Pre-payment meters

On 11th December 1990 John Major's government privatised what once were the area electricity boards. In the 18 years since then, neither the Conservative or Labour governments have acted to protect our poorest citizens from the surcharges applied to pre-payment meters.

Those with the smallest incomes whether they be benefits, pensions or minimum wage employment often have no choice but to use the pre-payment meter for their energy needs. It is an outrage that they also are faced with higher prices than those able to afford billed metering.

Energywatch found that pre-payment users could be paying up to £567, 42%, more a year than affluent customers using Internet tariffs. The Independent found that energy companies charge pre-payment users ten times more than the companies give back with their so-called social tariff schemes which are poorly publicised and difficult to access. National Energy Action calls these schemes random acts patronage. The LGA has found that the big six energy companies paid their shareholders an extra £257m in dividends in 2007, an increase of 19%, equivalent to £75 per household. We know the utilities can afford to change their billing.

It is a failure of conscience by the energy firms to have let this situation stand for so long. Clearly corporate social responsibility still has a long way to come. But it is a huge regulatory failure that the successive governments of John Major, Tony Blair and Gordon Brown have not taken
action. Surely at some point in the past 18 years time could have been found to simply require that pricing per unit was the same regardless of the meter used? Perhaps they were too busy privatising other public services like the trains, parts of the NHS or now Royal Mail.

The National Housing Federation estimate that over a million people in fuel poverty would benefit from changes to pre-payment charges. We know change is not beyond the realm of possibility because within our United Kingdom solutions have been found: In Northern Ireland pre-pay customers actually receive a 2.5% discount and can top-up over the phone 24/7.

With, according to National Energy Action, 5.4 million households in fuel poverty and about 1,000 people a day being forcibly put onto pre-payment meters because of debt this is a growing crisis. For Ed Milliband to only threaten to take action against these companies is astonishing. The utilities have had 18 years in which to mend their ways, they don't need any more second chances. Immediate action is needed now, today, can't they see the snow!