I took the opportunity on Saturday to question Ed Davey, the energy secretary, on the matter of prepayment meters ripping off the poorest in society and deepening fuel poverty in Britain.
Davey had come to the Lib Dem’s London region conference to speak about insulation schemes and the government’s Green Deal and talked about how these initiatives will help address fuel poverty.
They should do providing the take-up is high amongst the poorest people and is not concentrated in middle-earning households who have the time and inclination to browse through the brochures from various energy companies.
As companies and local authorities begin to market insulation offers to the public there is still much more work to be done to ensure doors in the most deprived areas are knocked on.
Yet what will make the greatest contribution to tackling fuel poverty is not insulation but tackling rip-off prepayment meters which have been foisted upon many thousands of poor people, often against their will.
Prepayment meters come with higher fuel bills thanks to exorbitant and completely unnecessary extra charges, allegedly to cover the costs of running the system but in reality it’s an additional money-spinner for fat cat energy companies and a stealth tax on those who can least afford it.
The energy utilities also employ a host of devious tricks to squeeze even more cash from the poorest such as lower power while emergency credit is running which extends the time emergency credit is in operation thereby increasing the ‘administrative’ charges, which is counter-productive to the customer but beneficial to company bosses bonuses.
While Davey spoke at the conference about what government is doing on insulation when faced with my question about perepayment meters he limited his answer to what the industry regulator Ofgem is doing. The brevity of his answer, saying only that Ofgem have been looking into this area, suggested that it wasn’t a top political priority which I found disappointing.
Ofgem have, to their credit, made it easier for prepayment customers in debt to swap supplier but that doesn’t begin to deal with the extra charge issue and, in any case, it is unlikely to have much impact as the poorest in society are least likely to exercise consumer choice to shop around for the best deal.
But the essential point is there is no justification whatsoever for treating people on prepayment meters differently than normal direct-debit paying customers by levying higher fuel costs on them, especially as most didn’t ask for the meters in the first place.
Some smaller suppliers have now entered the market offering prepayment customers switch deals where there are no additional charges so that the customer pays exactly what they would if they didn’t have a meter.
In the light of this development there is now no longer any excuse for the main energy companies to maintain any additional charges for meters. With this in mind the time is right for government ministers, led by Davey, to say to the companies loud and clear they must drop their higher charges to the poor.
I am pleased that Davey has simplified energy tariffs for everyone but this does not deal with the core issue of charging the poor more than other customers. Prepayment charges are a tax on the poor going straight into the coffers of private companies. Thatcherism in one clause. It is time this outrage was ended.
By Lester Holloway @brolezholloway
