§ Mr. Hilary BennTo ask the Secretary of State for Trade and Industry what steps he is taking to ensure that low-income consumers using pre-payment meters are charged the same amount for their gas and electricity as those who pay by direct debit. [117509]
§ Mrs. Liddell[holding answer 3 April 2000]: Provision of a gas or electricity supply through a prepayment meter (PPM) is inherently more expensive than via a standard meter because the meter itself is more complex and because of the additional payment infrastructure that is necessary. We have, however, encouraged the regulator and the energy supply industry to bring PPM tariffs closer to the cost of standard credit, so as to reduce the burden on those PPM users who may be on a low income. As part of the new price controls on the Public Electricity suppliers, the Office of Gas and Electricity Management (Ofgem) has proposed a new licence condition limiting the maximum additional annual surcharge for a PPM to £15 above the standard credit tariff. For gas, Centrica, which has about 90 per cent. of gas PPMs, has already reduced its PPM prices so that they are the same as those paid by standard credit customers who have not paid promptly enough to receive a discount for quick payment.
I should point out, however, that the use of PPMs should not be taken as a proxy for fuel poverty: a wide range of people use these meters because they like the control it gives them over payment. Many PPMs are in second homes or holiday lettings. About half of those reckoned to be fuel poor are pensioners; and yet less than 10 per cent. of pensioners use a PPM.