Edward Miliband (Doncaster North) (Lab) (Urgent Question): To ask
the Secretary of State for Business, Energy and Industrial Strategy
if he will make a statement on families having prepayment meters
forcibly installed in their homes by energy companies. The Minister
for Energy and Climate (Graham Stuart) The Government recognise the
importance of protecting customers, including those on a prepayment
meter. That is why this weekend, the Secretary of State set out
a...Request free trial
(Doncaster North) (Lab)
(Urgent Question): To ask the Secretary of State for Business,
Energy and Industrial Strategy if he will make a statement on
families having prepayment meters forcibly installed in their
homes by energy companies.
The Minister for Energy and Climate ()
The Government recognise the importance of protecting customers,
including those on a prepayment meter. That is why this weekend,
the Secretary of State set out a five-point plan on prepayment
meters. He wrote to energy suppliers to call on them to take
every step to support consumers in difficulty. The Government
want much greater effort from suppliers to help consumers in
payment difficulty, including offers of additional credit, debt
forgiveness and tools such as debt advice. Suppliers have been
asked to commit to stop moving households to a prepayment meter
wherever possible, and to reveal the number of warrants they have
applied for in recent months, as part of a drive to increase
transparency around prepayment meter installations.
There are reports that the courts are handling batches of
applications for warrants, so the Department for Business, Energy
and Industrial Strategy is working with Ofgem and the Ministry of
Justice—I am pleased to have beside me the courts Minister, the
Under-Secretary of State for Justice, my hon. Friend the Member
for Finchley and Golders Green ()—to ensure that the process by
which suppliers bring such cases to court is fair and transparent
and supports vulnerable customers.
The Government have urged suppliers to take action to increase
the number of vouchers being redeemed under the Government’s
energy bills support scheme. We have published a list of supplier
redemption rates, showing who is best meeting their
responsibilities and those who need to do more.
The Secretary of State has written to Ofgem, asking it to do more
to ensure that suppliers protect vulnerable consumers, including
by revisiting its approach to the enforcement of supplier
compliance and through the urgent publication of the outcomes of
recent investigations into vulnerable customers. I will meet
energy suppliers, Ofgem, Energy UK and Citizens Advice later this
week to discuss these matters further. Those actions come on top
of the Government’s unprecedented cost of living support,
including the £400 discount under the energy bills support scheme
and the energy price guarantee, which will save a typical
household—on top of that £400—£900 this winter, with equivalent
support in Northern Ireland.
Finally, we are considering a new approach to consumer
protection. The Government will work with consumer groups and
industry to consider the best approach, including options such as
social tariffs, as part of wider retail market reforms.
I am glad that the Government have in the last few days finally
woken up to the fact that we have a national scandal around
prepayment meters. The question is whether their actions will
stop the scandal; I fear the answer is no.
The Secretary of State could only say in his letter published
yesterday that he
“would expect that the volume of…pre-payment meter installations
and disconnecting households will start to subside over the
coming months”.
The words “start to subside” are no comfort for the thousands
more people who are facing bailiffs and being disconnected.
Labour called for a ban on the forced installation of PPMs for at
least the course of this winter to ensure that the Government,
the companies and the regulator reform a broken system. Let us be
clear that this is a broken system, with no proper criteria for
what forced installation as a last resort means; no clear
definition of the vulnerable; no proper clarity about the credit
that should be offered to people on PPMs; no proper rules on debt
repayment; and people on PPMs—the most vulnerable in our
society—paying the most for their energy: a prepayment
penalty.
Will the Minister answer three questions? First, would not the
best thing he could do to prevent hardship this winter be to
impose a temporary ban on the forced installation of prepayment
meters? That is the way to protect thousands more who may fall
into misery. Secondly, does he agree that, particularly in this
cost of living crisis, it is quite wrong that those on prepayment
meters are paying more for their energy, and will he take action
to end that penalty? Thirdly, will he pledge to look at the
system in other countries whereby nobody can forcibly be cut
off—as we do with water in the UK—with a minimum amount of power
supplied to all households?
Energy companies are forcing their way into people’s homes and
millions are being disconnected by the back door. It is not
enough for the Government to express regret, write letters and
have meetings; only a ban will do.
We have today already seen a response from suppliers to the
Government’s calls. We must look to be as effective as possible
in effecting change now, and we believe that the Government’s
calls on and engagement with suppliers, alongside that of Ofgem,
is the right approach. Suppliers must exhaust—as they are
required to do—all other alternatives before forcing the
installation of a prepayment meter.
