Page last updated at 05:02 GMT, Saturday, 19 July 2008 06:02 UK

Prepay energy meters are 'unjust'

Malcolm Wicks could introduce new laws to force energy providers to lower charges

Millions of UK households are paying energy tariffs that are "unjust", the Energy Minister Malcolm Wicks has said.

Mr Wicks said he would be prepared to legislate to force energy providers to lower their charges for the four million people on pre-payment meters.

Pre-payment tariffs can be up to 42% higher than the lowest rates available, said charity National Energy Action.

Mr Wicks said he had asked energy watchdog Ofgem to investigate the matter and report back.

Meter misery

The extra costs that people on pre-payment meters are now having to meet seem totally disproportionate
Malcolm Wicks, Energy Minister

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

"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."

Soaring oil prices could push energy bills up by more than 60% within the next few years, according to a report for the energy supplier Centrica.

This has led to concerns that consumers are having pre-payment meters installed because they cannot afford their energy bills.

Fuel poverty

Joanne Carr, from the energy charity National Energy Action, said: "About 1,000 people a day are being put forcibly onto pre-payment meters because of debt."

The charity said it expects the number of people struggling to pay bills to rise as energy prices soar.

"We're expecting them to go up by about 40% which is going to be dreadful for those who are in fuel poverty," she added.

One customer, Stuart Page, claimed he was forced onto a pre-payment system after his supplier underestimated his electricity usage and set his direct debit too low.

Mr Page was then told owed more than 1,000. When he could not pay, the supplier told him he would have to have a pre-payment meter installed.

"We've had to cut corners everywhere to pay for the electricity and it's wrong," he said.

The National Housing Federation, which represents 1,300 housing associations, estimated the difference between the best regular tariffs and the worst pre-payment tariffs was about 330 a year.

However, the energy suppliers' association said that pre-payments meters cost more to provide and that some tariffs had been reduced.

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