← Back to House of Commons Debates
Prepayment Meters: Ofgem Decision
06 February 2023
Lead MP
Graham Stuart
Debate Type
Ministerial Statement
Tags
TaxationEnergy
Other Contributors: 25
At a Glance
Graham Stuart raised concerns about prepayment meters: ofgem decision in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The Minister emphasised the Government's commitment to protecting vulnerable energy users by addressing recent reports of prepayment metre installations without proper support for customers. He welcomed Ofgem's steps to pause such practices and conduct a thorough review, as well as the intervention by Lord Justice Edis halting warrant authorisations for forced installation. The Secretary of State called on suppliers to provide redress to affected customers by the end of the day following the statement, including potential compensation. The Minister also committed to meeting with an all-party parliamentary group to discuss further action.
Ed Miliband
Lab
Doncaster North
Question
The Shadow Secretary of State criticised the Government for failing to act promptly on prepayment metre installations and asked about the duration of the pause, compensation schemes, a minimum power supply system, and windfall tax loopholes. He also highlighted recent reports indicating thousands affected by forced installations.
Minister reply
The Minister replied that the length of the pause will be determined by Ofgem as the regulator needs to ensure proper processes are observed before forcible installation is considered. Compensation details would be worked out through Ofgem and officials were considering a minimum power supply system but with technical challenges. The Minister emphasised the Government's energy price guarantee and dismissed Labour’s proposals on windfall tax and fossil fuel imports.
Question
The MP questioned why further powers are not being given to Ofgem to ensure that British Gas and other companies cannot continue forcing installations into homes, protecting the sanctity of people's homes.
Minister reply
The Minister agreed with the need for proper processes and supported Ofgem's assessment of supplier practices, committing to back the regulator in holding suppliers accountable.
Question
The MP criticised the situation and called for a radical overhaul of prepayment metre systems due to their perceived unfairness and impact on vulnerable users. She asked whether energy should be considered a human right.
Minister reply
The Minister acknowledged concerns about fairness but noted that prepayment metres have a useful role, particularly in preventing disconnections for those unable to manage traditional payment methods.
Craig Whittaker
Con
Calder Valley
Question
Welcomes the stopping of forced prepayment metres but highlights that premium tariffs paid by those on prepayment metres is unjust. Asks Ofgem to look at this matter.
Minister reply
Acknowledges charges should be cost-reflective and more expensive for prepayment metres, but seeks fairness in price increases relative to costs. Notes only 30% of those in fuel poverty have prepayment metres.
Nia Griffith
Lab Co-op
Llanelli
Question
Disappointed with the Minister's reply on a minimum level of supply and asks when he will make energy companies do it.
Minister reply
Emphasises emergency credit provision to customers and support for those in arrears as part of existing processes.
Bernard Jenkin
Con
Harwich and North Essex
Question
Asks about the legality of the process for issuing warrants for prepayment metre installations, questioning lack of judicial oversight.
Minister reply
Welcomes Lord Justice Edis' decision to stop warrant authorisations and will write back if he can identify the root cause.
Wera Hobhouse
Lib Dem
Bath
Question
Asks for an apology from the Government, removal of prepayment metres, and compensation for those affected.
Minister reply
Agrees with the proposal and commits to ensuring prepayment metres are removed when unjustly installed.
Bob Neill
Con
Bromley and Chislehurst
Question
Highlights flaws in the process of bulk warrant applications, suggesting potential perjury by energy company representatives.
Minister reply
Agrees with the questioner's concerns, commits to working with Ministry of Justice to look into robust processes.
Seema Malhotra
Lab Co-op
Feltham and Heston
Question
Points out injustice towards vulnerable people being charged higher rates for energy.
Minister reply
Acknowledges the situation but defends it as existing since Labour's regime, committed to fairness within the system.
Jack Brereton
Con
Bury North
Question
Asks about the extent of the investigation into historical poor practices.
Minister reply
Committed to supporting a thorough investigation by the regulator, including historical issues and abuse.
Alison Thewliss
SNP
Glasgow Central
Question
Describes a constituent's situation of losing home due to prepayment metre issues.
Minister reply
Emphasises the need for system reform and encourages pursuit of redress through existing systems.
Maria Eagle
Lab Co-op
Liverpool Garston
Question
Highlights minimal refusal rate in warrant grants, questioning immediate redress for affected families.
Minister reply
Commits to ensuring a fair system and rectifying failures of due process by suppliers.
Arfon
Question
Questions the fitness of Ofgem in light of potential supplier misrepresentation.
Minister reply
Acknowledges the need for a regulatory regime and system that does its job, will keep it under review.
