The House of Commons agreed a motion on 15 December 2022 calling on the Government to outlaw self-disconnection, in a backbench debate opened by Anne McLaughlin MP, the member for Glasgow North East1. The motion stated that prepayment meter customers "are not afforded the same rights when in energy debt as customers who pay in arrears", and that a prepayment customer is disconnected automatically once they exceed £10 of debt1.
"strongly urges the Government to outlaw self-disconnection to ensure that the poorest and most vulnerable customers are not left without basic energy provision"
McLaughlin said the supply stops once a customer goes over the £10, or in some cases £5, of emergency credit applied to each meter1. She cited figures from Citizens Advice Scotland showing roughly 15% of people in the UK are on prepayment meters, against 19% in Scotland and over 20% in Glasgow, and said Scotland has 500,000 prepayment meters, almost a fifth of its people, against 4 million across the UK as a whole1. She also said 13% of smart meters are now on a prepayment tariff, and that households moved to a prepayment meter this year will collectively spend £49.6 million more over the coming winter than they would have as direct debit customers1.
On costs, she said the rest of the UK will pay on average £2,500 a year per household for energy bills while Scotland will pay £3,3001. A Commons Library debate pack published on 14 December 2022 gives different figures for the Energy Price Guarantee period from 1 October to 31 December 2022, showing prepayment customers paying higher gas unit prices and higher standing charges than direct debit customers, but a lower electricity unit price3.
| Standing charge, pence per day, GB average including VAT | Electricity (single rate) | Gas | Dual fuel |
|---|---|---|---|
| Direct debit | 46.4 | 28.5 | 74.9 |
| Standard credit | 52.4 | 33.5 | 85.9 |
| Prepayment meter | 51.4 | 37.5 | 88.9 |
Source: Commons Library debate pack, 14 December 20223
The debate pack records that Ofgem's November 2022 letter to suppliers expressed "concern over remote switching of smart meters to prepayment mode"3. McLaughlin said Ofgem called such practices "unacceptable" and said it would take action if they continued, adding: "Six weeks after it said that, they are continuing"1. She also said 60,000 new meters were installed across the UK in the six months to March 2022, reversing a long-term fall, and that the department did not know how many people are being put on prepayment meters now1. On the Energy Bill Support Scheme, she said a reported £84 million is not reaching half a million households1.
The End Fuel Poverty Coalition reported that OVO Energy introduced a temporary ban on forcing people onto prepayment meters over Christmas, but "insists the practice will resume in the new year", and highlighted its suspension of debt recovery until at least March 20232. The coalition also reported that energy firms had secured almost 500,000 court warrants to install prepayment meters in the homes of customers in debt2.
Why it matters for households
For a household on a prepayment meter, running out of credit means the supply stops, and the debate set out how small the margin is: £5 or £10 of emergency credit1. That differs from paying in arrears, where disconnection is described as a last resort1. The debate pack notes that in 2020 Ofgem reported 4.3 million electricity and 3.4 million gas prepayment customers, and that its data showed 1 in 7 customers self-disconnected during 20193. It also records that the number of people Citizens Advice saw in 2022 up to October who were unable to top up a prepayment meter was more than for the whole of the previous five years combined, and that prepayment meters installed for debt ran at 700 to 900 per month in nearly every month since November 2020, up from 400 to 500 in most months in the previous three years3. The rules covering prepayment meters and vulnerable customer protections and forced prepayment installation sit with Ofgem, which requires suppliers to identify self-disconnecting and vulnerable customers and offer credit and additional support3. For a home, the practical effect is that energy independence depends on keeping credit on the meter rather than on a supplier's forbearance, and emergency credit is the buffer when it runs out.
What happens next
Anne McLaughlin introduced a Private Members' Bill on Pre-payment Meters (Self-disconnection) under the Ten Minute Rule; it was read a first time on 19 October 2022 and is due for Second Reading on Friday 24 March 20233. Citizens Advice called on 30 September 2022 for a "winter moratorium on moving customers to prepayment meters under warrant and on switching smart meters to prepay in an attempt to recover debt", to remain in place until April 20233. No Government decision to outlaw self-disconnection has been reported.
Sources3 cited
- Prepayment Meters: Self-Disconnection - Hansard - UK Parliament, hansard.parliament.uk
- Pre-payment meters pressure mounts on government and suppliers - End Fuel Poverty Coalition, endfuelpoverty.org.uk
- Subject:, researchbriefings.files.parliament.uk