Why the problem of prepayment meters won’t go away for vulnerable energy customers
One thing the energy industry agrees on in theory – if not, it turns out, in practice – is that forcing prepayment meters on vulnerable customers is unacceptable.
The widespread revulsion at British Gas debt collectors forcing entry to the homes of families is deserved and universal.
Less clear-cut is what to do about the underlying cause.
The industry calls it the “affordability crisis” but those facing the reality know it simply as poverty.
Forced installation of prepayment meters (PPMs) is a miserable practice that, until the energy crisis, existed at the margins, affecting only the poorest or most reluctant of bill payers.
The explosion in energy prices has pushed it closer to the mainstream.
PPMs are supposed to be a last-resort in response to a challenge that has always faced utility providers; what to do about those households who cannot or will not pay their bills, and who continue to run up unsustainable debt?
Forty years ago, when gas and electricity meters were commonplace and tampering was a criminal, occasionally fatal, offence, affordability was self-regulating. If you did not have 50p to feed the meter the lights stayed off.
In the age of near universal connection the responsibility for balancing ability and willingness to pay, and the right to essential utilities, lies with the energy companies themselves.
It’s an issue the regulator Ofgem has grappled with since its inception.
An ongoing issue for Ofgem
In 2009 it asked suppliers not to disconnect pensioners or any home with under-18s in the coldest months between October and March, and to reconnect anyone inadvertently cut off within 24 hours.
In the last decade PPMs have been the mechanism for managing debt. They are supposed to prevent customers from going deeper into arrears by requiring them to pay upfront with payment cards or emergency credit from suppliers.
In practice they are a digital version of the old coin meters. Those who cannot pay end up self-disconnecting.
Read more:
British Gas prepayment allegations – what you need to know
How do prepayment meters work and what are the rules?
Ofgem’s licence conditions have banned forced installation for vulnerable customers since 2018, and “suppliers must not disconnect certain vulnerable customers during the winter, or disconnect anybody whose debt the supplier has not taken all reasonable steps to recover first by using a PPM”.
That was plainly not the case in the British Gas examples highlighted by The Times, but it should be said even Ofgem believes PPMs have a place.
Support for prepay meters
Its chief executive Jonathan Brearley told MPs this week they were a reasonable recourse for customers who can pay but will not.
Underlying that is the reasonable assumption that suppliers should get paid, and that they have a responsibility to ensure customers do not run up unsustainable debts.
The practical challenge of the current crisis is straining those principles.
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The boss of British Gas’ owner, Centrica, has said
The energy industry and charities estimate up to 40% of households are spending more than 10% of their income on energy.
Ofgem’s own figures show close to one million people are in arrears on electricity payments and nearly 800,000 for gas, with no agreed plan to manage debt reduction.
The least well-off customers are routinely offered payment plans or emergency credit, around half of which is never repaid.
Retail suppliers privately say they cannot afford to offer such support on the scale that may currently be required.
Industry sources say the collective debt book is thought to run to around £2.5bn – around £2bn of which is considered bad debt.
The week that Shell announced profits of more than £32bn is a tough one in which to plead poverty, but the retail industry is separate from energy production, with regulated prices that have seen almost 30 companies forced out of business in the last 18 months.
A watershed moment for those in the market to reconsider?
That’s why, with wholesale prices falling, suppliers are calling on government to cancel a scheduled reduction in energy support that will increase prices, and distress to the poorest households, from April.
There’s little question that for those on the receiving end, forced installation of a PPM is a dehumanising bureaucratic device.
It’s possible too that anyone who runs up unsustainable debts heating their home satisfies a definition of vulnerability.
The industry-wide pause on using court warrants gives everyone with a stake in the market a chance to reconsider and may prove a watershed but there are no easy options or solutions.
Ofgem has recently argued for a subsidised social tariff, offering cheaper rates to defined vulnerable groups. The review of PPMs may also ask if it is ever okay to allow someone to be cut off.
Water companies cannot turn off the taps, but if the same applied to energy, how can commercial supply be sustainable in a medium term of elevated energy costs?
A meaningful review will have to examine the court process, which since the cost of living crisis has seen magistrates asked to approve hundred of warrants at a time and take suppliers at their word that due diligence has been done.
Unless government legislates to remove suppliers right to access customers homes the court process will be central to reform.
