Prepayment Meters

3. Topical Questions – in the Senedd on 8 February 2023.

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Photo of Jack Sargeant Jack Sargeant Labour

(Translated)

1. In light of the Ofgem announcement of a halt in the forced installation of prepay meters, what representations has the Minister made to the UK Government regarding support for those facing disconnection as a result of being forcibly switched already this winter? TQ722

Photo of Jane Hutt Jane Hutt Labour 3:07, 8 February 2023

I've written twice in the last two weeks, urging UK Government to end the abhorrent practice of forced installation of prepayment meters. I call on them and energy suppliers to remove any meters installed by force this winter, and I'm urgently seeking a meeting with the Secretary of State.

Photo of Jack Sargeant Jack Sargeant Labour

Can I thank the Minister for that answer, and again thank her for her leadership on behalf of the Welsh Government in bringing these issues to the attention of the UK Government?

The UK Government, Ofgem and the courts have watched this national scandal develop for over a year, seemingly simply trusting energy suppliers and debt collection agents to do the right thing. Thousands of warrants for the forced installation of prepay meters have been passed without scrutiny; the only check being that the debt collection agents simply state that nobody impacted is vulnerable. We know that that is not true. Just last week, we all would have seen the footage of the results: vulnerable people's houses entered, often broken into, and prepay meters forcibly installed. The courts have now finally ordered a halt to this, but for me, it's far too late for the thousands that have already been switched.

Minister, we need meaningful compensation, we need a ban on the remote switching, and to allow those already switched—forcibly switched—to switch back free of charge. In your meetings with the UK Government, if they accept your invitation and your calls, will you express the importance and urgency of the calls I've said today? And will you also investigate whether the Welsh Government and this Senedd could support the development of rules similar to those put in place for water back in the 1990s—those rules that don't allow people, people right across our society in Wales and the United Kingdom, to be simply cut off and disconnected?

Photo of Jane Hutt Jane Hutt Labour 3:09, 8 February 2023

Well, I'd like to thank Jack Sargeant for his relentless and effective campaign on what are the prepayment meter scandals that have emerged over recent weeks. You have raised this consistently over the past year and helped to expose it, for us and for the Welsh Government to respond, and indeed the whole Senedd and our fuel poverty cross-party group, which Mark Isherwood chairs, and I assure you that this is at the forefront of my agenda at the moment as Minister for Social Justice, to address this shocking scandal.

So, in recent correspondence and contact with the UK Government and Ofgem, including a meeting that I held with the Ofgem board this morning that happened to be in Cardiff, I've stressed the need for energy suppliers to not only stop forced installation, but also to revert any prepayment meters that have been recently fitted, and I continue to seek that meeting with the Secretary of State to make clear the urgency of this call. I have had a response from the energy Minister, and I'm happy to share that with colleagues in the Chamber in the Senedd today.

The existing rules, of course, were intended to protect the most vulnerable in our society, but they have not worked. They're clearly not working as intended, and we have to look at that. So, I did ask that question of the Ofgem board today. They have got to regulate the industry effectively, and in my meeting with them, with the chair and board of Ofgem this morning, I did say to them: are they making effective use of their existing powers as regulator? Are they using those powers? Are they sufficient to effectively regulate the sector? Do we need strengthened legislation? What can we do in terms of further powers needed to regulate the sector? And also, in their response, I will share with the Senedd today that they said that they've launched a robust investigation into the activities of British Gas, the debt collector collecting agency that they were using, and they're looking internally at their compliance activities. They did say that they're using all their current powers to full force, but obviously we need to hear from them, and I think it's due within the next couple of weeks, the outcome of that investigation.

Just finally, on your point about water, heat and power are vital services for our households. As with water, energy supply companies should not be simply able to disconnect users, and I'm going to raise this particular point, as I did today with Ofgem, with the UK Government.

