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OFFER/Ofgas Social Action Plan Discussion Document

A Response from UNISON Scotland Joint Utilities Committee

1. UNISON Scotland welcomes this discussion document and supports the need to review the present action plans.

2. We do not believe that price competition alone is sufficient to assist those with greatest need. Greater emphasis is needed on assisting people to reduce fuel use as well as the environmental benefits of such a policy.

3. We are not convinced that in the context of the benefit system price reductions can be regarded as equivalent to income for disadvantaged customers. We believe that price controls and other measures should directly assist these customers. Competition alone is not sufficient.

4. A range of support measures are required which would include low user tariffs. However, disadvantaged customers are not all low users (e.g. low income families) and therefore we would support controls on prepayment charges which went some way towards reducing the significant additional costs compared with direct debit payment customers. There is some evidence that under the current arrangements low income customers are subsidising better off customers.

5. We support the availability of the widest range of payment methods at no extra or differential cost to customers. This should include facilities for direct cash payments and companies should be expected to provide these facilities and to justify the closure of such facilities.

6. We support the suggestion of closer working with credit unions. UNISON branches are heavily involved in the establishment and running of credit unions which have been a major support particularly to low paid workers and their families.

Staff secondment particularly for new or expanding credit unions would be of considerable assistance. The most effective approach to debt prevention is to take measures to avoid the build up of debt.

These should include a requirement for more frequent meter reading and greater promotion of the facility for customers to send in replacement readings. Companies could do more to support debt advice services.

There is a need for a detailed review of Fuel Direct and the possibility of new budgeting arrangements through the social security system which should attract similar discounts to direct debit. Customers who have repaid debt should have the option of remaining on the Fuel Direct scheme until new arrangements are in place.

8. We would support a compulsory levy on all households to provide funds for energy efficiency and the use of these funds should be administered on a not-for-profit basis. These additional funds should be combined with a more co-ordinated approach to the current sources of funding for energy efficiency. Grant assistance should be the preferred approach rather than loans. UNISON would also support greater use of CHP schemes and other initiatives such as ‘Affordable Warmth' and Scottish Power/EAGA.

9. It is noticeable that new suppliers have fewer vulnerable customers than the more established suppliers. There needs to be stricter monitoring to ensure that all companies meet their obligations in this regard.

10. We welcome the recognition in the document that the use of prepayment meters can simply be a cover for self-disconnection and rationing. There is an urgent need for greater research in this area. Guaranteed Standards should apply to all suppliers. There should be minimum standards on the provision of charging points. UNISON would also support a minimum level of emergency credit of £5 for Gas and £10 for electricity. Consideration should be given to methods of spreading costs across the year and limiting debt recovery to non-winter periods.

11. We believe that there is evidence that some new suppliers are deliberately seeking to avoid supplying customers who use cash-based payment schemes. The regulator needs to take action in this area to ensure that disadvantaged customers benefit from competition. Further action is also needed to monitor consumer experience of doorstep selling.

12. On the supply of information there is a priority need to ensure that all suppliers promote awareness of their social obligations to customers. This should include improved liaison with social work and housing staff who have contact with vulnerable groups.

13. UNISON Scotland would support the establishment of a review group on the plan in Scotland.

Dave Watson Senior Regional Officer (Utilities)UNISON Scotland
July 1999

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