North East MPs unite to condemn direct debit fuel bill rip-off

MPs from all parties are urging the Government to act to stop fuel companies imposing extra charges on customers who don't pay by direct debit

Centrica has cut the cost of dual fuel bills for the second time
MPs opposing higher energy charges include Guy Opperman, Emma Lewell-Buck, Alan Beith and Ronnie Campbell

Ministers are set to announce an inquiry into a fuel bill rip-off which means some customers get charged up to £400 more than others.

North East MPs from all parties have joined demands for an end to an unfair billing system which means customers are charged extra if they don’t pay by direct debit.

Campaigners are calling for the penalty to be capped, or abolished altogether.

The arrangement means people without bank accounts are forced to pay more – and they tend to be among the poorest in society anyway.

And it also means customers are penalised if they simply prefer to pay their bill when it comes rather than allowing their bank to hand over the money automatically.

Fuel firms are under pressure from around 150 backbench MPs who have demanded an end to the practice.

They include Guy Opperman, Conservative MP for Hexham;
Emma Lewell-Buck, Labour MP
for South Shields; Ronnie Campbell, Labour MP for Blyth Valley, and
Sir Alan Beith, Liberal Democrat
MP for Berwick.

Nearly half of households don’t pay by direct debit – making the surcharges an effective money-spinner for energy companies already raking in billions in profit.

The Department for Energy and Climate Change (DECC) is expected to act after MPs speak out against the practice in a debate today.

The energy regulator Ofgem is likely to be directed to look into the issue with a view to introducing a cap on charges. Failure to pay by direct debit can lead to a higher bill of £114 on average – or up to £390 in the worst cases.

A motion signed by MPs warns that 45% of people in the UK currently do not pay their energy bills by direct debit.

It continued: “Over one million people in the UK do not have access to a bank account. These charges are a stealth tax on the poor.”

The MPs called on Ofgem to hold an inquiry, and urged the Government to consider ways of limiting the charges, such as by introducing a cap.

Mr Opperman said: “There are three million people without bank accounts out there. This is an issue of social inequality that we should try to address.

“I will be very interested to hear what DECC have to say.

“Particularly for those that don’t have a bank account, it seems very harsh.”

A spokesman for the DECC said: “We are looking into this and making sure charges are fair. It’s ongoing work and we don’t want to pre-empt the outcome of the debate.”

The parties are battling to prove which has the best plan for dealing with soaring fuel bills.

Labour says it will impose a 20-month freeze on fuel bills if it wins the next election.

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