Power politics pays the bills;Personal finance

5th June 1998 at 01:00
The TUC is now an official gas supplier J- with electricity to follow. Neil Merrick explains.

Like many householders, Mike Wilson has spent the past few months turning away salespeople offering to cut his gas bills. Four companies sent representatives to his home in Newark, Nottinghamshire, but he told them he had already found a new supplier.

By opting for Union Energy, a company set up by the Trades Union Congress, Mr Wilson is not necessarily choosing the cheapest gas. The only price promise made by Union Energy is that it will be among the five cheapest companies in each region throughout the next five years.

Although he expects to reduce his annual gas bill of pound;350 by pound;96, Mr Wilson, county secretary of the National Association of Schoolmasters Union of Women Teachers, admits the main reason for choosing Union Energy is political.

Each time someone signs up, the company pays their union a small commission. "I wasn't in favour of privatisation, but if the union movement can benefit then that's great."

Union Energy was set up after the TUC was approached by the EMA union, representing workers in the power-generation industry. A deal has been signed with Scottish Power which will provide Union Energy with both gas and, from September, electricity.

Mike Jones, TUC finance director and chairman of the new company, says: "We are pushing it as another benefit which will cover two of the basic necessities."

At present Union Energy is only available to members of TUC-affiliated unions although it may extend sales to non-TUC unions such as the Association of Teachers and Lecturers and the two headteachers' unions.

The company is supported by 42 unions and is being promoted at workplace meetings and conferences, but there is no doorstep-selling.

Paul Mundt, who teaches in Horsham, West Sussex, switched over to Union Energy in April, and expects to buy electricity from the company as well. But he says he's since had "several begging letters" from British Gas asking him to go back to them.

Union Energy claims that people living in a typical three-bedroom semi-detached house in the south of England can expect to save about pound;93 per year on their gas bill, or pound;102 if they pay by direct debit. The savings in other parts of the UK will be slightly smaller.

Other offers include a "winter holiday" discount during each December and January, when the standing charge will be waived, and a free protection scheme providing pound;200 credit if customers are made redundant.

Some teachers have found that Union Energy took a long time to complete paperwork. Stephen Harlow, an NUT member in the West Midlands, says he became tired of phoning up to establish whether he was being switched over. "At one point I was on the verge of signing for another supplier," he says.

Union Energy does not deny this but says the transporter Transco must be satisfied that health and safety conditions are met while British Gas checks whether a customer owes money.

Union Energy is reluctant to reveal how many new customers it has attracted, stating only that it is "performing up to expectation" and that none of the 22 new gas companies is publishing detailed figures.

Ofgas said last month that more than three million of the UK's 19 million households had switched from British Gas to another supplier, or had signed contracts.

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