Photo of Mark Isherwood Mark Isherwood Conservative 3:12, 8 February 2023

Last month, prior to your 31 January and 2 February letters to the UK Government and before The Times investigation revealed British Gas routinely sending debt collectors to break into customers' homes and force-fit prepayment meters, even when they're known to have extreme vulnerabilities, the then UK business Secretary Grant Shapps wrote to energy suppliers, stating that they should stop forcing vulnerable customers onto prepayment meters and that they should make greater efforts to help those struggling to pay their bills. He called for the urgent publication of the energy suppliers' recent investigation into vulnerable customers, and the release of data on applications suppliers had made to forcibly install meters. Last week, Ofgem asked energy companies to suspend the forced installation of prepayment meters, and on Monday, Lord Justice Edis ordered magistrates' courts in England and Wales to stop authorising warrants for energy firms to forcibly install prepayment meters with immediate effect. On the same day, the UK energy Minister, Graham Stuart, met the boss of Ofgem and told him that the UK Government expected strong and immediate action where suppliers fall short of their obligations.

In light of your call for an outright ban, what consideration have you given to concerns of a consequent increase in bailiff action, which I believe is the only thing that's held the UK Government back? And how will you work with British Gas to promote their ring-fenced prepayment customer support fund, targeted to help prepayment and vulnerable customers, who must apply, nonetheless, for this? Thank you.

Photo of Jane Hutt Jane Hutt Labour 3:13, 8 February 2023

Thank you, Mark Isherwood, for your questions, and I hope you will back my call for a meeting with the Secretary of State. Of course, I have written to the Secretary of State and I have had a response from the energy Minister. I think what is very clear is that we've got to recognise the scale of this: 200,000 households in Wales use prepayment meters for their mains gas and electricity; 15 per cent of all households, 24 per cent of tenants in the private rented sector, and almost half of social housing tenants use prepayment meters, and they're on the lowest incomes. We are talking about those who are most vulnerable.

What I've said to the UK Government is that, yes, we're pleased to see energy suppliers halting the practice of forced installation, but what did it take? It took the investigation of The Times, and politicians like Jack Sargeant, and indeed Ed Miliband, I would say, to expose what was going on. Enforcement didn't work. The UK Government isn't acting enough to look at the new legislation that probably needs to come forward. There is a lack of Ofgem safeguards in place. I said to Ofgem, 'We will support you if you need more regulatory power; we need to support you to do this.'

We have to await the outcome of that investigation into British Gas. I've met with energy suppliers on a number of occasions. They've given me assurances about the way they're treating and supporting vulnerable customers. I find it very hard to actually take on board some of the assurances they've given me when we hear particularly of their use of these unscrupulous debt collection agencies. I am meeting the Enforcement Conduct Board next week, and I will be able to report back on that, because we need to look at their work. I was glad that that was raised yesterday by Peredur in terms of their use and in terms of looking at how accredited enforcement agents are key to this. I will certainly be responding to and updating the Senedd on these issues. 

Photo of Sioned Williams Sioned Williams Plaid Cymru 3:16, 8 February 2023

In the cross-party group on consumer rights, which I chair, we heard on Monday from Which?. Their latest report, published this week, showed that 92 per cent of Welsh consumers are worried about energy prices higher than in England and Scotland, and that consumers are engaging in cost-saving behaviours that may be detrimental to their health. We know it's detrimental to their health: 78 per cent putting the heating on less, 18 per cent having fewer cooked meals. The Welsh Government must take action to do what it can to safeguard its citizens. Citizens Advice Cymru in that same cross-party group shared the frustration. Their graphs were showing plainly what was happening as regards prepayment meters, and they were completely frustrated that it took The Times to be able to get some action from the UK Government on this.

The distribution and supply of electricity and the supply of gas are, of course, both reserved to Westminster under the Government of Wales Act 2006. Consumer protection is also a reserved matter. Given this, what representations has the Welsh Government made to get these powers devolved, so we can ensure that the ban we need is implemented and maintained? Will the Minister call on the UK Government to devolve these powers? Also, we've heard, I think it was just yesterday, on the news that the take-up of vouchers available for prepay customers under the UK Government's energy bills support scheme is well below what was expected. Has the Welsh Government approached the UK Government to ensure any unspent or unredeemed money is used to support those vulnerable households here in Wales who are in fuel poverty and on prepayment meters? 