We, too, were once in opposition, so I understand the desire to
come up with superficially popular policies, but we do not want
to create a system where, in fact, more people are forced into
debt, end up with bailiffs and are drawn into the court system.
That is exactly what we wish to avoid. For many consumers,
prepayment meters are a useful tool to allow them to manage their
credit and ensure they do not get drawn into the court system in
that way. [Interruption.]
If the right hon. Member for Ashton-under-Lyne () were to stop chuntering
even for a moment, she would hear my response to the right hon.
Member for Doncaster North (), who asked me about the
penalty, as he put it, of higher costs. The standing charge is a
fixed charge that covers the cost of live supply, and it is
controlled by Ofgem. The system, which I think was in place when
the right hon. Gentleman was a Minister, is that the cost should
reflect the actual cost of providing the service. Ofgem manages
that, but I agree with him that this is something we should look
at. That is why we are going to look at social tariffs and why we
want to look at whether those costs should be socialised. This is
a long-standing situation that we are seeking to address. The
whole energy supply system is under stress right now because of
the energy crisis, and it is right that we make moves sensibly,
without perverse outcomes, to ensure that we protect the most
vulnerable.
On the question of not forcibly cutting people off, I am always
open to looking at these issues, but of course a lot of people
will manage the way they use heat and electricity, and it is
somewhat different from water. We want to ensure that we get the
balance right by protecting the most vulnerable and making sure
that we have a system that builds on the unprecedented protection
for consumers that we brought in this winter.
(Kettering) (Con)
Energy consumers on prepayment meters are among the most
vulnerable energy consumers. In the face of the biggest ever hike
in domestic energy prices, getting financial support to those
people is more important than ever. While it is good news that
99% of energy bill support payment vouchers have been issued, it
is alarming that only 71% have been redeemed. ScottishPower has
redeemed only 64%. Other companies such as Bulb have redeemed
79%. Will the Minister put a rocket under companies such as
ScottishPower to ensure that this money gets into the hands of
vulnerable consumers as quickly as possible?
My hon. Friend is absolutely right, and that is one of the
reasons we have published the list today. Transparency is the
best form of disinfectant. We expect the suppliers’ chief
executive officers to have conversations with their teams and to
ask, “Why are we at the bottom of this list?”. We want
competition between suppliers, but all of us have a role to play.
It is up to the whole of society to ensure that people are aware
of the vouchers. People in the greatest difficulty might be the
least likely to open the envelope, for example, so we have looked
at the design of the envelopes and at every front. We want to get
the message out there to people on prepayment meters that the
vouchers are there and that they are entitled to support. Like my
hon. Friend, I would like to see the take-up increase.
(Makerfield) (Lab)
Recently, the i newspaper reported that Wigan magistrates court
had been granting around 2,000 disconnection warrants each month.
On one day in December, 496 were granted in under four minutes
without magistrates even knowing the names and addresses of those
people, let alone their circumstances or vulnerabilities. Forcing
customers into a situation where they pay the highest rates for
energy and are at risk of self-disconnection without any
discussion of their circumstances is patently wrong. Will the
Minister ensure that this travesty of justice does not continue
any longer, and implement a ban on the forced installation of
prepayment meters?
I thank the hon. Lady for her question. Of course, before the
suppliers get to that stage, they are required by Ofgem to ensure
that it is absolutely the last resort. That is before they get to
the court stage. As I said in my opening statement, we are
working closely with the Ministry of Justice to ensure that the
court process, as part of the overall system, is fit for purpose
and provides the maximum protection possible.
(Gloucester) (Con)
Mortgage providers now do well in engaging with customers,
managing difficulties and greatly reducing the number of
repossessions. Does my right hon. Friend agree that energy
companies should do likewise, rather than turning to prepayment
meter warrants on the slightest pretext? If the numbers of
warrants do not come down, does he agree that more should be done
to have specific reduction targets?
My hon. Friend is absolutely right. We have to make sure that all
suppliers are fulfilling the requirements set by Ofgem. Ofgem’s
inquiry into the treatment of vulnerable customers by energy
suppliers found weaknesses across the board, and it is engaging
with suppliers on compliance. The Secretary of State wrote to
Ofgem again in the last few days to reiterate the importance of
ensuring that that compliance work has real teeth and that
suppliers fulfil their obligations to protect these people.
(Bath) (LD)
Prepayment meters enforce a poverty premium on some of the most
vulnerable in society. My Pre-Payment Meters (Temporary
Prohibition) Bill would prevent their installation during one of
the worst winters in living memory. In just over 30 days, the
Government will allow my Bill to fall—but it is not too late.
