Prepayment Meters: Ofgem Decision

Craig Whittaker Excerpts

Monday 6th February 2023 Commons Chamber

[Graham Stuart]

Where the charges are higher, it is because the system, which I think was last changed when the right hon. Member for Doncaster North (Edward Miliband) was Secretary of State, has meant that Ofgem is under an obligation to ensure that suppliers match charges to the actual cost of serving a customer. That was the principle established under the last Labour Government, and it subsists today, but I tend to agree with the hon. Member for Glasgow North East (Anne McLaughlin) that we need to look at this again. That is why we are looking at a reformed system for the treatment of vulnerable customers from April 2024.

[Craig Whittaker (Calder Valley) (Con)]

It is welcome news that forced prepayment meters have finally been stopped, but that is only half the story. The premium paid by those who are on prepayment meters is also a scandal. The least able to pay are paying the highest tariff because they cannot afford the cheapest tariff—you couldn’t make it up. Will the Minister update the House on what Ofgem is doing to radically and quickly look at the matter so that this injustice is finally put to bed?

[Graham Stuart]

As I said, the system for a long time has been that charges should be cost-reflective, and it is more expensive to service prepayment meters. We need to look hard to ensure that the increase in prices, which has come as energy prices have gone up, is commensurate with that before we look at the position of PPMs overall, which we will do as part of our overall reform of the treatment of vulnerable people. It is worth pointing out that the last time a survey was done, only 30% of those who are in fuel poverty had a prepayment meter, while 70% did not. Ensuring that we have a system that is fair to all is really important; that is why it is quite a complex job to make sure that we have a better system than the one we inherited from the Labour party.