Photo of Jane Hutt Jane Hutt Labour 3:18, 8 February 2023

Thank you very much, Sioned Williams, for reporting on that CPG on consumer rights. I'm shortly meeting with National Energy Action and Citizens Advice, who are key to inform us, and inform us regularly, of the evidence and also of the policy moves that we need to take. I think this is time when we do look to what powers we've got, the ways in which we can intervene when so much is reserved, which is why we have to press the UK Government on these issues. I think this is about the most vulnerable people. I've mentioned the numbers who are on prepayment meters. We have intervened in ways that we can, not just with our winter fuel support scheme, but with our partnership with the Fuel Bank Foundation, to make sure that people can access fuel vouchers through these difficult months.

Again, I said to Ofgem today—they were meeting in Cardiff—'You have got to show to us what the impact of your investigation into British Gas will be' in terms of their use of those debt enforcement agents, which is so shocking and appalling. My colleague the Counsel General is questioning the courts and the ways in which the courts have forced through these warrants. Worryingly, as he identified, over the past three years, over 22,000 warrants have been issued through Swansea magistrates' court, not just for people in Wales, we understand. This actually makes a strong case for the devolution of justice, doesn't it, in terms of the way forward.

But I finally want to say, and it is important, that I raised the issue about how can citizens on prepayment meters redeem their vouchers. Citizens Advice has said that all of the efforts to reach those customers are still not effective, as you've identified. I did get a response from the UK Government and, indeed, from energy suppliers saying that vouchers can be reissued, and we expect them to continue to do that even if the 90 days have expired. But, again, we will use this opportunity to promote the ways in which people—the suppliers and indeed customers—can access those vouchers. 

Photo of Jenny Rathbone Jenny Rathbone Labour 3:20, 8 February 2023

This scandalous exploitation of individuals who have the least and who need to keep warm, like everybody else, really exposes that we have a completely broken system. So, if you ever get the chance to talk to the UK Government about their failure to act on this—. It's been over three months that Jack Sargeant has been raising this in the Senedd. And what have the magistrates been doing when they issue these licences? Have they been asking whether these individuals are vulnerable and are able to get to the shop in order to top up their credit? It seems to me that what we need, Minister, is a complete overhaul of the regulatory system—Ofgem has been exposed as a paper tiger—and we also need to put a stop to this business of charging those on prepayment meters more than those who are paying by direct debit. It's absolutely scandalous, given that there is no service. You don't have to go and look at the meter to see how much people have used in the way of energy, they know that. So, it seems to be absolutely—. So, will you have discussions (a) with the Ministry of Justice, as to how they're going to increase the awareness of the magistrates of how ordinary people live; and (b) will you urge the UK Government to completely overhaul the regulatory system, otherwise known as Ofgem?

Photo of Jane Hutt Jane Hutt Labour 3:22, 8 February 2023

Certainly I will follow up all of those points, Jenny Rathbone, Chair of the Equality and Social Justice Committee, with the UK Government and, indeed, with Ofgem. I said, 'You need a complete overhaul of regulations' to Ofgem, and we'll see what impact their enforcement powers have in terms of their investigations in terms of British Gas.

Yes, it did take Lord Justice Edis, as Mark Isherwood said, to stop those applications for warrants for prepayment meters in magistrates' and district judges' courts, so that's what the Counsel General is following up as well. They've ceased to be listed, but when you hear of the way that they were going through the back rooms of courts, people with no representation—£22, I think the Counsel General has been saying; the money that was made by the courts out of this—we need a review of the legislation. In fact, that is actually something that Lord Justice Edis said himself. 

I think the point is, finally, that it is the most vulnerable and the poorest in society who are on prepayment meters. They should be scrapped. Yes, it is a choice for some, but one of the questions that has been asked, and I'm sure it has been asked in your cross-party groups, is: has remote installation stopped? No, I don't believe it has. Enforced installation has stopped, but remote installation is still going on. 