Will the Minister consider supporting it?
I thank the hon. Lady for her question. As I have said, we are
looking at the treatment of vulnerable customers overall,
including on the issue she raises through her Bill.
(Rushcliffe) (Con)
I am incredibly concerned to hear reports of a number of
vulnerable customers being moved on to prepayment meters and to
hear energy companies quoted in the media as saying that higher
energy prices are here to stay, implying that the fall in
wholesale prices will not be passed on to our constituents. I
welcome the Government’s actions on both issues, but can my hon.
Friend set out what steps are available to the Government if
energy suppliers do not play fair, and reassure my constituents
that he will take those steps if needed?
Suppliers are required to provide emergency and friendly hours
credit to all prepayment meter customers, and where a supplier
identifies that a customer in a vulnerable situation has
self-disconnected or is self-disconnecting, it must offer them
additional support credit where it is in the customer’s best
interest to do so. Ofgem warned suppliers way back in June 2018
that PPMs should only be installed as a last resort for debt
collection and banned forcible installations for vulnerable
consumers in 2017. We are watching to ensure that we have the
right steps in place and will take further steps if required to
make sure that suppliers live up to their obligations.
(Leeds Central) (Lab)
What possible justification is there for forcing people to sit in
the cold and the dark because they have been required to have a
prepayment meter connected that they cannot afford to top up?
Twenty-five years ago we had the same debate over water
disconnections, and society decided it would no longer be lawful
to deny any human being access to water. Have we not now got to
the point where, similarly, our constituents should be entitled
in all cases to light and to warmth?
Heat and light, not least as driven by the current energy prices,
constitute a significant cost to families and to the nation. We
have to work with the system to provide additional credit and
support for people, but, having had 30 suppliers close business,
with high costs imposed on the system and thus on consumers, we
must get the balance right, so that we have a system that
encourages people to pay their bills but also protects those who
most need help.
(Newcastle-under-Lyme)
(Con)
I thank that the Minister for his statement. I have a number of
constituents who use prepayment meters. Should energy companies
not be using all their efforts this winter to focus on supporting
those constituents with their energy costs, such as with the
voucher scheme he has already mentioned, rather than trying to
transition them forcibly on to prepayment meters?
My hon. Friend is right, as ever, and that is an important part
of the message we are sending out today. I think this urgent
question helps to strengthen that message to suppliers and others
to ensure that people who are in a vulnerable position are
supported to the greatest extent possible.
(Glasgow North) (SNP)
Seeing as the Minister is all about encouraging and asking
companies to do things rather than enforcing any action, perhaps
he might encourage or ask the energy companies to publish how
much interest they earn from money that is loaded up-front on to
prepayment meters, before it is expended on electricity and
energy?
I thank the hon. Gentleman for that question and will write to
him with an answer.
(Peterborough) (Con)
Too many people in my constituency are on prepayment meters. The
forced installation of prepayment meters in places such as
Peterborough, so that the most vulnerable have to pay more, needs
to stop. What more can the Minister do to ensure that energy
companies look at every possible avenue so that those in my city
who are least able to pay are not paying the highest energy
prices?
My hon. Friend is absolutely right. The system that we inherited
and that exists today reflects the cost of supply, and Ofgem
supervises that to ensure it is the case. Alongside him and
others across the House, I would be interested in looking at that
again to make sure we get a system with the right balance.
(Kingston upon Hull West and
Hessle) (Lab)
It is fundamentally unfair that people with a prepayment meter
pay more for their energy. Whether they have chosen that
prepayment meter or not, they have the same energy coming into
their homes as everybody else. The argument from the energy
companies that somehow, “This is justified because it is more
expensive” falls completely flat when we find out that many
people are being moved from smart meters straight over to
prepayment meters. So will the Minister look at taking
enforcement action to stop those on prepayment meters being
charged more?
I thank the hon. Lady for her question. Switching any customer
from smart credit to smart prepayment can take place only after
an energy supplier has gone through a prescribed process, in the
same way as if they were going to fit a prepayment meter to
replace a traditional credit meter. The energy regulator, Ofgem,
has rules in place that restrict the forced fitting of a
prepayment meter or the switching of smart meters to prepayment
mode for those in arrears except as a last resort.
(Totnes) (Con)
I do feel that the Government need to offer a clearer explanation
as to why those on prepayment meters have higher energy
charges—that is the least we can do. What help and support is
being given to those who were on prepayment meters but, finding
themselves in better financial situations after the Christmas
period, are now trying to transfer back across to credit meters?
