Top energ y firms ‘rip off poorest by £440m’

ENERGY companies are overcharging their poorest customers by £440 million a year, it has been claimed.

new research has found that the poorest families and pensioners who are on benefits are not on the cheapest tariff with their supplier.

The net effect is that these people are paying about £440million a year too much for heat and light.

The influential commons Work and Pensions Select committee is now urging the Prime Minister to demand that energy firms move these customers on to their cheapest tariff.

Labour MP Frank Field, who chairs the committee, has written to Theresa May asking her to take urgent action to protect what is a particularly vulnerable group.

Mr Field said: ‘As a next move in protecting the vulnerable human underbelly of British society, the Prime Minister should take the first opportunity to oblige energy companies to place all of their customers on the cheapest available tariff.’

The issue surrounds the Warm Home Discount, which automatically gives £140 off a winter electricity bill to pensioners on certain benefits. Some families also qualify for the discount, particularly those on benefits with young or disabled children.

But many of these households are on expensive variable tariffs, wiping out the benefits of receiving the £140 discount. It is said these tariffs typically cost up to £300 a year more than cheaper alternatives.

Small energy company First Utility is accusing the Big Six power suppliers – British Gas, SSE, e.On, npower, EDF and ScottishPower – of ‘hoodwinking’ struggling customers. First Utility estimates that 1.5 million households are affected.

The firm’s managing director, ed Kamm, said: ‘It’s outrageous that those most in need of financial help to heat their homes this winter are seeing their Warm Home Discounts fuelling the energy giants’ profits rather than their own hearth.’

Separate research has found that one in three families are struggling with energy bills and many plan to ration central heating this winter.

Half are planning to cut their energy use so they can meet other bills. And a third say they do not even put on their heating when their house is too cold.

This could cause real hardship with some reports suggesting the winter could be the coldest for five years.

The latest claims are based on a survey of more than 2,000 families by price comparison website uSwitch.com.

energy expert at uSwitch, claire Osborne, said: ‘It’s appalling that even families in work are struggling to pay their energy bills – and we haven’t even seen any major price hikes for nearly three years.

‘When you consider that millions of households are already in debt to their energy supplier, it’s a stark warning that consumers feel they have no other option than to ration their energy.’

British Gas said: ‘We regularly tell our customers if they could switch to a cheaper tariff’. EDF said: ‘We are committed to helping our poorest customers and 57 per cent of our vulnerable customers are on our fixed deals.’

Other energy firms did not respond to requests for comment.

‘Fuelling their profits’