Prepayment Meters: Self-Disconnection

Stephen Kinnock Excerpts

Thursday 15th December 2022 Commons Chamber

[Kevin Hollinrake]

The hon. Lady has raised an important point about people being treated equally. In these circumstances, people will often have been through the processes that she has described. They will have been on normal payment terms, and there will have been a debt recognition and reconciliation process that may have ended up with people either adopting a prepayment meter voluntarily or, as a last resort, having one forced upon them. There are mechanisms, which I will explain in a minute, whereby people are granted abeyance and forbearance.

In the case of many households, if debt were allowed to spiral out of control—and that is not generally voluntary; it is more often due to matters beyond the control of those households, and it is important that we provide support for them—the suppliers themselves could find themselves in a perilous position. These are commercial suppliers of electricity and gas. In fact, this could force out of the market suppliers who specialise in cases such as this. The last thing we want is a lack of provision for people in these circumstances.

These prepayment meters have moved on from the ones that we used to have. The modern smart meters are far easier to top up remotely, and make it easier to check balances.

[Stephen Kinnock (Aberavon) (Lab)]

I thank the Minister for giving way; he is being very generous.

My constituency office is being contacted by a great many people who have still not received their prepayment vouchers from the energy suppliers, but are receiving letters from the suppliers telling them that if they do not use the vouchers by January they will be cancelled, which would of course push those people further into debt. What are the Government doing to ensure that they receive the vouchers and do not lose the money to which they are entitled?

[Kevin Hollinrake]

Other Members have made that important point, and I will come to it, but I had better make some progress, because you asked me to finish in about four minutes, Madam Deputy Speaker, which I shall endeavour to do.

We believe that there is a role for prepayment meters. Ofgem rules already require energy suppliers to offer a prepayment service only when it is safe and reasonably practicable to do so, and that applies whether a meter is smart or traditional. There are clear obligations on energy suppliers regarding customers in payment difficulty, and a prescribed process for occasions on which a warrant is required. That point was raised by the hon. Member for Kilmarnock and Loudoun (Alan Brown) and, indeed, by the hon. Member for Glasgow North East.

There are clear expectations for suppliers in respect of the steps to be taken before they instal a prepayment meter owing to debt, or switching a smart meter from credit to prepayment mode. Those steps include conversations to discuss debt repayment, budget management and energy efficiency measures, and referrals to debt advisers and charities. Before a prepayment meter is chosen as the debt repayment pathway, its safety must be assessed, as well as the customer’s ability to pay. Suppliers must give their customers seven days’ notice before installing a prepayment meter or switching a smart meter to prepayment mode. Ofgem recently published a regulatory expectations letter, in which it set out its expectation that suppliers will ensure that prepayment meters are safe and reasonably practicable in every case.

I would like to highlight some of the circumstances in which it is not deemed safe to have a prepayment meter, which include having specific disabilities or illnesses, or having children under five, as has been set out. Indeed, the hon. Member for East Lothian (Kenny MacAskill) raised that point. It is absolutely right that we provide support for those who are most in need.

The hon. Member also raised the issue of social tariffs, which were introduced in 2008 as part of a voluntary agreement between the Government and energy suppliers. They were replaced by the current mandated warm home discount scheme in 2011. This has improved outcomes by providing consistent and transparent benefits, and by utilising data matching to improve targeting. Clearly, it is important that we continue to review our current provisions and see what else might be done to help people in those circumstances.