Energy Price Cap: Prepayment Meter Customers

Business, Energy and Industrial strategy – in the House of Commons on 22nd February 2022.

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Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

Whether he is taking steps to support prepayment meter customers following the increase in the energy price cap through the energy bills rebate.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

We are working hard to design this scheme at pace. We acknowledge that delivering the bill reduction for this payment mechanism will require a special focus, and that is why we are engaging with consumer groups and Ofgem to work out how best to design the mechanism.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

People on prepayment meters will see their bills rise by £708, which is £46 more than for those who pay by direct debit. How will the Secretary of State ensure that people do not self-disconnect, leaving them without heat and means to cook? How will that be monitored? What thought has been given to private renters so that they do not lose out on the rebate due to the frequent tenancy changes in that sector?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

We are constantly engaging with Citizens Advice, Ofgem and a huge range of stakeholders about how to protect the most vulnerable consumers. The package announced by my right hon. Friend the Chancellor only a couple of weeks ago includes £350, which goes halfway towards addressing the increase that Yvonne Fovargue describes. The warm home discount is being extended from 2 million people to 3 million people, and the uplift will be to £150.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Climate Change and Net Zero)

The 4 million pre-payment meter customers in this country will be profoundly unimpressed by the Secretary of State’s answers this morning. Not only are they paying far more than the £693 increase on the price cap for customers with accounts, but it is uncertain whether they will have access to the £200 Government scheme to lend customers their own money, as they do not have accounts through which to do this. Indeed, many of them will miss out on the council tax rebate, too.

Would it not have been much more straightforward and fairer for prepayment meter customers if we had levied a windfall tax on companies that are profiting from high gas prices and provided those customers with a direct and non-refundable discount on their bills through their meter?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

That is why we have £155 million that can be applied discretionally, particularly to protect these vulnerable consumers. Labour’s whole approach to energy security has been woeful. Labour destroyed the nuclear industry we had, without any progress, and it has created massive uncertainty in energy supply through its proposed windfall tax, which is not the way to produce energy supply that secures low-cost energy for our people.