Page last updated at 09:33 GMT, Friday, 22 August 2008 10:33 UK

Tories plan energy discount card

George Osborne
George Osborne says the proposed scheme will help low-earners

A scheme aimed at allowing people who do not have bank accounts to cut energy bills is to be unveiled by the Tories.

The card account scheme, to be run by the Post Office, would aim to help low-earners receive the same discounts as those paying by direct debit.

Shadow Chancellor George Osborne says this could help as many as four million people save up to 100 a year.

The government said they were already working with energy companies to help people meet their payments.

'Deeply unfair'

Under the Tory scheme, people would be allowed to pay power and utility bills using Post Office Card Accounts (POCA) in the same way as other consumers use direct debits.

At present, customers tend to miss out on discounts if they cannot pay directly from their bank accounts - about eight million people in the UK do not have a bank account, or withdraw all their cash weekly.

Many of the poorest households end up paying more for their energy and water bills because they don't have bank accounts and can't pay by direct debit
George Osborne

Mr Osborne said it was "deeply unfair" that "many of the poorest households end up paying more for their energy and water bills because they don't have bank accounts and can't pay by direct debit".

"Our plan, developed with industry, will help people struggling with rising household bills by letting them use their Post Office Card Account to pay their utility bills," he said.

The scheme could even revive the fortunes of some post offices threatened with closure, he added.

Fuel poverty

Theresa Perchard, of the Citizens Advice Bureau, said the proposal "offers to put more money in the pockets of poorer consumers by reducing their outgoings and providing for weekly budgeting to help avoid debt".

But Mike O'Brien, the minister for pension reform, said three quarters of people with the post office accounts had bank or building society accounts from which they could pay by direct debit.

"But POCA is only available to people who are on benefits - and we want to help people off benefits and into work and we believe having a bank account is an integral part of being ready for work," he said.

He said there had already been "extensive work" with energy companies to find ways of helping people meet rising bills - and firms were to increase their spending on social programmes by 150m a year by 2011.

"Since 1996 we have helped over four million households out of fuel poverty - not least by the winter fuel payment which the Conservatives opposed," he added.

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