Steve Hawkes and Philip Webster
Win luxury hampers plus Waitrose vouchers & guidebooks
The big six energy companies are charging the poorest customers up to £330 a year more for gas and electricity, it emerged last night.
Tariffs for prepayment meters, used typically by pensioners and the less well-off, are up to 45 per cent higher than for internet customers. The industry watchdog branded the practice a £400 million rip-off.
The details came as the Government plans a crackdown on energy companies that take advantage of their poorer customers. Alistair Darling, the Chancellor, is ready to deliver an ultimatum to E.ON, npower, British Gas and other companies in his Budget next week.
The gap between the tariffs has grown after a round of inflation-beating price rises across the sector, despite Mr Darling urging companies to do more to help people on low incomes. The Chancellor will stop short of imposing a windfall tax on their £9 billion profits.
A Treasury source said: “There are other ways of tackling this.” Mr Darling expects the companies to tackle the “inequity” of consumers who use prepayment meters being charged more than people who pay by direct debit – or face “the big stick of intervention”.
More than 4.5 million people are in fuel poverty – spending more than 10 per cent of income on heating their home.
Figures compiled by Energy-watch, the watchdog, show that on average prepayment customers are charged £255 a year more than online customers for power, compared with £190 before Christmas.
E.ON’s prepayment charge is an average of £1,097 – 45 per cent higher than its internet tariff of £769. British Gas charges its prepayment customers 30 per cent more.
Graham Kerr, of Energywatch, said: “We have hard evidence of £400 million of excess profits being taken off the poorest members of society just at a time when fuel poverty is continuing to rise. Instead of taking from the rich to give to the poor, it seems that energy companies are taking from the poor to give to the rich.”
Energywatch’s figures come amid increasing expectation that the Chancellor will address the issue of fuel poverty in the Budget and could “shame” companies into taking more action.
Yvette Cooper, Chief Secretary, and Malcolm Wickes, the Energy Minister, are understood to have held a series of talks with industry leaders this week. The Times has been told that the ministers are urging the companies to give more information to customers about their ability to switch from company to company.
A new system of vouchers for cheap electricity and gas for people on low incomes has also been proposed.
Gordon Brown hinted yesterday that he expected the energy companies to do more to help people on low incomes. He backed the inquiry by Ofgem into the energy and electricity markets. “It is right that he [the head of Ofgem] pursues an investigation to see whether competition is working effectively in the industry,” he said. It was also true that windfall profits had been made by the energy companies because of the European emissions trading scheme.
The Prime Minister said in the Commons yesterday that while energy companies had made extra money available for the poorest, “that is a small amount in relation to what the Government are doing through the winter allowance”.
The current allowance is £200 for the over-60s and £300 for the over-80s. “This winter, when people are experiencing high utility bills, the winter allowance that we are giving is crucial”, he said.
One in five prepayment customers is classified as fuel-poor. A third of single parents with dependent children use gas prepayment meters.
A spokeswoman for E.ON said last night: “The cost of the prepayment meters are more expensive and we are currently looking at a major meter replacement programme. I don’t think it’s 100 per cent fair to compare prepayment with online.”
Read the training tips and advice that helped our London Triathletes
Enjoy screenings of all the classic films you love, plus take advantage of two-for-one tickets
Times Online's new TV show helps you make the right decisions for your pet
Read our exclusive 100 Years of Fleming and Bond interactive timeline, packed with original Times articles and reviews
The latest travel news plus the best hotels and gadgets for business travellers
Shortcuts to help you find sections and articles

Overseas contacts and local business information

Find a course, arrange a game and save money
2007
£47,995
2008
£42,945
06/2006
£40,850
Great car insurance deals online
£33,000
Macmillan Cancer Support
Central/South West
£50k
NHS
Nationwide
£
£30k OTE
Meltwater News
Nationwide
circa £70k
Central Office of Information
London
5% below developer pre-launch price!
Luxury Appts, beautiful gardens w/ Thames views
Great Homes Available on a shared Ownership Basis
Great Investment, River Views
Visit the ‘entertainment capital of the world’
at great sale prices!
Christmas Cruises
From only £995pp
APTs East Coast now from only
£2425pp.
Great travel insurance deals online
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times. Globrix Property Search - find property for sale and rent in the UK. Visit our classified services and find jobs, used cars, property or holidays. Use our dating service, read our births, marriages and deaths announcements, or place your advertisement.
Copyright 2008 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.
for all prepayments meter consumers.
there is a company who actually will only charge for gas and electricity used. It is worth looking into it the name is Ebico.
I use to have key meters and they were the best and cheapest. they also do not have standard charge.
They also have great customer service as you get a person on the phone not a machine and they are based in England.
Web site: www.ebico.co.uk
Check it out!
ED, London, UK
E. D, London, UK
As a disabled chap, I would like to see the winter fuel payment extended to those who cannot work due to a disability, and who are under 60.
