Asked by
To ask His Majesty’s Government how they will ensure that the new
Ofgem Code of Practice regarding installing pre-payment meters
for vulnerable and disabled customers will be enforced.
(Con)
My Lords, the code of practice is a step in the right direction,
with better protections for vulnerable households, increased
scrutiny of supplier practices, and redress measures when
prepayment meters were wrongly installed. Ofgem has now confirmed
that it will put strengthened rules into energy company licences
so that they can be enforced. The Government will monitor very
closely the behaviour of suppliers and regulators and will not
hesitate to intervene again if necessary.
(LD) [V]
My Lords, after the appalling behaviour of energy suppliers
forcibly installing prepayment meters at the homes of the most
vulnerable and disabled, why is Ofgem’s new voluntary scheme not
compulsory? Worse, the categories “High Risk—Do not install” and
“Medium Risk—Further assessment required” are confused and rely
on energy supplier staff to make medical judgments. Someone
awaiting a transplant is high risk but, post transplant, when
they are medically still very vulnerable, they may not be. As
Scope pointed out, does a customer with dementia even have the
capacity to respond to chasing calls and emails? Does the
Minister think that staff from energy suppliers should be making
these medical decisions, and how will safe practice be
enforced?
(Con)
The noble Baroness asked a number of questions. First, Ofgem does
not have the right to impose rules without consultation. It is an
independent regulator accountable to Parliament, but this
voluntary code is agreed by all suppliers; it will be put into
their contracts by October. There were some nuances and details
perhaps lost in the Ofgem announcement on Tuesday about the code
of practice. The medium-risk group is always protected by the
precautionary principle so, if there is any doubt that the
consumer is financially vulnerable or likely to disconnect, they
must not install a prepayment meter. The vulnerable group
includes any family with children under five, the elderly over
65, those with many other serious medical conditions including
Alzheimer’s and Parkinson’s, and those in temporary situations
such as pregnancy and bereavement. Ofgem has worked very hard to
try to include everybody in the prevention of installation of
prepayment meters and will continue to do so. They have all been
paused for the moment.
(Con)
My Lords, I refer to my interest as honorary president of
National Energy Action. Could my noble friend address two vital
issues that the code of conduct does not cover? First, prepayment
customers pay more per unit than any other customer, regrettably,
and that has so far not been addressed by the Government. Will
she urgently address it? Secondly, the standing charge is
increasing, often every six months, by up to 20% a time. That is
a charge over which customers have no control whatever at a time
when there is a cost of living crisis.
(Con)
My noble friend is not quite correct, in that we are doing a lot
to tackle the higher costs that PPM users pay, and the Government
are taking action to end the prepayment penalty. There are
specific costs associated with prepayment meters, not least that
the Post Office is often used as a conduit for payment and
charges, and there are some regulatory and system costs. We have
acted, we are continuing to take action, and we are introducing
reforms to the energy bills to remove this premium paid. For the
moment, that will be covered by the energy price guarantee and
there will be permanent resolution to the issue in April
2024.
(Lab)
My Lords, does the Minister think that the use of the
precautionary principle by those who install the prepayment
meters is rarely the kind of judgment that these people are
expected to make? Are they expected to make a judgment on whether
somebody is 85 or 84? Does it not need to be much more clear cut
as to who can have the exemption and who cannot?
(Con)
The noble Lord makes a fair point but, once all the conditions of
the code of practice have been met, there must be at least 10
attempts to contact the customer before a prepayment meter is
installed. Then when it is installed, which is often with a
bailiff, there has to be body camera footage to show that it has
been done correctly. The precautionary principle is a very strong
bar. If there is any doubt that the consumer is financially
vulnerable, cannot pay, and is at risk of being cut off, the
meter must not be installed.
(Lab)
My Lords, notwithstanding what the Minister said about the
precautionary principle, and following my noble friend, are the
Government really satisfied that the firm ban on enforced
prepayment meters will not cover high-risk groups such as lone
parents of a newborn babies, people with Alzheimer’s, and those
aged 80 to 84? Surely they are at high risk and should not have
to rely on the exercise of the discretion—the precautionary
principle—of the installers.
(Con)
The noble Baroness mentions some temporary conditions covered by
the precautionary principle, which can include pregnancy and
bereavement. But if a supplier concludes, taking into account the
meter type, the aftercare support, and reasonable energy-saving
assumptions, that the household will frequently or for prolonged
periods self-disconnect and risk causing significant consumer
harm, the supplier must consider the prepayment meter not to be
safe or reasonably practical and must not install it.
(Con)
My Lords, there is understandably grave concern about the effect
of prepayment meters on the vulnerable and disabled. Can my noble
friend clarify whether the social tariffs are still an option?
Additionally, what is being done to improve the energy bill
support scheme voucher take-up?
(Con)
My noble friend refers to a number of policies that the
Government have put in place to give financial support to
consumers, and social tariffs are indeed still an option.
Following the Government’s Autumn Statement commitment, we are
working with consumer groups and industry to consider the best
approach from April 2024 when the energy price guarantee comes to
an end, and this could include social tariffs. As for the energy
bill support scheme voucher take-up, we have a problem in that,
as of 1 March, 97% of vouchers have been delivered since the
scheme launched, but only 78% of these have been redeemed. This
means that at this time 2.1 million vouchers have been issued to
suppliers but not redeemed by households, so we are carrying out
extensive communications, including through the Help for
Households, to encourage people to redeem these vouchers. We are
making announcements through local radio, charities, consumer
groups and the media generally to encourage people to take up
this support.
(Lab)
My Lords, we have all heard the harrowing stories that come from
forced entry into the homes of the most vulnerable people in this
country. I would like some more clarification. Surely discretion
from the energy companies is not the answer, as we have heard.
Why do the Government not take responsibility and continue the
ban on installations until a better system is in place protecting
the vulnerable. Is not failure to act on this a dereliction of
duty?
(Con)
The Government were very quick to take action following the
Citizens Advice report in mid-January. The Secretary of State
responded in late January by writing to Ofgem and all suppliers,
and forced installation of PPMs was then stopped within
weeks—even before the take-up by the national press campaign—so I
do not agree that we have not done enough, quickly enough. The
energy, markets and consumer team in the Department for Energy
Security and Net Zero is responsible for this. We will monitor
Ofgem very closely to make sure that all the provisions that we
have put in place to protect vulnerable customers are indeed
practicable and enforced.
(Con)
My Lords, I congratulate the Government on their scheme to help
people with energy costs. That was clearly an appropriate
response. But in connection with these forced prepayment meter—or
smart meter—installations, will the code of practice include how
the meters are installed, whether they are installed in places
that are accessible, and whether those who have them are trained
in how to use them? It should surely be part of the code to
ensure that putting in a meter which elderly and disabled people
do not know how to operate does not happen. Installing it at the
top of a high cupboard which, if people are elderly and cannot
reach it safely but need to stand on a stepladder to press that
button and restore their energy supply, should not happen
either.
(Con)
The noble Baroness makes some very good points. The aim of the
code of practice is to set out very clearly how suppliers should
protect customers in vulnerable circumstances. This will include
minimum steps that suppliers need to take to conclude whether it
is actually safe to install a prepayment meter, with greater
prescription—as we have heard—about how vulnerability is defined,
and enhanced aftercare for PPM users. Additionally, the supplier
will have to carry out a site welfare visit before a PPM is
installed. As I have said before, all installations of prepayment
meters have been paused until suppliers can prove that they are
compliant and have given redress measures to those whose
prepayment meters have already been installed.
