Prepayment Meters: Self-Disconnection

Patrick Grady Excerpts

Thursday 15th December 2022 Commons Chamber

[Patrick Grady (Glasgow North) (Ind)]

May I say what a moving experience it was to be in the Chamber this morning for the commemoration of the holocaust?

I congratulate my hon. Friend the Member for Glasgow North East (Anne McLaughlin). She is my constituency neighbour, and indeed my constituency MP, and she has done extremely well to secure this debate and in all her work on this important issue. I do not think there is anything wrong in principle with the concept of prepayment meters. There will always be consumers who find the ability to pay up front, instead of in arrears, helpful and convenient for a variety of different reasons. For some there will be a sense of security about their ability to budget, and to make sure that money is not spent on other things. There is perhaps a certain convenience, especially for those familiar with the technology, around digital prepayment where meters can be topped up from apps or by phone.

However, as my hon. Friend made clear, there is something fundamentally flawed about the way prepayment meter schemes work in this country, and as we have heard, the consequences are profoundly challenging. It has never been clear to me—I do not think it is clear to anyone in the Chamber—why there should be such a significant differential cost between prepayment meters and paying by direct debit. Although efforts have been made in recent years to align prices, there are still significant discrepancies. Citizens Advice has calculated that households who are moved to a prepayment meter this year alone will collectively spend £49.6 million more than they would have as direct debit customers over the coming winter. The excuses given by energy companies—that admin and infrastructure costs are higher—simply do not wash, especially with the arrival of smart meter and remote technology.

The much higher standing charge is particularly pernicious and unfair. My very limited experience of prepayment metering is relatively benign. Our campaign headquarters during the independence referendum campaign had a pay-as-you-go electric meter. In some respects that was helpful, because we did not need to worry about a bank account, and in theory we only paid for what we needed. However, on more than one occasion when we opened up the shop we found that the power was off because daily standing charges had eaten away at the credit, even though nobody had been in or used any power for several days. For us, that was a minor frustration and inconvenience, but for some of the most vulnerable in society, that represents a premium charge in already difficult and often heartbreaking situations.

Marie Curie’s “Dying in Poverty” report talks about situations where patients come home from hospital or a hospice to find the lights out, the heating off, or their meter in debt. People with terminal conditions, rushed perhaps at short notice to A and E, are unlikely to be thinking immediately about topping up their gas or electric meters, and if an extended stay leads to credit running down, they could return to a cold or dark property without immediate options to fix it. Marie Curie’s research also shows that a terminal diagnosis can lead to a 75% increase in energy bills. I have spoken in this place before about my very close friends Mel and Tom. Mel has very late stage cancer, and she explained some of the difficulties they are facing to Marie Curie:

“I live in the Highlands of Scotland, which is a colder climate and as soon as my bones get cold, they hurt. It’s very painful. We have to keep the house warm, but with the energy prices going up, we can’t do that.”

For customers like Mel and Tom who are on prepayment meters, the costs are already higher than they are for other customers. They already face high costs compared with those who can pay by direct debit, and those costs are rising as a result of overall market increases in prices. Overall usage is going up because of the particularly cold snap, and then usage is increasing again because keeping the house warm is literally a medical requirement. I think that counts as a quintuple-whammy, and it is all down to factors outwith their control. The Government and the Minister should listen to Marie Curie’s calls for all terminally ill people, regardless of age, to be eligible for support from the winter fuel payment and the warm home discount scheme.

[Anne McLaughlin]

My hon. Friend directed me to the story of the couple he mentioned. One of the most moving things to read was that, on top of needing to keep everything warm, all Mel wants to do is provide memories for her little boy—positive, happy family memories. She said that she cannot even begin to do that because she is too busy trying to keep on top of the energy bills. Does my hon. Friend agree that that is one of the hardest things for any parent to bear?

[Patrick Grady]

Yes, absolutely, and I recommend that everyone in the House reads that report, and not just that testimony, but testimonies from other people across the country. The point Mel made is that they are not unique. That situation is repeated up and down the country, and all of us will have such cases in our inbox. My hon. Friend mentioned Scope’s research, which found that 50% of disabled people who are on prepayment meters say they are forced to ration energy usage so that they do not lose supply, 26% are going off supply in order to save money, and 14% went off supply because they were not physically able to top up their meters due to their impairment. That is disgraceful behaviour on the part of energy companies—cutting people off because they physically cannot access their prepayment meters. Citizens Advice has documented similar cases. The increasing practice among energy companies of using smart meter technology to force people on to prepayment meters is particularly concerning, especially when they are using it as a means of avoiding the requirement for a warrant to enter people’s homes.

I echo Citizens Advice’s call for a moratorium on all forced switches to prepayment meters until at least April 2023. That chimes with the calls in my hon. Friend’s motion, in her ten-minute rule Bill and in other ten-minute rule Bills and motions that have been brought before the House. The Government have been using sitting Fridays in this Session to put a lot of very worthy legislation through the House, so there is no reason why they could not find a way to prioritise my hon. Friend’s Bill and offer some security to those who face fuel poverty or disconnection this winter.

The Government must work with and, if necessary, proactively regulate the energy companies to ensure that prices are aligned. Nobody should pay a premium just because of the type of meter or payment method they use, and especially not those who can least afford it.

[Rachael Maskell]

Does the hon. Gentleman agree that the Government really need to talk to directors of public health? We are seeing a real spike in respiratory syncytial virus among children and babies, and in community-acquired pneumonia and flu. People in cold conditions are often the most susceptible to illness. To prevent a further crisis in the NHS, it is therefore really important that preventive measures be put in place so that people are not cold and living in damp housing.

[Patrick Grady]

The hon. Lady is absolutely right. The case studies that we have highlighted show that this is a health issue: it is about people’s health and wellbeing. It is not about some sort of privilege or nice thing to have.

If people’s body temperature is not allowed to remain stable and they are not kept warm, the costs will ultimately be passed on to the NHS. Like a lot of interventions and preventive measures, this is going to have to be paid for somehow, so it should be paid for in a way that keeps people well, comfortable and cared for in their own home. Otherwise, the costs will be passed on via the interventions that come through the NHS. The energy companies need to realise that and step up their response. They are getting money up front from prepaying customers, and presumably they earn interest on money going into their bank account before the energy has been consumed, so you would think it would be in their interest to make prices fair across the board.

If the Government will not regulate the energy companies and the prices that people have to pay, they should devolve the powers so that Scotland’s Parliament can step up and step in. As my hon. Friend the Member for Glasgow North East says, we are talking about energy-rich Scotland, where people living in fuel poverty look out their windows and see cheap, renewable, clean wind turbines on the horizon—energy-rich Scotland, where the average energy costs are higher than in the other parts of the UK and the use of prepayment meters is disproportionately higher. Energy-rich Scotland, as we all like to say on the SNP Benches, has the energy but does not yet have the power. As with so many issues, if the UK Government will not act, people in Scotland will ultimately decide to take power into their own hands through independence.