Prime Minister Andy Burnham is facing calls to ban energy suppliers from increasing direct debit payments while customers' accounts remain in credit, as new figures reveal providers hold billions of pounds of household money.
The Labour leader, who has pledged a series of pro-consumer cost-of-living measures, has been urged to go further with reforms after Ofgem data showed energy firms held £3.2bn of customers' money in the year to March, with the average household £135 in credit.
Hilary Osborne, writing for the Guardian, has led the calls for change, highlighting that some households on fixed tariffs with large balances are still being told their supplier wants to increase their direct debit. She noted that while customers can refuse, the burden falls on them to challenge the increase.
Proposed Changes to Direct Debit Rules
Osborne suggested providers could be banned from raising direct debits by more than the price change, or when customers have built up a surplus that covers a set percentage of their bills. The proposal comes as part of a broader push to tackle what Burnham describes as everyday financial hassles.
This week, a spokesperson for the prime minister said he would be “getting out of Westminster and meeting people where they are”. The spokesperson added: “He thinks Westminster has got used to telling people that everyday hassles – like hidden pricing and consumers being ripped off – must be accepted as part of life.
“He doesn’t think that’s right. That’s why he’s going to start rolling out a series of pro-consumer cost-of-living measures to give people some room to breathe.”
Broader Cost of Living Measures
Burnham has already promised a range of measures to tackle the cost of living, including a ban on fake discounts and making it easier for people to escape unwanted subscriptions. The prime minister said: “I know people are sick and tired of rip-off discounts and subscription traps. Westminster has got used to telling people that everyday hassles like this are just part of life.
“I don’t think that’s right, especially when the cost of living continues to weigh heavily on so many people’s lives. I’m determined to pull every single lever we can to provide people with some room to breathe on the cost of living.
“We’re putting an end to phoney bargains. If something is advertised as half price, it should actually be half price. We’re also making it as easy to leave a subscription as it is to join.
“These are just two of the everyday fixes we’re going to be rolling out – today is just the start. We want to put more money in people’s pockets and give people hope that politics really can work for them and their everyday lives.”
Impact on Households
The proposed changes would directly affect the millions of households that currently pay energy bills via direct debit, many of whom have built up credit balances over the winter months. If implemented, the measures would prevent suppliers from unilaterally increasing payments without clear justification, potentially saving the average household from unexpected financial strain.
The prime minister's commitment to rolling out further measures signals a continued focus on consumer protection, with the direct debit issue now firmly on the agenda as part of the wider cost-of-living strategy.
