Prepayment Meters

Lord Callanan Excerpts

Tuesday 14th May 2024 Lords Chamber

[Lord Lennie]

To ask His Majesty’s Government what steps they have taken to compensate individuals or households who have had pre-payment meters wrongly installed.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, suppliers are responsible for paying compensation. It is paramount that customers affected by the involuntary installation of some prepayment meters receive compensation as soon as possible. Suppliers have so far carried out 150,000 assessments to ensure that those impacted get the compensation they deserve. Of those, around 2,500 customers have been identified as requiring compensation, and 1,502 payments worth £342,000 have been made so far. We engage with Ofgem regularly to ensure that suppliers compensate remaining customers promptly.

[Lord Lennie (Lab)]

I thank the Minister for that Answer. However, as he said, the assessment was carried out by the selfsame people who supplied the enforced prepayment meters in the first place. Does he not see that there is a potential conflict of interest here? Will he say whether the Government have arranged for any independent checks to show that these assessments are accurate and are not simply letting companies mark their own homework?

[Lord Callanan (Con)]

I understand the point the noble Lord is making, but that is the role of the independent regulator Ofgem. My Secretary of State and Minister Solloway have had regular meetings with suppliers directly and with Ofgem to ensure that they are doing the job correctly and that the assessments are being made correctly, but the noble Lord is right, and we are monitoring the situation closely.

[The Earl of Clancarty (CB)]

My Lords, energy companies will sometimes say that your meter needs to be replaced because it is too old. Of course, this can be used as a ruse to get a prepayment meter installed. Can the Minister say what authority any energy company has to demand that? Who really decides whether a meter is too old? Where does the responsibility lie for this—with property owners, landlords or tenants, who are paying the bills and are often the point of contact? If the Minister cannot answer this question now, I am happy for him to write to me.

--- Later in debate ---

[Lord Callanan (Con)]

Of course, if the customer is not in debt, it is their choice whether to have a prepayment meter. There are circumstances in which prepayment meters are fitted involuntarily—the consequences of the scandal that we saw last year are being closely monitored—but, in most cases where a customer is in credit and not in debt, it is their choice whether to accept a prepayment meter or, indeed, a smart meter.

[Lord Teverson (LD)]

My Lords, one of Ofgem’s new conditions for energy suppliers, now that they can start forcing prepayment meters again, is that they carry out internal audits to make sure they are complying with Ofgem’s new rules—that is, marking their own homework. Given the trauma to households of forced entry and the bad behaviour of the sector in the past, should Ofgem not get off its backside and instigate its own external audits?

[Lord Callanan (Con)]

My Lords, energy suppliers are not marking their own homework. Ofgem very closely monitors them. Not all suppliers have been given permission to restart involuntary installations. They have to put in place a strict code of conduct and make at least 10 attempts to contact the relevant customer. They have to put in place relevant prepayment plans and credit payment plans, if necessary, taking into account the customer’s ability to pay, and some prepayment forcible installs are banned completely in the case of vulnerable customers.

[Lord Watts (Lab)]

My Lords, all the regulators seem to be failing the public. Is it because the Government do not want them to do the job properly, or are all our regulators incompetent?

[Lord Callanan (Con)]

I think that is a bit of broad generalisation, if the noble Lord will forgive me for that. The principle of independent regulators was established a number of years ago throughout many Governments. I think all of us will have our opinions on how good or bad independent regulators are—they sometimes absolve the political system from some blame; that is my personal criticism—but we put in place through legislation the system of independent regulators, and of course we need to keep an eye on how they are doing their job.

[Lord Woodley (Lab)]

Does the Minister agree that these energy companies are very fast in putting up their prices but very slow in paying compensation? Does he agree that pensioners and poor people should not be forced to put these meters into their homes if they do not want them?

[Lord Callanan (Con)]

Of course, I am pleased to tell the noble Lord that, since the height of bill rises, the price cap has come down by about 60%. So it is not true that prices are going up; they are coming down, although they are still at a historical high. As I said in response to a previous question, if the customer is not in debt, it is absolutely their choice what kind of meter they have.

[Lord Porter of Spalding (Con)]

On the basis of that answer, can my noble friend confirm for the public at large, so that there is no doubt, that any tenant who has occupied a property that had a bad credit history before the tenant moved in should have been entitled to have that meter swapped to a normal meter—and that any customer who has been kept on a prepayment meter against their will on the basis of a previous tenant’s history should not have had to suffer that and should be due compensation?

[Lord Callanan (Con)]

I think I would agree with the noble Lord’s point: of course you are not responsible for the debt of a previous tenant. The only qualification I would make on that is that, if it is a tenant, the landlord owns the property, so the choice of meter would be subject to the permission of the landlord as well.

[Lord Porter of Spalding (Con)]

That is strictly not true. The tenants in rented property are responsible for their own gas, electricity and water supplies; the landlord is not.

[Lord Callanan (Con)]

I am happy to hear the noble Lord’s clarification. If I am wrong on that, I will certainly write to him about it.

[Lord Sahota (Lab)]

My Lords, I represented one of the most deprived wards in my town for over 20 years. What I learned about these prepayment meters is that they are the bane of the lower-paid. Some of those people wanted them made illegal and to be taken out. Do the Government have any such plans?

[Lord Callanan (Con)]

No, we believe that some customers prefer to have prepayment meters, which enable them to manage their credits and debts responsibly. Some customers choose that; some prefer direct debit; some prefer to operate on a normal credit basis. All choices will remain available. As I said, if they are not in debt, it is the customers’ choice as to what payment method they use.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I have been away for a couple of weeks, and the answers on my return are no better than when I left. Can I give the Minister the opportunity to answer my noble friend’s question? Which organisation is doing best: Ofsted, keeping our education at a high level; Ofgem, causing problems for the consumers, not the suppliers, as we have heard; or Ofwat, for getting the rivers so polluted? Which is number one on his list?

[Lord Callanan (Con)]

Of course, the absence of the noble Lord has been a great loss to the House. While he may complain about the quality of some of the answers, some of us might take issue with the quality of some of the questions. The noble Lord is asking a very broad question about a whole range of regulators. I suppose I would say that perceptions of the quality of regulators may vary.