Peco emailed me back and here is their reply...
"The extra wire is for use should you wish to have a switched frog polarity as shown in diagram 7 of the instruction leaflet. This is especially recommended when used with DCC. If you do not wish to modify the point as per diagram 7, the point can be used as supplied and the wire should be trimmed off level with the end of the sleeper."
Of course I had lost the instructions, which being an Australian male made absolutely no difference as I never read them. Come on, you can't in all honesty say that you ever read them!
"I would not join any club that would have someone like me for a member." -- Groucho Marx