Fiona
Bruce MP raises the problem of fuel poverty in Parliament
Fiona Bruce MP
spoke in Parliament recently about the problems faced by many of the poorer and
more vulnerable in society who end up on higher tariffs through use of pre-payment
meters for their utilities.
Speaking in Parliament, Fiona Bruce
said:
I recently had the privilege
of launching in this House a report entitled “The poor pay more”, by the debt counselling
charity Christians Against Poverty. It outlines concerns that I want to express
today about a specific issue, which is the prepayment metres that 10.8 million
people across this country use.
It is a sad fact that the
poorest in our country pay more for their fuel. As the CAP report highlights,
the reason is that people on prepayment meters face higher tariffs and charges
than those who pay in other ways. They simply cannot get on to the best
tariffs, so they are forced to pay more, and they often have to turn to payday
lenders to do so. Their difficulties are compounded by the fact that prepayment
meters are predominantly used by vulnerable consumers: lower-income households,
the unemployed, those with long-term disability and often those with mental
health challenges, terminal illness or learning disabilities.
I do not have time to cite
CAP’s statistics, but they reveal how extensive the problem is. Prepayment
meter consumers are more susceptible than others to consumer detriment, because
they find it more difficult to engage
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with suppliers, or to switch
to or obtain the best tariff. Higher tariffs are not just a penalty for those
in arrears; they affect thousands of people who are unable to engage
effectively and switch. Those people need more support to engage effectively,
and I hope that the Minister will consider how that support can be provided.
Ofgem estimates that PPM users
pay an extra £300 a year compared with those on the cheapest tariff. Moreover,
even if those people can engage effectively, they face other significant
barriers that prevent them from switching to more competitively priced deals,
such as charges for the installation or removal of a PPM, credit card checks
and security deposits. Put simply, this is a matter of social justice; the poor
should not pay more for such a basic and important commodity.
The unfairness of the
situation is starkly illustrated by the statistics in CAP’s report, and behind
every statistic is a human story: 8% of PPM users never use their heating in
the winter, and a quarter use it for less than two hours a day. People miss hot
meals, or do not wash themselves or their clothes. Many people fall behind in
making payments, or have no energy supply at all.
Official disconnection figures
hide the true statistics. In 2015, there were only 192 instances of official
disconnection. However, in most cases where a customer falls into difficulties,
energy suppliers install a PPM instead of disconnecting a supply. Then when
customers cannot afford to put money into their meter, they are classed as a
“self-disconnection”, so they do not fall within the official figures. The
number of such self-disconnections is high. In 2014, approximately 300,000 new
electricity PPMs and 320,000 new gas PPMs were installed. Customer Focus
estimates that one in six PPM users are self-disconnecting. Current methods of
measurement simply do not detect the level of disconnection that exists or the
human stories behind each disconnection.
I could go on, Sir Roger—there
are other points I would have liked to make, for example the need for clarity
about standing charges over the summer months. Currently, when PPM users put
money in as winter approaches, they often find that all their money has gone,
simply to pay for the standing charges. That situation needs to be looked at,
and people need help to understand it.
We also need to ensure that
more innovative social and smart tariffs are introduced. Steps should be taken
to ensure the introduction of smart meters, which promise infrastructure
savings for suppliers and cost reductions for PPM users. They should be given
as a priority to those who currently have PPM meters. However, with full smart
meter roll-out not expected for another five years, action is needed today to
ensure that the price differentials that 10.8 million PPM users currently
experience are eradicated.
