Anne McLaughlin – 2022 Speech on Prepayment Meters

The speech made by Anne McLaughlin, the SNP MP for Glasgow North East, in the House of Commons on 15 December 2022.

I beg to move,

That this House recognises that prepayment meter customers, who pay for their usage in advance, are not afforded the same rights when in energy debt as customers who pay in arrears, such as those who pay in direct debit; understands that a prepayment meter customer is automatically disconnected when they exceed just £10 of debt; acknowledges that, in contrast, those who pay in arrears are afforded time and support to resolve their debts before action is taken to disconnect; is deeply concerned that so called self-disconnection of prepayment meter customers will see the most vulnerable in our society left without heat, light and facilities to cook and wash over the coming winter; and strongly urges the Government to outlaw self-disconnection to ensure that the poorest and most vulnerable customers are not left without basic energy provision.

First, let me thank the Backbench Business Committee for agreeing to this debate, and for understanding the urgent nature of it and, thus, offering me a pre-Christmas date. It is urgent, because something needs to be done now, even if only on a temporary basis. It is urgent enough for me to say at the outset that I am not just trying to raise awareness today; I am asking the Minister to do something about this, preferably today. Perhaps he will be unable to do so because of procedure, but I hope he will at least resolve to listen closely and act urgently.

The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake) indicated assent.

Anne McLaughlin

I see that the Minister is nodding and I thank him for that. I hope he is able to come back next week before Parliament goes into recess, before we are plunged into even colder temperatures than we are experiencing at the moment and before people start dying because they did not enjoy the same rights as the majority of people. I urge him to come back next week and tell us that he has decided to give everyone those rights and that he will do so by outlawing so-called “self-disconnection” for those on prepayment meters.

I am also calling on the energy suppliers to do the same. One of them surely will have the moral compass and backbone to lead the way and be the first to promise that nobody—none of its customers—will be subjected to self-disconnection simply because they are on a prepayment meter. I am calling on the big six, as those guys have the money—they have the billions—and they can do this. Those companies have to take responsibility, but we probably cannot wait for that and the Government need to compel them to do so.

The other thing I would like the Government to get on top of this side of Christmas is ensuring that everybody is accessing the energy bill discount of £66 a month. The consumer rights group Which? told me this morning that a reported £84 million of that money is not reaching half a million households—the ones who need it the most. That is happening for a variety of reasons. Every company has a different way to access this help, with some requiring people to go to the post office. With others, the help arrives by post and often the recipient thinks that this is junk mail or they are afraid to open the letter. That is what happens when someone is on a low income: they get scared of the letters coming through the door, so they bury their head in the sand. I know that the Secretary of State has written to these companies about this issue, but anything more that can be done must be done urgently.

Before I come on to the substance of the debate, may I also thank the many MPs, from all parties, who signed my debate application, both those who are here today and those who sent messages of support, as I very much appreciate it? More importantly, our constituents will appreciate seeing their MPs stand up and fight for them —I hate to say it, but in some cases they are fighting for these people’s lives.

I pay my gas and electricity bills by standing order. In common with those who pay by direct debit or pay when the bill comes in, I pay in arrears. Also in common with those who pay in arrears, if I stop paying my bills I can be disconnected by my energy provider but it is very much a final step—a last resort. That is not the case for those who pay by prepayment meter. Should they be unable to pay for gas or electricity, the first thing that happens is that they are disconnected from their supply. The minute they go over the £10 or, in some cases, £5 of emergency credit that is applied to each prepayment meter, their supply just stops and they are considered to have self-disconnected.

Rachael Maskell (York Central) (Lab/Co-op)

I congratulate the hon. Lady on securing today’s debate. Does she agree that it is an absolute disgrace that people on a prepayment meter are having to pay more for their energy, particularly as they are often the people in greatest deprivation and cannot afford to do so?

Anne McLaughlin

I absolutely agree on that. I should thank the hon. Lady, because I have a ten-minute rule Bill on this matter and she spoke up for it last week in allowing it to continue in this place. I will come on to that. It is so ironic that the poorest people are paying the most. We get to pay less, yet we are paying in arrears.

