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The Guardian view on energy prepayment meters: customers need protecting

Op-Ed 2023-01-17, 10:51pm


Jehangir Hussain

Jehangir Hussain

When millions of people have their energy cut off, the system isn’t working. Ministers must step in, The Guardian said in its editorial.

The fact that 3.2 million people in Britain were left in the cold and dark last year after their energy prepayment meters ran out of credit shows that something has gone seriously wrong. The more information that emerges about the use of these meters, the more reasons for concern there seem to be. By shining a light on energy companies’ practices, and particularly what looks like a slapdash approach to consent, campaigners have succeeded in creating a sense of urgency. On Friday, Labour’s Ed Miliband called for an immediate to halt to forced installations.

Ministers have also voiced concerns, but the question is how quickly and effectively action will be taken. Citizens Advice says that more people sought help with energy last year than in the past 10 years combined, with standing charges for meters another cost imposed on those who can least afford them. The rate of switching from other payment methods rose from 380,000 in 2021 to 600,000 in 2022. Faced by growing numbers of people priced out of energy use, suppliers have decided to get tough. Needless to say, many of those affected are also struggling with food prices and the chronic insecurity of privately rented housing.

Ofgem, the energy regulator, has already issued warnings. Last year it criticised the service offered by suppliers to vulnerable customers and described variations in the quality of service as a case of “pot luck”. Faced by the prospect of millions more people being left without heat and light in coming months, it and the government must now insist on change and oversee it.

Prepayment meters work for some customers, and the newer smart meters have features that the old ones do not – for example, enabling suppliers to add credit remotely. But the scale of compulsory switching is out of hand and should have been interrupted sooner. Rightly, the role of magistrates in signing off forced entry to properties is under scrutiny, after an investigation discovered that one court in the north of England issued almost 500 utility warrants in under four minutes.

Some suppliers have already taken steps to ease the pressure on customers, by pausing debt collection over the winter. The impatience of others is the crux of the problem. The determination to avoid and recoup arrears drives the policy of insisting on prepayment. But when the weather is cold, prices are high, and companies have no reliable means of knowing which of their customers are vulnerable – for example, because they are disabled, require electricity to power medical equipment or have a baby in the household – they must not be allowed to continue in the same vein.

The proposed moratorium on forced installation called for by campaigners should be taken up. The judiciary should issue new guidance to ensure that warrants are not waved through in bulk. Energy is a necessity, not a luxury, and the fact that it is being withdrawn from people so frequently is an indication of both policy and market failure. When it comes to debt, policymakers as well as suppliers must develop alternatives to automatically applied “clawbacks”, which increase the bills of the poorest people.

Some suppliers have behaved badly. The sector must be more proactive with regard to its vulnerable customers,  instead of expecting them to request special treatment. But the fact that courts have authorised companies to force their way into hundreds of thousands of homes points to a wider political and regulatory failure. MPs must get a grip and stand up for their constituents.