5. Member Debate under Standing Order 11.21(iv): Prepayment meters and energy advice services

– in the Senedd at 3:19 pm on 22 March 2023.

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Photo of David Rees David Rees Labour 3:19, 22 March 2023

(Translated)

Item 5 is next, a Member debate under Standing Order 11.21: prepayment meters and energy advice services. I call on Jack Sargeant to move the motion.

(Translated)

Motion NDM8219 Jack Sargeant

Supported by Alun Davies, Carolyn Thomas, Delyth Jewell, Heledd Fychan, Jane Dodds, Jayne Bryant, Joyce Watson, Llyr Gruffydd, Luke Fletcher, Mike Hedges, Peredur Owen Griffiths, Rhianon Passmore, Rhys ab Owen, Sarah Murphy, Sioned Williams, Vikki HowellsTo propose that the Senedd:

1. Believes that:

a) it is a national scandal that 600,000 people were forced onto prepayment meters in 2022 because they could not afford their energy bills;

b) energy regulator Ofgem has failed to protect vulnerable households by allowing energy suppliers to bypass proper checks;

c) those forced on to a prepay meter should be properly compensated by energy suppliers and switched back free of charge.

2. Notes that:

a) 3.2 million people were cut off from energy last year due to running out of credit on their prepay meter;

b) average household energy bills could rise even further, placing an additional burden on households already struggling due to the cost-of-living crisis.

3. Acknowledges the Welsh Government’s 2021-22 in-home energy advice pilot, providing proactive advice and outreach support to people who are, or at risk of being, in fuel poverty.

4. Calls on the Welsh Government to roll out an in-home energy advice service across Wales to ensure all households can access the support and advice they need.

(Translated)

Motion moved.

Photo of Jack Sargeant Jack Sargeant Labour 3:19, 22 March 2023

Diolch yn fawr iawn, Deputy Presiding Officer

This motion is the culmination of months of campaigning. Since autumn last year, I have been calling for a ban on the forced installation of prepayment meters. This was because customers on prepayment meters are forced to pay more for their electricity, but also because of the growing evidence throughout the year that people were being forcibly switched onto prepayment meters on a scale never seen before.

Late last year, campaigning journalist Dean Kirby of The i newspaper wrote a story where he described sitting in a courtroom, where nearly 400 warrants were issued to forcibly install prepay meters in less thaen three minutes—400 warrants in under three minutes. Dirprwy Lywydd, suddenly everything made sense: 600,000 people switched last year alone, with only 72 of these warrants rejected, and the month on month increases in people being forcibly switched. Dean's story exposed the reason behind these numbers. Absolutely no checks were being done to see if any of these people were vulnerable. As Dean explained, not even their names were read out on that day in court.

Photo of Jack Sargeant Jack Sargeant Labour 3:20, 22 March 2023

Dirprwy Lywydd, let's be clear about what is supposed to happen: energy suppliers should give anyone who classes themselves as vulnerable the chance to refuse a prepayment meter. Instead, Ofgem allowed energy suppliers themselves to define what is classed as a vulnerable individual, and this has been exploited with catastrophic consequences. The UK Government and Ofgem were asleep at the wheel, and whilst the statistics I have stated already came into the public domain, they did nothing. The regulator, Ofgem, only conceded wrongdoing when a The Times exposé caught agents working on British Gas's behalf breaking the rules on camera. Any regulator who witnessed this explosion in warrants issued last year, including over 20,000 of them in one court in Swansea, should have acted. And even the current moratorium on the installation of prepayment meters is happening voluntarily, simply because of those British Gas videos.

Now, Dirprwy Lywydd, I note Ofgem's recent national call for evidence on prepayment meters, but I must say that I share real concern about whether those who have already been so badly let down by the regulator will engage with that process. In February, I launched my own survey to gather evidence, and this was because, at that time, Ofgem told me in the meeting I had with them that there was no evidence of wrongdoing outside of British Gas, even though the statistics prove otherwise. And the responses I had, Dirprwy Lywydd, in my report, entitled 'A National Scandal: The true cost of pre-pay meters' were very difficult to read. They paint a clear picture of just how difficult life on a prepayment meter is for so many families. One response said, and I quote,

'My husband is an army veteran with reconstructed ankles, PTSD and many more health issues'.

They went on to add,

'On one occasion, I felt so embarrassed having to ring and ask if they could put some credit on my meters, which they took back as soon as I had the money to put on the meters, basically putting me back to square one. I never rang them again and instead went without'.

Dirprw Lywydd, how in twenty-first century Britain are we failing those who have served in our armed forces so badly that they are left in the dark and in the cold in their own homes? This gentleman is a war hero. He risked his life for each and every one of us, and yet, in his time of need, the system has totally failed him.

Another couple, both in receipt of personal independence payments, with three young children, were switched by their energy company in January. They said, and I quote,

'We felt bullied onto a prepayment meter because they gave us a lot of debt out of nowhere that we couldn't afford to pay. We're currently paying £10 a day just for electricity, and we're struggling financially'.