Catherine West (Hornsey and Wood Green) (Lab)

The hon. Lady is making an excellent beginning to her speech. Does she agree that what we see from the energy companies is the “rocket and feathers principle”, where the prices skyrocket when they first come in but then they drop like feathers? The gas price has actually gone down, so why are some people paying up to £4,300 for their energy just on their gas bill when that far outstrips what one would be paying on a direct debit or other form of payment for gas?

Anne McLaughlin

Yes, I absolutely agree with the hon. Lady on that. The whole system is wrong and crazy. Let me go back to what I was saying about the people who are just disconnected for their £5 or £10 of debt. When they are disconnected, they cannot boil a kettle or heat a room. They cannot even heat an electric blanket. They cannot wash their clothes, have a shower or watch TV—they cannot even charge their phones. In some cases, which I will come on to, they can no longer operate disability aids—that is an absolute disgrace. It means that I, as a well-paid MP and someone who is clearly able to pay their bills, could stop paying them just on a whim and, unlike someone on a meter I could then run up hundreds or perhaps thousands of pounds-worth of debt to my energy supplier before being disconnected, whereas people on prepayment meters—the ones with the least money—are limited to a debt of only £5 or £10 before they are cut off. It is that inequity that I want addressed.

I do not believe the Minister will tell me today that this situation is fair. I would be amazed if he did try to argue there was anything equitable about this treatment. So, as I have said in the past, I am hopeful, verging on confident, that the Government will support what I am calling for here. As I said at the start, the Government need to do it quickly—they need to do it now. I know how slowly things move in this place, but I also know the Government can move quickly when they need to, and I argue that they really do need to. I am desperately worried about people out there. I am worried that people are going to die—people who would have lived, had this awful practice been outlawed.

However, I want to start by talking about a very important group of people who do not fit that category, because they are not going to live for much longer regardless of the result of my campaign. I have been speaking to Marie Curie about its “Dying in poverty” campaign and have heard about the people it is supporting: people who return home after a lengthy stay in hospital or a hospice, try to top up the prepayment meter and discover that the large sum they have topped up by just is not enough.

Why is that? Because every day they were in the hospice, they racked up daily standing charges. They were not there and they did not use gas or electricity, but they have a big debt to pay off before they can even access heat or light. Worse, their daily standing charges are higher than our daily standing charges. When we consider that the average cost of an electricity bill can rise by 75% for someone who is terminally ill, it is doubly unfair. Would any of us want that situation for our own families? Of course we would not—and if it is not good enough for our families, it is not good enough for anybody’s family.

I want to run through some of my main concerns about these meters. Those on prepayment meters are generally on them because they are on low income and most are given no choice. Citizens Advice described the process as follows: people have a period where they are unable to pay their bills and their energy supplier is obliged to negotiate a repayment plan that takes in to account their ability to pay for the debt and their ongoing energy consumption. Because of the higher costs, however, many people do not have enough money to cover their ongoing usage, let alone pay towards arrears. They begin to fall behind on payments and, to recover that money, the supplier gains entry to their home and installs a prepayment meter.

Rachael Maskell

I do not know whether the hon. Lady saw this article in The Independent, but I was completely taken aback and shocked to read that Wigan and Leigh magistrates court took a call from the energy supplier and, in just three minutes 51 seconds, determined that 496 people would have their energy supply cut off. Where is the scrutiny in that? Surely we should not be cutting anyone off at this time?

Anne McLaughlin

That is exactly what the Good Law Project is working on; I think it was featured in that article. Tens of thousands of warrants are being rubber-stamped by magistrates in minutes. The Good Law Project has asked me to ask the Minister whether the Government will consider instructing Ofgem to require energy companies to halt all new installations of prepayment meters, including remote switching of smart meters.

