A group of MPs have backed a new bill which would make it unlawful for energy companies to rip off their poorest customers.

The cross party group of MPs - including Lib Dem Shadow Chancellor Vince Cable - want to outlaw tariffs which hammer low income families who pay their fuel thorough prepayment meters.

The Equalisation of Tariffs for Gas and Electricity Bill was formally presented to the House of Commons yesterday. It could become law if the private members bill is selected in a ballot later this year, when the proposal is likely to gain widespread support.

The National Housing Federation, the trade body for England's housing associations, estimates around 1.5m households are still being charged £40 extra a year more than customers who pay via quarterly bills.


Energy companies rake in an extra £50m a year through the excess charge they force prepay customers to pay – even though they have a household income of just £13,500.

While E.ON, Scottish Power and Npower have dropped the prepayment meter premium, British Gas, EDF and SSE are still charging their 1.5m prepayment meter gas customers a premium.

Federation Chief Executive David Orr welcomed the bill and said a new law was the only way of ensuring energy companies stopped overcharging their poorest customers.

Mr Orr said: "The energy companies have shamelessly ripped off their poorest customers over many years and at last this group of MPs is taking a stand by proposing a bill which would outlaw this blatant discrimination between different customer types.

"Millions of low income families are already struggling to make ends meet during the recession. Hitting them with the very highest fuel tariffs in the market is simply not acceptable and must be outlawed."

(CD/GK)