10. Short Debate: Supporting people in a cost-of-living crisis

– in the Senedd at 7:02 pm on 25 January 2023.

Alert me about debates like this

Photo of David Rees David Rees Labour 7:02, 25 January 2023

We will now move on to the short debate, and if those Members who are leaving could please do so quietly.

Photo of David Rees David Rees Labour

(Translated)

I call on Jack Sargeant to speak to the topic he's chosen. Jack Sargeant.

Photo of Jack Sargeant Jack Sargeant Labour

Diolch yn fawr, Deputy Presiding Officer, and in opening today's short debate I'd like to give a minute of my time to both Sioned Williams and Jane Dodds. 

A 'cost-of-living crisis' is another way of saying that increasing numbers of people are being forced into poverty. It's a sign of failure of policy makers and of the way our economy is organised. It is not inevitable, and we can and we should seek to make people's lives easier and tackle poverty. We all know what happens if we don't.

This is a familiar script. We've read it all before. Poverty removes people's agency and, particularly when it's experienced in childhood, causes trauma that scars people for life. And we often talk about the need to judge people on merit. Well, how is that possible when an increasing number of people's life chances are affected from the start by poverty?

Couple this with the incredible cost of picking up the pieces after the trauma that poverty causes and you have to wonder why the UK Conservative Government are doing so little to stop certain organisations actively making things so much worse. One such group is energy suppliers. I'm sure Members will have seen the campaigning I have done and that organisations have done, calling for a ban on the forced installation of prepayment meters, and I'm grateful to the many of you who signed my statement of opinion that I tabled this week, calling for that very ban.

In fact, every single Member of the backbenches from the Welsh Labour Party, every single Member in Plaid Cymru, every single Member in the Welsh Liberal Democrats did sign the motion. But not a single Conservative Member. Presiding Officer, we don't even have one in the Chamber. We have just one online. Not one Tory signed this statement of opinion calling for a ban. And I'm calling for a ban not just because these meters serve to ensure that the poorest in our society pay the most for their energy, but it is because, in front of our very eyes—whether that's your Labour eyes, your Plaid Cymru eyes, your Liberal Democrat eyes or your Tory eyes—a national scandal is taking shape, a scandal that is putting lives at risk. I will briefly set out what is happening.

Photo of Jack Sargeant Jack Sargeant Labour 7:05, 25 January 2023

In the middle of a cold winter and significant growth in poverty, with inflation rampant and wages lagging behind, we're allowing energy companies to forcibly switch people to the most expensive and precarious way of paying for energy—hundreds of thousands of people. And of the 500,000 applications for court orders to forcibly switch residents, just 72 were refused, and that's despite the so-called requirement for energy companies to ensure that prepayment meters are suitable for customers regarded as vulnerable—those who are disabled, those with long-term health conditions.

Presiding Officer, there is meant to be a ban on switching to a prepayment meter if the consumer does not want one, yet we have reports of batches of court orders being taken at once, sometimes hundreds issued at a time. Does this suggest to anyone that the appropriate checks are happening? Vulnerable people are being switched in the middle of winter with either little or, in fact, no work to see who they are or what their conditions and circumstances are. This leaves many constantly living with the fear of being cut off. Citizens Advice have reported that somebody is cut off every 10 seconds because they cannot afford their top-up to their prepayment meter. Quite frankly, this is a matter of life and death.

It is abundantly clear that neither the regulator, Ofgem, nor the UK Government have grasped the extent of this problem. I have been highlighting this for some months now. When I wrote to Grant Shapps, the Secretary of State, at the end of December, he gave a standardised reply demonstrating no concern at all. But finally, this weekend just gone, after hundreds of thousands have already been switched, he's finally recognised the need for serious concern. But he has allowed the situation to continue, and instead written and asked for co-operation from suppliers. Well, I am clear that in the middle of this winter, in the middle of this cost-of-living crisis, we cannot leave this to the courts, we cannot leave this to the suppliers, and that's why, once again, I am calling on the Secretary of State and Ofgem to ban the forced installation of prepayment meters, or at least at a very minimum, Presiding Officer, they should order a halt to enforce prepayment meter switches until companies can show beyond doubt that they do perform the process safely.

Fortunately, Presiding Officer, unlike the UK Tory Government, I'm not burdened with an ideological belief that despite all evidence, things must be left to the goodwill of these companies. It is time for these UK Tories to show leadership. Let's be clear: prepayment meters are installed because it suits the energy suppliers. I hope we all can agree that preserving lives is much more important than that. And as I said at the start, poverty isn't just about the immediate prepay scandal that will impact people's lives forever; the cold that results from people not using energy or being cut off will have so many more impacts. It will inhibit children's ability to learn. It will cause people to fall ill and develop chronic conditions. It will cause trauma and mental health problems, and create so many more issues that it is impossible to speak to them all now. 

