The ‘pay as you go’ penalty

A call for the Government to put a stop to the “scandalous” premiums that poorer Bath and NE Somerset residents who use prepayment meters face, has been made by Metro Mayor Dan Norris.

There are over 7,000 households in and around the area who are ‘pay-as-you-go’ energy customers, meaning they pay for their gas and electricity in advance, either online or from credit bought in shops.

But they are forced to pay higher rates than households who pay their bills by direct debit despite having less than half of their disposable income. When the energy price cap rose by £693 a year for typical households in April, it rose by £708 for the average prepayment customer.

Now Mr Norris has backed a Labour plan to level the playing field. Labour wants to bring prepayment prices in line with direct debit prices. The party would reimburse energy companies for the difference this winter by fixing loopholes in the windfall tax, another Labour proposal that the Government brought in in May after relentless campaigning by the party.

This is the first announcement in a package of measures to tackle the energy crisis that Labour Leader Keir Starmer will announce in the run-up to the 26 August price cap announcement from Ofgem.

The call for change comes after a meeting between ministers and energy executives on Thursday yielded no additional help to ease the burden of the cost-of-living crisis on hard-pressed West of England families. Analysts have predicted that typical energy bills could rise to approximately £3,500 in October, and more than £4,200 in January.

Metro Mayor Dan Norris said: “The poorest in the West of England fork out more for their gas and electricity through prepayment meters that have higher standing charges and higher tariffs. This is simply scandalous.

The truth is many Bath and NE Somerset residents will not have a dilemma about whether to turn the heating on this Winter; without the funds to put in the meter, they will not have the choice. The Government must end this unfair prepayment premium today – not tomorrow, not at some unspecified point in the future but today – and help everyone manage their bills over the winter.

Our region is in the midst of an energy emergency that requires strong leadership from Whitehall, but we’re stuck with a zombie government that is out of ideas, out of touch and out of time. The Government eventually came round to Labour’s demands for windfall tax and once again it is up to us to set the agenda. We have a plan to get us through this crisis.

The West of England has already endured a summer with a government missing in action. We cannot afford to waste any more time. We need action now”.