Their situation, Dirprwy Lywydd, has become so difficult that they have been forced to borrow money from a family to top up. Very sadly, multiple other respondents expressed that they too have had to borrow money just to keep the lights on. The toll that prepayment meters are taking on the health of those forced to live with them is so shockingly clear in this report. One person living with severe arthritis had a prepayment meter forcibly installed at the end of last year. Another explained how they regularly run out of credit on their gas meter and the extended periods of cold have made their asthma much worse. 

As I've said in this Chamber on a number of occasions, Dirprwy Lywydd, this is a matter of life or death. One survey respondent said that, despite being reliant on a medical device that has to be plugged into the mains, they have been put on a prepayment meter. Every day, they are having to make the choice to limit their energy usage, just so that they can be sure that they can use their medical device. Can you imagine the stress and the anxiety this must cause this particular family? It is truly heartbreaking that families across the United Kingdom are having to live this way. 

Dirprwy Lywydd, it's sadly unsurprising that many of those who responded to my survey expressed how their mental health has suffered as a direct result of their prepayment meter. This anxiety has been made worse by the treatment they have been subjected to by their energy suppliers. The Minister will remember that I recently highlighted the case of a mum who was on hold for over an hour, sat in the dark, sat in the cold, after their prepayment meter stopped working. When she finally got through to her call handler and she explained that they needed help, and that their six-year-old son was obviously very upset, very concerned, crying at home in the dark, in the cold, the person on the other end of the phone laughed, and then hung up. It's nothing more than a disgrace, Deputy Presiding Officer

Every one of these people who have responded to my survey, every one of these people we've described in these statistics, they have been let down by their energy supplier. They have been let down by Ofgem, and they have been let down by the United Kingdom Government. I want to be absolutely clear, Deputy Presiding Officer, I have absolutely no faith in Ofgem, but there is a clear role for the UK Government to legislate. Colleagues will remember that, at the end of the 1990s, it was recognised that private companies should not be allowed to cut people off from their water supply. Energy, too, Deputy Presiding Officer, is life and death. We should follow suit and legislate to stop being cut off, and this includes people being cut off because their prepayment meter runs out of credit. 

Dirprwy Lywydd, in the meantime here in Wales, we need to look at rolling out the in-home domestic energy advice pilot to ensure that people are empowered with access to the best advice possible. And we need to look at what powers we have to stop landlords being able to force tenants onto prepayment meters as well. Deputy Presiding Officer, in closing, I want to say this: people have been badly let down by those who are supposed to protect them in the energy market. Let's hope we see an end to this national scandal, and let's hope it ends soon. Diolch.

Photo of Mark Isherwood Mark Isherwood Conservative 3:28, 22 March 2023

According to the latest available estimates from energy regulator, Ofgem, there were around 4.1 million electricity and 3.3 million gas customers on a prepayment meter, or PPM, in Great Britain in 2020, with proportionally more households in Wales using PPMs than in England. Wales has the highest proportion of gas PPMs compared to other GB nations, and they're often used by some of the most vulnerable in society, as we heard, on low incomes and already in debt to their supplier. Anglesey has the highest level of prepayment meters in Wales at almost 29 per cent, followed by Gwynedd at almost 22 per cent.

Despite a concerted effort from Ofgem in 2020, including introducing new supplier license conditions for identifying vulnerability, offering emergency and friendly hours credit, and considering ability to pay when setting up debt repayment plans, the global energy price crisis exacerbated the severity of the situation, with the number of PPMs in operation across the UK rising. In January, before The Times investigation revealed that British Gas was routinely sending debt collectors to break into customers' homes and force-fit prepayment meters, even when they were known to have extreme vulnerabilities, the then UK business Secretary 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.

In February, Ofgem asked energy companies to suspend the forced installation of prepayment meters, and 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 then UK energy Minister met the boss of Ofgem and told him that the UK Government expected strong and immediate action where suppliers fall short of their obligations. Ofgem's temporarily suspended forced installations of PPMs includes ceasing of installation by warrant, ceasing of remote-mode switching of smart meters to prepayment without explicit agreement of the customer, and ceasing new applications to court for installation warrants unless theft is suspected.

During last week's UK Government budget, the Chancellor announced that, from 1 July, prepayment energy charges will be brought in line with customers who pay by direct debit on a permanent basis. Climate Cymru has expressed concern that this does not affect the standing charges, which is where the majority of the PPM uplift happens. In this context, the UK Government has asked Ofgem to report back on options for ending the higher standing charges paid for by prepayment meter users. At the UK Parliament's Business, Energy and Industrial Strategy Select Committee on 14 March, Ofgem confirmed that all suppliers are now extending the suspension of forced prepayment installations beyond 1 April, which won't be lifted until Ofgem establishes that suppliers are acting in accordance with a new code of practice.

National Energy Action, NEA, believes there's also an immediate need to ensure that enforcement action is strong, including reversing wrongful installs and compensating households affected, to strengthen protections and licence conditions, and for a root-and-branch review of prepay, reducing the number of traditional prepayment meters in use and addressing debt. NEA believes that the delivery of energy-efficiency measures should be promoted and delivered alongside independent direct advice and assistance to vulnerable households in or at risk of fuel poverty on improving home energy efficiency, maximising incomes and managing or reducing energy costs and accessing the broader support available in the energy market.

