Dearne MP John Healey has won his 18-month campaign to stop the government using phone lines at rip-off rates.
An announcement that cheaper 0345 numbers will replace 0845 was made at a hearing of the Public Accounts Committee in the Commons on Tuesday.
This will make calls to the Department of Work and Pensions free or cheaper for most people, costing no more than a local landline rate instead of up to 41p a minute.
Cabinet Office permanent secretary Richard Heaton said they would bring forward a new government approach within a few weeks.
The U-turn is a victory for Mr Healey who has campaigned strongly against the use of 0845 numbers by government departments and GPs.
Just months ago, Work and Pensions Secretary Iain Duncan Smith dismissed Mr Healey’s arguments, saying the costs to customers were “beyond DWP control.”
But Mr Healey’s report, ‘The Telephone Tax’, published in May, revealed that nearly two thirds of government services have 0845 phone lines, including Disability Living Allowance, Carers Allowance, Jobcentres, Social Fund (for crisis loans), Pensions Service and the Student Loans Company.
His evidence persuaded the National Audit Office (NAO) to launch an inquiry, which reported in July, and now the PAC hearing.
Mr Healey said: “The government has promised an end to high-cost lines that rip off the most vulnerable and poorest in our country.
“This is a victory for all those who are put off from seeking help they need and are entitled to because they can’t afford to spend a big chunk of their tight budget making the call. The Government’s widespread use of 0845 numbers is a telephone tax on millions of hard-pressed people who have to use the lines to contact public agencies.”
Much of Mr Healey’s campaigning has focused on the Department for Work and Pensions. His Freedom of Information request in 2012 found more than 80 per cent of their helplines – used by the sick, elderly and vulnerable – were 0845.
The MP added: “While promising a switch to 03 is a positive step I would like the government to go further. I want to see calls to public services made free across the board, or at least for those likely to be under the most pressure.”
The NAO’s report said switching all high-rate lines to 03 would save callers £29m a year and cost thegovernment £7m; while a move to 0800 would save callers £46m and cost government £21m.
The PAC was told by Department for Work and Pensions permanent secretary Robert Devereux that DWP pays £80m to BT for its phone system, and switching to 03 would cost about £1m which was “neither here nor there.”
Dialling 0845 is expensive from a mobile but a switch to 0345 would save those calling DWP from a mobile £20m a year. People on lower incomes are more likely to rely on their mobiles.
PAC chair Margaret Hodge described the high cost lines as “a racket” and said it was “shocking” that people had to call 0845 numbers to access crisis loans, victim support and bereavement services.
She told the PAC that Mr Healey had been a “great campaigner” on the issue, and added: “Well done to John Healey in winning this campaign. It is a brilliant example of what a campaigning MP can do through Parliament to get real change which will make a big difference to the everyday costs for millions of ordinary people.”