30th July, 2010
Action needed to help less well-off families with soaring energy bills
Saturday August 30, 2008
Call to tackle unfairness and help protect the Post Office networkTom Biggins, Conservative Candidate for Telford, has given his strong support to new proposals to help less well-off families with their energy bills. Conservatives have pledged to reform Post Office Card Accounts so that families without bank accounts can benefit from the lower energy and water tariffs offered to customers paying by direct debit.
This could cut the energy bills of up to 4 million Post Office Card Account (POCA) holders by up to £100 a year. There are 8 million people in the UK who do not have a bank account or are effectively without a bank. Many of them use Card Accounts instead. But because they cannot pay their bills by direct debit, they face higher prices for gas, electricity and water.
· A Conservative Government will reform Card Accounts so that they can be used for the first time to pay utility bills by direct debit. This proposal, which is supported by leading utility companies, will bring significant savings to energy companies through lower collection costs, which can be passed onto consumers in the form of lower bills.
· In addition, because state benefits are automatically paid into Card Accounts each week, customers will benefit from a more convenient way of managing their finances and paying their bills.
· This policy could also generate up to £20 million a year in additional revenue for Post Offices, which could help keep Post Offices from going to the wall as a result of Labour cuts. By contrast, the Labour Party is planning to take the Card Account away from Post Offices, which will lead to more Post Office closures.
Tom explained: “It is totally unfair that many of the poorest households across Telford end up paying more for their energy and water bills because they do not have bank accounts and cannot pay by direct debit. Under Labour, it is the poor who suffer most.
“These new Conservative proposals will help people struggling with rising household bills by letting them use their Post Office Card Account to pay their utility bills. Energy and gas bills of up to four million people could be cut by £100, helping many families at a time when the cost of living is rising fast.
“These plans will also bring in additional revenue for Post Offices, helping maintain our important network and stave off more Labour cuts. I have always maintained that we should make the Post Office network once again sustainable by restoring to it additional services..
Over the last ten years the Labour government has taken valuable business away from the Post Office network. In some cases that has amounted to 90% of turnover. As a direct result of this a significant number of Post Offices in Telford such as Lawley Village, Dawley Bank, St Georges and Ketley Bank have been closed and Randlay is about to close.
This plan is certainly a step in the right direction to both help people with fuels bills and also help sustain the local Post Office network. It is a win win situation.”
- ends -
Notes to Editors
CONSERVATIVE PLANS TO HELP LESS WELL-OFF FAMILIES
How the policy will work
· The Post Office Card Account (POCA) is a basic cash account run by the Department for Work and Pensions, which can only receive welfare, state pension and tax credit deposits.
· A Conservative Government will expand and widen the role of POCA, both enabling it to accept additional deposits – including housing benefit and any weekly wages – and create sub-accounts which can be used for direct debit payments on a full range of public and private sector bills, including utilities.
· Based on evidence from industry, vulnerable customers ‘cost’ utility companies on average double the amount of non-vulnerable customers. This is because of higher collection costs.
· The running costs of the additional functionality will be met in full by participating energy companies. A number of utility companies, including EDF, United Utilities and Water UK (the representative body for UK water companies) have endorsed this proposal.
Who will benefit
According to the latest Treasury figures, over 2 million people do not have access to a bank account (HM Treasury, Family Resources Survey, 23 July 2008). However, research by the social enterprise Saving for Poverty has shown that the figures for those who are unbanked or act as unbanked (because they withdraw all their cash on a week-by-week basis) is actually nearer to 8 million.
Not being able to pay bills by monthly direct debit adds a substantial penalty onto household bills – primarily because of the higher collection costs faced by energy companies dealing with unbanked customers.
Amongst the six main energy suppliers, direct debit customers save up to £80 a year over standard customers, and save £122 a year over pre-payment meter customers according to the latest available figures from Energywatch. These figures are even higher when compared to online direct debit payments.
Save the Children has estimated that the ‘poverty premium’ costs an average £1,000 per year. This figure includes fees arising from the use of non-mainstream credit lenders who can charge as much as 170 per cent interest.
Utility companies will use the cost savings generated through these customers paying through automated direct debit style processes – estimated by Saving for Poverty to be up to £800 million a year – to offer lower rates to these users, bringing them broadly into line with traditional direct debit customers. This equates to £100 per POCA customer.