We cannot afford to keep the heating on all the time, and personally this has resulted in 5 weeks in hospital, so far this year, with pneumonia.
I am 33.
Even tonight, Friday evening, my flat is cold, I am in pain from the temperature sensitivity, and completely fed up with this pathetic, stupid, lying and incompetant government.
Thatcher was the worst thing to happen to this country, and all this government seems to do is imitate, imitate, imitate.
I will NEVER vote tory... uuuuugh..... nor labour again. The Lib Dems have promised to pay the winter fuel allowance to disabled people. They have my vote because, and solely because, of this.
Completely immaterial to the affairs of the world, but I need warmth. The energy companies are non supportive, but then I guess it is not their job to be social workers, in a competative and free market
Philip Harkins, London, England
Check for yourself on one of those comparison sites, yes there is difference, mainly on gas rates but not as high as first appears for low users.
The costs and infrastructure of prepayment meters is much higher than credit meters. Shops etc require a cut for top up facilities, corrupt and lost key tokens, more frequent meter renewals, vandalism and general wear and tear.
So why should those individuals on credit meters help fund prepayment methods?
JB, Birmingham, UK
The exploitation of the less well off and the vulnerable seems to be enshrined within the utilities' attitudes to its customers. My father, an infirm pensioner in his 80s suffering from dementia, was forced by the council to sell off our family home of fifty years in order to pay his care home costs. E-on allowed him to go into credit by well over £1,000. The house has been empty for much of the past two years since my father moved into a home as the house has been on the market, so very little gas or electricity has been consumed. E-on refuse to return the money , citing "differences in meter readings" between our reading and theirs, despite clear evidence re patterns of use and a credit due of £700 a year ago when a new meter was fitted. They claim they cannot get into the property to verify or explain the differences and wont pay until they can. No interest is earned on the money in credit by my father. E-on also claims not to earn any - who profits here - the Banks, the Chancellor?
JC, Nottingham, UK
The fact is, EW Thompson, that people have paid in for years and should expect to get an across-the-board benefit, and if this means that some ex pat pensioners in Malta get the payout then so be it. The problem appears to be with low income people who cannot manage a direct debit or internet system. I have an internet account but do not see why I should have to pay less per unit than the more vulnerable in our society.
Alan, Midlands,
Competition is not always good - hence other Euro countries have not privatised everything - that's where social democracy rather than ' greed is good' comes in. People don't seem to understand about pre-payment meters - the companies don't have to go out and collect the money - the poorest people have to go out and about to try to find somewhere (usually a garage) which accepts cash to charge their meter key. I had to do this for a few years as a single parent - it cost me valuable bus fares and time with a child in tow, it was humiliating and expensive and very hard to budget.
You can't penalise everyone who is not in a Scandinavian style insulated house - many Euro homes have very expensive and sophisticated heating systems - underfloor heating etc and they expect warmth in every house. I was in rubbish rented accommodation with no proper heating - expensive portable heaters etc. and that is typical for those on low income. Get helping them not criticising and have some charity
L, london,
Somehow I don't think shaming the Companies into action will do anything, will it 'Darling'?
So just hit them with the windfall tax first - then they might do something and it will at least start to claw back the Northern Rock billions.
Bry Barnes, Somerset, Uk
Peter Hertfordshire,
No one has to go and collect this money from people anymore. A pre-paid meter operates( normally), by going to the pOst Office and buying a card for a set ammount. The post office then sends the money electronically off course, to the Energy companies.
The only solution to this is re-nationalistion, or to be more honest a Europe wide single utility company so everyone in the EU gets charged the same!
John, London,
Rip off Britain.First the banks are in court for over charging customers.Then the energy suppliers followed by council tax over charging,When will the goverment wake up.
Bill Hodkinson, oldham,
As the Bank of England are now unable to do more to limit inflation,the Government must step in with some price controls in these key sectors of the economy.
Tony, Henley/Thames, uk
I pay for electricity before I use it. I am therefore a better credit risk than someone else who could do a moonlit flit owing several hunfdred pounds for a quarter's electricity. I should pay less than them, not more. I used to get letters informing me I had overpaid by £10-£12. "This letter is for information purposes only". No cheque to repay what they owe me. Not even a key top-up. Now they don't even tell me if they owe me money.
The gas is paid by monthly DD. I am always in Credit. I get no interest on the money I overpay. Ocassionally they fiddle about with the monthly payment. They once reduced it by £5 a month because they thought they had too much of my money, only to increase it by £6.50 the following month due to price increases. I lose both ways. I am told it would be better to pay both bills by Internet every quarter, but if I had a suddenly heavy bill, my pension wouldn't cover it. Would you want to choose between heating and eating?
Beryl, Windsor, England
Well, New Labour isn't for the small man, no matter what they say.
