Ofgem's Chief Executive, Jonathan Brearley, announced on 14 March that the ban on the forced installation of prepayment meters is being extended beyond the end of March, according to a written statement by Jane Hutt MS, the Welsh Government's Minister for Social Justice, published on 28 March 20231. The ban will lift "only when and if" firms follow Ofgem's new code of practice, the statement says1.
The minister said the existing rules intended to protect the most vulnerable "are clearly not working as intended"1. She had written to Grant Shapps, Secretary of State for the Department for Energy, Security and Net Zero, on 13 March calling again for the removal of prepayment meters, and for the UK Government to follow the water industry, where companies are prohibited by law from disconnecting or restricting supplies to households who owe them money1. She also called for a social tariff and for magistrates' courts to permanently end bulk approving warrants1.
"I have been calling for this ban to be extended and am pleased Jonathan Brearley, Ofgem's Chief Executive announced on 14 March the ban is being extended beyond the end of March and will lift 'only when and if' firms follow Ofgem's new code of practice."
The statement also covers wider support. The Energy Price Guarantee will remain at £2,500 until July for a typical household, which the minister welcomed, but she said the £400 Energy Bill Support Scheme payment ends in April, meaning a typical household pays £400 more for energy from April1. She said bills in Wales are higher because of the age of the housing stock and extremely high standing charges, and that the "prepayment penalty" was ended in the budget by bringing prepayment energy charges in line with direct debit customers1. She has called for the removal of standing charges for prepayment customers and for the benefits and cheaper rates available on standard credit meters to be available on prepayment meters1.
On Welsh Government support, £1.2m was given to credit unions in 2022-23 to expand lending, in addition to £500k per annum to promote the sector's growth1. An extra £18.8m was secured for the Discretionary Assistance Fund, taking the total budget for 23/24 to £38.5m1.
| Change from 1 April 2023 | Detail |
|---|---|
| Emergency Assistance Payments | One set of rules for all payments |
| Award uplift | 11% |
| Applications | Up to three times in a rolling twelve-month period, with a seven-day gap between applications |
Why it matters for households
For a household facing forced prepayment meter rules, the extension means involuntary installations should not proceed while the ban holds, and the moratorium on involuntary prepayment meter installations continues past the end of March. The conditions attached to lifting it sit within Ofgem's wider prepayment and vulnerable customer rules, and the conduct of suppliers on debt and prepayment is covered under supplier conduct on prepayment meters and customer debt. The minister said householders subject to forced use of a prepayment meter, through the warrant process or because they were encouraged to do so without appreciating alternatives, must be offered the chance to revert their meter at no cost1. The statement does not say who would fund that, or how it would be enforced.
The ending of the £400 payment in April raises the cost of energy for a typical household by that amount, the statement says1. For homes already on prepayment, the ending of the prepayment penalty in the budget narrows the gap with direct debit customers, but standing charges remain, and the minister has called for their removal1. Details of how prepayment meters work, including emergency credit and repaying energy debt through a prepayment meter, sit alongside the Energy Price Guarantee and the closed Energy Bill Support Scheme.
What happens next
The minister said she is meeting Mr Brearley again at the end of March, and will raise debt collector accreditation with energy suppliers when she meets them again at the end of March1. She met Catherine Brown, Chair of the Enforcement Conduct Board, in mid-February and supports the Board's calls for debt collectors employed by energy suppliers to be accredited by the ECB1. The statement does not give a date for when the ban will lift, or the terms of the code of practice firms must follow.