Government officials have been instructed to draw up measures to tackle concerns that suppliers are forcing customers to move onto prepayment meters, the secretary of state for business and energy has revealed.
Grant Shapps told the House of Commons on Tuesday (17 January), during business, energy and industrial strategy (BEIS) ministers question time, that the measures will be outlined in a letter he is sending to Ofgem.
The secretary of state made his comments as MPs queued up to express concerns triggered by last week’s report by Citizens Advice claiming that hundreds of thousands of customers are being forcibly moved onto prepayment meters (PPMs).
Backbench Labour MP Clive Efford described the use of magistrates’ courts to approve the “industrial scale” of such switchovers as a “real scandal”.
Shadow environment minister Kerry McCarthy said self-disconnections by customers, who are unable to afford prepayment meters top ups, had “rocketed”.
Shapps responded that he is “very concerned” about the process of forcing customers onto PPMs with the risk of subsequent self-disconnection.
“It is a matter of considerable concern that anybody should be removed from their power or heating.
“We do not want to see people cut off during this cold weather,” he said, adding that officials are “actively working” on a response to the concerns raised by Citizens Advice and that a letter outlining “helpful” measures is “ready to go” to Ofgem.
Junior BEIS minister George Freeman said later during BEIS question time that the department is convening a roundtable and Shapps is “putting pressure” on Ofgem to make sure vulnerable consumers are looked after.
Shapps’ comments follow the publication of a letter this morning, signed by more than 40 MPs and peers, urging the government to write off PPM standing charges this winter as part of a six-point plan to ease financial pressures on the “most vulnerable” customers.
In a letter to prime minister Rishi Sunak and Shapps, members of the All-Party Parliamentary Group (APPG) on fuel poverty and energy efficiency have warned that “urgent” government action is required to prevent forcible installation of PPMs and address price disparities between prepayment and direct debit customers.
The APPG recommends that the government should:
- Ban the forced installation of PPMs by court warrant
- Direct Ofgem to enforce existing licence conditions on banning installation of PPMs in the homes of people with medical conditions and increase enforcement efforts to ensure customers on smart meters are not remotely switched to prepayment mode
- Amend the Energy Price Guarantee from April to remove the differentials between different payment types so that prepayment customers do not pay more than standard credit and direct debit customers
- Write off the standing charge for PPM customers this winter
- Move the cost of failed suppliers into general taxation and ensure no prepayment customers are paying for the costs of failed suppliers through their unit rate for gas and electricity
- Use the Treasury’s Spring Statement in March to provide targeted financial support specifically to help PPM customers clear their debts in order to reduce the likelihood of self-disconnection