British Gas Ripping Off The Poor
A survey by The National Housing Federation has found British Gas is charging up to £400 a year more for customers who use prepayment meters in their homes.
More than three million such meters are situated in British homes, mainly from low income families, and the big energy companies are charging them more for their power than more affluent people who use different methods of payments.
Prepayment meter customers are paying an extra £89 per year extra than those who pay by standard credit and £176 more than customers paying by direct debit and a staggering amount of £401 more than customers who set up and use a direct debit account online!
An average yearly bill with joint gas and electricity accounts for British Gas meter customers is at current an average price of just over £1,143. For those customers who open an online direct debit account will pay approximately £742 over the same period, making a massive savings of £401.
The Federation based its research on figures from gas and electricity consumer watchdog Energywatch and according to their league table NPower is the second worse offender. They are charging their prepayment meter customers £226 more than those who have an online direct debit account.
Federation Chief Executive David Orr labelled the British Gas figures a disgrace, when he said “Effectively, British Gas is getting its poorest customers to subsidise discount for those who are better able to pay”
“The Company should be ashamed of itself, dip into its £700m profits and offer a better deal to customers with prepayment meters”.
Members of The National Housing Federation, who represent 1,300 independent not-for-profit housing associations’, were urged to write to Energy Minister Malcolm Wick. The petition will raise the state of affairs reference the overpayment of the poorer customer, in the hope that he will introduce a fairer price through the Energy Bill. The body of housing associations provide two million affordable homes for over five million people in Britain.
Raising Issue with Ofgen
Malcolm Wicks expressed his concert last week over barriers stopping new entrants entering the energy market. He will now be raising the issue with industry regulator Ofgen
Mr Wicks rejected any suggestion that the larges companies colluded over price hikes when speaking to the Commons Business, Enterprise and Regulatory Reform Committee and he said “There was a question about whether six companies represented ‘enough competition’”.
“What I am particular interested in if there are barriers to new entrants which shouldn’t be there” he told MPs.
“I think in a competitive market like this at the moment – when wholesale prices are going up, when there are new form of energy coming into the systems from renewables, when there are new idea about decentralised energy systems, combined heat and power, and all of that”.
Price different within the Federations league table had British Gas at the top with a price different of £401, while the lowest was Scottish Power with a price difference of £107. Albeit lower prices, it is still charging those poorest customers more!
Pre-Paid Meters
Pre-payment meters are fitting into a cupboard, usually under the stairs where customers have to credit the meter via either a top up card or tokens.
Years ago along with the rent collector, milk man and window cleaner, we had the meter man who came to empty the meter on a regular basic. The cash was counted out and in a lot of cases a refund was given to the customer.
Those meeting hard times found out they could ‘open’ the meters and use the same coin to keep topping up, but at the same time their bill was getting higher.
Houses were easy targets with the coin meters and many burglaries found the meter broken open and emptied.
With the introduction of top up cards and tokens, many customers were happy to know that they would now have up to 4 hours of ‘emergency time’. If their meter ran out of credit, they would at least have a few hours before they could get out to the shops to tot up their top up cards.
The pre-payment premium no longer exists in Northern Ireland where the market has shifted benefit those customers. In fact the pre-payment customer gets 2.5% discount of the standard rate and making a short telephone call can top up their cards at any time during 24 hours.
More than 366,000 pre-payment customers had meters installed into their homes in 2007 by companies to recover debt owned to them. While the debt is still outstanding the houses are unable to have the meters removed.
