Energy Bills: Self-disconnection

Kenny MacAskill Excerpts

Wednesday 25th January 2023 Commons Chamber

[Kenny MacAskill (East Lothian) (Alba)]

(Urgent Question): To ask the Secretary of State to make a statement on the levels of self-disconnection from power sources and on Government support for energy bills.

[The Minister for Energy and Climate (Graham Stuart)]

As I set out to the House on Monday, the Government recognise the importance of protecting customers, including those on prepayment meters. This weekend, the Secretary of State set out a five-point plan on prepayment meters. He wrote to energy suppliers, calling on them to take every step to support consumers in difficulty, particularly those who are at risk of self-disconnection. The Government want to see a much greater effort from suppliers to help consumers in payment difficulties, including offers of additional credit, debt forgiveness or debt advice. As the hon. Member for East Lothian (Kenny MacAskill) will be aware, Ofgem, as the independent regulator, is in a position to direct suppliers in a way that the Government are not.

The Government understand that this is a difficult time for many families. That is why we have put in place unprecedented cost of living support. It is easy to take that for granted, but it is extensive. It includes the £400 discount under the energy bills support scheme, which has been appearing on electricity bills since the October bills arrived this winter, as well as the energy price guarantee, which does not need any form of application process and directly subsidises energy bills for the typical family this winter to the tune of an additional £900, with equivalent support in Northern Ireland. The Government are also committed to supporting those households without a relationship to a domestic energy supplier with a £400 discount under the energy bills support scheme alternative funding, with eligible households able to apply from 27 February.

It is critical that this support reaches consumers, which is why the Government have also urged suppliers to take action on increasing the number of vouchers being redeemed under the Government’s energy bills support scheme and why we have published a list of supplier redemption rates. We want to encourage suppliers to compare themselves with their rivals and look to do as well as the best, showing which ones are meeting their responsibilities and which need to do more.

There are also established industry rules and processes to reduce the risk of self-disconnection. Suppliers are required to have conversations with customers in arrears to set up a suitable debt repayment plan, taking account of their ability to pay. It is vital that these rules are followed. The Secretary of State wrote to Ofgem to ensure that it takes a robust approach to compliance. In response, Ofgem is reviewing supplier practice, and a key area of its review is the suppliers’ approach to self-disconnection.

But this is continuing work. This afternoon I will be meeting energy suppliers, Ofgem, Energy UK and Citizens Advice to ensure that they hear from the Government, the hon. Gentleman and all hon. Members that there is a strong urge in this House to do everything we can to protect everyone this winter, and most of all, the most vulnerable.

--- Later in debate ---

[Kenny MacAskill]

A parliamentary answer on Tuesday disclosed that around 66,000 households in Scotland and 660,000 across Britain had self-disconnected from smart meters in the third quarter of last year. Self-disconnection is a euphemism for simply being unable to afford to heat or power your home. It is as pernicious as the term “collateral damage” is in war. Those afflicted by self-disconnection and all its misery are also civilians, but we are at peace, not war. These figures are for a quarter before prices rose and temperatures dropped. They are also only the tip of the iceberg. The numbers are far greater, as these figures do not cover those on legacy prepayment meters, the numbers of which are substantial, with almost 2 million in the UK and 300,000 in Scotland. They apply to those that operated before smart meters were brought in and they will substantially increase the numbers so tragically afflicted.

In an energy-rich country, fuel poverty is an obscenity. Given this heartless cruelty in a cold winter, will the Minister, first, end the forced installation of prepayment meters forthwith? Secondly, will he immediately abolish the perverse higher standing charges and tariffs for prepayment meters? Thirdly, will he as a matter of urgency bring in a social tariff for the poorest and most vulnerable?

[Graham Stuart]

I thank the hon. Gentleman for his questions. He rightly raises the issue of those who are self-disconnecting. I think we can be proud of the fact that the numbers of people who were physically disconnected from power and heat last year were in single figures. The installation of prepayment meters has to be an absolute last resort. We must insist that people do not end up being physically disconnected from an energy supply. It is important to highlight that all suppliers are required to offer emergency credit when the meter runs out. This should give consumers enough time to top up their meters. Traditional meters have an automatic setting that allows for a set amount of emergency credit to be used after the customer is notified that the topped-up credit has been used.

As I have said, we are committed to having the right regime in place. In 2009, there were issues around the additional costs of prepayment meters. Ofgem had responsibility for supervising that at that time, as it does now, and it looked into the issues and brought in a regime to ensure that any costs and charges were commensurate with the actual costs of delivery. To a certain extent that has all been superseded by the energy price cap brought in by this Government, which limits the amount that anyone can charge for their energy.