Energy Costs (Pre-payment Meters and Social Tariffs)

Disconnection, or more likely self-disconnection, has widespread implications that are horrific yet masked by benign euphemisms. It is not simply the horror of choosing between heating and eating this winter, although that alone is bad enough. The implications of being unable to access power go far beyond that. It is the mother who wishes to wash her children’s clothes for school, so she can keep them clean and smart. It is the youngster who needs to charge their phone to access employment opportunities they desperately seek. It is the parent who wants to power up the iPad given by the school, so that their child can improve their education and hence their life chances. It is the dialysis patient who requires to switch on the machine that they require for life itself, never mind others suffering from cancer or sick from other illnesses and who feel the cold more, yet are unable to provide, or are even denied, that modest comfort during convalescence—or even, shamefully, at end of life.

Compounding that injustice are accrued standing charges even when users have been sparing in their consumption. Many will find that their power card or savings are immediately consumed by paying debt before they get even a modicum of power. As I said, fuel and energy costs are about more than just heating or eating. They are about dignity, they are about opportunity, they are about life itself. This has not come about through some climatic disaster as has tragically afflicted Pakistan. Nor can it be blamed solely on Putin and the war in Ukraine. These are policy issues overseen by the UK Government where injustice and iniquity have been allowed to take root. Much of that can be addressed by the ending of higher standing charges for pre-payment meters, and through the implementation of a social tariff for those with the least and who are most vulnerable. After all, it is not just unjust but perverse that those with least should pay most for energy, especially when those with most are paying least in their tax burden.

I accept that some have found pre-payment meters helpful for budgeting, although the strength of that argument has been sapped, if not ended, by the arrival of smart meters. There is also the situation of private landlords who wish to ensure that they avoid costs if a tenant should depart without paying their bill. Again, smart meters offer some solution, but again the issue is not the meter itself but the tariff charged. Some 13% of smart meters are on pre-payment tariffs. Technology is meant to liberate us, not perpetuate injustice. Pre-payment meters, whether smart or otherwise, can remain. What must end are the higher standing charges and tariffs. They are simply unacceptable anytime, but most especially now.

Both Ofgem and energy suppliers testify to the technical capacity to make that change. What is required is the political will, which is why I have proposed this Bill. It has widespread support within and without Parliament. It would, of course, require a very modest tariff increase for those paying on credit, but the numbers involved, and the amount of energy consumed through PPMs, make it a very small burden upon those of us more fortunate. Likewise, a social tariff is a concept whose time has come. Ending the burden on the poorest and most vulnerable through changes to PPM tariffs must be matched by the availability of a social tariff, one where the poorest and most vulnerable can access energy and at affordable rates. It is a concept that has the support of the organisations I mentioned earlier with regard to action on pre-payment meters—Energy Action Scotland, Age Scotland and National Energy Action—and is also argued for by the Fuel Bank Foundation and Fair By Design, organisations working for those at the heart of the fuel and energy crisis who are being hit hardest.

It is not impossible, let alone unheard of—even before the current energy crisis and emergency measures being invoked, other countries provided for the poorest and most vulnerable. A federal law in Belgium

“protected residential consumers with low income or precarious situation”.

That social tariff saw almost 10% of electricity users pay 34% less and a similar number of gas users pay between 38% and 48% less. Those were the poorest and most vulnerable and certainly those facing the most acute need and difficulties. In Belgium, the social tariff covers people receiving minimum income benefits; people receiving an income replacement benefit; people with disabilities receiving integrated support; and people in receipt of an income guarantee benefit. Who would quibble with those priorities or dispute that those people have additional need for fuel and energy that requires them to be charged on a tariff that recognises that?

Belgium is not alone in operating a social tariff. Again, even before this crisis, Spain provided a social bonus scheme whereby a 25% discount was available on electricity bills for vulnerable energy customers, including disabled customers, with a 40% discount for severely disabled consumers. Other countries also take the appropriate action, even if criteria, eligibility and amount may vary. However, the urgent need remains that, in this time of crisis, the poorest and most vulnerable require the most support and should pay the lowest tariffs. That and the injustice of higher charges being imposed upon them must end.

That is why the Bill is necessary. Energy, fuel and power are fundamental—