In some instances there are penalties for doing this. It should
not be right that any energy company is imposing a penalty for
those who wish to transition away from prepayment meters.
I agree with my hon. Friend and it is important to make sure that
people do not find themselves caught in a cul-de-sac. He asked
about the Government laying out the rationale for higher costs. I
believe I have said this on two occasions, so I hope I have at
least set out the rationale, whether or not people agree with it.
The one that we inherited and that subsists today is that this is
cost-reflective. Ofgem, the regulator, supervises this and
ensures that no charges are imposed that do not reflect the
additional costs of providing energy through that particular
methodology. Whether we should change that is a separate matter,
but I hope I have at least been clear in explaining the rationale
that we inherited from the right hon. Member for Doncaster North
() and others previously.
(Dwyfor Meirionnydd)
(PC)
People living in north Wales are at the sharp end of the cost of
living crisis. Last year, many of them paid the highest
electricity prices in the UK, and the costs for those on
prepayment meters was higher still. Recent figures from Citizens
Advice show how precarious access to energy is for prepayment
meter customers in Wales, with 32% being disconnected last year
because they could not afford to top up. We have heard that the
Minister will not ban the forced installation of prepayment
meters, so will he give the Welsh Government the power to step in
and put people before private energy profit?
I entirely reject the premise of the right hon. Lady’s question.
We are not putting people behind the private energy company
profits—quite the contrary; we are trying to ensure that we have
a system that stops vulnerable people getting caught in debt,
having bailiffs coming to the door and being further impoverished
by a system that does not help them. That is what we are seeking
to balance. As I have said, we are going to consider this in the
round going forward, because the system and, most of all, people
such as those she refers to are under a stress that has never
been seen before.
(York Central)
(Lab/Co-op)
The scrutiny and support that the Minister says the energy
companies should be putting in place is not happening, so there
is no point in hiding behind the words because 600,000 people
were flipped over to prepayment meters last year. So why will he
not—can he give a real reason for this—put in place a moratorium,
until this mess is sorted out, on anyone moving over to
prepayment meters? Will he also reverse things for those people
who have been forced on to these high tariffs?
The speediest way this winter to make an alteration to this is to
call on the companies to do everything possible to avoid doing
it. Some have already managed to do it. That, of course, throws
up the question of whether we should seek a long-term moratorium,
and that is something to look at. However, right now, by
publishing the data and urging the companies to cease using this
except as an absolute last resort, which is supposed to be the
requirement in any case, I hope to see those numbers collapse as
soon as possible. This is the fastest way we can make a
difference now.
(Hornsey and Wood Green)
(Lab)
The Minister needs to get a grip. A constituent has written to me
saying that she has cut back to having one shower a week. Another
says:
“I am mostly washing in cold water, but I’ve recently started
getting the beginnings of painful arthritis in my fingers as a
result.”
How low do people have to fall before the Government get a grip,
take back control and get on top of this problem so that our
constituents can have the basics of a good life?
Of course, the Government are providing an unprecedented three
layers of support for consumers: the cost of living support for
those on benefits, the £900 reduction in energy bills this winter
and the additional £400 energy bills support scheme, as well as
help for those on alternative fuels. The Government are bending
over backwards, within an unprecedented and tight situation,
precisely to help constituents such as those the hon. Lady
mentioned, because we have to bear in mind the most
vulnerable—those who are struggling, especially on a day like
this when it is so horribly cold.
(East Lothian) (Alba)
Legacy prepayment meters number about 300,000 in Scotland and 2
million in the UK. Many have a credit limit of only £99, which
with the perverse higher tariff and standing charges does not go
far, especially in cold times such as now. That requires multiple
top-ups, and often people who are on legacy prepayment meters
live in either rural areas or deprived urban areas devoid of
public transport, or have restricted mobility. Will the Minister
also undertake to address this other injustice, heaped upon those
who are already the poorest and most vulnerable?
The hon. Gentleman is right to highlight people in rural areas,
including the remote highlands and islands, which I am sure the
right hon. Member for Orkney and Shetland (Mr Carmichael) will
question me about if he gets the chance. The hon. Gentleman is
absolutely right that we need a system that recognises the
geographical and proximity challenges that affect people such as
those he has mentioned, and—while under unprecedented stress, as
I say—works at that granular level for ordinary families, often
in remote areas. They need help and we need a system that
supports them.
(Merthyr Tydfil and Rhymney)
(Lab)
Figures from Citizens Advice show that in Wales 81,441 people are
being disconnected at least once a month, and 24,432 people are
being disconnected at least once a week. In October, Ofgem warned
suppliers that not enough was being done to identify customers in
vulnerable circumstances before installing a prepayment meter,
but analysis of calls to Citizens Advice’s consumer service just
in the past month suggests that that practice is ongoing.