There is a problem of people on smart meters being switched to prepayment without the need for a warrant, because the warrant is about gaining entry to the house and, if the switch can be done remotely, there is no need to gain entry. Ofgem called those practices “unacceptable” and said it would take action if they continued. Six weeks after it said that, they are continuing, so I am keen to know what action Ofgem plans to take and when it plans to do it.

The energy companies say that the reason those on prepayment meters pay more is the cost of installing the meter. I am not sure I buy that, and in any case I do not think the cost should be passed to the customer, but, if that is the case, surely they cannot charge higher amounts to someone who has been switched remotely? Another concern is that, as has been mentioned, people on prepayment meters pay more per unit of energy and higher daily standing charges, and they pay in advance while the rest of us get to pay in arrears.

I am also concerned about the numbers: 60,000 new meters were installed across the UK in the six months to March this year, reversing a long-term trend of falling numbers. However, the Department for Business, Energy and Industrial Strategy does not know how many people are being put on prepayment meters now and it cannot give me an answer to that. I think the Minister will be interested in finding that out for us.

Something else that concerns me is that, according to Citizens Advice Scotland, Scotland disproportionately bears the brunt of this situation. We have more prepayment meters per population than any part of the UK: roughly 15% of people in the UK are on them, but it is 19% of people in Scotland and in my city of Glasgow it is over 20%. Scotland is also colder, as you will know, Madam Deputy Speaker—I see you nodding in agreement. Estimates suggest that next year, while the rest of the UK will pay on average a shocking £2,500 a year per household for energy bills, in Scotland it will be £3,300 on average.

It stands to reason that Scotland will see more disconnections, because people cannot magic up an extra £800 on top of all the other increases. There is nothing the Scottish Government can do, because we are not independent and we do not have the power in Scotland to do anything about it. That is ironic, given the amount of energy Scotland produces. We produce six times more gas than we consume and 80% of electricity comes from clean energy sources. As my hon. Friend the Member for Aberdeen South (Stephen Flynn) said yesterday, we have the energy; we just do not have the power—yet.

Energy suppliers are supposed to be obliged to consider whether somebody is vulnerable before disconnection. I would argue that everyone on a prepayment meter, especially this winter and especially in the middle of a cost of living crisis, is vulnerable, but there are definitions that the suppliers are supposed to work to. Ofgem recently produced a report expressing a lack of confidence that they are doing so and certainly concerns that they are not doing it consistently.

Let us look at a few examples of people I would consider most vulnerable. We already know that those living with disability pay a financial premium; many of them have only ever known a cost of living crisis. The average extra cost of being disabled in the UK was £583 a month, and for the 24% of families with a disabled child, that figure was more than £1,000 a month before the cost of living crisis, so those figures will be higher now.

A report from Scope, the charity that fights every day for equality for disabled people, has shown that those with disabilities have higher energy needs in their homes and are even more exposed to the energy crisis—so exposed that 91% of those surveyed by Scope were worried that they would not be able to afford to pay their bills this winter. We often talk about choosing between heating and eating, but many of those paying a premium of well over £500 a month just to survive are now able to do neither adequately. For those on a prepayment meter that will spell disaster if we do not outlaw the practice of forced self-disconnection.

That is not always just about money. Many people with disabilities have mobility issues; I have heard of people who cannot reach their meter and have to wait for someone to help them with it, and others who have periods when they are unable to get out of the house to top up the meter.

Rachael Maskell

The hon. Lady is being very generous with her time. I want to highlight people who have to use home medical devices. This could be a feeding machine, sleep apnoea machine or bilevel positive airway pressure machine—there are many devices that people have to use at home. Those people are now having to make significant choices about their health. Should they not have an additional payment? I know the Government have put in a little bit of money for disabled people, but should there not be full cost recovery for running those devices?

Anne McLaughlin

I absolutely agree with that, and for another reason too: we have an issue in the health service with bed blocking. If people are unable to run the equipment at home, they will end up in some kind of care facility, which blocks beds and increases the NHS waiting list. But yes, the moral argument is that they should absolutely have those costs covered.

