The Big Six energy companies have been urged to work with Liverpool City Council to stop the poorest people having to pay the most on their fuel bills.
The problem arises for those people who use prepayment meters which are more expensive to use than paying by direct debit.
Now Councillor Tim Moore, cabinet member for transport and climate change and Councillor Ann O’Byrne , Assistant Mayor and cabinet member for housing have written to the energy companies – British Gas, Scottish Power, E.on, SSE, EDF and nPower – asking that they help deliver fairer energy options.
Councillor Moore said: “Fuel poverty is a real and growing issue in this city and the recent increases which the energy companies have announced will make the situation worse.
“We are pointing out to the energy companies the people who use pre-payment meters are often the poorest and it is grossly unfair that people who can afford the least have to pay the most.
“For them, changing energy provider – which has been suggested as a way of cutting bills– is not an option. Too often they are facing the choice of heating or eating.
“So we have written to the energy companies asking that they work with us to work out ways in which the poorest people are not the hardest hit
“We would like them to come to Liverpool to see how we can work together to end this unfairness.”
The letter sent to the energy companies.
As you will be aware, families and households across Liverpool and elsewhere are facing major challenges as the cost of living rises.
Repeated rises in domestic energy costs are an increasing feature of the pressures on household budgets. It is with massive disappointment and concern that we see further rises announced in recent weeks that will pile even more pressure on residents and families.
This problem is most acute for those residents using prepayment meters, who pay more for the energy they use and are less able than others to seek a better deal, or “price freeze” offers that many companies promote as a solution to rising charges.
Many of these are residents who are already on the lowest incomes, and can therefore least afford to pay more.
According to Save the Children, the ‘poverty premium’ for families unable to pay by direct debit is over £250 per year. Whilst such a disparity has never been fair, at a time when the poorest are facing multiple attacks on their finances and standard of living it is ever more important that this disparity is tackled.
We note that energy providers argue that many users like the prepayment system. Whilst it may be the case that some energy users wish to pay up front to help manage their budgets – it cannot be right that the cost of doing so is much greater, or that often those least able to afford high energy costs are laden with a premium simply for seeking to manage their finances more effectively.
We also understand that energy companies are actively working through ECO and other means to improve household energy efficiency in many of our communities. Whilst this is positive, welcome and will help reduce overall costs, it does not address the fundamental comparative unfairness of the poorest paying more for the energy that they do use if they use a prepayment meter.
With this in mind we would like to work with you to explore how the prepayment disparity could be reduced or abolished for our residents. As a city council we are undertaking various activities to try and support those residents suffering most from the challenges outlined above, including collective
switching schemes, LED lighting provision, and support for credit unions. However, we also want to tackle the fuel poverty premium as part of this work.
Whether through data sharing where appropriate, access to credit unions, financial advice, co-ordination with Housing Associations or collective purchasing power as a council we want to explore avenues to work alongside energy companies in a joined up effort to try and find ways to end the unfair reality of those who can least afford to, paying more for their energy.
We also recognise the role that other parties such as tenants and private landlords play in this – and we as a council would seek to use our position and influence to encourage all partners to seek solutions to the issue.
However, for any progress to be made, commitment from energy suppliers to work collaboratively to explore a better, fairer approach is vital. It is this simple commitment that we are asking for.
Liverpool City Council would actively welcome any proposals, pilots or schemes locally from yourselves that could genuinely help us address this problem together, and we would be happy to meet to discuss any suggestions you may have.
We hope that you are able to respond positively and work with us to help deliver better, fairer energy options for Liverpool residents.
