Power firms 'take from the poor to give to the rich'

Published on Sunday 9 March 2008 20:47

ENERGY firms are charging pre-pay meter users an average of £255 a year more than online customers, it has been revealed.

The higher cost of pre-payment meters for gas and electricity is penalising the poorer households and pensioners who typically use them, according to Energywatch.

The industry watchdog is calling on companies to stop charging punitive rates.

Energy firms are making a 400 million profit from the pricing system, according to Energywatch figures.

And one in three households in fuel poverty – where more than 10 per cent of income is spent on heating – has a pre-payment meter.

Graham Kerr, of Energywatch, said: "We have hard evidence of 400 million of excess profits being taken off the poorest members of society, just at a time when fuel poverty is continuing to rise.

"Instead of taking from the rich to give to the poor, it seems that energy companies are taking from the poor to give to the rich."

The claim comes as the watchdog Ofgem continues to investigate the UK's gas and electricity markets in the wake of a series of price hikes.

The inquiry, which was launched last month, is being carried out under Ofgem's Enterprise Act powers, with its initial findings due to be published before the end of September.

Energywatch said it wanted Ofgem to use its investigation to set out how the industry would stop using pre-payment meter tariffs to exploit the poorest householders.

In January, British Gas announced average price increases of 15 per cent for its customers, with regional variations for the increases to its electricity tariffs.

Rival energy firm E.ON revealed increases of 9.7 per cent for electricity and 15 per cent for gas last month.

That followed price hikes from Npower of 17.2 per cent for gas and 12.7 per cent for electricity, while EDF increased its gas prices by 12.9 per cent and electricity by 7.9 per cent.

Scottish Power pushed up electricity prices by an average of 14 per cent, with gas prices up by 15 per cent.

Scottish and Southern Energy, the last of the big six suppliers, has said it will hold its prices until the end of March at least.