Energy Costs (Pre-payment Meters and Social Tariffs) Debate

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Lindsay Hoyle

Main Page: Lindsay Hoyle (Speaker - Chorley)

Energy Costs (Pre-payment Meters and Social Tariffs)

Lindsay Hoyle Excerpts
1st reading
Wednesday 19th October 2022

(1 year, 8 months ago)

Commons Chamber
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Kenny MacAskill Portrait Kenny MacAskill (East Lothian) (Alba)
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I beg to move,

That leave be given to bring in a Bill to abolish higher standing charges for customers with pre-payment meters; to require energy companies to provide social tariffs for low income customers; and for connected purposes.

Energy costs are the social and economic issue of our time, yet the steps taken to mitigate the pain of rises are far from adequate. Fuel poverty is soaring and winter is nearing. That Scotland, which is energy rich, should find over half its people fuel poor is absurd. The pain is likewise felt south of the border, even if the climate is less severe and the natural bounty less kind. Additional action is therefore required across the country, and urgently, especially for those most desperate and most vulnerable.

The £2,500 figure is not the cap but the average cost. Past support has provided modest finance, but it has been inadequate for most to keep pace with soaring costs. As bills escalate, fear is turning to horror in the knowledge that even that support is there only until April. Beyond the Government soundbites, hardship remains, and the cost of energy will bite many severely, if not devour them. Anomalies and injustices remain, which must cease. The most appalling is the perversity of prepayment meters having higher standing charges. A social tariff for those poorest and most vulnerable, as exists in many other countries, must also be introduced. That is what lies at the heart of the Bill. It is supported by both Energy Action Scotland and National Energy Action, who know the fuel poverty faced by those whose interests they represent, as well as by Age Scotland, which advocates on behalf of older people. I am grateful for their endorsement.

Scotland, with some 500,000 prepayment meters, is disproportionally affected, but the numbers across Britain are still significant with 4 million households having higher costs imposed by PPMs. Action to address these injustices is both right and necessary as fuel and energy are not luxuries but necessities. Their implications in our modern society go far beyond heating a home. Power and energy are required for so many basic aspects of life. The inability to provide them undermines the ability to function in our society or to maintain dignity and self-respect.

Of course, a new euphemism has entered our lexicon: the phrase “self-disconnection.” It is misleading and it is insidious. It is akin to those other phrases that are meant to hide horror or injustice such as collateral damage when what is meant is the killing of innocent civilians.

What does self-disconnection mean in reality? It is not someone who simply chooses not to switch on the heating, nor does it refer to the past generational—though no doubt fast-returning—parental demands to switch off lights or turn off the shower. Instead, it is the situation in which many now find themselves where they simply cannot afford either to buy a power card or to turn on the heating or any other powered appliance. It is not voluntary. It may not be imposed through any law or enforced at the barrel of a gun, but it is forced on them through circumstances over which they have no control. That is why the Bill and the actions that it requires are necessary.

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—

Lindsay Hoyle Portrait Mr Speaker
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Order. This is a ten-minute rule Bill. The hon. Member has gone beyond 10 minutes, so I hope he can sum up quickly.

Kenny MacAskill Portrait Kenny MacAskill
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Indeed. The fact that Scotland is energy-rich yet Scots are fuel-poor is absurd, and it is shameful that that should be replicated across the UK. Worse than that is the perversity that the poorest and most vulnerable pay the most. That must end, and this Bill will ensure that.

Question put and agreed to.


That Kenny MacAskill, Neale Hanvey, Richard Burgon, Angus Brendan MacNeil, Mr Alistair Carmichael, Liz Saville Roberts, Margaret Ferrier and Alison Thewliss present the Bill.

Kenny MacAskill accordingly presented the Bill

Bill read the First time; to be read a Second time on Friday 24 March 2023, and to be printed (Bill 166).