Tory energy minister Greg Barker will demand to know why energy firms are hoarding up to £2bn from direct debit billpayers
The big six energy companies will on Tuesday be ordered to stop “sitting on customers’ cash”, as the government comes under pressure from Labour to deal with soaring household bills.
In an assault on overcharging by the utility companies, Greg Barker, a Tory energy minister, will demand to know why gas and electricity firms are hoarding up to £2bn from people who pay by direct debit.
He will use a meeting with company bosses to ask about reports they are making £36m a year from interest alone because many customers are paying too much when they are automatically charged an estimated amount for their gas and electricity each month.
A source close to Barker said he will demand the energy companies – British Gas, SSE, Scottish Power, EDF, E.ON and npower – declare how much consumer credit they are sitting on and how many of their customers are in credit.
On Monday night, he said it was vital people who paid by direct debt were not “being unknowingly ripped off”.
“The better energy companies will now automatically refund your cash if you build up more money than required to meet your normal bill or will pay you interest if you are in surplus,” he said. “However, it looks like some companies aren’t doing that and I am determined to get consumers a better deal and call time on the big six sitting on customers’ cash.”
It comes after the Guardian saw figures showing npower stockpiled £400m at one point last year from customers, while British Gas put £20m in “credit balances” into its annual account in one recent financial year.
Following those revelations, the minister will ask companies to pay interest to customers who are in surplus, following the lead of some small suppliers, including Ovo Energy, which pays 3% interest on credit balances.