It's been a year since the Welsh Government consulted on the next iteration of its Warm Homes programme, and we urgently need to accelerate the improvement of energy efficiency in fuel-poor homes. NEA and Fuel Poverty Coalition Cymru would like to see the Welsh Government setting out a timeline for the next demand-led scheme to be operational before winter, focusing on the worst first—those on the lowest incomes, living in the least-efficient homes—and taking an appropriate multi-measure, fabric-first approach. A constituent e-mailed me, stating that prepayment meters were intended to prevent people from getting into arrears, and that the problem here is that the utility companies charge a higher rate to those people using prepayment meters, and that that needs to change. Punishing someone for paying in advance, and punishing someone for being on a low income, cannot be justified. We will be pleased to support this motion accordingly.

Photo of Sioned Williams Sioned Williams Plaid Cymru 3:33, 22 March 2023

I welcome this debate. While fully supporting the motion's contention that it is a national scandal that 600,000 people were forced onto prepayment meters because they could not afford their energy bills, I would point out that, while the distribution and supply of gas and electricity and consumer protection are reserved matters, we will never be able to be fully confident that we can protect our citizens from this type of damaging and shameful action until powers over these matters are devolved to Wales. The present temporary ban on forced installation of prepayment meters is not 'job done', and, as yet, the code of practice of which Mark Isherwood spoke for suppliers is not legally enforceable.

As the motion makes clear, fuel poverty is at severe levels in Wales, and this could deepen even further. Those who have been forced onto prepayment meters are usually struggling not only with the cost of living, but also with debt. The first committee inquiry I was a part of after being elected was that held by the Equality and Social Justice Committee in the autumn of 2021 on debt and the pandemic. As with the COVID crisis, overwhelming debt will certainly be one of the awful consequences of this cost-of-living crisis, compounding the worrying findings of that report, which was published just as energy prices were beginning to rise. 

As well as ensuring proper compensation by energy suppliers for those forced onto a prepayment meter, National Energy Action are right to call for the UK Government to also fund debt amnesty, using the funds that have become available by recent falls in wholesale prices, perhaps. The motion also speaks to the need to ensure advice and support for those at risk of fuel poverty, which is most welcome, but must be accompanied with energy efficiency measures to help prevent fuel poverty in the first place. I have tried in this Chamber, by written question, and together with my fellow members of the Equality and Social Justice Committee, to get clarity on the timeline for when the next iteration of the Welsh Government's Warm Homes programme will be operational—not procured, operational. We must, as Mark Isherwood said, accelerate the improvement of energy efficiency in fuel-poor homes in Wales. What we've had thus far, from both the Minister for Climate Change, and the Minister for Social Justice, has been a commitment that a new, national, demand-led scheme, focused on homes in fuel poverty, will be procured by the end of the year, and there would be no gap in provision between the new and existing programmes. 

So, I would ask again, Minister: when will the demand-led scheme, which focuses on those on the lowest incomes, living in the least efficient homes, be operational? Please answer clearly, as I hope all Members and the Minister agree that it is crucial that those in the deepest hardship are helped as quickly as possible to live in warmer, healthier homes, before next winter plunges people into even more crippling debt and even darker, colder nights. 

Photo of Mike Hedges Mike Hedges Labour 3:37, 22 March 2023

It is very expensive to be poor; almost everything costs more. If I'd been having this discussion about 20 years ago, I would have said that everything costs more, but the German discount-rate retailers arrived, so not everything does cost more, but very few things don't cost more, for being poor. It makes good business sense for the energy suppliers to have prepayment meters. They get a guaranteed income for energy used. They do not cut people off, because they cut themselves off. Citizens Advice has found in the UK that more than 2 million people are disconnected at least once a month, and that approximately one in five prepayment meter customers cut off in the past year have spent at least 24 hours without gas or electricity. No thought for those without energy.

It is clear that disconnection as a result of running out of credit regularly impacts the lives of those living with prepayment meters. We cannot allow a system to continue that sees vulnerable people's lives put at risk because they're constantly faced with being cut off. These are disproportionately the elderly, the vulnerable and people with young children. Older adults can lose body heat fast, much faster than when they were young. Changes in your body that come with ageing can make it hard for you to be aware of getting cold. A big chill can turn into a dangerous problem—before an older person even knows what is happening, hypothermia is setting in. 

For children living in a cold home, they are at increased risk of asthma, respiratory infections, slower development and higher risk of disability, mental health problems, as well as low self-esteem, low confidence, poor educational attainment, poor nutrition and injuries. We do a lot of things talking about children and giving them an opportunity in life—starting off in a cold home puts you at a huge disadvantage. 

If you're on a tariff that includes standing charges, you will always have to pay them, regardless of whether you're actually using energy or not. No money for the prepayment meter means no energy. What does no energy actually mean? It means no light. It means no heating. It means no tv. It means no hot water for washing yourself or clothes, no washing machine, no hot food or drink, no cooker or a microwave, no fridge or freezer, and a return to getting up and going to bed depending on the light outside. This is a world far beyond the life of Senedd Members, but it is the life of many of our constituents. 

