Rachel Reeves says Labour would end 'morally wrong' prepayment meter premiums

Labour has announced that it would put an end to “outrageous” premiums that those on low incomes pay for prepayment energy meters.

Currently those with such meters are charged more than those who pay by direct debit.

Rachel Reeves, the party’s shadow chancellor, said Labour would end the “morally wrong” situation which sees those who earn the least paying the most for energy bills.

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It comes as the first in a series of measures the party is putting forward to tackle the cost of living crisis that families are facing in the country. It is understood Labour will set out more policies next week.

Rachel Reeves has said Labour would take action over excess charging on prepayment meters.Rachel Reeves has said Labour would take action over excess charging on prepayment meters.
Rachel Reeves has said Labour would take action over excess charging on prepayment meters.

“It’s outrageous that people on prepayment meters have to pay more for their energy,” said Ms Reeves.

“Why should those with the least have to pay more to heat their homes and put the lights on? This is unjustifiable and morally wrong.

“As energy prices spiral, this unfair prepayment premium must end. Labour would make sure that no one pays over the odds for the same gas and electricity that everyone else gets, as well as taking broader action to help people manage their bills over the winter.

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It is understood Labour would eliminate the gap between the two price caps and reimburse energy companies for the difference over the winter, estimated to cost around £113m between October and March.

This would be paid for through a strengthened windfall tax on oil and gas companies, which the opposition claims currently has a “loophole” which allows energy giants to exploit it in order to pay less tax.

Liz Truss this week ruled out a further tax on energy companies, telling The Yorkshire Post that it would send the wrong message to businesses.

Labour’s action on the cost of living crisis comes after Gordon Brown’s major intervention on the economy which saw him call for energy companies to be temporarily nationalised like banks were during the financial crisis.

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In what appeared to be a slight towards Sir Keir Starmer, the former prime minister said that crises don’t “don’t take holidays, and don’t politely hang fire”.

The Labour leader has been largely absent during the recent days of the escalating warnings over the economy and water shortages, and has come under criticism for being on holiday over the last fortnight as the scale of the problems the UK is facing has emerged.

Writing for the Guardian, Mr Brown called for the energy price cap to be cancelled, saying that interventions cannot wait until the new prime minister is chosen, as that would leave “impoverished families twisting in the wind”.

“There were two great lessons I learned right at the start of the last great economic crisis in 2008: never to be behind the curve but be ahead of events; and to get to the root of the problem,” he wrote.

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