Claims energy supplies are inflating customers' direct debits to ease cashflow difficulties are to be investigated. Business secretary Kwasi Kwarteng said companies had three weeks to respond to allegations about 'unjustified' direct debit increases.
The Times reports that energy suppliers could face 'substantial fines' as an investigation begins into claims customers are being ripped off. Energy regulator Ofgem has warned suppliers that customer credits cannot be used to “prop up their finances”.
There have been anecdotal reports of suppliers inflating direct debits beyond what customers are using without justifying the increase and either ignoring or rejecting appeals for the payments to be reviewed, the paper reports.
Customers have to be told if their direct debits are increasing and given the chance of using meter readings to challenge any rises. Last month, the energy price cap rose by 54 per cent and customer bills have been sent soaring.
The Times quoted Ofgem as saying: “Our top priority is to protect consumers and we recently wrote to suppliers to alert them that we are commissioning a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly.”
Mr Kwarteng told the Times: “Some suppliers have been increasing direct debits beyond what is required. The regulator will not hesitate to swiftly enforce compliance, including issuing substantial fines.”
Boris Johnson has acknowledged there was more that could be done to help address the cost-of-living crisis despite insisting the Government was doing “everything we can”. The Prime Minister warned that increasing Government spending to prop up household finances could fuel inflation rising even faster.
And as BP announced soaring underlying profits despite a hit from pulling out of its Russian business, Mr Johnson warned that a windfall tax on energy firms would deter investment.
On ITV’s Good Morning Britain on Tuesday, the Prime Minister was challenged about the case of a 77-year-old viewer called Elsie, who has seen her energy bill soar and cut down to one meal a day.
Told that she spent the day travelling on buses to stay out of her home and keep her bills down, former London mayor Mr Johnson said: “The 24-hour freedom bus pass was actually something that I actually introduced.”
Mr Johnson said there are “plenty of things more that we are doing”, adding: “What we want to do is make sure that we have people who are in particular hardship looked after by their councils, so we are putting much more money into local councils.
“We have the particular payments to help elderly people in particular with the cost of heating.”
The Prime Minister warned that increasing state support beyond its current levels could drive inflation even higher.
There is a “global context” caused by a surge in energy prices which is hitting all aspects of the economy including food, he said, adding: “The cost of chickens is crazy.”
On energy, Mr Johnson said: “This country is in the insane position of having to take in, pipe in, electricity from France and elsewhere because we haven’t done enough to invest in our own security of energy and electricity.”
His comments came as BP group plunged to a 23 billion US dollar (£18.4 billion) replacement cost loss for the first three months of the year after its decision to ditch its near-20% stake in oil producer Rosneft, which it co-owned with the Kremlin, in response to the Ukraine war.
But, with the one-off charge stripped out, its underlying replacement cost profits more than doubled to 6.2 billion US dollars (£5 billion) from 2.6 billion US dollars (£2.1 billion) a year ago thanks to the rocketing cost of crude.
Under pressure from opposition politicians to impose a one-off levy on oil company profits, Mr Johnson said: “If you put a windfall tax on the energy companies, what that means is that you discourage them from making the investments that we want to see that will, in the end, keep energy prices lower for everybody.”
The Government has set out a £9 billion package of loans to cut energy bills and council tax rebates, but Mr Johnson faces calls to go further.
