The UK government has waded into the prepayment meters row, demanding that energy suppliers end the practice of forcible instalment of such devices in households of financially strapped consumers. Such meters should only be regarded as a last resort measure, underscored Britain’s Business and Energy Secretary, after credit or debt advice had been offered.
“Suppliers are clearly jumping the gun and moving at risk customers onto prepayment meters before offering them the support they are entitled to... I simply cannot believe that every possible alternative has been exhausted in all these cases,” Grant Shapps said in a statement.
Shapps has also vowed to “name and shame” the worst "rogue" energy firms who failed to make a greater effort to help those struggling to pay household bills. Amid the surge in cases when such devices were installed, the Business Secretary asked suppliers to share data on the number of warrants they have requested for this purpose in courts.
The UK government was forced to intervene and demand greater transparency around the issue after mounting evidence of applications for warrants to forcibly install such meters from energy suppliers being approved in a matter of minutes.
The UK Business Secretary said that together with energy regulator Ofgem and the Secretary of State for Justice "to ensure that the process by which suppliers bring these cases to court is fair."
Screenshot of Twitter account of National Energy Action UK charity.
© Photo : Twitter
Earlier, consumer group Citizens Advice warned that prepayment electricity meters, which were being used by around 4 million households across the country, could plunge struggling consumers into a vortex of debt.
Also known as "pay-as-you-go" meters allow a customer to pay for gas or electricity in advance, by buying credit, typically with a token, key or smartcard. If an individual has a prepayment meter, they will need to buy credit for it at a 'top-up point', located in a local shop, Post Office, or via a smartphone app. While it involves paying small amounts often, Citizens Advice cautioned that it ended up being more expensive than getting an energy bill. The consumer watchdog said that one would pay less if opting for a direct debit deal. Plus, there is the daily fee for being connected - the standing charge.
Amid the ongoing cost of living crisis, as a result, in part, of switching to prepayment, over 3 million people unable to afford to top up their energy accounts were disconnected from energy by suppliers last year, according to Citizens Advice. In 2022 this number was more than all of the previous 10 years combined.
The service revealed that 19 percent of households thus cut off at some point in 2022 had to go for at least 24 hours without gas or electricity.
According to UK energy regulator - Ofgem - groups of consumers such as disabled people and those suffering from long-term health conditions should not be forced onto a prepayment meter. Already in October last year the regulator had urged energy suppliers to do more to determine which customers were in "vulnerable circumstances" before installing a "pay-as-you-go" meter.
As the issue gained traction in the Commons, ministers have been urged by the All-Party Parliamentary Group on Fuel Poverty to impose a moratorium on forced fitting of prepayment meters, but, so far, the government has resisted the measure.
The developments come as 40-year high inflation figures, their disconnect with wages, and electricity prices in some cases surging threefold as compared with a year earlier are forcing more Britons to struggle to make ends meet. The double-digit inflation has been fuelled by the energy crisis, exacerbated by sanctions and embargoes on Russia over its special military operation in Ukraine. The onslaught of the cost of living crisis against the backdrop of a looming recession of the UK economy, in turm, set off a wave of strikes by state and private employees across diverse sectors.