Finally, I have asked for suppliers not to be making standing charges. They're the highest in north Wales in the whole of the UK, and very high in south Wales. And even if people cannot even feed their meters, they're still subject to the standing charges, so when they get their fuel vouchers, perhaps via us, they actually are paying off the standing charges. Isn't that an absolutely shocking situation, which we've got to address?

Photo of Elin Jones Elin Jones Plaid Cymru 3:24, 8 February 2023

(Translated)

And finally, Mike Hedges.

Photo of Mike Hedges Mike Hedges Labour

The Minister has answered part of what I was going to raise, because the Minister is quite used to me talking about the problem of people having standing charges. I understand from The Observer last Sunday that standing charges can be up to 50p a day. Most of us don't consider having to spend a day without putting on any lights, without putting on any television, without putting on any heating. That is the life of a number of my constituents, where they have to not use any energy, and then when they do—. As one constituent told me—I've mentioned this to the Minister before and I'm going to keep on mentioning it—she had not used any energy for four days, she heated or warmed a tin of soup, and her energy costs went over £2 because she hadn't used any energy for four days. Does the Minister agree that we've got to get standing charges ended and that we need to get them ended now? Because what is happening is the poorest are paying more and more for less and less. It is a scandal; it is a scandal that should not have been allowed, and certainly one we need to bring to an end.

Photo of Jane Hutt Jane Hutt Labour 3:25, 8 February 2023

Can I thank the Llywydd for enabling more Members to make the points and ask the questions today to this topical question? Yes, the standing charges are an outrage in terms of the impact they have on people's lives.

Can I just go back to the point that was raised by Jack Sargeant in his supplementary question? We need the sort of legislation we've got in the water industry to prevent customers being disconnected even if they are in arrears, and we need to get Ofgem to take on those powers to safeguard vulnerable customers. But I will continue to press for the end of those standing charges, which energy suppliers, with all the profits that are being made, can afford to cut and cover. 

Photo of Andrew RT Davies Andrew RT Davies Conservative

Thank you, Presiding Officer, for allowing the question. Minister, I’m grateful to you for your answers so far today on the abhorrent practices that we saw last week. I do not absolve the UK Government from responsibility in this; they do have responsibility. They’re ultimately the Government that sets the legislative framework. But one thing I do think is a fundamental weakness here is the point that Jenny Rathbone made and others have made: Ofgem is completely not fit to purpose. I speak from a business point of view, and I declare an interest in that I’ve had interaction with Ofgem. I’ve raised it with the First Minister himself here on several occasions in First Minister’s questions about Wales having its own place on the board of Ofgem—a dedicated board member, so that Welsh interests can be truly represented.

I understand the Welsh Government meet periodically with them, as you’ve done today. Did you pose the question to those board members today? Do they consider, in light of the evidence over the last 12 months, that they themselves are fit for purpose, given the blight that we’ve seen on people’s lives with the revelations that came out last week, but also the impotency they seem to have in face of what’s gone on in the electric and energy market over the last 12 months in particular, where businesses and consumers have felt helpless at the hands of many large companies who’ve shown no respect for the wishes and concerns of people and the situations they find themselves in? 

Photo of Jane Hutt Jane Hutt Labour 3:28, 8 February 2023

Thank you very much, Andrew R.T. Davies. I was standing in for the First Minister today at the Ofgem board. They were meeting in the UK Government offices in Central Square, where they actually have an Ofgem office, which actually, they told me, is being expanded in terms of their presence here in Wales. The chair of the Ofgem board is actually representing Welsh interests. They’ve been here for two days making visits to Tata and to local energy initiatives as well. I think your points are very well made. We have to see now whether or not they are using their powers, which they say they have got, in terms of a root-and-branch review of what is happening, what the scandal is, and then question what their role is. Diolch.

Photo of Elin Jones Elin Jones Plaid Cymru 3:29, 8 February 2023

(Translated)

I thank the Minister. The next question is to the Minister of health. Russell George.

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