Then there is the added cruelty of standing charges. A payment has to be paid on days when you cannot afford to use any energy, charges levied if you've used no energy at all. As of April 2023, customers in the UK will be paying an average standing charge of around 53p a day for electricity, and 29p per day for gas. So, if someone is without gas, that means that, if they use no energy for three days, which isn't unusual, they'll make a payment on their prepayment meter and instantly the money available is reduced by over £1.50 before they get charged for using. 

I've had a constituent tell me that it costs over £2.50 to heat a bowl a soup. I had to explain that that was mainly made up of the standing charges. In this example, a £10 prepayment sees over a quarter gone meeting standing charges on days that no energy is used. I just think that is absolutely wrong, and it really hurts the poorest. I know I keep on going about it, and I'm sure people are getting fed of me going on about it, but it really is something that has to have something done about it. If they had just put the lights on, they'd have still used their £1.50. Also, when it runs out, you have to reset the boiler, which, with an older boiler, can take a number of goes to reset. I would add that standing charges should be abolished. If they cannot be abolished, they should be added to the tariff. If energy companies will not abolish and meet the cost from their profits, it should be added to the costs, so those of us who have energy every day, which is everybody in this room, are not being subsidised, effectively, by people who can't afford energy every day. We've got to stop standing charges on days that no energy is used and that's got to be a first priority. It is hurting people, it's damaging children's progress, it's putting elderly people's lives at risk. 

In energy supply, we moved from a state monopoly to an oligopoly, where profits are large and the consumer pays. Whilst I would like to see energy taken back under public ownership, for those who remember the adverts of, 'It is now—tell Sid', it should be now, 'Tell Sid he's going to be forced on to a prepayment meter and will go without energy for days.' 

Photo of Jane Dodds Jane Dodds Liberal Democrat 3:41, 22 March 2023

If you are poor, life is totally against you. You have no chance of having direct debit to pay your bills, you have to put up with a higher standing charge, and now we know the scandal of prepayment meters. We use the word 'scandal' here quite a lot, but it really is a scandal that, actually, shamefully, has only just come to light recently, and which has only just been acted on. If you are a Centrica shareholder, the owner of British Gas, you don't have any problem with paying your gas bill or any bills at all. Let's just remind ourselves about what Centrica made last year. They made £3.3 billion in profit, triple the £1 billion that they made the year before, and we know what they did. They forced their way into people's homes in order to install prepayment meters. We know also that the UK Government could have done more earlier, and I'm pleased that they have eventually come out, but, as we know, this is going to take some time.

These predatory schemes will continue, and I'm really pleased to be able to support this motion today and to hear from the Welsh Government what they're going to be doing. It's only right that energy companies that have raked in billions over the last year, while many people have faced total misery in having to disconnect heating from their homes, not having fridges, not having anything in order to heat their homes—. They are the people who now need compensation and repayment. 

ONS figures show that 41 per cent of people on prepayment meters struggled to stay comfortably warm. So, we also need to do more about that, and I'm following on from my colleague Sioned Williams in raising the question to the Minister, if I may, around energy efficiency and when we can see that operational start to the Warm Homes programme in Wales. We have been waiting some time, and, really, we can't afford to wait any longer. Next winter will soon be upon us, and the understanding is—I'm not an economist, but the understanding is— that the financial situation of poor people next year will be even worse—can you imagine—than it is this year. We must really accelerate the development of the Warm Homes programme. By my own calculations, if we look at insulation, it would take 135 years to insulate all of Wales's fuel-poor homes, on the basis of the performance of the scheme in 2020-21. So, I do hope that we're able to hear very soon that there will be an acceleration of the programme, but also that we will learn from the previous programme about how we absolutely can get to those, and target those, fuel-poor homes. Rapid investment in our homes would benefit all of those in fuel poverty as well as ensuring that we address, partly, the climate emergency.

I welcome the opportunity to sponsor this scheme brought forward by Jack Sargeant. Thank you so much, Jack, you are a champion of people who are in difficult circumstances, and I’m proud to be able to support this motion. I do hope that we can hear from the Minister what steps we are going to be taking in order to address not just the issue Jack has raised in his motion, but also that of the Warm Homes programme. Thank you, diolch yn fawr iawn.

Photo of Peredur Owen Griffiths Peredur Owen Griffiths Plaid Cymru 3:45, 22 March 2023

There have been many great points made in this debate already. The perversity of prepayment is in many ways the perfect distillation of callous Westminster politics and the rigged energy market that we’re burdened with in the UK. How did we ever get to this situation, where people’s homes were being entered without permission on an industrial scale to fit prepayment meters against their wishes? To add insult to injury, those on prepayment meters would end up paying far more for their gas and electricity than someone paying on direct debit. This means that a millionaire would pay less per unit of gas and electricity that someone in receipt of benefits, struggling to make ends meet. How was that ever legal?

