Poor get raw deal from new gas firms
Sunday 09 February 1997
Two reports sent to Ofgas this weekend indicate that low-income gas users are getting a rawer deal than their well-heeled neighbours in the test markets of Cornwall, Devon and Somerset, which have already been deregulated.
The companies offer big discounts on British Gas's standard rates for people who pay by direct debit, mostly middle-income families. But those who use pre-payment meters - largely the elderly, single parents, students and the unemployed - get much smaller savings. In three instances there is no benefit to pre-payment customers for switching from British Gas.
"It's our interpretation that this is undue discrimination," said Trevor Houghton, research co-ordinator with the National Right to Fuel Campaign, which argues that the tariffs help companies cherry-pick wealthier customers. "It's telling them [pre-payment customers]: 'We don't want you.' "
Pre-payment meters are most often installed by customers who are struggling to pay off existing fuel debts or those on fixed incomes who wish to budget the amount of gas they use.
Two-fifths of British families spend 8 to 10 per cent of their disposable income on fuel. One million of them use the pre-payment system.
In some cases the difference between the two tariffs has been as high as 41 per cent, and a survey last week by the Gas Consumers Council found the average gap was 26 per cent.
Right to Fuel said the unbalanced rates were a sign that the companies are flouting the Act, which requires that public gas suppliers do not show "any undue preference to any person or class of persons when fixing tariffs".
Both Right to Fuel and the GCC admit that pre-payment meters are more expensive to administer than direct-debit systems, partly because the Quantum meters provided by British Gas were over-engineered for the simple tasks they are required to accomplish. But they do not see why the spread should be any wider than the 14 per cent extra charged by British Gas.
An inquiry by Ofgas last year found that the differences in British Gas's charges were justified. "If BG can do it then the others can as well," said Michael King, Right to Fuel's chairman.
The council shied clear of claiming that the public gas suppliers had contravened the letter of the legislation, but Sue Slipman, the group's director, said: "These pricing policies show a disregard for the spirit of competition."
Although the GCC does not believe it can file a formal complaint about the tariffs, the rates could be used as evidence to back up a future referral if it feels the companies are not meeting their social obligations under the Act.
The companies counter that they had little experience with pre-payment meters when the competitive experiment in the consumer market began last year, and that in some cases the full costs of the system were not apparent when they set tariffs.
Ofgas lent support to that view, saying it expects the situation will naturally improve. "Suppliers, who have so far been unable to offer discounts for pre-payment customers, will see the benefits of doing so as the market matures," it confidently forecast.
Midland Gas, which in the latest league table has the largest gap - 38 per cent - argued that its rates were still lower than those charged by British Gas. "Both Ofgas and the GCC are happy with our tariffs," said a spokesman for the company.
Board creates magnetic field to achieve lift
Follow the latest events from this Champions League fixture
Like Madonna, Sister Cristina Scuccia's video is also set in Venice
Singer says the track was 'force-fed down people's throats'
techThe original free dating app will remain the same, developers say
Endangered species spotted in a creek in the Qinling mountains
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 5 The inventor of the Facebook 'like' button says he never made a 'dislike' button because he feared the 'unfortunate consequences'
Ukraine crisis: Donetsk 'tactical missile' explosion at factory sends blast wave across rebel-held city
Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
Oscar de la Renta dead: Legendary US fashion designer dies after long cancer battle aged 82
Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
Super-sized ships arrive in Britain: How big can they get?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
Lord Freud hangs on as MPs of all parties 'call for his head' over disability comments
iJobs Money & Business
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....