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Prepayment Meters

Volume 506: debated on Thursday 25 February 2010

Prepayment meters play an important role in helping some customers to control their energy expenditure and should remain an option for consumers. Smart meters will in due course replace current prepayment meters and we are committed to rolling out smart meters to all households. Meanwhile, the replacement of the older-style token prepayment meters was due to be nearly completed by the end of 2009. I await an update on the present position from Ofgem.

There is a lot of concern about energy prepayment meters because they are used mainly by those on lower incomes. Is it right that such people should pay more for their gas than those who are better off? When will prepayment meters be entirely phased out? Phasing them out would be a good thing, and that idea is warmly supported by Labour Members.

For the reasons that I have given, I do not, regretfully, agree with the hon. Gentleman about the presence and use of prepayment meters, but they will all be gone when we have smart meters by the end of 2020. In the mean time, one of the Ofgem licence conditions that I mentioned earlier was to rule out any unfair discrimination against users of prepayment meters. As a result, the differential between prepayment meter and standard credit rates has effectively been eliminated.

Does my hon. Friend agree that, while we wait for smart meters, it is right that the Government should intervene to prevent the most vulnerable people from being ripped off for having to use prepayment meters?

Yes; we called on Ofgem to carry out that probe, we supported the licence conditions that it proposed and I am pleased that they have been implemented.