Families have gone cold this winter due to this scandal. Older people have sat in the dark due to this scandal. People have died due to this scandal. All of this has gone on while our energy companies have been making record profits, profits that have been made on the backs of people in misery. In a crowded field, this is one of the most shocking examples of unfairness that we can see in the UK today. It is right that we’re debating this matter in the Senedd today, and I commend Jack for bringing this debate to this Chamber and for his tireless campaigning work on this topic. He has the full support of Plaid Cymru in shining a spotlight on the injustice that has been allowed to go on far too long in the energy sector.

While I support Jack’s proposals, I think there is a wider debate to be had about the way people in debt are treated. Earlier this year, I met with the Enforcement Conduct Board, who provide independent oversight for bailiffs, and they shared with me some horror stories about the charges that are applied to people in debt. I’ve mentioned this case before, but it’s worth reiterating. I was given an example of a woman who lives in social housing in Newport and receives universal credit and personal independence payments. She was subject to a High Court enforcement case on behalf of a utility creditor. She asked the debt collection company if she could arrange an instalment plan, but the company refused and insisted that they visit her to see if she had any assets they could repossess. This meant that, in addition to the £75 charge that was added to her debt because of the telephone stage of enforcement, a further £190 was added to her debt for the visit. If she had not been at home on that first visit, a second visit would have led to a stage 2 High Court enforcement fee of £495 being added on.

The way people in debt are being treated by bailiff companies has the hallmarks of the way people are being treated by having prepayment meters forced upon them by energy companies. I’m pleased to hear that the Welsh Government is now engaging with the Enforcement Conduct Board, and I’d welcome an update on that. I hope that greater regulation can result from these meetings in order to clamp down on rogue firms that take advantage of people in poverty and plunge them into even greater poverty. Diolch yn fawr.

Photo of Jenny Rathbone Jenny Rathbone Labour 3:48, 22 March 2023

It is an absolute scandal, is it not, that over half our energy is now generated by renewables, yet we are still submitting poor people to this sort of treatment? The energy system is absolutely broken.

I wanted to focus on how effective the method of getting payments to people was. So, I spoke to Ofgem, who assured me that companies are adding credit automatically, where possible, if customers have a smart prepayment meter—if it’s working correctly. It should automatically add that £45 a week to the household’s credit balance. If the meter is faulty, I’m told households are sent a code by text or e-mail, so that they can use that to then top up their credit online. As a last resort, a voucher is issued to a customer by post, and I’ll come back to why that is a last resort.

If a household has a traditional prepayment meter, they either get a credit when they top up at their usual top-up point—and it's good to see exactly how much information energy companies hold about individuals; Sarah Murphy is not in the room at the moment, but this is a big data protection issue—or they get a voucher through the post as a last resort. And the reason why I describe this as a last resort is that we have huge amounts of evidence that people who are struggling financially stop opening the post—that is the way they cope with it. So, they think that every single letter that isn't from their granddaughter is going to be another demand for money that they haven't got. So, they never find out about the voucher that they desperately need to help them pay for heating.

Now, no information as yet is available of the cost-benefit analysis of different delivery methods of support, but there's clearly a lot of work to be done. So, for example, in Cardiff Central, between October and December last year, nearly 105,000 households should have got their money, but for 2,000 of them, it was simply never delivered. So, 2,000 never got the payments they were entitled to, and that is the payment that Boris Johnson got and that everybody else in this room got—2,000 of the poorest people never got that money. What is the explanation for that? And, equally, where vouchers had been issued to 6,800 households, there were just over 4,000 households where those vouchers were redeemed; 1,600 people never got them. Nobody ever knocked the door and said, 'Did you get the voucher, missus, or should we reissue you with a new one?'

These are really important issues and, thank goodness, on top of that, we have the Welsh Government fuel voucher statistics as well to go on, because the £200 pushed out by the Welsh Government was targeted at those who actually needed it rather than at those who could afford to pay. And the Fuel Bank Foundation has had a huge increase in the number of organisations that are now associating with them. They issued over 17,000 vouchers to support people who weren't able to afford to top up their prepayment meter; 44,000 people, of whom, over 40 per cent were children—the children who couldn't afford to have a bath or a hot meal or read a book before they went to bed. I think what's a worrying statistic for me is that only 148 households received help to purchase off-grid fuel. What are local authorities in areas where a lot of the dwellings are off grid doing to ensure that people, who should be getting that help, are getting it?

So, I think that all of this tells us that we need to—. Just as we need to regulate local authorities who use unregulated bailiffs to collect council tax debts, we clearly need to regulate energy suppliers who use unlicensed bailiffs to break into people's homes. The Enforcement Conduct Board has got to be given some regulatory teeth to enforce that and, frankly, the energy companies need to have some controls put around them in the way that water companies cannot cut off people's water. We need to ensure that the minimum amount of energy is being provided to every household in this country—as I say, the fifth or sixth largest economy in the world.

