Ofgem has been criticised in the House of Commons for allowing remote switching of smart meters to prepayment mode to continue, six weeks after the regulator described the practice as unacceptable. The criticism came during a backbench debate on prepayment meters and self-disconnection on 15 December 20221.
The debate was secured by Anne McLaughlin, MP for Glasgow North East, and opened with a motion calling on the Government to outlaw self-disconnection, the term used when a prepayment customer's supply stops because they cannot top up. The motion states that a prepayment meter customer is automatically disconnected when they exceed just £10 of debt, while customers who pay in arrears are given time and support before any disconnection1.
"Ofgem called those practices "unacceptable" and said it would take action if they continued. Six weeks after it said that, they are continuing"
The debate heard that remote switching avoids the need for a warrant, because a warrant is required only to gain entry to a property, and a switch carried out remotely requires no entry. The Good Law Project has asked whether the Government will instruct Ofgem to require suppliers to halt all new prepayment meter installations, including remote switching of smart meters1.
Figures given in the debate set out how prepayment use varies across the UK:
| Measure | Figure |
|---|---|
| People in the UK on prepayment meters | roughly 15% |
| People in Scotland on prepayment meters | 19% |
| People in Glasgow on prepayment meters | over 20% |
| Prepayment meters in Scotland | 500,000 |
| Prepayment meters in the UK | 4 million |
| Smart meters on a prepayment tariff | 13% |
| New meters installed UK-wide, six months to March 2022 | 60,000 |
The debate also heard that households moved to a prepayment meter during 2022 will collectively spend £49.6 million more over the coming winter than they would have as direct debit customers, and that average annual household energy bills in Scotland will be £3,300 against £2,500 for the UK as a whole1. On disabled customers, the debate heard that 50% of disabled people on prepayment meters say they ration energy use so they do not lose supply, 26% go off supply to save money, and 14% went off supply because they were not physically able to top up due to their impairment1. MPs also raised the £66 monthly energy bill discount, saying a reported £84 million of that money is not reaching half a million households1.
Why it matters for households
For a household on a prepayment meter, the point at which supply stops is set by the meter's emergency credit, described in the debate as £10 or, in some cases, £51. That is a different position from paying by direct debit, where disconnection is described as a last resort after debt has built up. The practical effect is that a home's energy independence rests on a topped-up balance rather than on a supply that continues while a debt is repaid. The debate also set out that prepayment customers pay more per unit and higher daily standing charges, and pay in advance rather than in arrears1. For households already moved to prepayment, the rules on prepayment meters and vulnerable customer protections and on whether a smart meter can be switched to prepayment without consent are the ones that apply. Households disputing a switch or a supplier's conduct can use the energy complaints and redress routes, and the Ofgem page sets out what the regulator covers. The debate noted that prepayment use is higher in Scotland than in the UK as a whole1.
What happens next
The debate record does not set out a date for Ofgem to report on action against remote switching, and no deadline for a Government response to the call to outlaw self-disconnection is given. The Hansard record shows the Minister indicated assent during the debate, but no commitment or timetable is recorded in the text1.
Sources1 cited
- Prepayment Meters: Self-Disconnection - Hansard - UK Parliament, hansard.parliament.uk