Voluntary action is not working, so I repeat: will the Government
implement a total ban on forced prepayment meter installations
until new protections are brought in?
We have called on suppliers to voluntarily stop the practice of
switching to prepayment meters as the answer to households
struggling to pay their bills, and they should also make a
greater effort to help the vulnerable. We are going to look at
this whole system, not least following Ofgem’s investigation that
found failings by energy suppliers when dealing with the most
vulnerable.
(Brent Central) (Lab)
We must thank Dean Kirby from the i newspaper for his campaign—he
called me because of my 2016 campaign on prepayment meters, and I
also informed him of my experience as a magistrate. I am
disappointed that it has taken so long to ensure that people on
prepayment meters do not pay the extra tariff. An elderly
constituent of mine who had had a stroke had no gas in their
home. The unintended consequence of smart meters is that they can
be switched remotely, and the Minister cannot rely on energy
suppliers to do the right thing. Can he please take emergency
action, and will he please realise that winter deaths have
increased by 20% this winter?
One of the issues raised by the right hon. Member for Doncaster
North () was the fact that
redemption of the energy support vouchers that provide help for
people on prepayment meters is at about 71%, as opposed to the
higher level that we would like. That is something we need to
address, because in this freezing weather it is more important
than ever that those with prepayment meters look out for and
redeem their vouchers, as a contribution to helping them get
through this challenging time.
(Chesterfield) (Lab)
With respect, the Minister’s response to this urgent question has
been utterly pathetic. The truth is that the voluntary approach
the Government have taken is not working, as has been said by
Members on the Government Benches as well as on ours, so the
question for the Minister is this: will he take action to prevent
people from freezing to death this winter, or will he continue to
have reviews when the emergency is now? Will he please show the
urgency and the scale of response that is needed, and tell us
that he will take the approach laid out by my right hon. Friend
the Member for Doncaster North ()?
As I have said to the House, we are urging suppliers to desist
from using prepayment meters and to do everything possible to
make sure that they are avoided, but we recognise that, as a
final and last resort, having exhausted everything else, they can
be a way of helping people to control what might otherwise be an
unmanageable debt.
(Eltham) (Lab)
The entire debate around fuel costs when prices were spiking was
about the impact on vulnerable people and people who would have
to make the choice between heating and eating, and sometimes not
being able to make a choice about either. Why, then, did it take
Citizens Advice to expose this scandal and the fact that the
Government have been asleep at the wheel? The only way to sort
this out, when forced entry warrants have been issued on an
industrial scale by magistrates courts, is to impose a
moratorium, so that we make sure that no one who has a prepayment
imposed on them is forced into a situation where they cannot
afford to pay fuel costs. That is surely the minimum that the
Government should do.
As I have made clear to the House, the Government are absolutely
calling for suppliers to do everything possible to avoid doing
this, and I think that we are already seeing movement as a result
of that call.
(Slough) (Lab)
You will be aware, Madam Deputy Speaker, that prepayment
customers, many of whom are the least well off in society, are
charged a higher rate for their energy. Does the Minister
recognise the huge injustice being forced on thousands more
households as they are shifted on to prepayment meters and higher
rates? What will he do to correct that injustice urgently,
including, hopefully, issuing a moratorium?
I have explained that the system that Ofgem enforces, and has
long enforced, is strictly based on the cost of delivery. We will
look at that again to make sure of that. We have to ensure that
the existing conditions on compliance on which Ofgem works with
suppliers are right, but we also need a future system that learns
from current pressures.
(Orkney and Shetland)
(LD)
In Orkney and Shetland, we have the highest rates of fuel poverty
anywhere in the country. The premium paid by the poorest people
in my constituency takes the advance situation and risks making
it catastrophic. We have another problem on top of that, as we
cannot get any energy company to install meters in new-build
houses in the northern isles. When the Minister next speaks to
the energy companies, and when he has stopped them installing
meters that people do not want in the rest of the country, can he
ask them to send some engineers to the northern isles to install
the meters that new house owners need?
The right hon. Gentleman has raised this with me. There are
issues, and the Government have intervened to make sure that the
distribution costs in the far north of Scotland and the islands
are not fully reflected in the price, so a special exemption has
been made. However, he is right—I have heard about the difficulty
for builders of getting a meter installed, and it should not be
beyond the wit of man for people to align and work together to
make sure that the system runs efficiently and people get a meter
when they should. I share his frustration.
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