Photo of Heledd Fychan Heledd Fychan Plaid Cymru 3:54, 22 March 2023

Thank you, Jack, for proposing this important debate that relates to an issue affecting so many people in our constituencies and regions day in, day out. And I won't repeat the points raised, but I think it is that personal connection: we've all had people come to us who are struggling; we all know of organisations that are trying to provide that support and are just unable to meet the demands. And I think in the period before, where Citizens Advice and so on were able to offer solutions in terms of how you could reduce your energy costs and so on, we're at a point now where essentials are no longer affordable, and it's not just a matter of being able to tweak here and there. As we've heard already from other contributions, energy prices have just gotten out of control, and it is an absolute scandal to see these companies make these vast amounts of profit, while we know—as others have mentioned—that people are dying because they cannot afford to heat their homes. That’s the reality here in Wales today.

It's easy for us perhaps to become a bit immune to some of those statistics, but we have to ask ourselves: why do we have excess death rates currently here in Wales? What are the reasons for that? Why do we see an increase in child poverty? All of these are interconnected. So, I think that, for us—. I remember doing my GCSE in history, and looking back at when you were told about how terrible things were in Victorian times, et cetera. Well, the stories that we are hearing now are just as bad. People are dying because they can’t afford basics. This, for me, is something that we need to look at as a society.

Obviously, there is an issue specifically around prepayment meters, and the fact that they have been forcibly installed, and that people are being cut off. But, fundamentally, energy prices are too high, and people can’t afford the basics, and that’s something that we need to address. I think that Sioned Williams was perfectly right to say that we need to have the power over power here in Wales. We need to be able to ensure that essentials are affordable. There are things that we can call for from the UK Government, but ultimately, there are solutions here in Wales, and that’s what we should be focused on as well for the long term.

I think that the issue in terms of Warm Homes schemes—I certainly echo those calls. But I just wanted to share with you what this means currently for people living in South Wales Central. I recently held a cost-of-living event in January, where organisations were telling me about those that they have been able to help—individuals—through fuel bank vouchers, but that the demand was just extortionate, and how they were going to keep up with that demand was a concern.

They told me of people who were coming to them who had been stealing, just to be able to pay energy costs; of returning to drug dealing, to be able to pay for energy. This is the reality in our communities now, that people are having to take drastic action, and that people are choosing to take those drastic actions just to heat their homes. I am very concerned about those most vulnerable in our society who are just going without—those who just decide, 'I am not going to be able to afford anything. I don’t want to ask anyone for help.' So, even the support available, they are not accessing.

Another issue that I’d like to focus on, in terms of prepayment meters, is how difficult it can be to top up, even if you do have money available. We have had examples of post offices closing in communities, which are often used as top-up points, meaning that people have to travel further, perhaps sometimes a few miles, to be able to top up. We know how frequently you have to top up because of costs. Some stores then only take cash, but there’s no cashpoint, or it’s not working. That then means that you have to walk, perhaps miles, back to your home, not being able to top up. We will be discussing buses later on. We know that, in some communities, if you don’t have access to buses, and if they don’t run frequently or don’t turn up, what are you then supposed to do in terms of reaching those top-ups? So, I think that there is, fundamentally, a problem in terms of access as well.

Emergency credit varies from company to company. It’s very much up to a landlord if they do install a smart meter sometimes, which means that that emergency credit is not always available if you don’t have a smart meter. There are so many difficulties when you are cut off during the night or weekends, when shops are closed, and you are not able to have that urgent support that we are told is there, but in reality isn’t.

I’d briefly just like to mention it in terms of period dignity as well. I think about the fact that we are striving as a nation to be a nation of period dignity, well, not accessing warm water and not being able to wash does have a disproportionate impact. And I have heard some colleagues mention bath time—that parents are having to ration bath time, and so on. These are very real issues, and we need urgent solutions. So, thank you, Jack, for raising this, but now we need to act as a Senedd and ensure that those changes come through, so that people aren’t suffering, dying or just not able to do basic things that we take for granted.

Photo of Rhianon Passmore Rhianon Passmore Labour 3:59, 22 March 2023

As a named supporter of this Member debate, I want to place on record the work of Jack Sargeant in raising this very critical issue, as many have said, both in this place and beyond. And it is, as many have said today, the sick and the disabled and the elderly and the young who this issue impacts the most upon. It is a result of sheer profit over people, and it's the sick face of privatisation unregulated, with billionaire energy owners riding bareback on those who are most frail and vulnerable. Estimates suggest that up to 45 per cent of all households in Wales could be in fuel poverty following increases to energy prices and consequent budget impacts now.

The shocking revelations in The Times last month exposed that climate of fear, as many Members of this Senedd today have articulated, with people unable to pay their fuel bills, debt collectors let loose, as Jane Dodds and others have stated, and prepayment meters being forcibly installed. But the sheer scale and immorality—I'll use that really strong word, it is immorality—of this issue is so profound. My constituents, as Sioned has also said, tell me this weekly. Some 200,000 households in Wales are using prepayment meters for their main gas and electricity, and 45 per cent of social housing tenants are using prepayment meters.

I do want to thank Jack here for this campaign, and I also do welcome the work of Jane Hutt, Minister for Social Justice, who has called publicly for Ofgem to extend the ban on forced installation of prepayment meters beyond the end of March. We must, as Mike Hedges states, stop standing charges. Indeed, collectively, the Welsh Government has acted strongly in its united response, with £90 million to provide support to vulnerable households to meet rising energy costs, including a £200 fuel support scheme on top of the UK Government's fuel support payments. This has come from other Welsh Government priority areas. And further, to meet the need, social justice Ministers have secured an extra £18.8 million in the draft budget, increasing the total discretionary assistance fund for this coming financial year to £38.5 million.

