It took an expose by the Times to galvanise Ofgem into action. The newspaper’s investigation revealed how third parties, working on behalf of British Gas, were breaking into the homes of vulnerable customers and attempting to install costly prepayment (prepay) meters, in breach of an Ofgem supplier’s licence condition.
The investigation followed a plethora of warnings from charities that large numbers of households were being forcibly moved onto the pay-as-you-go meters after falling behind with their bills. It came just weeks after new data was published estimating that 600,000 households had been moved onto the meters during 2022, up from 380,000 in 2021.
All of which it chose to ignore until the public outcry provoked by a team of journalists forced it to open its eyes. It has now developed a Code of Practice (CoP) governing how these devices are installed into the homes of customers who don’t want them.
Anti-poverty campaigners have described the CoP as ‘much-needed’ but have pointed out that its biggest weakness is that it is voluntary. Until it becomes part of Ofgem’s licence conditions, suppliers are under no obligation to adhere to it, they argue. And even then, suppliers may choose to side-step it, in much the same way that they have spent the last 12 months dodging Ofgem’s key licence agreements.
To be fair, all UK energy suppliers have agreed to stick to the code, once they have been cleared to resume the forced installation of prepay meters. But given that it fails to address the crisis in the domestic energy market, it is hard to see how the volume of forced installations will fall, especially now that the £400 Energy Bills Support scheme has ended, and some analysts are predicting that energy bills will remain high for a decade.
Should energy bills start to fall in July, as the government expects, it should not be forgotten that the average household will still be paying almost twice as much for their energy than they were in 2021. Throw in grocery inflation, currently at 19%, and rising interest rates, it’s only a matter of time before more households will fall into energy arrears.
What would make a difference, in light of a cost-of-living crisis that shows few signs of abating, is if Ofgem ordered a permanent ban on the forced installation of prepay meters and established a social energy tariff. That way, more cash-strapped households could afford their energy, and suppliers would have no reason to complain about sitting on a £2.5 billion mountain of bad debt, which they are then forced to pass on to their customers.
