MPs accuse energy firms of "stealth tax on poor"

The Northern Echo: Tory Anne McIntosh Tory Anne McIntosh

HIGHER energy bills for customers who pay by cash or cheque - rather than direct debit - are a “stealth tax on the poor”, angry MPs will say today (Tuesday, February 4).

Up to 170 MPs of all parties 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 a Tory backbencher, Robert Halfon, who has branded it the “great utility rip-off”.

Mr Halfon has called for charges to be capped at £24 a year, at the most – arguing that the much higher top-ups do not “reflect the real costs of the form of payment”.

However, his investigation also uncovered the fact that some smaller energy firms – but not the ‘Big Six’ – do not charge non-direct debit customers any extra at all.

Among the MPs calling for change are several from the region, including Conservatives Anne McIntosh (Thirsk and Malton) and Julian Sturdy (York Outer).

And Labour MPs Hugh Bayley (York Central), Dave Anderson (Blaydon) and Ronnie Campbell (Blyth Valley) have also signed the motion Miss McIntosh said: “I’m supporting this debate, because it’s unfair to people who don’t have bank accounts, or who choose not to have bank accounts.

“And those in my constituency who are off-grid have got no choice and are suffering real hardship. We need a special tariff to help them.”

There are already signs that David Cameron is keen to seize on the issue, as he seeks to fight back against Labour’s successful assault on high energy prices.

No.10 has briefed that it wants the department for energy and climate change (DECC) to look into the “scale of the differentials between different payment methods”.

According to Mr Halfon, 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 cost 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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