Record profits for energy companies and forced installations for struggling households – Jack Sargeant MS


“Our energy market is broken. How much longer will we allow profiteering to trump the interests of residents and employers – we need serious change.”

By Jack Sargeant MS

Last month, British gas reported record profits of £969 million for the first half of this financial year, a staggering 900% increase on the same period last year. It is likely other energy suppliers will soon report similar surges in profit.

As households across the UK continue to struggle with soaring household bills, such profits add to the serious list of concerns about the UK’s broken energy market.

Throughout last winter I worked to highlight the disgraceful behaviour of energy suppliers as they forced their way into the homes of thousands of vulnerable people to fit prepayment meters.

Many of you may remember the sickening footage from an undercover investigation by The Times which showed a debt agent revelling in breaking down the front door of a single parent with three young children, declaring “this is the exciting bit. I love this bit.”

So how has a company that has been so publicly exposed in this way been allowed to make obscene profits of almost £1billion? The answer lies with the organisation which is meant to protect consumers – energy regulator Ofgem.

Forced installations were occurring up and down the country despite energy suppliers being under a duty to check that no one living in a household is vulnerable prior to installing a prepayment meter. If a meter runs out a household is automatically disconnected. This can have a significant impact on a person’s mental and physical health as they are left in the dark and cold, with vulnerable customers most at risk.

I was horrified therefore to hear that that just 72 of 500,000 court applications to install prepay meters last year were turned down. It was clear no proper checks were being carried out and warrants issued on mass – Ofgem was categorically failing to hold suppliers to account.

As Chair of the Senedd’s Petitions Committee I led an evidence session with energy suppliers and a representative from Ofgem about the prepay meter scandal. During that meeting, Ofgem’s Director for Strategy Neil Kenward claimed: “The people who put the bills through your letter box for your electricity and gas [energy suppliers], they’ve been loss making collectively for the last four years, ever since the price cap was introduced”…

Kenward continued: “Now, we hope they return to profit, because that’s a sign of a healthy sector that’s going to get the investment it needs. But we also expect them to deliver good services for customers at fair prices.”

British Gas profits show Ofgem have delivered half of this objective, (thanks to their decision to raise the energy price cap) but are nowhere near achieving fair prices or good service for customers. Recent data released by Citizen’s Advice Cymru shows the number of people needing help because they cannot afford to top up their prepay meter is still around ten times higher than it was in 2021.

This data makes it abundantly clear that the regulator is not fit for purpose.

I was seriously disappointing that UK Government continue to put the profit of private companies ahead of the welfare of those most vulnerable. They have now failed to consult on new proposals to protect households from April 2024 through measures such as a social tariff.

We need a change in the law so that vulnerable households across the UK have legal protections and are not reliant on the good will of suppliers. In the late 1990s legislation was introduced to stop people’s water supply from being cut off. ‌‌‌‌‌‌‍‌‌‌‌‌‍‌‌‌‌‌Water companies could still seek to recover debts, but they could not cut people off. ‌‌‌‌‌‌‍‌‌‌‌‌‍‌‌‌‌‌This was because water is needed to sustain life, the same can be said for energy and we need to put this into law.

Unfortunately, it is clear this Tory UK Government has neither the will nor the competence to put such protections in place.

I will continue to do all I can to use my platform to end the prepayment meter scandal and will be launching the petitions committee report in the Autumn. This could well coincide with the ending of the voluntary hiatus on the forced installation of prepayment meters by energy companies.

The UK Government failed to use the Energy Bill to give itself the powers to force a ban and OFGEMS flawed consultation on the reintroduction points to poor practice starting again just in time for winter. 

All this points to one clear point. Our energy market is broken. How much longer will we allow profiteering to trump the interests of residents and employers – we need serious change.  

Featured image: A selection of EDF and EON electricity prepayment meter keys and a Quantum gas prepayment card. Photo credit: lydia_shiningbrightly under Attribution 2.0 Generic (CC BY 2.0)

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