But it is a source of sadness that this is needed today, as others have mentioned, in a G7 country where we as the UK are languishing at the bottom. It is imperative that the UK Government now step up to the plate and use those resources available to them for those in fuel poverty in Wales who have all been made poorer by each consequent action of this callous UK Government. I know that the Minister will continue to lobby the UK Government, Ofgem and energy suppliers to finally rise to the moment and fulfil their moral obligations to the poorest in society, but, sadly, until we get a Labour Government in Westminster, working with us, the Welsh Senedd, it will continue to fall on marble as ordinary people continue to freeze. I say, 'Shame on Ofgem', and I say, 'Shame on the UK Government.'

Photo of Jane Hutt Jane Hutt Labour

Diolch yn fawr, Dirprwy Lywydd. I welcome today's debate on prepayment meters. It's a national scandal the way consumers, often the poorest in our communities, have been treated. Jack Sargeant has been at the forefront of the campaign to expose this scandal, and the Welsh Government not only welcomes, but supports this motion today. I thank all the Members who've spoken today and contributed. It's good to see the whole of the Senedd—you've united us all behind your motion with such powerful speeches.

The cost-of-living crisis is having a detrimental effect on all of our living standards, but it's having a more devastating effect on the households who are least able to pay. And yet the energy supply market, which provides an essential service, operates in such a way that vulnerable households, already struggling to pay their bills, face the threat of having prepayment meters forced upon them. In 2022, approximately 200,000 households in Wales relied on prepayment meters for their mains gas and electricity, and this represents 15 per cent of all 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. Dirprwy Lywydd, we were all shocked, weren't we, and appalled to see households, including those who are clearly vulnerable, being transferred to prepayment meters against their will.

Alongside Jack Sargeant's representations and other campaigners', it's of further concern that it took a journalist to highligh the issue, as Jack has said, when the regulator Ofgem has the regulatory role to prevent this occurring. It’s clear that the existing rules and how they are enforced and not working. This has been reflected in contributions this afternoon. They’re not protecting the most vulnerable in society. I’m meeting Ofgem on Monday, and I will reporting back in full on the contributions made on this motion today. I’ve been consistently clear: householders who’ve been subjected to forced use of a prepayment meter—either through the wholly flawed warrant process, or because they were encouraged to do so, perhaps not appreciating alternatives available to them—must be offered the opportunity to revert to their previous meter at no cost. I think that call is also being supported this afternoon.

As a result of the exposure of this scandal, the practice of forced installation of prepayment meters was halted, but only temporarily. It was halted and we welcomed that, but it was only temporary. I’ve regularly made the point to the UK Government and to Ofgem that it was premature to allow the warrant process to continue from the end of this month. If you recall, it was just halted to the end of March, risking further vulnerable households being forced onto meters against their will whilst the Ofgem investigation was ongoing. So, I think, colleagues, it is important to record today that Ofgem’s chief executive announced on 14 March that they will continue that ban and they’ll only lift it when and if firms follow Ofgem’s new code of practice. I shall be pressing for that ban to continue indefinitely. It’s been commented on about the code of practice—I think that ban has to continue indefinitely, and I’m sure you would support me with that.

It is vitally important that Ofgem regulate the industry effectively. I’ve sought assurances at board level and I’ve asked that if they don’t have sufficient powers and interventions, then we would like to help them to press for those powers. 

Photo of Jenny Rathbone Jenny Rathbone Labour 4:07, 22 March 2023

In your meetings with Ofgem and indeed with the UK Government, can you establish that the other scandal around prepayment meters, which is the so-called prepayment premium, which forces people to pay even more, is actually going to end in July? Can you get some assurances for that, if you haven't had them already, categorically?

Photo of Jane Hutt Jane Hutt Labour

Thank you very much, Jenny Rathbone. Clearly, there has been a change in the budget last week in terms of the premium. I’m clarifying what exactly that means, because it’s no good going back to the voucher situation, which you raised so rightly earlier on. Unless that premium is levelled and it is actually reflected in the cost, then that will not be good enough, and I will raise that on Monday.

Can I just say also that I’m pleased people raised the issue of standing charges? I think, Mike Hedges, you’ve raised this so regularly. It's a real injustice to prepayment customers. They continued the standing charges and put people in a more vulnerable position. Following a period of self-disconnection, when it becomes impossible to secure further credit, householders find they’re charged for all the days when it hadn’t been possible to obtain a supply. Again, thank you for joining and showing that call that I’m making that these standing charges should be removed for prepayment customers.

Dirprwy Lywydd, we do have to turn to look at ways in which we can improve things. It’s the UK Government who do hold the levers in the energy supply market and they do have the power to make a real difference to vulnerable households. We have called on the UK Government and Ofgem to introduce a social tariff to protect vulnerable households. It is important that they have now agreed to explore this. We must press for that change, because actually, then we could fund energy in a more progressive way. Social tariffs have received positive and broad support.

