Millions on “unjust” pre-payment energy tariffs

21 July 2008

Energy minister has asked Ofgem to investigate

The Energy Minister, Malcolm Wicks, has said that there are millions of households in the UK paying “unjust” gas and electricity tariffs.

Mr Wicks also said that he would even be prepared to introduce new legislation to force energy companies to decrease their prices for the four million UK customers who currently have pre-payment meters.

He also said that he had spoken to Ofgem, the energy watchdog, and asked them to investigate the situation and then report back to him with their findings.

“The extra costs that people on pre-payment meters are now having to meet seem totally disproportionate,” said Mr Wicks.

“The gap between what they’re paying and what other people are paying has grown to a very unjust extent.

“Depending on what the report says, we’re well prepared to legislate to ensure this injustice doesn’t occur in the future,” he added.

According to the charity National Energy Action, customers on pre-payment meter tariffs can end up paying as much as 42% more for their energy than those customers on lower rates.

Additionally, the National Housing Federation, which represents 1,300 housing associations, has estimated that there is around a £330 annual difference between the cheapest regular tariffs and the most expensive pre-payment tariffs.