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Energy Blog Energy Companies Accused of ‘Stealth Tax’

Energy Companies Accused of ‘Stealth Tax’

Ian McKenna
by Ian McKenna February 6, 2014
Renewable Energy Generation Up & Emissions Down

Energy suppliers in the UK are facing fresh controversy after nearly 200 MPs have signed a House of Commons motion for an Ofgem enquiry following accusations of ‘ripping off’ customers.Specifically, recent government figures have shown that customers who pay by methods other than a direct debit are paying £114 more than those who do.  Conservative MP Robert Halfon said these charges amount to a ‘stealth tax’ on some of the poorest in society.

“Energy companies have been ripping the consumer off – have been fleecing the consumer- particularly the poor and pensioners, with their stealth tax for some time,” he told the BBC.

Energy companies have been quick to defend the costs, saying they are the outcome of paying by means which take more time and effort to process. Halfon, however, would prefer to see that capped in the same way phone and broadband are regulated.

The latest energy furore has unsurprisingly caught the ear of David Cameron. The Prime Minister has already begun an inquest to discover if cash-payers are subsidising direct debit customers.

Surprisingly, data presented by Mr Halfon suggests 45% of the country pays by cash or cheque, with at least a million UK citizens unable to use a direct debit anyway as they do not hold a bank account.

“What they’re saying is that they’re imposing a cost on the pensioners and the poorest in order to pursue non-payers,” he said.

Energy UK, has already reached out via a spokesman, saying it agrees with the Prime Minister’s investigation into direct debits and would be happy to meet with Mr Malfon per his concerns.

The body, which represents most of the energy suppliers in the UK would not confirm the £114-a-year figure, but did tell the BBC that “We offer a small discount on our normal rates to reflect the fact that it costs us less to administer this payment method,”.