Legislation in the water industry—and this has been raised—prevents customers from being disconnected, even if in arrears. I’ve urged market change to prevent disconnection; I’ve offered immediate recommendations following on the advice from National Energy Action Cymru and Citizens Advice. I have been also calling on the Chancellor to use the opportunity in this budget not to increase the energy price guarantee, and welcome the fact that that is now remaining at £2,500 until July for a typical household.

Finally, Dirprwy Lywydd, it is important that I pick up on some of the other points that have been raised in the motion. The Welsh Government recognises that trusted advice services are very important, and more than 176,500 people have received energy efficiency advice through the Warm Homes programme since its launch in 2011. That energy advice pilot also tests and measures the effectiveness of providing in-home advice as well. Can I just say that the Minister for Climate Change, on the Warm Homes programme, expects to procure a new demand-led scheme that tackles both the climate emergency and fuel poverty? It is crucial, the next iteration of the Warm Homes programme. There will be no gap in provision between the new and existing programmes, and it will take that fabric-first, Wales-first and low-carbon approach.

Finally, thank you, Dirprwy Lywydd, for enabling us all to contribute. I met Jack Sargeant last week to discuss the findings of his survey and the shocking feedback from his constituents, and I have shared that survey with Ofgem. I'm meeting the chief executive of Ofgem on Monday, and I will be reporting not only on his survey and its outcomes but also on the contributions made in this very important debate today. Diolch yn fawr i chi i gyd. 

Photo of David Rees David Rees Labour 4:11, 22 March 2023

(Translated)

I call on Jack Sargeant to reply to the debate.

Photo of Jack Sargeant Jack Sargeant Labour

I'm grateful, Deputy Presiding Officer. Can I firstly thank the Minister, Jane Hutt, for her dedication on this matter, and the dedication of the Counsel General for the Welsh Government as well? You've both grasped the seriousness and have understood the seriousness of the situation we have in front of us from the very start. Your response today emphasises that, and your letter to Grant Shapps, the Secretary of State, on 14 March emphasises that again. 

I'm going to try to quickly go through some of the contributions before reflecting on one final point. Thank you, Mark Isherwood, because I didn't know where the Welsh Conservatives stood, really, until today on this. I do thank him for his contribution today and for the confirmation of the support of the Welsh Conservatives on this motion. The contributions and support from Plaid Cymru, the Liberal Democrats and my backbench colleagues here, and of course the Minister, prove that this is bigger than politics, it's bigger than party politics; this is a life-and-death situation in front of us. And that's why, Mike Hedges, I will never get bored of you continuously, tirelessly working to bring it up, calling out injustice where you see it and standing up for the most vulnerable people in society. Mike Hedges, I will never get bored of you standing up for those people and calling out those standing charges; rightly so. 

Jane Dodds referenced the incredible profits of suppliers and the stark difference and the stark contrast for those people who have no money to top up their prepayment meters. We heard from Sioned Williams and Heledd Fychan the realities of having no energy, the need for compensation, the commitment from the Welsh Government to procure that Warm Homes programme, as Jenny Rathbone and others, too, referenced. Rhianon, you are absolutely right; the scale of the programme, the sheer scale of the programme, deserves a response from the UK Government. I will finish, Dirprwy Lywydd, by just reflecting on some final remarks, setting out for you, as Peredur Owen Griffiths said, how rigged the market is.

Let me just explain to you how broken the system is. In that same meeting, the same meeting with Ofgem where they told me that there is no problem and there's no evidence to suggest any wrongdoing—apart from in British Gas because they were caught on camera—I told them a little story and asked them what I should say to my resident who was in my local surgery, in tears in front of me because they had been forcibly switched over to a prepayment meter. We've all had stories similar to that. We've heard them from all benches today. Ofgem told me that they should complain. Well, you know, we all know, I know, they know that the complaints process is ridiculous. You must write to your supplier with your complaint, you must give them eight weeks to respond, and then you might get a response back, but probably not one that's worth while. You then have to take it to the energy ombudsman, with no defined period for resolution. How ridiculous is that? That's why Ofgem is not fit for purpose. How can the regulator only have this to say to a vulnerable person who has been incorrectly and forcibly switched and, that very day, is at risk of going without heat and light? I'm pleased that the Minister responded with the rolling out of the energy service. It's the best advice we can offer to people that will stop people reaching crisis point.

Llywydd, I will end now on this one final comment. We are here in the Senedd, but this is much bigger than the Senedd; this is life and death—one thing's for certain. And it's good to see all political parties in Wales here today and the Welsh Government supporting this motion, because there's one thing that we can not do for sure: we cannot let this national scandal continue. Diolch yn fawr iawn.

(Translated)

The Llywydd took the Chair.

Photo of Elin Jones Elin Jones Plaid Cymru 4:15, 22 March 2023

(Translated)

The proposal is to agree the motion. Does any Member object? No, and the motion is therefore agreed in accordance with Standing Order 12.36.

(Translated)

Motion agreed in accordance with Standing Order 12.36.