”.
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.
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