Prepayment Meters

Energy and Climate Change – in the House of Commons at 10:30 am on 26th January 2012.

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Photo of John Robertson John Robertson Labour, Glasgow North West 10:30 am, 26th January 2012

What the level of debt is by which a prepayment meter customer is able to change supplier.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

The debt assignment protocol helps prepayment meter customers with a debt of £200 or less to switch, providing the new supplier agrees to take on the debt. Ofgem monitors the protocol’s effectiveness by recording the number of customers blocked from switching as a result of having a debt.

Photo of John Robertson John Robertson Labour, Glasgow North West

I am sure the Minister will understand my question when I mention that because of debt 200,000 customers are trapped on tariffs that they cannot get out of. If the level was extended to £350, a lot of those people would be able to get their debt down. What is he doing to try to deal with that and will he persuade Ofgem to set the figure at £350?

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

The hon. Gentleman raises an important point, and I shall ask Ofgem to look at the issue in detail. Many people are on prepayment meters because they were already in debt and it was a way of trying to manage their repayments to get them back on a firm footing. Clearly, we want people in all circumstances to be able to benefit from lower tariffs and it is important that they should be set at the right level in that part of the protocol.

Photo of Michael Weir Michael Weir Shadow SNP Spokesperson (Business), Shadow SNP Spokesperson (Energy and Climate Change)

Whether or not they are trying to switch, many people on prepayment meters are clearly fuel-poor. What action is the Department taking to monitor self-disconnection among that group?

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

We understand that about 20% of those who are fuel-poor are on prepayment meters, and we will clearly look at any reasons why anybody is disconnected. If they are required to be disconnected by the supplier, the evidence has to be reported to us and those figures have fallen very sharply in recent years, but if people are self-disconnecting we need to understand the reasons behind that.