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.
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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.
Some of the biggest US technology companies have pledged billions of pounds of investment to turbocharge Britain’s artificial intelligence (AI) industry, as the two countries announce a landmark technology deal.
Nvidia, Microsoft, Open AI and Google made a flurry of announcements to coincide with President Trump‘s state visit to the UK.
They include plans to build data centres and invest in AI research and engineering.
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Sir Keir Starmer described the agreement, which both leaders will sign over the coming days, as “a generational step change” in Britain’s relationship with the US.
The deal will see both countries cooperate on AI, quantum computing and nuclear energy, with investment in modular reactors revealed earlier this week.
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Energy boss makes case for nuclear future
The prime minister said it was “shaping the futures of millions of people on both sides of the Atlantic, and delivering growth, security and opportunity up and down the country”.
The government said the deal would deliver thousands of jobs, with a new AI Growth Zone in the North East of England earmarked for 5,000 jobs.
The region will host a new data centre developed in partnership with ChatGPT developer OpenAI, the US chip giant Nvidia and the British data centre company Nscale. The UK government will supply energy for the project, which will be based in Blyth.
Jensen Huang, chief executive of Nvidia, who has previously drawn attention to Britain’s inadequate levels of digital infrastructure, said: “Today marks a historic chapter in US-United Kingdom technology collaboration.
“We are at the Big Bang of the AI era – and the United Kingdom stands in a Goldilocks position, where world-class talent, research and industry converge.”
Nvidia chief executive Jensen Huang. Pic: Reuters
The Blyth data centre is part of Stargate, Open AI’s infrastructure project to build large data centres across the US.
The company has also developed sites in Norway and the UAE. Nvidia, which provides the graphic processing chips (GPUs), expects to generate $20bn (£14.6bn) by the end of this year from “sovereign” deals with national governments over the coming years.
Sam Altman, OpenAI’s chief executive, said: “The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users and a government that quickly recognised the potential of this technology.
“Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth.”
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Microsoft also pledged £22bn, its largest ever investment in the UK, to expand data centres and construct the country’s largest AI supercomputer.
Meanwhile, Google owner Alphabet pledged £5bn to expand its data centres in Hertfordshire and fund its London-based subsidiary DeepMind, which uses AI to power cutting edge scientific research. The company was founded in Britain and acquired by Google in 2014.
Other investments include £1.5bn from AI cloud computing company CoreWeave and £1.4bn from Salesforce.
There are “no discussions around taxpayers’ money” to prop up Jaguar Land Rover’s (JLR) suppliers, according to the prime minister’s official spokesman, as the carmaker grapples a lengthening production shutdown following last month’s cyber attack.
JLR factories fell silent more than two weeks ago. While it is damaging for the company, it represents a perilous loss of business for the supply chain which has also been forced to send workers home.
Some have already lost their jobs.
Unions and the business and trade committee of MPs were among those to request the possibility of aid to prevent job losses and employers going bust as the disruption drags on.
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What happened?
It was revealed on 1 September that global production at JLR had been stopped following a cyber attack.
IT systems were taken offline by the company under efforts to limit penetration and damage.
The company appeared confident initially that manufacturing could resume but restart dates have been consistently put back.
What damage was done?
Jaguar Land Rover has said very little about the extent of the attack.
But it admitted last week that some data had been accessed. It gave no further details.
Who is to blame?
A criminal investigation is continuing.
A group of English-speaking hackers claimed responsibility for the JLR attack via a Telegram platform called Scattered Lapsus$ Hunters, an amalgamation of the names of hacking groups Scattered Spider, Lapsus$ and ShinyHunters.
Scattered Spider, a loose group of relatively young hackers, were behind the Co-Op, Harrods and M&S attacks earlier in the year.
It is widely believed that M&S paid a sum to regain control of its systems after it was targeted with ransomware though it has refused to confirm if this was the case.
How is this affecting JLR as a business?
The business was highly profitable last year but 2025 has seen new trade war challenges in addition to the cyber attack: File pic: Reuters
JLR typically produces about 1,000 vehicles a day.
Production staff are being paid but kept away from plants at Halewood on Merseyside, Solihull in the West Midlands, and its engine factory in Wolverhampton. It is the same story for workers at sites in Slovakia, China and India.
JLR revealed on Tuesday that production lines would now remain shut until at least 24 September.
David Bailey, professor of business economics at the Birmingham Business School, told the PA news agency: “The value of cars usually made at the sites means that around £1.7bn worth of vehicles will not have been produced, and I’d estimate that would have an initial impact of around £120m on profits.”
JLR achieved a pre-tax profit of £2.5bn for the financial year ending 31 March 2025, so should be able to absorb such a hit.
Sales and service operations continue as normal at its retail partners but the longer the disruption goes on, so do the risks to its inventories and bottom line.
Why does its supply chain need help?
JLR’s supply chain includes everything from components to paint. Pic: Reuters
This is the part of the operation that was always bound to suffer most in the event of a global JLR production shutdown.
No manufacturing means no need for parts.
The company usually depends on a ‘just in time’ supply chain to feed its factories and keep production lines running smoothly.
The Unite union has appealed for a COVID-style furlough scheme to prevent job losses and the risk of affected companies, often small or medium-sized firms, being forced out of business.
JLR’s operations are understood to directly support more than 100,000 jobs in the UK though that sum doubles through indirect roles.
The loss of any major supplier would risk further production delays once JLR’s IT systems are back online.
It is currently understood that the vast majority of directly affected workers remain in their jobs but have either been sent home or are on restricted tasks.
JLR suppliers Evtec, WHS Plastics, SurTec and OPmobility have had to temporarily lay off roughly 6,000 staff while a growing number of other firms are cutting workers, with temporary or contracted workers most likely to be affected.
What has the government said?
In addition to the remarks by the PM’s official spokesman, minister for industry Chris McDonald told Sky News: “We know this is a worrying time for those affected by this incident and our cyber experts are supporting JLR to help them resolve this issue as quickly as possible.
“I met the company today to discuss their plans to resolve this issue and get production started again, and we continue to discuss the impact on the supply chain.”
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