Centrica chief executive Chris O’Shea said this week that the plight of his energy customers was symptomatic of a wider affordability crisis for basic essentials, including housing.
As the man ultimately responsible for British Gas’s actions he may not be the most sympathetic witness, and the answer can never be to drill the locks of the disabled, but he had a point.
Business
In Halifax’s night-time economy, no one is holding back over what is required in the budget
In the upstairs bar of a slick new brewery, the cheese-lovers of Halifax are paying “homage to fromage”.
It is one of the first events in the historic West Yorkshire town for the monthly cheese club and there is a decent turn-out.
Sky News visited Halifax’s clubs, bars and restaurants to get an insight into people’s priorities
The night-time economy in Halifax is a useful measure of how the landscapes of our town and cities have changed
Discussion of Wednesday’s budget is not as popular as an accompaniment to the cheese as the selection of wines. But no one holds back on what is required of the chancellor.
Natalie Rogers, who runs her own small business with her partner, said there needs to be focus.
Small business owner Natalie Rogers wants to see more investment in local industries
“I think investing in small businesses, investing in these northern towns, where at one time we were making all the money for the country, can we not get back to that? We’re not investing in local industries.”
At the next table, with a group of friends, Ali Fletcher said there needs to be bigger targets.
“I think wealth inequality is a major problem. The divide is getting wider. For me, a wealth tax is absolutely critical. We need to address this question of ‘Is there any money left?’. There’s plenty of money, it’s all about choices that government make.”
At this monthly cheese club, people told us about their priorities ahead of the budget
The evening’s cheese tasting was being marshalled by Lisa Kempster. “The impression I get from talking to people is there’s a lot of uncertainty, but when you ask them what they’re uncertain about, they’re not really sure, there’s just a general feeling of uncertainty and being cautious.”
Ali Fletcher reckons wealth inequality is a major problem
Read more:
Budget will be big – and Starmer has some serious convincing to do
Reeves vows to ‘grip the cost of living’
What tax rises could chancellor announce?
This corner of Halifax, close to the town’s historic Piece Hall, is buzzing with clubs, bars and restaurants, trying hard to defy the crunch in the night-time economy. It is a useful measure of how the landscapes of our town and cities has changed.
“Whenever there’s a budget, for a few days afterwards, there’s a drop off in trade,” said Michael Ainsworth, owner of the Graystone Unity, a bar and music venue in the town.
“I accept the government needs to raise money but, in this day and age, there’s better ways to go about doing that, like closing tax loopholes for the huge businesses to operate up with banking arrangements outside the UK.”
Michael Ainsworth owns a bar and music venue and thinks the chancellor needs to close tax loopholes
In the bar, a folk singer is going through a quirky and caustic set. In the basement, a punk band called Edward Molby is considerably louder.
On a sofa in the main bar, recent graduates Josh Kinsella and Ruby Firth, newly arrived in Halifax because of its more affordable housing, pinpoint what they want on Wednesday.
“Can we stop triple-locking the pensions, please? Stop giving pensioners everything. For God’s sake, I know they have hard times in the 70s and the 80s, but it just feels like we’re now paying for everyone else.”
Josh Kinsella and Ruby Firth feel there’s too much focus on pensioners
Ben Randm is a familiar face at the bar and well known on the music scene with his band, Silver Tongued Rascals.
“Everyday people are seen as statistics, we’re always the afterthought. When the cuts are done, we’re always impeded and the ramifications that has for people’s livelihoods, for people’s mental health, for people’s passion and drive… it’s such a struggle.”
He, like many in the night-time economy sector, wants extra help for hospitality and venues that, he says, provide a vital community link.
Ben Randm who has his own band reckons everyday people are ‘always the afterthought’
David Van Gestel chose Halifax to open the third branch of MAMIL, a bar in jokey honour of those cycling “middle-aged men in Lycra”. On a busy quiz night, he said venues had to provide something different to get people out of their homes.
“I think the government needs to start putting some initiatives in place. They talk about growth but the reality is that the only thing we’re seeing grow is our costs.”
There’s a lot going on at TikTok right now.
As well as online safety updates and new features, the company is introducing sweeping changes to how it moderates the platform’s content.
At the same time, there’s an intense focus on online safety, particularly here in the UK.
With all that going on, Sky News got a rare, exclusive sit-down with one of TikTok’s senior safety executives, Ali Law.