Then there are people who have been homeless, who have finally moved into their new home and almost always find it has a prepayment meter. The Simon Community in Glasgow told me that many of the people it works with are simply walking the streets again in an effort to warm up because they do not have the money to get the meter working. How can that be right?

Many pensioners are on prepayment meters, and some will inevitably find themselves in the situation I have described, where they have no gas and no electricity. That is bad enough for anyone, but for a pensioner it can be disastrous. Age UK tells us that being cold even for a short period of time can be dangerous to older people. Age UK is widely respected and not given to hyperbole, so we really should listen. We cannot have our pensioners being cut off from gas and electricity because they have gone £5 or £10 over, while the rest of us have the luxury of paying our bills months in arrears.

The Children and Young People’s Commissioner of Scotland is campaigning for the right of children and young people not to find themselves with no gas or electricity in their home simply because their parents use a prepayment meter. He is calling for the definition of vulnerable to be widened, so that instead of applying only to children aged up to five, it applies to those up to 18. It is hard for me to think of an argument against that, so instead I wholeheartedly support it, and I ask if the Minister would be good enough to look at that question and come back to me on it.

All I am really asking is for those on prepayment meters to be treated equally to the rest of us. The right to be treated equally is crucial, because I have heard just two arguments against my proposal: first that people could end up in debt; and secondly, that people might simply not bother to pay their bills. On the latter point, I would argue strongly that those on prepayment meters are no more likely to be morally predisposed to not bothering to pay their bills than those of us who pay by different methods. Living on a low income does not make someone any less honest than anybody else. Yes, there is a risk that stopping self-disconnection could lead to people being in debt, but I repeat what I said in my ten-minute rule Bill speech: if the rest of us, paying by different methods, are allowed to take the risk of ending up in debt, and we are trusted to find ways to resolve that without being disconnected, why not those on prepayment meters? Secondly, if anyone in the Chamber is asked to choose between debt or death for their constituent, who among us would seriously choose death? I know how dramatic that sounds, but life is dramatic. It is unpredictable at the moment, and our constituents’ lives are at risk if we do not sort this.

The campaigning organisation Debt Justice wants the Government to start thinking now about what will happen to people who simply cannot pay their energy bills, and those who will rack up unpayable debts despite living frugally, and who will never be in a position to pay it off. Debt Justice wants the Government to start thinking about debt write-offs, and how that would work and who would be eligible. As I said, in order to stay alive, some people will have to run up debt. If we do not start talking about that now, some people will be so worried about that debt that they will simply switch everything off and their lives will then be endangered.

A point was raised with me by the Children and Young People’s Commissioner Scotland about the legislation that allows companies to forcibly enter people’s homes and install prepayment meters in the first place, namely the Rights of Entry (Gas and Electricity Boards) Act 1954. First we were getting rid of the Human Rights Act, and then we were not, then we were again, and now I think I am right in saying we are not. We have the Human Rights Act, and we are keeping it, as we should, but the 1954 Act predates that. I would be grateful if the Minister could look into whether it is compatible with human rights legislation—I know that others are looking into that too.

We are heading for recess, and I have no objection to anyone taking a well-earned break. I know that we are not an emergency service, but we can do something now to prevent people from ending up in emergency situations. I am speaking up for everyone on prepayment meters, and I want nobody to be disconnected. I am most terrified for those whom I noted in my speech: young people, pensioners, those who were previously homeless, people living with a disability, and those living with a terminal illness. I repeat my call to the big six energy companies: will one of them please just have the backbone to be first to say that nobody will be forced into so-called self-disconnection this winter? We can argue later about how long that should last, but will one of those companies, today, please blaze a trail for their industry?

Finally, there would be no need for me to stand here and plead with those huge companies to throw people a few crumbs from their billions in profit if the Minister simply told them that they can no longer disconnect people on prepayment meters. A moratorium, a ban, right now—I don’t mind which. As long as when we head to our warm homes and our families for recess, we know that our constituents are guaranteed that their energy supply will not be cut off, leaving them in misery and their lives in peril.