RB, Aberdeen,
The Government needs to revise its winter fuel allowance for the over 60s. Firstly they should stop paying the subsidy to those folks who have choosen to live in temperate climates overseas. Why is a winter fuel subsidy paid to someone residing in Malta, for example? Secondly the subsidy should be paid only to those with an income less than a reasonable amount. Why are those with incomes of say £30k/year being subsidized? The additional funds by making rational economies can be used to increase the allowance to those that really need it,
E. W. Thompson, Arnold, UK
This is a direct result of Thatcherism. I remember the ex Prime Minister MacMillan saying that she was selling the family silver and he has been proved right. The Blair government and the Brown government can aptly be described as Thatcherite governments with heart, but not much. These utilities which used to belong to the people of this country are mainly owned by foreigners only interesred in profit and they are really screwing the people of this country. This shower of hypocrites called New Labour ( a better title would be New Tories) voted solidly against every privatisation by Mrs. Thatcher and then when in government proceeded to do exactly the same.
Thomas Ralphs, Leigh, England
The phrase "Rip off Britain" rings a bell. No wonder so many are leaving.
B J Deller, Marbella, Spain
Peter Land "These supplies are now competitive". Sorry, I must have missed this bit. All of the power companies charge about the same amount, all of the power companies raise and lower their prices at about the same time. I'm not sure where the competition bit comes in.
David Leslie, Perth, Scotland
Government should renationalise british gas and use it to set competitve pricing.
javed, london, uk
Due to a drastic change in circumstances four years ago (divorce, private renting, landlord sells up), I found myself living in a Housing Association home. It was already fitted with a pre-payment meter which I was well aware would cost me more to use. Depite having a good credit history and having always paid utility bills by Direct Debit, I was told that it would 'cost' a £100 'deposit' to have the meter changed to a regular, non-prepayment one becaue of my new address being somehow less credit-worthy than I am. Thankfully I was able to do this BUT how could a pensioner or family on benefits afford this trumped up fee? There are obstacles to those on low incomes (for whatever reason) being able to enjoy what so many take for granted; desirable school places, fair priced fuel, afordable public transport (or even DECENT public transport at all!), fair taxation on low incomes to name a few. Choice is a concept which doesn't exist for many people in the UK today.
AspieMum, North Yorkshire,
These supplies are now competitive, so if any company was making excessive charges they would soon lose market share and ultimately their business. the cheaper cost of supplying customers who do not insist on pre-payment meters, who accept paperless bills and who pay by direct debit, must be passed on to them and the rip off would be if it were not. The only point I do wonder about is whether the companies have fairly priced in the low credit risk of customers who chose prepayment, although the high cost of actually physically going and collecting the money would outweigh that massively.
peter land, Hertford, Hertfordshire
So what's new? It's a cartel, simple as that
Paul, Coventry,
The problem with mutual societies is that they should work for the mutual benefit of the members. But they often work for the mutual benefit of the employees. And so with the formerly nationalised industries. The unions were over powerful, the businesses were overmanned, service was poor and the prices bore no relation to the costs.
It is unfortunate that many people cannot afford to pay for heating, but the problem is not caused by the private ownership of the energy companies. Profit is not evil.
Perhaps if the ( how often public owned? ) houses were built to Scandinavian standards of heat efficiency, or fitted with efficient unwastefull heating systems - I recall the electric storage heating of my childhood, then this would be less of an issue.
This situation has been a long time coming, and is not a new phenomenon caused by power companies making a ( I agree excessive) profit. But they could have "lost" the profit by employing a lot of unnecessary people.
David B, Larkhall,
The Government should not rely on the power companies to be generous. They must govern them. A windfall tax to finance fuel efficiency improvements to the homes of those in fuel poverty will give long lasting benefits and then true regulation applied to the power companies allowing them a respful profit level is all that is required.
William, Sheffield,
Take profit out of public services. These should be nationalised industries, not private companies. Electricity, gas and water are essential public utilities that everyone needs and it's quite standard practice these days for private companies to take advantage of the poor it seems.
So it's best to stop them being private companies. Fuel will cost a damn sight cheaper than now once you remove £9b profit out of the system. Come on Labour, do something for the people..that's what you used to stand for!
Kevin Rogers, Preston, United Kingdon
As a pensioner, I survive on £119 per week. Gas and electricity cost me around £30 per week in the Winter, and about £20 in the Summer.This is a huge chunk out of my income, and leaves very little for clothes, food, etc. I have a card meter for both. I am with EON. I only have the gas heating on for a couple of hours per day, and rarely at all in the Summer months. But you can't get away with that where electricity is concerned, you have to have light, kettle, shower etc. It's bad that these huge companies are ripping off pensioners. they should pay less, not more.
SW, Nottingham, UK
Not only a rip off but also the worst possible service... Think of British Gas, are they not delivering a mediocre service ? This industry's practices are an absolute shame.
Quentin, London, UK