The increasing role of artificial intelligence
One of the biggest changes happening at TikTok is around artificial intelligence.
Like most social media companies, TikTok has used AI to help moderate its platform for years – it is useful for sifting out content that obviously violates policies, and TikTok says it now removes around 85% of violative content without getting a human involved.
File pic: Reuters
Now, it is increasing its use of AI and will be relying less on human moderators. So what’s changed that means TikTok is confident AI can keep young users safe?
“One of the things that has changed is really the sophistication of those models,” said Mr Law, who is TikTok’s director of public policy and government affairs for northern Europe. He explained that AI is now better able to understand context.
“A great example is being able to identify a weapon.”
Whereas previous models may have been able to identify a knife, newer models can tell the difference between a knife being used in a cooking video and a knife in a graphic, violent encounter, according to Mr Law.
“We set a high benchmark when it comes to rolling out new moderation technology.
“In particular, we make sure that we satisfy ourselves that the output of existing moderation processes is either matched or exceeded by anything that we’re doing on a new basis.
“We also make sure the changes are introduced on a gradual basis with human oversight so that if there isn’t a level of delivery in line with what we expect, we can address that.”
Human moderator jobs being cut
That increasing use of AI means TikTok will rely less on its network of tens of thousands of human moderators around the world.
TikTok moderators and union workers protested outside the company’s London headquarters over job cuts
In London alone, the company is proposing to cut more than 400 moderator jobs, although there are reports a number of those jobs will be rehired in other countries.
On 30 October, Paul Nowak, general secretary of the TUC union, said “time and time again” TikTok had “failed to provide a good enough answer” about how the cuts would impact the safety of UK users.
Ali Law speaks to Sky News from TikTok’s European headquarters in Dublin
When Sky News asked if Mr Law could ensure UK users’ safety after the cuts, he said the company’s focus is “always on outcomes”.
“Our focus is on making sure the platform is as safe as possible.
“We will make deployments of the most advanced technology in order to achieve that, working with the many thousands of trust and safety professionals that we will have at TikTok around the world on an ongoing basis.”
Dame Chi Onwurah speaks at the House of Commons. File pic: Reuters
The UK’s science, technology and innovation committee, led by Labour MP Chi Onwurah, has issued a probe into the cuts, with Ms Onwurah calling them “deeply concerning”.
She said AI “just isn’t reliable or safe enough to take on work like this” and there was a “real risk” to UK users.
However, Mr Law said that, as a parent himself, he is “also highly concerned and highly interested in issues of online safety”.
“That’s why I’m so confident in the changes that we are making at TikTok in terms of content moderation as a whole,” he said.
“The power really comes in the combination of the best technology and human experts working together, and that still is the case at TikTok and it will be going forwards as well.”
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UK’s online safety rules: One month on
New wellness tools
The interview came at the end of an online safety event at TikTok’s Dublin office, its European headquarters.
During the conference, the company announced a number of new features designed to increase user safety, including a new in-app Time and Wellbeing hub for TikTok users.
The hub is designed with the Digital Wellness Lab at Boston Children’s Hospital and gamifies mindfulness techniques like affirmations, not using TikTok during the night and lowering your screentime.
Ali Law, TikTok’s director of public policy and government affairs for northern Europe
Read more from Sky News:
Meta to block Instagram and Facebook for users under 16 in Australia
Half of novelists fear AI will replace them entirely, survey finds
How violent extremists are thriving online – and why it’s getting harder to catch them
Cori Stott, executive director of the digital wellness lab, said many people use their phones to “set their wellbeing, to reset their emotions, to find these safe spaces, and also to find entertainment”.
The hub was built as part of the TikTok app because young people want wellness tools “where they already are”, without needing to go to a different app, she said.
Still, there are plenty of reports suggesting that phone use and social media has a damaging effect on young people’s mental health… is TikTok trying to solve a problem of its own creation?
“If you are a teen on the app, you will load up and find that you have, if you’re under 16, a private profile, no access to direct messaging, a screen time limit set at an hour, [and at] 10pm sleep hour suggestion,” said Mr Law.
“So the experience is one that does try and promote a balanced approach to using the app and make sure that people have the options to set their own guardrails around this,” he said.
“I think the other thing I’d say is that the content on TikTok is, in the main, inspiring, surprising, creative.”
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