ENERGY BILLS RISING RAPIDLY
Fuel prices have risen by an average 23 per cent since January 2008. The average family energy bill will now cost £1,126 (source: Uswitch website, August 2008). The table below shows the recent price rises for a standard dual fuel bill of the ‘Big 6’ energy companies since 1 January 2008.
|
Supplier
|
Standard Plan:
1 Jan 2008
|
Standard Plan:
1 July 2008
|
Standard Plan:
After price rise
|
Total increase:
1 Jan – 1 July
|
|
|
Scottish and Southern Energy
|
£875
|
£1,006
|
£1,006
|
+£131
|
15%
|
|
RWE nPower
|
£908
|
£1,056
|
£1,056
|
+£148
|
16%
|
|
E.ON
|
£913
|
£1,063
|
£1,226
|
+£150
|
16%
|
|
Scottish Power
|
£958
|
£1,100
|
£1,100
|
+£142
|
15%
|
|
EDF Energy
|
£907
|
£1,007
|
£1,211
|
+£304
|
34%
|
|
British Gas
|
£912
|
£1,055
|
£1,322
|
+£410
|
45%
|
|
Average
|
£912
|
£1,048
|
£1,126
|
+£214
|
23%
|
Household energy bills may climb by 40 per cent by the end of the year, reflecting a 74 per cent increase in the price of wholesale gas from January (BBC News Online, 18 June 2008).
UK electricity prices, excluding taxes, are now the sixth highest in the EU 15, and 7.4% above the median price (BERR Select Committee report, Energy Prices, Fuel Poverty and Ofgem, August 2008).
The systematic rises across the domestic retail market has pushed an extra 600,000 people into fuel poverty since the start of the year. There are now 4.5 million fuel poor customers in the UK. Older people are more likely to be affected by fuel poverty than any other group. Age Concern has estimated there are now more than 2.25 million older households in fuel poverty in the UK.
POST OFFICE CARD ACCOUNT UNDER THREAT
The current Post Office Card Account contract ends in 2010. Gordon Brown’s Government is replacing it with a new contract (so-called ‘POCA2’), but due to EU rules, it has to put the new contract out to competitive tender. The National Federation of Sub-Postmasters has stated that 3,000 post offices will forced to close if the Post Office Ltd loses its contract for the Card Account. The Card Account is used by 4 million people each week to access pensions and benefits.
By contrast, under Conservative proposals, fees from utility companies for this POCA functionality are projected to generate £20 million in additional revenues for post offices each year. Post Office Ltd makes a saving of approximately £18,000 from the closure of each individual post office. The £20 million of additional revenues could therefore help to keep more post offices open and help suspend Labour’s programme of forced post office cuts.
TOM'S PLEDGESThe General Election has been called and Tom Biggins has set out his pledges for the Telford constituency. Should he be elected as Telford's MP, this is the work he will be concentrating on: |
KEY POLICIESThese are just some of the steps a Conservative Government will take to get our country back on track:
|
Vote Biggins - a record of action
The choice at this election
Local news
Eric Pickles visits Telford and invites residents to 'do their bit'
Conservative Party Chairman, Eric Pickles, has paid a visit to Telford to meet with local residents ahead of next week’s General Election.
Ken Clarke visit gives rallying start to Telford’s General Election campaign
Off to a rallying start, Tom Biggins’ General Election campaign to become the first Conservative MP in Telford gained Ministerial support today with a visit to the town by Shadow Minister, Ken Clarke.
Stop Labour’s tax on jobs and working people from killing the recovery
Tom Biggins, Conservative Candidate for Telford, today gave his backing to new Conservative plans to stop a new jobs tax on working families and local firms across the West Midlands.
More News...
National news
Home Secretary announces radical police shake-up
Theresa May has unveiled plans to re-establish the link between the police and the public.
Championing British business abroad
David Cameron announces a new commercially-minded focus to Foreign Office activities.
National Citizen Service to be piloted
David Cameron announces plans for National Citizen Service pilot schemes next summer.
Cameron discusses key issues with President Obama
David Cameron is undertaking his first official visit to the United States since becoming Prime Minister.
More News...
Conservative policies
Want to know what the Conservative policy is on your issue? Click here to search for the issues that matter most to you. For a copy of the manifesto published on 13th April 2010 click here.
Donate to Tom's campaign
Join our mailing list
Contact Tom
Write to: Tom Biggins, Broadway House, 2 Haygate Road, Wellington, Telford, TF1 1SG
Telephone: 01952 253473
Email: tom@tombiggins4telford.com