Prepayment Meters: Pricing

Baroness Kennedy of Cradley Excerpts

Tuesday 11th October 2022 Lords Chamber

Asked by

[Baroness Kennedy of Cradley]

To ask His Majesty’s Government what steps they are taking to ensure that individuals and families who pay for their energy through a prepayment meter are not paying the highest unit prices.

[Baroness Kennedy of Cradley (Non-Afl)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interest as director of Generation Rent.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, prepayment customers will benefit from both the energy price guarantee and the Energy Bills Support Scheme. Under the energy price guarantee, a typical household in Great Britain will pay around £2,500 a year on their energy bills from 1 October 2022. There will continue to be a small difference under the energy price guarantee between the unit cost for a prepayment meters and other types of payment methods to reflect higher costs to serve those customers.

[Baroness Kennedy of Cradley (Non-Afl)]

My Lords, using a prepayment meter is the most expensive way to pay for your energy, yet they are most likely to be used by the households least able to afford to heat their home. To cope, these families severely cut back on the energy they use, but their efforts are diminished because of the impact of the rise in standing charges, which remain the same regardless of the energy used. So I ask the Minister two things. Will the Government insist that there is a winter truce on energy suppliers forcing families already struggling to pay their bills to use prepayment meters to clear their debt? Will the Government make it clear to Ofgem that the continuing ratcheting up of standing charges to cover costs over and above what the standing charge should cover is unacceptable?