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01Sep08

CONSERVATIVES WOULD CUT UTILITY BILLS BY UP TO £100 A YEAR

As part of the Conservative Party’s campaign on fairness, the Party has announced that a Conservative government will reform Post Office Card Accounts to enable families without bank accounts to benefit from the lower energy and water tariffs offered to customers paying by direct debit.

It is estimated that this could cut the energy bills of up to four million Post Office Card Account (POCA) holders by up to £100 a year. There are approximately eight million people in the UK who do not have a bank account or are effectively unbanked because they withdraw all their cash weekly. Many of these use POCA instead. But because they cannot pay their bills by direct debit, they typically pay much higher rates for gas, electricity and water.

A Conservative government will reform POCA so that they can be used for the first time to pay utility bills using the equivalent of a direct debit. This proposal, which has support from leading utility companies, will generate significant savings for 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 POCA each week, users also benefit from a more efficient way of paying their bills.

The Labour Government has rejected this policy because adding functionality to POCA contradicts their plans to shut Post Offices. In fact, this policy could also generate up to £20 million a year in additional revenue for Post Offices, which could help keep some Post Offices from being closed down by the government.

Conservative Parliamentary Candidate, Mark Versallion, commented, “It is deeply unfair that many of the poorest households end up paying more for their energy and water because they don’t have bank accounts and can’t pay by direct debit. “Our plan will help people struggling with rising bills by letting them use their Post Office Card Account to pay their utility bills.

Theresa Perchard, Director of Policy at the Citizens Advice Bureau has said “At a time when fuel and other household costs are escalating, intensifying the pressures on poorer consumers, this proposal offers to put more money in the pockets of poorer consumers by reducing their outgoings and providing for weekly budgeting to help avoid debt. And the fact that it might cost less if utilities, other creditors and government bodies work together rather than alone must mean it deserves serious consideration.”