"Stealth tax… Rip-off Britain… Prices up
30 percent… Another reason to avoid Club sites… I will not be renewing
my membership…" Rarely has there been a topic to inflame passions as
much as this year’s increase in pitch charges, as
these extracts from the Chat Forum go to show.
The price increases are the result of changes in
the way electricity is sold: instead of charging
separately for hook-up, the cost of power is now included in pitch fees. Ironically, these changes were introduced to prevent consumers from being charged too much, but instead these new regulations have opened the floodgates to higher pitch fees for all,
with no electricity opt-out, less price transparency, more scope for unscrupulous sites to charge what they
like under the guise of new legislation, and more
work for site owners who want to maintain separate hook-up charges.
The trouble stems from tough new regulations set by the Office of Gas and Electricity Markets (Ofgem) to prevent organisations selling-on electricity at higher prices than they paid for it. Ofgem says the rises are necessary because of changes brought about by the Utilities Act 2000. Now, power can only be resold at the same price it was bought for - whatever that may be, as rates vary between suppliers - otherwise known as MRP (maximum resale price).
Ofgem says the new rules were needed due
to the switch from regional electricity boards to a competitive market. And although MRP
is aimed mainly at preventing landlords from profiteering at the expense of their tenants, it applies equally to site owners offering hook-ups.
WHO DARES WINS?
If you were a student in a bedsit, the regulations would be good news for you as they demand that anyone selling-on electricity must be able to prove they are not charging more than MRP. The consumer has the right to see evidence proving this, and there are financial penalties for those who are charging too much.
In houses at least there are electricity meters, but this is not so on campsite pitches. The
installation of meters would cost thousands
of pounds and would, in the words of Ros Pritchard, director general of the British Holiday and Home Parks Association (BH&HPA), be
"an absolute nightmare".
The only winner in all this is the Chancellor, who is now able to take more VAT from motorcaravanners. According to everyone we have spoken to, it amounts to a spectacular own goal by Ofgem, which brought in the rules on 1 January. Ros Pritchard again: "We told Ofgem the regulations were unfair and wouldn’t work in the [motorcaravan] industry, but they wouldn’t
listen. The whole thing is a pig’s ear."
There is some good news, though: Energywatch, the consumer watchdog, has pledged to investigate your complaints, and The Caravan Club hints that it will rethink the rises if, as seems likely from public reaction so far, there is a big backlash.
But Ofgem has left a door open for site owners, and it is one through which the industry has bolted. By ditching the hook-up charge and having an inclusive pitch fee that includes ‘provision for a service’ - that is, an electricity supply - site owners are technically not reselling electricity at all and thus not subject to MRP.
Tony Taylor, owner of Waterrow Touring Park, near Taunton, speaks for many site owners when he says that he has had to switch to all-inclusive charges
"to cover our backs". He told us: "We’ve had to change to a system which is less transparent and more unfair on our customers. It is also not fair that some site
owners, especially peak-season operators, stand to make money out of it."
So what’s wrong with an all-inclusive charge?
As on-the-ball Practical Motorhome readers have already pointed out, there is an immediate tax penalty: VAT on electricity is five percent while on a pitch fee
it is 17.5 percent. An all-inclusive fee is also unfair
for those who don’t need a hook-up, as they end up paying for something they don’t use.
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