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The poor pay more - a year in review

It has been a year since the launch of The poor pay more: Prepayment meters and self-disconnection report in December 2015. This took place in a parliamentary briefing attended by MPs, representatives from Ofgem and the Big Six energy suppliers, amongst others. Since then we have been encouraged by the response and have subsequently met with Ofgem and five of the Big Six energy suppliers to discuss our findings further.

Here we take a look back at the impact this has had over the past year:

December 2015: An Early Day Motion (EDM) called ‘Christians Against Poverty Report on Prepayment Meters’ was tabled by Siobhain McDonagh commending the findings and recommendations of the report. This has since been signed by 39 MPs.

February 2016: CAP met with Dawn Butler, MP for London Brent Central, who had already been working to raise the issue in parliament. Following the meeting she said, CAP’s excellent The poor pay more report highlights the hardship and inequality of this expensive form of energy supply and I will continue to fight for a better deal for those consumers who need it most.' Following the launch of her PrePay Rip Off campaign, more than five thousand of CAP’s supporters signed a petition to raise awareness of this issue.

May 2016: By May, we had attended several workshops and roundtables with key stakeholders in the energy industry to raise the issue, as well as meeting with five of the Big Six energy firms. The report laid grounds to discuss changes to policy, which in turn saw two of the Big Six companies drastically reduce the number of days it takes before action is taken if there has been no top-up.

4 reasons - poor pay more

 

June 2016: In June, the Competition and Markets Authority (CMA) published their final report following a two year investigation into the energy market. The report acknowledged that prepayment is not often a choice for low-income households, and that they face higher levels of excessive pricing. CAP responded to welcome the recommendations and transitional price cap and highlighted that more needed to be done to address consumer welfare more broadly. This month CAP was also invited to meet with Ofgem to discuss our insights into the support needed by vulnerable customers.

July 2016: Rachel Gregory, CAP’s External Affairs Analyst, spoke on a panel at an All-Party Parliamentary Group (APPG) on poverty event about the wider support foodbank visitors need. She was asked to speak about the poverty premium and was able to raise the contribution of prepayment meters to this within the discussion.

September 2016: Dawn Stobart, Director of External Affairs, spoke on a panel at Credit Strategy’s Utilities and Telecoms Conference. Dawn shared CAP’s expertise about how to identify vulnerable customers and discussed the impact of smart meters on vulnerable customers alongside Citizens Advice, E.On and Ofgem. CAP also responded to Ofgem’s Helping energy customers make informed choices consultation to echo the importance of consumers being able to make informed choices and highlighting that specific attention needs to be given to the ability of those on prepayment meters to do so.

October 2016: Energy UK launched their improved standards for prepayment customers. These ten principles encourage energy companies to monitor their customers on prepayment meters to identify vulnerable customers, and when a prepayment meter is installed for debt reasons, energy suppliers will provide a package of support including tariff and energy efficiency information. These measures are another step towards achieving greater opportunities and fairer tariffs for prepayment customers.

November 2016: Ofgem finalised their proposal to take action to reduce the impact of charges when a prepayment meter is installed under warrant. This sought to introduce two-tier protection by capping warrant charges for all consumers and prohibiting charges for those in the most vulnerable situations. CAP had inputted into the development of these proposals through the consultation process and welcomed this as an important step, but again raised our wider concerns about the experience of prepayment meter users.

December 2016: Looking ahead, the future for those on prepayment meters still looks uncertain. We have seen much progress made and attention given to this important issue including several suppliers charging the same tariff on smart prepay as those on credit. However, while smart meters present opportunities to address many prepayment issues with the rollout not completed until 2020, there remains an urgency to tackle the issues facing prepayment customers in the present and lay the groundwork to ensure smart meters will benefit vulnerable customers. The additional steps being taken by energy firms to protect their vulnerable customers is encouraging, but with lots still needing to be done to protect the needs of the most vulnerable we will be continuing this work into 2017 and beyond. 

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