Energy companies 'should be banned' from cutting off supply amid cost-of-living crisis

LEEDS, UNITED KINGDOM - MARCH 19: A boy plays football in the street next to traditional back to back homes in Beeston on March 19, 2021 in Leeds, United Kingdom. (Photo by Christopher Furlong/Getty Images)
Four in 10 Brits are struggling to pay their energy bills, according to the ONS. (Getty Images) (Christopher Furlong via Getty Images)

A senior Labour MP has said people should have the legal right to energy for their homes as the escalating cost-of-living crisis leaves households choosing between heating and eating.

Brits are feeling the squeeze amid soaring energy costs, tax hikes, and rising inflation - with the Office for National Statistics (ONS) revealing last week that 40% of Brits are struggling to pay their energy bills.

Hilary Benn, Labour MP for Leeds Central, told Yahoo News UK that in the same way people have the legal right to water, they should also have the right to energy, meaning it would be unlawful to cut off someone's supply.

“It was legal, before, for people to be disconnected from their water supplies if they didn’t pay the bill,” the former cabinet minister said.

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“There was eventually such an uproar about this, because people said: ‘how can you expect someone to live if they don’t have access to water to wash, to flush the loo, to drink, to bathe?’.

“And it is now unlawful to disconnect someone because they haven’t paid the water bill.”

He went on: “I’m talking here about people in genuine distress, who haven’t the money to pay their bill – because, I think, human beings, as well as having a right to water we have a right to light and to warmth.”

CAERPHILLY, UNITED KINGDOM - OCTOBER 17: A gas prepayment meter seen installed in a house on October 17, 2018 in Caerphilly, United Kingdom. With a prepayment, or 'pay as you go' meter, energy is paid for before you use it - usually by adding money to a 'key' or smart card, which is then inserted into the meter. (Photo by Matthew Horwood/Getty Images)
Prepayment meters provide a pay-as-you-go system for energy which is more expensive and means households that cannot afford energy are disconnected. (Getty Images) (Matthew Horwood via Getty Images)

Benn also raised the issue of prepayment meters, which provide a pay-as-you-go system for energy. According to Ofgem, about four million households rely on prepayment meters in the UK.

Prepayment meters may be installed by energy suppliers if a household has fallen into energy bill debt.

Read more: Cost of living crisis: The everyday food items that are soaring in price

However, they can often lead to higher bills – in part because they are more difficult for energy suppliers to process compared other forms of energy usage monitoring, as well as the fact there are fewer tariffs available to customers using prepayment meters.

According to National Energy Action (NEA), more than half of prepayment customers have incomes below £18,000 per year — significantly below the national median household wage.

“People who are poorest are most likely to be on prepayment metres,” said Benn.

Hilary Benn pictured at a Centre for European Reform fringe event on Brexit, during the Labour Party annual conference at the Arena and Convention Centre (ACC), in Liverpool. Picture date: Tuesday September 25th, 2018. Photo credit should read: Matt Crossick/ EMPICS Entertainment.
Senior Labour MP Hilary Benn has said humans have the right to energy for their homes as the escalating cost of living leaves households choosing between heating and eating. (PA) (Empics Entertainment)

“Now, that's not exclusively the case — because you may be moving into a flat that has a prepayment meter because the previous tenant had one and you can pay your bills.

“But, basically, we are charging the highest energy prices to people, many of whom are on the very lowest incomes. It's not fair and it's not right.”

Benn’s remarks come as Rishi Sunak comes under more pressure to increase the amount of support he is providing to people struggling with energy bills.

Read more: Sainsbury’s to cap prices as it warns of lower profit amid cost of living crisis

The chancellor told Mumsnet on Wednesday that it would be “silly” to provide more support now before the winter, when energy bills are expected to rise further.

Sunak has defended his existing Energy Bill Rebate scheme announced in February, comprising of:

  • £150 council tax rebate for bands A-D

  • £200 discount on energy bills due to be repaid in £40 instalments over five years

Critics have described the £200 discount as effectively a “loan” as households will pay back the same amount in instalments over five years.

Moreover, recent analysis from Labour says one million Brits will be forced to pay for the discount even if they don’t receive it this year, totalling £112m.

Chancellor Rishi Sunak speaking at a press conference in Downing Street, London. Picture date: Thursday February 3, 2022.
Rishi Sunak has said it would be 'silly' to provide extra support for people struggling with energy bills before winter when prices are expected to rise further. (PA) (PA)

The discount has also been criticised for how it will have a negative impact on prepayment customers.

“[The £200 discount] is worrisome for households on prepayment meters,” said Benn.

“If there are periods when they're not connected, because they can't afford to top up the meter, the moment they top up the meter the money to repay the [£40 instalment] will go [on that],” said Benn.

He said all options should be considered when it comes to easing the energy squeeze on households — including Labour’s windfall tax on profits of oil and gas companies, as well as proposals of a “social tariff” from Scottish Power.

Read more: Energy boss's plan to reduce bills by £1,000 with new 'social tariff'

“The long and the short of it is we have to provide more support to people on the lowest incomes to make sure that they can meet their bills,” he said.

“But from my point of view, crucially, to ensure that people do not end up disconnected - whether they can put money into the meter or not.”

Watch: Cost of living: Energy bosses call for price cap to be scrapped and aid to prevent 'horrific' winter ahead