Andy McDonald
Lab Co-op
Middlesbrough and Thornaby East
Question
Criticises the Government's approach to the issue and demands immediate action to stop forced installations.
Minister reply
Commits to support through energy price guarantees, bill support schemes, and benefit system for those affected.
Question
I hope I can be coherent, because I am so angry. People with disabilities and their families face a monthly cost in excess of £600 a month for a single person and over £1,000 for a family with a disabled member in it. Right throughout this cost of living and energy crisis, they have suffered more than double the amount that normal households have. The Minister says he wants to focus on suppliers who are not doing things correctly, but I want you to focus on people who are—
Minister reply
I thank the hon. Lady for her question. As I have said, the legal decision today that no more warrants will be implemented is, I think, the right one and should give her some confidence that between the regulator, the suppliers, the justice system and others, we will ensure that we have a system that is fit for purpose and has the interests of people including the disabled people she has highlighted as its top priority.
Janet Daby
Lab
Lewisham East
Question
According to information from the Ministry of Justice, on 1 February The Times published a story revealing that British Gas routinely sends debt collectors to break into customers’ homes and forcibly fit pay-as-you-go metres, even when those customers are known to have extreme vulnerabilities. Is this not just another example of the Government’s failure to regulate our broken energy market?
Minister reply
I would say no, because there are clear duties on the suppliers, in this case British Gas, which is why I spoke to its chief executive last week to tell him how disgusted the Government and indeed the whole House were with that behaviour, that it was unacceptable, that the proper processes had to be followed and that we had to ensure that people were treated fairly.
Question
I am not sure that the Minister answered the question from my hon. Friend the Member for Glasgow North East (Anne McLaughlin) on this, so I will try again. Does he think that access to energy and electricity should be a fundamental human right?
Minister reply
As the hon. Gentleman will know, my job as the Energy Minister is to ensure that we have a strong, robust energy system that is fair to everyone and most of all to the most vulnerable, and that is what I will focus on. I will leave it to others to decide what is or is not a human right.
Rachael Maskell
Lab Co-op
York Central
Question
The Government’s job is to govern, but for months and months the Minister has been sitting on the sidelines watching this car crash happen, and it is the people of our country who are paying for that. Why does he not bring forward legislation right now to ensure that people on prepayment metres do not pay a different tariff from everyone else and that the other corrections can be put in place?
Minister reply
As I have said, the situation was created under the last Labour Government in which suppliers have been obliged to charge rates that reflect the actual costs to them of delivering a service to someone. That, at face value, is the correct system. We need to look at whether we need to change that system to be fair to vulnerable consumers, remembering that most vulnerable consumers are not on a prepayment metre. We have to have a system that is fair for all.
Question
Almost one in five households in Scotland are off the gas grid. Fuel poverty and the use of prepayment metres are greatest in those areas because those households are reliant on unregulated fuels and on electric heating systems, which have always been more expensive. Will the Minister recognise that additional burden, regulate those additional fuels and provide sufficient support in those areas for insulation and alternative heating systems, as well as financial support? The crisis there is even greater due to the double whammy of people being off the grid and in fuel poverty.
Minister reply
I thank the hon. Gentleman for his question, and he is quite right to speak up for people in rural areas who find themselves in exactly the position he describes. I am pleased to say that as of today, credits to electricity bills will be being paid to of people who are on the electricity grid but off the gas grid—they will be appearing from now on. We are determined to help those people, which is why we announced in the autumn statement a doubling of the alternative fuel payment from £100 to £200. That money will be going to help those people, and the portal will also open before the end of the month for those who are not on either the gas grid or the electricity grid, so that they too can apply and get that £200 support.
Dawn Butler
Lab
Brent East
Question
It should not take a journalist going undercover for the Minister to finally decide to wake up. I have been campaigning on prepayment metres since 2015, and the Government are still relying on energy companies to do the right thing. They are not going to do the right thing, so the Government need to force them. We have seen how quickly the Government can put legislation through.
Can I ask the Minister to confirm three things? First, in addition to providing compensation, will he remove prepayment metres from vulnerable households? Secondly, will he make prepayment metres cheaper per unit of energy? That is when the energy companies will start changing how they act. Thirdly, the cost has been significantly reduced due to smart metres, so the energy companies cannot use that as an excuse, but the scandal of smart metres is that energy companies can switch people remotely. Will the Government ensure that that can no longer happen and is outlawed?
Minister reply
I thank the hon. Lady for her question, and I am happy to confirm the compensation. If prepayment metres were made cheaper, we would have everybody seeking a prepayment metre and there would be nobody left to subsidise the vulnerable, and most of the poorest people do not have a prepayment metre. That question is entirely aligned with typical economic policy from the Labour party, but I do not think it contributes usefully to the debate.
