OPINION: Victory over scandal of prepayment energy meters

Over 11,000 households across Peterborough are set to benefit from action to tackle the scandal of prepayment energy meters.

The government was finally forced to act to cut charges in the Budget after a long campaign by Citizen’s Advice, Martin Lewis and many other debt campaigners.

No-one should have to pay more to heat or power their home just because they don’t have much money. Yet that is the reality for around four million people across the UK, including many in Peterborough and Cambridgeshire. Prepayment meter customers typically pay more for their energy than those who pay through their bank.

This scandal was one of the first campaigns I gave my support to after I became Labour’s candidate to be our next MP last year having met families across the city struggling with rising energy costs, something made much more difficult if you are charged additional premium associated with a prepayment meter.

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I first came across this scandal during the financial crash in 2008 when rising prices and the credit crunch highlighted the additional costs of prepayment meters.

The last Labour government said it would hold Ofgem to account but plans for new rules were dropped by the Conservative government in 2010.

The cost-of-living crisis has affected all of us with rising energy bills, the cost of the weekly shop and petrol hitting the pockets of many local families.

According to government statistics, living standards are expected to fall by 6 per cent over this fiscal year and next as inflation outstrips income growth. This is the biggest drop in living standards since records began. Wages are not due to recover to 2008 levels until 2026.

For too many families in Peterborough, life is getting tougher with rising costs and falling wages. This makes the indignity of charging families on prepayment meters even worse. The government is finally taking action but only after years of being warned of the consequences of this economic hit.

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Research by Citizens Advice has found that 3.2 million people across Great Britain ran out of credit on their prepayment meter last year because they couldn’t afford to top up. 

And government inaction has made the situation worse. Based on Ofgem figures, Citizens Advice also estimates that 600,000 people were forced onto a prepayment meter because they couldn’t afford their energy bills in 2022.

The recent media expose of big energy companies forcing themselves into people’s homes to install prepayment meters because they could not pay their bills brought the issue to a head.

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Labour has called for a ban on the forced installation of prepayment meters alongside scrapping the energy premium on them.

Yet, even with the Budget announcement, there is a sting in the tail. Families on prepayment meters will still have to continue paying more for another three months whilst government changes the rules.

When we have our richest Prime Minister in history installing a new heated swimming pool at his house I am not surprised Ministers are out of touch with working families in our area.

We need a long-term plan to help people through the immediate cost-of-living crisis and to start bringing the high-skilled, high-wage jobs that we need to the city.

Andrew Pakes is the Labour & Co-operative Parliamentary Candidate for Peterborough