Prepayment Meters: Pricing

Baroness Sheehan Excerpts

Tuesday 11th October 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes a very important point. Obviously, we are doing everything we can to make sure that there are no blackouts, but if that very unlikely eventuality comes to pass, of course we will want to do all we can to make sure that the most vulnerable are protected.

[Baroness Sheehan (LD)]

My Lords, I am sure the Minister will agree that although the situation now with the differential is not as extreme as it used to be, we could easily go back to a situation in which those on prepayment meters will be paying the highest tariff. If the Government were minded to, they could easily remedy the situation; for example, simply by removing the ability of Ofgem to set differential rates for people with prepayment meters. If they did that, that would sort the problem. Does the Minister agree that this would do the job and would get rid of the injustice whereby the poorest are being asked to pay the most?

[Lord Callanan (Con)]

I refer the noble Baroness to the Answer I gave earlier: using a prepayment meter is not the most expensive way, and many customers choose to do it for their convenience. The licensing conditions for Ofgem reflect the cost of serving different groups of customers. Of course, we keep these matters under review, but if we equalised it, then those paying by direct debit—often those who are fuel poor as well; there is a higher percentage of customers on that level —would end up paying more. There are no easy answers to this.