BRITISH Gas, EDF and other members of the Big Six have been breaking into homes, effectively disconnecting families and leaving them to freeze – use whatever variant of company-speak you like to describe it. So where is the outrage?
For one day, anyway, there was some – on the normally reserved Today Programme, presenter Justin Webb asked “What on earth were they thinking?”
Actually, the real puzzle is what government, media, professionals and watchdogs were thinking if they expected loopholes not to be ruthlessly exploited by companies with extreme form in fleecing their own customers.
The mass “self-disconnection” facilitated by forced installation of pre-payment meters – revealed by The Times’ undercover investigation – comes exactly a decade after the “mis-selling” scandal which was the direct result of scripts issued to staff guiding “vulnerable” customers deliberately onto higher electricity tariffs.
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And the root cause of them both? The need to make bumper profits in a sector too vital to be left to the sharp practice of the marketplace in most of northern Europe. Yet amidst all the current hand-wringing with hindsight about the brass-necked iniquity of firms breaking in (with warrants) while householders were at work, there is no mention of the role played by privatisation, deregulation and the Get Out of Responsibility Free card enjoyed by “nothing to do with us, guv” Westminster.
Astonishingly, Ofgem boss Jonathan Brearly actually backed forced installation just days before the scandal struck, telling the Business, Energy and Industry Strategy Select Committee, “There is a group of customers who can afford to pay their bills but don’t. In those circumstances, mandatory switching to a prepayment meter is a reasonable policy.”
Obviously, there has since been back-pedalling aplenty. It seems “vulnerable” customers shouldn’t have been affected and may now receive compensation. Yet the “vulnerable” are obviously the folk most likely to fall behind on energy payments. So, the system was working as intended – a cosh to get poor customers off their books.
About 4.5 million people in the UK last year had prepayment meters and most were earning less than £18,000. But while the average annual direct debit bill rose to £1,971 last May, the average prepayment meter bill rose to £2,101. Up to £360 of that was standing charge rises – a regressive flat-rate levy that must still be paid, even when prepayment meters are disconnected or empty. It is outrageous and essentially the poll tax of our time, but with less visibility and a lot less political traction.
Standing charges may be the final straw prompting self-disconnection – yet even then, when people can’t stay warm, cook food, wash themselves properly or clean clothes, the standing charges keep racking up a debt that must be paid off before reconnection. A dire Catch-22 situation faced by three million people who ran out of prepayment meter credit last year. So, the system has been stacked against the poor for years.
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But the business of breaking into homes to force meter installation is relatively new. According to the ex-boss of Npower Paul Massara, prepayment meter installation soared when regulators essentially outlawed winter disconnections. It’s worth pausing to take that in.
A former Big Six boss admits that companies making billions will always resort to sharp practice unless watched like hawks. Mr Massara added that companies shouldn’t have put meters into vulnerable homes without vulnerability tests. Purlease. If vulnerability was taken seriously, energy would be re-nationalised tomorrow.
In fact, sub-contractors were paid commission on each meter installed – as one British Gas whistleblower said debt recovery is now the "be all and end all" of the company. Apologists suggest the Big Six simply lost track of what was being done in their names. But who agreed a system that so clearly incentivised “self-disconnection?”
And where were the professionals? Did alarm bells not ring as magistrates and sheriffs rubber-stamped 187,000 forced meter installation applications in the first six months of 2022? Apparently, they presumed checks had been made about health, disability, vulnerability, etc. Useful tip. When swimming with these sharks, presume nothing.
And what about the useless watchdog – clearly on side with companies, not consumers? Business Secretary Grant Shapps felt his collar on Sunday, saying “the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them”
So, it’s official. Energy companies are ceaselessly at it.
Indeed, why else did a Tory laissez-faire government introduce a price cap? Without it companies were simply pitching prices as high as they liked and raking in the profits. After 2019, many companies simply shifted price-rises to the un-capped element of bills – standing charges – which thereafter doubled. Cute.
And by the by, Scots – producing the lion’s share of renewables – have had to pay the highest regional standing charges. Then, when winter disconnection became unlawful, the smash-and-install prepayment meter scam kicked in.
There is a pattern here. Private energy companies fleece customers relentlessly till their wheeze is uncovered, at which point they apologise, express amazement and desist whilst devising the next scam, knowing the public may not forgive but will soon forget.
And we do. Aided and abetted by public service broadcasters. Even though the Business Secretary was her main guest yesterday, Laura Kuenssberg didn’t ask a single question about the prepayment meter scandal. The story is already old and the Big Six are probably off the hook, planning their next wheeze – as former Ofgem boss Dermot Nolan admitted on Radio Four, smart meters are fast becoming another type of prepayment system.
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And so it goes on. It’s how profit-maximising companies in the deregulated wild west of Tory Britain habitually operate.
So, here’s what Grant Shapps should have been asked. Will you scrap prepayment meters? If not, will the Chancellor abolish standing charges on prepayment meters? And since energy companies circumvent every half-hearted constraint placed upon them, why not renationalise energy supply?
Sadly, no political party will go there. So, before the decade’s out, we’ll be back here again. Mark the calendar.
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