But access to heat and energy should be something that we all can take for granted, no matter what our background is. It should be a principle on which our system of energy supply is designed around, but instead it's abundantly clear that what takes precedence over this is the interests of energy suppliers. And this Tory crisis will grind on, and Government must become agile to spot the risks and support people. And I'll end, Presiding Officer, with this: if the Tory Government in Westminster cannot simply do that, then they should now call a general election and let the people decide what the Government's priority should be. Diolch yn fawr.

Photo of Sioned Williams Sioned Williams Plaid Cymru 7:10, 25 January 2023

(Translated)

Thank you to Jack Sargeant for bringing this topic before us this afternoon. Plaid Cymru fully supports a ban on forcing customers to pay for their energy through prepayment meters, and as I raised with the Minister for Social Justice in the Chamber this afternoon, the Conservative Government in Westminster needs to do more than encourage electricity and gas suppliers to prevent this unsafe and unfair practice that has a totally disproportionate and detrimental on the most vulnerable households of Wales. There needs to be a ban. And if Westminster can't protect the people of Wales from the greed and irresponsibility of the energy providers, the Welsh Government needs to seek the powers necessary to do that.

People are disconnecting themselves from their meters, from light, heat, the ability to wash with warm water and keep their clothes clean. People, as you said, are dying as health conditions are exacerbated as a result of living in cold houses. They are dying now. We must hold the Westminster Government to account for that. The Welsh Government must take action to do what it can to safeguard its citizens.

Photo of Jane Dodds Jane Dodds Liberal Democrat 7:11, 25 January 2023

Thank you so much to Jack. You are a tireless advocate and champion for issues relating to people living in poverty, as I know are many around this Siambr. For those of you who don't know why I joined this mad world of politics, let me tell you what it was. For 25 years, I practised as a social worker, visited families where we were doing child protection work, found those families to be amongst the poorest. The poor just get poorer. The poor just have no resources to deal with what's going on. The poor have no options, have no hope, and I hope that myself, and I'm sure, all of us here—and I'm very sorry not to see anybody from the Conservatives, not even online any more—I know that we all want to see things change.

I would go one step further, I would say we should ban all prepayment meters, not just those who are forced to consider it, but all prepayment meters, because they are the devil incarnate in terms of looking at how we can help people who are in poverty. They don't have the resources, they don't have the energy, they don't have the strength to resist what's going on. So, I do call on the Minister to consider how do we ban them in Wales, how can we make sure that they don't get installed any further into our homes in Wales. Thank you. Diolch yn fawr iawn.

Photo of David Rees David Rees Labour 7:13, 25 January 2023

(Translated)

I call on the Minister for Social Justice to reply to the debate. Jane Hutt.

Photo of Jane Hutt Jane Hutt Labour

Diolch, Dirprwy Lywydd. Can I start by thanking Jack Sargeant for bringing this debate today? It does provide me with an opportunity, once again, to reassure people across Wales that supporting them through this cost-of-living crisis remains our priority. I've talked at length in recent months about the impact of spiralling energy prices, the effect of inflation, particularly food inflation, the disastrous fall-out from the UK Government's mishandling of the economy, which has decimated our budgets and pushed people into poverty.

But these facts and figures don't tell you what this crisis actually means for people living with those pressures every day. They don't convey the personal cost to the mother who is going without food so that her children can be fed, the elderly person who is too worried about their finances to put the heating on, or the harrowing experience of the family that find themselves homeless because they can no longer afford their rent—one of an ever-increasing number of families and individuals that are experiencing being without a home for the first time. The bottom line is, Dirprwy Lywydd, that the amount of money that people have coming in, increasingly, no longer covers the amount needed to cover the basic essentials for life such as housing costs, heating and food. The books no longer balance, and as the weeks go past, their capacity to meet these essential costs reduces further and their levels of debt increase.

But I share the concerns that Jack Sargeant has raised today in this debate, in the topical question earlier on this afternoon, consistently at every opportunity, about the growing use of prepayment meters by energy companies as a means of reclaiming energy debt. We know that paying for energy charges on a prepayment plan is significantly more expensive for some of the most vulnerable and poorest households in our society, even where that customer is on a smart meter and there's no increase in the administrative charges for the supplier. So, on Monday this week—and I've reported on this already this afternoon—I met once again with energy suppliers and I called on them to give me their assurance that due diligence was being followed and people were not being moved onto prepayment meters against their will, in particular those already on a smart meter. I will continue to meet with them regularly to ensure that, on the promises they gave me—and they did give me some promises about their practices, saying one after another that this was only a last resort—I will hold them to account in my engagement with them and look to those means, which have been raised by Jack and colleagues today, where we could actually influence those decisions.

