Energy customers with prepayment meters (PPMs) will no longer be charged more for bills than those who pay by direct debit, the Chancellor Jeremy Hunt is expected to announce this week.
Households with prepayment meters have been subjected to higher bills because the energy regulator Ofgem has said it costs providers more to serve these homes.
However, many customers who rely on PPMs are vulnerable and live in fuel poverty, meaning the price discrepancy hits them even harder than it otherwise would.
i has exposed how energy firms have forcibly installed PPMs in half a million of the UK’s poorest homes since the nation emerged from Covid lockdowns. Debt collection agencies were handed 490,000 warrants to force their way into properties and fit the equipment between July 2021 and December 2022 alone, this newspaper revealed.
Afteri uncovered the PPM scandal, the Government ordered firms to end the “harmful and anxiety-inducing practice” of forcibly moving people on to the controversial meters without taking “every step” to support them with their bills. The ban will last until 31 March. Meanwhile, Ofgem has ordered suppliers to remove the meters and pay compensation where rules have been broken.
Mr Hunt, who will unveil his 2023 Budget on Wednesday, is poised to bring charges for PPM customers in line with those for direct debit customers. The change, believed to be coming into effect in July, will protect more than four million households from paying the “PPM penalty”, saving them about £45 each.
“It is clearly unfair that those on prepayment meters pay more than others,” the Chancellor said. “We are going to put an end to that.”
Ed Miliband, Labour’s shadow climate and net zero secretary, welcomed the move, but said the delay would be “cold comfort for the millions of prepayment customers who have been paying higher energy bills as a result of the Government’s indecisiveness”.
The ban on forced installations must remain in place beyond the end of March, he added.
Simon Francis, co-ordinator of the campaign group End Fuel Poverty Coalition, said: “This is a welcome surprise, but we need to see the detail to make sure it applies across the standing charge as well as the unit cost.
“The fact is that it also ends up being another payment from the taxpayer to the energy firms and is no replacement for a fundamental reform of the energy market.”