However, the hon. Lady is right to highlight the importance of smart metres, and we want to see an acceleration of that programme. Smart metres provide a much better service and are cheaper to run, and I hope that as part of our plans for April 2024 onwards, when the Government support ends, we will have a system that encourages the installation of more smart metres and is much fairer to vulnerable users.
Question
Analysis by Citizens Advice Cymru indicates that around a third of prepayment users in Wales have been disconnected at some stage during the past year. Furthermore, there has been a threefold increase in the number of consumers being switched to prepayment metres. Do those stats alone not indicate that there is a real issue with the way in which energy companies use prepayment metres?
Minister reply
I thank the hon. Gentleman for his question. The cost of energy has gone up, and despite extraordinary interventions by the Government, families are none the less finding it harder as a function of the Ukraine war and of global energy prices. That is why this Government have gone so fast in moving ourselves to cheaper renewable energy and away from the—what was it?—just 7% of energy that came from renewables when the right hon. Member for Doncaster North left office. Now that figure is well over 40%. We are going to move to a cleaner, greener and cheaper system that will be better for consumers in Wales.
Question
My constituent had fallen into arrears with ScottishPower, but he was complying with his repayment plan when ScottishPower demanded the full settlement of his debt in December. When he could not do that, he was forced on to a prepayment metre, which of course compounded the problem.
I have two questions. First, the Minister has mentioned that only 30% of the most vulnerable are on prepayment metres. I would like to know when that data is from, because it would be useful to have a more up-to-date figure than that; I struggle to believe that is still the case. Secondly, if energy companies are forcing the installation of these prepayment metres, can the Minister give the House an assurance that it will not be the vulnerable customers who end up footing the bill—that those costs will be absorbed by the massive profits that the energy companies will make—and that prepayment rates will be on par with other energy rates?
Minister reply
I will write to the hon. Lady with the exact date—I believe it may have been 2020 or so—when 30% of those deemed in fuel poverty were on prepayment metres and 70% were not. It is highly unlikely that that would have materially changed in the period since so that the ratios are reversed. I can give her the assurance that there is no way that people who have been subject to the wrongful installation of prepayment metres will be picking up the tab. However, a complexity worth highlighting in the House is that although energy generators may be making record profits, energy suppliers have not been making profits in recent years, and we need a system that is fair to consumers and ensures stability in the energy supply market.
Question
We have heard that the people who are struggling most to pay their energy bills are often the most vulnerable in our society, and they are being forced on to a higher tariff. We have also heard that the appeals system is cumbersome and people may even lose their house. The Minister has blamed the utilities companies and Ofgem, neither of which have covered themselves in glory. He has even blamed the previous Labour Government, of 13 years ago. Does he not think that perhaps now is the time that this Government should take their responsibility?
Minister reply
Under this Government, not only are we seeing the transformation of our system to being greener, but we have seen the contracts for difference, which are of course reducing the costs to consumers, as those generators pay hundreds of millions of pounds into the pot to help lower bills for everybody. This Government have taken forward the greening of our energy system and at the same time we are working towards a sustainable future that will be fair to everyone, most of all the most vulnerable.
Jim Shannon
DUP
Strangford
Question
I thank the Minister for his answers. Does he not agree that this treatment of customers—of the disabled, pregnant women and single parents with young children, some of whom were in hospital when they were moved to prepayment metres—if not already illegal, should be? What further steps will he take to prevent the big companies from being able to trample all over the little man and the little woman, not simply in this one aspect, but in the overall treatment of the ill and the vulnerable?
Minister reply
The hon. Gentleman may always come at the end of the questions, but his are rarely the weakest ones. He is absolutely right on this. If we need to do more to strengthen the regulator, we will do so, to make sure that, as he says, the people who feel themselves to be at the bottom of the pile are not ill-treated—we cannot have a system that does that. We have to have one that puts their interests at the top of our list of priorities.
Shadow Comment
Ed Miliband
Shadow Comment
The Shadow Secretary of State criticised the Government for being slow to act and failing to ban forced installations of prepayment metres. He highlighted reports from Ofgem, Citizens Advice, and recent numbers indicating thousands affected by such practices. The Labour Party called on the Minister to pledge a pause until reforms are implemented, detail compensation schemes, consider supplying a minimum amount of power to prevent disconnections, and address upcoming energy bill increases through windfall tax reforms.
▸
Assessment & feedback
Summary accuracy
About House of Commons Debates
House of Commons debates take place in the main chamber of the House of Commons. These debates cover a wide range of topics including government policy, legislation, and current affairs. MPs from all parties can participate, question ministers, and hold the government accountable for its decisions.