Photo of Jane Hutt Jane Hutt Labour 7:15, 25 January 2023

However, there's now evidence that suppliers aren't following the basic rules to protect people in vulnerable circumstances. Again, Jack, you referred to the Citizen's Advice evidence. From September to December last year, more than three times the number of people were moved onto a prepayment meter for debt compared to the same period in 2019. Front-line advisers consistently see evidence of people in vulnerable circumstances being moved onto prepayment meters, in breach of energy supplier regulation. So, they are in breach. We need to look at those regulations, and that's what I'm going to do. These practices continued even after Ofgem wrote to suppliers in November to remind them of their obligations. Ofgem also published a report on Monday outlining its concerns about the sharp growth in households struggling to pay their bills being switched over to prepayment meters, sometimes without their even knowing about it, as we know, leaving them without heating. 

National Energy Action Cymru has highlighted the case of the magistrates' court that approved 496 warrants to install prepayment meters in just four minutes. Who are these magistrates? We must go to them. We must address this with them. Such practices risk vulnerable customers, including those with medical conditions, being forced onto prepayment meters when this could be unsafe. Approximately 200,000 households in Wales rely on prepayment meters for their mains gas and electricity. This represents about 15 per cent of all our households. Twenty-four per cent of tenants in the private rented sector use prepayment meters, and almost half of social housing tenants rely on prepayment meters.

Welsh households were amongst the hardest hit by the increase in the standing charges being applied to household bills from last April. The highest increase in Britain was in north Wales, up 102 per cent, with south Wales witnessing standing charges up 94 per cent, the fourth highest in Britain. These additional costs to already rising fuel bills have had a disproportionate negative impact on low-income households and those on prepayment meters in particular. Citizen's Advice has highlighted record numbers of people who can no longer afford to top up their prepayment meters, including disproportionate demand from single-adult households, women and disabled households. There's no doubt that placing a customer on a more expensive tariff when they're already struggling to pay is disconnection by the back door.

You know of the Welsh Government's range of initiatives that we've put forward and that we're implementing to keep homes warm this winter. The one I want to particularly just focus on is the Fuel Bank Foundation partnership, which has so far helped 14,377 people who are struggling to prepay for their fuel and were at risk of self-disconnection. The fuel voucher scheme has resulted in 5,500 vouchers being issued to help top up prepayment meters. People struggling to pay for their off-grid fuel have also received support.

So, as I have done this afternoon, I'd take this opportunity to again urge Members to use their social media to encourage constituents who have a traditional prepayment meter to use their vouchers from the UK Government scheme. There is a 90-day expiry limit, and a worryingly large number are outstanding. But, I was also assured by energy suppliers on Monday that they would reissue those vouchers. I'm going to hold them to it, so they reissue those vouchers until people receive those vouchers. It's only 72 per cent at this time, for that £400, which is vital to the poorest in Wales. 

So, you know that we have our fuel support scheme already reaching 310,000 households with the £200 payment this year, increasing eligibility. I'd again urge eligible households, this financial year, to ensure they apply for this vital support, because this is crucial in terms of getting money into people's pockets. Our current funding allocation from the UK Government isn't sufficient for us to repeat the scheme in 2023-24, but we will lobby UK Ministers to provide further financial support for people during this difficult time. And we have also ensured that our discretionary assistance fund is there, with an increase, as you know, in the draft budget, to access emergency financial help in a crisis.

We continue to call on the UK Government, which holds the key levers for tackling poverty, to put in place practical actions that have an immediate and positive impact on those affected by the rising cost of energy, particularly those on prepayment meters. And we have called—and I'm sure that you will join me today—in calling for the removal of standing charges for prepayment customers. That hopefully could be another statement of opinion. For two years, we've called on UK Ministers and Ofgem to introduce a social tariff to protect the most vulnerable households. They are now saying that they will look at this. I'm meeting Ofgem shortly. Most of the energy suppliers I met this week were moving towards being in support of this. We have got to call for that social tariff together.

So, finally, thank you to Jack Sargeant, a tireless advocate and campaigner. I pay tribute to Jack for his determination. He's put this matter in the headlines not just here in Wales, but widespread across the UK. You've highlighted the detrimental impacts that the forced change to prepayment meters has had for vulnerable households. You've galvanised political and public support for proper checks to be undertaken in every case before switching a customer to prepayment. And you've repeated calls to Ofgem and the UK Government to ban the forced installation of prepayment meters, and I have backed all those calls, Jack, and it's so good to hear that our colleagues from Plaid Cymru and Welsh Liberal Democrats are backing the calls as well. So, you did make a difference last weekend—we've got to recognise that Jack Sargeant did have an influence. Grant Shapps wrote to UK energy suppliers this weekend, restating their duty under the regulations to protect vulnerable customers struggling to pay their bills. But that's not strong enough, that's not good enough. We've got to look at those regulations to see what we can do, and we have to ensure that we take these calls and this campaign forward together. Thank you very much. Diolch yn fawr, Jack.

Photo of David Rees David Rees Labour 7:22, 25 January 2023

(Translated)

Thank you, Minister, and thank you to Jack Sargeant. And that brings today's proceedings to a close.

(Translated)

The meeting ended at 19:22.