Biggleswade's MP defends government over 'poor treatment' of customers on prepayment meters

Biggleswade's MP has defended the Conservative government after it came under fire about the "poor treatment" of customers using prepayment meters (PPM).

Its policy has been criticised by Julian Vaughan, Labour Parliamentary candidate for North East Bedfordshire in 2017 and 2019, who claims that the poorest are having to pay more for energy than those on a direct debit scheme - something branded as "perverse" by Keith Anderson, CEO of Scottish Power.

However, Richard Fuller MP states that the government has introduced "a wide-ranging package of support" that provides "help to everybody with their energy costs".

But Mr Vaughan claimed: "As acknowledged by Ofgem in their 2020 Impact Assessment report, aside from cold homes and unlit rooms, customers are unable to wash properly and there are the added issues of stress due to financial problems, as well as feelings of shame and embarrassment."

He cites several issues, including that PPM customers are paying standing charges at a higher rate than any other method of payment. He claims there's also a "profound injustice", as when people ‘self-disconnect’ from their gas or electricity supply, they still accrue further debt on a daily basis, as the standing charges still apply.

He added: "In April 2023, the Energy Price Guarantee will rise to £3,000, up from the current level of £2,500. This will increase unit prices and standing charges further. In spite of the welcome support provided by the £900 Cost of Living payment, many households will struggle will this 20 per cent rise in energy costs. Potential solutions to ease the burden would be to abolish standing charges for those who pay their bills by PPM."

Responding to Mr Vaughan, Mr Fuller said: "Although all households will receive financial support with their bills, the government has taken steps to ensure that the greatest help is available to the lowest-income households: launching a £1.5 billion Household Support Fund, which represents a more than doubling of the support available to the most vulnerable; reducing the Universal Credit taper rate to ensure that claimants in work receive more; increasing the National Living Wage; and ensuring that everybody receives direct help with their energy costs, with the households with the lowest incomes receiving the most support.

"Ofgem has taken a number of actions on prepayment meters. It warned suppliers in June 2018 that prepayment meters should be installed only as a last resort for debt collection. Ofgem banned forcible installation for vulnerable customers in 2017.

"In order to provide more help to the most vulnerable, in addition to the above payments, there have been additional payments of £650 for people receiving Universal Credit, Pension Credit and Tax Credits, an additional £150 for those in receipt of certain disability benefits, and an additional £300 for pensioners in addition to the Winter Fuel Allowance (which is in the process of being paid).

"In addition, the government will continue providing cost of living payments and next year it will provide extra one-off payments of £900 for the eight million households on means-tested benefits."

But Mr Vaughan added: "Mr Fuller states that Ofgem has taken action and warned suppliers that Prepayment meters should only be installed as a ‘last resort’. However, the rate of prepayment meter installations has rocketed in the last year."